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China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

To get started with the third dose, you need to understand the way it goes.

Text | Li Yun

Edit | Sun Pengfei

Special Consultant | Daisy

Text total: 5251

Estimated reading time: 8 minutes

At the end of the 19th century, during the Spanish-American War, large-scale smallpox broke out in the Philippines. Local vaccines in the Philippines came by sea from the United States, and the lack of temperature control during transportation led to the failure of vaccine distribution.

There are also ample vaccine stocks in Manila. But the lack of ice-making equipment has also led to villagers and U.S. servicemen scattered across the Philippine provinces and regions dying in hemorrhage and abscesses all over the body.

Infectious viruses are present with humans. Fortunately, the defensive weapons held by mankind are also being replaced. For example, the pharmaceutical cold chain.

Since September last year, the third dose of the new crown vaccine has been launched in various places. China's pharmaceutical cold chain has begun to enter a busy period in the new season.

With the advancement of modern logistics technology, the rapid development of refrigeration technology, and the increasing improvement of human research on virus and drug activity, the pharmaceutical cold chain has become our umbrella in the face of daily diseases and outbreaks.

As of October 17, 2021, China has provided more than 1.5 billion doses of vaccines to more than 100 other countries and international organizations, more than the total number of vaccines aided by other countries around the world.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Source: Xinhua News Agency

The formation of the pharmaceutical cold chain system has enabled human beings to form a healthy community across space, race and natural environment.

Today, we use ten questions to explore the cold chain of medicine and the basic appearance of the cold chain of medicine in China.

01.What is the cold chain of medicine transported? How big is the market demand?

In the pharmaceutical cold chain, the main items transported are medicines, vaccines, blood products and biological samples.

According to the data of the Prospective Industry Research Institute, in 2019, among the subdivisions of China's pharmaceutical cold chain, IVD (in vitro diagnostic reagents) had the largest market share, accounting for 22%; followed by medical devices (except IVD) and vaccines, with market shares accounting for 14% and 13% respectively.

With the rapid development of emerging industries such as biological engineering in China, the quality and logistics requirements of related products are becoming more and more stringent, and the demand for pharmaceutical cold chain logistics will become larger and larger.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Image source: Sohu

According to the "China Pharmaceutical Cold Chain Logistics Industry Research Report 2021", in 2020, the sales volume of China's pharmaceutical cold chain market reached 390.34 billion yuan, an increase of 14.97% year-on-year.

02. What is the difference between transporting vaccines and transporting ice cream?

Both the pharmaceutical cold chain and the food cold chain belong to the branches of the cold chain industry. However, the two are very different in terms of transportation requirements, costs, and scales.

In simple terms, the temperature is also not precisely controlled, and there is no big problem with the ice cream melting partly - at most, there is only one more child in the world who has eaten a strangely shaped popsicle.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

The ice cream with the highest winning rate when I was a child - baby ice cream Image source: The Internet

If the vaccine is being transported, too high or too low a temperature will cause it to fail.

The stringent requirements of pharmaceutical logistics also determine the high cost of transportation equipment. The cost of a refrigerated truck required for vaccine transportation is generally about 500,000 yuan. The refrigerated trucks needed to transport ice cream are priced at about 40,000 yuan.

At the same time, in addition to the high demand for infectious disease vaccines such as the new crown vaccine, the general vaccine market is characterized by a wide range of demand but a small dose.

Therefore, the transportation of drugs by pharmaceutical companies generally presents the characteristics of small batches and multiple batches, which is different from the characteristics of large-scale transportation of ice cream and scale advantages.

In general, the pharmaceutical cold chain is compared with the food cold chain: strict supervision, high threshold, and large upfront investment.

03. Is it enough to transport special medical products?

It is not - the pharmaceutical cold chain is not to ensure that it is cold, but constant temperature. Some medical supplies are not only afraid of light and heat, but also afraid of freezing.

