In the rapidly evolving landscape of pharmaceuticals, we delve into the intricate web of supply chain operations within the pharmaceutical industry through this month’s cover story, to arrive at the answers of some rather complex questions. We explore the dynamic interplay between advancements in medicine, regulatory demands, and the logistical challenges that underpin this complex ecosystem. As pharmaceutical companies strive for efficiency, safety, and global reach, understanding the current state of pharmaceutical logistics becomes paramount. This exploration will navigate through the technological integration, collaborations and synergy’s, rise of reverse logistics, and environmental impacts, uncovering both the achievements and the avenues for further enhancement within this pivotal sector.
The pharmaceutical industry – a cornerstone of modern healthcare, is a dynamic realm where the pursuit of scientific innovation intersects with the urgent need to improve and save lives. The role of logistics stands as a critical linchpin in the industry which operates at the nexus of research, development, manufacturing, and distribution.
Historically, the pharmaceutical industry has operated within a carefully orchestrated framework, characterized by meticulous research, stringent regulatory oversight, and meticulous supply chain management. However, the emergence of the COVID-19 pandemic has ushered in a seismic shift in the industry’s operations, compelling rapid adaptations and reshaping the way pharmaceutical companies approach their responsibilities. This transformation has not only exposed vulnerabilities but has also catalyzed unprecedented growth, collaboration, innovation, and global solidarity.
As per Data Bridge Market Research analyses this pharmaceutical logistics market which stood at USD 227.45 billion in 2022, is expected to reach USD 446.61 billion by 2030, at a CAGR of 8.8% during the forecast period 2023 to 2030.
It is evident that the pharmaceutical industry has introduced a new chapter marked by resilience, accelerated development, and a renewed commitment to public health. We try to understand where the industry stands. For that, we start by looking into the challenges faced by the industry and then delve into certain aspects, looking at how the challenges are being tackled, the progress that has been made and where it is heading.
The Challenges
As the pharmaceutical industry advances, it unveils new vulnerabilities and hindrances in the supply chain to tackle. This is largely due to the critical nature of its products, stringent regulations, rising demand for temperaturesensitive drugs, and complex global supply chains.
Some of the prominent logistical challenges include:
Temperature Control and Cold Chain Management: Many pharmaceutical products, especially vaccines, biologics, and certain medications, are highly sensitive to temperature variations. Kamal Jain (Director, Cargomen) points out temperature excursions as a major challenge. Maintaining the cold chain throughout transportation, storage, and distribution is crucial to ensure the efficacy and safety of these products. “Many pharmaceutical products require stringent temperature control during transportation and storage. Ensuring the integrity of the cold chain is required to prevent spoilage and maintain product efficacy,” said Dr. Ravi Prakash Mathur (Vice President, Supply Chain Management, Dr. Reddy’s Laboratories)
Regulatory Compliance: The pharmaceutical industry is heavily regulated by various national and international regulatory bodies. Meeting compliance requirements, including proper documentation, labeling, and adherence to Good Distribution Practices (GDP), is essential.
Bhupendra Kumar (Head of Logistics, IOL Chemicals and Pharmaceuticals) said, “Regulatory compliances are a significant hurdle in managing pharmaceutical supplies due to the stringent adherence required to quality and safety standards.” Further, he highlighted, “Balancing global operations with localized regulations and geopolitical factors is complex.”
Pharmaceutical supply chains which are often global, involve multiple suppliers, manufacturers, distributors, and partners across different countries, co-ordinating these complex supply chains can be challenging.
And, in balancing all this, failure to comply with regulatory compliances can result in recalls, fines, and damage to a company’s reputation.
Product Serialization and Anti-Counterfeiting Measures: Counterfeit drugs pose a significant risk to patient safety and the integrity of the pharmaceutical industry. Dr. Mathur said, “Protecting the supply chain from counterfeit drugs is a constant battle. Implementing robust anti-counterfeiting measures and authentication systems is crucial to safeguard patients.”
