Throughout 2019 there was strong growth across the pharmaceuticals industry. The 2020 COVID-19 pandemic has further highlighted the need for an integrated and well managed pharmaceutical distribution network. A subcategory of the pharmaceutical industry is temperature-sensitive drugs which also includes vaccines. Some are sensitive to high temperatures, others to freezing temperatures.
The growth in sales of these temperature-sensitive drugs is 2x the rate of the industry average. This growth in demand is bringing with it a surge in the requirement for specialist temperature-controlled logistics. These cold-chain logistics companies who are experienced in the handling and controls involved with sensitive bio-pharma products are increasingly in demand. They must provide safe, reliable and cost-effective transportation of highly sensitive products. It is estimated the bio-pharma cold-chain logistics industry will grow 12% year on year and reach $18.6 billion by 2022.
The growth is being brought about by a shift in the availability of precision medicines. Many of these new, high-value drugs are also highly sensitive to temperature fluctuations and have a short shelf life requiring rapid delivery. As these specialized forms of treatment make their way to every corner of the world there are new challenges ahead. Particularly when faced with emerging markets and the lack of infrastructure often found in those areas.
The challenges are being faced at every level, from the manufacturers to the third-party logistics companies (3PL) partners that transport and distribute the pharmaceutical products, down to the clinics and local health workers who administer the drugs. It is estimated the bio-pharma industry loses around $35 billion annually from the failures of temperature-controlled logistics. This cost not only comes from the product value itself but wasted logistics and cost of replacements. It also does not quantify the health risks to the patients receiving the tainted product.
Temperature excursions happen frequently, and they are not always minor!
In the Pelican Biothermal survey, it was found that 44.6% of those surveyed reported multiple temperature excursions in the past 12 months. 16% replied that temperature excursions were a monthly occurrence. Of these, 2 out of 5 (41%) of these excursions were greater than 4°C (39.2°F) and 21% were more than 8°C (46.4°F). The fact that this data exists means that some level of monitoring is taking place. But it is all retrospective and not data which can be acted upon at the time to prevent the excursion.
Driving Factors
Future of Pharmaceuticals
The future of pharmaceuticals features a shift towards biosimilar, tailored treatments. The industry experts who responded to the Pelican Biothermal survey said they foresee the majority of the new drugs coming to market in the next 10 years will be sensitive biologics. Precision medicines, gene based therapies and blood-revied treatments are expected to increase 69% in the next 5 years. These are typically produced in small batches and have time and temperature constraints when it comes to their delivery.
Cold-Chain Logistics
The forecast for 2020 is that as the industry driving factors push the pharma industry forward, we will see the pharmaceutical and biotech companies aligning themselves with specialist cold-chain logistics providers. The existing logistics providers will need to re-think their logistics strategies if they wish to be a part of this new industry. The companies who forge a pathway in this new territory will give themselves a powerful competitive advantage, as they can claim assurances of both product quality and delivery times.
Product Quality and Visibility
As one would expect, biopharma manufacturers invest heavily in their quality assurance programs across their manufacturing operations. This is to ensure a quality and safe product is delivered to the end-user, and also to comply with various government legislation in this heavily regulated industry. What happens though once the product has left their door and is in the hands of the third-party logistics (3PL)? There is no longer the same level of quality assurance that has been provided while under their control. A large proportion of the respondents in the Pelican Biothermal survey said that they see the ability to log location and temperature as an essential part of their operations.
The pressure is increasing from consumers, biopharma and government regulatory bodies that there is a ship too label traceability for products. This traceability will provide proof that the product has been maintained at the approved temperature ranges throughout its transportation, distribution and storage prior to administration to the end-user.
As more time and temperature sensitive drugs come to market, this requirement is only set to increase. Pharmaceutical manufacturers and 3PLs will need to able to leverage data to actively recognize and respond to temperature excursions as they happen. This allows for preventative action to be taken, for spoilage to be avoided, or in the event the excursion can’t be prevented, it can be noticed and replacements shipped sooner. The data can also be analyzed to uncover the root causes and problems within the cold-chain logistics network that need to be addressed. The ability to provide real-time visibility of the shipments and their condition will be vital.
Distribution
The biopharma industry is global network of manufacturers and distribution. Over 50% of the companies who responded to the Pelican Biothermal survey ship products regularly across borders. Only 16.5% said they never ship across international borders. This means there are often several parties involved in the cold chain distribution network, not to mention government bureaucracy and paperwork’s at ports of entry which add to the delays. The majority of shipments are by truck, the air is also highly used. Air transport has traditionally been the primary method for transportation of highly sensitive pharmaceutical products. But there is a growing use of other methods such as rail and sea.
Airfreight has become increasingly more expensive and costs around 700% more than the ocean freight. However, ocean freight just isn’t applicable for many shipments due to the time constraints. Advances in packaging materials and insulation are helping to address the challenges of maintaining the cold chain during sea freight shipping. Airfreight though remains the method of choice for timely delivery of temperature-sensitive pharmaceuticals.
Three Keys to Success
Visibility
The ability to have complete supply chain visibility from the factory to end-user is going to become more and more important as new temperature-sensitive treatments become available. This visibility allows for better quality assurance, protection of your brand, safe medicines for the end-users and compliance with regulatory requirements.
Flexibility
Utilizing logistics partners who have the agility to evolve and keep pace with the evolution of the biopharma industry and their needs.
Investment
It is important to recognize that the investment in a system that provides monitoring and visibility across the cold-chain supply network will payback in a short period of time by minimizing spoiled product.
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