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Device Label Externalizing or Outsourcing

Device Label Externalizing or Outsourcing. Is it for you?

October 07, 2020 Labeling

If you are single product Device Company or single country multi-product company or a company with mostly low risk devices, externalizing with a partner on labeling work may not add high value to your bottom-line.

As you already know, labeling is an important mechanism for communicating safety and benefit-risk information to patients and healthcare professionals. Labeling errors could pose a significant risk to patient safety, resulting in an instance of regulatory non-compliance. This in turn leads to high costs to the company, including those related to product recall and potential fines, ultimately, damaging the brand reputation.

End-to-end labeling is a critical process as it encompasses multiple stakeholder groups, from Medical and Regulatory to Artwork to Supply Chain and Manufacturing. The entire process could take years, and a single labeling change could affect multiple SKUs in several markets, with each potentially having differing requirements and approval timelines.

In comparison with other functions, labeling has been kept mainly in-house. Why is this case? Is it largely due to the risks of getting it wrong, or the complexity of the process? Is it because service providers have not quite caught on to the opportunity? Whatever the reason, one thing is clear: there is an opportunity to increase labeling outsourcing, and potential benefits are achievable in the areas of cost, capacity, capability, quality and compliance.

Where are the opportunities to outsource labeling operations?

Labeling processes that are defined and scalable

Activities that require more repetitive actions can be governed by SOPs and, once established, can be partly or fully automated with minimal human intervention. These processes, such as labeling submissions, translations, tracking and data entry, QC and gap analysis, require less specialist resources and can be readily outsourced and managed at arms-length within a well-defined process and governance framework.

Where specialist resources are required.

It can make sense, from both an operational and compliance perspective, to outsource activities such as local translations and submissions to “specialist vendors” who have the experience and SME knowledge in the local regions. These vendors could also serve as a resource to keep companies updated on changing local regulations.

When flexible resourcing is beneficial.

Relying on an external vendor can improve capacity management by providing flexibility to accommodate fluctuations in workload and internal staffing capabilities. This is a potential competitive advantage that enables the deployment of high-value internal resources towards activities of greater strategic significance such as labeling strategy and development labeling.

Why might Companies not want to outsource labeling?

Decreased oversight.

Given the risks associated with errors in labeling and the potential cost of remedial measures, the potential for decreased oversight is a major reason why companies may hesitate to outsource. For this reason, it is essential that manufacturer select outsourcing vendors with deep labeling expertise and insights, and proven track records, and proactively leverages technology to achieve the best possible oversight. This risk is also mitigated by having atrue partnership, rather than a transactional model of engagement, with clear governance, oversight metrics and KPIs and continuous improvement processes in place.

Strategic reasons.

Lack of clarity on what are core* (retained) and non-core (transactional) activities, a clear business plan and roadmap for successful implementation, dearth of internal leaders with experience in outsourcing labeling activities and managing outsourced vendors, and unavailability of detailed historical data on operational metrics are some of the reasons mentioned by companies that refrain from outsourcing labeling.

There are a number of options: finding the ‘best-fit’ model is key

Outsourcing your labeling activities to a reliable vendor can provide substantial benefits in the areas of capacity management, cost (mainly through economies of scale), improved oversight, quality and compliance. These benefits are achievable only if the right, ‘best-fit’ model is used. For successful outsourcing, an organization has to develop a well thought-out sourcing strategy, clearly map core and non-core activities, identify an internal team to identify and then manage vendors (who have the required capabilities, global coverage in regions of interest, and proven experience with similar clients), and evaluate risks and setup mitigation plans before initiating the actual implementation. Regardless of which model is chosen, clearly defined processes, a robust governance plan with roles and responsibilities, distinct escalation pathways, and pre-determined milestones will improve the likelihood of a successful implementation.

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Labeling