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I thought I would begin this issue’s “From the Editor” where the last entry left off—my Trade & Channels Strategies experience. The conference, organized by Informa and held in Philadelphia in December, has a goal of doing exactly what its name suggests: Uniting biopharmaceutical manufacturers and wholesalers—along with their trading partners—to discuss not only the obvious (trade, channel strategy), but also topics including:

All of these aforementioned subjects are right in the wheelhouse of 

 editorial coverage, which was one of several reasons I was excited to attend for the first time.

There were a multitude of useful tidbits that I gathered over the course of the three days, beginning with a presentation on the current and future trends impacting trade and distribution by Bill Roth, general manager and managing partner of Blue Fin Group, a management consulting firm that is also an IntegriChain company. He set the tone early by quoting a colleague in saying that although “we are at a tectonic shift of plates in distribution,” pharmaceuticals continue to operate via five main distribution models:

Manufacturers selling to 80,000 points of shipment.

 Manufacturers selling to physicians’ offices.

 Manufacturers selling to warehouse/finite locations.

Manufacturers selling on a secondary basis.

Meanwhile, in his state of the channel address, Dave Weiss, IntegiChain’s VP of industry solutions, pointed out that channel disruption has indeed arrived, and the resulting pressure of rising distribution fees and patient access obstacles is forcing changes in commercial strategy. He also presented a notion that I found interesting: Due in large part to COVID-19, vaccinations are expected to shift more to retail pharmacies, but other than for influenza, he adds, this hasn’t really occurred across the adult vaccination market yet. And perhaps this makes sense—a piece put out by 

 reminded me that the convenience of walking into a pharmacy at any given time to be immunized (even without an appointment) goes a long way.

Switching gears, I wanted to echo Mike Hennessy Jr.'s thoughts in his "Publisher's Note" in stressing the importance of sustainability in our industry. It bears repeating: It is a theme that will continue to grow in relevance. I was fortunate enough to present on this topic at the Trade & Channels show, and have come to realize that listing the many important statistics associated with sustainability and reducing the carbon footprint would be too large to fit on one page. However, I’ll leave you with one that has been top of mind as of late. A report released by ReportLinker states that according to WHO, over 300 

tons of plastic waste is produced by the pharma sector, with 50% of that waste being single-use.

Nicholas Saraceno is Pharmaceutical Commerce's Editor. He can be reached at

A multitude of conclusions surrounding distribution were reached at the Trade & Channels Strategies conference. 

The Impact of Industry-Powered Education

There are many reasons to devote a column to value and access.

Value and access are perhaps the most important and yet least comprehended two words in today’s biopharmaceutical industry. Corporate talk includes frequent mentions of value and reaching patients, but is it just lip service? Payers certainly think so.

In my recent article “The IRA is Industry’s Wake-up Call” (

), I reported on payer feedback with respect to four typical evidence gaps in pricing and reimbursement submissions from biopharma companies. The problem is that companies either have a poor understanding of evidence needs, or have a decision-making process that does not sufficiently incorporate value and access angles.

Why are many companies surprised every time they receive a poor access or pricing decision? Over the last 10 years, 93% of new drugs reviewed in France received an innovation rating that does not warrant any premium price over standard of care. Firms keep making the same mistakes again and again. In some circumstances, a minimal evidence package with an imperfect comparator or surrogate endpoints may make sense. However, have we properly analyzed the situation, and was that a deliberate decision?

Many perceive the drug industry to be greedy. In the introduction of my book 

I write: “How did the drug industry, with its lifesaving innovations, manage to earn a public image that is much worse than industries with products that kill, such as gun and tobacco industries?” That poor reputation and public anger resulted in the institution of effective price control in the US under the Inflation Reduction Act of 2022 (IRA). The same public anger resulted in the introduction of price controls in Germany in 2015 and subsequent increasingly restrictive measures.

Are governments fair? I am going to ask you to engage in an experiment. Please go to your regular grocery store and tell them that unfortunately you exceeded your food budget for the year by, say, $700, and ask them to refund the overage. I will let you use your imagination on the grocer’s reaction. Yet, governments now routinely demand repayments for overspending in the drug budget: 

. On top of that, prices are effectively controlled through UK's National Institute for Health and Care Excellence (NICE) at a cost-effectiveness cut-off rate that has not changed since 1999. 

 of a 1999 pound sterling is only £0.48, simply due to inflation. If taking responsibility for paying its fair share, new drug prices in the UK should be at least double of what they are allowed to be today. Unusual? No. Despite aging populations, unhealthy lifestyles, and the emergence of innovative technologies, European governments routinely budget for zero or minimal growth.

The implementation of IRA and other access evolutions around the world, such as the recent “AMNOG 2.0” decision in Germany, will also be topics of discussion in this column. We don’t know how the Centers for Medicare & Medicaid Services (CMS) will decide what is fair value for a drug. Yes, decide. The penalties to the industry for not agreeing to the “negotiations” are so severe, that you cannot speak of a real negotiation but rather an “offer that you can’t refuse.” We don’t know whether legal challenges of IRA will be effective and how IRA will affect the pipeline for new drugs and launch pricing.

Despite many contentions, the biopharma industry is a very competitive industry where companies make early development decisions based on a trade-off between multiple leads. An effective shortening of the patent life, which the IRA is, will result in lowering of an already 

low return on investment for biopharma R&D

. A company can rationally only either discontinue less attractive development options, or (where possible) increase price to offset the reduced revenues. In the first case, there will be fewer new drug innovations, and in the second, IRA will not yield meaningful savings. It’s simple math! What will happen if IRA does not result in lower drug cost? IRA 2.0? Is the industry ready to pre-empt that with a better dialog on drug (industry) value and global healthcare needs?

Ed Schoonveld is a value and access consultant, and author of The Price of Global Health.

New Pharma Commerce column addresses the relevance of pricing.

Introducing Value & Access 

Rheumatoid arthritis (RA) is a chronic, progressive, autoimmune disease. If not treated aggressively and effectively, it can lead to debilitating, irreversible joint damage and disability. RA patients are also at increased risk of cardiovascular disease, cancer, and death. Despite the availability of numerous approved therapeutic options, many patients do not respond well to these products.

Historically, patients have managed RA primarily with nonsteroidal anti-inflammatory drugs (NSAIDs) and steroids to address pain and inflammation. In recent decades, however, the field of rheumatology has expanded greatly to enable earlier intervention using biologic or targeted disease-modifying antirheumatic drugs (DMARDS) that interrupt underlying disease pathways. But these newer therapies also add complexity, ranging from their strict temperature-controlled handling and storage requirements to their administration (self-injected by patients), high costs, and potentially dangerous safety profiles. The DMARD therapeutic class is further divided as follows:

These are frequently monoclonal antibodies or receptor constructs that are administered by intravenous or subcutaneous injection. They target a specific molecule—either a cytokine, a cytokine receptor, or another cell membrane antigen—that mediates joint damage.

