As highlighted in ‘Transport Intelligence’s vast and varied coverage of Healthcare Logistics’, Transport Intelligence’s Senior Analyst, Cathy Roberson, has a keen interest in this industry.
So, as promised, I held a short interview with Cathy to offer some exclusive insights into progress and content of the upcoming Global Healthcare Logistics Report.
Lilith Gardiner (LG): The healthcare industry is vast and varied (as is Ti’s/your coverage of it!) in terms of logistics, which areas would you highlight as ‘ones to watch’ and why?
Cathy Roberson (CR): Like so many other industries, healthcare/pharma is transforming – expiration of patents, industry consolidation, changes in government regulations and requirements and the growing influence of emerging markets are all having a major effect on not only the industry as a whole but also in terms of logistics.
LG: Are there any areas that you have found interesting to monitor?
CR: From a personal perspective, the cold chain is extremely interesting. For so long, air freight providers have been heavily dependent on high-tech goods. Now, as the high-tech market undergoes its own transformation and with some shifts favouring ocean transport, air freight providers are looking for alternative solutions. Biopharmaceuticals fills that need very nicely – according to various research, 25% of all healthcare products are temperature sensitive and that by 2016, over 50% of the top 50 best–selling drugs will require cold chain transportation (Brief: Growing Demand for Healthcare Necessitates Better Logistics). However, this type of cargo requires special monitoring and handling – as such, many logistics providers such as DHL, FedEx and UPS have developed solutions to address these needs.
LG: You’ve written a number or briefs and blogs about pharmaceutical distribution, what is it that makes this an interesting area to focus on?
CR: Distributors are redefining their role – by globalizing and as competition for logistics providers. The 3 largest US distributors have approached this in unique ways – Cardinal Health has invested heavily in the Chinese market by acquiring several domestic distributors. Meanwhile, McKesson, a US-based pharmaceutical distributor, recently acquired Celesio, an European medical logistics provider. AmerisourceBergen acquired World Courier, a niche air cargo provider that provides the clinical trials transport. In 2013, AmerisourceBergen also signed a 10-year, $400bn agreement with Walgreen, the largest drug retailing chain in the US and with Alliance Boots, which was formed through a merger of the British high street pharmacist Boots Group and the pan-European wholesale and retail pharmacy group Alliance Unichem. Walgreens owns a 45% share of Alliance Boots. This alliance has been dubbed “the Earth’s Drugstore” and will have a very interesting and influential supply chain (Brief: Competition increases in the pharmaceutical wholesale market)
LG: What role can a logistics provider really play within the healthcare supply chain and how has this changed from Ti’s last healthcare industry report, Global Pharmaceutical Logistics 2012?
CR: I think with the last report many pharmaceutical manufacturers were just beginning to recognise the important role logistics providers could provide. Logistics providers have really stepped up their game and have become quite knowledgeable in the supply chain needs of the healthcare industry. As such, outsourcing has picked up particularly as pharmaceutical manufacturers expand into new geographies and may not be as knowledgeable in the transport infrastructure, import/export requirements, regulations and compliance etc. This is where a logistics partner can come in handy.
The healthcare supply chain is getting longer and complicated and a good logistics partner can help by “uncomplicating” the supply chain and create a network solution for the healthcare customer.
LG: What other areas have been developing in the healthcare supply chain?
CR: Technology is also becoming a major focus for pharmaceutical providers, particularly cloud computing. Pfizer has embraced this technology and has creating a global system in which it supposedly has real-time visibility in tracking and monitoring of its goods, including temperature-based, anywhere in the world. Unyson Logistics, part of The Hub Group, assists in monitoring of logistics and transportation partners.
LG: Threats to the supply chain is a concern in all industries, can you identify some of the main threats to the healthcare supply chain that you might investigate in this report?
CR: Counterfeit drugs are a huge threat to the supply chain. In fact, according to the World Health Organisation’s estimates, it is thought that 10-15% of the world’s drug supply (about 1% in the United States) is counterfeit. Each country is grappling with this issue. The US government recently passed the Drug Quality and Security Act which will create a national track and trace system and hopefully cut down on this dangerous problem.
LG: What else can threaten the supply chain?
CR: Properly monitoring temperature sensitive goods while in transit is a big concern. Manufacturers need to do their homework when deciding upon transportation and logistics providers – not all are able to provide the specialised service and handling that temperature-controlled goods require.
Finally, the global supply chain itself can be a risk – political upheavals, natural disasters, infrastructure concerns must all must be taken into consideration when the supply chain becomes further extended.
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I’d like to thank Cathy for setting aside the time to hold the interview as well as thank you for reading, thank you!