Product Circularity – Confronting the Challenges

In our first article on the Circular Economy model for pharma and medical device industries, we examined its considerable implications and potential benefits in circular economy.

We saw how the overall business case is strong for adopting the circular paradigm to leverage the ‘3 Rs’ of reuse, recycling and reducing material consumption as the way to true sustainability. However, we should also be aware that this is a road with hills, sharp turns, and tricky junctions.

In this second article, we will examine some of those potential obstacles in detail. Again, this summarizes findings in our report on the Circular Economy, based on Erdmann Solutions’ in-the-field experiences with helping companies make the transition to circular device programs.

Logistical Challenges

Perhaps the most complex set of challenges is the logistical one of reconfiguring the supply chain to enable products not only to go out but also come back again. The reality is that just as products are being marketed on a pan-national and regional basis, so they need to be collected and recirculated on the same scale. This immediately raises two issues.

One is that now pharmaceutical companies take responsibility for what happens to medical device products after first use, through to end of life disposal. However, ‘waste’ cannot be traded across national borders, so new forms of networks and declarations are required.

This may involve navigating detailed customs and handling procedures, documentation, declarations, packaging and labelling requirements that may differ somewhat even between different EU countries.

Then, of course, there are the physical infrastructure challenges of organizing the collection and transportation of used devices from hospitals, clinics, patients’ homes, etc., to reprocessing centers or to recycling. These are further aggravated by complex waste coding and the problems of maintaining timeliness due to the dependency on storage times of collection hubs. Establishing and maintaining an efficient and reliable distribution network across multiple countries can be complex and costly – an obvious area for outsourcing.

And this only takes us halfway round the loop. When it comes to placing reprocessed or repurposed devices back into circulation, there are further packaging, distribution and delivery challenges that differing market entry requirements for various countries might complicate. These include registration with national health authorities and local representation.

Overarching the whole logistics challenge including software (traceability) is the constant need for meticulous inventory management to ensure availability while avoiding overstocks, along with now mandatory Track and Trace functions for safety and security.

Regulatory Challenges

Discussion of mandatory requirements takes us into the area of regulatory challenges, which are also varied and complex. Not least among these are the EU’s MDR medical device regulations and similar rules elsewhere that limit the notified bodies designated to certify recirculated devices, leading to bottlenecks and delays. Compliance with these comprehensive and stringent regulations requires significant documentation, quality assurance, and conformity assessments.

More generally, reused or recycled devices must meet stringent health and safety standards set by regulatory bodies like the FDA, EMA and local authorities and while the EU has overarching regulations, individual member states may have additional requirements or interpretations that may need to be navigated specifically for each market with commensurate costs in delays and specific documentation. Further afield, the lack of EU-pattern standardized and harmonized regulations across different regions and countries makes it yet more challenging to implement circular practices on a global scale.

This lack of harmonization can be seen in lack of simple multilingual iconography and signage conventions for recyclable materials, such as glass or metals. It also applies in areas like Sterilization and Safety in ensuring that reprocessed devices are as safe and effective as new ones, or Environmental Impact in assessing the carbon and other footprints of the processes involved in reprocessing, such as transportation and sterilization.

Economic and Technological Challenges

When it comes to counting the cost of going circular, the outlays associated with collecting, cleaning, sterilizing, and testing reusable devices need to be balanced against the savings from reduced raw material usage and waste disposal. While this might show a net deficit, there are also the intangible rewards to be considered of enhanced brand and shareholder value, as well as CSR or EHS gains.

Making the business case to convince stakeholders such as pharmacy associations, healthcare providers, of the value of reprocessed devices can also be challenging. Any safety or reliability concerns are likely to be deal-breakers. Erdmann Solutions’ own experiences in the field have shown us that patients and doctors welcome reliable solutions and are increasingly demanding them from pharma companies as their personal interests and attitudes evolve.

Technologically, significant upfront investments may be required to develop and implement the necessary new materials, designs, processes, and infrastructure for circular practices, but again, these have ‘known unknown’ gains in potential leverage and spin-off applications.

Research required into, say, new materials that are both high-performing and easily recyclable or biodegradable, can have positive impacts across the whole value chain, while any advanced recycling techniques required to process medical devices without compromising their quality and safety may also have applications elsewhere.

Similarly, the sophisticated data management systems required to track circular device usage, monitor performance, and manage recalls or failures can be seen as part of the need for continuous improvement of IT generally.

Cultural and Organizational Challenges

The final set of challenges are even more amorphous, concerning the need for cultural change. Introducing circular economy measures can be seen as a disruptive model that flies contrary to traditional mindsets. This will require determined action to overcome organizational inertia and cultural barriers in organisation, supply chain integration and partnerships.

Any tendency within the organisation to operate in departmental ‘silos’ runs counter to the whole ethos of circularity and its emphasis on cross-discipline collaboration, coordination and knowledge sharing – exactly the attributes needed for any agile business.

Integrating circular practices into existing supply chain operations may similarly require coordination between various stakeholders and alignment of goals and processes. The outsourcing rewards of forming partnerships with third-party organizations, such as recycling firms or logistics providers, also brings responsibilities in ensuring they also adhere to the required standards and practices.

Reaching further outward, gaining the buy-in for circular practices from all stakeholders, including manufacturers, healthcare providers, patients, etc., may involve challenging their own mindsets. Similarly, encouraging healthcare professionals and patients to return used devices rather than disposing of them may require them to rethink their internal practices.

This all adds up to a formidable list of challenges that also contain the clues as to why embracing the Circular Economy is an idea whose time has come: the change in overall mindset involved. Circularity involves holistic thinking and streamlined processes at every level, both of which are great for the organization’s overall culture of innovation, ‘Kaizen’ continual improvement, and its operational efficiency.

The other good news is that these are all challenges that can be overcome and in our final article we sketch out a roadmap towards implementation and a Circular Economy Action Plan.

To read on or skip back to the beginning, just follow the links below:

• Part 1: Embracing the Circular Model in Life Sciences: What is the Circular Economy and what is its relevance to pharma?
• Part 3: Moving to Circularity: The main steps involved in reaching an implementable action plan.

References

1. Novo Nordisk Global – Introducing ReMed™: Driving change to avoid plastic waste.
2. Johnson & Johnson Sustainability.
3. European Federation of Pharmaceutical Industries and Associations – EFPIA White Paper on Circular Economy.
4. Pharma Manufacturing Magazine – Pharma’s shift towards a circular economy.

Resources

Click on From Idea to Innovation for further information.
Click on Johnson & Johnson Environmental Sustainability to learn more.