70.8% of Pharmaceutical Companies Looking to Work with New Logistics Partners
The success of any medicine depends on a huge number of wide-ranging factors, from approval and marketing to affordability and efficacy. But there is one issue in particular that truly can be make or break for pharmaceutical companies. Never to be underestimated is the importance of getting drugs to the patients who need them, efficiently and in perfect condition.
In an ever more global industry, pharmaceutical distribution is among the most pressing issues facing every drug maker worldwide. Partnerships between pharma and logistics firms must be based on mutual understanding and trust if supply chains are going to work, with product integrity intact throughout the journey from lab to end user.
Confidence in pharmaceutical distribution
In a recent Harris Interactive study, compiled for logistics and transportation services provider UPS, new light was thrown on many of the key distribution challenges facing pharma firms in the 21st century market. The report was based on interviews with delegates from almost 150 drug companies and gave insight into their feelings on a range of supply chain issues.
One of the researchers' starting points was to look at the levels of confidence drug companies have in their logistical support networks. They found that 47 per cent of the firms represented were planning expansion into emerging drug markets within 18 months. Among the regions attracting most interest were China, Brazil, India and Argentina.
Barriers to global expansion
The study revealed that around 80 per cent of the US drug companies surveyed were currently trading in at least one country internationally, in spite of numerous common factors being cited as barriers to such growth. Perhaps unsurprisingly, product quality was among the top concerns, as well as fears for supply chain security, limited infrastructure and regulatory obstacles.
Harris Interactive's findings brought to light a number of worries relating to compliance and pressure from regulatory bodies to comply in each applicable country. The companies surveyed cited tightening regulations, US healthcare reforms, intellectual property protection and patent expiry risks as dominant issues affecting their supply chain.
Outsourcing has been a key talking point at every stage of drug development in recent years, with third-party organisations now involved with everything from clinical trials to manufacturing and distribution. The UPS report found that pharmaceutical firms were largely keen to increase their outsourcing activities in a range of areas, including the final leg of the journey.
More than a third of delegates interviewed said that their companies would make greater use of third parties for drug distribution over the next few years – a notable increase from the 13 per cent who said the same a year earlier.
A further 26 per cent of firms were said to be looking at maintaining their current levels of distribution outsourcing. But in order for such methods to provide the desired cost and time efficiencies, strong ties must develop between pharmaceutical companies and their service providers.
Successful drug distribution partnerships
In a recent Pharma IQ survey conducted ahead of Pharmaceutical Distribution 2011 in September, key community figures were asked to provide feedback on their current logistics and transportation service providers. More than 83 per cent of the delegates surveyed were directly responsible for distribution at their respective companies.
When asked whether they were currently happy with the external partners and solution providers they worked with at the distribution stage, responses were somewhat mixed. Almost two-thirds claimed to be satisfied with the current level of service overall. Quite concerning, however, was the revelation that 37.5 per cent of drug companies are currently to some extent unhappy with their partner's offering.
Interestingly, these results were not exactly reflected in the question of whether they would currently consider working with a new solution provider. Despite 62.5 per cent previously claiming to be happy with their current partner, 70.8 per cent of respondents said that they were looking to invest in or work with a different organisation.
Trust between pharma and logistics
Just as in any area of business, successful partnerships are usually built on foundations of mutual respect, trust and understanding. In the Pharma IQ survey, leaders in global pharmaceutical distribution were asked to rate the extent to which they trust their logistics partners to deliver products quickly, safely and without damage to product integrity. Respondents indicated their trust of service providers on a scale of one to ten, with higher figures relating to greater levels of trust and vice versa.
The study revealed that 37.5 per cent of pharma distribution professionals would place their current level of trust at the eight-out-of-ten mark. Only 4.2 per cent gave a perfect ten, while the lowest level of trust was four – also indicated by just 4.2 per cent of delegates. In total, 45.8 per cent of responses fell between the markers of five and seven, while the remaining 8.3 per cent offered a generous score of nine. These results suggest that, on the whole, pharmaceutical firms are confident that their chosen partners will get products to their destination quickly, safely and without loss of quality at least most of the time. But are the logistics firms delivering?
Overall levels of satisfaction
Participants in the Pharma IQ research were next instructed to estimate how often the company's products typically reach their destination on a completely satisfactory journey. The findings here were similarly quite promising, with exactly half of respondents suggesting that 75 per cent of shipments were being distributed quickly, safely and with minimal loss of product integrity. In an ideal scenario, the cargo would not be damaged in any way at all, though the lowest score was 50 per cent, indicating that only half of all deliveries had reached the desired quality standard. Worryingly, this was the response of more than one in five participants, perhaps helping to explain why almost so many firms are currently looking to work with other distributors.