One of the biggest shifts taking place in pharmaceutical distribution right now is that more and more consumers are buying over-the-counter (OTC) products that are non-controlled online. This started pre-Covid, but the pandemic revved up that engine and now the onus is on the pharma distributors to meet this new demand. “The pharmaceutical industry is embracing the e-commerce channel for non-controlled drugs,” says Adam Brown, global market development director at Dematic, “which means that about 80% of the drugs used in day-to-day life can be ordered online now.”
“Everyone was looking at how to turn over more inventory and get more throughput out of their automation,” says Leber. “That’s all gone out the window, and particularly for pharma. Now, a lot of companies are investing in warehousing, moving away from using third-party logistics providers (3PLs), and regaining control over their supply chains.” This is driving more investment in fully automated operations, he adds, versus the one-off approach that some organizations were taking pre-pandemic (e.g., adding automation here and there to solve specific problems in the warehouse or DC).
When making those sweeping investments in automation, pharmaceutical companies want proven, risk-free solutions. When talking to those organizations about goods-to-person and other automated options, for instance, Leber is often asked, “That’s great, but where can we use this outside of just a proposal, demo, or simulation?” Operating in an industry that vehemently protects its privacy—and that is still limiting in-person contact due to Covid—pharma companies are often hard-pressed to find use cases to model or borrow from. “We’ve had a couple of ‘quiet’ visits that some of our best pharma customers have [allowed],” says Leber, “but even those that were previously willing to show off what they’re doing [with automation] aren’t letting anyone in. We’re hoping those restrictions will lessen in the next few months.” Top-notch systems, please Looking ahead, Leber expects pharmaceutical companies and their distributors to adopt software that can be validated (versus just adding bolt-on programs over time) using documented evidence that confirms systems were correctly installed, meet specifications like good manufacturing practice (GMP) codes and will accommodate users’ needs. He says companies are also looking for single solutions that can manage many aspects of their operations, versus individual solutions that tackle just one part of the pharma distribution process. When making their investments in automation, pharmaceutical companies are following a broader trend by giving logistics and supply chain a bigger say in those investments. “Logistics used to be at the low end of the totem pole for obtaining corporate capital because their investments didn’t necessarily grow the top line,” says Leber. “Now, more companies understand that you can significantly hurt the top line if you don’t have top-notch systems.”
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