These include two groups of drugs: conventional synthetic DMARDs (csDMARDs) and targeted synthetic DMARDs (tsDMARDS). The first tsDMARD agents—the janus kinase (JAK) inhibitors—are administered as small molecule agents in pill form, rather than self-injection, and prevent the phosphorylation of JAKs, a group of enzymes that enable inflammatory signals to be activated inside the cell.

Ewa Olech, MD, senior medical director and head of rheumatology center of excellence for IQVIA, notes that with the exception of biosimilars, there have not been any new FDA approvals of RA therapies since AbbVie’s JAK inhibitor Rinvoq (upadacitinib) was cleared in 2019.

“Currently, the biggest unmet need in RA is selecting and optimizing therapies while using drugs that are currently available,” says Olech. “Meanwhile, preclinical RA and susceptibility to RA are other areas of interest.” She adds that in the coming years, new treatments for this population will need to be different than existing RA drugs. “These new targets are expected to be more molecular targets that hone in on the early process of pathogenesis of RA,” explains Olech.

Today, there are more than 20 experimental therapies in Phase II and III development for RA, points out Akshay Mehta, a principal in the strategic advisory practice of Trinity Life Sciences. “Novel mechanisms of action that demonstrate high rates of clinical remission and robust safety data will catalyze the current RA market that is already saturated with biologic therapies,” says Mehta.

“There is particular interest to develop new oral treatments that act on pathways different from JAK inhibitors, and to explore potential combinations of a biologic with a drug for more refractory RA,” adds Anna La Noce, MD, PhD, executive medical director, medical management, for Syneos Health. “What could potentially be a breakthrough therapy is a drug acting on the function of regulatory T cells, which is impaired in many autoimmune diseases including RA. Restoring their function would lead to restoring self-tolerance and, therefore, reduce autoimmunity without causing immune suppression as current therapies do.”

Stem cell therapy using umbilical cord-derived mesenchymal stem cells (MSCs) is another method under investigation in the RA space.

 “Single IV infusions of MSC therapy could also be a game changer based on curative properties, and may demonstrate similar efficacy and decreased risk than biologics, thus improving patient outcomes,” says Mehta. The number of related clinical trials has been on the rise in recent years, according to ClinicalTrials.gov.

One source of constant frustration is that the typical treatment paradigm in RA involves a healthy dose of trial-and-error, with the patient moving from one therapy to another over time, until one provides the desired clinical response. Time lost on an ineffective drug can result in disease progression and irreversible joint damage over time.

“To date, there is no defined biomarker for diagnosis, treatment outcome, or prognosis in RA,” says Jian Wang, MD, executive medical director, medical management, for Syneos Health. “Rather, RA is a clinical disease, and treatment is based on shared decision-making between the patient and the rheumatologist, taking into consideration disease activity, safety issues, and other patient-reported outcomes, such as comorbidities and progression of structural damage.”

According to Robert Zutaut, RPh, clinical specialist with McKesson Provider Solutions, there are no biomarker tests available today used to define a specific treatment in RA—only to determine the presence of the disease.

“Moving forward, I believe there will be an increase in specific predictors (e.g., mRNA biomarkers, cytokine profiles) that will be originated by the rheumatologist to predict treatment response and/or target certain patient profiles or segments,” adds Mehta.

While no clear biomarkers have yet been identified to help rheumatologists match specific therapies with specific patients, a biomarker-based blood test was brought to market in August 2020 to help guide prescribing in RA. PrismRA from Scipher Medicine—a molecular signature response classifier (MSRC) that is ordered as a blood test by rheumatologists—yields clinically validated test results that predict if the patient will not have a desired clinical response to tumor necrosis factor-alpha inhibitors (TNFi), a widely-used class of RA medications that is often prescribed early. PrismRA evaluates the combination of clinical, serologic, and molecular features to accurately predict a patient’s likelihood of inadequate response to TNFi therapies in RA, according to the company.

“The biomarker-derived precision medicine test provides important insight to rheumatologists at the point of care, helping them reduce the reliance on trial-and-error prescribing in RA by avoiding TNFi therapies and instead prescribing a therapy with a different [mechanism of action] sooner,” says Krishna Patel, PharmD, associate director of medical affairs at Scipher Medicine. “This saves critical time, which helps to slow disease progression, improve clinical outcomes, improve quality of life for the patient, and reduces overall medical costs.”

In a parallel path, Olech of IQVIA notes that “the ability to identify at disease onset which patients who are likely to respond to csDMARDs remains another major unmet need, adding tremendous medical expenses to the healthcare system and negatively impacting patients’ lives.” She notes, however, that a new generation of machine learning algorithms has been shown to accurately identify these types of patients, offering promise to help “maximize the potential 

of csDMARDs and promote early biologic intervention where appropriate,” she adds.

RA biosimilars: Waiting for impact to be felt

Commercial immunology drugs represent a significant portion of global medicine sales (valued at $127 billion in 2021), and the prescription immunology market showed the highest historic growth rate of all large therapy areas, with a five-year compound annual growth rate (CAGR) of 16%, according to a May 2022 blog authored by IQVIA analyst Aaron Wright.

 RA is forecasted to remain the largest indication in immunology through 2026.

“The expected biosimilar pipeline is exciting, as the influx of treatment options will eventually commoditize the market,” says Mehta. “The autoimmune disease space is a top spend category, so pending biosimilar launches in 2023—especially biosimilars of Humira (adalimumab), which is the most prescribed branded biologic at most plans and will lose its patent exclusivity [this year]—will help create a downward pricing pressure on the originator product.”

To date, FDA and the European Medicines Agency (EMA) have approved multiple biosimilar versions of originator/reference biologics Humira (adalimumab), Enbrel (etanercept), Remicade (infliximab), and Rituxan (rituximab) for the treatment of RA. However, most of the launches in the US have been delayed due to patent litigation. According to La Noce, biosimilars for adalimumab should be launched this year, while etanercept biosimilars could be delayed until 2029.

Amgen is set to launch the first biosimilar for Humira in late January; the product will have a six-month exclusivity. “In July, we expect to have from six to eight other manufacturers enter the market," says Zutaut of McKesson. "It will be interesting to see how this will impact the practices and the patients from a cost perspective.”

To date, rheumatologists have been slow to adopt biosimilars, despite lower costs to patients. For example, Zutaut notes that infliximab biosimilar products have been in place since 2017, yet the branded version (Remicade) still holds a fair amount of market share. “Some of this has been due to competitive pricing on the part of the manufacturer, but a fair amount has also been due to the unwillingness on the part of either the provider or the patient to switch to the biosimilar,” he says.

Also, in an interesting twist, for most approved RA therapies, insured patients are able to get expensive biologics with very low cost to them out-of-pocket, says Olech. “However, regulatory policies for drug pricing negotiations against anticompetitive practices of exclusionary contracts could allow biosimilars to enter the market sooner and at lower costs, and this will markedly increase their use,” she adds.