Only some pharmaceutical products require extremely low temperature preservation environments. For example, the mRNA covid-19 vaccine requires a transport environment of minus 70 °C.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Drafting: Cube Knows how to make a bureau

Most vaccines need to be refrigerated at temperatures between 2-8 ° C, which is the refrigerated preservation temperature of the general household refrigerator.

However, if the temperature is too high, the high temperature sensitive drug will become ineffective and even toxic; if the temperature is too low, the low temperature sensitive drug will lose its therapeutic effect due to freezing.

Maintaining the constant temperature of items for a long time is difficult to achieve in ordinary refrigerators, which is also one of the "core technologies" of the pharmaceutical cold chain. In the field of pharmaceutical cold chain, temperature detection systems are crucial –

Refrigerated trucks, refrigerated bags, and refrigerators for pharmaceutical transportation must have temperature monitoring equipment and certain control functions in order to achieve timely response to temperature abnormalities.

At the same time, transport personnel must understand the characteristics of the drug.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Source: Wikimedia Commons

There are many unexpected situations during transportation. For example, the delivery of drugs is delayed due to weather conditions, which requires the transport personnel to adjust the temperature. For the same drug, to be stored for one week and three days, the temperature requirements are different.

04. At present, which companies are doing pharmaceutical cold chain in the market?

Upstream: mainly refers to enterprises that produce pharmaceutical cold chain equipment, including refrigerators, refrigerated trucks, vaccine transport vehicles, etc.; and companies that provide refrigeration services, including cold storage enterprises and refrigeration centers.

Midstream: Mainly refers to companies involved in the transportation and warehousing of drugs. These companies provide services for the supply chain, including information systems and platforms, refrigerated transportation, cold storage warehousing operations, and end-of-line distribution.

The average person is more familiar with one of the logistics companies, which are divided into three categories:

The first category is the national drug flow, China Resources pharmaceutical logistics, Drug flow and Jointown logistics and other pharmaceutical logistics enterprises with large pharmaceutical enterprise background, its advantage lies in the centralized scale operation, monitoring and management is done well.

The second type is the enterprise whose main business is the pharmaceutical cold chain represented by Shanghai Shengsheng Logistics. The advantage is that the professionalism is high, and the weak is that the cost remains high.

The third category is the third-party logistics enterprises represented by SF. Such enterprises can provide affordable transportation services for small and medium-sized pharmaceutical wholesale enterprises with limited funds.

Downstream: mainly refers to the final application of the drug. These include pharmaceutical distribution enterprises, hospitals, pharmacies, etc.

Data source: Qi Cha Cha Chart: Cube Zhi Manufacturing Bureau

05.Is SF reliable? I was a little flustered when I thought that the drugs I used were sent by the courier company...

You're not the only one who feels similar.

At the beginning of 2017, SF went public and made a lot of noise for its pharmaceutical circulation business. On that day, Hu Jiqiang, chairman of Kang'enbei, wrote a sentence in his work diary: "This is the shame of our medical people." ”

Hu Jiqiang may be the same as you think: "delivering fresh" and pharmaceutical companies to grab business, this matter makes the latter somewhat difficult to accept.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Hu Jiqiang, chairman of Kang Enbei (Source: Xinhua Net)

In fact, SF's pharmaceutical logistics section is independent and advantageous, and makes up for the shortcomings of pharmaceutical company logistics.

In 2014, SF established a separate pharmaceutical logistics division, and two years later, it officially established the "cold transportation division" to separate the pharmaceutical cold chain and fresh cold chain resources. Therefore, SF's pharmaceutical cold chain, cold fresh delivery and ordinary commodity express delivery services belong to different systems.

The addition of SF completes the map of safe transportation of drugs:

In the past, pharmaceutical company logistics could only cover the path between pharmaceuticals from pharmaceutical factories to distributors. Most pharmaceutical wholesale enterprises do not have strong economic strength to hire logistics teams, and the coverage is limited. Drug transport destinations are generally concentrated in provincial capitals.

SF undertakes drug distribution between distributors and users, covering more than 75% of key areas in the country. Relying on the warehouse distribution network accumulated over the years, SF has established pharmaceutical logistics subsidiaries in four major regions: Southwest China, South China, East China and North China.

