The rising cost of health care can be felt all the way through the supply chain, and companies that supply medical device manufacturers are feeling the pressure to add capabilities.
It doesn't look like Washington will provide any additional clarity to the health care situation, so it's highly likely these pressures will continue to drive decisions for the foreseeable future. It already had a major impact in 2018, as many of the expansions and acquisitions that occurred were driven to make suppliers stand out to OEMs.
Industry companies have responded to this pressure in different ways. Raumedic, Datwyler and West did so through expansion—the first two bringing manufacturing plants to the U.S. Others like Trelleborg, Flexan/FMI, Freudenberg Medical and Lubrizol, went out and acquired companies that brought in capabilities they previously did not have, ones that will make them a "one-stop shop."
West realigns footprint
West Pharmaceutical Services Inc. grew on one front, while consolidating on another.
In Europe, the firm opened a 220,000-sq.-ft. facility in Waterford, Ireland, to produce the firm's proprietary elastomeric laminate sheeting used to package insulin for use in pen injectors. It will employ 100 and projects to add more jobs as it begins commercial production.
But in the U.S., West elected to close a contract manufacturing plant in Frankfort, Ind., and consolidate its site in Clearwater, Fla., into a nearby facility in St. Petersburg, Fla. The work in Indiana will be moved to Williamsport, Pa., with 54 employees in Frankfort facing layoffs, West said in August.
Datwyler opens U.S. plant