Mehta believes the pricing dynamics established by biosimilar manufacturers so far have not been competitive enough to incentivize payers to switch their coverage from the originator products. “This story could change, given that multiple Humira biosimilars will be entering the market in 2023, and this could help patients reduce their out-of-pocket costs.”

The majority of the biologic drugs for RA are provided as auto-injectors or prefilled syringes, and, much like insulin, are generally required to be transported and stored at 2-8°C. “It is becoming ever more critical for patient services solutions to become more personalized in terms of interactive engagement models and customized educational, adherence, and emotional support,” says Mary Lynn Kelley, VP of patient support services for TGaS Advisors, a division of Trinity Life Sciences.

For example, as Brittany Ahmed, MD, medical director, medical and scientific management, Syneos Health, points out, many hub programs give patients access to "nurse ambassadors," who can help support these individuals in several ways, including, says Ahmed, in identifying ways to save money on the treatment, accelerate the learning curve when it comes to self-injection at home, establish a consistent administration schedule, and manage side effects.

At the same time, in recent years, there has been a shift from these types of high-touch services to more digital-driven support to help patients take more ownership of their healthcare journeys, says Josh Marsh, senior director of Cardinal Health Sonexus access and patient support. “This includes chat bots and other digital channels that give patients real-time access to insurance information and other affordability options, and tools to support adherence, such as educational videos or digital chat capabilities with a nurse,” explains Marsh.

In turn, hub programs today continue to shift a significant level of the responsibility onto the patient. “I believe that, overall, this trend is actually a good thing, as RA is a lifelong condition without a cure, and no one can care as much about your health as you can,” says Ahmed.

Maria Kirsch, general manager for patient services at EVERSANA, notes that many brand teams will use different vendors to manage and deliver disparate types of patient hub services, but argues collaborating with a single partner allows for more integrated program development, which could potentially result in better medication adherence and outcomes.

Some of the current challenges impacting patient support services, according to experts, include disparate data, high-cost vendor services, subpar service levels, and hiring strains (internal and external) as companies continue to recover from the COVID-19 pandemic. “Coupled with the rise in product complexity, drug manufacturers are forced to challenge themselves to think outside the box on the design of their patient support services strategies," says Kelley of TGaS Advisors, citing data architecture design and advanced analytics as particular areas where hub partners can help manufacturers keep pace.

“Data and true analytics insights are key to effectively administering a hub program," adds Marsh. "Whether the brand is using a single provider or multiple third-party partners to create their patient-support ecosystem, all data must be aggregated using common language and definitions to ensure the analytics that are output are meaningful to the brand team." He says it is important for partners to have the appropriate data warehouse, matching logic, and analytics capabilities to provide true insights back to the manufacturers.

“Embedding pharmacy expertise—as a resource for physicians—is equally important to support things like general clinical information, treatment pathways, infusion workflow, inventory control, and overall economic analysis of the entire pharmaceutical book of business,” adds Zutaut.

1. Wang, L.; Huang, S.; Shimei L.; et al., Efficacy and Safety of Umbilical Cord Mesenchymal Stem Cell Therapy for Rheumatoid Arthritis Patients: A Prospective Phase I/II Study. 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6930836/

2. Wright, A. MIDAS Sales by Disease Insight Series #9. IQVIA Blog, May 10, 2022, 

https://www.iqvia.com/blogs/2022/05/midas-sales-by-disease-insight-series-9

As the range of treatment options for rheumatoid arthritis (RA) continues to grow and biosimilars are poised to enter the arena, the need for expert strategies to improve therapy selection and address the access, affordability, and adherence challenges patients face is coming into sharper focus.

Disruptive Factors Shape RA Landscape

Like an explosion whose reverberations echo long after the smoke has cleared, the global COVID-19 pandemic continues to affect supply chains across industries and across oceans, including the pharma industry. Unlike other impacted industries, however, the pandemic has spurred significant investment in capacities and services, due to the need to deliver vaccines and treatments expeditiously around the world. These investments will benefit the pharma logistics industry for a while to come, especially in the area of fragile, deep-frozen medicines, and treatments.

One of the biggest reverberations, still playing out, is in basic transportation costs in logistics. While the headline-grabbing backlogs of ocean freighters off US ports have faded (which were then replaced by backlogs of stranded, emptied containers around the world), logistics costs in all modes are still unsettled. For ocean freight, long-term contracts were up by 50% or more in the first half of 2022, but were settling down to pre-pandemic levels by the end of the year. Air freight rates were 100% higher over pre-pandemic levels in early 2022 (at some points in 2021, rates were up sevenfold), but were softening by the end of the year.

North American trucking rates were up 7% in the contract trucking category at the end of 2022, while the spot rate had plummeted from 67% above equilibrium in mid-2021 to 31% below in late 2022, according to the Coyote Curve Index. (Coyote Logistics, a trucking broker, defines “equilibrium” as zero change of year-over-year comparisons.)

The potential for a global recession to set in during the coming year is making supply chain managers leery of locking in contract rates, since spot rates might be more attractive in coming months. Or not.

In the recent past, “The supply chain(s) used to be quite seamless and fluid,” says Marie-Christine Lombard, CEO of third-party logistics (3PL) provider Geodis, in a recent 

 interview. “But it’s no longer smooth. It goes up and down. The world order has a huge impact on the supply chain and its stability.”

As an industry that usually requires premium services for moving its products, the pharma/ healthcare industry generally did not suffer the holdups in deliveries during and after the pandemic. But the transition was by no means smooth. “Refrigerated containers for pharma get a prioritized position on ocean freight," notes Robert Coyle, SVP of healthcare at Kuehne+Nagel, a global logistics provider. “But during the ocean freight crunch, it was difficult to maintain that priority when general freight rates approached or exceeded premium rates. We spent time talking with our carriers to make sure the message stayed on track that these pharma/ healthcare shipments would not get bumped, due to the importance of the products to our customer’s patients.”

Global provider UPS worked with World Business Research, a conference company to complete a poll of pharma supply chain managers in late 2021 and early 2022. In the “Vital Signs” survey it released at mid-year, cost control was the biggest challenge respondents reported. Not far behind that leading challenge was the specific instance of cold chain costs; interestingly, “cold chain management” had the same ranking as costs.

“Real-time tracking of cold chain shipments is becoming a more sought-after service,” says Dan Gagnon, VP of healthcare marketing at UPS. “We’ve responded with an initiative to aggregate all the fragmented elements of the supply chain, from warehouses to the transportation modes of ground, air, and ocean.” He touts the advent of UPS Premier services, currently being rolled out in the US and eventually globally, which will feature location and condition monitoring throughout a shipment, based on devices installed on shipments and in communication with a global network.

