Cold chain as a Service: Is outsourcing the next step for pharmaceutical logistics?

Jay McHarg, CEO of AeroSafe Global discusses the five elements necessary for highly integrated cold chain to work as a service




According to the IQVIA Institute for Human Data Science (formerly The IMS Institute), the pharmaceutical industry loses roughly $35 billion annually as a result of temperature excursions, making transport one of the weakest links in many manufacturers’ supply chains. Today, millions of shipments per year arrive at their end destination out of spec – compromising brand reputation, efficacy, quality, and most importantly, patient safety. As noted in the 2018 Biopharma Cold Chain Sourcebook, it’s projected that 30 of the top 50 global drug products will require cold chain handling by 2022, with total sales approaching close to $149 billion. Yet for most manufacturers, managing a complex cold chain continues to fall outside of their core competencies.

A new set of realities -- including increased regulatory requirements, an influx of new gene and cell-based therapies, and the expectation that such therapies will be more readily available at points of care -- all require a cold chain that is highly flexible and infinitely more reliable. The industry and the regulators can and will demand zero excursions, and the technology and infrastructure are certainly there to support that.

By definition, a true cold chain isn’t one thing; it includes vital links of packaging, storage, transportation and monitoring, all tied together by service or services. It’s complex, but necessary to accommodate product that has an equally complex composition that can be rendered unsafe or ineffective by even a few degrees of variation. What’s necessary for an unbroken cold chain is integration that ensures reliability and flexibility without sacrificing simplicity.

When delivered in a highly integrated fashion inclusive of containers, shipping management, data analysis and more, this unbroken chain is aptly called cold-chain-as-a-service (CCaaS). Like its corollary software-as-a-service (SaaS), CCaaS is predicated on ensuring quality and usability from development to end use. When implementing and adopting CCaaS practices, the exercise must start with an end-to-end solution design; supply management and logistics, including all pre-pack-out activities (preconditioning, kitting, etc.); just-in-time delivery; data services, including payload and package data captured on site and in transit; and program management, including inspection, repair, reconditioning and re-kitting. Manufacturers must also factor in the cost of containers that cannot be reused, including packing material and other waste from the shipping process.

Given the cost and time required to design and manage an efficient, flexible, reliable and sustainable cold chain, many manufacturers are looking at outsourcing more of the required steps. This is also driven by increasing adoption of custom-designed solutions and just-in-time packaging deliveries that require smaller packaging and inventory footprints, which can free up valuable warehouse space for better, more profitable (or less costly) use. Outsourcing cold chain logistics also allows pharma manufacturers to more easily adapt to international market demands and regulatory requirements that can vary greatly from state-to-state and country-to-country. The result is increased scalability and standardization once a drug is approved for use in the global marketplace.

Beyond the need for greater vigilance to ensure temperature-sensitive therapies reach patients, the pharmaceutical industry also suffers from a waste problem. At least part of that problem could be addressed by shipping for purpose, which includes not overpacking because of uncertainty about weather, time and other factors, and using reusable containers. This could reduce shipments by up to 350,000 annually, leading to a reduction in waste disposal by 1.9 million kilograms.

What’s required to get started with CCaaS? Any solution must be comprehensive, holistic and capable of ensuring zero excursions. Any compromise or concession casts doubt on the system as a whole. Many prefer outsourcing because CCaaS requires highly technical skillsets and carries significant risk if not implemented well. And the idea of shipping with zero excursions without increasing costs – and maybe even lowering them – is a compelling value proposition for many.

In either case, the lesson for manufacturers is to start with a checklist of must-haves. As mentioned above, the following is a starting point – or at least what should be expected of any external partner:

  • Customized solution design
  • Supply management and logistics, including all pre-pack-out (preconditioning, kitting, etc.)
  • Just-in-time delivery capability
  • Data services, including payload and package data captured on site and in transit
  • Program management, including inspection, repair, recondition and re-kitting

In addition, the packaging technology used for transport must be proven and state-of-the-art. While it’s not just about the packaging, a poorly designed container simply cannot support the reliability, flexibly, simplicity and sustainability required for the age of biologics. It’s all about zero excursions, and whatever solution you choose, make sure you’ve checked all – and have all – the right boxes.