Longer life drives growth in pharmaceutical packaging, Solutions!, Online Exlusives, September 2003

LONGER LIFE DRIVES GROWTH IN PHARMACEUTICAL PACKAGING

From Iggesund Paperboard AB

Prescription and non-prescription medications represent a growing market for innovative packaging materials, and can offer pharmaceutical companies the opportunity to distinguish their products for increasingly savvy consumers.

You’ve heard about global warming—but what about global graying? As healthcare improves around the world, people are living longer. The increasing average life span is resulting in an older population that suffers from more and more treatable illnesses. That is the main reason why sales of medicines are increasing faster than average sales growth. In 2003 global drug sales are estimated to reach the amazing sum of 435 billion dollars, and annual growth is predicted at 9 percent in the years immediately ahead.

“In terms of value, paper and paperboard make up just over 35 percent of the packaging materials used for pharmaceutical products, so this is an incredibly important market for us. If we only retain our market share, that gives us growth, and if we can show customers that we’re better than our competitors, the return will be even greater,” said Guy Mallinson, business director-packaging at Iggesund Paperboard, headquartered in Iggesund, Sweden. Iggesund Paperboard is a business unit of the Holmen Group, one of Europe’s major forestry and forestry products organizations, whose other interests include pulp, newsprint and timber.

Consumer’s choice
In recent years, the value of packaging material used in Europe is predicted to have exceeded five billion dollars, and growth over the next decade is estimated at 60 percent. Deliveries of packaging materials to the pharmaceutical sector are already growing twice as fast as deliveries to other industries.

“One important reason is that people are medicating themselves more today—a trend which is partly the forced result of galloping health-care costs,” Mallinson explained. “An increasing proportion of sales are over-the-counter (OTC) medicines—that is, non-prescription drugs—where the consumer makes the final purchasing decision at the point of sale. The selling points of the packaging become increasingly important.”

There are two clear trends in the market. For OTC medication, it is important to catch the consumer’s eye, so design features are often very important to the consumer’s choice. Yet when it comes to prescription medicines, particularly generic brands, little emphasis is put on the design aspects of the packaging.

“Pharmaceutical packaging is characterized by a high degree of conservatism,” Mallinson said. “To some extent this is regulated, but I think that a more advanced packaging design could be a good way for large pharmaceutical companies to distinguish their innovative products from the generics. If the packaging has functions which make daily life easier for the patient, or if it makes it harder to take an incorrect dosage, or gives better information, then those are added values which should definitely be able to influence sales.”

Fast, clean—and affordable
Iggesund Paperboard supplies paperboard from both its product families, Invercote and Incada, to the pharmaceutical industry. The company’s broad product portfolio enables customers to find the particular properties they require for their own special paperboard packaging.

“Requirements for printability and surface properties have increased in recent years, but the most important competitive means are runnability and hygiene,” Mallinson commented. “Our runnability is based to a great extent on our product uniformity together with technical documentation and a service organization that make sure customers get the most out of their equipment and our materials.”

Despite the expected sales increases, there is great pressure on materials suppliers to cut costs. In order to be competitive, suppliers must be able to offer an attractive combination of technical performance, price, logistical service and, not least, product development.

“Our development has been that we regularly bring to the market new grades which reduce the consumption of material, while the protective properties remain unchanged,” concluded Mallinson.