Uniform service quality is also a goal at K+N, where the company’s 238 GXP-compliant healthcare facilities are being brought to a uniform level of quality management, says Coyle. The scaleup of global vaccine distribution over the past two years will have a lasting impact for all pharmaceutical distribution, he adds. “Our customers are noticing that the effort we’ve put into linking our logistics services with our emergency and relief services gives them the capability to take products into markets that they couldn’t reach previously,” says Coyle. The company has doubled its healthcare-specific staff over the past three years and established uniform service-quality standards globally.

At least regarding pharma cold chains—and healthcare products generally—there is still a land grab going on for claiming a bigger share of a high-growth market. Industry surveys like the Evaluate Pharma World Preview Report peg pharma’s growth at a 6% compound annual growth rate (CAGR) through 2028 (although growth for this year is less, due to the expected recession). Temperature-controlled biologics and other specialty pharmaceuticals are expected to continue growing at twice the general industry rate.

 noted capacity expansions or acquisitions by DHL, K+N, UPS, FedEx, Tower Cold Chain, Cryoport, and BioLife Solutions, and cold-chain-specific technology introductions by Envirotainer, va-Q-tec, SkyCell, Lifoam, and Sonoco ThermoSafe—all in the prior 12 months (see https://bit.ly/3J9sN2a). Since then, UPS has acquired Bomi Group, an Italian international healthcare logistics provider. Geodis acquired trans-o-flex, a German delivery company for healthcare products. DHL Supply Chain has acquired NTA, a Mexican healthcare logistics concern. Kuehne+Nagel has contracted for airside capacity—including cold chain storage—at the OR Tambo International Airport in Johannesburg, South Africa, and has executed on its long-term contractual arrangement with Atlas Air for charter air flights. Marken, a UPS subsidiary specializing in clinical trial logistics, acquired Cedra Express, a medical courier in New Zealand.

New technology introductions in recent months include Swiss Airtainer, a new company offering an air-freight unit-load device to compete with Envirotainer, CSafe, and DoKasch. Sensitech has upgraded its lines of Temp-Tele dataloggers. With a June acquisition of an internet of things (IoT) networking company, Qopper, ParkourSC, a software platform for real-time supply-chain management, now enables “digital twinning” of supply chains, the better to analyze and optimize performance.

The US’s big three wholesaler-distributors—McKesson, AmerisourceBergen, and Cardinal Health—each have specialty pharmaceutical logistics business units. AmerisourceBergen integrated World Courier, a clinical logistics company, with its ICS business unit a few years ago. More recently, in November, Cardinal Health announced a collaboration with Medically Home around Cardinal's supply chain network and last-mile fulfillment tool, Velocare, to enable hospital-level acute care in the home by fast product and service delivery.

Many, if not all of these companies are also targeting the emerging business of cell and gene therapies (CGTs; also known in Europe as “advanced technology medical products, or ATMPs). CGTs have attracted billions in venture-capital and Big Pharma investment in the past few years (although down somewhat in 2022); over 1,000 companies globally are developing candidate therapies, according to data published 

by the Alliance for Regenerative Medicine (ARM), a trade association that includes tissue engineering with CGTs.

There is real excitement in the field; the 20 or so products that have been commercialized around the world hold the promise of actually curing serious diseases, especially genetic birth defects that can be fatal if untreated. From a logistics perspective, however, the excitement needs to be tempered by the reality that the treatments are often formulated for individual patients with rare or ultra-rare diseases—there will be no mass market therapy in the near future. For some therapies, a few dozen vials of genetically altered cells might be all that is necessary for a year’s inventory.

Taken as a whole, what adds to the logistics business for CGTs is the volume of clinical trials currently being conducted. As of mid-2022, ARM counts 2,093 clinical trials going on worldwide, including 200 Phase III trials. “Because some of these therapies are for individual patients, the commercial (after approval) supply chain will be very similar to the clinical supply chain," notes K+N’s Coyle, who previously worked at GSK. “With traditional meds, logistics and supply chain processes for clinical trials are different from the processes once the products are approved. Now with some of the new products, the clinical and commercial processes are starting to align, and we need to look at designing the supply chain for the entire product lifecycle.

World Courier conducted a survey in mid-2022 and found a laundry list of attributes that CGT developers look for in their logistics providers (see chart at left). Note that the ability to serve commercial patients, as well as to manage clinical trial logistics, are on the list.

An added complexity of the CGT field is that many of its transportation and storage needs require cryogenic conditions (roughly, -170°C, a point at which living cells—which many CGT therapies are—become dormant and, therefore, preserve their efficacy). The Nashville company Cryoport, for one, has latched onto this requirement by offering a growing list of services ranging from dewars containing liquid nitrogen to ultracold refrigerators, to cell collection, preservation, and delivery services. “Future advances in medicine will be more and more at a cellular, rather than chemical or biochemical basis,” says Jerrell Shelton, CEO of Cryoport. Currently, the company is introducing the Cryosphere, a dewar that maintains performance regardless of its orientation (conventional dewars lose cooling if laid flat or upside down), and is developing a proprietary condition monitoring system to track and report shipping data.

The majority of CGTs on the market or in advanced development are autologous ones, requiring the use of the patient’s own cells. This necessitates a complex process of extracting those cells, delivering them to the manufacturer, and then returning them to the same patient, all within tight time constraints. The alternative, allogeneic therapy, uses cells that are treated to make them compatible with any patient and, thus, they are sometimes called “off-the-shelf” CGTs that can be stored until needed. That creates a distribution system more like conventional biotech products.

Something of a milestone was reached in December when the first allogeneic CGT received market authorization in Europe: Atara Biotherapeutics’ Ebvallo (tabelecleucel), a treatment for a rare hematologic malignancy for patients with organ transplants. “The approval of Ebvallo in Europe is a medical breakthrough for patients with significant unmet need,” stated Pascal Touchon, president and CEO of Atara, upon the announcement. “As the first allogeneic, or donor-derived, T-cell immunotherapy to receive approval from any regulatory agency in the world, this marks a historic moment for Atara, our European partner, Pierre Fabre, and for the broader cell therapy field.”

Being living cells, though, means that allogeneic CGTs will still need precise temperature control. “Freezing cells below -150°C using cryogenic storage techniques is one option to address the shelf-life for fresh cells, allowing them to be kept almost indefinitely,” writes Adrea Zobel, senior director of personalized supply chain at World Courier. “However, emerging markets and remote locations, in particular, may not have the specialist facilities to maintain cryogenic storage and transport. Cryopreservation, in some cases, is critical to enable long-term storage and long-distance transit.” She goes on to say that significant infrastructure upgrading is now occurring, with advanced packaging solutions, coolant charging stations, and real-time location tracking and temperature monitoring.

Complementing this perspective is a 2022 study from Insight Partners, "Cryopreservation Equipment Market Forecast," which values the current equipment market at $6.4 billion, growing by an 11.9% CAGR to $12.5 billion by 2028.

Post-pandemic conditions are improving for the temperature-controlled market, but, meanwhile, the technical demands are rising.

