The global pharmaceutical (pharma) industry will surpass US$1.9 trillion in revenues by 2027; online pharma revenues will surpass US$185 billion by 2027. With online healthcare, tailored medicines, and regulatory stringency all increasing alongside an elevated focus on drug supply security following the Covid-19 pandemic, pharma supply chains have drawn considerable attention.
Digital transformations are being used to ensure not only supply resiliency but also competitive differentiators. ABI Research says Cold Chain Track & Trace revenue for refrigerated containers (reefers) in the pharma industry is expected to reach US$2.9 billion globally by 2027 as companies look to tackle the US$35 billion worth of products lost to failures in temperature-controlled logistics within the industry each year.
“Both profit and human well-being play a role in the industry's structure and development. Pharma companies seek to innovate and deliver new drugs to the market. In contrast, governments and healthcare systems seek to regulate and ensure that drugs and medicines are verified and effective when reaching patients,” explained Ryan Wiggin, supply chain management & logistics industry analyst at ABI Research.
He added that digital transformations offer a means to achieve both, helping to guarantee end-to-end (E2E) product integrity while delivering effectively and at a fair price. "Comprehensive solutions tackling contemporary pain points are critical for pharma companies to achieve the most efficient and robust routes to market," he continued.
One of pharma's most pressing issues is the need for increasingly granular traceability. Regulations such as the EU Falsified Medicines Directive (EU FMD) and the Drug Supply Chain Security Act (DSCSA) push companies away from manual processes and toward more sophisticated digital solutions.
These include Warehouse Management Systems (WMS), such as SnapFulfil, offering inventory management and stock flow optimisation, Internet-of-Things (IoT) enabled traceability at a unit level from companies like Wiliot, reefer telematics from companies like Motive, and supply chain control towers from the likes of Optel Group that provide a layer of orchestration by bringing together systems and data siloes into a centralised platform.
In addition, pharma companies and retailers are also revolutionising their picking operations through robotic picking solutions from companies like RightHand Robotics, alongside Automated Storage and Retrieval Systems (AS/RS) in warehouses and healthcare facilities. On top of higher speed, accuracy, and picking time, robotic deployments are helping to facilitate protected environments for temperature-controlled products and better resiliency to labour supply fluctuations.
Wiggins opined that out of necessity, cold chain infrastructure and product traceability will see strong investment in support of growing biologics drug development and tailored medicines.
"From a retail and e-commerce perspective, big players like Walgreens and Amazon operating in the generics and prescription markets will continue to lead direct-to-consumer (D2C) channels with higher automation initiatives," he commented.
He further posited that as competition increases and operational requirements evolve, end users must focus on internal alignment and incentivise cooperation with close trading partners to support E2E solutions.
"Technology vendors should utilise strategic partnerships and explore as-a-service offerings to offer companies a comprehensive and managed transformation with simplified adoption,” concluded Wiggin.