Overcoming the barriers in Pharmaceutical Logistics

The Logistics Chain is as strong as its weakest link and this stands especially true for “temperature controlled” services. Irresponsible handling can easily destroy a shipment of tremendous value and pharmaceutical companies are depending on a flawless service when it comes to sensitive goods.

 

New EU Regulations like the “Good Distribution Practices” (GDP) or certifications like IATA’s Center of Excellence for Independent Validators for Pharmaceutical Handling (CEIV Pharma) are dedicated to ensure patients safety and prevent of money waste.

 

IATA valued the global pharmaceutical logistics market at $64 billion in 2013, making it the most expensive cargo business in the world.

 

“The Cool Chain Association aims to bring together shippers and logistics actors in order to enhance the quality along the whole logistics chain“, says Sebastiaan Scholte, CEO at Jan de Rijk Logistics and Chairman of the Cool Chain Association (CCA).

 

In order to achieve that, the latest get-together of the industry took place on October 1st and 2nd near Basel EuroAirport, one of the most important Pharma Cargo Hubs in Europe. The “Third Pharma & Biosciences Conference” of the CCA was a good opportunity for over 60 guests to visit the brand new temperature controlled hangar of 21,000 m2 in Basel, co-organized by EVA International and the CCA.

 

More individual and patient centric healthcare

Like every industry, the Pharma companies are bracing themselves for major changes. The opportunities and challenges are massive and they will impact logistics providers as well.

 

“Healthcare is evolving, patients are better informed and hence more demanding while many different national rules and regulations are intervening in how treatment should be provided”, says Edwin Kalischnig, secretary-general of the CCA and CEO of XTREME Technologies.

 

Mr Kalischnig competently leads through the event which since a few years represents the yearly highlight of the CCA.

 

Considering the latest Pharma Management Radar survey of Camelot Management Consultants, regulations like GDP or CEIV are a huge topic for Pharma companies, says Andreas Gmuer, Partner and Head of Logistics Practice at Camelot Management Consultants.

 

“Subjects like temperature control or traceability are becoming more important because companies are challenged to implement them while the regulatory side is still not very clear everywhere”.

 

However, the implementation is necessary for taking the next steps in healthcare. Customized treatment, homecare or direct-to-patient deliveries are definitely on the agenda of the shippers.”

 

The European Union launched the upgraded Good Distribution Practices in September 2013 while CEIV Pharma exists since January 2014. CEIV Pharma is derived from the successful Center of Excellence for Independent Validators for security validation, explains Andrea Gruber, Senior Manager, Special Cargo, IATA.

 

The IATA programme aims to support air freight as the modal choice for the transportation of pharmaceutical products. “The programme is not mandatory but CEIV Pharma is dedicated to the patients’ safety and provides guidance for global shipments taking into account the full transport lane”, advocates Ms. Gruber.

 

The implementation of GDP or CEIV has a cost and it can take up to a year to be certification-ready. Especially training sessions have to be planned for the entire handling team. CEIV for example requires 8 to 10 days of training depending on the employee’s position and responsibility.

 

Camelot 01 (Custom) 

Talking makes it better

Processes and regulation are necessary but one very basic problem leaves the community frustrated: Poor communication. “Everything is connected but when shippers, ground handlers, freight forwarders and carriers work together they often do not speak the same language”, says Stavros Evangelakakis Global Product Manager of Cargolux.

 

The CCA conference in Basel was not only a welcome network opportunity but also helped to speak a common language and express the concerns of the community. CCA aims to be a discussion group to understand the processes better and improve them.

 

“It took about one year to transform GDP into Air Freight Language”, Manu Jacobs, Director Business Development Pharmaceutical Logistics from Air France – KLM Cargo. After the implementation, the real work started, living up to the standards and persuading the shippers to accept the standards. The feedback from the shippers is generally positive but there is still room to move forward.

 

GDP and CEIV have forced the community to discuss. “A standardized industry approach to handling Pharma in transit warehouses is necessary”, admits Daniel Setz, Senior Vice President – Head of Global Cargo Operations, Swissport.

 

Not all the shippers are aware of the handling constraints, says the logistics industry. The risk managers and sales representatives are often not the ones caring about transport, are common complaints. This creates an unhealthy situation where shippers either demand too much or not enough. And often pharma companies expect a service tailored to their needs.

