Asia’s pharmaceutical industry is expected to generate revenues of US$ 386 billion this year, and Singapore – viewed as a healthcare hub – is expected to be a frontrunner in this growth.
Owing to its superior infrastructure, transparent regulations and excellent connectivity, Singapore has established itself as Asia’s healthcare destination. The city-state has an international presence in the R&D sector of the biotechnology and pharmaceutical industry. With Singapore emerging as a hub for central laboratories in the region, more than 30 of the world’s leading biomedical science companies are using the country as their base.
The extensive movement and transport of biomedical products has opened up a cold chain market for third-party logistic players (3PLs) in Singapore.
Logistic complexities in the cold chain
Cold chain logistics refers to maintaining specific temperature bands under which drugs and drug accessories are stored and transported. It is perhaps one of the most intricate and demanding logistic segments, due to its rigorous temperature requirements and energy dependence. The handling of highly sensitive drugs that will ultimately impact a human being has enforced the need for a robust cold chain logistics system in the pharmaceutical industry.
“Temperature logistics is getting more and more important here, thanks to substantial growth in the biopharmaceutical and the bioservices sectors,” said a senior official at an MNC logistics company in Singapore, who wished to remain anonymous.
However, in a recent survey conducted by Gartner on cold chain distribution strategies, Lisa Callinan, a research director at Gartner pointed out that less than 10 percent of the global life science companies they interviewed had a well-defined strategy in place or had developed the necessary in-house expertise to optimise processes and minimise cost. Companies face substantial hurdles in the implementation and management of cold chain logistics.
The foremost challenge for the cold chain lies in the need to maintain exact temperature ranges while transporting pharmaceutical products. As these products are highly sensitive to temperature, even the slightest of fluctuations can have an adverse impact on their efficacy, resulting in substantial write-offs for the drug manufacturer.
The other mammoth challenge that pharmaceutical companies face is adhering to both local and global regulations. Local regulations around the pharmaceutical industry differ from country to country. This means that having intimate knowledge of all the regulations across the cold chain is mandatory not to run afoul of the law.
“Manufacturers are likely to see continued increases in costs associated with temperature sensitive transportation due to additional qualification and validation protocols,” said Callinan.
Pharmaceutical companies are thus looking at 3PLs to provide them with the most optimal cold chain solution. This will allow them to focus on their own core expertise, while capitalising on the 3PLs’ scale of operations, logistics expertise and technology innovations.
Logistics solutions on offer
A robust cold chain is one that encompasses appropriate packaging for the product, best practices in transportation and temperature visibility throughout transit. These are the tangible factors that pharmaceutical companies audit and review when they verify the efficacy of cold chain solutions of logistic companies.
The right packaging
In Asia, custom clearance is mandatory while transporting products from country to country. Since delays in customs are likely, it is crucial for pharmaceutical companies to have packaging that can endure for a longer period of time.
Logistics players provide different types of thermal packaging to keep the products within permissible temperature limits. Shipper boxes that only use XPS or EPS material (rigid, closed cell and thermoplastic foam materials) with water gel are one of the most commonly offered thermal packages. However, the challenge with such packaging is that it is not sturdy enough to withstand extreme temperature fluctuations.
“When we transport a vaccine from Singapore to Korea in winter, we are moving it from 25 degrees Celsius to -10 degrees Celsius. In such conditions, if we use XPS or EPS material with water gel, the product will have a thermal shock and lose its potency,” explained the MNC senior official.
This translates into the need for logistics companies to constantly innovate on packaging. The latest packaging solution that is being offered to address this issue, for instance, is the vacuum insulated panels (VIP), where double-walled boxes contain a vacuum between the two layers. The vacuum will insulate the product since temperate fluctuations will not travel through it.
Logistics companies have also introduced phase change materials (PCM) into the packaging. Frozen water-based gel pack will last for only two days before it loses its strength and turns into a liquid. PCM, on the other hand, can maintain the temperature of the packaging even in liquid form and extend product life by another two days.
Drugs and vaccines lose potency if their temperature band is breached during storage and distribution. Hence round-the-clock temperature visibility is of vital importance to companies so they can proactively take remedial actions if needed.
To offer pharmaceutical companies temperature visibility, temperature loggers can be installed for real-time monitoring right through the transit. One such end-to-end solution is Kuehne + Nagel’s KN PharmaChain, which offers door-to-door temperature control, a 24-hour alert system and a corrective action mechanism. Throughout the shipment’s entire journey, the KN Login online tracking and tracing tool captures temperature data from wireless sensors and transmits the data to the customer for complete visibility of the temperature of the shipment.
Logistics companies are required to submit proof of their best practices in packaging, transportation and temperature visibility, and their expertise in managing regulatory requirements to their clients. Additionally, clients increasingly expect 3PLs to invest in training their employees, so the latter can upgrade their skills on an ongoing basis and mitigate human error that might rise during the transportation and storage of sensitive material.
The evolving cold chain market in Singapore
Twenty of the world’s top 25 3PLs have a major presence in Singapore, and the value they can offer the pharmaceutical industry here is only expected to grow. Besides cold chain management and customs facilitation, they are already offering sophisticated mechanisms for the management and timely delivery of research and clinical trial samples.
3PLs looking to grow in Singapore can leverage their position as potential channel partners to pharmaceutical companies expanding in Asia, growing in tandem with these as they respond to the latter’s demands in increasingly sophisticated ways. Their role is expected to grow to include inventory management and the handling of warehouse facilities as well.