Rising fuel and labor costs are not exclusively responsible for the increase in the pharmaceutical industry transportation spend. There are many factors driving a notable increase in the clinical supplies transportation budget for pharma’s and biotech’s today, such as:
- The mounting complexities of clinical development – with an increase in vaccines and biologics that require special packaging and handing needs across the supply chain.
- The special handling needs of temperature-controlled products during packaging, labeling, storage (including storage while waiting for customs clearance), and finally transportation to investigator site.
- The import/export requirements and the ability to clear supplies through customs, especially in emerging markets. Fines and penalties can be imposed for failure to comply with these regulations, and budgeting for tax and duty should not be forgotten.
- The location of sites and patients. In the past, investigator sites were usually located near the major airports and cities. Now, as clinical teams focus on patient recruitment in often difficult-to-access regions, getting supplies out to them is frequently treated as an afterthought – an afterthought that can prove costly!
A flawed approach to containing transportation costs is to choose the cheapest courier or to assume your corporate choice of courier is fine.
The Scene: A temperature-controlled package validated from 48 hours reaches its destination 120 hours later, causing a supply of biologics valued at $100,000 to fall out of specifications.
The Solution: Send out a new supply of biologics, but this time via premium courier, to ensure that all supplies arrive within temperature specification and in time for patients’ rescheduled appointments.
All couriers are not equal in their abilities. Our advice in choosing the right courier is to ask yourself a few questions:
- What supplies am I transporting? Are they temperature sensitive? Do they have any special needs?
- Where are the clinical trial sites located?
- What level of service do you need? Some products may need a higher level of management during transport than others.
- What additional services do I need with this courier, other than just transport? Import/export support? Customs clearance support?
- Storage requirements? Timed delivery?
- Does this courier have a good track record in this region or country? How can you check out actual performance over a period of time?
- Are the quoted costs within budget?
- What are the timelines of the study? How large are the shipments? How frequent are the shipments?
Working with an extensive list of suppliers who are regularly monitored and audited allows for data-objective selection. For each origin and destination point, there is likely a great option for lower cost provider for a ‘standard’ shipment, and an alternate ‘premium’ provider where time, temperature and value are primary considerations. It is in making the right selection given the shipment parameters that we can fully optimize transportation spend.
Learn how a detailed analysis of a leading multinational pharmaceutical company’s transportation spend led to a 4% improvement in their on-time, in-full performance while also decreasing use of premium couriers to only 7% of their shipments.