Logistics is increasingly becoming so critical to the future of medicines
Why supply chain resiliency is so critical to temperature-controlled pharmaceutical logistics and how new infrastructure and digital technology tools are going to bring immense value to customers and stakeholders.
Pharmaceutical supply chains have become global and complex. With more outsourcing, new modalities, and novel ways to reach patients, it's critical to ensure that they can withstand shocks. Natural disasters, international trade tensions, cyber attacks, and global pandemics are just a few of the shocks that can immobilize pharma companies. The reality is that the occurrences of such shocks are far more frequent today than a decade ago.
A McKinsey report finds that in the pharma industry cyber attacks and trade disputes create the greatest risk of supply-chain disruption. "That's primarily because of the industry's abundant proprietary knowledge, capital intensity, international data flows, and a moderate level of digitization. Trade disputes pose a threat because of the industry's high levels of international trade and constant pressure to relocate parts of the supply chain for economic and other reasons," says the report.
However, industry stakeholders that include research and development companies, pharma and bio-pharma manufacturers, logistics companies and industry associations are beginning to address those challenges more seriously and find ways to deal with them more efficiently as and when they occur. Adding to these challenges are the rapid innovations in therapies and life sciences products. These innovations require a much more complex logistics and supply chain design.
Cell and gene therapy (CGT) have been heralded as a paradigm shift in the treatment landscape. The complexities of cell and gene therapies stem from a requirement for an end-to-end traceability of viable cells to manufacturing to bedside infusion, and long term follow-up. Further, the need to provide a greater degree of transparency of manufacturing processes to patients and healthcare professionals, including regulatory requirements, makes it critical to think through innovative operating model designs.
A recent report by Pharma.Aero attempted to analyse the potential size of the CGT market and what logistics capabilities it requires besides the constraints and challenges it faces.
"Due to the fact these therapies are based on genetic cell components and life cells related to complex development pathways, the CGT places significant challenges on the current clinical and commercial supply chain. The logistics sector needs to collaborate directly with researchers and manufacturers to understand the specific needs, demands of the CGT products and define together the solutions for safe and efficient transportation," says the report.
Pharma.Aero is a cross-industry collaboration of pharma shippers, CEIV certified cargo communities, airport operators, and other air cargo industry stakeholders.
This development has to be seen within the context of the global value of pharmaceutical goods traded. According to UN Comtrade Database, the global value has grown six-fold from $113 billion in 2000 to $629 billion in 2019. Amid this growth, supply chains have become increasingly global, complex, and opaque. More companies are outsourcing production to contract manufacturers, adding new modalities (like CGT), and exploring novel ways to reach patients. For some products, according to McKinsey, this results in supply chains that are so complex that they start in Asia and circumnavigate the globe twice.
Is the logistics industry ready to serve and support such complex supply chain demands and are they ready to design solutions that address supply chain resiliency?
"The main objective of Pharma Corridor 2.0 is to provide the highest levels of assurance in the quality of handling to pharmaceutical shippers and forwarders through the establishment of pharma corridors between airports with cargo handling communities certified under the CEIV Pharma programme."
Fabrice Panza, Etihad Cargo
Pharma.Aero says that the CGT sector presents unique complexity in terms of supply chain and logistics flows. "Challenges are found in every link of the chain, from planning, procurement to distribution and require simultaneous shipments at different temperatures. The global challenges of the sector including cost control and industry standardisation are subject to a lot of reflection and request significant improvement at the logistics level."
In a scenario like this, air transport is an essential link in the logistical chain and represents key elements on which to capitalize to make flows more fluid. Pharma.Aero is calling for greater collaboration in the industry to facilitate logistical improvements necessary for CGT.
We have seen how the logistics industry raised its performance and responded to challenging demands of the Covid vaccine distribution during the pandemic which continues even now. Going forward, a large portion of life sciences products will need to be moved under very strict temperature management, some of them to be transported under ultra temperatures.
Etihad Cargo, the cargo and logistics arm of the Abu Dhabi-headquartered Etihad Aviation Group, has built significant capabilities to address the demands of this market. It continuously reviews its product offering with a view to enhancing capabilities through the introduction of new features "Our award-winning PharmaLife product is dedicated to the safe transportation of pharmaceuticals around the world. In 2022, we have continued to expand our pharmaceutical capabilities and increased PharmaLife volume by 46 percent, and we have tripled PharmaLife volumes in less than two years," said Fabrice Panza, Manager Global Cool Chain Solutions at Etihad Cargo.
To meet the requirements for transporting dangerous goods in frozen and deep-frozen conditions, Etihad Carrgo's PharmaLife provides premium tailored solutions to handle temperature-controlled conditions from -80 to 25 degrees Celsius via the carrier's portfolio of leased active and hybrid containers.
"The Vertical Integrated Cargo Community (VICC) project will incorporate a significant portion of its internal infrastructure and systems platform to the proper handling and transportation of pharma and other perishables products."
