GBI Research reports on 3PLs in pharma logistics

Pharmaceutical companies are hiring a little help, and joining with Third Party Logistics (3PL), but are they abandoning too much control over their business? asks a new report by healthcare experts GBI Research.?
By Patrick Burnson, Executive Editor
July 19, 2012 - LM Editorial

Pharmaceutical companies are hiring a little help, and joining with Third Party Logistics (3PL), but are they abandoning too much control over their business? asks a new report by healthcare experts GBI Research.?

?The new report states that use of 3PL companies is a growing trend in the global pharmaceutical supply chain, as cost cutting measures encourage businesses to use outside companies, who can offer services at competitive prices. However, while Direct to Pharmacy (DTP) and Reduced Wholesaler Agreements (RWA) models play a vital role in the UK, other EU countries are boosting their direct sales, and only time will tell which approach will succeed.??

Around 772 full-line wholesalers in Europe supplied pharmaceutical products to pharmacies, hospitals and doctors in 2010, according to the European Association of Pharmaceutical Wholesalers (GIRP). During this year, the overall sales turnover generated within EU-27 countries was valued at $180 billion.

The Institute for Pharmaeconomic Research (IPF) concluded that over 703 million transactions took place between pharmaceutical full­line wholesalers, pharmacies and manufacturers every year within France, Germany, Italy, Spain, the Netherlands and the United Kingdom collectively.??However, the number of full-line wholesalers in the UK is decreasing due to a rise in the adoption of alternate distribution systems such as DTP and RWA.

The impending absence of full-line wholesalers is expected to increase the number of transactions to 97.9 billion per year, and result in unnecessary transportation and delays for doctors who desperately need medicines.?? Logistical help has been prevalent in the pharma industry for several years, as Merck’s partnership with United Parcel Service (UPS) in 2003 set the scene for business collaborations.

UPS agreed to provide distribution and logistics services in the US, and this was later extended internationally. UPS Inc. now manages the distribution, warehousing and transportation of medicines and vaccines manufactured by Merck in North America, and according to the new deal, the company is set to additionally provide distribution, warehousing and transportation services for Merck in some Asian countries and Latin America, and transportation in Europe.

“While Merck benefit from a comprehensive delivery service, UPS have secured an enormous contact, and work in the upcoming pharma powerhouses of China and Brazil,” said Cathy Roberson, an analyst with the London-based think tank, Transport Intelligence. “ However, does this deal signify a loss of control for Merck, as aspects of their business are run by another company?”



About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Even though China’s costs have risen and the U.S. has now surpassed Mexico as the preferred locale for relocating offshored manufacturing, advantages can be fleeting and the challenges great

Memphis-based FedEx reported solid fiscal second quarter earnings results today. Quarterly net income of $616 million was up 23 percent annually, and revenue, at $11.9 billion, was up 5 percent. Operating income at $1.01 billion was up 22 percent.

UPS said this week that it has added significant space to some of its North America-based distribution facilities, which the company increases the total size of its supply chain solutions network size by roughly 1.2 million square-feet. The company’s total global supply chain solutions network is comprised of 596 facilities and about 32.8 million square-feet. UPS offers various services at these facilities, including: warehousing and fulfillment inventory, transportation and returns management; custom kitting and packaging; and store-ready displays.

A week ago, the average price per gallon of diesel gasoline saw its steepest decline in more than two years, when it fell 7 cents to $3.535. This week took that decline a step further, with the Department of Energy’s Energy Information Administration (EIA) reporting that the average price this week fell 11.6 cents to $3.419 per gallon.

With an eye on further expansion of its e-commerce business and related reverse logistics processes, transportation and logistics bellwether FedEx last night announced it has inked an agreement to acquire Pittsburgh-based GENCO, a third-party logistics (3PL) services provider specializing in product lifecycle and reverse logistics.

Article Topics

News · 3PL · Supply Chain · Logistics · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA