Most industry experts estimate that supply chain logistics for clinical trials account for 20 to 25% of total R&D costs. There is evidence that those estimates are growing. EvaluatePharma reports that logistics services are experiencing a growth rate of 12%, which is faster than the more stable overall market growth of 2 to 2.5%. With rising cost pressures from payers and policy makers worldwide, it is surprising that more attention has not been paid to this increasingly dominant factor in clinical development.
To the uninitiated, supplying drugs for clinical trials may seem like a straightforward activity: A manufacturer ships drugs to investigator sites where trial participants receive the medication. This would explain why, in a survey conducted by SCM World, only 39% of pharmaceutical respondents see the supply chain as an equally important part of business success.
Clearly there is an under-appreciation of what can go wrong. Anyone experienced with supply chain management will tell you that numerous variables make this far from a simple activity: type of drug, size of patient population and geographical areas of investigation. The list goes on.
Consider the case of a clinical trial for a biologic with a short half-life that needs continuous infusion for several weeks and bag changes every 48 hours. To ensure the necessary supply of product to 750 patients enrolled in the study at sites across a dozen locations globally, logistics managers need temperature-assured transportation and packaging. They also need to plan for return of unused medicines, as well as shipment of medical samples to centralized analytical laboratories.
As medical science becomes more personalized and clinical trials become more global, so too are logistics challenges becoming more complex—too complex, in fact, to rely on the same business models that have become engrained in the industry.
Conventionally, most pharmaceutical supply chains were designed to satisfy regulatory requirements and produce high volumes of product to avoid stock-outs, while at the same time risking significant write-offs of inventory that may expire. These outdated models paid little attention to the agility needed in an increasingly complex and global environment.
Today, the primary driver of costs in the clinical trials supply chain is the explosion of therapies that require cold storage. These temperature-sensitive products include biologics, such as monoclonal antibodies (mAbs) for certain cancers, as well as vaccines and other blood products are delivered in liquid form by injection or infusion, and packaged in vials, syringes or “pens.” In clinical trials, the cold chain preserves the integrity of the product, and thus maintains the validity of trial results. This keeps research organizations in compliance with various laws, regulations, guidelines and codes around the globe.
The costs associated with maintaining a cold supply chain, however, should not be overlooked. It costs more to store products at 2 to 8 °C or at frozen temperatures, more to pack and transport them cold, and more to prove each shipment remains cold throughout shipping.
By 2020, 27 of the top 50 sellers will be drugs requiring 2 to 8 °C cold-chain storage and handling. The total value of bioengineered drug products is more than $150 billion worldwide, three times what it was 10 years ago, and vaccines and blood products have expanded as well.
A one-size-fits-all approach to the supply chain needs to evolve. The next generation of the supply chain will be built around flexibility, responsiveness and reliability, shifting the supply paradigm from a stock-based model to an order-based model.
Secure, direct-to-patient shipments are emerging as is the state-of-the-art delivery process utilizing individual temperature-controlled containers. Bypassing medical facilities and biopharmaceutical depots, this approach offers faster delivery to patients and better accountability.
Direct-to-patient shippers are a fraction of the size and weight of current shippers. This dramatically reduces distribution and shipping costs, especially for temperature-sensitive products. Direct-to-patient shippers can be the same kit box that clinical supplies are packed in. Technology can be built into the shipper to provide for tracking, temperature, light and other critical measurements.
R&D, marketing and sales used to be the most important functions for pharmaceutical companies. Today, logistics may well define competitive advantage. With nearly $250 billion being spent on supply chain costs annually, any improvement in logistics could free up capital resources to be reallocated for investment in other business areas.
Matthew Howes is senior vice president, marketing innovation for PALIO, an inVentiv Health company. A leader in digital strategy, he has provided the fuel for digital businesses visited by over 100 million people every month. Email email@example.com.
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