Making waves: The challenges of pharma logistics

Published by Ariel Arcebido on

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What are the challenges facing pharma logistics? Especially for temperature-sensitive and time-critical drugs and vaccines. The pharmaceutical industry is constantly innovating its medical products thanks to comprehensive research and clinical trials. These are heavily invested and distributed globally extensively throughout the world. Especially now with the Covid-19 pandemic ravaging across the regions.

However, for the drugs to keep their potency and efficacy, they need to adhere to certain protocols, especially in terms of storage and transportation.

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Given how sensitive they are to moisture and temperature, pharmaceutical manufacturers are especially concerned about temperature control during the storage and transportation of the drugs.

Traditionally long distance transportation of medicines is done by air. In recent years there has been a shift to deliver these products via refrigerated containers. During this kind of pharmaceutical distribution transit, manufacturers have to make sure the products have sufficient storage to successfully the complete cold chain. And, the logistics provider needs the expertise and requirements to ensure successful out-turns.

Transportation of pharmaceutical products has been often associated with long, often hazardous routes. In effect, the need to monitor the temperature-controlled environment continually. Temperature excursions, customs glitches, packaging breakdowns, and packing choices are all the inherent risks that go with the global logistics market. Every pharmaceutical firm should always consider these variables that may arise, and put in place the countermeasures to mitigate them as countless lives are depending on the drug reaching it safely from origin to destination, on time, and it’s quality intact.

AKCP Live shipment monitoring

Cold chain logistics is one of the most common forms of transport as it is a temperature-controlled supply chain, and is designed for delivering medicinal products. However, this mode has unique challenges, some of which are not just connected to the cold chain logistics sector.

The pharmaceutical companies are facing so many obstacles when trying to deliver their products safely and efficiently to their destinations. Not only that they have to face medicine counterfeiting, warehouse theft, and spoilage of vaccines due to improper storage and monitoring. With the Covid-19 pandemic still present in the world, pharmaceutical logistics companies face an ever-changing landscape that needs expertise and better business acumen.

So what exactly is pharmaceutical logistics? It’s the detailed operation of a complex network involving many people, facilities, or supplies involving pharmaceuticals transportation. Pharmaceuticals products are expensive, and lifesaving products, so the pharma logistics services are critical to getting those products to where they are needed the most. Quickly and safely.

Common Logistics Challenges in the Pharmaceutical Industry

Cost of Technology

The pharmaceutical cold chain is getting more complicated, and consumer expectations are rising. Many pharmaceutical companies are moving to outsource their logistics and cold chain management to outsides parties to perform the company’s distribution and fulfillment services. The logistics companies need to invest in new technology in location and temperature monitoring in real-time, as well as storage security.

Operational Issues

Logistic providers perform the “set point” temperatures and may include their independent data loggers to measure product and air temperatures. Hence, the pharmaceutical firms must have a signed contract with the carriers before the cargo goes out of their warehouse to adhere to the different shipment requirements. The products in transit may need additional instructions and checks during transit, depending on product parameters. Clearance by the government authorities in the receiving countries need to be clarified as also providing the necessary standards with due diligence.

Globalization

Globalization has been expanded by international trade and information technology and has narrowed the gap between borders. The dependence of countries with each other and allowed them to easily access and affordability to quality products. And, as a result, there has been an increasing demand for pharmaceutical products. This adds pressure on the pharmaceutical industry to deliver life-saving drugs efficiently and effectively without compromising its integrity.

methods fo transportation for logistics

Lack of coordination

Sometimes, a lack of coordination can be the biggest problem faced by the pharmaceutical logistics industry. The importance of coordination cannot be overstated. People are always in need of medications or drugs of some kind, and if the logistics companies are not coordinated, the customers may end up settling for cheaper or even counterfeited alternatives. These counterfeit pharmaceuticals can do a lot of harm to the patients in need of their medications.

Temperature control

For the most part, almost all pharmaceutical products need to be stored at a particular temperature through the transportation period from origin to destination. The idea behind temperature control is to make sure that the drugs are actually useful to the patients taking them. Some pharmaceutical products can degenerate if the temperature they are stored at is not correct. This is why many logistics companies need to offer temperature-controlled freight options, as Diversified Transportation Services does.

Warehouse management

The global pharmaceutical market has nearly doubled over the last 10 years, leading to an increase in sales volume and penetration in developing nations throughout the world. This means that the need for warehouse management cannot be overemphasized. The pharmaceutical industry must rely heavily on logistics services for this task. The increasingly attractive markets, increased visibility in the chain of supply, and reduction of costs have made this need even more of a reality.

So what are some pharma logistics solutions to these common problems? When pharmaceutical companies work with the right logistics companies, like Diversified Transportation Services, most of these problems are taken care of. With options like LTL freight services, which is a market estimated at roughly $35 billion, temperature control freights, and precise coordination, pharmaceutical logistics are handled without a glitch.

What are the Challenges facing Pharma Logistics?

Price Pressure.

Just like any other company, the aim of pharma companies is to make profits. However, they are facing pricing pressure and generic drug competition as a result of the price controlling policies launched in several markets in the world. And also the participation of governments leads to a strong public market. For pharma companies, this means a portion of the profits must go through government pricing requiring the lowest price. In addition to price sensitivity, the products have to be made available at short notice for government pharmacies.

