Global healthcare spending to reach $1.3 trillion by 2018; smarter cold chains needed
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A new generation of cold chains needs to be developed for the life sciences and healthcare industry to improve global health standards, according to new research by DHL Global Forwarding. DHL’s white paper “The Smarter Cold Chain: Four essentials every company should adopt” highlights the critical challenges facing the healthcare industry as global demand for expensive structurally complex and temperature-sensitive biologics and specialty drugs grows. This latest report was published during DHL’s 15th Global Annual Life Sciences & Healthcare conference, held in Hamburg, Germany from June 15 to 17.
“Astounding developments in the life sciences industry coupled with globalization means there is an opportunity for better health, pain relief and cure from disease for many millions of people around the world,” said Frank Appel, CEO of Deutsche Post DHL Group. “But getting the medication to patients in the right condition and achieving that goal requires a complex balancing of cost and risk. It emphasises yet again the strong link between trade, logistics and the impact it has on improving people´s lives.”
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Pharmaceuticals are expensive and sensitive – also product integrity is paramount as ultimately someone’s health and even life may depend upon it. With global demand, particularly in emerging markets, growing hand in hand with ever stricter compliance from regulators, the industry faces a critical situation unless a new generation of cold chains are developed that can support growth aspirations and at the same time safeguard products.
Global spending on healthcare is forecasted to reach around $1.3 trillion by 2018 and the World Economic Forum estimates that by 2020 one third of all global health expenditure will be in emerging markets. Specialty drugs and biologics are one of the fastest growth areas with US spending on specialty drugs to quadruple to $401.7 billion in 5 years, according to PricewaterhouseCoopers, with similar growth rates being projected for the rest of the world.
These highly sensitive pharmaceuticals bring new complexity to the supply chain since they have specific condition tolerances and a high value. Annual per-patient treatment costs can be up to and above US$100,000, making a single consignment worth up to US$50 million. The distribution of these complex drugs and increased global demand is predicted to fuel approximately 60 percent growth in cold chain logistics reaching US$13.4 billion by 2020.
“Collapsed cold chains due to non-appropriate conditions can result in loss of a shipment worth hundreds of thousands of dollars. Over the longer term, this can lead to a damaged reputation, slumping sales, potential share value and even pose a risk to patients. These are high stakes and a smarter supply chain is necessary to overcome these challenges. As the life sciences and healthcare industry expands and transforms to meet the growing needs of the world, logistics providers need specialist investment in research and development as well to be able to offer the expertise needed to get medicine and equipment to the patients. In the simplest terms: better logistics can contribute to better healthcare,” said Angelos Orfanos, President Life Sciences & Healthcare, DHL Customer Solutions & Innovation.
To ensure a smart supply chain for its life sciences and healthcare customers, DHL developed over time a rich product portfolio that caters for all needs and all transport modes. For managing temperature sensitive air freight shipments, DHL Global Forwarding implemented a new global standard called DHL Thermonet. Furthermore, for customer interested in shipping their goods via ocean, DHL Ocean Secure is the global standard for high value and sensitive goods. A door-to-door courier transport solution, ‘Life Sciences graded Specialty Courier’, covers for the specific needs of the life sciences industry and complements another product offer, Medical Express, which is based on DHL Express’s global network and time definite express service. With ‘DHL Clinical Trial Logistics’ we provide logistics services for clinical trial materials including investigational medication, ancillaries and lab kits.
The full report “The smarter cold chain: Four essentials every company should adopt” is available for download at www.dhl.com/lifesciences_smarter .