Well-known multinational pharmaceutical companies did not choose other professional pharmaceutical distribution, but chose traditional express delivery companies. This shows that the participation of third-party logistics in the competition of China's medical cold chain market is the future trend.

Since the State Council canceled the administrative approval of the third-party pharmaceutical logistics industry, the domestic pharmaceutical cold chain has a relatively clear direction of change: from logistics subcontracting to one-stop service, and the supply chain structure from cabbage to flat.

06. What is the most important thing for each link in the industrial chain?

If we regard the drugs on the pharmaceutical cold chain as the president, then the medical cold chain facilities and equipment are bulletproof vehicles, which maintain the safety of the environment to the minimum; and the transportation logistics is the driver and the bodyguard on the car, ensuring the stability of the road and solving the unexpected situation.

It can be seen that the key to cold chain facilities and equipment lies in stability. For example, the pharmaceutical cold storage must be equipped with two sets of refrigeration systems, one for one use, and at the same time need to configure temperature and humidity monitoring alarms, which are always alert for environmental changes in the preservation process.

The key to cold chain logistics is more about ensuring a closed loop in the handover process. During transportation, the refrigeration truck adopts the active refrigeration method to keep the drug at a constant temperature. The temperature control between the refrigerated truck and the receiving point at the time of delivery is completed by the cold package, which ensures the cold chain closed loop of the whole process from shipment out of the warehouse, in transit transportation, and terminal delivery.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Due to the large total circulation of national drugs, meticulous and comprehensive manual temperature inspection is bound to reduce the efficiency of customs clearance and handover, increase the cost of enterprises, and now the information system between various enterprises has not yet been fully opened, and it will take a certain amount of time to close the loop.

07. In recent years, the development of the pharmaceutical cold chain industry, rely on what black technology?

The development of the pharmaceutical cold chain industry is inseparable from the popularity of third-party medical testing (ICL).

According to Guoyuan Securities, China's ICL market space will reach 57.9 billion yuan in 2023, with a compound annual growth rate of 25%.

The delivery of biological samples became busier as the ICL's four-sided blossoms became busier. Due to the increasingly fierce competition trend in the domestic ICL industry, many companies have chosen to build their own pharmaceutical cold chain system as their moat and establish their own leading edge.

Another technology that promotes the safety of the cold chain of medicine is the Internet of Things.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

The IoT system can track and analyze the location, temperature, and power of any box in real time, and can forcibly record the entire operation data and save it to the corresponding server.

In this way, manufacturers, logistics distribution agencies, regulatory departments can grasp the drug delivery situation in a timely manner, the whole process becomes more transparent, and can also save the labor cost of manual monitoring in transportation; even if a link goes wrong, it can also be followed by evidence and real-time early warning.

08. Since the drugs are directly pulled to the hospital, what is the direct relationship between the cold chain of medicine and me as a patient?

Let's look at a set of Data from the World Health Organization .

Every year, 25% of vaccines arrive at their destination unusable due to improper transportation. Nearly 30 percent of end-of-life sales by pharmaceutical companies can be attributed to logistics problems, and 20 percent of temperature-sensitive health products are damaged during transportation due to cold chain breaks.

Problems in the pharmaceutical cold chain are harmful to you, businesses and society. Having established this, let's talk about a future B2C trend that may be closer to you.

In the future, the diagnosis and treatment pattern in China may change, and a new model of direct docking of patients by pharmaceutical companies and hospitals will emerge.

Referring to the CVS pharmacy model in the United States, patients can complete remote diagnosis through the online diagnosis system of pharmacies, get a prescription, and directly buy drugs to go home.

In the future, when we go to see a doctor or diagnose, it may not all happen in the hospital, but can be done at home or in pharmacies. At that time, the pharmaceutical cold chain is likely to become a bridge connecting patients with pharmaceutical companies and large professional medical institutions.

Such a scene has already sprouted in China.

