Mohamed Nasser, MD, Eli Lilly (Saudi Arabia): Understanding the Importance of Cold Chain as Part of the Bigger Picture

Andrea Charles
Contributor: Andrea Charles
Posted: 11/16/2011

Mohamed Nasser, Managing Director, Eli Lilly, Saudi Arabia, joins Pharma IQ to discuss the significant business impact of the temperature controlled supply chain, the importance of the cold chain as part of the bigger supply chain in the quality of medicine, aligning process with regulation and ensuring integration between the manufacturer, distributor and pharmacy. Nasser also shares his insights on best practices for cold chain management across the Middle East.

Pharma IQ:
Could you outline a bit about your current role, please?

M Nasser:
I'm currently the Managing Director for Eli Lilly in Saudi Arabia. For some people, they may find it easier to say the General Manager of the company in Saudi Arabia. My role is to oversee the total business of Lilly in Saudi, and the same time, which is probably more important, managing management team that's responsible for many branches of the business, like human resources, sales and marketing, and finance, and medical and other operational staff, and that management team has independent teams, and at the same time cross functional teams working together to run the company business, and so on.

Pharma IQ:
What do you think are the unique challenges that the Middle Eastern pharmaceutical market faces, with respect to the cold chain and temperature controlled distribution?

M Nasser:
There are a number of challenges. I think, speaking specifically over the cold chain, the number one challenge we need to watch out, the climate in this part of the world is different from many other parts of the world, so if we are always concerned or careful about the product quality in different parts of the world, we need to be doubly careful about the quality of our product, post manufacturing, during handling and distribution in this part of the world. And I think the regulations are enforcing that very strongly by classifying the area here as specific zone for that climate.

I think every company needs to consider that as number one; I wouldn’t say a challenge, but number one thing to consider when you think about distribution of medicines.

I think the second point we need to watch out, a key challenge is the widespread geography, which sometimes makes it double effort to reach a product, or reach a medicine, to some remote areas. Unlike other countries, where the geography is much more consolidated around specific, small transportation zones, Saudi Arabia, or mostly the Gulf countries, are having that particular challenge, and I think the transportation is developed in some countries, but not very well developed in other countries, and I think the more fortunate the country, the transportation system helps transporting that medicine.

So I think that's probably the second key challenge, is how can we ensure that the medicine is distributed well to the remote areas, and based on the existing transportation system. That's very important.

The third challenge that comes to cold chain and transportation of medicine is to ensure that what we call a closed chain, and what I mean by that is to ensure the medicine is not altered while transported from the distributor or the manufacturer, all the way until it reaches the patient, so it's even beyond the pharmacy.

And one of the biggest challenges, for pharmaceutical today is counterfeit, and that's not only in the Middle East. I'm talking about a global challenge. Some studies go up to 10% of the medicines in the market are counterfeit, and again that's global percentage.

So the ability of the company and the distributor and the pharmacy, the chain, to ensure that distribution challenge is very well closed and very secure against, or circumvented against counterfeit penetration, is a significant challenge, and very, very important to make sure that quality medicine is reaching the patient.

Pharma IQ:
What steps have you taken to boost your cold chain security?

M Nasser:
I would speak on behalf of the industry, more on behalf of Lilly. I think we, the whole industry is concerned, and that’s one of the great areas, one of the important areas, the whole industry works together on it. I don’t think independent company effort or independent distributor of effort can circumvent the supply chain and meet that challenge.

I think all the companies are giving this very special attention to how can we, number one, hire the right distributor, number two, help the distributor to improve their security to the right standard? And that's a continuous operation. It's not like, you get the distributor there, or you get the company there, and then inspect it every five years. That's very much a continuous operation, because as much as we develop, I think the counterfeit industry is developing as well. They are trying to develop their own technology.

So first, hire the right distributor; second, work with the distributor to upgrade their standards. Thirdly, and I wouldn’t say thirdly is in terms of importance. Much more in terms of just a number, to be honest with you; work with the government to establish the right regulations to ensure that we minimise or eliminate parallel importation through unauthorised distributors and dealers, because that could be a very big opportunity for counterfeit people to alter the medication through the parallel importation channel.

