Article: Measure the True Cost of Logistics Failures to your Biopharma Supply Chain

By World Courier |

A Shift to a More Patient-Centric Approach

The biopharmaceutical industry is undergoing a shift to a more patient-centric approach, informed partly by the expanding focus on niche cell and gene therapies alongside traditional blockbuster drugs. But the cost and complexity of tailored, individual treatments is high – often staggeringly so. Then there’s the everyday challenges of biopharma logistics, whether it’s effectively transporting goods from manufacturing sites and storage facilities or maintaining the integrity of delicate, temperature-sensitive new treatments. 

In this content series, we investigate how the former affects the latter – and how big a role courier performance plays in this. Starting with two white papers, we’ll show how logistics providers’ non-excursion rates impact real-world performance and how much this could cost your organization in dollar terms. 

When a Small Margin Reveals a Big Gap

The increasing pressure to remove cost from the supply chain, coupled with the importance of reliable delivery for treatments, creates a difficult balancing act when choosing a supplier. While a courier with a 90% non-excursion rate presents noticeable limitations, the difference between couriers operating at 99.0% and 99.9% appears less clear cut. But if we look at the different failure rates – 1% and 0.1% respectively – we can see ten times the possibility of something going wrong. Our first white paper, ‘Measuring certainty in the specialty pharmaceutical supply chain’, analyzes how the different excursion rates of couriers can affect your supply chain.

Using a custom-built statistical model, we simulated excursion rates for typical shipping profiles and courier performance rates. What became clear is that a small shift in percentage points for excursion rates delivers big changes in expected performance. This difference became more evident as the number of shipments increased. Perhaps most crucially, as excursion rates increased, the predictability of performance decreased, making it harder to forecast and plan for drug delivery. 

Lost Time, Lost Money, Lost Confidence

The huge sums involved in researching and developing treatments mean that logistics incidents can have significant financial implications. It’s estimated that delays for niche products could cost up to $600,000 per day, with blockbuster drugs losing as much as $8 million per day..1 But understanding the true cost of an excursion is complex. It encompasses a significant number of variables, from the time taken to deal with paperwork to the type of treatment being transported. The second white paper in our series, ‘How to calculate the cost of excursions in your pharmaceutical supply chain’, provides clarity on this subject.

Our focus is on the opportunity costs of teams dealing with the fallout of an excursion, and the direct costs of resupplying and reshipping a product – essentially the combination of time and money losses. Continuing the theme from our first white paper, we’ve calculated how these costs vary for specialty logistics partners with excursion rates of 99.0% and 99.9%. The results lay bare the significant financial challenges you could face if you choose a provider with an excursion rate above 0.1%. To make this applicable to your organization, our calculation tables include space to input your own data. We have also created an interactive incident calculator to help you discover just how much you could be losing with a 99.0% courier. 

Two people in lab coats take a reading from a digital monitor inside an insulated package.

The Cost of Certainty

Confidence in your logistics performance is vital. Our research highlights the high-stakes nature of this market and the consequences of accepting anything less than a non-excursion rate of 99.9% – after all, money, trials, reputations and the health of patients are all at risk. Reading both white papers will give you in-depth insight into to the financial and practical repercussions of choosing different couriers. And it will prove that the most effective and reliable choice is a specialty pharmaceutical logistics partner such as World Courier. 

Download your free copies of our two white papers now to get the full detail on the effect courier performance can have on your organization. And if you want to see how much excursions could cost your business, try our incident calculator too.

References
1 The Real Cost of Clinical Trials: https://www.gopraxis.com/real-cost-clinical-trials/