BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT
For years, regulatory programs around the world have required manufacturers to reduce certain discharges and emissions from industrial facilities. However, regulatory mandates have been less focused on addressing long-term sustainability of products and the processes used in their production.
Recently, however, it has been corporationsnot regulationsthat are driving certain industries to adopt more sustainable business models.2 Companies are discovering that managing their carbon footprints and determining their impact on the surrounding environment is not just good environmental stewardshipit is also good business. Although consumer-based markets have been the primary proponents of this business model, the medical technology industry could benefit greatly from embracing the notion of sustainability.
Photo by JUPITER IMAGES
Sustainability and Its Barriers
In 1987, the World Commission on Environment and Development published a report titled Our Common Future, which later came to be known as the Brundtland Report.3 This report established the guiding principles for sustainability by defining sustainable development as "development that meets the needs of the present generation without compromising the ability of future generations to meet their needs."
This principle can further be defined as a framework of three overarching objectives based on meeting environmental, economic, and social needs. The goals of sustainability are to balance these three objectives to the greatest extent possible and to avoid exploitation of one for the benefit of another.
Throughout history, entire societies have succeeded or failed based on their ability to live within their social, economic, or environmental means. Just as the choices made by a society dictate its likelihood of survival, the choices made by a designer or engineer can determine the survival of a product or its manufacturer. The act of balancing environmental, economic, and social factors not only builds sustainable businesses, but also efficient, effective businesses.
Historically, the medical device industry has been slower than consumer-based industries to adopt new product design philosophies, new technologies, and alternate manufacturing methods. Strict FDA regulations, legal liability, and rigorous device performance requirements promote an adherence to proven methods and the status quo. Requirements such as biocompatibility, high-temperature or caustic sterilization modalities, and long-term stability restrict the use of new or innovative materials. In addition, desires to mitigate contamination, avoid reprocessing, and derive continuous revenue have impelled numerous medical device companies to espouse disposable products as their primary source of revenue.
Hospitals in the United States alone produce 2 million tons of waste per year, of which 85% is nonhazardous and potentially recyclable.4,5 Much of this waste can be traced to device packaging and disposable plastic parts used for surgical, drug-delivery, or patient care applications. And although disposable medical devices constitute a large volume of waste, electronics and diagnostic devices tend to supply the majority of the toxic waste. For example, lead and mercury are still commonplace in printed circuit boards, blood-pressure monitors, and fluorescent lighting used in surgical electronics and operating room capital equipment.
While consumer industries are promoting sustainable products as market differentiators and key selling points, many medical device manufacturers see sustainability as another set of regulatory requirements, not as a revenue opportunity. In fact, this perception is well on its way to becoming a reality, as the time for medical device companies to voluntarily pursue sustainable initiatives is waning. Such practices may soon become a necessity, as indicated by evolving international requirements.
Overseas Regulatory Drivers
A variety of drivers is beginning to coax the medical technology industry toward more sustainable design and operation practices. The majority of these drivers can be categorized as internal or external forces. Internal drivers may include company decisions related to issues such as efficiency, time-to-market, shareholder returns, business goals, corporate policies, stewardship, or the company's corporate vision or mission. While many of these internal drivers are voluntary in nature, external drivers are typically imposed on the business by customers, regulators, trade requirements, product requirements, energy costs, or new technology.
Several external drivers have the potential to dramatically affect the business practices of medical device companies, particularly those with products classified as electrical or electronic devices. For example, the European Union's Waste Electrical and Electronic Equipment (WEEE) directive requires compliance with specific labeling, reclamation schemes, registrations, and instructions for end-of-life dismantling and recycling.6 The directive affects medical devices meeting the definition of electrical and electronic devices in most EU nations.
