2023 Leading Minds Network Market Report: Biopharma Forecast and Insights by Nick Basta
Global supply chains are undergoing fundamental change, even as the pharma industry’s use of them is also evolving. Groundbreaking therapies and personalized medications promise a new future on the horizon that are literally changing the way we practice medicine today. However, many regulatory and infrastructure challenges lie ahead.
To say that “change” is occurring in any business is something of a cliché – things are always changing, and companies that don’t evolve with those changes quickly fall behind. But today, in the aftermath of a global pandemic (which is still playing out in much of the world), a brutal war in Ukraine drawing the attention of most of the industrialized world, and the threat of a global recession brought on in part by highly volatile energy markets, supply chain managers have many reasons to lose sleep. At the same time, fundamental shifts are occurring in the pharmaceutical markets, notably the return of a “patent cliff” as numerous blockbuster drugs go off patent and become lower-cost generics or biosimilars. Alongside that shift, the importance of cellular and genetic therapies (CGTs, roughly equivalent to what are called “advanced medical therapy products” in Europe, or ATMPs) is rising: More such therapies are becoming commercialized. A hallmark of many of these CGTs is that they are “n of 1” products – tailored to an individual patient. That, for reasons that will be explained later, dramatically shifts how medicines will be distributed and administered.
Thus, there are two distinct perspectives for today’s pharma supply chain managers: a global perspective to account for the changing trade and manufacturing practices around the world; and a local one, to focus on how to get an individualized therapy to a specific patient. Many observers of the pharma industry focus exclusively on sources of supplies (ingredients) and contract services when talking about the supply chain, but the reality (and the best strategy) is to combine both sourcing and where finished products are going to achieve an end-to-end solution.
In reality, pharmaceutical supply chain managers must adopt two distinctive perspectives. In addition to procurement, they must also focus on how an individualized therapy gets to a specific patient. This is the only way to achieve an end-to-end solution.
The glue, as it were, that will hold the global/local perspective together, along with the sourcing and finished-product perspective, is digitization and data. “How to accelerate digitization is the big challenge today,” says Dan Gagnon, VP of global strategy at UPS Healthcare. Not only are companies like his increasing the quantity and quality of data they collect as they make deliveries, but they are operating in a healthcare ecosystem that is itself becoming more digitized. “In-home care is creating the need to coordinate things like the shipment of a drug with when a visiting nurse can administer it, and with shipment of, say, an infusion pump while monitoring the level of inventory of those devices, and triggering a resupply signal to a warehouse management system,” he notes.
The need for end-to-end visibility is giving rise to a new concept: monitoring as a service (MaaS). “In addition to end-to-end and real time visibility, MaaS is clearly the future,” says Christoph Bamert, global head of sales and marketing at ELPRO. “In addition to data logger and software solutions of today, we see enhanced services such as control tower, prediction, intervention, alarm prequalification and certainly reverse logistics for a more sustainable handling of our loggers.”
The market research organization Evaluate Pharma predicts compound annual growth of 6% for pharma products globally through 2028, but anticipates 2023 sales of $1.153 trillion, up only 1.2% over 2022.  A recession affecting most global economies is expected; faster growth will occur in the out years. There are some certainties, notably that Abbvie’s Humira biotech product will lose exclusivity in the US, knocking its >$20-billion annual sales down to single digits.  Other patented products losing exclusivity in this year represent some $57 billion, which could be slashed in half or more as biosimilars invade the market (however, from a supply chain perspective, the patented and biosimilar products together could represent an increase in volumes of these specialized, temperature-sensitive products to be delivered).
However, there are considerable uncertainties to the global sales perspective, notably how the Covid-19 pandemic plays out. The IQVIA Institute for Healthcare Informatics anticipates annual spending in the $30-40-billion range through 2026, representing both vaccine sales and therapeutics for patient treatment – higher if new disease variants appear, lower if caseloads dwindle.  With over a year of handling worldwide distribution of these highly temperature-sensitive vaccines under their belts, global logistics providers are well-positioned to handle ongoing distribution.
The scaleup of global vaccine distribution over the past two years will have a lasting impact for all pharmaceutical distribution, according to Robert Coyle, SVP for Healthcare at Kuehne+Nagel. “Our customers are noticing that the effort we’ve put into linking our logistics services with our emergency and relief services gives them the capability to take products into markets that they couldn’t reach previously,” he says. The company has doubled its healthcare-specific staff over the past three years and established uniform service-quality standards globally.
Drive Toward Specialty
Extraordinary attention is being paid today to cellular and genetic technologies (CGTs), from the research laboratory to the patient bedside. The Alliance for Regenerative Medicine, the trade association representing the field, announced in its first-half 2022 report that 2,093 clinical trials were underway, somewhat less than the previous year but also including 200 Phase III trials – the the last step to commercial-approval application.  There are almost 1,400 commercial developers of CGTs, according to ARM. CGTs – powered powered by the revolutionary discoveries in CAR-T and CRISPER science – have the potential to cure intractable birth defects and severe illnesses. To a certain degree, even the first-of-their kind mRNA vaccines that have confronted Covid-19 represent part of this cellular revolution.
Many of the CGT therapies commercialized so far are based on autologous treatment – taking cells from the ill patient, manipulating their internal mechanisms and returning them to the patient. These are the n-of-1 therapies, necessitating complex, temperature-controlled shipments both from and back to the patient. It is also typical that some or all of these shipments are carried out cryogenically or at least under sub-zero conditions.
