Pharma's emerging-markets push fuels cargo growth

Over the past several years, some of the biggest stories in pharma have been international. Manufacturing moving to Asia. Outsourcing and partnerships in India. Big investments in China and Russia. M&A in Brazil and South Africa. As drugmakers increasingly look outside their home markets in the U.S. and Europe, they're fueling growth in an entirely different business: Cargo.

Airlines and freight services alike are investing in facilities tailored for drug shipments, Bloomberg reports. UPS, for one, has pushed money into 5 new pharma facilities over the past year, and it just snapped up the drug logistics company Pieffe Group. Meanwhile, Lufthansa inaugurated a new cold cargo facility in Frankfurt to bolster the pharma hub it opened in Hyderabad, India, in May. The airline's cargo unit is planning to dedicate 6 McDonnell Douglas MD-11s to pharmaceuticals transport.

Pharma air freight is expected to grow by 12% annually over the next 5 years, fueled in part by emerging markets, particularly India, China and Brazil, the news service reports, citing Transport Intelligence analyst Cathy Roberson. Pharma logistics will grow an average of 7.6% in coming years, Roberson concludes. "Continued outsourcing to [emerging markets], along with changes in government legislation, will drive increases in logistics spending," Roberson says.

And according to UPS' Dan Gagnon, director of European healthcare logistics, there's even more opportunity to come. "For us the biggest opportunity and competition is in-sourced supply chains," he tells Bloomberg. "Health care is behind when it comes to outsourcing, and if we break down the market, that's where most of our opportunities come from."

- read the Bloomberg story