Market Focus

Pharmaceutical Labeling

July 20, 2005

Brand protection and regulation drive changes in pharmaceutical packaging trends.

In 2003, the US Food and Drug Administration (FDA) announced a mass recall of the cholesterol-lowering drug Lipitor. The recall, triggered by the discovery of counterfeits, affected more than 130,000 bottles.

While drug counterfeiting in the US is still rare, the number of investigations are on the rise. According to the FDA, the number of counterfeit drug investigations has risen from an average of five per year in the 1990s to more than 20 per year since 2000.

Growing use of the Internet to purchase prescription drugs also complicates matters. “The biggest threat now to every pharmaceutical manufacturer is online buying of prescription products. How do you control that, make sure that the authentic product is being purchased, plus at the correct price?” asks Neil Sellars, director of product development and marketing for National Label Company in Lafayette Hill, PA. “Online purchasing brings everything to a whole new threshold.”

“Counterfeiting is a huge problem for the pharmaceutical industry as it relates to direct liability. The drug companies annually loose billions of dollars to very clever counterfeiters. From a cost standpoint, if they could reduce the amount of counterfeit drugs in the marketplace, that will help them with their bottom line,” says Bob Piefke, business development manager for Appleton in Dayton, OH.

Widely publicized cases such as the US Lipitor recall of 2003 have catapulted the issue of counterfeited drugs into public view. All this attention has trickled down into the label industry, where many industry pundits report a rise in interest of tamper evident and security packaging.

Track and Trace
There’s no doubt security measures are being talked about heavily within the pharmaceutical supply chain. According to a report released in February of this year by the FDA, the administration is recommending a multi-pronged approach to combat counterfeiting.

Among the suggestions, the report states that using one or more authentication technologies such as color shifting inks, holograms and taggants is an important anti-counterfeiting tool. Furthermore, it reports that radio frequency identification (RFID) “tagging of products by manufacturers, wholesalers and retailers appears to be the most promising approach to reliable product tracking and tracing.”

RFID, a technology that allows for multiple chips to be scanned simultaneously, has made headlines for its usefulness in the logistics industry. But it is also gaining notoriety for the role it can play in the pharmaceutical supply chain. That is, tracing pallets or individual pharmaceuticals to make sure they come from — and stay with — legitimate sources.

While track and trace is a popular buzzword in RFID circles, some question whether or not it is feasible today. “The infrastructure globally doesn’t exist for them to take advantage of the track and trace benefits of this technology, which is really what the FDA is highlighting,” says Sellars.

“It’s really not feasible because you have to have the infrastructure around the globe to read the technology and download it. Right now, as you prepare the product you can take that information and uplink it, but uplink it to where? Who’s going to take that information? How’s it going to go globally?” asks Sellars.

Despite the barriers, Sellars and others say RFID will have a growing presence within the pharmaceutical industry. “At the present time, RFID is in its infancy in the pharmaceutical industry,” says Piefke. “I would say that probably in the next two years it could have a fairly major effect on the direction that the industry goes regarding variable information labeling, and certainly in the long term it will have a major effect.”

Other Security Features

In order to combat counterfeiting, many companies are utilizing security features.
Photo is courtesy of Appleton.
Within the industry, some pharmaceutical companies are choosing to adopt a security triangle, which is a three tiered approach to security measures in packaging.

Level one includes overt features such as holograms. “It’s still probably the most important [level] because many of the pharmaceutical products that have been counterfeited were caught by the consumer, so you have to communicate with the consumer,” says Sellars.

Levels two and three utilize covert features. For example, Sellars says, level two measures might include products also seen on currency — pen reactive inks, for instance. And level three moves into forensic technology.

“There’s a ton of different types of technologies out there. The most common are IR taggants that are added to the ink and they basically are tuned to a specific reader that a manufacturer would own.”

So what does the spotlight on counterfeiting, brand protection and security features mean for the label converter? At the moment, some would argue not very much. One issue is cost. Talk is cheap. Packaging security features and RFID implementation is not.

“We’ve looked at other technologies, taggants and that sort of thing. We’ve offered it to some of our clients, and most of the technologies we’ve offered are still under debate,” says Andrew Vale, East Coast sales manager for Ampersand Label, headquartered in Garden Grove, CA.

“Security measures are of increased importance, but as far as getting involved with the dollars and cents, it is one of those things where [our clients] would like to adopt the technology, but they really don’t want to pay for it. At this point, the cost is still enough of a road block to stop the technology from being adopted,” Vale adds. “There’s a lot of talk about counterfeiting, but no real action.”

Others are more hopeful about the growth of security features. St. Paul, MN-based label converter Tursso Companies has placed high confidence on the growth of security features within pharmaceuticals. The company has recently focused in on three features: taggant encoded inks, label materials with fluorescent fibers, and optical watermarks.

So far, the response has been encouraging. “We’ll be gathering our market data over the next 2, 3 months to find out what the receptivity is, but I think it will be strong,” says David Gray, VP of sales and marketing for the company.

If RFID and complex features are out of the price range of some pharmaceutical customers, less expensive alternatives that add security to the pharmaceutical supply chain are appearing as well. Verify Brand is a relatively new company that works with pharmaceutical companies and their label vendors. The label printer would generally print a code on the pharmaceutical label, along with a URL or phone number. Consumers and suppliers can use that contact information to verify that the product is genuine.

“We don’t cause the manufacturers to change their production or distribution processes. They just continue to order labels the way they do today. Once we find a place to put a code on the label, it causes very little disruption, and very little, if any, cost or equipment to the [label] manufacturer,” says Kevin Erdman, president of the Minneapolis, MN-based company.