 

The handling agents are not only referring to the constraints on the ground but they are also worrying about the necessary investments. Shippers expect a lot from a handling agent but the financial compensation is rarely correct, although forwarders and airlines receive yield premiums for pharmaceuticals.

Foto 1 CCA Opening by Chairman Sebastiaan Scholte (Custom) 

Standardised or tailor made?

The new regulations are welcomed by the logistics industry, admits Nathan De Valck, Cargo & Product Development Manager, of Brussels Airport who chose CEIV his operations. Ground handlers hope it will lead to a more standardized way of handling.

 

While some shippers worry more about costs, many have unrealistically high expectations and demands. Ground handlers and carriers are confronted with customers that expect special treatment. It creates a very difficult situation for airports which struggle to apply different standards and procedures for every single customer.

 

But can a Ground Handling Agent offer an individual service next to his GDP or CEIV processes? The response is clearly no, according to Fabrizio Iacobacci, Institutional Affairs & Special Projects Manager, BCUBE air cargo: “It is simply not possible, cost- or operation wise, to provide a special treatment for every single client.”

 

Standardization is able to create more trust among the actors as CEIV and GDP raise awareness for good procedures. In conjunction with training, the standardized processes minimize mistakes and bad handling. However the integrity of the chain is not flawless when only part of the chain is certified and ready. Mr Evangelakakis raised an alarm on the handling process at destination.

 

Often, carriers are left frustrated when they see pharmaceuticals and perishables are left baking on the tarmac for a long time or when overheated trucks load temperature sensitive goods without special care.

 

When processes are failing or customs times add up to weeks, innovation can make a difference. The Zurich-based company SkyCell offers a novel container against temperature excursions equipped with a cold-energy battery and special insulation.

 

This passive energy unit can prove life-saving especially for emerging markets, where temperature controlled infrastructure is commonly lacking. The light weight containers, which come in sizes of 0.77m3 and in 1.54 m3, are fueled by a battery that recharges itself when stored between +2°C and +5°C, extending their lifetime considerably, according to Bernhard Bärtschi, Head of Sales at SkyCell.

 

The current products are dedicated to pharma and airfreight. Other sizes are also planned, culminating to a very small container useable by drones or express services dedicated to direct patient delivery.

Track-and-tracing can also enhance the processes considerably, says Christian Hay, Senior Consultant Healthcare, GS1.

 

“Modern traceability is much more than just knowing where the item comes from and where it goes to. With the new Electronic Product Code (EPC) standard, you can not only track items but you also track events about the shipment.” Temperature changes or opening of containers can be linked and monitored with ease. And the security increase is important as well as the high value of pharma shipments is attracting theft.

Foto 1 CCA Opening by Chairman Sebastiaan Scholte (Custom) 

What does the industry want?

GDP is often stricter than what the Pharma sector wants in general, was a statement heard by a pharmaceutical shipper, but the whole industry is on a learning curve. The expectations of the actors are slowly aligning. Ruud van der Geer, Supply Chain CoE of the pharma company MSD, stated that awareness is shifting in the industry.

 

Logistics was usually a matter of storage, but more and more, delivery and transport conditions become a topic. Van der Geer admits that the expectations of the Pharmaceutical companies in transport are not necessarily matching the processes of the handlers.

 

The value of shipments can be very high and especially vaccines are fragile goods. However not every pharma shipment is fragile and needs heightened attention, it’s the shipper’s responsibility to fix the process with expert guidance from his 3PL. It is also important to understand the logistics companies you are dealing with. From the shipper’s view, an integrator may not be a better option as they often lack the network coverage, especially in more remote areas.

 

The input of all the actors is necessary in order to enhance the quality of the handling in a realistic way. Now regulators need to listen to what the actors really need. The CCA wants to encourage a dialogue and therefore uses the traditional panel discussion, which this year was managed by Malik Zeniti, treasurer of the CCA and manager of the Cluster for Logistics Luxembourg.

 

Every year the Cool Chain Association organizes two major conferences, dedicated either to pharmaceuticals or to perishables. The next spring event of the CCA will be dedicated to perishables while the Pharma meeting in autumn will focus on pharma. Additional information on the events and the association CCA can be found on the website coolchain.org

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