Pharmaceutical Drugs And Biologics Logistics Market Definition
Pharmaceutical drugs and biologics logistics is the logistics of pharmaceutical and biologic drugs from the manufacturer to the end-user. It includes transportation, warehousing, inventory management and other logistics functions.
Pharmaceutical Drugs And Biologics Logistics Market Size
The global pharmaceutical drugs and biologics logistics market reached a value of nearly $79.9 billion in 2017, having grown at a compound annual growth rate (CAGR) of more than 3.3% since 2013.
Growth will result from increasing demand for drugs in general and in particular for temperature-sensitive biopharmaceutical products such as vaccines and blood plasma products. The pharmaceutical drugs and biologics logistics market has benefitted from rising pharmaceutical sales. Governments across the globe are continuously establishing new healthcare reforms triggering the growth of the pharmaceutical market, and rising income levels and urbanization in emerging economies also fuel its growth. The advantages to pharmaceutical manufacturers of outsourcing to logistics service providers are another driver. Low cost and greater visibility in the drug distribution chain are the main advantages of outsourcing logistics services and these are becoming an integral part of pharmaceutical companies business strategy.
Factors that could hinder the growth of this market include poor infrastructure for cold chain logistics, skills shortages in the industry and unstable regulatory environments in emerging countries. The market may also be negatively affected by increased regulation on temperature-sensitive pharmaceutical products distribution. For example, the Drug Supply Chain Security Act in the US requires drug manufacturers to implement serializations, traceability and data reporting to help secure the drug distribution chain and increase consumer safety. Complying with greater regulation raises logistics costs and may make distribution of some products to some markets uneconomic.
Pharmaceutical Drugs And Biologics Logistics Market Drivers
The Key drivers of the pharmaceutical drugs and biologics logistics market include:
Healthcare Reforms - Healthcare reforms in both developed and developing countries triggered the growth of the pharmaceutical industry. The American Health Care Act (AHCA) was introduced in the US in 2017. China and the World Bank launched the China Health Reform Program-for-Results to improve the quality of healthcare services in the country. India also launched a new National Health Policy in 2017. All these reforms and policies were aimed at improving the efficiency of healthcare systems, thus driving the demand for pharmaceutical products and their logistics.
Pharmaceutical Drugs And Biologics Logistics Market Restraints
The key restraints on the pharmaceutical drugs and biologics logistics market include:
Poor Infrastructure for Cold Chain Logistics - The pharmaceutical drugs and biologics logistics market was negatively affected by poor infrastructure for cold chain logistics. Many developing countries lack the cold chain infrastructure and logistics necessary for the efficient transportation of pharmaceutical products. Fragmented infrastructure of cold warehouses also adds to inefficiency of logistics. Cold chain logistics requires heavy investments and developing countries lack such investments. For example, the cold chain industry in China lags in terms of quality and capacity. The cold storage capacity in China grew by 800% over last 8 years but it is still not sufficient to close the cold chain gap. India also suffers from inadequate cold chain infrastructure and currently has less than half the capacity to meet its cold chain needs. This had a negative impact on the market since the major challenge for a pharmaceutical logistics company is to maintain the integrity of the product throughout the cold chain which is difficult in a poor distribution infrastructure.
Pharmaceutical Drugs And Biologics Logistics Market Trends
Major trends influencing the pharmaceutical drugs and biologics logistics market include:
Increasing Consolidation In The Industry - The pharmaceutical drugs and biologics logistics market is undergoing increasing consolidation by several large pharmaceutical logistics companies acquiring smaller logistic companies to extend their geographical presence and proprietary knowledge. With an acquisition, large firms acquire new technologies and expertise, while providing the smaller vendors with adequate financial and infrastructural support. For example, in 2016, UPS Healthcare Logistics acquired Marken, a clinical trial logistics provider. UPS has also acquired Polar Speed, a UK-based provider of temperature-sensitive pharmaceutical logistics. In 2016, DHL acquired MIT Safetrans, an Italian pharmaceutical logistics provider. In 2017, Kuehne + Nagel acquired Zet Pharma, a Turkey-based pharmaceutical logistics company, and Ferlito Pharma Logistics, an Italy-based pharmaceutical logistics company.
Blockchain And IoT In Pharmaceutical Logistics - Pharmaceutical logistics companies are increasingly using advanced digital technologies such as blockchain and the internet of things (IoT) to enhance operational efficiency. Blockchain is a digitized ledger that maintains, records and authenticates data and transactions. IoT is a network of physical devices that communicate over internet. IoT technology can potentially help pharmaceutical logistics companies to mitigate lead time, reduce costs and track cargo movement. Blockchain technology can significantly improve the efficiency and reliability of distribution chains. It can also achieve cost savings by powering leaner, more automated and error-free processes, thus adding visibility and predictability to logistics operations. For example, DHL and Accenture have created a blockchain-based serialization prototype with nodes in six geographies to track pharmaceuticals across the distribution chain. Maersk, a Denmark-based container shipping company, is using refrigerated containers integrated with IoT technology to ensure visibility in pharmaceutical logistics. SkyCell, a Swiss technology company, offers blockchain and IoT-enabled refrigerated air freight containers for biopharmaceuticals.
Pharmaceutical Drugs And Biologics Logistics Market Segmentation
The pharmaceutical drugs and biologics logistics market is segmented by service type, by mode of transport, by pharmaceutical type, by therapeutic area and by geography.
By Service Type -
The pharmaceutical drugs and biologics logistics market is segmented by service type into
Cold chain logistics had the highest growth rate of nearly 6.8% during the historic period.
- a) Non Cold Chain Logistics
- b) Cold Chain Logistics
By Mode Of Transport -
The pharmaceutical drugs and biologics logistics market is segmented by mode of transport into
By Type Of Pharmaceutical -
The pharmaceutical drugs and biologics logistics market is segmented by type of pharmaceutical into
- a) Air Transportation
- b) Ocean Transportation
- c) Land Transportation
By Therapeutic Area -
The pharmaceutical drugs and biologics logistics market is segmented by type of therapeutic area into
- a) Pharmaceutical Drugs
- b) Biologics
By Geography - The pharmaceutical drugs and biologics logistics market is segmented into
- a) Musculoskeletal
- b) Cardiovascular
- c) Oncology
- d) Anti-infective
- e) Metabolic Disorder
- f) Central Nervous System
- g) Genito-urinary
- h) Respiratory
- i) Gastrointestinal
- j) Hematology
- k) Dermatology
- l) Ophthalmology
North America is the largest market for pharmaceutical drugs and biologics logistics, accounting for almost 38% of the global market. It was followed by Western Europe, Asia-Pacific and then the other regions. Going forward, Asia-Pacific and South America will be the fastest growing regions in this market.
- o North America
- o Western Europe
- o Asia Pacific
- o Eastern Europe
- o South America
- o Middle East
- o Africa
Pharmaceutical Drugs And Biologics Logistics Competitive Landscape
Major Competitors are:
- • Deutsche Post DHL
- • FedEx Corporation
- • Panalpina World Transport
- • UPS
- • Kuehne + Nagel
- • DB Schenker