UPS Healthcare sounds off on the future and challenges of the supply chain – Endpoints News

FRANK­FURT, Ger­many — Go­ing in­to the CPhI con­fer­ence, sup­ply chain is­sues were still a rel­e­vant fac­tor for many com­pa­nies and man­u­fac­tur­ing or­ga­ni­za­tions. Out­side cir­cum­stances com­bined with ris­ing prices and the usu­al sup­ply chain fac­tors have led to some sig­nif­i­cant chal­lenges on the sup­ply chain front.

Speak­ing to End­points News at CPhI, UPS Health­care Pres­i­dent Wes Wheel­er and VP for In­ter­na­tion­al Sales Cathy O’Brien de­tailed the state of the sup­ply chain fur­ther and where the fu­ture sits for the health branch of the lo­gis­tics gi­ant.

Wheel­er ac­knowl­edged that the Covid-19 pan­dem­ic was a ma­jor dri­ver in the fo­cus on sup­ply chain is­sues, and it woke up both UPS Health­care and the rest of the in­dus­try to gaps in cold chain de­liv­ery and that de­liv­er­ies at ul­tra-low tem­per­a­tures are be­com­ing the norm.

Wheel­er de­tailed:

We re­al­ized that first of all we have in­con­sis­ten­cies in how we dis­trib­ute around the world. We know now we have gaps in the, in the cold chain around the world, not on­ly us but the rest of the in­dus­try. With the vac­cines com­ing in at ul­tra-low tem­per­a­tures, frozen tem­per­a­tures mi­nus 70. And now the cell and gene ther­a­pies are at mi­nus 150. So the whole in­dus­try is mov­ing to cold and frozen. And be­cause these drugs are bi­o­log­ic, and they’re de­rived from or­gan­ic ma­te­r­i­al, they’re frag­ile. And frag­ile means that they have lim­it­ed shelf life, they have short sta­bil­i­ty times. And every sin­gle one of our cus­tomers now wants to know where the drug is, where it is, and what tem­per­a­ture is at right. And if it ex­ceeds the tem­per­a­ture by one de­gree, they want to know about it and in some cas­es, they’ll re­ject the batch.

For some of the wider ob­sta­cles that UPS faces, Wheel­er said that the Eu­ro­peans have not adopt­ed as­pects of what he calls “pas­sive tech­nol­o­gy” for pack­ag­ing, which can help a box hold its tem­per­a­ture for 96 hours pos­si­bly. The chal­lenge that Wheel­er and UPS have en­coun­tered is that the Eu­ro­peans don’t ac­cept that nec­es­sar­i­ly as the stan­dard of ac­tive trans­porta­tion, such as trucks with re­frig­er­a­tion units, as stan­dard.

But there is al­so a chal­lenge in how long sup­ply chains have ex­tend­ed as well.

But the chal­lenge we have is that many bi­o­log­ics now and the bio gener­ics are com­ing out of Asia, South Ko­rea, Tai­wan, Sin­ga­pore, for var­i­ous rea­sons, whether it be gov­ern­ment in­cen­tives or whether it be tax in­cen­tives, but that’s where a lot of them are com­ing from. So, you imag­ined that as a bi­o­log­ic com­ing from South Ko­rea, be­ing trans­port­ed all the way to Min­neapo­lis or a fill-fin­ish site in Eu­rope some­where, cross­ing bor­ders is a big prob­lem. So pas­sive tech­nol­o­gy, if it’s on­ly good for 72 hours, it gets held up at the bor­der, it’s go­ing to fail. And these are very ex­pen­sive drugs. If they sit on the tar­mac in the air or at the air­port for three or four days, they’re go­ing to go out of sta­bil­i­ty. And that drug or patent will fail and will be de­stroyed. And that’s the biggest chal­lenge that the sup­ply chains are long now. And you’ve got to re­ly on cus­toms bro­ker­age, and re­la­tion­ships you have with the gov­ern­ments to get them across the bor­der.

O’Brien not­ed that the geopo­lit­i­cal are­na, with con­flict in Ukraine, shut­downs in Chi­na, and gov­ern­ments look­ing to re-shore op­er­a­tions, are al­so ma­jor is­sues. And the ef­fort to reshore may be more com­pli­cat­ed than gov­ern­ments may think. Wheel­er said that most of the start­ing ma­te­ri­als for in­gre­di­ents and oth­er drugs come from Chi­na, and find­ing an al­ter­na­tive area for the start­ing po­si­tion may be com­pli­cat­ed.

“If you want to de-risk the sup­ply chain. You’ve got to find al­ter­na­tive sources of these drugs. And you can’t do it in the US too ex­pen­sive, we’re talk­ing about mak­ing ba­sic chem­i­cals that go in­to mak­ing drugs you can­not source them from the US they have to be com­ing from ei­ther a lot of low-tax lo­ca­tions or low-cost lo­ca­tions,” Wheel­er said.

How­ev­er, one of the new mea­sures to tack­le will soon be the wider trans­porta­tion of cell and gene ther­a­pies, as reg­u­la­tions around those ther­a­pies are even more strin­gent than just deal­ing with reg­u­lar drugs, and one mis­take in the chain could have detri­men­tal ef­fects. There­fore, Wheel­er stress­es that as cell and gene ther­a­pies be­come more preva­lent, the sup­ply chain will need to be ex­treme­ly care­ful and pre­cise.

While Covid-19 was a ma­jor detri­ment to the in­dus­try, O’Brien said that this has forced sup­ply chain lead­ers to have a seat at the ta­ble when mak­ing de­ci­sions when it was an af­ter­thought a few years ago, and de­spite the chal­lenges, the cur­rent times for the wider sup­ply chain are ex­cit­ing but al­so crit­i­cal to nav­i­gat­ing for the fu­ture.