Global bio-pharmaceutical logistics market: trends analysis and forecasts up to 2022

The global size of bio-pharmaceutical logistics market was valued at USD 61.1 billion in 2014 and is expected to reach around USD 100 billion by 2022, growing at a CAGR of 7.0% during the forecast period of 2016 to 2022.

In an organization logistics deals with the procurement, planning, and implementation of process activities in the forward and reverse transportation of goods from one place to other. Temperature control, regulatory compliance, security, safety and chain of custody are the key obstacles for the bio-pharmaceutical manufacturers at every turn from the manufacturing stage to distribution. As a remedy, the strategic supply chain management will help the manufacturers to overcome these obstacles. Logistics is the key integral part of supply chain management, which deals with procurement, planning and implementation of all the logistics activities in an organization. The pharmaceutical industry utilizes logistic services for the complete administration of the distribution of medicinal products and devices to different end users where they are required. These logistics services help the pharmaceutical companies have a continuous supply of drugs, devices and equipment from suppliers and distributors of various locations.

Nowadays, most of the pharmaceutical companies are outsourcing their logistics services to third party providers known as LSPs (Logistics Service Providers) to focus on their core business activities such as marketing, sales and research & development activities. The outsourcing of logistics services is becoming core of business strategies in most of the organizations, as a cost cutting program. The global prescription drug sales has more than doubled in the past ten years and is expected to surpass one trillion in terms of sales value by the end of 2020. Moreover, patent rights for several leading drugs are set to expire, indicates that large portion of sales will shift from original brand manufacturer to generic manufacturers. Similar to other sectors, the pharmaceutical industry is also undergoing the geographic shift in its production facilities and sales markets. Markets like Asia, Latin America, Middle East, China, etc. are becoming increasingly attractive to these pharmaceutical companies, however, these markets are considered as the most challenging in terms of supply chain regulations.

At present, the distribution structure in the European and American markets are heavily inclined towards national warehouses both regionally and centrally. Developing warehouse structures and outsourcing to logistics service providers is the key focus areas for the pharmaceutical manufacturers. Low cost and greater visibility in the supply chain are the main advantages of outsourcing logistics services and is becoming an integral part of overall business strategy. These above-mentioned factors are the key drivers for the growth of the market in the coming years.