DHL - OPPI release study on transforming Life Sciences logistics in India

- Pharmaceutical exports predicted to grow at an estimated CAGR of 23% till 2015 - India expected to be the second largest exporter of Active Pharmaceutical Ingredients (APIs) - India is the 6th fastest growing Life Sciences & Healthcare consumption market in the world

Mumbai, Maharashtra, September 28, 2011 /India PRwire/ -- DHL, the world's leading Logistics Company, together with the Organisation of Pharmaceutical Producers of India (OPPI) today revealed findings from a study entitled "Transforming Life Sciences Logistics in India". The study delves into the competitive landscape of the life sciences industry and analyzes how logistics can be a crucial enabler of the growing life sciences segment in India. Developed jointly by a team of DHL and OPPI professionals, the study focuses the spotlight on fundamental issues and offers solution ideas with thought leadership.

Inviting the attention of business leaders, government authorities, infrastructure developers and logistics companies, the study analyzes how India can achieve a world-class life sciences logistics setup. Based on detailed secondary research, the study is backed by DHL and OPPI's collective insight of the life sciences industry and its supply chain.

The study highlights 12 assets and enablers which need to be implemented, in order to achieve world-class life sciences logistics in India. These include setting up dedicated pharma zones at airports, GST implementation, faster co-ordination amongst all ground handling agencies, multi-user warehouses and shared reefer vans and ocean freight containers. Maintaining the supply chain integrity by using latest technology such as RFID, GPS and anti-counterfeit equipment will greatly improve the standards for life sciences logistics in India.

Speaking at the launch Christoph Remund, CEO - DHL Global Forwarding India said, "India is well positioned in the Life Sciences and Healthcare sector both as a producer and as a consumer of pharmaceuticals. In this study we closely examine India's life sciences logistics setup and benchmark these against the best practices prevailing across the globe. Thus we are providing a realistic roadmap for India's growth and progress in the life sciences logistics sector in the future".

Tapan Ray, Director General - OPPI said, "Supply chain and logistics are essential enablers for the life sciences industry to achieve cost and time efficiencies and ensure the right product reaches the right consumer at the right time. The joint study by DHL & OPPI proposes actionable recommendations to make India more competitive and achieve global competencies in life sciences logistics. These will address changing market dynamics, like expiring patents for blockbuster drugs, the growing need to reach hinterland areas and increasingly stringent regulations requiring compliance to global standards".

The study reveals that India's spending is set to increase from the current 1% of GDP, in the next decade. India is well positioned in this sector, as a producer, exporter, and a consumer of pharmaceuticals. Having proven its capabilities to produce cost-effective, high quality bulk drugs and formulations, India is also well known for its immense talent pool. The study also shows, that the country is registering strong growth in the manufacturing of medical devices and is expected to grow at an estimated rate of approximately 12% in 2011-12.

Another interesting facet of the study reveals how India, although seen as a cost competitive market for logistics, might be lagging behind China and even the European Union (EU), if the additional costs due to logistics inadequacies are taken into account. These inefficiencies exist in state-border delays, tolls and lost time due to paperwork. For instance, delays at Indian borders may take anywhere between 2 to 24 hours, while transit across borders in China takes only 15 minutes to 2 hours and almost no time in the EU.

According to the study the domestic Indian life sciences market is currently valued at INR 2767 billion and is set to grow to INR 3127 billion by 2015 reflecting a 13% CAGR growth, making India the 6th fastest growing life sciences & healthcare consumption market in the world. As an exporter, India is expected to see double digit growth of 23 % CAGR until 2015, thus cementing its dominance in the life sciences market globally. Given these high growth figures the importance of this industry to the Indian economy cannot be undermined.

Companies are also using logistics as a source of competitive advantage to accelerate product reach to the rural market. As a result of these global trends, Indian life sciences logistics needs to focus on driving cost efficiencies; striving for global quality standards and improving end-to-end supply chain integrity. In order to achieve this India would first need to 'become competitive' by firming up the foundation and implementing the more transformational logistics solutions, and thereafter move into 'best-in-class' by closing the remaining gaps.

The exhaustive analysis undertaken by this study clearly indicates how the life sciences logistics framework can be re-defined to have cost effective supply chains, global quality standards and a strong focus on supply chain integrity. If the existing inefficiencies in logistics are rapidly addressed, India can well exploit the opportunities that the life sciences segment holds for the country.

Notes to Editor

Key Recommendations of the study:

In order to make this roadmap a reality, seven key recommendations are put forth involving collaboration amongst the relevant authorities and various stakeholders.

◦Expand existing public-private partnerships to achieve stronger momentum on Life Sciences logistics infrastructure: These partnerships could be leveraged in areas such as the construction of connecting roads to link pharmaceutical hubs to major highways; multi-user temperature controlled warehouses.
◦Simplify and streamline import/ export processes at airports and sea ports: Ensure greater coordination between ground handling authorities i.e. Assistant Drug Controller, customs, airlines, shipping lines, logistics companies and other relevant regulatory bodies, by using the same IT system; allow one physical or electronic copy to be used across authorities instead of multiple copies per authority. Upgrading the technology and IT systems at customs could enable adoption of e-freight or online clearance thus streamlining the process further.
◦Define the 'right' technology for achieving stronger supply chain integrity in India: Set up a special working group - consisting of regulators, facility development authorities, pharmaceutical companies and logistics providers. The working group should evaluate the breadth of existing solutions for supply chain integrity (such as bar-coding and serialization). The group should come up with a consensus on the 'right' technology for India, along with acceptable timelines and clearly identified responsibilities.
◦Attract more funds and investments into the sector: In order to promote use of technology, pharmaceutical associations could facilitate and encourage investment flows into specialized technology companies all along the supply chain (e.g. warehousing and technology companies providing RFID, GPS, etc).
◦Achieve 100% GxP compliance: It is the responsibility of both pharmaceutical manufacturers as well as relevant government regulators to facilitate achievement of 100% GxP compliance throughout the Life Science supply chain. Government and regulatory authorities could call for idea contribution from manufacturers' associations and logistics providers to draw up relevant measures
◦Increase consumer awareness of product safety: Consumers should be encouraged to demand proper temperature controlled storage of drugs which might require appropriate labels on the product to help consumers identify the product integrity. Pharmaceutical companies and associations could also create help lines or web links to enable consumers to raise incidents of counterfeit products reaching them.
◦Increase efficacy of contingency plan implementation: This can be achieved through regular training on contingency and disaster management conducted by organizations like the UN for key ports and airports.

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