Pharmaceutical Industry Evolution: What is Postponement Packaging?

Postponement packaging provides flexibility, reducing time and cost

What Is Postponement Packaging?

Also known as late-stage customization, the term postponement packaging refers to the supply chain practice of retaining a product in a standardized format for as long as possible.  This involves making the drug product packaging market-specific or possibly customer specific as soon as demand occurs.  The practice of postponement package enables pharmaceutical companies to be especially responsive and efficient to the variability of market demand, more so than in traditional supply models.  Think of postponement packaging as the equivalent of just-in-time manufacturing, but with boxes.

In short, postponement packaging provides the flexibility and reduced lead time needed to handle the volatile demand of smaller volume drug products. As a long-term strategy, this makes sense as the pharmaceutical industry moves towards personalized medicine as well as the smaller patient volumes encountered in dealing with rare diseases and orphan drugs.  Utilization of postponement packaging will enable the use of patient-specific packaging on an individual patient basis, even facilitating prescription drug products directly from the warehouse to the patient.

What Are the Benefits of Postponement Packaging?

  • Helps to eliminate repackaging finished products that were produced for different markets, eliminating additional cost, lead time and waste.
  • Enables products to remain sector agnostic to provide the flexibility necessary to react to market demand fluctuations and regulatory changes, speeding time to market
  • Enables accommodation of variations in requirements from country to country, including language differences and artwork requirements
  • Can be helpful in streamlining operations and enhancing efficiencies, resulting in a savings of time and money
  • Often tends to be particularly effective when dealing with smaller volume products as well as those with relatively unpredictable demand levels

The Pharmaceutical Industry Continues to Evolve, and Along with It, So Does Packaging

While traditional small molecule drug products still have their place as therapeutics, the research and development effort over the past decade has led to new classifications of drugs.  Newer drug products are being developed specifically for specific diseases and their variants.   This often impacts smaller patient populations, resulting in lower volumes of these drugs being needed.  Postponement packaging fits in seamlessly with the need for greater flexibility and cost reduction. 

The packaging of drug products is kept market-agnostic until a market requirement arises to sufficient level at which action is then required.   This produces savings by avoiding the waste generated by repackaging products that had already been prepared to be in regulatory compliance or for a different market. It also reduces the need for working capital through a reduction in the company’s finished goods.

Here is How Postponement Packaging Works:

Pharmaceutical products are not finalized, but rather partially prepared then relocated to a centrally situated warehouse.  Until the products are required, they can simply remain in storage or they can be tailored and adapted as needed then shipped out in days or even hours to meet demand.

Often the market demand for certain pharmaceutical products can be unpredictable.  This may be due to the relatively small volume needed, especially relevant in the case of orphan drugs used to treat rare diseases.  As more large molecule biotech drug products continue to be launched, it can be challenging to ensure that there is a ready supply.  Because biotech drug products are high value, costly and often particularly fragile, they require notably short packaging cycles to safeguard their efficacy.  This makes postponement packaging highly desirable.  Pharmaceutical companies and contract packaging organizations (CPOs) can pack biologics once they are required, increasing the efficiency and enabling customization on a patient-by-patient basis.

Challenges Encountered with Postponement Packaging

Thinking of implementing a postponement strategy?  Here is a look at some of the pitfalls.

Information Availability

Pharmaceutical supply chain partners require regular, extensive insight into patient forecasting data to prevent stock outs and facilitate the required lead time handling the processing and logistics of drug products in and from centralized warehouse facilities.

Information visibility can be facilitated through the use of technology including warehouse management software, customer portals and other relevant systems. It is critical that the information technology systems be able to handle serialization with aggregation, track and trace and comply with FDA DSCSA regulations.

Outsourcing:  Supply Chain Partner Selection

To minimize the need for the costly capital investment in purchasing machinery, packaging equipment and warehouse facilities, many drug manufacturers opt to use contract packaging organizations (CPOs) and/or third party logistics providers (3PLs).  Outsourcing can produce significant positive results. Leveraging these types of specialized businesses enables your company to take advantage of the economies of scale, for example in shipping as well as the experience and pharmaceutical industry expertise and packaging knowledge of seasoned experts. 

Select third party outsource service providers that specialize in pharma.  They should be both knowledgeable about and experienced with ensuring regulatory compliance as well as in the requirements for handling, storing, processing and shipping sensitive, fragile, high value pharmaceutical goods.

Conclusion

Having an actionable, cogent postponement strategy can drug manufacturers time and money if they have thoroughly prepared in advance, foreseen and worked through the pitfalls.  Late stage customization of drug products provides the needed flexibility for case-by-case customization as the demand arises for the respective drug product.  Postponement packaging can reduce capital expenditures and enable drug manufacturers to still be responsive in generating the packaging necessary, even on a case-by-case basis for patients.

Learn more about industry-specific software for your pharmaceutical business:

WAREHOUSE / DISTRIBUTOR

Real-time warehouse management software for the pharma supply chain.

THIRD PARTY LOGISTICS

Third Party WMS manages inventory of multiple pharmaceutical companies.

MANUFACTURER

Pharmaceutical Companies Use Datex WMS for Quality Control.

HEALTHCARE

Datex Healthcare WMS will reduce costs, boost labor productivity and ensure regulatory compliance.

CONTRACT MANUFACTURER / packager

Multi-client inventory management WMS for contract manufacturing companies.

SPECIALTY PHARMACEUTICAL DISTRIBUTION

Ideal for the Specialty Pharmaceutical Distribution Industry.
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