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Logistics Insight Asia, 1/11/2007

As Asia gets set to become the worldʼs largest pharmaceutical market, opportunities are opening up for logistics providers with the capability to deal with the exacting demands of the industry.

Asia is poised to become the largest pharmaceutical market in the world, with many Asian countries growing into the powerhouses of the industry. To date, many multinational pharmaceutical companies have built a presence in the region and many Asian pharmaceutical companies are extending theirinternational reach.

While the global pharmaceutical market grew seven percent in 2006, the Asian market witnessed growth close to 10 percent and isset for further expansion.

For example, Thailand’s pharmaceutical market, which was worth about US$2 billion in 2006– the largest after Indonesia – isexpected to experience 15 percentannual growth over the next fiveyears. Meanwhile, the Philippinesand Indonesia markets are lookingat 5.5 and 10 percent growth,respectively.

However, Asia as a region is far from homogenous and each market presents its own unique challenges. The risk landscape for the pharmaceutical industry is complex, and serious concerns remain despite the progress made on many fronts in recent years. As such, Asia is not just a region of explosive growth but one of extensive opportunities.

CLINICAL TRIALS
The recent shift of focus to Asia by the global pharmaceutical market has created a corresponding change within the Asian pharma environment, especially on the regulatory front.

Revisions to the industry’s regulatory laws, as well as improved patent laws in countries such as Japan, China and India, have led to the burgeoning of the clinical trials market in Asia. The Indian clinical trials market alone was valued at US$120 million in 2006 and is expected to hit US$1 billion by 2010.

When it comes to clinical trials, Asian presents numerous advantages to industry players, compared to the US and Europe, which face a number of challenges such as the increasing difficulty in recruiting patients to participate.

In contrast, the large populations of Asian countries like India and China facilitate patient recruitment for clinical trials. The number of well-trained researchers, as well as patient participants willing to be involved in global clinical trials, is also an added bonus. In addition, the pool of treatmentnaïve patients offers an added advantage, on top of providing a pool of genetically-diverse clinical study subjects.

Asia also offers lower costs compared to Europe or the US. The cost of conducting a clinical trial in Korea, for instance, is estimated to be two-thirds of that in the United States.

Furthermore, as many major global players, which recognized the potential of the region early, have initiated clinical trials here and invested in introducing international standards for conducting such trials, Asia has a fast growing pool of countries with the ability to participate in global clinical trials.

In parallel, progress is being made in strengthening government regulations and intellectual property (IP) protection in Asia.

However, it’s not all good news. A major area of concern is the tight market for personnel trained in the area of clinical trials. A pool of professionals well-trained in Good Clinical Practice (GCP) is required to ensure that the appropriate processes are followed throughout a clinical study.

And more well-trained researchers, investigators and technologists are needed to cope with the industry’s rapid expansion and to ensure sustained long-term growth in Asia.

EXPERTISE NEEDED
When clinical test samples are transported overseas via air, their movement is subject to regulation

by the International Air Transport Association (IATA), which has stringent requirements for packaging, documentation andregulatory declarations.

However, many medical professionals in the region who are getting involved in clinical trials for the first time may not be trained or certified by IATA. Inadequate knowledge, which leads to inaccurate labeling or packaging, can result in customs delays for days and render the test samples invalid, causing disruption to a clinical trial’s progress.

Besides strict adherence to regulations and the right skill sets, the full execution of a successful clinical trial is dependent on one essential component – logistics. The complexities of managing clinical trial logistics in Asia have spawned the entry of global, full service logistics providers, such as TNT, to the pharmaceutical logistics industry.

In clinical trials, diagnostic specimens such as blood samples are both time and temperature sensitive. To derive accurate test results from such patient specimens, they need to be kept within specific temperature ranges and tested within a specific time frame after collection. The typical temperature ranges required for such samples include ambient (room temperature), refrigerated (2-8°C), and frozen(below -70°C).

With its varied transportation infrastructure and the inability to have a homogeneous, integrated network in Asia, the movement of samples to and from remote placesis a challenge.

Hence, many pharmaceutical companies and central laboratories have turned to specialist logistics providers to help ensure the integrity of test kits and samples throughout the clinical trial process, and enable pharmaceutical companies to focus on their corecompetencies.

As well as having a requisite level of expertise, it is important that such providers continue to upgrade skill sets so that they are always up-to-date with the most current knowledge of health, safety, andtransport and customs regulations.

SPECIALIST SERVICES
In 2004, service provider TNT established a Life Sciences Centre of Excellence in Singapore to provide expertise in handling specialized and time-critical goods, primarily for clinical research. It serves as a regional coordination and knowledge management center, functioning as a resource hub for the biomedical sector within theregion.

TNT also set up “Clinical Express”, a suite of expert services for the clinical trial logistics market and targeted at pharmaceutical companies, central laboratories and contract research organizations engaged in clinical research and drug development. One of the distinct services offered is global door-to-door delivery for diagnostic specimens shipped under frozenconditions.

And then earlier this year, in March, the company launched the Life Sciences Express Hub, a sector focused, 65,500 square feet regional distribution center, also located inSingapore.

According to TNT, the new facility enables healthcare manufacturers to consolidate and store products bound for the Asia Pacific market, and includes cold chain management technology to facilitate the safe transport and storage of goods ranging from medical devices, clinical diagnostics topharmaceuticals and biotechnology.

LOGISTICS BENEFITS
“Rising healthcare costs andregulatory changes have promptedindustry players – biomedicalcompanies, healthcare andpharmaceutical companies, centrallaboratories and hospitals – toreassess the efficiencies of theirsupply chain,” said Damien Tan,Country General Manager, TNTSingapore.

Hence, in terms of logistics, the value proposition of the regional distribution management solution is that customers who use the facility can reach their own customers faster by consolidating their products, thereby eliminating the need to maintain multiple warehouses in various locations. In fact, TNT makes the promise that it will send any item from the hub to distributors, hospitals or clinics in any major city in Asia within 24 hours.

As well as temperature and humidity-controlled storage facilities, the Singapore hub, which is TAPA A and Good Distribution Practice certified, offers 24/7 security, information visibility, and quality control to ensure product integrity is maintained.