March 8, 2017 PAP-Q1-17-FA-007
Clinical supply chain logistics form a crucial component of clinical trial infrastructure. The effectiveness and efficiency of a supply chain is directly related to the outcome of clinical trials.
In the last decade, the complexity of clinical supply chain logistics has increased dramatically due to the growing number of multinational clinical trials as well as the requirements to handle temperature-sensitive therapeutics. In order to manage the complexity and related challenges, pharmaceutical companies frequently turn to outsourcing to improve supply chain efficiency, reduce costs and access new technologies and new markets.
In the 2017 Nice Insight Clinical Supply Chain Logistics Survey, the influence of globalization and cold chain logistics can be observed in every surveyed category, including survey respondents’ composition, outsourcing service needs and service provider selection. In addition, Nice Insight has also explored the patterns of buyer outsourcing practice, their preferences in forming outsourcing partnerships, and areas in the clinical supply chain and logistics requiring improvement.1
A total of 320 pharmaceutical and biotechnology professionals from a wide range of companies participated in the survey. Two demographic features of the respondents stand out. Asia accounts for the largest regional group (37%), followed by Europe (33%) and North America (30%). This all reflects the current trend of growing involvement of emerging countries — the Asia-Pacific region led by China and India; Latin America led by Brazil; and Eastern Europe led by Russia — in clinical development of novel pharmaceuticals.
The main factor driving the expansion of global clinical trials is to reduce costs. Emerging countries offer a much lower cost per patient compared to the developed countries. Furthermore, the availability of a large group of patients in these regions who are eager to participate in clinical trials allows shorter timelines for recruitment. However, conducting clinical trials in these regions presents unique challenges associated with local regulatory rules, cultures, logistics and market conditions.
The second factor lies in strong representation from the biopharmaceutical sector: 70% of the respondents were from biopharmaceutical or biotechnology companies, followed by branded pharmaceutical companies (19%) and a few others from generic and over-the-counter (OTC) pharmaceutical companies and others.
Of the respondents, 52% were from big pharma or biotech companies, followed by small (21%) and midsized companies (18%). Less than 10% of respondents are from emerging, virtual or specialty pharma and biotech companies, laboratories, contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs). All were from departments that operate or oversee the supply chain activities, and the majority of them are at the corporate management level.
The strong presence of the biopharmaceutical sector in the survey is a reflection on increasing R&D efforts on biologicals. Today, 38% of pharmaceutical products are temperature-sensitive and over 35% of late-stage pipeline drugs are biologics.2
Biological materials often require cold chain logistics to ensure that they are stored, transported and distributed within their required temperature range. The demand in this area is mounting: by 2020, it is projected that eight of the top ten global pharmaceutical products will require cold chain handling.2
Managing cold chain logistics at the global scale is extremely complex and challenging. As shown in the 2017 survey, establishing secure temperature-controlled drug storage and distribution is ranked as one of the most complex tasks during clinical supply chain logistics operations. It is also an area that needs a great deal of efficiency improvement.
One important component in managing a temperature-controlled supply chain is temperature-monitoring. The demand for new equipment and technologies to monitor temperature conditions throughout the investigational drug life cycle is growing: 30% of survey respondents plan to acquire temperature data collection and management services. Aside from regulatory compliance, using temperature-monitoring technologies to reduce the likelihood of temperature deviation offers an effective cost-containment strategy.
The engagement of buyers with clinical supply chain logistics providers — for assistance in the global distribution of biological samples and clinical trial materials — is fairly high: 88% of the respondents are actively involved and the remainder are likely to require this type of service in the next 24 months.
Outsourcing occurs at every development phase, with the highest level of outsourcing partnership engagement reported in phase II (60%), followed by phase I (54%), phase III (35%), preclinical (29%) and phase IV/postlaunch (21%). As investigational drugs advance to the next stage of clinical development, more outsourcing activities are likely to be seen in the late phase (II and III) development in the future.
