Home to Warsaw, IN—also known as the "Orthopedic Capital of the World"—Northeast Indiana boasts $12 billion in total regional orthopedic device industry revenues in addition to nearly 100 life sciences, orthopedic, and medical device companies. Looking to leverage and support these local thriving orthopedics and life sciences sectors, Northeast Indiana's Whitley County Economic Development Corp. is now launching an initiative to cultivate a medical device and disposables packaging cluster.
Boasting the presence of such top orthopedics companies as Zimmer, Biomet, and DePuy Synthes, the region is ripe for the development of a medical packaging cluster, according to an industry report, "Securing a Strategic Advantage: Developing Medical Device Packaging Capabilities in Northeast Indiana." Despite the area's solid infrastructure and proximity to a large concentration of medical device companies, however, these opportunities are simply not being capitalized on and the need for local service providers is evident.
"Indiana and other Midwest companies are currently sending their products hundreds, even thousands, of miles away to Tennessee, Ohio, Illinois, even California, to be packaged, sterilized, and shipped," says Brian Emerick, president and CEO of local company Micropulse in a press release. "Both local and regional medical device companies could save considerable time and money by engaging with a Northeast Indiana-based packaging operation."
And the timing couldn't be better for a medical device packaging hub to materialize, according to the research. It found that the impending medical device excise tax has medical device manufacturers focusing on cost-cutting measures, including the outsourcing of 'non-core' elements of manufacturing, such as packaging and sterilization. Consequently, local packaging companies could reap the benefits of such outsourcing decisions while manufacturers cut costs and keep operations local.
In order to go the outsourcing route, however, medical device manufacturers must be convinced that "the financial gains offset internal concerns about quality, traceability, and loss of control," the report found. It further identified a critical concern as: "My packaging engineers want to look out on our shop floor and see product moving efficiently, safely, and meeting quality standards firsthand. What are you going to do to make up for that if we outsource?"
Thus, packaging companies would need to address these key concerns and offer the capabilities OEMs require. Local medical device manufacturers specifically identified the following needs from packaging providers, according to the report:
- Precision die-cutting, multilayer laminating, and slitting to tight tolerances
- Cleanroom capabilities
- Access to medical-grade adhesives
- Testing and validation capabilities
- QA capabilities and processes that minimize the possibility of Class 1 product recalls attributed to compromised or defective packaging
The potential uptick in local outsourcing opportunities and the concentration of potential clients are key angles for attracting medical packaging companies to Northeast Indiana. Furthermore, the region offers a highly skilled workforce with a depth of expertise in the medical device industry, regulatory affairs, and even packaging. The local talent pool may also expand in the coming months and years in the face of a struggling economy and the controversial device tax to which many layoffs are being attributed. "Potential or real layoffs within orthopedic OEMs, including outsourcing of packaging operations, creates new workforce asset/availability," the report states.
For more information on Indiana's medical device industry, check out a regional focus feature on the region from MPMN's archives titled, "Indiana's Medical Device Mecca Has Good Bones." --Shana Leonard
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