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New generation of cold chains is crucial to better global health standards

July 8, 2015

A new generation of cold chains needs to be developed for the life sciences and healthcare industry to improve global health standards, according to new research by DHL Global Forwarding.

A new generation of cold chains needs to be developed for the life sciences and healthcare industry to improve global health standards, according to new research by DHL Global Forwarding. DHL’s white paper The Smarter Cold Chain: Four essentials every company should adopt highlights critical challenges facing the healthcare industry as global demand for expensive structurally complex and temperature-sensitive biologics and specialty drugs grows. This latest report was published during DHL’s 15th Global Annual Life Sciences & Healthcare conference, held in Hamburg, Germany recently. “Astounding developments in the life sciences industry coupled with globalization means there is an opportunity for better health, pain relief, and cure from disease for many millions of people around the world,” said Frank Appel, chief executive officer of Deutsche Post DHL Group. “But getting the medication to patients in the right condition and achieving that goal requires a complex balancing of cost and risk. It emphasizes yet again the strong link between trade, logistics, and the impact it has on improving people’s lives.” Global spending on healthcare is forecasted to reach around US$1.3 trillion by 2018, and the World Economic Forum estimates that by 2020 one-third of all global health expenditure will be in emerging markets. Specialty drugs and biologics are one of the fastest growth areas with US spending on specialty drugs to quadruple to US$401.7 billion in five years, according to PricewaterhouseCoopers.

According to the research, life sciences and healthcare companies that want to overcome the challenges of maintaining product integrity, regardless of climactic conditions faced during global distribution, will need to build a new generation of cold chains. Lisa Harrington, president of the lharrington group and senior research fellow, Robert H Smith School of Business, University of Maryland, and author of the research, recommends companies collaborate with logistics service providers that have the right infrastructure in place and can ensure consistent processes on a global level. The white paper urges pharmaceutical companies to build high-performance partnerships to create and manage highly complex, next-generation supply chains. These partnerships need to be firmly based on a foundation of collaboration at both the strategic and tactical levels—all focused toward one common goal: serving the health of the patient. According to the report, smarter cold chains must be consistent and robust, incorporating ways of mitigating risk and loss, with strong contingency capabilities and proactive problem-resolution processes. Most importantly, they must be built on four key essentials: •A highly specialized and compliant network tuned to moving products efficiently, while protecting their integrity •Globally consistent processes—policies and procedures that mitigate risk •Risk-appropriate packaging—technology, cost-appropriate, perfect handling •Total cost strategy—includes assessing risk and the real cost of failure to the company The white paper is available for download at www.dhl.com/lifesciences_smarter.