Regulations put maximum impact on Pharma Logistics

Of the many global trends that impact global healthcare industry and its supply chain; changing or increasing regulatory compliance tops the list. In the absence of a single universal regulation on pharma logistics, the global logistics industry is working around increasingly tightening regulations implemented by regions and countries.

The lengthening of global supply chains and shortening of order cycle times has made airfreight a vital mode in the global supply chain. This is particularly true of the pharma industry that depends on a well managed and robust supply chain management right from the laboratory to the patients in hospitals around the world.
At a recent air cargo conference Steef Van Amersfoort, chairman of the air transport at the Dutch Shippers Council and veteran pharmaceutical-logistics executive said that the “pharma defection to ocean is a ‘wake-up call’ to airfreight”. It is a fact that the airlines are looking out for premium products to get back to either claim the lost revenue from the 2008 global recession that hit the industry or to increase their revenue.
Amersfoort claimed that there is a massive difference between what pharma shippers need and expect, and what the airlines actually deliver. “To be honest, there aren’t a lot of airlines offering time and temperature sensitive (T&TS) shipping services that I am confident of,” he said. “I don’t want to be told ‘don’t worry’ about my shipment. I need to know everything about the service. I need to know about the hardware, but also about its organisational processes, so I can see it is properly a part of the company. I often see that the airlines control the service themselves at the origin and during transit,” he added. According to him, even within the airline, not everyone always knows about the specifications of the service. “If you offer a service you have to ensure it can be delivered to every part of your network at the same level of quality and reliability,” he warned.
In the increasingly regulated environment of pharma import and export, specifically regulations related to the transport of medicines and particularly temperature sensitive pharma products, Pudong International Airport Cargo Terminal (PACTL) is building up facilities to match up to the expectations of the pharma industry. “It is important for us to ensure that sufficient capacities and the highest quality standards are in place in order to supplement the product portfolio of our 52 airline customers. As providing a state of the art infrastructure eligible for the handling of temperature sensitive goods is essential, we have been investing in additional freezers and coolers gradually throughout the last years,” said Lutz Grzegorz, vice president, PACTL. The company is building a new ambient cool chain facility – the first one of its kind in mainland China. “We are doing so, because our goal is to establish a pharma gateway at Shanghai Pudong International Airport,” Grzegorz added. PACTL handles 20,000 tonnes of temperature sensitive pharmaceuticals and other health care products of which the majority requires ambient temperature conditions. Grzegorz claims the growth rate seen in this segment year on year is about 25 percent on average.
Grzegorz of PACTL said that it is a fact that pharma cargo is moving to sea freight to a certain extent as the air cargo business cannot compete rate wise. “However, it is important for the air cargo industry to further strengthen the cooperation between all parties involved in the supply chain in order to achieve a significantly higher quality, faster dwell times and complete information transparency,” explained Grzegorz. As part of this, PACTL is supporting this issue by investing in its cool chain facilities on the one hand and extensive staff training and therefore enhanced customer service on the other hand.
Temperature controlled pharmaceutical products have developed into important growth drivers of Lufthansa Cargo’s sales. Their rising importance is the result of a long-term strategy by the management and large investments in infrastructure and personnel. DoKaSch cool containers utilized by Lufthansa Cargo for pharma transports document permanently key parameters like internal and external temperatures.
In October last year American Airlines Cargo (AA Cargo) expanded its global temperature-sensitive logistics capabilities as it began accepting the CSafe RKN container, which is an advanced, compressor-driven refrigeration ULD which provides precise, temperature control of +4°C to +25°C (+39.2°F to +77.0°F). “With ExpediteTC° AA Cargo offers an exceptional experience for customers who are shipping temperature-sensitive products. The addition of CSafe to our cold chain program provides customers with more options for their shipping needs,” said Tom Grubb, Manager of Cold Chain Strategy for American Airlines Cargo. “This technology is desired by our customers for accurate temperature management of delicate shipments in order to protect and maintain the efficacy of potentially life-saving products for patients.” AA Cargo continues to see strong growth in its ExpediteTC° cold chain program which currently serves 157 cities in over 45 countries, worldwide.
If there is one thing that is supporting the logistics revolution in pharma industry, it is certainly the rapid innovations brought by technology. Think about insulin. Once stored at a critical temperature, the biological effectiveness is pretty much spoiled. Thus, a permanent temperature measurement is essential. “We therefore not only established sufficient storage facilities providing the temperatures demanded, but also a control system to ensure the initiation of corrective actions as soon as the temperature exceeds any limit defined. There’s even a separate control center for the cool chain facilities with all important information on hand. Customers automatically receive status updates with real time data,” said Grzegorz.
Brussels airport has become the first European shipping hub to adopt a cold-chain certification programme for pharmaceutical cargo that industry group IATA claims “goes beyond” GDP requirements. The Center of Excellence for Independent Validators (CEIV) certification means that ground handlers, freight forwarders, truckers and airlines that use the Belgian airport will be trained how to ship pharmaceutical products in temperature controlled conditions.
Opening the first CEIV pharma community of Europe at the Brussels airport in December last year Tony Tyler, director general and CEO of IATA, stressed on the importance of the cold chain transportation, which according to him is “a growing business opportunity for air cargo”. “This sector is facing increasing regulatory burdens which are adding cost and complexity. The CEIV Pharma offers a solution to this issue,” he said.
The fifth edition of the Biopharma Cold Chain Sourcebook analyzes economic, regulatory and technological trends in the shipment of temperature-controlled products. The just-published report calculates that current (2014) expenditures for commercial shipments will be $8.36 billion, rising to $10.28 billion in 2018. By comparison, last year’s report estimated the 2013 cold-chain business to be $7.5 billion, rising to $9.3 billion in 2017.
“Solid growth in the value of these services has been occurring for years now,” says Nicholas Basta, author of the publication, “and the drivers of that growth remain the same: a greater emphasis on biologically-originated drugs, and a tightening regulatory climate for both in-country and international drug shipments.” In particular, he notes, 2013 saw the establishment of Good Distribution Practices (GDPs) in the European Union; those GDPs, which require closer monitoring and documentation of shipments, are the model for recommended practices worldwide.
A soon to be organized logistics conference, a part of BioAsia 2015, in Hyderabad, a key pharma manufacturing city in India, is expected to focus on active pharmaceutical ingredient (API) manufacturing and finished products distribution. The main aim of this conference is to discuss and deliberate on the pros and cons of the current supply chain management and to come out with ways and means to build a robust supply chain management that is safe, cost effective and foolproof to counterfeiting.
According to P V Appaji, director general of Pharmexcil, it is important to have a robust and fool proof supply chain management for Indian companies. As more and more Indian companies looking to expand and penetrating newer world markets, an agile, customized and cost-efficient supply chain management plays a vital role in ensuring safe and effective product delivery. “In the absence of a fool proof supply chain management, the export consignments of many Indian pharma companies have been intercepted and distorted by some unscrupulous elements to malign the brand image of Indian pharma,” said Appaji.