Pharmaceutical industry undergoing supply chain transformation, says UPS survey

UPS's sixth annual "Pain in the (Supply) Chain" survey has revealed that the pharmaceutical supply chain is undergoing significant change amid growing concern about product protection and security and the global regulatory environment.

The survey identifies trends in the pharmaceutical sector by gathering data about the practice and strategic plans of global healthcare executives. Of the 441 executives surveyed in North and South America, Asia and Western Europe, 84% will invest in new technologies over the next five years, 78% will enter new global markets and 70% will transform their supply chain by going direct to providers, retailers and even end-patients.

Product security was cited as a greater concern than cost management for the first time since the survey's inception in 2008 - increasing counterfeit sophistication and poor supply chain disability were the most common reasons for this.

Bill Hook, Vice President of global strategy at UPS Healthcare Logistics said, "healthcare companies are balancing a number of priorities related to capturing business growth opportunities in new markets, protecting increasingly sophisticated and high-value products and navigating a complex regulatory environment worldwide. As the industry shifts to meet new customer and market demands, executives are investing in transformative supply chain strategies and strategic partnerships that will help them achieve long-term business goals."

Pharmaceutical sector of increasing importance to major carriers

With an annual revenue of over $1 trillion, the pharmaceutical industry is big business, and the leading global courier and freight services know it. Each of the major carriers is expanding and developing its business to cater to this sector, seeking a slice of the sales by striving to meet the logistical challenges of managing the supply chain of temperature-sensitive and highly regulated products. 

Not long after UPS opened a high-tech pharmaceutical storage and distribution facility in Hangzhou, China, DHL has launched DHL Thermonet- a new temperature-sensitive air freight service for pharmaceuticals and medical supplies. The new service is an addition to an already considerable network and service offer for pharmaceuticals, the most notable previous addition to which was the opening of a DHL  'Life Science and Healthcare Centre' in Barcelona three months ago. 

A DHL employee working at one of the DHL Thermonet facilities

The new DHL services is offered by the group's Global Forwarding, Freight branch. Roger Cook, CEO of the division, confirmed that the Life Sciences and Healthcare industry was a key sector for DHL and commented "we are heavily investing in new products and services to provide comprehensive solutions to the needs of our customers".

Sales of temperature-sensitive products accounts for approximately 25% of total pharmaceutical sales, a sizeable chunk of the industry's massive annual revenue. DHL claims that the industry's increasing shift of new products from chemical-based to biotech and speciality drugs means that the growth of the temperature-sensitive segment is expected to accelerate, generating fifty percent of sales by 2018. Carriers are demonstrating their intention to capitalise on this potential. 

But there are challenges as well as opportunities. Commenting on the specialist knowledge and capabilites required in the sector, Angelos Orfanos, President of DHL's Life Sciences and Healthcare Customer Solutions and Innovation, commented, "The current situation within the Life Sciences and Healthcare market, facing an increasingly regulated environment, demands a higher level of service compliance. By means of DHL Thermonet, we will meet our customers' requirements, enhance our cold chain activities and expand our market leading capabilities".

Quickacy signs three-year contract with DHL Supply Chain

DHL Supply Chain has scored an agreement another high-profile European client. The successful Swedish pharmaceutical company, Quickacy (Swedish: Snabboteket AB), signed a three-year contract with the international supply chain solutions provider. 

 

DHL Supply Chain will responsible for the packing, distribution and warehousing of Quickacy’s pharamaceuticals which are highly temperature sensitive and will therefore be kept in special DHL Supply Chain facility in Örebro. 

The logistics company has assured that its team are trained in the GDP (Good Distribution Practice) rules and will comply with such. 

Source: DHL Supply Chain