When it comes to anti-counterfeiting and security initiatives, cost is not the only barrier. Pharmaceutical manufacturers are wary of another problem related to counterfeiting: the ease of duplication.

“A major issue today is the broad range of ‘solutions’ being offered to the pharmaceutical companies and the converters. It has become increasingly difficult for the brand owner and the converter to differentiate between truly effective solutions, and those that are easily counterfeited or imitated,” says John Keane, vice president of sales and marketing for Kurz Transfer Products, in Charlotte, NC.

Extended text
Outside pressures are not only fueling interest in anti-counterfeiting measures. They have also affected the amount of content found on the label, leading to a rise in constructions that accommodate extended text.

“You need extended text now because of the drug fact requirements, minimum type sizes and the amount of content that needs to be on the label. You need more real estate on the label these days for any type of drug,” says Shev Okumus, president of Star Label Products, Fairless Hills, PA.

“Expanded content labels are growing in the pharmaceutical industry, since they are available in so many different formats and sizes,” says Rob Ryckman, director of marketing and product development, RFID and security products for CCL Label located in Hightstown, NJ. “It is the only way that the vast amount of required information can be applied directly to the item in multiple languages.”

Also driving a trend toward extended text is the convenience of a booklet label. “It makes it a more self-contained package. Historically, there have been inserts, on-serts, top-serts and products that get affixed to the top of the package or somewhere in the carton. If you can eliminate the carton with an insert and have a label with a booklet affixed, you’re saving a significant amount of money,” says Gray of Tursso Companies.

While booklet labels can be a money-saver if it eliminates the need for cartons and instruction sheets, they are more expensive than using a regular label. Fortunately, there are other ways to get more information without ordering a booklet label.

“We’re trying to come up with different ways, even using paper with different release coatings, things like that, without having to make a multi-layered label. We’re trying to keep the cost down for some of our generic brand customers,” says Okumus.

Using specialty release coatings allow a converter to print on both sides of a label. The ability to print on both sides creates more room for text without adding another layer of material. “Through the printer’s sophistication, the release coating can be spot applied or pattern printed to some extent. They would be able to get a particular label to come off completely, or it could be part of the label design, where it can be pulled back and reapplied,” says John Donaleski, senior chemist for Craig Adhesives and Coatings located in Newark, NJ.

Paperless labels, white labels

Photo courtesy of Ampersand Label
While currently there is a trend toward extended text labels, there is also a move in the industry for the opposite. The Pharmaceutical Research and Manufacturers of America (PhRMA) will soon be launching a trial of its paperless labeling initiative. After successfully testing it at 10 pharmacies, PhRMA now plans to bring the trial to 265 pharmacies for a larger test.

How it works is that the drug information “would be available on the Internet. And you can access a web site and download or print out the information,” says Gray. The information would be in portable document format (PDF). Although it is only in testing stages, and there are definite opponents to the initiative, the association has publicly stated that full electronic dissemination of labeling information is the ultimate goal.

Is this initiative a concern for label converters? “It’s a concern, but I don’t see it as an immediate concern,” says Gray. “People aren’t ready yet in the 45 and up age group to get their drug information from a web site… I still believe there’s a generational shift that needs to occur before it’s more readily available.”

And even if the paperless labeling initiative came to pass on a wide scale, labels won’t be eliminated all together. “There may be labels with less information, but in no case would I conceive of bottles without some identification information on them,” says Lowell Matthews, CEO of Ampersand Label.

Internationally, another trend has been noted, coined as the “white label initiative”.

“It’s very popular in Europe because they run with smaller SKUs and a great number of languages,” says Sellars. The white label initiative is not a mandate, but a trend. Pharmaceutical companies purchase blank labels and print the labels themselves using a digital printer. Or they use a generic preprinted label and have a variable information section that is printed.

The chance that this new trend will reach the United States is unlikely. “A lot of our customers have looked at it, but it’s just not feasible right now,” says Sellars. “Digital serves two great markets: on demand and variable information. If you don’t have either one of those requirements, then it is an expensive luxury.”

Special considerations

As with any market, trends come and go. But one thing that remains a constant within the pharmaceutical industry is the need for quality. If a label is not manufactured correctly, it could mean huge implications in the form of human and financial losses. Consequently, the converters who print for pharmaceuticals must adhere to strict guidelines.

The procedure to get a pharmaceutical account can be laborious as compared with other label markets. “With the pharma industry, there’s a whole process that has to be done in order to get that client’s business, a whole number of steps starting with them auditing your facility and setting up procedures with you,” says Matthews.

Once the business is there, it’s a whole other process to keep them. Attention to detail is critical. Many converters offer clean rooms and double inspections. Some even destroy the trash before it goes outside.

“We set up our new building so that there is an indoor trash compactor. When you get rid of their waste, their labels, if you have a dumpster outside, it means anyone can get in there and pull out labels. We have an indoor trash compactor that all of our trash goes into, but it was put there because of our pharmaceutical label customers,” says Okumus.

Another way converters are helping their customers is by offering to consecutively number the label liner. Pharmaceutical customers must account for the number of labels they have in their facilities at all times. If the pharmaceutical company only uses half a roll of labels, the consecutive numbers save employees from hand counting the leftovers.

While there are certain challenges associated with servicing pharmaceutical clients, some things are the same across all label markets. “At the heart of all it’s a printing business. The three key factors will never change: price, quality and service. All of the innovations are a natural evolution, but at the heart of it is the basics,” says Gray.
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