Pharmaceutical Logistics Market to Exceed $191.1 Bn by 2034

Pharmaceutical Logistics Market Size, Shares and Segmental Growth

The pharmaceutical logistics market was estimated at US$ 105.6 billion in 2023 and is projected to grow to US$ 191.1 billion by 2034, rising at a compound annual growth rate (CAGR) of 5.54% from 2024 to 2034. The demand for efficient and timely delivery of pharmaceuticals, growing research & development on novel drug development and biologicals, and increasing investments drive the market.

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Pharmaceutical Logistics Market: Streamlining Delivery

Pharmaceutical logistics involves procuring, storing, and transporting pharmaceutical goods like medications, medical devices, and equipment. The service includes the management of the supply chain in the pharmaceutical field from the procurement of raw materials from the vendor to the transport of finished products to the customers. It is a complex process requiring careful planning and implementation to ensure safe and efficient delivery of products.

The rising demand and need for pharmaceuticals are the major drivers of the market. The increasing incidences of chronic and acute disorders, rising population, and COVID-19 pandemic generated the demand for several pharmaceutical products such as drugs and medical devices. The market is also driven by the advent of biological products such as vaccines, cell and gene therapy products, and precision medicines, which require stringent regulatory requirements and temperature-controlled transportation. Additionally, recent technological advancements such as the use of AI and ML automate the entire logistics process, resulting in better outcomes and customer satisfaction.

Pharmaceutical Logistics Market Trends

• In August 2024, LSPedia, a SaaS provider in global product traceability, announced a strategic partnership with Pharma Logistics, a specialist in pharmaceutical logistics services. The partnership intends to provide turnkey compliance, data visibility, strong supply chain efficiency, and enhanced value for the combined client base of both businesses.
• The initiatives by the Indian Government, such as PM Gati Shakti and the National Logistics Policy, as well as digital technologies, such as the unified logistics interface program (ULIP), promote the pharmaceutical logistics sector.
• The fourth-quarter fiscal year 2024 revenue of Cardinal Health, Inc., a specialist in distributing pharmaceuticals and medical products, was increased by 12%, accounting for $59.9 billion. While the company’s revenue for fiscal year 2024 was found to be $226.8 billion, an 11% increase from fiscal year 2023.
• According to the Observatory of Economic Complexity, pharmaceuticals were the world’s 7th most traded product, with a total trade of $835 billion in 2022, accounting for a 3.85% rise from 2021. The top five exporters of pharmaceuticals in 2022 were Germany, Switzerland, the United States, Ireland, and Belgium. Whereas, the top five importers were the United States, Germany, Switzerland, Belgium, and China.

Cutting-Edge Technology: Simulating Pharma Supply Chain

Advanced technologies like artificial intelligence (AI) and machine learning (ML) algorithms streamline the supply chain of pharmaceutical goods. It provides real-time data and analytics about the delivery of pharmaceutical goods and determines the best possible routes. Telematics and remote monitoring in cold chain logistics facilitate cargo transportation, providing efficiency and better connectivity. AI can notify companies about their inventory levels and support the supply chain. Additionally, cloud computing and the internet-of-things (IoT) can monitor dosage, temperature deviation, ingredient types, etc., and generate a quality management system, ensuring product integrity throughout the supply chain process. Therefore, integrating AI into delivery and transportation can guarantee the safe, effective, and timely distribution of necessary prescription drugs, enhancing patient outcomes and satisfaction.

Restraint: Strict Regulations

The major challenge for pharmaceutical logistics is the stringent regulatory requirements. Pharmaceuticals are supplied across various countries, requiring companies to fulfill different regulations for storage, transport, and documentation. Another challenge is the rise in transportation costs due to increasing petrochemical prices. Additionally, the lack of tracking of goods reduces efficiency and workforce productivity.

Regional Insights

Favorable Government Policies Dominated North America

North America held a dominant presence in the pharmaceutical logistics market in 2023. The presence of key pharmaceutical companies, technological advancements, and favorable infrastructure drive the market. The market is also driven by favorable government policies to promote pharmaceutical logistics in the region. The US Department of Health and Human Services (HHS) released a white paper on April 2024 highlighting steps to prevent and mitigate drug shortages and proposing additional solutions for policymakers to consider. Additionally, the Drug Supply Chain Security Act (DSCSA) by the US Government highlights steps to achieve an interoperable and electronic way to identify and trace certain prescription drugs at the package level as they move through the supply chain, preventing the entry of harmful drugs. According to the Canadian Institute for Health Information’s National Health Expenditure report, pharmaceuticals are the second-largest component of healthcare expenditures, representing approximately 14% of total spending.

