Contract manufacturers are expanding their offerings to suit the evolving needs of medical device OEMs.
Phillips-Medisize has added electronics to its contract manufacturing capabilities to meed demand for devices have complex capabilities, such as communicating with mobile devices.
For some drug-delivery devices, the work of administering medication is just one aspect of the product. The convergence of pharmaceuticals and medical technology is producing devices that can track a patient's compliance with medication while also collecting data for clinicians. Devices are not only smaller and smarter, they're also increasingly complex and electrified, explained Phillips-Medisize CEO Matt Jennings. As these design changes shape the new wave of medical devices, medical OEMs are adjusting their contract manufacturing strategies accordingly.
"That has really driven a need for additional [manufacturing] services where we can think through what is the patient population, how does that translate into design and development, and ultimately, the manufacturing of these products," Jennings said.
Jennings started to see the market shift in 2011, when Hudson, WI-based Phillips-Medisize was a smaller operation. At that time, there was an unmet need in end-to-end contract manufacturing services. Phillips-Medisize started making investments to match medical OEMs' needs for a broader scope of manufacturing offerings. Acquisitions brought Phillips-Medisize capabilities in electronics, as well as new global manufacturing sites. In June, Phillips-Medisize acquired Denmark-based Medicom Innovation Partner, a company that has the capability to produce a device with electronics that can communicate with a mobile app. Phillips-Medisize itself was recently acquired by Lisle, IL-based electronic components supplier Molex, which further builds on the capabilities it can offer to medical device OEMs, Jennings said. Phillips-Medisize applies those capabilities in manufacturing complex medical devices, surgical devices, palm-sized diagnostic devices, and drug delivery devices.
While Phillips-Medisize has grown by capitalizing on changes in device design for medical OEMs, PlasTech Engineering has established a defensible niche by going small. The Lake Geneva, WI-based company is a full-service contract manufacturer serving some large customers, but the company has made the strategic decision pursue small medical device makers that aren't served by larger suppliers, said vice president of sales and marketing Robert Fesus. PlasTech's customers range from inventors and physicians backed by funding, to early-stage startups. The company also does work for companies that have spun off from a large pharma or medical technology company without bringing manufacturing expertise along with them. PlasTech's involvement with a customer can range from producing a single component to manufacturing an entire device. The company can handle the regulatory work for early-stage companies that don't have that expertise on staff. After a medical technology company has passed regulatory hurdles and is ready to ramp up manufacturing, PlasTech can also take on various parts of the customer's supply chain, such as sterilization and distribution.
|See Phillips-Medisize (booth #506) and other contract manufacturers at the BIOMEDevice San Jose expo, December 7-8, 2016.|
"We'll do as much or as little as the customer needs," Fesus said. "We have those conversations as we go through the RFP. We can do the whole thing, if you want."
A company that has the savvy and the budget to do its own engineering may also have the flexibility and the budget available to spend on tooling, which the customer owns completely. PlasTech can build custom tools specific to the close tolerances and high-end requirements of certain devices. But injection molds are expensive, particularly to cash-strapped startups. For those customers, PlasTech can also offer the option of using the company's own modular mold frames. PlasTech can't take shortcuts, but the company aims to give small companies different options, Fesus said.
For some medical device OEMs, the options they seek include global manufacturing capabilities. Decisions to manufacture in a particular geographic region can be driven by a wide number of reasons. While speed to market is a near-universal goal for OEMs, the timeline can vary depending on the product, Jennings said. For example, a drug-delivery device that extends the patent life of a drug may have a longer time line than a new product that a medical OEM aims to launch into a market. In other cases, cost considerations drive the choice of where to manufacture a product. Sometimes an OEM chooses a location to align contract manufacturing with the geography where its own development or marketing teams are located or where the product will ultimately be used by patients.
Fesus acknowledges the growth of globalization in medical device manufacturing, but he also sees some contract manufacturing being "redomesticated." For reasons that range from travel and communication challenges to device complexity, he said some medical OEMs are opting to keep the manufacturing of certain components closer to home.
Both Phillips-Medisize and PlasTech can work with medical OEMs at various stages of a product's cycle. Early on in the design of a product, a supplier can help with the company's strategy for the device, Jennings said. But Phillips-Medisize also works with medical OEMs who are ready to start manufacturing. Though the company works with OEMs at various stages of product development, Phillips-Medisize, like most contract manufacturers, prefers to be brought in early on in a product's development. That gives a contract manufacturer time to understand the goals and objectives of the OEM, and the ability to marshal the resources around those objectives. Early involvement can also avoid the need to make changes later in the process, when making decisions or revisiting previous decisions is more expensive. "It's cheapest to do it [early] rather than having to reverse it later on in the process," Jennings said.
Early engagement can avoid major problems before manufacturing is underway. Fesus recalled an instance in which a company contacted PlasTech for help after an FDA inspection found problems with the materials selected for its product. It turns out that the previous manufacturer had chosen automotive plastics to save money. PlasTech took on regulatory work for the company getting the appropriate plastic validated and verified. But the customer's initial materials selection oversight brought additional expense and delays that could have been avoided.
Fesus also advises medical device OEMs to leave room in their budgets for changes. If a customer wants to alter something in the device's design after manufacturing has already begun, even a single change can require many downstream adjustments.
"Your project may seem simple, but it's got a thousand steps in it," Fesus said. "Each step affects the other steps."
Frank Vinluan is a freelance contributor to Qmed. Reach him at [email protected]
Correction: An earlier version of this article incorrectly referred to the Denmark-based company Phillips-Medisize acquired as Medios. The company's name is Medicom Innovation Partner.