Global healthcare spending to reach $1.3 trillion by 2018; smarter cold chains needed
A new generation of cold chains needs to be developed for the life sciences and healthcare industry to...
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 .
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.