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  September 22nd, 2016 | Written by

Pharmaceutical Logistics Expected to Grow at Seven-Percent Clip

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  • Global pharmaceuticals market is expected to reach $942 billion by the end of 2016.
  • Patents for several leading drugs are set to expire, shift production to generic manufacturers.
  • Emerging markets are the most challenging for supply chain management in pharma sector.

Temperature control, regulatory compliance, security, safety and chain of custody are key issues for pharmaceutical manufacturers. In every organization, logistics is an integral part of supply chain management, which deals with procurement, planning and implementation of all logistics activities. Effective logistics management helps pharmaceutical companies to have a constant supply of drugs, devices and equipment from various dealers and distributors in different locations.

The global pharmaceutical market has more than doubled in the past ten years, according to a recent report from Pharmiweb, and is expected to reach $942 billion by the end of 2016. Patent rights for several leading drugs are set to expire, meaning that a large portion of sales will shift from original brand manufacturers to generic manufacturers.

The global market for bio-pharmaceutical logistics was valued at $61.1 billion in 2014 and is expected to reach $91.0 billion by 2020, growing, according to the report’s forecast, at an annual rate of 6.9 percent through 2020.

The pharmaceuticals industry is also undergoing a geographic shift in its production facilities and sales. Markets like Asia, Latin America, the Middle East, and China are becoming more attractive to pharmaceuticals companies but these same markets are considered the most challenging in terms of supply chain management.

At present, the pharmaceuticals distribution structure in the European and American markets is heavily inclined towards national warehouses. Developing warehouse structures and outsourcing to logistics service providers is the a key focus for some pharmaceuticals manufacturers. Low cost and greater visibility in the supply chain are the main advantages of outsourcing logistics services and is becoming an integral part of their strategy.

The primary driving factor for the growth of this market include new regulations in the form of Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP), according to the report. In addition, factors such as increasing demand for temperature sensitive pharmaceutical products and delivery methods could contribute to the growth of this market.