Global Pharmaceutical Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Global Pharmaceutical Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Global Pharmaceutical Logistics market size is expected to show an annual growth rate of approximately 5% during the forecast period 2022-2027.

The short-term effect of COVID-19 on the market is a crucial factor for pharmaceutical logistics' speedy development across the globe. In the midst of the pandemic, governments all throughout the world are emphasizing healthcare facilities and ample medicinal supply for patients. Accordingly, the exchange of regular medications is expanding from one country to another. Also, United States Food and Drug Administration (FDA) has endorsed Emergency Use Authorization for hydroxychloroquine, which is to be utilized by authorized medical care suppliers to treat adolescents and grown-ups hospitalized with COVID-19 who gauge in excess of 50 kg.

The pharmaceutical manufacturing companies are increasingly outsourcing packaging and labeling activities from third-party providers. Many pharmaceutical companies are expanding their operations in untapped regions, including Sub-Saharan Africa and South America. Herein, the preference for local logistics providers with high expertise in pharmaceuticals is of great importance to drug manufacturers. However, the deteriorating service levels and loss of control are significant threats that are faced in outsourcing operations.

The increasing demand for sea and air freight pharmaceutical logistics is anticipated to propel industry growth over the forecast period. The transportation of pharma products by sea reduces the transportation cost by up to 80% and brings down the staffing requirements. Additionally, it conserves the packaging and storage needs while reducing the carbon footprint of logistics operations. The increasing use of air freight logistics for long-distance and intercontinental distribution of valuable vaccines and medicines is expected to fuel the growth further.

The non-cold chain logistics segment dominated the market and accounted for the largest revenue of 75 USD billion in 2021. The segment is expected to have a considerable share in the next seven years owing to the increasing demand for non-cold chain pharma medicines and other products. The cold chain logistics segment is expected to witness a significant growth rate from 2022 to 2027. This growth is attributable to the rising demand for temperature-controlled products, such as the ongoing distribution of COVID-19 vaccines, which require accurate temperature control logistics services in order to maintain the products’ efficacy.

Furthermore, the stringent government regulations to maintain accurate temperature for highly temperature-sensitive pharmaceutical products are expected to boost segment growth over the forecast period. The growing adoption of telematics in cold chain pharmaceutical logistics is helping companies to enhance the efficiency, connectivity, and safety of transport cargoes. Most biological and medical products require a temperature-controlled environment during the stage of manufacturing and distribution, which helps in maintaining the effectiveness and quality of the medicines. Thus, pharma companies are using temperature-controlled transportation and cold storage systems.

North America is the largest single pharma market region-wise, with Unites States contributing USD 555 billion in 2021. However, while mature markets like the US and Europe are saturated with growth mainly depending on new products and services, emerging markets such as Latin America, Asia, and Africa, still offer a high potential for growth with exist­ing portfolios. They are therefore closely monitored by pharma companies.

Despite these promising developments, pharma distribution is still a major challenge, involving diverse region-specific market risks and issues. United States market faces high pric­ing of pharmaceuticals due to missing governmental price controls and limited access to lower-priced medicine from abroad. Regions such as Latin America, Africa, and Russia still struggle with geopolitical risks, corruption, and illicit medicine. The ­African continent, moreover, must cope with security issues, unstable political situations, and approx. 30% of counterfeit products. Although these challenges are rather obvious, they indicate that a detailed analysis is inevitable for pharmaceutical companies before entering those markets.

The market is highly fragmented, with many companies across the globe. Some of the top names in this industry include DHL, DB Group, and FedEx.

To maintain their position in the market, the pharma companies are continuously undertaking strategic initiatives such as mergers and acquisitions. Furthermore, the companies in the market for pharmaceutical logistics are investing in technologies such as telematics, remote sensing and monitoring, and GPS and GIS integration in transport cargo, thereby providing the customers with safe and convenient pharmaceutical logistics services.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support