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Processors Warned Of Barriers To Entry In Medical Device Market


WESTLAKE, OHIO (April 21, 12:45 p.m. ET) -- Plastics processors expecting to enter the medical device market would be well warned to do their homework.


“The challenge of this marketplace is that there are very big barriers to entry. There’s long gestation periods across the whole spectrum of medical devices, but as you get into drug delivery systems, because of the nature of the products, [there are] a lot of FDA regulations, a lot of clinical trials, a lot of hurry-up–and-waiting,” Brenan Riehl, president and CEO of custom injection molder GW Plastics Inc. in Bethel Vt., told attendees at the recent Plastics in Medical Devices conference in Westlake.


Riehl and Len Czuba, president of product development firm Czuba Enterprises Inc. in Lombard, Ill., ran a workshop April 12, the first day of the three-day conference, which was geared toward injection molders looking to get into production of medical devices.


According to Czuba and Riehl, medical devices will be a $250 billion industry by 2012, with U.S. consumption accounting for 45 to 47 percent of the global market. The U.S medical device market is a $90 billion industry, with four big firms taking up 40 percent of total revenue — yet there are 8,000 medical device companies in the country, Riehl said.


He added that in 2005, 20 percent of medical device manufacturing was outsourced by original equipment manufacturers, compared to just 10 percent in 2002: “There’s a lot of outsourcing opportunity and I believe it’s just going to continue to grow, as medical devices companies — OEMs — spend more of their time on innovation and [research and development] and less time on manufacturing.”


Riehl said GW Plastics — Plastics News’ Processor of the Year for 2009 — spent about 10 years in the late 1990s and 2000s switching its operations from primarily automotive products to about 75 percent medical-related parts. The company is ISO 13485 certified and registered with the Food and Drug Administration for medical device manufacturing, and has six, ISO-class clean rooms for molding and assembly.


But Riehl said clean room requirements — ISO 100,000 and ISO 10,000 — shouldn’t be a barrier to molders looking to enter medical; they could start with white rooms, which don’t require as sophisticated air-quality monitoring and filtration system, but will satisfy many medical device manufacturing requirements.


Czuba agreed, and like Riehl, said automation and scientific monitoring of production were the keys to taking high U.S. labor costs out of medical device manufacturing.


“It shouldn’t make any difference whether [manufacturing is in] China or India, or South America or Europe, or in Vermont: Whatever quality you put into place, it should be the same,” Czuba said.


He said a bright spot for the plastics industry is that although cost-conscious insurance companies and medical providers are looking into more reuse and reprocessing of medical devices, most major manufacturers are leery of it, since patients who suffer complications from recycled, improperly sterilized devices would sue the manufacturers. So there should be plenty of demand for resin and newly-molded products.


But Czuba cautioned molders who aren’t familiar with FDA regulations regarding medical devices to get to know them — even if they aren’t planning on making parts in North America.


“The FDA is now being much more proactive and they’re starting here in the states, but there also doing it overseas. So if you have foreign manufacturing facilities, don’t think that you’re immune to the FDA showing up at your doorstep and asking to see your records on medical devices. Because they have that right,” he said.


Len Czuba’s brother, John, director of quality at Czuba Enterprises, said in an April 12 interview that smaller molders just entering the medical device industry are giving the brothers plenty of consulting business.


“Many people just don’t understand what it takes to get it out there. The problems that occur are fixable. They want help, but they’re afraid to ask. A lot of these people have been doing plastics for automotive or retail or pharmaceuticals,” he said.


Several such companies were represented at the Cleveland conference, including custom molder Plastics Components Inc. of Germantown, Wis. — which won Plastics News’ 2009 Processor of the Year award.


Marketing Manager Teresa Schell was among about 300 attendees at the conference, and said since the start of the recent economic downturn, PCI has looked to broaden its customer base beyond making small engines, plumbing, appliance- and automotive-related parts.


“We are focusing on one particular area, because we don’t want to be everything to everybody. We are focusing on one particular [medical] segmentation,” she said. Schell would not disclose the medical products that PCI plans to make. The company in early April received ISO 13485 certification, she said. “The next step will be changes operationally, whether that’s putting in a white room, which would be followed by a clean room, so systems are in place quality-wise, systems will  be in place operationally, we’re already working on new market opportunities — so I think that all of that, bound together, will help.” Schell said.


PCI has 42 injection molding machines and 46 employees, “so we are going to find an application that is going to fit our business model that doesn’t require a body at the press,” she said.


Room-in-room options or portable press-side clean rooms are cost effective alternatives for many medical applications molded in multi-market facilities, Riehl said in his presentation.


Riehl and Czuba urged molders to invest in zero-defect, robust tooling and molds, and to become familiar with hot runner systems to increase productivity before they get into making medical devices.


Time is of the essence: Riehl pointed out that by 2020, 54 million people globally will be 65 or older, about a 54 percent increase over the 35 million who fit that demographic in 2000.


Czuba pointed to increased use of alternative outpatient site treatments (“shopping malls instead of hospitals,”) and increased replacement of metal and glass by plastics as additional reasons for molders to get into the space. He also pointed to the trend of medical devices being designed to be left inside the human body, where they would last a long time — or in the case of some bioplastics, dissolve and be harmlessly absorbed, as some of the exciting trends emerging in the industry.

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