Pharma logistics has hit full steam with a turnover of 69.3 billion dollars in 2019. According to Grand View Research, the market for pharmaceutical logistics will grow by 3.5% per year through 2025, according to their estimates.
This article will discuss the main factors that affect the pharma logistics industry: national regulations, design, and equipment for warehouses for medical supplies and material, and the challenges associated with transporting drugs.
What is pharma logistics?
Pharma Logistics is responsible for distributing, storing, and disseminating medication, active ingredients, as well as other biological products from the source to the point of sale. You should know that pharmaceutical goods need special storage conditions. This is why they are subject to strict controls that ensure safe consumption.
We have highlighted the main characteristics of pharma logistics.
- Maximum Logistics traceability inventory control: These two aspects can be used to quickly identify batches in case of an irregularity or anomaly.
- Stringent quality control: Proper storage of drugs requires that you establish certain procedures and place special areas within the warehouse. This includes sterilization and quarantine zones that are designed to keep drugs and other medicines free from microorganisms.
- Special conditions for storage and transport of products: It’s important to not break the cold chain vaccines and other thermolabile drugs. It is also important to prevent contamination and theft of medical materials.
- Adjusted delivery time refers to goods of high value that often require urgent delivery. It is therefore essential to ensure that they are transported with the greatest precision.
The Drug Supply Chain Security Act, (DSCSA), is legislation that affects pharma distribution.
Congress enacted the Drug Quality and Security Act (DQSA) on November 27, 2013. The Drug Supply Chain Security Act (DSCSA) Title II of DQSA outlines steps for building an interoperable electronic system to track prescription drugs distributed in the United States.
These are the main provisions of the Drug Supply Chain Security Act. These provisions apply to manufacturers, repackagers, and wholesale distributors as well as dispensers and third-party logistic providers, as noted below.
- Product identification Manufacturers and repackagers need to put a unique product ID on certain prescription drugs packages. This could be done using a barcode that can easily be read electronically.
- Product trace: Manufacturers, wholesalers of drug distributors, repackagers, and many dispensers (primarily pharmacies), in the drug supply chain must provide information about a drug, as well as who it was sold to, each time it is sold in the U.S.
- Product Verification These same groups should also set up systems and processes to be able to verify the product identifier of certain prescription drug packages.
- Detection & Response: They must also immediately investigate and quarantine any drug they have identified as a suspect. This means that the drug may be counterfeit, unapproved, or potentially dangerous.
- Notification: They must also establish systems and processes for notifying the Food and Drug Administration and any other stakeholders in the event of an illegal drug being discovered.
- Wholesale drug distributor licensing: Distributors of wholesale drugs must report their licensing status to FDA.
- Third-party logistic provider licensing: Third-party logistic providers are those who offer storage or logistical operations in connection to drug distribution. They must obtain a state license or a federal license.
Effective management of pharmaceutical facilities
Safety is an important consideration when designing pharmaceutical warehouses, just as it is with the storage of chemical products. These are the top strategies that companies in this sector use:
– Secure zoning and the choice of versatile storage systems
Pharmaceutical installations have to strike a balance between SKU accessibility (orders need to be delivered promptly) and maximum leveraging of space (especially in the case of cold stores or controlled-temperature warehouses). Because the layout of the warehouse zones will impact daily operations as well as the safety of goods, this requires an in-depth analysis.
Mecalux, for example, equipped the facility of Ziaja in Poland with pallet racks that combine the storage of pallets at the top with boxes at the bottom to enable low-level order picking.
Other warehouses have specific storage conditions to which the medical equipment must adhere. We automated operations at the Steris facility in France using conveyor circuits and stacker cranes. This increased safety during the goods sterilization process by avoiding risks arising from manual handling.
– Optimized Picking of Small Items
Orders containing medicinal products can be difficult to prepare because the goods are often stored in small units, such as boxes and trays. How can you speed up the picking process in pharmacies when these conditions exist?
Your installation should be equipped with systems to make it easy to access the SKUs. Pick towers equipped with conveyors for boxes or carton flow racks are two common solutions for picking. These are used for high-turnover items and are often integrated with pick-to-light devices.
A warehouse management software will be able to handle complex orders. It is not uncommon for additional tasks such as kit assembly and extensive quality control to be added to standard picking tasks in pharma logistics.
This is evident in the installation by US supply chain organization ROI. ROI was able to improve efficiency by 20% in all phases of picking and drastically reduce the error rate thanks to Interlake Mecalux’s Easy WMS.
– Monitoring medicinal product stock
The regulations that affect pharmaceutical logistics make the visibility of stock available vital for distributors, manufacturers, and sales points. The FDA (US Food and Drug Administration) must be notified of any supply problems in the US.
Warehouse management systems are useful in preventing stockouts. One of their main functions is to keep track of warehouse inventory. You can also:
- Proper location assignment, prioritizing logistics parameters like stock turnover or expiration dates (FIFO flow).
- Automatic control of stock outflows using checkpoints.
- Organization for picking and dispatching based on each order’s priority
- Each SKU’s information is updated in real-time. This allows you to quickly locate batches.
Transporting medicine safely is a good practice
Proper risk management is essential for lowering costs in the pharmaceutical logistics sector. IATA (International Air Transport Association), estimates that 35 billion dollars in annual losses are due to storage issues in the air transport of thermolabile drugs. Nearly half of these losses are due to drug degradation as drugs move along the various links within the supply chain.
To protect the cold chains in pharmaceutical logistics, it is essential to eliminate friction at every stage. For example, SASs (security alarm systems) ensure that goods are not subject to sudden temperature changes and are not impacted by any other atmospheric factors.
Additionally, transportation methods used to transport medication must be capable of maintaining different temperatures (they may be isothermal or cold) using active and passive control systems. Monitoring the humidity, atmospheric pressure, as well as impacts on product handling is crucial.
Smart packaging is making it easier for medicinal products to be properly stored. According to the Smart Packaging Market Research Report, the sector is increasing at a rate of 5.16% annually for the period 2017-2023. Smart packaging uses IoT (Internet of things), which can collect data about the health of medical materials and detect improper handling of goods.
Logistics in the future for the pharmaceutical industry
The current changes in the pharma logistics industry are a result of its growth and regulation regarding the storage and transport of medical material.
Two of the most prominent pharma logistics trends are the automation and management of processes. Interlake Mecalux has worked with some of the most prominent companies in this industry around the globe. Get in touch for personalized advice about modernizing or designing your pharmaceutical warehousing.