And then the very last one is, and I think that's an opportunity for improvement, is to work with the pharmacists to ensure that they receive the product from the distributor, and only the distributor, not from any other source, and make sure that they keep the medicine within the right supply chain, and qualify the pharmacist to have the right secure chain for the medicine until it reaches the patient.

Pharma IQ: Do you think the regulations with regards to cold chain are only likely to get stricter?

M Nasser: I think it's getting stricter than it was before. I can say that we are happier today with the upgrade in the regulations, and I think we're going to get even more in the future, and I think most companies, and I would say all companies, if I can say that, are happy to see much stricter regulations.

I think we need to work closely with the government to ensure that the technology and the process and the regulations are running at the same speed, because if any one of them is running at higher or lower or slower speed, or a faster or slower speed than the other one, that can crack out the system. Let me explain. If you, for example, have a technology today that can secure your product with, say, radiotechnology, for discussion’s sake, or any GSM technology, for example, can secure a product and ensure it's in a closed supply chain. I'm not ready with the regulation and the process to make that technology in action, or make it applicable, we wouldn’t benefit from the technology. And it's the other way around: if we dream that we can have a supply chain without having the proper technology, and we put whatever regulations there, whatever process there, without the right supporting platform of technology, the regulations and the process will continue to be just hypothetical or theoretical, without real implementation on the ground.

So while I'm personally very positive about the current supply chain, cold, or non-cold supply chain regulations, and I think it's improving, I think it's very important the industry works with the regulators, to ensure that the process, the regulation and the technology are running at the same speed, or a complementary speed together.

Pharma IQ: What would be your top tips for someone looking to develop a pharmaceutical cold chain in the Middle East?

M Nasser: I can give you a tip from a business perspective, not really from a technical perspective. I think, from a business perspective, to look at the complementary supply chain. Before applying the pharmacy supply chain, you need to look at the distributor supply chain. Can the distributor supply in a short span of time, or in a longer span of time? So the distributor can supply me every three days or every four days; my pharmacy supply chain should be quite different from if the distributor is only able to supply me every 45 days, and I think that's a major piece, and the level of investment and the level of structure of the supply chain, of the cold supply chain.

The second part is to be able to segment the type of business: how much the cold product represents of my total volume, and the process and the value of those cold products versus the total volume, because I need to invest correctly on the cold supply chain. At the same time we should not over invest or under invest.

And lastly, the security of that supply chain; how can you ensure that supply chain is very well monitored, and the product coming in and coming out having the right log, so ensuring that the system again is closed and secure, and that the best quality medicine is going to the patient.

So again, before thinking of my own supply chain as a pharmacy, I should really think of the complementary supply chain, how the pharmaceutical company, how the distributor supply chain work, and how can I complement mine with the bigger supply chains?

Pharma IQ: From a business perspective, how do you measure the impact that cold chain is having on the pharmaceutical industry?

M Nasser: If you look at most of the by-products, many of them require cold supply chain, and if you look the future development of pharmaceutical industry, much of the innovative pharmaceutical industry is moving in what we call biopharmaceutical industry, so it looks to me like many of the future products are going to be somehow covered by a cold supply chain, or a need for a cold supply chain.

The pharmaceutical industry cannot do everything, and I think it will always rely on good distributors in many parts of the world who have the right supply chain, and that supply chain, as we said, that will start from the good warehousing, the good release at the airport, and including the good transportation, and definitely a good pharmacy, or just pre-patient point.

If we consider all of those, I think there has to be a better dialogue between the pharmaceutical industry and their partners, specifically the distributor and the pharmacy, about the future need, not the current need, the future need of the future product, the future biopharmaceutical products, what this product is going to look like? What will be the volume? Will a box be one cubic metre, or one cubic foot, or a few centimetres? Those kinds of dialogues and discussion need to become as proactive as possible, in order for the distributor and the pharmacy to start to consider that.

