Promoting Visibility in the Pharma Supply Chain

Author: Tancred Taylor

By 2025, global spending on pharmaceuticals (pharma) [ML1] will reach US$1.596 trillion, according to IQVIA. And that doesn’t even include the current US$220 billion spent on chemicals, raw materials, excipients, and other Active Pharmaceutical Ingredients (APIs) that are needed to produce finished medicines. Although industry stakeholders may be delighted about such demand, this presents an enormous supply chain challenge.

Not only are there larger quantities of shipments that must be tracked, but there are also numerous parties that have a role to play in the pharma supply chain, making product visibility trickier. From manufacturers to end customers, stakeholders should seriously consider the use cases of Internet of Things (IoT) solutions to improve their approach to pharma logistics.

Pain Points in Pharma Logistics

Between higher volumes and lower price points, pharma companies must seek new ways to keep margins high. Reducing the costs associated with the pharma supply chain has become a popular method to recoup diminishing returns.

After speaking with leaders in the pharmaceutical space, ABI Research has learned a lot about the diverse set of supply chain challenges that organizations face, which can all be solved with tracking solutions. Some of those challenges include theft, misplacement, diversions, environmental regulation, and delivery expectations.

Benefits of Tracking Solutions in Pharmaceutical Supply Chain

By tracking a product’s movement throughout the pharma supply chain, and even monitoring a product’s properties like temperature levels, tracking technologies can help decision makers choose the right packaging type, optimize shipping routes, control inventory, shift the mode of transport or delivery speed, and change service levels from partners. With a deeper level of visibility, a company can gain a broader overview of its delivery network and how to cut logistical costs.

What Hardware Solutions Are Being Used in Pharma Logistics?

Barcodes and Quick Response (QR) codes enable full visibility of a product at each point of the shipping journey. Either a worker scans a pallet or carton with a handheld scanner, or the process may be automated. This collection of data can provide pharma logistics managers valuable insight into bottlenecks and inefficiencies of their processes.

Radio Frequency Identification (RFID), although not mandated by the U.S. Food and Drug Administration (FDA) like barcodes are, can store more product data than barcodes and QR codes, and do it in bulk. RFID helps companies:

  • Learn more about how they’re utilizing assets
  • Automate inventory data collection
  • Track pallets and crates

As of now, the use of RFID is relatively rare, with only 11% of U.S. hospitals using RFID-based infrastructure.

An indicator label is useful for temperature-based pharmaceutical products, as it can detect when a product has been outside the acceptable range for a period of time. Based on the temperatures reached and the longevity of being outside the temperature range, the label will turn a corresponding color, allowing the receiver to make an informed decision on whether the shipment should be accepted or denied.

Loggers, like indicator labels, monitor temperature-sensitive products—more notably, cold chain supply. In real time, these solutions enable companies to gain access to not only temperature levels, but also humidity, air pressure/quality, light exposure, and any physical impacts on products. Logger devices rely on Universal Serial Bus (USB) connections, Near Field Communication (NFC), and QR codes to communicate data retrieval.

To gain a deeper understanding of a shipment’s journey, companies can use cloud-based trackers. Trackers, unlike other technologies, enable visibility throughout the entire shipment journey, as opposed to a specific stage. As a result, this solutions allows companies to adjust their pharma logistics process before a major problem arises.

Multi-use trackers, usually controlled by the solution provider, rather than the adopter, free up a lot of resources for companies that want visibility at all stages of the supply chain process without having to get too involved. On the other hand, disposable single-use trackers, which require a more hands-on approach, serve as a point of location reference for a single journey. One interesting technology that’s emerging is called smart locks. Smart locks alert users of unauthorized or unexpected attempts to open a door. Using their smartphone or another device, someone can unlock doors, containers, crates, and trucks remotely.

Because of its low cost, Bluetooth (BT) sensors are a common pharma supply chain visibility choice for companies. Whether it’s a specific pallet or even an individual item, BT tags feed data to a nearby gateway tracker. For example, if a truck takes a predictable route every week, a tracker can be placed along the route, and a warehouse worker can analyze the information that the BT tag sends to the tracker.

Pharma Supply Chain Solutions Show No Signs of Slowing Down

COVID-19, and its subsequent effect on the global supply chain, highlighted the importance of supply chain visibility. IoT tracking technologies, especially as they merge with Real-Time Tracking Visibility (RTTV) software, offer pharma logistics teams the best solution when it comes to optimizing processes in a way that meets delivery times, adheres to regulations, and ensures quality assurance.

In every region of the world, tracking software solutions and services in pharmaceuticals are going to continue to be in high demand. Between 2019 and 2026, the North American market will grow at a Compounded Annual Growth Rate (CAGR) of 27%. And other regions, like Europe and Asia-Pacific, will grow even quicker (mostly because North America is already the most well-established market).

To learn more about how visibility technological solutions can be used to improve the pharma supply chain, read ABI Research’s IoT and Supply Chain Visibility in the Pharmaceutical Industry: Ecosystem Assessment report (AN-5352). This report is part of the company’s IoT Markets research service, which includes research, data, and ABI Insights.