Tech and policy evolution of India’s pharma supply chain

The pharma industry is one of the critical pillars of India’s economy, and supply chain is what gives it enduring strength. For the longest time, however, the pharma supply chain was unorganised. This is changing now, with the entry of big players and retail giants. We are also seeing a shift away from the old ways when patients used to go to pharmacists to pick up the medicines they needed. Today the pharma, healthcare, and retail industries offer not just products, but personalised experiences and value-added services to patients. Products are delivered to people’s doorsteps in record time, that too with discounts and offers.

India is the world’s third largest producer of pharma products and has earned the sobriquet of “the pharmacy to the world”. Indian pharma companies have a substantial share in the prescription market in the US and the EU. India also has the largest number of FDA-approved plants outside the US.

To continue driving growth for the industry, we need modern, smart supply chains that are compliant with both domestic and international regulations; follow robust standard operating procedures; have multimodal capabilities across air, land, and water; provide end-to-end visibility and control; and use the latest technologies for competitive advantage. Let us examine some of the recent developments and emerging trends on the policy, consumer, and technology fronts that are shaping the evolution of India’s pharma supply chain.

Policy-aided modernisation and growth
The supply chain in post-Covid times is being shaped, in part, by government policies. In September 2022, the Central Government announced the National Logistics Policy with the objective of lowering the cost of logistics, increasing the competitiveness of Indian products in domestic and international markets, and improving the efficiency of industries. India’s pharma MSMEs will benefit from the reduction in logistics costs. The establishment of multi-modal logistics parks, as proposed in the policy, will improve last-mile connectivity, and strengthen the cold storage and warehousing infrastructure across the country. It will also allow for inventory buffers, thus lessening our dependence on other countries for raw materials.

In the pharma supply chain, products are usually sent to C&F agents, then to city-level distributors, and ultimately to retailers. Since much of this happens at a local level, it can cause compliance issues, especially when it concerns medicines that need to be transported and stored at specific temperatures. This is because, in India, temperatures can vary widely across states, and even within cities in the same state. The newly proposed storage and warehousing policies will guide the ongoing efforts of pharma and logistics companies in addressing such issues by increasing the accessibility of the cold chain infrastructure and enhancing the connectivity to the storage areas through multimodal connectivity.

Building robust cold chain and reverse logistics capabilities
Cold chain is one of the toughest aspects of logistics to get right, and the demand for it is on the rise. Pharma and healthcare companies often ship products like vaccines, blood products, and medicines, which need to be maintained at certain temperatures to preserve their potency and validity. This can be achieved through temperature-controlled warehousing and transportation, with IoT sensors to continuously monitor the temperature. Furthermore, cold chain systems must have inbuilt protocols for mitigating risk and loss, and strong capabilities for dealing with contingencies.

Reverse logistics capability is yet another crucial aspect of pharma supply chain. There could be times when certain products need to be withdrawn from the market. This entails picking up the product from every nook and corner of the country and bringing it to the company’s warehouses or to their country of origin. There’s a need for more investments in setting up dedicated centres that perform quality checks, re-labelling, and dispatch of the returned products to the warehouses. Technology will help in developing a robust control environment to prevent fraud and tampering in both forward and reverse logistics.

The role of Blockchain
Spurious drugs are a serious issue across the world, but a technology-enabled, transparent supply chain can help in addressing it. In Africa, improvements in pharma supply chain have reduced the prevalence of spurious and failed drugs from almost 45 per cent to less than 10 per cent in the past 10-15 years.

Supply chain visibility, speed and coordination are critical to the safe and timely delivery of pharma products, and Blockchain technology can be of great help in several areas. These include monitoring the cold chain; identifying contamination of high-value, temperature-sensitive products; ensuring the authenticity of products; improving time and cost efficiencies; addressing regulatory requirements for drug tracking, and more. Blockchain can help in accurately recording price, date, location, quality, certification, and other relevant information. This improves supply chain transparency and traceability and reduces administrative costs. Blockchain can help pharma companies build trust and optimise the value chain through secure and tamper-evident data-sharing; product provenance; and digital asset tracking. Blockchain technology can give a clear picture of every capsule, every drop of a product from the manufacturer to the consumer, and nobody can manipulate the data.

Predictive supply chain with Big Data, AI, and ML
Pharma businesses that invest in Big Data Analytics, or work with logistics partners who do so, gain a great competitive advantage, as they can make more informed decisions, optimise capacity utilisation, reduce risk, and improve customer experiences. Dynamic, real-time route optimisation through the correlation of multiple data streams (such as shipments, weather, and traffic) can enable more efficient scheduling of consignments, optimisation of load sequences, and accurately predict the time of arrival. Smarter forecasting of demand, capacity, and labour can significantly optimise planning and resource utilisation and reduce supply chain costs. Big Data can be used to mitigate risks by detecting, evaluating, and providing alerts on potential disruptions caused by unexpected events, man-made or natural. This can be further enhanced with the integration of data from IoT devices.

Big Data, together with Artificial Intelligence (AI) and Machine Learning (ML), can also help pharma companies predict prescription trends and align their operations accordingly, well in advance. Geography-based market trends, customer behaviours, and healthcare trends can be used to predict orders. For instance, Rajasthan might have higher prevalence of a different set of illnesses as compared to Karnataka. The demand for medicines will accordingly differ. By studying the demand data, AI will be able to predict the prescription trends, and enable pharma companies and retailers to be ready with adequate quantities of the required products at the distribution centres that are closest to the most likely customers. This can help pharma retailers to meet heavy demand and offer quick home deliveries.

With pharma industry accelerating its digital transformation journey, the supply chain services providers have also increased their focus on driving innovations backed by data to strengthen the pharma and medical logistics. For instance, DP World’s production management and business intelligence tools provide enhanced visibility and control across the supply chain, thereby supporting optimum decision making. Furthermore, company’s suite of digital technologies is helping our customers identify bottlenecks in their supply chains and smooth the flow of medical supplies across borders.

Looking ahead
The era of the metaverse is dawning, and although it’s still early days, we can expect the metaverse to find a wide range of use cases that enable pharma companies to improve their experiential offerings. The metaverse will also play a vital role in applications such as simulating terminal operations; carrying out container and vessel inspections; conducting immersive, online safety trainings; and creating Digital Twins where a virtual representation of real-world processes is created, which can help in addressing industrial and supply chain challenges and achieving substantial time and cost savings.

Metaverse can help a single operator monitor terminals from different parts of the world in real time through virtual reality. It can also enable pharma companies to virtually check out the facilities and capabilities of prospective logistics partners. From a user benefit standpoint, Metaverse can be used to demonstrate the correct way of administering a certain medicine.

In coming years, we could see specialisations emerging within the pharma supply chain. Clinical trials, for instance, require a specialised supply chain because the samples are highly sensitive and need careful management and handling.

Meanwhile, as the costs and complexities of healthcare and pharma logistics continue to rise, pharma companies need logistics partners who can mitigate any adverse impacts on their business and on patients. The ability to leverage relationships, network, experience and skills is crucial to ensure that access to quality healthcare remains equitable across the globe.

Partnering with logistics providers can yield significant benefits for pharma companies on both the business and the consumer health fronts. With the health of millions of humans at stake, there is no room for compromise or laxity.