Equally important, talk to government about this, because some of the product margins today are very much based on the price of the product and not based on the cost of the supply chain associated with the product. Let me give you an example. A tablet of 100 Saudi riyal, for example, having the very same margin of an injectible form or a cold-needed supply chain product of 100 riyal; the supply chain for the 100 riyal cold product is much more expensive than the supply chain for the 100 riyal tablet form. I think there has to be some sort of thinking in the future, how can we get better margins, distribution and pharmacy, and at the same time pharmaceutical, because this product costs much more in the supply chain event. I think, for example, if I'm shipping a cold product from my manufacturing site in the US, to Saudi, or to Dubai, that costs the company much more than if I'm shipping a tablet product of the very same value.

So I think those things need a much more proactive discussion, back again to the regulation with the technology and the process. We need to align those three items because they're much more. And I think the more proactive we are, the better the future of cold supply chain in the area, and better assessment of the level of investment required.

Pharma IQ: How are you seeking to embed best practices with regards to cold chain within your organisation?

M Nasser: I'm a big advocate of integration, because historically the quality of the product was only defined as a product produced or manufactured under good manufacturing process, and that's been valid, but if you consider that a medicine is only effective if it reaches the patient in the right condition. The pharmaceutical industry specifically outside the developed area, with the pharmaceutical industry relying on partners for distribution, actually do not distribute themselves, so we don’t control the quality of the product ourselves. We control the quality of product at the point of manufacturing. We need to work much better and integrate with our distributors from the process perspective, to ensure that product reaches our distributor in a good shape with the carrier that takes the product from the manufacturing side all the way to the distributor, then thirdly, from the distributor, all the way to the pharmacy. I think the integration, and I don’t mean integration as a term of measuring or a business integration term, I'm talking the integration of the process and the transparency of this process together is very, very important for ensuring the quality of the product to the end user.

Pharma IQ: What do you think the Middle Eastern pharmaceutical companies can do to increase their market share?

M Nasser: There are a number of traditional things we need to do, and we need to do right. It's doing the right things right, and doing new things. Right things right is all the traditional pieces around launching the product right, the right communication to physician, the right communication to patients, if relevant or if applicable. The very tradition of this investment in communication to the medical community of the benefits and risk of any medicine that we launch on the market is that we should continue to do the traditional piece very well.

I think the new approach that we need to start to think of is how can we partner, long-term, with healthcare providers, and specifically healthcare organisations, I would say, to develop a better approach for patient benefit, overall patient benefit, beyond the very traditional price of the product, and look at the total impact of a single product on the disease area.

Let me give you an example. Some products, back in 1997, some diseases needed complete admission of the patient to the hospital. Today, the admission of that particular patient to the hospital is just history, because there were a number of good interventions and good innovation of product, with a stream of innovative product, from 97, all the way to today. It stopped getting the patient admitted to the hospital. The patient integrated into the community. I think that has a significant impact on the level of investment required for opening new beds for this particular disease. That investment was saved because new, innovative medicine came in the picture. I'm not sure that was considered when they assessed the value of that particular medicine, and I think the industry and the buyers are stuck somehow on the discussion of the price; are not looking at the wider picture of how can we improve the overall healthcare, how can we reduce the cost to the overall healthcare, and make sure that the innovative medicine is well used, and the same time the generic medicines are very well used as well.

The pharmaceutical industry, and I think the buyers as well, need to sit together and look at the overall picture. How can we help the healthcare coverage and the cost be much more effective? It's not just the price of medicine, or how many packs we use, or which medicine we use. It's a much portion than that.

I think when the industry sits with the buyers, in positive intention to impact that picture on the intermediate and the long term, the market share of these companies will automatically improve, because the medicine starts to focus on patient benefit and healthcare benefit, and it's not just on the very traditional market share uptake from one competitor to the other.

I think there is a significant business impact of the cold supply chain.

Interview conducted by Andrea Charles.

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Andrea Charles
Contributor: Andrea Charles
Posted: 11/16/2011


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