Cold Comfort for Pharma

Pharmaceutical Technology Europe

Pharmaceutical Technology Europe, Pharmaceutical Technology Europe-08-01-2005, Volume 17, Issue 8

Cold chain management is becoming pivotal to success in the pharmaceutical industry.

The pharmaceutical industry faces the challenge of getting its products to market faster while maintaining the quality and safety of its products. As more temperature-sensitive products continue to be developed, the demand for cold chain management — driven by quality and regulatory requirements — means that transport and logistics service providers have to meet the challenges involved.

Magnus Welander

In the last few years, pharma companies have spent a lot of time and money working with partners in logistics to improve cold chain management. Initiatives with various cold chain associations, such as the Cold Chain Committee and the Pharma Logistics Forum, show that the industry is aware of the challenges involved. This has also meant that cold chain companies have become an integral part in the development and implementation of transport solutions alongside the larger, global logistics companies, with the air cargo industry sitting at the heart of the pharmaceutical supply chain.

The care taken by manufacturers to ship pharmaceuticals globally means that consumers can expect their products to be safe. However, this comes at a significant cost and the potential risk of a product not being kept at the correct temperature in the transport chain — leading to immediate and significant revenue losses. Such an incident could mean increased product time-to-market, damaged reputations, and increased demands on production and transport capacity because replacement products need to be produced and shipped. If competing products exist, the manufacturer could face loss of market share.

Challenges

The biggest challenges for a shipper are the competition for margins among the various service providers in the logistics chain, and the lack of transparency of responsibilities as the products are being handed over from one provider to another along the transport chain. Air cargo has historically been a commodity industry, but is now offered in a complex environment with numerous carriers and agents not only competing on price, but also by differentiating the service they offer. This complex and nontransparent environment makes it difficult for a shipper to choose business partners, especially for the movement of temperature-sensitive air cargo because big differences exist between the way these products are being handled by carriers. To overcome this issue, pharmaceutical companies set a clear trend of working in partnership with established forwarders, carriers and specialty packaging companies to achieve the transportation quality standards their products demand, without increasing the total cost of the supply chain.

This is not a new phenomenon. In the 1990s, many pharmaceutical companies started to develop creative in-house developed solutions, building packaging solutions to try and cope with their own specific requirements, or trying to overcome the difficulties by defining clear specifications and working with defined sets of suppliers to build customized solutions.

Cool Customers

The segment of the pharmaceutical industry requiring 2–8 °C or room temperature (usually 2–25 °C) conditions is increasing. Leading insulated box suppliers are developing increasingly sophisticated products with layers of diverse materials and gel-packs to give them greater ability to withstand extreme conditions.

Innovative cold chain management companies are developing systems that not only keep the product cold, but also maintain the autonomy and stability of the entire system under extreme conditions.

Even the best packaging and transport solution is only as good as the logistics partner applying it in the real-life chain. One or two shipments might work well, but a logistics provider paying limited attention to quality and the specific needs of the commodity will, over time, deliver a significantly higher failure rate. Training of all the employees involved in the cold chain is, therefore, essential.

I believe the pharmaceutical logistics sector is undergoing a similar change to the IT software industry in the 1980s and 1990s when standard software solution packages slowly began to replace the multitude of custom-built, company legacy software systems. A process that was neither quick, nor easy, but that in time delivered many advantages for the industries that went through it.

A similar process will occur in the cold chain industry in the next few years, with standardization of requirements and use of standard solutions leading to a smaller number of players with greater specialized knowledge.

Magnus Welander is the CEO of Envirotainer, Sweden.