The economic downturn, combined with interest on the part of hospitals and device makers to reduce liabilities, risks and costs, is creating opportunities for some materials companies that supply the medi- cal industry.
“The impact of downsizing is helping materials suppliers,” said Larry Johnson, marketing director of health care for PolyOne Corp. The Avon Lake, Ohio-based company has grown its health-care materials business by 70 percent since the end of 2006 and expects to attain a 10 percent-plus growth rate in 2009 despite the rugged economic climate.
Johnson said in an interview at Medical Design & Manufacturing West, held Feb. 10-12 in Anaheim, that new opportunities are arising for materials suppliers that have weathered the economy so far, as some device makers need to replace companies that have gone out of business. Others are looking for marketing partnerships because they have reduced their own sales and marketing staffs.
PolyOne is in discussions with six or seven other companies on marketing partnerships, according to Johnson.
“These companies still need to market even though they have downsized, so companies have asked us to form partnerships to market their products in health care,” he said.
Pressures to lower costs — always present in the medical industry — have accelerated because of the economy, providing materials suppliers with yet another boost.
“Everyone is looking to take costs out, to make products lighter-weight and smaller, to use materials that reduce risks, and for products that increase the speed or throughput in providing hospital services,” said Thomas O'Brien, industry manager for health care for Sabic Innovative Plastics US LLC in Pittsfield, Mass.
That creates the opportunity for material suppliers to provide resins for more in-home diagnostic devices, such as the Breastlight from Dumbarton, Scotland-based PWB Health Ltd., which uses Sabic compounds for the lens and housing and allows women to perform breast exams at home. The product is approved in Europe and Canada and is awaiting U.S. approval.
“Home health care is really explosive,” O'Brien said. “Things are becoming smaller and becoming more portable. It is all about throughput. Hospitals want to turn around patient care quicker and send people home with a portable testing or care device. The health-care trend is from in-patient to out-patient care and to devices that are portable, reliable, lightweight, durable and attractive.”
But cost pressures are just one factor driving cost awareness.
States are cutting back payments to hospitals, and Medicaid decided in October to stop reimbursing health-care providers for adverse patient outcomes caused by their own mistakes have created an extra level of “cost consciousness,” according to the chief executive officer of one contract manufacturer, who asked not to be named.
“It is a growing issue for hospitals,” the CEO said. “They are looking for technology and products that help eliminate potential mistakes — such as hospital-acquired infections — help improve patient outcomes and help reduce the cost of providing care.”
As a result, needle-free connectors and products with antimicrobials are gaining inroads, along with plastic materials with greater chemical resistance to not just lipids and disinfectants, but also to the growing number of stronger cleaning solvents used by health-care providers.
“Cost pressures continue to accelerate for the whole value chain,” said Scott Hanson, global industry leader for medical plastics for Eastman Chemical Co. in Kingsport, Tenn.
“There is a demand for increased performance. There is an increased demand for products with resistance to harsh environments and for products made from chemicals that minimize infection rates.”
That risk avoidance also extends to an increasing interest in products that have phthalate-free plasticizers and products that can replace medical devices that contain bisphenol A.
With those two trends in mind, Eastman introduced at MD&M West a line of BPA-free, medical-grade Tritan copolyester resins that it believes are well-suited for applications such as intravenous components and respiratory and blood-therapy devices.
“We have seen a dramatic increase in companies looking for alternatives to products that contain BPA,” Hanson said. “We expect this to be one of our leading materials going forward, as a direct replacement in applications dominated by polycarbonate.”
That would match the inroads Eastman has made in the past 16 months with the nonmedical grade of the polymer in housewares, baby bottles and sports bottles.
“Chemical-resistance materials should have a bright future,” he said.
He added however, that the first applications for the new Tritan materials are likely to be 18-24 months away, “unless there is a push” from the Food and Drug Administration, which in the fall requested information from medical manufacturers about devices that contain BPA.
Similarly, GLS Thermoplastic Elastomers — a PolyOne business based in McHenry, Ill. — unveiled at the show five medical grades of Versaflex HC thermoplastic elastomers that are phthalate- and halogen-free and can be extruded or injection molded, allowing the same material to be used in tubing and connectors.
Three of the grades offer high clarity for applications such as intravenous tubing, and the other two grades are translucent and provide high-temperature performance for autoclaving.
“The jury is still out [but] the clear trend is for increasing restrictions” governing the use of phthalates and other additives, said Joe Kutka, technology launch manager for GLS.
“Companies are getting away from PVC tubing and halogenated compounds and looking for materials that are halogen-free and phthalate-free, even though they are more expensive,” Kutka said. “They offer less risk, so companies are switching materials.”
“We have developed a product line that targets certain performance parameters,” said Rick Noller, GLS global marketing director. “For companies that decide they want out of PVC, we have an alternative. We replace flexible PVC, but don't really compete” with it.
PolyOne's Johnson pointed out problems some medical companies are having as their suppliers go out of business, “Requalification has always been a problem in medical, but right now it is an especially big problem” with all the plant closings, he said.
“In normal times, our customers are looking at new technologies and materials, but right now people are just trying to stay in business. So they are looking for suppliers who can support them and help them qualify and revalidate materials. Instead of specifying one raw material supplier, everyone is trying to specify more than one supplier.”
Sabic's O'Brien agreed. For original equipment manufacturers, “risk is a big issue … and they want to minimize it,” whether it is in product safety or a potential interruption in supply. “You have to have a proven track record.”