November 2024
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 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.
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.
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.
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.
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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.
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.
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November 2024
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Deepa has certified the degree of Master’s in Pharmacy in the Pharmaceutical Quality Assurance department from Dr D.Y. Patil College of Pharmacy. Her research is focused on the healthcare industry. She is the author or co-author of four Review Articles, which include Solid dispersion a strategic method for poorly soluble drugs and solubility improvement techniques for poorly soluble drugs, Herbal Drugs Used In Treatment Of Cataracts, Nano sponges And Their Application in Cancer Prevention and Ayurvedic Remedies of Peptic ulcer. She has also published a Research Article on the Formulation and Evaluation of Mucoadhesive Tablets of Miconazole cocrystal which was published in GIS Science Journal Volume 9 Issue 8. Her passion for secondary research and desire to take on the challenge of solving unresolved issues is making her flourish is the in the research sector.
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