On the final day of Interphex, Todd and Todd met with Kelly Ng, product manager in healthcare with Epson. Ng discusses some of the market and regulatory factors that have caused the labeling process to become more complex. Ng also focuses on the company’s color labeling solutions, as well as the systems integration aspect of labeling and how this affects patient safety.
Todd S: Good morning. This is Todd and Todd, live from New York, Life Science Connect Radio on location, direct from Interphex day three. Todd, we have an exciting guest up next, but I'm about to weep, because we only have two conversations left before we wrap Interphex 2014.
Todd Y: I know, heartbreaking. But you know what? There's next year. There's always next year, and we're going to be back next year again. There's just so much to learn. Reflect back a year ago, at how different and how much more and how much more integration there is, and it's not going to stop.
Todd S: It's not going to stop. Well, our next guest is going to be a lot of fun. Say hello to Kelly Ng. He's a product manager in healthcare with Epson. Kelly, welcome to the show.
Kelly: Thank you very much.
Todd S: Thank you for stopping by and joining us. I'm looking forward to our conversation. Before we get into a conversation, Kelly, take a few quick seconds and tell us a little bit about you and your background.
Kelly: For Epson, I represent the healthcare business. We've been serving the hospitals and pharmacies now for about six years. We first started doing culling labels as you need it: one patient, one drug, one day, one dosage. This is the penultimate of print on demand. What we found over time, what people were starting to look for were short runs of labels to put on their pharmaceuticals.
We had this one operator of hospitals. They repacked their own drugs, and they brought us in. What they do is they print their daily needs of labels and apply them right there. When you think about it, the pharmaceuticals, yes, they produce tens of thousands of bottles of material, and you do have to label them.
But if you're a distributor, one day you're serving someone in Brooklyn and another day, you're serving someone in Pennsylvania and on and on and on. Sometimes they only order ten, twenty, thirty, forty, fifty items. How do you serve that?
Especially if you get involved in the spot market basis, where you have this customer this week, but not next week, do you buy all of your pre-printed stock with their logo on it, and then what do you do when they go away, or when they change their mind? Or, like right now, with the FDA, when they're still in flux about what they want on a label?
Anything you do in a permanent or high-volume basis is at risk, unless you produce high volume, and you can use them up. What we're bringing to this market is a color labeling solution. You can print one, you can print 5,000, and we believe we have a very good solution for that.
Todd Y: Kelly, I want to take you about eight steps backwards. I'm old enough to remember you can pick up a bottle of aspirin, and you had a brand name and the word “aspirin” and “fifty tablets.” That was it.
Kelly: That was it.
Todd Y: That label was just fine. Everybody knew what the heck it was. Talk a little bit about the market factors and regulatory factors and what other additional factors are just driving all this additional complexity.
Kelly: We have to separate it into two groups. We've got the high volume, the aspirin people, and they could produce millions of bottles a year. For them, once they get their labels set, they just print and print and print, and you don't want to get in the way of that train. There are other groups that have more boutique treatments. You have clinics, either oncology, beauty, or some unique treatment.
They oftentimes want to brand their clinic. Now you have a logo. It's colored. That's one. That's a business aspect of it. Regulatory, the FDA requires certain information, especially with new drugs.
They approve what's on the label, so what you may run and get for your first set of clinical trials, you have to change, because they don't like the wording or there's some content shift. Now you have – what do you do with the old material?
Todd S: You throw it away.
Kelly: Right. I challenged – when we go into plants, not only in pharmaceutical, but in manufacturing, about a quarter to half the materials in their label stock room is obsolete. It's gone. It's money on the shelf that you're wasting. What we can do is, “Why don't you have a blank label and print what you need?”
That's what we're bringing to the discussion, is being able to print what you need, in a very short time. We've coined the phrase, “JITC: Just In Time Color.” That's our business. We've been doing all of that kind of stuff in a variety of ways. You have touched, but not realized it's us. Have you been to a grocery store?
Todd S: Yes.
Todd Y: Does it look like I've been to a grocery store?
Todd S: You mentioned color a second ago, Kelly. Talk about that strategic use of color. I have to assume it has an impact on tracking and safety.
Kelly: Absolutely, very important. We learn from the pharmacy dispensing people. We started working with compounders. As they make the unique compound, there are whole new sets of warnings that go along with it. What they've done in the past is they've had a whole host of labels that are pre-printed.
They get the order, they make the compound, “Oh, I've got to pull one of these and one of these,” and by hand, they build up this ribbon of colorful warnings. We can do that via computer. Keep all that information, and we print it out as you need it. We can print one inch, seven inch.
There's ultimate flexibility and certainty. That's where the patient safety comes in. If you're relying on a person to pull something from a stack, sometimes they forget or they pull the wrong one, whereas if you have a computer tied in, it'll be consistent, and you'll have much better control of the safety.
Todd Y: Let me poke at that a little bit. I absolutely agree with you, that a human being peeling labels – that is terror, very high risk of it. I've been around the computer business for a good chunk of my career, and I know how difficult system integration is.
