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Indian pharma logistics and warehousing costs 15% higher than other countries

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Shri Vaibhavi Logistics

NEW DELHI : Best-in-class pharma companies globally have an inventory period of 64 days as compared to Indian counterparts that have 98 days, according to a latest study released by GS1 India, a global supply chain standards organization.  Along with that, the overall supply chain, logistics and warehousing costs in India is 15 per cent higher compared to other countries, the report added.

The report titled “Building resilience in India’s post-Covid healthcare supply chain” is based on a comprehensive study done by GS1 and Association of Healthcare Providers (India) (AHPI) on the healthcare supply chain in India.

The current challenges of the pharmaceutical and medical devices supply chain are counterfeit medicines and devices, pilferage, wastage, medication errors and lack of timely availability putting patient safety at risk. Drug counterfeiting has become a problem of a significant magnitude globally.

The GS1 India study showed more than 50 per cent of Pharma and medical devices manufacturers lose 1 per cent of their sales due to expiry and pilferage. Substandard, Spurious, Falsely Labelled, Falsified and Counterfeit (SSFFC) medical products are often designed to appear genuine and unidentifiable from authentic medical products. Their growth was previously a menace, but it has only escalated manifold with the outbreak of the COVID-19 pandemic.

The findings of the study released on 29th April show in the current scenario, over 80 per cent of the Pharmaceutical and Medical Devices Manufacturers do not have product visibility till point of care.

Nearly 69 per cent of survey respondents (Pharma and Medical Devices Manufacturers) do not have the capability to implement product recall beyond the distributor due to lack of end to end visibility.

Healthcare sector has been at the centre of COVID crisis. The challenges were numerous, beginning with managing multitude of patients affected, to managing the supply chain disruptions. In the midst of it all, the sector had to continuously innovate and come out with new ways of taking care of patients. Supply Chain disruptions during the pandemic led to drug and device shortage, which had a severe impact on the patients. This, coupled with reported fake and spurious medical products entering the supply chain, made the task of the stakeholders involved all the more challenging.

“As far as healthcare is concerned, the role of standardization in GS1 standards is going to play a very vital and important role. Healthcare is all about outcomes. It is an industry, it also has financial implications, but what’s the most important are the health outcomes. And the health outcomes are dependent a lot on how the care is delivered. One of the biggest problems in modern health care is errors. And that is something which can be resolved very easily by having this standardized technology and standardization in terms of nomenclature and product information,” said Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare Ltd.

“One of the other important elements in healthcare is traceability. The traceability of implants, medication etc is extremely important and that is something which has to be done long term. If that is integrated into the digital systems of healthcare delivery systems, that would go a long way to improve the outcomes and also making healthcare safer,” he said.

The report noted that making the healthcare supply chain resilient will require end-to-end supply chain visibility through digitalization and use of global standards which facilitate interoperability.

All the stakeholders including the government, the regulators and the industry need to work together to build a resilient healthcare supply chain, the report said.

India’s healthcare sector has witnessed rapid growth over the last five years, exhibiting a compounded annual growth rate of 16 per cent since 2016. The industry will reach a market size of US$ 877 billion (₹65 lakh crores) by 2030 if it continues to grow at the same pace. As a result of the rapid and sustained growth, the sector augmented jobs and economic development, directly employing 4.7 million people, the report noted.

The report highlights that India’s healthcare supply chain faces five key challenges: fragmentation, complexity, opaqueness, lack of agility and inefficiency. Furthermore, the economic and patient safety cost that result from counterfeiting, pilferage and product recall is also discussed and supplemented with insights gathered through our primary research with industry stakeholders.

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