In the supply chain industry, companies may deliver highly sensitive products. However, few of them are subject to such strict regulation and require state-of-the-art technological advances than pharmaceuticals. Third party logistics suppliers for drugs and vaccinations require to comply with strict fleet monitoring and supply chain visibility regulations.
Of course, it is a matter of life of death.
According to the World Health Organization, 25% of vaccinations arrive at destination in degraded conditions, due to incorrect transportation options, and 20% of temperature sensitive products are damaged in transportation, as the cold chain is broken.
In Mexico, for instance, the National System of Medication Residuals estimates that, of the 2 billion units of medications produced a year, 10% risks expiration on the same year it was distributed, Forbes reports.
Critical factors for pharmaceutical transport deliveries
According to Inbound Logistics, pharma manufacturers often turn to 3PLs for high-security facilities with the technological capability to maintain products at specific temperatures. This occurs for several reasons:
- They’re dealing with more sensitive products, such as customized treatments for rare diseases.
- They include more high-value active ingredients that offer shorter shelf lives and carry strict temperature requirements.
- They must be maintained at temperatures lower than 25 degrees Celsius, while some require from 1.5 to 7 degrees in their cold chain transportation.
- They require controlled room temperature, which must be maintained there during transport using temperature-assured containers, such as reefers, to avoid the spikes that can come in ambient containers.
- They are subject to tight regulations by the health authorities in their countries.
In the United States, the U.S. Food and Drug Administration’s (FDA) requires that products such as drugs must be traceable all the way back to the point of origin.
This has lead to higher shipper demand for efficiency, visibility, and product freshness, and driving cold chain 3PLs to add a wide range of value-added services such as automation, Inbound Logistics reports.
However, despite the expenses to move items across multiple actors, ensuring that these products retain their integrity and safety is still a “moving target” for cold chain operators.
In Spain, for instance, attendants to an annual pharmaceutical supply chain conference were asked where are distribution best practices most difficult to implement, reports Logística y Transporte . An overwhelming majority claimed that transportation had the most critical challenges (79%), followed by third party operations (40%).
Source: Logística y Transporte
That is why Mexican transportation expert Joel Cue tells Forbes that, regardless of the volume of units, it is important to have transportation solutions equipped with trustworthy temperature control and monitoring.
Temperature True: how UPS handles monitoring
Logistics Management illustrates the case of UPS in Europe and the United States, where the company has launched temperature true services. The company introduced active shipment monitoring via global healthcare control towers, where agents monitor critical transit milestones for their shipments.
According to UPS, “companies that will ultimately win in the new healthcare marketplace will view their supply chains as strategic areas for innovation and business growth. Trends such as industry collaboration and convergence mean that supply chains must become inter-connected. The old linear model is out. Flexible logistics networks are in.”
A good example of how this flexible network for pharmaceuticals is operating is Chile. In this country, both the state provision of medication and the private supply of drugs and vaccination have led to change the way the supply chain ran.
- In the private sector, Negocios Globales reports that after the widespread development of chains of small sized pharmacies – there was a need to reduce in-store inventory.
- In the public sector, Logistec introduces the case of the Supply Center for the Chilean Ministry of Health (CENABAST), as it outsourced supply chain operators, withdrawing products directly from healthcare suppliers, and then distributing them to the national health network.
However, there are some challenges for suppliers:
- The state requires strict technological accountability, such as an online tracking and a call center, to monitor Inbound and outbound products along the way, in over 500 delivery points and 600 different products a month.
- Vaccines require strict cold chains. At the same time, psychotropics and controlled substances require tight inventory control, as its prescription is regulated.
- The number of different SKUs is very high. At the same time, regulation from the National Health Institute -Chile’s own FDA- is very strict.
- The location of stores concentrates in the central part of cities and malls, with very tight time windows.
That is why, even though the return on investment of medications is high, the CENABAST confesses that there is a lack of specialized operators.
The importance of IT and fleet monitoring technologies
Planning a route with multiple stops to deliver drugs requires precision like no other industry. An important factor, to Logistec, is the intermediate stops between unloading and uploading processes, which are mostly to blame breaking the cold chain.
That is why, to Pharmaceutical Commerce, having a right IT infrastructure in place not only ensures that logistics managers can handle regulatory agencies with information validating the chain of custody. Supply chain visibility is critical.
To the portal, the right IT infrastructure can also provide data that can highlight important information, like exceptions, trends and key performance indicators that need to be improved, and recommend best practices, such as driver teams, sealed inventory and geographic fleet tracking systems. That could increase the ability to investigate when shipments veer off their delivery routes.
Do you handle pharmaceutical products? What is your biggest challenge?