We're talking about integrating multiple systems, so that I get the right bottle or the right package, or the right whatever, and the right label at the same time. I mean, it is possible to have a bug in the program. Talk about the systems integration aspect of it, as it relates to safety. That's really critical, as you just pointed out.
Kelly: It is the hidden elephant that's out there. You hear all of this EHR, electronic health records, you hear about patient data, you hear about HIPPA. How do you tie that together? A lot of that is still unproven, and I'm not going to claim that we can do it.
What we have to do is work with the various database managers, ERP folks, and help them, by being able to print, at the last possible moment. Work on all your software, do your wonderful things, and we don't have to meet the deadline except for the bottling. That's how we're easing that load.
But we work with partners that can take data feeds and repurpose the data into a color-coded ribbon, or label. Those are stored away in the computer. Once you set it, you can reuse it, and you can add things like serial number, date, patient name, their ID, very specific.
FDA is moving towards serialization, where every drug has a unique serial number, so you can trace it back, if there's any problems. There are three reasons. If there's a problem with the formulation, that's the most obvious. The second is they've been finding fraud, and theft has been a major problem in that market. People bring stuff in from the outside.
You have no tracking of that, and the quality of that. Serialization, the serial number on that bottle, you can have a means to track it back. We had a conversation this morning with one purveyor, which is, “Okay, I have a 20,000-pill bottle. I break it down into 25. I still have to associate the serial number on my 25 back to the original lot.” That's where industry has some work to do.
Todd Y: You've disrupted the market as you've done – there's a change now, versus the traditional method of doing things. Is the market reacting? Are they adjusting to what you're making available? Is every level in the marketplace, from physician groups in clinics to the larger distributors – are they adjusting to this? Are they appreciating scalability of this?
Kelly: Actually, we're just beginning that hunt. Because we were getting the repackers on a one by one basis, we looked around. Is there a larger need within the community? This is our first year here, and we've had many high quality conversations with repackers who have the same problem.
We've spoken to another fellow today – he prints on the order of six million labels a year, but roughly a third of them are in quantities of fifty to 1,000. That would drive you crazy. It would. Buying a thousand labels? That's very expensive. If you use 1,000 a year, how many years' supply, if you buy them in minimum quantity, a four years' supply?
Todd S: Let's talk a little bit about the cost impact. It strikes me that, all up and down the supply chain, I'm putting labels on all of the components and all of the sub-assemblies and all the way through that chain. Give us a feel for what the cost impact is, at various steps along the supply chain.
Kelly: If you look at just the cost of the label, you're in the pennies. You can get upset if your label costs from half a cent to two cents, but consider the impact of the wrong label. We've had two good examples. One was an international producer – not of pharmaceuticals, but of hard goods, and they would wind up with a shipment headed for Argentina on the pallet for Germany.
Todd S: Not good.
Kelly: To fix that, it cost him $400. We were talking to a mail order operation for pharmacy. If they get the address wrong, if their unit fails, it's $400 gone, because once it leaves the facility, they can't take it back in. They have to destroy it, $400 average.
Todd S: Millions.
Kelly: Right. But even if you've got it perfect, 99.999, you're going to have fifty, 100 – let's say it's 50. That's $20,000 a day. That's where efficient labeling, color is helpful. We're not the end-all. We're a facilitator.
Todd S: Kelly, you said this is your first Interphex. Did I hear you correctly? When we sit down with you in a couple of years on this show, at, say, Interphex '17, what will be some of the things we'll be talking about? Are there some trends coming? Are there some innovations? Is there some advance in technology that's going to make you even more of service to the market?
Kelly: What we're hoping, there are things that we can do. We can make our product faster, we can make it more robust, we can make it handle bigger jobs. That's our part. What we want to do is also work with database managers, system people. Make sure that we can print what they want to print.
We're at the end of the tail. We really are. But we want to make it easier for them. You want color? Great. No problem. You want it this morning? No problem. That's what we're getting to. I'm hoping, in three years' time, we'll have a number of large database companies that say, “Yes, we work with Epson.”
Todd Y: We work with Epson.
Todd S: Yes, we do.
Kelly: I'm very pleased with that.
Todd S: Kelly, I hate to say it, but we're about out of time. Before we let you go, how can people get in touch with you, and where can they learn more about Epson?
Kelly: We have a healthcare site. It's an odd name. It's POS.Epson.com/healthcare. That will give you a look at our hardware and some of our existing solutions. We're just now starting our initiative into the repacking and the pharma solution. If they want to reach me directly, Kelly_NG@EA.Epson.com.
Todd S: Alright, Kelly Ng, the product manager in healthcare with Epson, Kelly, it was great to have you stop by. Thanks for joining us.
Kelly: Todd and Todd, thank you for your time.
Todd S: It's our pleasure. Alright, that wraps this broadcast. On behalf of our guest, Kelly Ng, my co-host, Todd Youngblood, I'm Todd Schnick, Life Science Connect Radio's live coverage at Interphex. We'll be right back.