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Evaluating outsourcing and contract packaging

Product types, cost issues, and geography factor into the outsourcing decision Outsourcing of jobs to contract packagers (CPs) continues to be an important issue for many packagers of healthcare products. "I see continued outsourcing or contract packaging occurring due to the large number of start-up companies," believes Nancy St. Laurent, senior engineer of sterile facilities and packaging systems, Lockwood Greene. "These are mostly biotech companies, but also pharmaceutical companies." She believes that though many CPs may have the equipment to handle existing product packaging, "that might not be the case with toxic drugs that require isolation technology, or where there are other sensitive or controlled drugs. In those cases, companies will probably build their own facility with dedicated equipment." Dana M. Guazzo, Ph.D., president, of consulting firm RxPax LLC, adds, "In order to minimize costs, but still produce a quality product, pharmaceutical companies are increasingly relying on the specialized focus that contract packaging firms provide. Unfortunately, this doesn't always address the lack of expertise available to support companies at the developmental level."

David Rudd, senior engineering specialist for Cardinal Health, anticipates that outsourcing will continue, especially in areas of the world where the effective labor rate is lower, whether these rates are actually lower or artificially supported by their respective governments.

Smith & Nephew Orthopedics engineering project manager John White believes outsourcing depends on a company's "capacity issues, geographical location, core competencies, capital restraints, et cetera. A lot of energy has to be put into the selection of a contract packager. When we look at contractors, we involve a lot of Smith & Nephew expertise before we make any decisions."

By Jim Butschli, Editor
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