Inflation.

 Another challenge for pharma companies is the high inflation rate. Prices in medical products are rising due to the global economy and the import dues of various countries. Plus the fact the research and development used resources to manufacture the drugs.

Illegal Medicine.

The biggest challenge that pharmaceutical companies are facing is the problem of illicit medicine. The Pharmaceutical Security Institute reports that counterfeit seizures have increased by 56% over the past 5 years. These fake medicines are not only a big money loser for the legitimate pharmaceutical companies but also poses a public health hazard, the big pharma companies are putting serialization requirements for pharmaceutical products.

Counterfeiting of medicines is a prevalent problem, made worse by online selling. Thus, the desire to make sure the product is safe and genuine has led the pharma companies to re-evaluate cold chain processes to prove e-pedigree.

Government Compliance

Companies are finding themselves under scrutiny to an evolving and growing set of regulations and compliance standards between countries and regions. It places duress on cold chains to comply with regulations without compromising efficiency and cost-effectiveness. Thus, companies have to find innovative ways to take advantage of regulatory changes.

Security

Biologics are expensive medical products, hence, it presents a tempting target for thieves to steal. The cost of the brand name medicines along with endless man-hours of research and development which makes them very valuable. The security of the cargoes has always been part of the cold chain logistics. This means pharmaceutical firms need to put more investment in security systems, both in storage and in transit.

pharma theft

Cost pressure

Pharma companies are in increasing pressure to keep the price of medical products at low price. Most of the consuming public are turning to generic products to keep their daily medicine at a minimal cost. This would leave a big gap in their revenue income. So the challenge is to find ways to maintain their profitability and at the same make it affordable for the public.

Logistics locality

With the global population boom increasing, it is mostly concentrated around big cities. While the distribution networks in urbanized centers are the best, it’s still a problem to fully cover in rural areas, as long distances between different centers and difficult terrains exist.

Due to the difficulties and varying political situations, the need for specialized local solutions and limited capabilities and networks are utilized across different countries. The various political landscape, where the countries have their own inspection and GMP certification regulations, results in country-specific requirements for import and export.

But having local distribution centers with local stock can be risky for the pharma companies. They need to deal with multiple partners and the increasing problem of obsolete products.  It is also very difficult to re-export products from a country and transfers to neighboring countries, which makes it challenging to react to demand changes.

Although people are living longer due to better living, public health still remains to be a problem, especially in third world countries. This gives a significant challenge for pharmaceutical manufacturers and their logistics providers. Obstacles like transport links and infrastructure are still inadequate and require improvement.          

Therefore, it is not surprising that the normal pharma logistics setup requires a local distribution center and local inventory in each country. Most pharma companies usually distribute their products directly from production to the local stock locations in the country.

The Covid-19 Pandemic Challenge

Pharmacies today are in a race to produce a vaccine to eradicate this disease. They are working on unprecedented time and speeding the traditional procedures to test the vaccines. The world is desperate to acquire the vaccine and would do anything to help its citizens. The aim here now is how to deliver the vaccine to the people who need it. That’s about almost every person in the world. You can imagine the kind of logistics will be required to bring the products.

That would involve every delivery company in the world with a centralized network keeping track of it and maintaining the prescribed temperature.   

Local Logistics Solutions

The challenges start with the climate, with large parts of the having different cold, hot and humid weather conditions. In the same situations, dimensions and requirements for the temperature control of these products are multiplying. Temperature control is set for ambient and refrigerated storage, but in reality, there are always temperature deviations. There the observations from monitoring the logistics in some of the countries, it may look good on paper but the fact is storage facilities do not adhere to all the prescribed procedures.

The pharma industry is increasingly in need of temperature-controlled transport, storage, and production, which adds more requirements to operate the cold chain supply delivery.  It’s not unusual for the cold chain logistics providers to meet the demand for both strictly controlled and low temperatures, across a global network of facilities and transportation modes.

 

Sustainability

Sustainability is the key to business growth.it must solidly base on more employment interaction, stronger relationships with the distributors and the consumers, minimizing pollution to the environment, and enhancing community relations. In other words, accountability is a key driver to business growth.

 

Other Distribution Solutions

Lately, many pharma companies are shifting to the use of regional distribution centers (DC), which allow a centralized stock center in the area and easier replenishment of local markets, reducing local stock in the markets.

In order to properly profit from this, regional packaging is essential or capable of postponing deliveries that are needed at the regional DC to adjust to local packaging requirements.

These regional DCs can also alternate from air freight to sea freight for primary transportation by combining the different inbound deliveries. The being is sea freight also offers better temperature control to maintain the refrigeration chain.

Conclusion:

Tomorrow’s challenge for the pharmaceutical industry is to find and develop new medicines that are more tolerant to temperature deviations.

The world of pharmaceutical logistics is an ever-evolving and complex sphere. Companies need to be prepared to meet the challenge and navigate the increasing demands of a more connected global economy. Pharmaceutical companies need to be flexible at managing complexity and risk, reducing total cost, and maximizing efficiencies to increase profits.

The pharmaceutical wholesale and distribution sector are aware of the importance of logistics and the challenges they face within it. Many of the players are focusing on initiatives and optimizing strategic changes to increase efficiency.


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