In addition, the EU's Restriction of Hazardous Substances (RoHS) directive requires manufacturers of electrical and electronic equipment to remove certain toxic metals, specifically mercury and lead, as well as certain flame retardant materials commonly found in flexible polyvinylchloride (PVC) products.7 Although medical device manufacturers are currently exempt from the EU RoHS regulations, the exemption is under review and could be lifted as early as 2010.8
There is no RoHS exemption for medical devices in China, where a more restrictive regulation referred to as China-RoHS became effective in 2007.9 China-RoHS does not yet restrict the use of the EU RoHS toxic metals and flame retardants. However, it does require self-disclosure and imposes strict labeling requirements when electronic and electrical products contain these toxic metals and flame retardants.
Regulatory drivers are not limited only to electronics and electrical products. The EU is also moving to ban many hazardous materials, promote large-scale recycling, and encourage energy efficiency by passing further legislation. The EU's Registration, Evaluation and Authorisation of Chemicals (REACH) regulation, which went into effect in 2007, calls for the regulation of more than 30,000 chemicals.10 Meanwhile, the Energy-Using Products (EuP) directive will pose further restrictions on wasteful or hazardous products and manufacturing processes.11 While currently in place as a voluntary directive, some European nations are expected to adopt EuP legislation as law over the next year. Loss of market share in Europe due to noncompliance would be devastating to the bottom line of device manufacturers operating in this key market.
U.S. Drivers of Green Design
Although the United States has lagged in the passage of similar directives, many experts agree that the adoption of environmental requirements in the U.S. market is only a matter of time. As the product development cycle for medical devices tends to be considerably longer than in many other industries, devices under development now may be subject to such regulations when they are launched to the market. Designing new products and preparing current products to meet impending environmental regulations will provide significant cost savings in retooling, redesigning, and retrofitting products in the long term.
Regulations aside, medical device manufacturers operating in the United States are already feeling pressure to adopt sustainable design practices. In the U.S. healthcare system, group purchasing organizations (GPOs) and large hospital conglomerates are beginning to encourage the use of healthier, greener medical products. Desires to reduce waste, mitigate liability, improve safety, and publicly support the theme of environmental stewardship have driven GPOs to use their buying power to influence the medical device industry to embrace sustainability. Many GPOs gear their purchasing preferences toward eco-friendly design factorssuch as mercury-free, PVC-free, or lead-free productsand products that conform to EU standards. Device companies that can meet the challenges of GPOs' purchasing preferences will have a greater chance of winning lucrative, long-term contracts.
The Value of Green Practices
Preparation for future environmental regulations and opportunities is imperative for medtech manufacturers. However, many device companies see the previously described regulations and factors as distant concerns that have little effect on their current bottom lines. Nevertheless, advanced and active employment of sustainable design practices can provide significant rewards and savings immediately.
For example, reductions in product size and weight, lowering of assembled part counts, and minimization of packaging are all considered sustainable improvementsbut they also have a direct effect on lowering product cost. Meanwhile, improving manufacturing efficiency, reducing or eliminating hazardous materials, and minimizing waste will save on disposal costs, raw materials, and energy usage. The tenets of good quality systems management and environmental management are inextricably linked.
As fuel prices continue to rise to record levels, understanding and evaluating transport and logistical costs as part of the product design process are also becoming critical considerations. Evaluating the product life cyclefrom concept through manufacture, transport, use, and disposalcan expose inefficiencies, unintended waste, and hidden costs that quietly erode profitability. Implementation of life-cycle analysis methods, development of formal environmental management systems, and performance of supplier audits can provide valuable insight into the true costs of a finished product, not just those present on a bill of materials.
Life-cycle analysis and tracking tools can be valuable to both device manufacturers and their customers. Understanding the origins of raw materials; the input, output, and byproducts of manufacturing processes; and final product composition can mean the difference between a successful device launch and the arduous process of revalidation or even product recall. Furthermore, product life-cycle design techniques can provide higher quality and lower cost products to customers by minimizing manufacturing waste, streamlining supply chains, and improving product reliability.
Sustainability in Practice
Whether sustainability drivers are internal or external, they all have the potential to negatively or positively affect medical device manufacturers. How companies choose to respond to such drivers may make the difference between grasping market opportunities and losing them to competitors.