Pharma Cold Chain in Search of Equilibrium

A quick look at the history of cell and gene therapy (CGT) shows an industry with decades of incremental growth followed by more recent acceleration. With fast growth comes a pattern of progress through trial and error. A peek into recent headlines shows this in real time, with conversation around improving accessibility, managing costs through research and development, and perfecting a just-in-time (JIT) manufacturing and delivery model.

Unlike many pharmaceutical products, CGTs are a one-to-one treatment. Starting materials most often originate from the patient, and the final therapy is infused back into the same patient. There’s no room for delay or temperature excursions. The supply chain must operate flawlessly.

Though the words "cell and gene therapy" are used in combination, they are different fields of biomedical research and treatment. Both treat, prevent, and cure genetic and acquired diseases. However, they work differently.

According to FDA, gene therapy is used to modify a person’s genes with the intent to treat or cure a disease.

 By contrast, cellular therapy uses healthy transplanted human cells to grow, replace, or repair damaged tissue that causes disease.

 These cells either originate from the patient (autologous) or a donor (allogeneic).

Hematopoietic blood stem cell transplantation—a cell therapy—was first explored in humans in the 1950s and is currently a well-established treatment for blood diseases. Gene therapy was first introduced in the late 1970s, and the first trial in humans began in 1990 when colleagues at the National Institutes of Health (NIH) performed the first-approved gene therapy procedure on a 4-year-old with severe combined immunodeficiency (SCID).

Growth for the CGT market is exponential and expected to continue a rapid climb for the foreseeable future. Currently, most of the therapies use products derived from blood samples. But with growing momentum to develop treatments for solid tumors and other tissues, more products with different requirements are likely to emerge. In 2021, the CGT market size was $5.9 billion. The market is expected to reach $42.56 billion by 2030—a compound annual growth rate (CAGR) of 39.42%. Additionally, there are currently seven approved CGT drugs in the US with 1,200 in the pipeline.

Though becoming increasingly complex as pharmaceutical manufacturers expand globally, a typical pharma supply chain is straightforward. A product is manufactured, it’s distributed to retail pharmacies and hospitals, and it’s provided to patients. On a commercial scale, these products are delivered in large quantities and not unique to a specific patient.

CGTs, on the other hand, are unique to a specific patient and not currently manufactured at scale. Starting materials most often originate from the patient, are sent to a manufacturing site to create the therapy, delivered back to the same patient’s bedside, and infused into the patient. Key touchpoints in the supply chain are handled at medical facilities that vary in infrastructure, available equipment, technologies, and staff trained in processes, such as temperature control.

Since CGTs are generally a treatment of last resort, patients are often very sick. Many would not be able to donate a second blood sample if the first sample or therapy experienced damage. The supply chain leaves no room for error. One delay or a temperature excursion that renders a therapy obsolete can mean life or death for a patient.

Foolproof temperature control is necessary, especially when shipping a patient’s cells to a biotech organization. Yet medical facilities may not have equipment to refrigerate or freeze cells, space to store bulky temperature-controlled packaging, or appropriate freezers to condition packaging components.

Staff familiarity with and training on temperature-controlled packaging could also introduce risk in the form of temperature excursions.

Companies that specialize in temperature-controlled packaging now make single-use and reusable shippers to help overcome many of these challenges. New refrigerated shippers require no conditioning, are more compact and lightweight than traditional shippers, and require only the touch of a button to activate the cooling process for refrigerated materials.

These systems use evaporative, reactive cooling technology that responds and adjusts to varying ambient temperatures. This ensures the payload remains between 2-8°C and is protected from external temperature fluctuations throughout the duration of the shipping process. Therapies shipped back to a patient’s bedside often ship frozen using vaporized liquid nitrogen (LN2). This requires special training, since LN2 can cause frostbite or skin burn if touched, and its gases can damage delicate eye tissue.

Maintaining supply chain integrity is critical to mitigating risks and ensuring the safe and secure transportation of health-giving and life-saving cells and therapies. And stakeholders in pharmaceutical shipments are demanding increasing levels of transparency regarding the status of shipments, including location information and temperature history.

Cold chain and courier companies can use advanced asset management software to monitor temperatures and validate location information. Real-time temperature monitoring using smart loggers and devices connected to the internet of things (IoT) makes it possible to understand what happens to a payload in transit. This real-time information is especially helpful when a payload is hand couriered to a final destination, allowing preventive or corrective supply chain actions as they’re needed.

GPS and cellular are current technologies that provide real-time location tracking, though they are not widely used. GPS technology tends to be heavy, expensive, and takes up a fair amount of payload space. Additionally, when loaded on an airplane, the tracking signals must be turned off so that they do not interfere with airplane navigation. This technology is most often used with individualized chimeric antigen receptor T-cell (CAR-T) therapies, where the loss of a product could mean life or death for the patient. When exact location and condition is not needed, JIT devices offer the ability to review historical information about a shipment.

The CGT industry is at a pivotal point as it transitions out of early development and into rapid growth. Its long-term success will depend on managing costs with innovative strategies to create more “off-the-shelf” therapies, or proving the cost and benefit of current therapies align, scaling manufacturing while keeping costs low, and optimizing the supply chain.

CGT companies face several complex challenges, including protecting the integrity of temperature-sensitive, high-value payloads during transportation. As the market continues its evolution, CGT manufacturers, cold chain companies, and other stakeholders will need to work closely to standardize the supply chain. The future of CGTs depends on this coordination.

https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/what-gene-therapy

https://alliancerm.org/technologies/cell-therapy/

3. Scheller, E.L.; Krebsbach, P.H. Gene Therapay: Design and Prospects for Craniofacial Regeneration. 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2907101/#:~:text=On%20September%2014%2C%201990%2C%20W,)%20(Anderson%2C%201990)

4. Cell and Gene Therapy Market Size, Growth, Trends, Forecast Report 2022-2030. Vision Research Reports, August 11, 2022. 

https://www.biospace.com/article/cell-and-gene-therapy-market-size-growth-trends-forecast-report-2022-2030/

Vince Paolizzi is the Director of NanoCool Sales, Peli BioThermal.

How cell and gene therapies can be safely protected as they move along the supply chain, even when temperature-related challenges present themselves.

The CGT Evolution: Key Considerations

Nico Ros, who is not only a Swiss engineer, but a member of SkyCell’s c-suite as its chief technology officer, partnered with co-founder Richard Ettl to establish the pharma container manufacturer over a decade ago. The cold chain company has put sustainability at the forefront of its efforts, with its product catalogue offering related environmental efficiencies in the transport of pharmaceuticals, specifically in the weight and space departments.

 spoke with Ros to discuss the challenges that come with fully committing to environmental conservation initiatives, the current inefficiency obstacles impacting the pharma sector, and how life sciences organizations can balance cost and sustainability when making supply chain decisions.

