Biologistics hint healthy future -- Trend to personalized cures promises to boost 'art' of tight medical shipping

The Commercial Appeal
Oct 15, 2006
By Daniel Connolly

Shipping packages around the nation is difficult, but it becomes harder still when a single box can be worth more than $100,000 and when a patient depends on its timely arrival. Biologistics, the craft of shipping medical equipment or biological materials on a tight schedule, is a highly refined art in Memphis, a city known both as a distribution center and a hub for the orthopedic medical device industry. And the biologistics sector could continue to expand here as medicine moves toward personalized cures, said Steve Bares, president and executive director of the Memphis Bioworks Foundation, a group promoting bioscience businesses. "That's really the opportunity for Memphis to go forward," he said. With personalized medicine still relatively rare, companies like San Diego-based NuVasive, Inc. are using Memphis facilities to distribute traditional medical equipment. In NuVasive's case, that means assembling and distributing complex and expensive spinal surgical kits at a 100,000-square-foot warehouse on Shelby Drive near the Memphis International Airport. The company relocated its distribution facilities from San Diego and shipped its first package from Memphis on Sept. 5. It now ships a few hundred kits per night to hospitals nationwide, taking advantage of a specially arranged 10 p.m. FedEx pickup time, said Noah Blank, the firm's director of customer service and distribution. It's much easier to ship from Memphis than from California, but the task is still highly complex, he said. Workers do a series of checks to ensure that surgical kits have the requisite number of parts, which can range from 25 to a few hundred in some cases, Blank said. Then they send the kits to hospitals nationwide. When the kits arrive at the hospitals, two days before the scheduled surgery, a local NuVasive sales representative and the hospital's surgical staff check them again. After the surgery, the hospital staff ships the instruments and unused implants back to Memphis, where workers sterilize them before preparing them to be shipped out again. NuVasive bills the hospital for every part used, right down to the last bolt. A single tray of the instruments can be worth $15,000 to $100,000, Blank said, and each kit can contain up to four trays. That means the company puts a premium on tracking the goods. "It's full tracking and traceability from when it leaves the building until it comes back," Blank said. There's also a premium on having the kits arrive just in time at the hospitals and at the Memphis warehouse because the company wants to avoid having its equipment sit idle, he said. NuVasive's loan model is very similar to that of Medtronic, the Minnesota-based medical device maker that has its spinal and biologics units here. Indeed, Blank, who runs the NuVasive warehouse, used to work for Medtronic in Memphis, as did several other executives for the firm. That familiarity helped the San Diego-based company settle on Memphis when it was considering sites for a distribution center, said Keith Valentine, the company's president. "We have a good flavor of Memphis and think very positively of the city," said Valentine, who also worked for Medtronic. "I think the city did a fantastic job of welcoming us and being a help with the planning process," he said. In June, the Memphis and Shelby County Industrial Development Board approved a property tax break that was expected to save NuVasive $566,778. NuVasive does not have manufacturing and research facilities in Memphis, though company executives say they may add them. The firm employs about 25 people here. Distribution jobs, even in biologistics, pay relatively little compared to research. But Bares says Memphis should use its distribution strengths as a method to create jobs in the biosciences while continuing to try to attract more research dollars. "The future of Memphis has a lot of logistics built into it," he said. - Daniel Connolly: 529-5296 This article is © 2006- Commercial Appeal, The (Memphis, TN)