The medical plastics market will remain strong in 2000, and much like other markets, will find processors broadening the services they offer and facing consolidation pressures. "We feel like medical is one of the high-growth markets in the plastics business," said John Williams, vice president of sales and marketing-medical for Moll Industries Inc., based in Knoxville, Tenn.
Moll has added assembly space, secondary operations such as surfacing finishing, and design and development, he said.
"The medical molding community will need to think much more about being a contract manufacturer," Williams said.
About 10 percent of Moll's roughly $450 million in injection molding sales worldwide is in medical, he said.
The aging of the U.S. population continues to drive growth, but that is moderated by vigorous pricing pressure from group purchasing plans and health maintenance organizations, and mergers among medical-device original equipment manufacturers.
"The whole health-care industry is more competitive every day, which nobody likes to hear," said Randy Barko, corporate vice president for custom injection molder Nypro Inc., based in Clinton, Mass. "Hospital buying groups are consolidating. The squeeze is taking place across the board.
"Consolidation in the supply industry [among molders like Nypro] also will be taken. All the customers we do business with are looking for cost reductions and economies of scale."
Medical OEMs want molders to provide more design and development work, and they want suppliers to do more testing and validation of products, Barko said.
That increases the risk on companies such as Nypro because they must put more into product development, he said.
"We've had our share of ones that didn't make it. ... There are companies we've dealt with who have spent millions on molds and tools, and everything is in mothballs," he said.
Injection molder Courtesy Corp. of Buffalo Grove, Ill., has seen slower growth recently in medical because of economic pressures, said President Gerald Sommers.
"Because of the strong push for reduced costs, some companies are not making it," he said. "I had one competitor drop his prices 45 percent. There's no way someone can stay in business over the long term."
Investment house Hicks, Muse, Tate & Furst Inc. bought a stake in Courtesy last year, and the two are looking for more acquisitions.
Other medical molders are looking for growth through acquisition. Merit Medical Systems Inc. in South Jordan, Utah, plans to continue acquiring outside its core market of accessory devices for radiology and cardiology, said Leigh Weintraub, chief operating officer.
Medical device consultant Len Czuba, director of the medical sector at design house Herbst Lazar Bell Inc. in Chicago, expects pressure on PVC to lead to some material replacement in specialty products.
"I do see it happening in the longer-contact, specialty products," he said. "It will be sort of a pull through — once you get more volume out there, pricing will go down, and you can justify" other conversion.
But molder Brevet Industries in Irvine, Calif., which developed a polyurethane tubing connector as a PVC replacement, found that demand never materialized, said Richard Manning, director of sales and marketing.
"It's like bringing up the issue of soft money on the political side," Manning said. "Everyone is going to talk about it but no one is going to do anything about it."
Charlotte Brody, co-coordinator of Health Care Without Harm, said more stockholder resolutions encouraging medical companies to phase out PVC are in the works. She also predicted that a report from the National Toxicology Program will move the industry. But vinyl industry officials predicted there will not be significant shifts.
Czuba also said the industry will be watching closely for a Food and Drug Administration ruling on reuse of single-use medical devices.