: Environmental considerations and sustainability need to be implemented into a business from the start, as trying to accomplish that after the fact can be a challenge. How can this be accomplished?

 It has become very clear over the last several years that a focus on sustainability is non-negotiable. It’s not just merely something that’s “nice to have”—businesses that cannot or will not adapt to improve their footprint will not survive. This is particularly true for operators in the pharmaceutical sector, as major companies come under increased pressure in regard to their sustainability practices. This, in turn, will trickle down to the wider supply chain industry, which will come under increasing pressure to meet the highest sustainability standards and demonstrate a plan for continuous improvement toward net-zero goals and beyond.

Figuring out how to tackle the problem of CO2 emissions and steering a business toward this—and sustainability as a whole—is no easy task. One way to accomplish this is by creating incentives for taking sustainable actions. For example, if a business were to give any CO2 emissions reduced internally a monetary value per ton, and different departments would receive more budget the more they reduced, then this incentivization could ensure that sustainability is more of a strong consideration for all. At SkyCell, we’ve set a goal for all departments to reduce their CO2 footprint wherever possible, and when it comes to each new product that we develop, we ensure that it’s more CO2 efficient than any products that came before.

Incentives can accelerate change, so by giving CO2 a price, newer, better, and greener solutions moving forward will become much more lucrative from both a monetary and sustainable perspective.

External factors will also help encourage businesses to implement these considerations from the start. Increased government regulation, such as stricter limits on CO2 emissions, penalties for generating landfill waste, and bans on single-use plastics will force businesses to take action to remain compliant, while also generating cost-savings as a secondary benefit. Investor pressure is also something to keep in mind, as environmental, social, and governance (ESG) becomes further ingrained in their value-making processes.

What are the main inefficiency challenges facing the pharma industry? How can embracing the circular economy help to combat these obstacles?

When SkyCell was established in 2012, my co-founder Richard Ettl and I decided that one of the defining principles of the company would be to embrace the circular economy by combatting the inefficiency and sustainability challenges that the pharmaceutical industry faces. The global healthcare industry emits approximately two gigatons of CO2 emissions annually, which by itself makes it equivalent to the world’s fifth largest emitter country.

One of the reasons for this infamous ranking is the inefficiency during the transport of temperature-sensitive pharmaceuticals.

For example, a typical intercontinental transport of one pallet of medication, including packaging, emits between six and 14 tons of CO2, so a pharmaceutical organization producing around 100,000 of these pallets emits about one million tons of CO2 through the transport of their products alone.

These emissions are the equivalent of the energy used by 125,000 homes in the US in a single year.

These inefficiencies are caused by the fact that about 70% to 90% of these temperature-sensitive medications are still transported in low-tech single-use packaging, which are essentially cardboard and Styrofoam boxes with cold bricks. Next to the natural resources that they consume and the waste they create, they are also extremely inefficient in terms of their weight-volume ratio. This means that these single-use pharmaceutical containers can weigh up to five times as much as the actual product, and they use 3.5 times the space of the product they secure. Their transport creates unnecessary air traffic and consumes much more fuel than is actually needed.

That’s where the circular economy comes in place. Due to the reusability of the newest pharmaceutical containers, it becomes economically and technically feasible to use high-performance materials, which are light and thin, thus drastically reducing the amount of space and weight needed to transport pharmaceuticals. As an additional benefit of these circular containers, the waste and global landfill can be drastically reduced. SkyCell’s newest product, the 1500X hybrid container, only needs about 1.5 times the volume compared to the product it secures, and weighs only 228 kg (503 lbs) for every cubic meter transported, thus reducing the necessary aeroplane trips and the fuel needed to transport life-saving pharmaceuticals.

As nice as these circular solutions sound, their leasing fee is often higher compared to single-use packaging. How can a pharma company balance cost and sustainability in their supply chain decisions?

When it comes to pharmaceutical containers, as is true for many other clean technologies such as electric cars, it is crucial to compare the total costs of ownership. For pharmaceutical transport, an important component to consider is airfreight costs, which are charged as a function of weight and volume. CO2 emissions from transport are also a function of weight and volume, and by reducing these two factors, pharmaceutical shippers can, therefore, reduce both factors simultaneously, which is the beauty of the transport sector. As an example, for every kilogram of intercontinental transport, the industry emits 20-30 kg (44-66 lbs) of CO2, at a cost of currently about 4.5 USD per kg. Reducing the weight per pallet by 200 kg thus reduces CO2 emissions by about five tons, and reduces costs by approximately 900 USD.

In addition, single-use containers are prone to temperature excursions, leading to costs for cost-and-preventive actions (CAPAs) and lost products. When adding the cost, single-use containers become even more expensive and less sustainable, since products need to be discarded, remanufactured, and re-transported.

To sum up, when considering total costs, using circular solutions in most cases makes sense both economically and ecologically.

In September 2022, SkyCell released its second annual Sustainability Report, which details the progress made in achieving net-zero emissions within the entire supply chain and making pharma supply chains more sustainable. Could you describe the outcomes of that report?

Our goal of eliminating loss in the pharmaceutical supply chain is closely linked to how we embrace sustainability as a company and our pursuit of becoming net-zero by 2040. With our Sustainability Report, we want to lead by example and demonstrate how we are taking steps toward reaching our net-zero goals.

For pharmaceutical companies, supply chains represent such a large portion of the emissions they create, with scope 3 emissions being the most challenging to reduce as they fall outside of any one company’s direct control. Pharmaceutical companies on average report emissions anywhere between 5.6% (Amgen) to 10.5% (Eli Lilly) of their emissions with transport. However, most pharmaceutical companies do not report the non-CO2 effects of their transport. By accurately including these effects, the actual emissions of transport would likely be approximately twice as high.

To reduce these emissions, which are a large part of the total emissions of any pharmaceutical business, three measures can be taken: optimization of the route, optimization of trucks and aeroplanes (including fuel switching), and improvement of the packaging. In the short term, the optimization of the packaging has the biggest effect. Switching from a single-use to an efficient multiuse container can reduce CO2 emissions by around 50% due to the higher volume-efficiency, as mentioned earlier. In the climate section of our annual report, we highlight this principle. Another key highlight was that SkyCell had successfully transitioned our operations to run solely on renewable electricity in 2021.

The report also highlights our continued work on embracing the circular economy and the reusability of our products. The opening of our first in-house production center was a big step toward taking further ownership of our own supply chain and the increased life cycle of our products. Additionally, SkyCell was awarded an EcoVadis Gold Medal in recognition for its accomplishments in environment, ethics, labor, and sustainable procurement.

We will continue to publish these sustainability reports so that we can hold ourselves accountable, and, in turn, help the pharmaceutical industry to tackle the enormous sustainability challenges it faces.

The sector has seen a plethora of companies make carbon-neutral pledges over the next couple of decades and beyond, including SkyCell. How can the pharma industry continue to push the envelope on this?