Considerable excitement was generated when Atara Biotherapeutics, a relatively young CGT company, announced in December that it has received commercial approval in Europe for Ebvallo (tabelecleucel), a treatment for a rare hematologic malignancy for patients with organ transplants. Ebvallo is an allogeneic therapy: unlike the n-of-1 autologous CGTs, a batch of donor-derived cells can be produced, stored and delivered on demand to patients. “The approval of Ebvallo in Europe is a medical breakthrough for patients with significant unmet need,” said Pascal Touchon, president and CEO of Atara. “As the first allogeneic, or donor-derived, T-cell immunotherapy to receive approval from any regulatory agency in the world, this marks a historic moment for Atara, our European partner, Pierre Fabre, and for the broader cell therapy field.”
The allogeneic route has significant potential benefits for the CGT field, in part because its simpler production has the potential to lower the costs of CGT therapies, which typically run into the millions of dollars for each treatment. Today’s commercialized CGTs are mostly for rare diseases, but advocates in the field look forward to when these therapies might be suitable for common conditions like cancer or cardiovascular disease.
Cell and gene therapies of today are mostly for rare diseases. Their possible future use for common conditions such as cancer or cardiovascular diseases is raising high hopes among advocates ini this field.
Being living cells, though, means that allogeneic CGTs will still need precise temperature control. “Freezing cells below -150°C using cryogenic storage techniques is one option to address the shelf-life for fresh cells, allowing them to be kept almost indefinitely,” writes Adrea Zobel, senior director of personalized supply chain at World Courier, a leading specialty logistics provider. “However, emerging markets and remote locations, in particular, may not have the specialist facilities to maintain cryogenic storage and transport. Cryopreservation, in some cases, is critical to enable long-term storage and long-distance transit.” She goes on to say that significant infrastructure upgrading is now occurring, with advanced packaging solutions, coolant charging stations and real-time location tracking and temperature monitoring.
Whether autologous or allogeneic, CGTs fit into a larger category of drugs known as specialty pharmaceuticals. Specialty pharmaceuticals generally are complex therapeutics that require special handling (which usually means cold chain transportation) and other factors. Most are biologic in origin, and most are expensive, which puts an extra burden on safe handling and storage. An entire ecosystem of manufacturers, distributors and pharmacies has arisen over the past decade or so for these therapies.
In its 2022 Specialty Distribution: Facts and Figures report, the Healthcare Distribution Alliance calculates the global specialty pharmaceutical market at $512 billion in value in 2021, and growing at 11% CAGR (that’s twice the estimated growth rate of all pharmaceuticals).  Over 40% of these drugs are distributed to hospitals or their specialty pharmacies.
Specialty pharmacies are qualified by several standards-setting bodies in the US, and here is one area where new regulations come into play (there are many other existing regulations). In 2022, URAC, an accreditation body for pharmacies, issued its URAC 4.0 standard. Specialty pharmacies have had to manage their cold chain shipments well under URAC 3.0; now under the newer standard, they need to ensure safe delivery of room-temperature (i.e., non-cold-chain) pharmaceuticals as well. Both AmerisourceBergen and Cardinal Health, major US distributors, have set up advisory services to help their pharmacy customers meet URAC 4.0 standards.
Generating the Data
As this overall look at the coming global pharmaceutical market demonstrates, the need to track shipment activities – including temperature control – is growing in importance. This trend is being turbocharged by the current focus on managing supply chains more closely.
There is a somewhat bewildering assortment of resources to consider when a pharma supply chain manager investigates data collection for commercial or clinical shipments. Distributors carefully manage the compilation of data they receive on incoming and outgoing shipments (their revenues are dependent on accurate tracking); most if them can provide data on temperature and other conditions for some shipments as well. Third-party logistics providers do the same; many of their service contracts require such tracking. But data also can be sourced from shipping-package providers, some of whom include condition and location tracking devices on their containers. Meanwhile, a growing presence is supply-chain IT providers, who arrange linkages among shippers, 3PLs and customers. Transportation companies – air, ocean and ground – are also in the game. And of course, a pharma manufacturer can choose to hire its own tracking service, including the monitoring devices.
The trend toward seamless tracking of shipping activities is gaining momentum, being turbocharged by the current focus on managing supply chains more closely.
Providers of condition and location data- collection devices themselves are also an option. ELPRO, for example, offers the ELPRO Cloud, a way to transmit and retain the data its devices generate, making it available for meeting regulatory requirements and, depending on how the service is set up, a degree of preventive management of shipment upsets in time to address them. “End-to-end, real-time visibility is the critical opportunity today,” says ELPRO’s Global Head of Sales & Marketing, Christoph Bamert. He sees ELPRO as having a competitive advantage because it is becoming a popular choice not just for in-transit shipments, but also for stationary storage applications at laboratories, manufacturing sites and warehouses. The ELPRO Cloud can thus track a shipment from its storage location through to its destination.
The data demands of today’s pharma industry are evolving even as manufacturers are re-evaluating their supply chains, looking for “nearshoring” suppliers and vendors in the aftermath of the upheavals caused by the pandemic, unstable political environments, and national industrial policies. And when manufacturers look at their customer base – ultimately the patients that use their products – richer data will provide value in both directions.
1 Evaluate Vantage 2023 Preview, https://www.evaluate.com/thought-leadership/vantage/evaluate-vantage-2023-preview
2 Vivo Outlook 2023, https://invivo.pharmaintelligence.informa.com/outlook
3 Global Use of Medicines 2022, https://www.iqvia.com/insights/the-iqvia-institute/reports/the-global-use-of-medicines-2022
4 Regenerative Medicine: The Pipeline Momentum Builds, https://alliancerm.org/sector-report/h1-2022-report/
5 Specialty Distribution: Facts, Figures and Trends, https://hda.org/publications/2022-specialty-pharmaceutical-distribution-facts-figures-and-trends/
Founder and Former Editor of Pharmaceutical Commerce
Nicholas is a contributor to Leading Minds Network
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