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CDMO Swiss-American Products addresses the trends and challenges in the topicals contract packaging arena
July 29, 2016
By: Tim Wright
Contract Pharma recently talked contract packaging market and technology trends with Swiss-American Products, a contract development and manufacturing organization (CDMO) that specializes in topical skin and wound care products. We spoke to Larry MacPhee, chief marketing officer, and Ede Payne, chief operating officer, about a range of topics from the current state of the market to the external regulatory forces reshaping the market landscape. Contract Pharma: How would you characterize the current state of the contract packaging market? Ede Payne: In topicals, which is the market Swiss America Products (SAP) serves, contract packaging is quite active, especially in over-the-counter (OTC) and prescription, and has been for a few years. Customers tell us there are three main drivers, and the pool of CMOs able to meet these needs is smaller. First, more topicals are being classified as medical devices, so sponsors are looking for CMOs who handle both drug and device manufacturing and packaging. Second, some of the smaller and virtual CROs don’t want to outsource to larger contract organizations that also have development capabilities. And third, some CMOs have high minimums and don’t address the smaller or introductory volumes for clinical phases or commercial testing. CP: How has the market performed so far and how will it perform in the coming years? Larry Macphee: We’re very optimistic that outsourcing remains attractive and do not see it slowing in the foreseeable future. Companies will continue to outsource when it’s in their best interest. The trend is definitely toward focusing on and investing in core competencies, and outsourcing the rest. CP: What are the external factors impacting the market? Payne: Regulation remains a big factor. Regardless of where in the world a company plans to take its products, regulatory requirements are increasing, not decreasing, and nowhere are product regulations being simplified. Cost can also drive decisions on where drugs are manufactured and packaged. CP: How are these conditions influencing pharma manufacturers and their dependence on contract packagers? Macphee: It boils down to pharma manufacturers needing to find the right CMO partner. Once they make the decision that something is outside their core competency, it’s important to engage the CMO who can provide that competency. Pharma is also making a commitment, because it’s a lengthy process to transfer technologies – and so the nature is to stay. CP: What are your pharma partners’s demands and how are these evolving? Payne: Defined and disciplined processes, and open and robust communication are absolutely essential to a smooth partnership and project success. Defined processes help establish a collection of ‘knowns’ so that all parties can set and be confident of project expectations. Effective communication then allows for the alignment of expectations—grounded in reality—around timelines, budget, and who handles what. Even though ‘resource challenged’ seems to be a very common phrase we hear in pharma, it’s important for us to be able to meet their demands and expectations to receive support and detailed information from the customer on the technology being transferred. CP: When it comes to primary packaging, what are the key market trends and hot growth areas? Payne: Controlling cost is still very much on our customers’ minds. Bottles and tubes remain the primary package of choice for topicals, but we’re seeing innovative closures—as long as the cost isn’t prohibitive. Self-sealing, measured dose, airless and other closures can meet pretty much any dispensing need these days. CP: What type of primary packaging makes up the largest chunk of the market? Will this remain so and why? Macphee: Tubes lead the market for topicals because they offer so many attributes: easy to fill, consumer friendly, recyclable, economical, flexible in terms of color, size, and so on. We don’t anticipate that changing. CP: In the secondary packaging arena, what are the market trends and challenges? Payne: There’s a desire for green or sustainable secondary packaging. But there are still regulatory requirements for labeling and product information that can mean more packaging material. So, as much as they want to cut down their footprint, they’re still obligated to provide a lot of information. The packaging industry works to stay ahead of that and offer alternatives, but then it comes down to cost. These can be competing priorities. For more information about Swiss American Products visit them online at www.swissamericancdmo.com.
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