For instance,

• In July 2024, Pendopharm signed an exclusive distribution agreement with Ascendis Pharma A/S. Pendopharm is responsible for the regulatory approval and commercialization of Ascendis’ hypoparathyroidism treatment TransCon PTH in Canada.

Trade of Pharmaceuticals Promote the Asia-Pacific Market

Asia-Pacific is anticipated to grow at the fastest rate in the pharmaceutical logistics market during the forecast period. The growing healthcare expenditure, rising population and chronic disorders, increasing demand for generics, and growing demand for online pharmacies drive the market. China and India are the major exporters of pharmaceuticals in the Asia-Pacific region. In 2022, China was amongst the top five importers of pharmaceuticals with a value of $37.4 billion, while it ranked 13th in the export of pharmaceuticals with $15.3 billion. India’s pharmaceutical exports rose 9.67% year-on-year to $27.9 billion in 2023-24. India supplies approximately 60% of the global demand for vaccines. Additionally, Japan exported $10.6 billion in pharmaceuticals in 2022. Furthermore, favorable government policies and suitable pharmaceutical manufacturing infrastructure augment the market.

Segmental Insights

By type, the non-cold chain logistics segment dominated the pharmaceutical logistics market in 2023. Non-cold chain logistics involves storing and transporting pharmaceuticals that do not require accurate temperature control. The products include several generic drugs, antibiotics, and over-the-counter (OTC) medications. The rising demand for such products, favorable infrastructure, and cost-effectiveness of non-cold chain logistics drive the market. Non-cold chain logistics also do not require specialized equipment and unique handling processes. The market is also driven by technological advancements such as management systems for transportation and warehouses. The cold chain segment is expected to grow fastest during the forecast period. The increasing demand for biologicals due to the COVID-19 pandemic and rising chronic illnesses boost the market. In addition, the adoption of AI also boosts the healthcare market, facilitating temperature monitoring throughout transport.

By application, the biopharma segment held the largest share of the market in 2023. Biopharmaceuticals are medicines that are derived from living organisms. Examples of biopharmaceuticals include vaccines, blood and blood components, allergenic, cell and gene therapies, and recombinant therapeutic proteins. These products require stringent conditions for storage and transport, such as cold temperatures and regulatory compliance. The increasing prevalence of chronic disorders like infectious diseases, cancer, autoimmune disorders, and hematological disorders increases the demand for biopharmaceuticals, thereby necessitating their efficient and timely delivery.  The chemical pharma segment is anticipated to grow with the highest CAGR in the market during the studied years. Chemical pharma are the products other than biologicals that are synthesized from chemicals. The growing demand for raw materials, bulk pharmaceuticals, common cough and cold drugs, and generics augment the market.

Recent Developments in the Pharmaceutical Logistics Market

• In August 2024, Nippon Express GmBH announced the acquisition of a GDP certification for temporary storage and air/ocean freight forwarding operations for pharmaceutical products at its Budapest Branch warehouse.
• In September 2024, MD Logistics LLC announced the upgradation of its Plainfield warehouse into a cGMP-compliant facility for pharmaceutical products. The 37,000-square-meter facility will comprise a constant-temperature area and a refrigerated area to provide safe and high-quality pharmaceutical logistics services.

Top Companies in the Pharmaceutical Logistics Market

• Agility Logistics
• AmerisourceBergen
• Cardinal Health, Inc.
• CEVA Logistics
• C.H. Robinson
• DB Schenker
• Expeditors
• Kerry Logistics
• Kuehne + Nagel
• Maersk
• Marken LLP
• Nippon Express
• Pharma Logistics
• SF Express

Segments Covered in the Report

By Type

• Non-cold Chain Logistics
• Cold Chain Logistics

By Application

• Biopharma
• Chemical Pharma
• Specialty Pharma

By Region

• North America
  • US
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Thailand
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Sweden
  • Denmark
  • Norway
• Latin America
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa (MEA)
  • South Africa
  • UAE
  • Saudi Arabia
  • Kuwait