Historically, the pharmaceutical industry has not been especially focused on environmental sustainability. For instance, in the past, some pharmaceutical companies have been accused of dumping hazardous waste, disregarding the normal legal processes for this type of activity. This has had a very detrimental impact on the reputation of these businesses, notwithstanding the necessity for them to spend hundreds of millions to clean up these sites. Many companies do not want to repeat these mistakes of the past and as such have announced bold sustainability goals, including carbon-neutral pledges. Many do this for ethical reasons, but the risk of climate litigation and its associated repercussions will loom large in their minds. Emitting over what is allowed in accordance with the Paris Agreement isn’t just harmful to the environment—it also increases the risk exposure of these businesses.

The first pledges of the industry mostly pertained to the emissions of their sites and from the energy they procure (scope 1 and 2). As a consequence, the sustainability actions taken were focused on these scope 1 and 2 emissions and targeted renewable energy and energy efficiency.

Therefore, improving the pharmaceutical supply chain, including the transport of pharmaceuticals, has up until recently not been in the sustainability scope of the industry. It has come to accept an average loss rate on shipments of products that results in millions of doses of potentially life-saving medicines going to waste each year. It has also been slow to adopt reusable solutions, with single-use boxes and external cooling solutions still being widely utilized. This is why the reduction of temperature excursions is so important, as preventing excursions means fewer product losses, which then leads to less waste, less creation of new inventory, and less resending of products.

In the past couple of years, we have learned that supply chain emissions (scope 3), caused by processes such as described earlier, are about five times the emissions of scope 1 and 2 combined. Therefore, future pledges and actions will focus on the supply chain.

With this new shift, losses in the supply chain will no longer be tolerated, and inefficiencies will be eliminated to reach net-zero goals.

To reduce these inefficiencies, low-tech packaging that does not utilize technology and data are simply not fit for purpose. One solution that’s becoming more widespread is the “hybrid” container, which is a temperature-controlled container that allows pharmaceutical companies to optimize their supply chain by reducing, and even predicting, the risks associated with delivering sensitive medicines. From a sustainability perspective, these containers are designed to be reused and put a stop to the heavy usage of single-use solutions that have been a staple of the industry.

If a net-zero future is to be achieved, it’s imperative that the industry works on the development of environmentally-friendly and technologically-driven methods like this to move these essential products.

How do you envision the future of pharma sustainability shaping out?

I see the future of pharmaceutical sustainability in the continued greening of the supply chain. The industry’s supply chain has a history of wasteful and unsustainable behavior, but going forward, concerns from the likes of governments, shareholders, and consumers will push businesses to consider ways to minimize their carbon footprint. Pharmaceutical companies have already reacted and several companies, such as AstraZeneca and GSK, have recently launched sustainable procurement programs, which will advance their sustainable purchasing.

As suppliers, we are eager to do our part to work together as an industry to reach our net-zero goals. I envision that in the next year or two, we will see the first net-zero pharmaceutical transport using clean-tech solutions, such as sustainable aviation fuels, hybrid containers, electric trucks, and ammonia-powered container ships.

From there, we can scale this flagship project to operate entirely on net-zero emissions. To truly become carbon-neutral, the pharmaceutical industry as a whole needs to fully embrace these renewable energy transport methods, while also seeking to become as energy efficient as possible.

To ensure the efficiency of net-zero transport like this, I envision that pharmaceutical companies will develop an increased digital visibility of their shipments to optimize efficiency and eliminate losses. Our SECURE software platform accomplishes this and allows for the optimization of all of our shipping lanes, which when combined with our containers, creates one of the highest payload efficiencies globally. The more companies that achieve this oversight, the better and more sustainable the coming years will be.

A conversation with Nico Ros, co-founder and CTO of SkyCell. 

Aligning Cold Chain and Sustainability

In an ideal world, the pharmaceutical supply chain is consistent and problem-free. Demand doesn’t change, there are no disruptions, weather and traffic are perfect, and there are ample logistic resources—capacity, carriers, and clear access to routes—to meet the needs of all pharma manufacturers. In the real world, of course, the pharma supply chain is anything but predictable. Demand ebbs and flows; there are spikes for certain therapeutics in response to disease incidence, and disruptions come in many shapes, sizes, and degrees of severity.

Better planning alone cannot minimize and resolve these disruptions, and holding increasing amounts of costly safety stock is not a financially efficient solution. However, looking ahead in 2023, deploying integrated tactical planning (ITP)—which brings greater integration of planning and operational systems across the supply chain—is critical to better position pharma manufacturers and the supply chain ecosystem to manage, reduce, and even predict supply chain challenges, as well as streamline and optimize operations.

ITP is a process where appropriate data is pulled together across the supply chain to provide real-time situational intelligence. This data is analyzed, contextualized, and used to drive informed decision-making and model the effects of those decisions in real-time.

In 2023, we can expect significant traction across a number of advances and innovations in technologies that are driving the digitization of pharma supply chain operations to enable ITP to be effectively deployed.

1. Supply chain command centers will become mainstream

Legacy supply chain models were built around domain-specific “control towers” that provided support for decision-making, enabling a degree of visibility and control across a supply chain. However, these control towers were almost exclusively focused on the logistics side and, therefore, limited in terms of their functionality, with deployment being highly siloed.

While control towers could highlight supply chain problems, they were unable to fix them, as there was no capability to intervene digitally when things went wrong. That process would have to be elevated and triaged on a case-by-case basis, requiring phone calls, emails, and manual tasks that prolong the problem-solving process.

Speaking with pharma companies using control towers, they expressed frustration that they are domain-specific and primarily focused on logistics and shipments, but not on product sourcing, manufacturing, storage, and movement. “Control towers,” said one executive, “are like watching a slow-moving car crash happen in front of you and having no control to prevent it.” The introduction of command centers enables all of the predictions ahead to be accomplished. They encompass the entire supply chain in real-time, are scalable, multi-company, and multi-domain, providing complete visibility, from raw material suppliers to warehouses, to last-mile delivery.

The most significant advantage of command centers is that they provide the capability to act on real-time data, predict possible disruptions, and resolve them with workflows or AI recommendations. Instead of just watching the car crash, manufacturers can proactively and automatically prevent it. Command centers allow all participants in the supply chain ecosystem to view data through digital twins, which speeds up decision-making across companies to resolve disruptions. Instead of just looking at shipments between locations, command centers analyze the product flow on the supply and demand side, along with warehouse and in-transit inventory, so more optimized decisions can be made that work across the entire supply chain, not just on the logistics side.

2. Deeper partner collaboration continues to move operations beyond simple visibility

In 2023, we expect to see increasingly deep collaboration as more companies embrace the concept of an integrated supply chain ecosystem that creates value for all involved, from manufacturer to end user. Such collaboration involves complex interconnections and network between entities that extends visibility all the way from active pharmaceutical ingredients (APIs) suppliers to medical providers, clinics, hospitals, and to patients themselves in some instances. All stakeholders are able to observe the supply chain flow and where shipments or packages are in real-time, and any disruption alerts go directly to the company or the functional department that can resolve the issue with speed.