The respondents work for companies that are focused on a variety of therapeutic areas. Metabolic disorders (41%), infectious diseases (34%) and endocrine diseases (31%) are the most common target areas. The interest in oncology seems to have decreased within this survey group (25%). However, cancer therapeutics still account for about 25% of the global late-stage pipeline.2 This observation may indicate that drug innovators are shifting away from cancer in the search for new agents.
To meet their clinical supply chain and logistics needs, pharmaceutical and biotechnology companies demand a wide range of services — from services related to global trials to cold chain logistics to controlled drugs. The top five most frequently demanded services are drug/material import and export requirements and management (39%), supply chain strategy development (34%), regional import/export requirements and management (33%), schedule I to IV controlled drug storage and distribution (33%) and depot services for clinical trial materials (32%).
The least frequently sought services include direct-to-patient services (13%), secure, temperature-controlled drug storage and distribution (17%), ancillary material management and distribution (18%), retest labeling of clinical trial materials at depots (18%) and global project management point-of-contact person (19%). It is likely that companies tend to conduct these types of services in-house.
For pharmaceutical companies, selecting clinical supply chain logistics partners is a complex and strategic decision. The capability and quality of service providers have a direct impact on the quality and outcome of the clinical development.
During the initial selection, service providers are evaluated based on an array of attributes. The most important attributes include regulatory compliance (59%), innovation (leading the industry with new logistics solutions) (58%), experience (operational, methodological) (58%), import/export and customs expertise (57%) and supplier industry reputation (57%). Structure of supplier receives the lowest ranking (43%), though the gulf from top to bottom was not vast.
It is interesting to note that industry research is ranked as the most popular method used to select an outsourcing partner (52%), followed by trade shows/events (42%) and referrals and colleagues (40%). Online directories and web searches are much less popular. In practice, a combination of these methods is often used in service provider selection.
Several industry drivers also play significant roles in this selection, with management ranked the most important industry driver by 49% of respondents, followed by reliability, cost, regulatory compliance, global reach and customer service. The importance of management from service providers in establishing an outsourcing partnership is prominent. Their commitment is fundamental for a long-term strategic partnership.
Interestingly, reducing costs ranks only fifth among the top reasons for partnering with clinical supply chain logistics providers. Access to specialized technologies, supply planning, process improvement and packaging design are all seen as more important. As in other sectors, it appears that cost is likelier to become an issue further down the road and only if all other things are equal.
In the field of clinical supply chain logistics, buyers are increasingly seeking strategic partnerships rather than a transactional vendor-sponsor relationship.
Although the ranking of costs is low in developing outsourcing partnerships, better price offered by competing suppliers accounts for the most popular factor that would prompt respondents to switch from their current supplier(s) (51%). Other highly ranked triggering factors include improved logistics (40%), low error rate compared to the current supplier (35%) and poor regulatory compliance of the current supplier (33%).
With respect to respondents’ satisfaction level in working with clinical supply chain logistics service providers, 23% are satisfied and 28% somewhat satisfied, against 1% unsatisfied and 12% somewhat unsatisfied. The rest are neither satisfied nor dissatisfied.
The top five sources of dissatisfaction listed from greatest to least are lack of contingency planning, enrollment delay, service quality, returns and destruction, and quality control. Undoubtedly, there is much that can be done to improve outsourcing partnerships in these areas.
Service providers may also find their niche by helping buyers address tasks that received high inefficiency ratings in clinical supply chain logistics operations. These include direct-to-patient services (48%), ancillary material management and distribution (44%), clinical trial material sourcing (43%), secure, temperature-controlled drug storage and distribution (43%), global inventory system, import/export management per country, drug and material (40%) and biological sample shipments (40%).
Nice Insight, established in 2010, is the research division of That’s Nice, A Science Agency, providing data and analysis from proprietary annual surveys, custom primary qualitative and quantitative research as well as extensive secondary research. Current annual surveys include The Nice Insight Contract Development & Manufacturing (CDMO/CMO), Survey The Nice Insight Contract Research - Preclinical and Clinical (CRO) Survey, The Nice Insight Pharmaceutical Equipment Survey, and The Nice Insight Pharmaceutical Excipients Survey.