A number of major consumer product companies have embraced the tenets of sustainable design in recent years. Nokia, Toyota, Nike, and many others are adopting them into their overall missions and philosophies, thereby improving profits and public relations in the process.12 Direct financial benefits of embracing sustainability can be seen in the booming hybrid car industry. Within the past year, Toyota has overtaken General Motors as the world's largest car manufacturer. Experts surmise that much of this success is derived from increasing sales of hybrid and fuel-efficient vehicles and a drastic decline in sales of fuel-inefficient sport utility vehicles.13
Although sustainable design is still emerging as a business strategy in the medical device and pharmaceutical industries, several major manufacturers have already committed to employing sustainable practices in their design and manufacturing (see sidebars). End-of-life equipment reclamation programs such as those instituted at GE Healthcare, the development of product life-cycle management software at Siemens, and voluntary compliance with a variety of environmental standards by Novartis and Philips are just a few of the tactics being used by corporations to differentiate their devices from the rest of the industry.
Sustainable design is not just design for the environment; it is a business strategy that promotes the creation, manufacture, and management of well-engineered products that benefit a manufacturer's bottom line in the short term and lay a foundation for continued success in the long term. Such a philosophy holds true not just in consumer-driven markets, but also in the highly regulated medical technology industry. Although many of the environmental requirements that govern consumer and industrial products do not yet apply to medical devices, companies that choose to see sustainability as a business opportunity, rather than a barrier, will be leading the marketnot just scrambling to keep up.
1. P Engardio, K Capell, J Carey, and K Hall, "Beyond the Green Corporation," Business Week (29 January
2007); available from Internet: www.businessweek.com/magazine/content/07_05/b4019001.htm.
2. M Borden, "50 Ways to Green Your Business," Fast Company no. 120 (2007): 90; available from Internet:
3. Report of the World Commission on Environment and Development: Our Common Future (New York City: Oxford
University Press, 1987).
4. L Brannen, Preventative Medicine for the Environment: Developing and Implementing Environmental Programs
that Work (Concord, CA: Center for Health Design, 2006); available from Internet:
5. "Reusable Totes, Blue Wrap Recycling and Composting: Environmental Best Practices for Health Care
Facilities" (Washington, DC: Environmental Protection Agency, 2002); available from Internet:
6. "Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on Waste
Electrical and Electronic Equipment (WEEE)," Official Journal of the European Union L37 (February 13,
7. "Directive 2002/95/EC of the European Parliament and of the Council of 27 January 2003 on the
Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment," Official
Journal of the European Union L37 (February 13, 2003): 19-23.
8. "RoHS Exemption for Medical Devices is Under Review," Green Supply Line [online] (August 25, 2006);
available from Internet: www.greensupplyline.com/howto/19230028.
9. "Management Methods for Controlling Pollution by Electronic Information Products," (Ministry of
Information Industry Order #39) (Beijing: China Ministry of Information Industry, National Development
and Reform Commission; Ministry of Commerce; General
Administration of Customs; General Administration of Industry and Commerce; General Administration of
Quality Supervision, Inspection, and Quarantine; and State Environmental Protection Administration,
10. "Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006
Concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH),
Establishing a European Chemicals Agency, Amending Directive 1999/45/EC and Repealing Council
Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive
76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC,"
Official Journal of the European Union L136 (December 18, 2006): 3-280.
11. "Directive 2005/32/EC of the European Parliament and of the Council of 6 July 2005 Establishing a
Framework for the Setting of Ecodesign Requirements for Energy-Using Products (EuP) and Amending
Council Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC of the European Parliament and
of the Council," Official Journal of the European Union L191 (July 6, 2005): 29-58.
12. "The Global 100," Business Week (29 January 2007); available from Internet:
13. "Toyota 'World's Largest Carmaker,'" BBC News [online] (26 April 2007); available from Internet:
Christopher Kadamus is a principal design engineer with Cambridge Consultants Inc. (Cambridge, MA). Wayne Bates, PhD, PE, is engineering manager at Capaccio Environmental Engineering Inc. (Marlborough, MA).