The life sciences industry is predicted to grow to more than $8.7 trillion dollars by 2020, driven in large part by growth in emerging markets. It’s also becoming more complex from a shipping perspective, due to increased regulatory and handling requirements. If you’re an IT or logistics manager who handles life sciences shipping, you’re facing a number of challenges that impact where and how you’re sending products.
These challenges include:
Regulatory demands. Increased regulation is having two effects on life sciences shipping. First is the need for compliance with track and trace requirements, cold-chain storage of certain types of materials and the ability to provide documentation of contents, trading partners and the like. These factors drive up costs. The second effect of regulation is that in some cases, it limits pricing structures in certain markets. All of these challenges combine to squeeze margins for life sciences companies.
Emerging markets and globalization. Demand is shifting from mature “Tier 1” markets like the US, Europe and Japan to emerging markets in the BRIC countries, Mexico, Turkey and others. This led to strong growth during the last recession as emerging markets increased their healthcare spending as a percentage of their overall economy. Although growth in these countries is likely to slow, it’s still outpacing established markets—which means more shipping to these countries.
Temperature requirements. Historically, life sciences shipping meant cold-chain storage mainly for vaccines, blood, tissue samples and the like. Today, as the industry shifts toward specialties like biotechnology, cold-chain refrigeration is required for more finished products: everything from biologically based medicines to research and clinical trial materials, drug coated implants and more.
Cost pressure. Uneven economic growth and higher insurance premiums along with lower deductibles mean that patients have less money to spend, but are having to pay more out of pocket for their medicines. This places increased pressure on life sciences shipping firms to contain costs while retaining margins.
Direct to patient. Home health care is a growing market for life sciences products due to an aging population in Tier 1 markets, where there is growing emphasis on aging in place due to escalating health care costs. This means many shipments are now going directly to price- and time-sensitive patients, rather than through traditional distribution channels.
All of this means higher volumes of smaller shipments, going to more places than ever before, along with increased need for accurate documentation and better visibility into specialized handling. Traditional logistics and ERP applications weren’t designed to deal with these types of challenges. If your systems are struggling to keep up, it’s time to ask some tough questions of your global parcel shipping software provider.
Today, life sciences logistics organizations are sending smaller shipments to emerging markets where the ability to handle these requirements cost-effectively isn’t a given. Parcels are beginning to replace pallets, as life sciences shipping begins to move away from traditional distribution methods. This means life sciences firms need more information than ever about the companies they choose and the parcel shipping software they use to manage the shipping process.
Here are eight key questions you need to be asking your global parcel shipping software provider:
Shipping has become more challenging for life sciences companies. You need a global parcel shipping software provider that can help you meet the needs of this rapidly evolving industry. You need life sciences shipping solutions from Precision Software.