Ireland’s Device Industry – A Lucky Charm?

4 May 2009 (Last Updated May 4th, 2009 18:30)

In a city that has been dogged by redundancies in recent months, one Irish medical device manufacturer is positive. Cook Group announced it is increasing its manufacturing capacity and developing new information systems to support future development. Nicola Boyes reports.

Ireland’s Device Industry – A Lucky Charm?

Bill Doherty says his company has had many challenges to overcome in the past few months. The executive vice president of Cook Group Europe has been preparing his plant in Limerick, Ireland, for the manufacture of a new drug-eluting peripheral vascular stent.

On a site which has not traditionally dealt with pharmaceutical substances, the manufacture of The Zilver PTX has meant the company has had to look to new systems to meet stringent pharmaceutical regulations while continuing with its existing manufacturing.

"This is new for us to the extent that this part of manufacturing comes under pharmaceutical regulations, because we are dealing with a drug here, so the regulatory environment around a drug is quite onerous," says Doherty.

The drug-eluting stent has undergone clinical trials in various centres throughout the world and is designed to treat peripheral arterial disease (PAD), a condition that is frequently under-diagnosed and that affects one in 20 people over the age of 55 in the UK.

"The first phase has involved an investment of about €25m, which will create 200 jobs over the next five years."

The coating of the stent is intended to help it to keep arteries open for extended periods, which will greatly help those patients who have been diagnosed with PAD.

Doherty says the company has had to construct cleanrooms, create an analytical chemistry lab and look at health and safety and training issues, all the while making risk analysis and looking at how the company will handle it going forward. "The basic systems are here the basic knowledge and know how, what we're adding on, the new element here, is the pharmaceutical side of it," he explains.

Manufacturing of the device is scheduled to begin later in 2009 and Doherty says the first phase has involved an investment of about €25m, which will create 200 jobs over the next five years. The second phase of the project will see the technology developed for other applications, resulting in additional investment and jobs during this period.

"Being able to invest in the manufacture of the stent in Limerick will not only create additional jobs in the short term, but will also form the basis for future technology development," says Doherty.

Sweet tunes for Limerick

Limerick has been struck hard in recent months, the latest estimates putting redundancies at 9,500 throughout the Midwest as a result of Dell shutting its manufacturing base in Limerick. The spin-off has also affected companies that had been supplying goods and services to Dell.

The medical device cluster situated in the city, however, has been resilient in the face of the recession. Johnson & Johnson, which has a subsidiary in the city and Stryker, which produces orthopaedics, appear to be holding up, says Doherty.

"The medical device industry is one of the success stories in Ireland over the past 20 years," he explains. "Right now we have of the order of 25,000 directly employed in medical device companies."

"The medical device industry is one of the success stories in Ireland over the past 20 years"

The cluster is one of the biggest in the world and Doherty says it is on a par with the likes of Massachusetts or Minneapolis. He puts it down to Ireland investing in education so it has the workforce available, being supportive of research and development and the fact it is an English-speaking nation on the edge of Europe.

Being on the edge of Europe, however, does not mean Cook does not have to track its products and maintain tight logistical and support services.

Doherty says the company continually updating shared-service operating systems so they can count product throughout Europe and know whether it is being used or not. "We're developing systems for controlling that so we know when the product has been used and when to ship a new one," he adds.

Hospitals are able to hold product as inventory until it is used, at which point the hospital will be charged for the product. "From the hospital point of view they have products available to them but they haven't incurred the cost but that want to have the flexibility," says Doherty.

Support, logistics and design

Stents come in different sizes, diameters and lengths depending on the blockages they are treating but if they were to stock all of those there would be considerable cost involved. Managing this can be very difficult for medical device companies because their inventory is often in hospitals around the world and because a hospital's primary function is keeping patients alive.

Hospital inventories may not be the best and so product can easily go missing, and at this point it can be difficult to figure out when it was used and who it was used on, according to Doherty.

"What we try and do is provide the logistics and the support for our benefit but also for the hospital as it helps them to try and manage that," Doherty says. "Our people are effectively managing the inventory in the hospital. The hospital doesn't really have to do anything except to agree upfront what they want to have in stock and we try from a logistics point of view to manage that."

"Cook is also looking at developing systems to deal with regulations throughout Europe."

Doherty says all of Cook's order entry system is in-house designed and linked to its manufacturing systems. "It's the same people that are writing manufacturing systems that are writing logistics or supply chain systems so they can assure that all of those systems talk to each other and as the business changes we can change things pretty quickly if we need to."

Overall, it allows a much more integrated system and the company the flexibility of being able to react.

Cook is also looking at developing systems to deal with regulations throughout Europe. A lot of businesses, particularly in Southern Europe, work on a tendering process. A group of hospitals will come together to seek suppliers to tender for products.

"We have developed our own in-house software here to allow us to basically use one software system to manage the tender requirements of multiple countries," says Doherty.

It doesn't sound as exciting as drug-eluting stents but it's a very important part of doing business today in the medical device area, particularly in Europe where there is such a large tender-driven system.