by Kevin Lawler, Vice President of Worldwide Sales at Pelican BioThermal
The cold chain for life sciences continues to undergo seismic change. In 2018, we saw an ongoing shift in the approach pharmaceutical manufacturers take to putting life-saving drugs in the hands of clinicians and patients. In turn, many logistics companies had to adjust their approach to shipping to ensure the cold chain continued to meet the demands of customers’ evolving needs.
The pressures are unmistakable. Healthcare consumers continued to drive significant change as they put mounting pressure on pharmaceutical companies to reduce drug costs — at a time when the industry faces internal pressure to lower its own costs to drive profits. Looking ahead, we see this past year and the recent years leading up to it as a harbinger of things to come. The following four predictions are what we anticipate will continue to drive change in 2019.
Shifting Cold Chain Strategies for Biologics
The pharmaceutical industry is already focusing intently on developing biological drugs because they are generally more effective than traditional chemical-based therapies. However, biologics are more sensitive to temperature variations, which makes shipping them more complex, risky and potentially costly. Going forward, pharmaceutical manufacturers will be re-evaluating their cold chain processes to ensure these more fragile therapies arrive on time and intact at their destinations. This will likely involve evaluating everything in the cold-chain, from temperature controlled packaging to pack-out procedures to different service levels and modes of transportation. It’s also likely that pharmaceutical companies will look to continue to outsource many of the cold chain strategies that aren’t in line with their core capabilities.
Specialty Pharma Adding Complexity and Cost
The rise of specialty pharmaceuticals is having a huge impact on pharmaceutical manufacturers, logistics providers and the patient base. These treatments that are highly specialized are making the cold chain more complex because the treatments are more complex, valuable and often delivered right to the patient’s doorstep. In turn, the patients’ own DNA, via the collection of cell samples, provides the raw materials that pharmaceutical companies use in the development of the eventual therapy — so patients aren’t just the destination for cold chain shipment, but also the point of origination. These therapies are highly sensitive and require very tight temperature ranges, which adds complexity and cost to the logistics lane. Whether direct-to-home or from home to pharma, businesses will be seeking high-performing shipping containers to keep contents within their required temperature range — yet easy for patients to use.
Bracing for Brexit Uncertainty
Despite many still-unknowns for the outcome of Brexit, businesses are already bracing for the impact. Fear of disruptions to the pharmaceutical supply chain persist as UK lawmakers continue to negotiate a Brexit deal — and contemplate the possibility of a stalemate. The possibility of a hard Brexit is likely to lead to added duties and taxes and roadblocks leading to delays in the supply chain. To prepare amidst the currently reigning uncertainty, pharmaceutical manufacturers are continuing to take steps to ensure that drugs can flow freely throughout the European Union by localizing the supply chain. Some are warehousing clinical and packaging supplies in mainland Europe — rather than importing — to buy more time and ensure adequate supplies. Some are moving trials out of the UK in the event that UK trials become invalid due to diverging clinical requirements between the UK and the EU. American pharmaceutical companies with infrastructure in the UK are already moving to mainland Europe and laying plans to move product into the UK as they can. As the specifics around Brexit continue to unfold in the first quarter of 2019, the potential to continue shifting infrastructure, product and personnel to the largest market — mainland Europe — will likely continue.
Shifting Reasons for Consolidation
Consolidation among pharmaceutical companies isn’t new. However, the impetus behind the heightened merger and acquisition activity has changed. Eight to 10 years ago, pharmaceutical companies pursued acquisitions primarily to support global growth. As patents cliffs were approaching, acquisitions supported the need to gain drugs in the clinical trial stage to fill pipelines. While this continues, many of the acquisitions going forward will be to gain a foothold in the biologics space. We will likely see more of this as the focus on biologics continues to grow. Likewise, there will be more consolidation among logistics companies to support pharmaceutical manufacturers globally, as well as the industry shift toward outsourcing cold chain strategies to focus on core capabilities.
About the Author
Kevin Lawler is the Vice President of Worldwide Sales at. During his nearly ten years with Pelican BioThermal, the company has achieved average year-to-year skyrocketing growth rates of over 40 percent. With more than 25 years of successful sales leadership experience, Kevin has a strong history in building and leading sales organizations capable of producing strong and predictable growth. Kevin earned an MBA from the University of Montana and resides with his family in Stillwater, Minnesota.