Emir Pineda, Miami International Airport
Miami International Airport (MIA) became the leading airport in the US for international cargo in 2021 processing 2.74 million tonnes of cargo. A significant portion of this is pharmaceutical cargo both in terms of volume and value.
"We believe MIA is well situated in the market to handle not only the current but all types of new pharma products. We work very closely with our cargo community to identify areas of improvements and try to facilitate wherever possible the needs of our airlines and ground handling companies. We also are working with our colleagues at Pharma.Aero on projects to improve the pharma cool supply chain," said Emir Pineda, Aviation Cargo Infrastructure Development Advisor, Miami-Dade Aviation Department.
MIA recorded remarkable growth in the volume of pharma cargo handled at the airport. It recorded close to 20,000 tonnes of pharmaceutical cargo in 2021. "There have been several contributing factors to the growth we have experienced in pharma over the past several years. One major factor of course has been our IATA CEIV certification, which let the global shippers/exporters/importers know that MIA's pharma cargo community knows how to handle transportation of cool-chain sensitive pharma products," said Pineda.
MIA has over 40,000 square metre of on-airport cooler space to handle large quantities of pharma and other perishable goods. Pineda claims that no other airport in the western hemisphere can offer such unique combination of factors.
"Cooling-only programme enables the Opticooler to combine passive and active solutions. During transport in the active Opticooler, passive solutions retain their full runtime. After unloading, they can access fuller coolpack capacities at the destination airport."
Andreas Seitz, DoKaSch Temperature Solutions
To address the rapidly changing demands for temperature controlled containers DoKaSchTemperature Solutions has been expanding its market presence into key pharma manufacturing centres. Availability of containers is a serious problem particularly when the demand is high.
"In order to be able to meet demand better and more flexibly, we have further expanded our global presence over the past two years and opened depots for our Opticoolers at important export locations for vaccines and pharmaceuticals. DoKaSch Temperature Solutions now operates service stations with depots for the Opticooler in Hyderabad, India, as well as in Tokyo and Beijing, and has its own office in Japan. We are also continuously expanding our network through agreements with major airlines. Just in July, for example, DoKaSch and Japan Airlines signed a master rental agreement," said Andreas Seitz, Managing Director, DoKaSch Temperature Solutions.
DoKaSch also increased stock of its temperature-controlled packaging solution and kept a reserve of containers to ensure high availability and to be able to serve unforeseen ad hoc charters. "This forward-looking strategy was particularly advantageous during the height of the pandemic and still is," added Seitz.
Collaboration and supply chain visibility have been key trends that emerged during the pandemic. Logistics industry began to understand the criticality of digitalization across its departments. Companies began to invest quickly into digital transformation projects. Digital strategy became a key priority for top leadership at logistics companies.
For instance, Etihad has enhanced its customer service capabilities with the launch of Microsoft Dynamics 365-based Pulse CRM, which will enable the carrier to meet customer demands more proactively. As the latest step in the carrier's digitalisation and continuous improvement journey, Etihad Cargo has transitioned to the Microsoft Dynamics 365-driven Pulse CRM system to empower customer service agents with more customer-focused data.
MIA has a very ambitious plan to develop a modern cargo infrastructure. "The Vertical Integrated Cargo Community (VICC) project will incorporate a significant portion of its internal infrastructure and systems platform to the proper handling and transportation of pharma and other perishables products," Pineda confirmed. However, it is uncertain, as of now, how much space in square metre will be dedicated to pharma at VICC. "The design which includes robotics and automated storage units takes into account the special needs of the pharma cool chain. The platform being designed is even more important since it will keep track of the temperature at all times while the pharma shipment is transiting the VICC," he added. According to MIA, once completed, VICC will be the leading pharma cargo handling facility in the US.
On the point of collaboration among different stakeholders it is important to note the initiative that Etihad Cargo has been part of to bring the much-needed transparency, traceability and trackability to the pharmaceutical supply chain.
"The HOPE Consortium, in partnership with Abu Dhabi Airports Company (ADAC), Brussels Airport Company and Pharma.Aero, launched Pharma Corridor 2.0 between Brussels and Abu Dhabi. The main objective of Pharma Corridor 2.0 is to provide the highest levels of assurance in the quality of handling to pharmaceutical shippers and forwarders through the establishment of pharma corridors between airports with cargo handling communities certified under the CEIV Pharma programme," said Panza.
Responding to the question on how temperature-controlled container solution companies are building their capabilities to meet the demands of the logistics for new types of pharma products Seitz said that DoKaSch is still focusing on its proven active temperature-controlled packaging solution, the Opticooler. "Nevertheless, we are of course constantly optimizing our product as part of regular maintenance processes, so the Opticooler is constantly evolving. However, battery-powered active containers are currently the most modern and efficient solutions on the market, which why we will keep our main focus and expertise in this area. Therefore, a complete new development is currently not on the agenda," he said.
But Seitz confirmed an upgrade in the cooling-only programme, which enables the Opticooler to combine passive and active solutions. During transport in the active Opticooler, passive solutions retain their full runtime. After unloading, they can access fuller cool pack capacities at the destination airport.