The most pressing challenge for pharmaceutical companies looking for a third party logistics provider in Mexico is aligning and tracking their strict cold chain and temperature control requirements across their supply chain and inventory management.

Keeping up to the correct temperature is an emerging trend in pharmaceutical 3PL warehousing, transportation and distribution logistics. According to Pharmaceutical Commerce’s annual Biopharma Cold Chain Sourcebook, the global pharma industry is projected to rise by 41% by 2020.

Products that require refrigerated storage and transportation are worth around $260 billion and increase 65% between 2014 and 2020, while non-refrigerated products are projected to grow by about 34%.

According to the study, the main factors driving this growth is the shift from bulk to “patient-centric” solutions.

Finding a proper inventory management system

End-to-end visibility in pharma products has many dimensions. It is not just about the location of a package, the number of stocks, manipulation and expiration date. Traceability for new products involves checking the correct temperature, security and adjusting to specialized distribution solutions.

According to the organizers of the upcoming pharmaceutical logistics conference in London, outsourcing logistics tasks to third party logistics providers is gaining momentum, but is challenged with increasing regulation regarding temperature and transit.

Bob Hayes, director at Seer Pharma and one of the keynote speakers at this event,  explains the challenges of the recently passed Falsified Medicines Directive in the European Union.

“Not all third-party suppliers understand the threat properly, and contracts are often lacking in sufficient detail, or are not properly managed,” he says.

For that matter, he predicts that pharma products “will be carried by specialist logistics providers – either independent companies, or specialist divisions within larger companies. The inclusion of pharma products as general freight is likely to reduce.”

His concern is managing supply chain integrity in sectors where the industry has no direct control. Thus, he is eager to create awareness on risk management for the distribution in this industry.

Keeping up to the temperature in distribution

The status of the supply chain logistics around the world is forcing the pharmaceutical industry to keep a close look to alignment and visibility. In Spain, a recent pharmaceutical congress explained that keeping up to a proper temperature is more challenging, due to the increasing complexities of logistical networks, with multiple pharmaceutical hubs and logistics operators.

On the other hand, according to Pharmaceutical Commerce’s Biopharma Cold Chain Sourcebook, more speciality pharmaceuticals, where the cold chain transportation is very common, “is gravitating toward a direct-distribution model, with individualized dosages being sent to patients or specialty clinics.”

 Good Distribution Practices

3PL companies in Mexico must comply with strict quality and labelling regulation, as it is required accross the globe..

Nathan De Valck, Cargo Account Manager at the Brussels Airport Company explains at the International Pharmaceutical Industry magazine that countries are increasingly enforcing good distribution practices (GDP) guidelines.

 Operators are looking for “reliable and transparent” temperature controlled solutions, and in his experience, it has led to diversifying specific handling services for products.

In Brussels, 3 out of 4 medical shipments need passive cooling solutions, and 1 out of 4 need active temperature control.

An important area is biopharmaceutical shipments, where suppliers need to invest in temperature and humidity management during transport, but also “significant specialist storage and transportation capabilities.”

“(…)in many cases a mismatch remains between expectations and service offered. We see a lack of uniform implementation through the entire supply chain at the airports globally. Not all stakeholders in the cool chain at origin or at destination of the route are properly equipped to handle temperature controlled products.”

De Valck demands that logistics providers  “adopt a more aligned supply chain model. This means working collectively with all business partners and service providers to craft supply chains for optimal end to end visibility and reliability.

To guarantee the correct handling of pharmaceutical cargo, he recommends companies to choose operators:

  • Who have the right temperature control technology and process in place.
  • With staff qualified in specific training, so people who handle pharmaceutical shipments understand specific transport and storage requirements.
  • A standardized process in the logistics, to keep track of handovers and maintain the integrity of products.

Why is this happening

The Pharmaceutical Commerce’s Biopharma Cold Chain Sourcebook predicts that cold-chain drugs and biologics sales growth “will outpace overall industry growth through 2018.” Consequently, the need for specific care of these components will grow as well.

“Biotechnology products, blood products and vaccines are derived from living cells and, like living cells, are susceptible to injury from excessive heat and often also to injury from freezing, with the accompanying loss of their therapeutic and financial value.”

 The use of a one-size-fits-all  logistical operator is not only a problem but a health hazard. To Pharmaceutical commerce, standardized, “enterprise” solutions could be less complex: they are more consistent and profitable.

However, when it comes to “larger pharma companies and distributors handling temperature-controlled products”, many factors create obstacles:

  • Different cold chain products and processes across multiple distribution centers.
  • Regional variations in bulk and parcel distribution channels.
  • Seasonal variation effects.
  • Variability in intracompany transfers and shipments to large customers, drop shipments to smaller clients, “and even the complexity of “direct-to-patient deliveries.”
  • The lack of national or international service providers across the range of services required.
  • An unavailability of competency centers with logistics professionals meeting good distribution practices and local requirements.

“The end result, for many larger organizations, is a proliferation of processes, technologies and logistics practices (…) Mistakes happen—something everyone in the pharma supply chain wants to minimize.”

 That is why the biopharma industry “is handing off more and more of the shipping and distribution process to third-party logistics providers (3PLs), even as regulatory burdens become heavier”, as companies require good electronic tracking of shipments, near real-time reporting of location and conditions.

Best ways for pharma logistics tracking

According to Pharmtech.com companies are using old and new technologies to improve the distribution process for pharmaceuticals:

  • Phase-change materials to condition the shipment in freezers or refrigeration.
  • Data loggers to take note of the temperature ranges.
  • Radio-frequency Identification, to monitor and collect information.
  • Direct data access for better in-transit monitoring.
  • Temperature controlled pallets, totes and containers for bulk shipments.

 Does your company need to work with specific temperature conditions? How do you find suitable 3PL providers?

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