Implementing product serialization, trackand-trace systems, and anti-counterfeiting measures requires investments in technology and collaboration across the supply chain.
Short Shelf Lives and Expiry Date Management: Pharmaceuticals often have short shelf lives, especially those that are biologically derived. Managing inventory to prevent stockouts and wastage due to expired products is a delicate balance. Dr. Mathur said, “Balancing inventory levels to meet demand while minimizing carrying costs is a complex task. Efficient inventory management is essential to prevent stockouts or overstock situations.”
Unforeseen disruptive events such as congestion delays, container malfunctions, and human handling errors can be detrimental. Inaccurate forecasting of potential disruptions and improper risk management approaches impair the supply chain and increase the loss ratio. “Developing contingency plans and running Business Continuity Planning as a process are required for mitigating the risk,” Dr. Mathur said.
Moreover, lack in proper communication between stakeholders is also an area of concern, which can hinder the integrity of the product and create a lag in real-time visibility and monitoring.
“Sharing data and information between different stakeholders in the supply chain (manufacturers, distributors, healthcare providers, etc.) is crucial for maintaining the integrity of the cold chain. In some cases, communication gaps and data management issues can occur, leading to potential disruptions,” says Pratyush Kumar (Senior General Manager – Demand Planning and Export Logistics, Glenmark Pharma)
Packaging and Serialization Challenges: Ensuring that pharmaceutical products are packaged correctly to prevent contamination, damage, or tampering is vital. Packaging also needs to accommodate serialization requirements for traceability. Glyn Hughes (Director General, TIACA) said “The industry faces many challenges, from ensuring that adequate cool chain facilities exist at origin, transit, and destination to adequate provision of dry ice where required to flight operational disruptions. The key to addressing all such challenges is communication and advanced data interactions to ensure downstream awareness of shipment details.”
Transportation Costs and Security: Shipping pharmaceuticals can be expensive due to the need for specialized transport, such as temperature-controlled containers. Additionally, the risk of theft or tampering during transit necessitates stringent security measures.
Recalls and Returns: Product recalls or returns are also becoming a rising challenge. Efficient processes must be in place to retrieve products from various points in the supply chain. This requires effective communication, reverse logistics capabilities and timely action.
Training and awareness: Cold supply chain management requires trained staff who know how to maintain the necessary temperature levels and handling protocols. “Poor training and awareness among staff can lead to errors and lost products.” Mr P. Kumar said.
Apart from these, Mr B. Kumar also highlights securing reliable service providers who adhere to high-quality standards for crucial pharma movement as a continual challenge, as a glaring gap exists when it comes to evaluating the quality of services provided by LSP.
Addressing these challenges requires a combination of advanced technologies, efficient processes, strong partnerships, and a commitment to patient safety.
Despite research and scientific efforts, no viable alternative to dry ice has been discovered yet. However, the industry has identified substitutes like thermal blankets. The industry must develop a suitable replacement for dry ice, as this would not only lower freight costs but also help the environment, said Tushar Jani, Group Chairman, Cargo Service Center
Implementing Good Distribution Practices (GDP) and Good Warehousing Practices (GWP) have been proven practices to ensure compliances are met over various geographies and have also withstood the test of time, said Sanjay Sharma, Chief Operating Officer, Coldman Logistics
During transportation and storage our containers protect the product while both the data from the client’s loggers as well as the SkyCell sensors provide real-time visibility and control through our fully data-integrated Secure platform that comes with the rental of the SyCell container, said Marrie Groenveld, Advisor to the board, Skycell
ESG is a big topic in the boardrooms nowadays, even though there is a very demanding position created called the Chief Sustainability Officer (CSO). There is a lot of focus from the investor community and peer pressure which is forcing companies to look at their ESG goals and identify projects to support in reducing the carbon footprint, said Ravi Kumar Thummapalli, Managing Director (India), va-Q-tec
This is an abridged version of the Cover Story Published in the September edition of the Logistics Insider Magazine. To read the complete story, click here.
