by Alex Maxwell Vice President, Life Sciences and Healthcare Business Development, DHL Supply Chain, Asia Pacific
The life sciences & healthcare (LSH) sector is undergoing rapid changes. Today, the global pharmaceuticals market is worth US$300 billion a year, a figure expected to rise to US$400 billion within three years . The medical devices market is going strong as well – its value will reach a projected US$398 billion by 2017 .
As the LSH industry reaches new heights, it also has to deal with new challenges. With the rise of economic giants like China and the ever-changing demographics of the world’s population, LSH players need to understand the shifts in the market in order to respond appropriately. At DHL, we recently uncovered three critical developments in an in-depth study of the LSH field – as part of our Trend Radar initiative.
Changing healthcare needs
The world’s population will hit 8.5 billion in 2030 , with developing countries leading the charge. At the same time, populations in most countries are ageing; the median age in China, in particular, has risen to 37.3 . Major economic centers are also shifting – in terms of purchasing power parity, China has already overtaken the US in 2014 to become the largest economy, while India has the potential to become the second largest economy in the world by 2050 .
All these forces will shape healthcare demands to come. Experts also believe several diseases will become more common, while new illnesses will also come into existence. Lifestyle diseases such as type 2 diabetes, cancer, cardiovascular issues, and psychological illnesses fall into the first category, mainly driven by unhealthy diets, lack of physical activity, and elevated stress in developed societies. Roughly 4.4 percent of the world’s population could suffer from diabetes by 2030 . On the other hand, cancer killed 8.2 million people in 2012, and new cases are estimated to grow by 70 percent over the next two decades .
Increasing urbanisation, globalisation, and climate change will also lead to unexpected changes in disease risks. Highly infectious diseases like SARS and swine flu can spread rapidly via flights and trade routes. Dramatic rises in temperatures can also alter the behaviours of pathogenic carriers like mosquitos, thereby affecting the geographical range of vector-borne illnesses like malaria.
The connected patient
Consumers today have become more well-informed. With the prevalence of the Internet and social media, consumers have access to more information about the services and products they are purchasing. This makes them more careful about medical claims, health authorities and procedures. As a result, they have more influence over the types of treatments they receive from healthcare practitioners. Health today is also defined more comprehensively than ever before. People today see staying healthy as a state of well-being and an enabler of higher productivity and enjoyment, rather than just avoiding diseases.
Higher levels of awareness among individuals also lead to more control over their own personal health. Take self-medication for instance: the market for over-the-counter drugs will reach US$106.3 billion in 2017 . Digital health tracking has also become popular, with portable and cost-friendly devices like Fitbit allowing users to monitor their physical activity and sleep patterns, and as technology matures in fields like sensing and miniaturisation, the quality of diagnostics on these gadgets will improve. Patients will have the capability to monitor and track their own health, and even get recommendations and coaching advice, just by using these devices. This will no doubt impact their reliance on traditional pharmaceutical products and health services.
New frontiers in healthcare
Continuous advances in LSH technology will also shake up the landscape. For instance, the field of biopharmaceuticals is undergoing great growth. The global biopharmaceutical market will increase with a CAGR of 9.6 percent until 2020 . This is largely driven by Asia, considered as one of the fastest growing markets with China in the lead. By 2030, the Asian middle class will increase by 571 percent, and 70 percent of global biopharmaceutical spending will come from the region .
Genetic testing could also enter mainstream medical practice by 2020 . As human genome sequencing becomes less costly, patients worldwide could soon be able to enjoy stratified or personalised medicine; treatments can be increasingly tailored to fit the particular group or individual receiving them. Currently, new biomarkers have been identified, while many more are being developed, thanks to the lowering costs of testing and computing.
Technical innovations in robotics and mobile technology are also opening up new avenues for healthcare applications. Robot-assisted surgeries have become a tangible option for patients today, while semi-autonomous care and cleaning robots will begin contributing to hospital services in the near future. Augmented reality in mobile devices can also be taken beyond the communications and entertainment spheres as it has the potential for enabling more accuracy in several medical practices. For instance, healthcare professionals can use augmented overlays to perform arthrography injections, which require a high level of precision.
Build a healthy supply chain
Now that we have a clearer picture of what is happening in the LSH sector, the next question to ask is how businesses can best adapt to these changes? One of the areas to consider is the quality of a business’ supply chain, which will be a crucial determining factor for success. Companies need to beef up their local capabilities in emerging markets and gain more control over their transportation channels by increasing visibility and ensuring adaptability. A robust supply chain will allow businesses to deliver healthcare services and products to more markets, improve offerings to existing customers, and keep operational costs low.
Gain end-to-end control with serialisation
As businesses extend supply chains to meet increased demand, it is important to know where their shipments are, and where they are headed. Serialisation technology allows companies to do just that and more. By tagging products with serial numbers, companies will be able to track and trace individual drug shipments. They can also ensure more seamless deliveries by getting timely updates of the status of their goods, and taking the appropriate measures should disruptions occur. In addition, this also increases the security of drugs against counterfeiting, a longstanding issue that has caused the deaths of one million people annually .
