The pharmaceutical and medical devices industry in the Philippines grew 7% last year and is seen to grow by the same percentage this year, presenting huge opportunities for cold chain logistics.
Ranked 11th most attractive pharmaceutical market in Asia-Pacific, the Philippines is host to manufacturing facilities of 14 of the top pharmaceutical companies in the world, said Rolly Melendrez, Alcon Laboratories Philippines country supply chain head, in a presentation during the recent Supply Chain Management Association of the Philippines’ Supply Chain Conference.
In 2018, the country saw total pharmaceutical and medical devices revenues grow 7% to P170 billion, he added.
With such high growth and ranking, as well as the growing number of hospitals nationwide, the country’s current healthcare system, and potentials of medical tourism, the pharmaceutical and medical devices industry may grow another 7% this year, Melendrez told PortCalls in an interview on the sidelines of the conference.
He added that hospitals no longer maintain their own warehouse as they now prefer centralized procurement, having their service provider just replenish their stocks at certain periods.
But while demand is there, Melendrez said “what is really lacking is the people opening up for cold chain,” that is, having more cold chain logistics providers address the pharma industry’s needs.
He noted the cold chain sector is currently focused on fast-moving consumer goods (FMCGs) due to their high volumes, and less on the pharmaceutical industry. “I think, they (cold chain sector) have not yet explored [pharmaceuticals] so much.”
Melendrez pointed out the pharmaceutical industry requires non-conventional cold chain service with specific requirements and different “parlance.”
He noted big capital is not even required, but “more partnership with the principal, what works best for both of you and what would be the [supply chain] model that you can have.”
Patient safety is part of the requirement of quality pharmaceutical cold chain logistics, something not necessary in FMCG.
What is required
Melendrez explained that for a company to engage in cold chain logistics service for pharmaceuticals, it should align its understanding with that of the client company and comprehend how the latter does business.
The cold chain company must also have the mindset to do things fast, must be flexible and agile, and must do well in reverse logistics.
It must also secure regulatory requirements from concerned government agencies to handle pharmaceutical products and maintain a warehouse.
Melendrez, however, noted that a company must be ready to wait because it currently takes a year or so to secure some permits.
Interested service providers must also align their infrastructure, quality management, and manpower with requirements of the client company. In terms of transportation, service providers must be flexible in accommodating different types of products, from a 400-kilogram equipment to small contact lens cases. Transport service providers must also be flexible and fast in delivering rush items, especially to hospitals.
Another important requirement is a full backup of generators for warehouses or storage facilities, and these facilities should have temperature-controlled capabilities depending on requirement of product manufacturers and the client company.
Moreover, quality reverse logistics service must be in place as products needing return must arrive in good condition.
The manpower should likewise be trained: they should have a mindset for patient safety.
Melendrez said service providers for the pharmaceutical industry should “maximize [their] reach not solely for business” but also to make a bigger impact in people’s lives as the products they handle are often life-saving and life-changing. – Roumina Pablo