Pharmaceutical Commerce - May/June 2017 - 7

Top News
Pharmaceutical cold chain logistics is a $13.4-billion
global industry
Pharmaceutical Commerce's annual Cold Chain Sourcebook projects moderating growth of 38% between 2015 and 2021
The 2017 edition of Pharmaceutical
Commerce's annual Biopharma Cold Chain
Sourcebook estimates that managing the
transportation of temperature-controlled
products (refrigerated and frozen) will
total $13.4 billion this year, growing at a
5-6% rate, and representing a moderation
of the 8-9%/yr growth rate of the past
several years. At the same time, the value
of temperature-controlled pharmaceuticals
being shipped is projected to grow 10.7%
this year (Fig. 1), suggesting that the industry
is learning how to manage cold chain costs
more efficiently. The growth of temperaturecontrolled products is continuing at more
than double the rate of non-temperaturecontrolled products, indicating that the cold
chain business in biopharma will continue
to grow healthily. The Report estimates 2017
non-cold-chain pharma logistics costs at
$66.5 billion, rising at a 4-5% growth rate.
By 2021, pharma cold-chain logistics will be
worth $16.6 billion and non-cold chain at
$76.5 billion (Fig. 2).
"There has been only moderate growth,
if any, in freight transportation costs across
the board in recent years," notes Nick Basta,
editor of Pharmaceutical Commerce, "and
since freight transportation comprises
roughly 70% of cold chain logistics costs,
that moderation is a factor in the slower
growth rate in cold chain logistics spending
by biopharma."
The global pharma industry today
is almost $1.2 trillion, and between 2015
and 2021 is projected to rise by 41% (Fig.
1). Within that, products that require
refrigerated storage and transport are worth
around $283 billion, and will rise 70%
over the same span, while non-refrigerated

products are projected to rise by about 32%.
The drivers, of course, are the continuing
transition to biologically based products
in new product introductions; additional
drivers are the tightening requirements
for life sciences shipments, combined
with the growing internationalization
of pharmaceutical trade. Biosimilars
introductions are rising throughout the
world (the first product was introduced
in the US in 2015), and while this will cut
into biopharma revenues, it is also expected
to expand the market for biologics-based
products-a potential growth factor for the
cold chain logistics business. Continued
strong growth in insulin products and
vaccines is also propelling growth, as is the
broader adoption of all these products from
developed economies to underdeveloped
ones, especially in Asia.
Controlled room temperature
In past years, there was a clear
demarcation between biologics and other
products that required refrigeration, and
tablets and similar products that did not.
With the introduction of Good Distribution
Practices (GDPs) and their requirement
for temperature monitoring of all types of
pharma products, the lines are beginning
to blur. Some CRT shipments employ
logistics practices identical to temperaturecontrolled shipments: insulated containers,
refrigerants and temperature-monitoring
electronics. But many CRT shipments
st il l fol low t r a dit ional pr a c t ices as
pharma manufacturers become adept at
analyzing the environmental conditions
of their shipments, and documenting the
temperature stability of their products (the

amount of time a product can be outside
its label temperature but remain effective).
"The combination of these factors enable
some manufacturers to continue to employ
conventional logistics practices, while
convincing regulators of the safety of those
shipments," says Basta. "However, the
noose is tightening around these practices,
and manufacturers are shifting to use
such practices as thermal blanketing and
temperature monitoring to provide better
quality assurance."
Another trend to watch closely is the
evolution of a variety of precision medicine
innovations, ranging from cellular therapies
to biomarker testing or regenerative
medicine in the form of stem cells. Some
of these therapies involve extracting blood
or tissue samples from patients, conveying
them to a facility for genetic or other
manipulation, and then returning them
to the patient. Every step in this process
is potentially a cold chain task, with tight
constraints on the condition monitoring
of the shipment. "There are a lot of new
technical requirements to these therapies,"

s ay s B a s t a , " i n clu d i n g f re e z i n g t h e
biomaterials during transit, and developing
new packaging methods derived from the
clinical research world." However, most of
these therapies are still in the developmental
phase, and the volumes involved, from a
pharma logistics perspective, are relatively
small.
About clinical trial logistics specifically:
The Sourcebook also looks at the clinical
logistics field (not differentiating between
cold chain and ambient, as most trials use
temperature controls in some part of the
process). Clinical trial logistics involves
shipment of products to be used in trials
to study sites that may be dispersed
around the globe, as well as shipment of
medical samples to centralized analytical
laboratories. Trial initiations and the scale
of trials will generate a logistics volume of
around $3.2 billion in 2017 (Fig. 3). Based
on estimates of future trial volume, location
and industry R&D spending, the Sourcebook
forecasts logistics spending growth at about
2% per year, to about $3.4 billion in 2021.
continued on page 31

Global biopharma spending ($billions)

Global biopharma sales ($billions) trend 2015-2021

Fig. 2. Cold chain logistics costs represent 16.7% of overall pharma logistics spend in 2017

Global clinical trials logistics spending, drugs and biologicals,
Phase I-IV ($billions)

Sources: 2016 forecasts by QuintilesIMS Institute and Evaluate Pharma; Pharma Commerce analysis

Fig. 1. Sales volume of cold chain products continues to grow
at double the rate of non-cold chain

Fig. 3. Clinical trial logistics continues a gradual upward climb
May | June 2017 Visit our website at www.PharmaceuticalCommerce.com 7


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Table of Contents for the Digital Edition of Pharmaceutical Commerce - May/June 2017

Table of Contents
Pharmaceutical Commerce - May/June 2017 - Cover1
Pharmaceutical Commerce - May/June 2017 - Cover2
Pharmaceutical Commerce - May/June 2017 - Table of Contents
Pharmaceutical Commerce - May/June 2017 - 4
Pharmaceutical Commerce - May/June 2017 - 5
Pharmaceutical Commerce - May/June 2017 - 6
Pharmaceutical Commerce - May/June 2017 - 7
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Pharmaceutical Commerce - May/June 2017 - 31
Pharmaceutical Commerce - May/June 2017 - Cover4
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