In addition, with the increase in mergers and acquisitions and tight partnerships between pharmaceutical companies, contract development and manufacturing organizations (CDMOs), and contract manufacturing organizations (CMOs), visibility across multiple companies and partners, along with better digital collaboration, is important and necessary. These various organizations cannot be siloed in data, analysis, or execution, or the entire supply chain will fail, especially if there is a major disruption, change in demand, or supply that affects multiple points in the supply chain.

A shipment delay with the potential to disrupt the timely delivery of products and impact a patient outcome should alert someone other than the carrier or logistics provider, who then contacts the distributor or manufacturer, who then contacts their customer support department that can provide alternatives to the end customer, patient, or hospital. A modern supply chain should be something other than a game of telephone tag. All the stakeholders in the value chain, along with the patient or hospital, should be automatically notified, along with customer support, which will provide options for delivery using a modern automated collaboration system. Simultaneously, logistics is notified to look at rerouting options, while manufacturing looks to produce another batch, depending on the delay time. Everyone in the supply chain who can help manage and solve the disruption should have visibility, whether inside or outside manufacturing, or the CDMO. Pharma and CDMOs will look for digital ways to work better together.

3. Planning for the real world with increased adoption of continuous execution planning

Advances in technology are enabling real-time supply chain intelligence, which will make traditional annual or quarterly planning a thing of the past. Leveraging the speed, granularity and immediacy of data, allied to rapid analytics and embedded intelligence will see on-demand, continuous execution planning becoming widely accepted.

The speed of change and disruptions in today’s supply chains means that organizations have to be ready and able to continuously replan, while ensuring alignment with quarterly and monthly integrated business plans and maintaining operational and product compliance. Changes and disruptions in sourcing, manufacturing, logistics, and distribution, along with quick changes in priorities, may dramatically affect monthly plans. The agility and flexibility to pivot and immediately replan, instead of having operations manually resolve disruptions and go off-plan, is critical.

Using live signals from the supply chain, planners and operations specialists can rapidly solve disruptions and get back on track or adjust plans in minutes. Companies will look for digitization solutions that combine data and execute in the gap to eliminate or minimize the variance between planning nd the actual execution data, which can only happen with a highly orchestrated supply chain embedded with digital twins and decision intelligence.

4. Expect to see greater decision intelligence and automated workflows

Within supply chain operations, technology is heralding a move away from slow manual processes that are inefficient and costly, and where important details can get lost. Looking ahead, we will see more use of artificial intelligence (AI) and automated workflows in the supply chain to resolve disruptions.

Embedding machine learning and AI into digital supply chain operations provides a platform to analyze historic data to provide benchmarking on which intelligence can be built through the addition and analysis of contemporary data. This opens up any number of capabilities and use cases. For example, what if AI can decide on routing or carriers depending on current real-time data, carrier performance, or the most cost-efficient routes? Looking at environmental, social, and governance (ESG) requirements, AI can also find the best routes to minimize carbon emissions. This would be like a more sophisticated Waze or Google Maps for logistics. How much time and stress would that save teams and help meet cost-savings goals?

Automated workflows or AI recommendations could also be used for possible temperature excursions, whereby the system can trigger an alert for potential temperature excursions in a shipment and then reroute the shipment to a refrigerated truck or a cold chain repackaging facility, thus maintaining quality compliance and not losing a valuable drug shipment. These AI and automated workflows can initially solve predictable disruptions due to traffic, weather, delays, spoilage, and production delays, and free your supply chain resources to look at priority issues, such as determining allocation due to shortages, long-term disruptions, and sourcing local APIs.

5. Greater automation response to disruptions with digital twins

As more and more companies look to digitize their supply chains, provide end-to-end visibility to all supply chain ecosystem participants, and expand beyond control towers to a true supply chain command center, they will have the signal feed and infrastructure to deploy digital twin technology.

A digital twin is a digital representation of real-life supply chain infrastructure and processes. But it is more than a static model; it is a living model that continuously gathers signals from sensors, transactional signals, and contextual data such as traffic, weather, port closures, and risk signals in the supply chain. The digital twin extends beyond four walls to the entire supply chain ecosystem, which is viewed in real-time. Location, temperature, humidity, or other quality indicators can be monitored, along with contextual information on traffic, weather, and disruption events.

This aforementioned digital representation allows more than just visibility, however. It can perform predetermined actions based on embedded AI models and business rules. Users can also model these automated responses before adding them to production. For example, a user can model a disruption and different response options: rerouting, new production, different inventory allocation, lot sizes to manufacture, planning expedited air freight, or allowing an AI algorithm to recommend the most optimum outcome. After the user is confident of the response, they can put that into production workflows. Because this digital twin encompasses an end-to-end model, potential problems can be quickly identified several nodes out within the ecosystem and corrective action taken in concert with supply chain partners. Having end-to-end visibility also enables better streamlining of the supply chain by identifying duplicate connections set up by different departments.

With the need for better inventory allocation, digital twin technology can model worldwide allocations to match regional demands. Should pharma manufacturers reshore or nearshore manufacturing to be close to the end customer, this technology can easily add new facilities and model the new supply chain to optimize on-time and in-full deliveries.

A digital twin is a powerful tool that provides the command center view of the entire life science supply chain. As companies digitize their supply chains, they will move to digital twin technology to lower costs, improve delivery times, optimize inventory performance, and minimize disruptions to supply chains.

6. Ongoing and increased focus on sustainability

In this age of cell and gene therapies (CGTs) and personalized medicines, each product shipment is much more critical and more valuable. In such a specialized, high-value space, reproducing a lost shipment is a much higher cost and longer delay, and may put patient outcomes at risk or a clinical trial study at risk. Gone are the options of creating a warehouse of safety stock or producing a year’s worth of supply in one production run. With therapies that have a shorter shelf life and require cold chain custody, each shipment must be produced and shipped just in time (JIT).

Because of the expense, time, and patient need, waste is much more unacceptable. The supply chain will focus more on reducing waste, shelf-life expirations, spoilage, temperature excursions, etc. Quality control will be added in every process step, including in-transit, live monitoring. This must be enacted to reduce waste, lower costs, and improve patient outcomes. Better visibility with digital track and tracking will reduce waste, but implementing a more agile and fast supply chain is the ultimate goal to meet the new types of therapies and improve care.

In addition, we are seeing logistics and packaging companies more focused on sustainability and adding reusable packaging and smart sensors. These packages and sensors will be part of the circular economy that produces less waste, lowers costs, and is trackable worldwide.

Outlining those advances poised to drive increased use of integrated tactical planning (ITP) in helping manufacturers overcome persistent supply chain obstacles.

Pharmaceutical Commerce - February 2023