This higher level of visibility can lead to more insights into an organisation’s supply chain, and subsequently more efficiencies. Serialisation can help monitor expiration dates, which helps staff track the shelf-life of drugs, anticipate demand, and plan production in advance. Organisations can then better control their inventories, bringing the right drugs to patients more effectively while reducing wastage and costs. Serialisation can also help save on transportation expenses with more efficient inventory management practices, thus reducing spending related to warehousing and truck fleets. Several DHL customers have already experienced some of these benefits first-hand. Our experts helped Turkish pharmaceutical manufacturers tag all their products with unique 2D barcodes and QR codes, and designed systems to track and trace them. This allowed them to comply with the requirements of the Turkish Ministry of Health’s Pharmaceutical Track and Trace System, which monitors 2.5 billion drug units annually . At the same time, the manufacturers drove process improvements through better operational efficiency and accuracy.
Ensure product integrity with cold chain solutions
As the industry moves towards more sophisticated drugs, supply chains must also be equipped to provide the delicate temperature conditions these products must be kept in. Cold chain technologies are fundamental to ensuring that the drugs are in tip-top condition from one end of the supply chain to the other, ensuring each shipment’s integrity through varying infrastructure, environmental and regulatory conditions of the various areas they travel through.
A cold chain solution provides a comprehensive, specialised network that can handle the transportation of complex drugs safely. It utilises a combination of temperature-monitoring sensors and temperature-controlled solutions, customised warehousing, staff training, and IT platforms to move sensitive products efficiently. Containers, trailers, and packages are outfitted with energy sources and thermostatic controls to maintain temperature levels. Water, ice, and dry ice can also be used to the same effect. Additional features, such as GPS and telemetry, can also be deployed to further ensure the shipments’ safety.
On a strategic level, IT platforms can be used to run analytics, which reduces risks and helps organisations make more intelligent decisions about temperature-controlled supply chains. As more data is aggregated, decision-makers can start to detect underlying problems, identify new opportunities and create innovative solutions.
Automate, dispense, deliver
When it comes to drug dispensation, automation and robotics technologies can have a direct impact on patients’ experience. The entire workflow – from prescription to dispensing – can be accelerated so that waiting rooms are not packed with patients queuing for their drugs, and pharmacists are not overwhelmed by heavy work volumes.
Technologies like pharmacy dispensing workflow software, drug dispensing systems, and radio-frequency identification (RFID) are available to assist today’s healthcare professionals. In one such application, pharmacists first review and tag prescriptions before dropping them into an RFID-tagged basket . This signals drug-dispensing robots to automatically identify, pick, and drop medicines into the appropriately labelled plastic bags. These enhancements are also used in conjunction with manual-picking processes. Staffs scan the barcodes on drugs, which triggers LED lights above the correct container for ease of identification. They then pack the medicines in a RFID-tagged basket, which IT systems will track, auto-assemble, and channel to the appropriate dispensing counters. In addition, the IT platform evenly distributes the workload between robotic and manual processing systems.
All these advantages will optimise the speed of dispensing to patients, reduce manpower requirements and more importantly, minimise the chance of human error.
Logistics technology: your most effective treatment
The LSH landscape is undergoing monumental changes, and so must the way organisations think about their supply chains. The key issues we have diagnosed include shifting global disease patterns that require innovative treatment methods and options, and the changing economic climates that LSH organisations must confront. The most effective treatment for these challenges would be the intelligent use of existing and emerging logistics technologies that will drive better supply chain efficiencies.
To assist LSH organisations in their efforts, we have invested significantly in the LSH logistics sector in Asia. To date, we have developed Life Science Competence Centres in Singapore, Shanghai, Mumbai and Hyderabad [15, 16]. The centres will support innovations such as Temperature-Controlled Logistics and boost LSH logistics capabilities in the region. We have also set up two integrated healthcare hubs in Singapore to improve patient care at the National University Hospital and Tan Tock Seng Hospital . In the long run, we believe that advancements in logistics services can put LSH organisations in a better state of health to pursue new objectives in the coming decades.
About the Author
Vice President, Life Sciences and Healthcare
DHL Supply Chain, Asia Pacific
Alex Maxwell is DHL Supply Chain’s regional business development lead in Asia Pacific. Based in Shanghai, China, he oversees a portfolio across the region which covers 132 customers, in 14 countries occupying in excess of 500,000 sq. meters of warehousing space. The Life sciences and Healthcare sector generated around 18% of DHL Supply Chain’s annual revenue in 2015.
Alex has over 20 years’ experience in the logistics industry, 14 of which has been in Asia Pacific working in the Life Sciences and Healthcare Sector, based out of Hong Kong, India, and Shanghai. He has been with DHL Supply Chain since early 2012. Prior to that, he worked for major pharmaceutical companies including Novartis, Dade Behring Diagnostics and Fenwal Blood Technologies. Alex also worked within the semiconductor industry for three years as General Manager China for JSI Customised Logistics.
His experience on both sides of the supply chain have seen him develop regional supply chain strategies for Dade Behring Diagnostics, implement a regional distribution centre in Singapore for Novartis, and lead the Healthcare Sector Strategy at DHL Supply Chain Asia Pacific.
References would be provided upon request.
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