Daphne Allen

January 6, 2016

3 Min Read
What will drive disruption?

In last issue’s Industry Outlook feature, we examined the potential for disruption in pharmaceutical packaging. With more patients thanks to the Affordable Care Act, more cost sensitivities throughout the system, and an increasing population of chronically ill patients, will healthcare payers look for products and packaging that improve the quality of care cost efficiently? Could this drive disruption? 

If so, will regulatory and technical compliance in pharmaceutical packaging—the priorities expressed by respondents to our annual Salary and Industry Outlook survey—be enough?  

We posed these questions to Peter Schmitt, managing director of Montesino Associates who provided insights for the article. “The divide here is between market needs, which are verbalized but not addressed, and incumbent product needs, which remain the focus of pharma packaging professionals,” says Schmitt. A transition from “molecule centric” to “patient centric” may be in order, he adds.

Schmitt also sees a “fault line” between baby boomers and millennials. “In general, boomers grew up and are comfortable with a molecule-centric universe,” he says. “The molecule is developed, launched, improves patient health, and generates large returns, and packaging’s job is to keep risk (regulatory, supply-chain) far away. The supply chain is well known, and the U.S. distribution system works. The boomers do concede, but it is not seen as disruptive—there are new regulatory challenges arriving, and they are incremental and manageable. While packaging professionals will be busy handling serialization and other incremental regulatory changes, there is no real challenge to the incumbent packaging process.” 

The millennials, however, do not see it this way at all, Schmitt observes. “First of all, they do not want to take medicine the way that boomers take medicine. They want it connected to their devices; they look at today’s packages and are appalled. They get patient centric and really don’t understand what they delay is. They want information that will improve their quality of life to be easily available to them and to medical professionals, and they like seeing incumbent items disrupted. Here you really do look at the possibility of disruptive rather than incremental changes.”

So change could be driven by the market, Schmitt suggests. But will this happen in a year, a decade, or ever? 

One survey respondent tells us that one of the biggest challenges faced is medical insurance reimbursement. “FDA clearance was hard enough, but reimbursement is more difficult and extends [our] timeline to get a start-up in making money and therefore survive,” writes this professional. Because our survey is anonymous, this perspective could be from either a pharmaceutical or medical device start-up, but the message is clear—insurance coverage is key. I would venture to say that such coverage concerns are felt in both industries. These days, cost-sensitive patients want to minimize their out-of-pocket costs as much as possible. Innovation has got to be covered to some extent. 

So disruption seems possible, but only if the healthcare payer system values its impact on healthcare quality, effectiveness, and efficiency—and therefore covers it. 

Schmitt points out that during the “boomer/blockbuster drug market, blockbuster drug pricing was absorbed by healthcare and consumers. However, we are entering the ‘Obamacare/millennial’ era, where decisions as to what will be bought and who gets it are changing. That will begin to drive the disruption,” he says. 

Schmitt also points out that “there are companies/ecosystems that want to move their technologies/innovations into the healthcare space. They may very well simply flank the incumbent system, go to outsourcing, and develop packaging that creates a competitive advantage for generics and other channels. Their access to outsourcing solutions will also drive change in the industry.” 

FDA is keeping pace with innovation: there’s news of 510(k) clearance for the Propeller platform for medications using GlaxoKlineSmith’s Diskus dry powder inhaler device for asthma and chronic obstructive pulmonary disease (COPD).

There’s also the chance that patients themselves may simply pay out of pocket for innovations and technologies that could influence their own health. Who knew that consumers would pay hundreds of dollars out of pocket for smart phones instead of accepting phones covered by their plans? 


About the Author(s)

Daphne Allen

Daphne Allen is editor-in-chief of Design News. She previously served as editor-in-chief of MD+DI and of Pharmaceutical & Medical Packaging News and also served as an editor for Packaging Digest. Daphne has covered design, manufacturing, materials, packaging, labeling, and regulatory issues for more than 20 years. She has also presented on these topics in several webinars and conferences, most recently discussing design and engineering trends at IME West 2024 and leading an Industry ShopTalk discussion during the show on artificial intelligence.

Follow Daphne on X at @daphneallen and reach her at [email protected].

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