In May 2020, JD Cold Chain's pharmaceutical cold chain service reached a cooperation with Neptune Star, and patients can purchase drugs directly online after receiving a prescription at the hospital. Jingdong cold chain adopts GSP standard cold chain equipment, delivers medicine to the door within 24 hours of placing an order, and ensures that the temperature of the whole process is visually controllable.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Image source: Xinhua Net

Many retail pharmacies are also developing into platform-based B2C e-commerce. For example, Good Doctor, a subsidiary set up by Jointown, connects the e-commerce online system and the offline logistics system based on user needs. Consumer big data can enable Jointown to achieve large-scale precision distribution for a certain region, thereby alleviating the previously mentioned logistics cost pressure.

Whether it is on-site service or online drug purchase, you may be the recipient of the cold chain of medicine in the future.

09. Where is the industry gap between China and other countries?

Let's first look at the three aspects of technology, equipment and infrastructure:

Technical side:

One of the shortcomings of China's pharmaceutical cold chain is that the real-time tracking system is not popular. Compare the United States and Canada:

Relying on big data technology, automatic identification radio frequency technology, electronic data interchange technology and remote control technology, the United States has established an information platform for matching transportation routes and vehicles and goods.

Canada applies modern information technology such as global positioning system and electronic data interchange, and builds a pharmaceutical cold chain logistics information exchange and management system according to unified standards, and has now realized full temperature control and real-time monitoring in all aspects of pre-cooling, warehousing, transportation and sales.

The construction degree of China's pharmaceutical cold chain logistics information management system is relatively low, partly because the system is expensive, resulting in high costs.

Device side:

At present Chinese the ownership rate of refrigerated trucks and cold storage is still lower than that of most comparable countries.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

According to data from the Head Leopard Research Institute, in 2020, Chinese refrigerated vehicles accounted for 0.3% of freight cars, while this data has reached 2.6% and 1% in the UK and the US, respectively. Chinese average cold storage ownership rate, only 1/4 of the United States.

This reflects that China's pharmaceutical cold chain industry is in the early stage of development, and the cost of pharmaceutical cold chain enterprises is high and the scale of investment is small.

China Securities News has reported that the average gross profit margin of China's pharmaceutical circulation enterprises in 2020 is 8.6%, and pharmaceutical circulation enterprises must ensure a gross profit margin of more than 25% to maintain healthy development.

According to the statistics of Guojin Securities, in 2020, the full load rate of China's pharmaceutical logistics is only 30%, and 70% of the vehicles cannot fully play their value. Most of the vehicles on the return journey are 100% empty.

Infrastructure end:

At present, China's pharmaceutical cold chain industry still needs to strengthen the standardization construction, for example, there is a situation where the information standards are not uniform, resulting in the information system used by many pharmaceutical logistics companies and the upstream and downstream enterprises docking standards do not agree, and it is necessary to develop port docking separately.

Therefore, in November last year, the State Council issued the "14th Five-Year Plan" cold chain logistics development plan, which mentioned that the whole process of monitoring the refrigerated trucks, refrigerated boxes and key cold chain products in the pharmaceutical cold chain industry should be basically fully covered, the cold chain traceability system of pharmaceutical products should be further improved, and the cold chain logistics network of pharmaceutical products with wide coverage, high efficiency, low cost, safety and reliability should be basically formed.

10. What is the future development direction of China's pharmaceutical cold chain?

The implementation of policies such as the "two-invoice system" has continuously increased the scale of pharmaceutical circulation in China, the number of enterprises with layout has continued to increase, and the pace of development of the pharmaceutical cold chain has accelerated.

At the same time, the new medical reform policy on the industry norms, product standards, but also so that China's pharmaceutical wholesale enterprises, pharmaceutical logistics enterprises, pharmaceutical equipment manufacturing enterprises gradually out of the small, scattered, chaotic pattern, to have a strong financial capacity, high professionalism, and clear intelligent layout of large enterprises transformation.

China's pharmaceutical cold chain: this link has a problem, and vaccines around the world are affected

Source: Official government website

In the future, a series of ways to reduce costs and increase efficiency in the pharmaceutical cold chain, such as the integration of warehouse allocation resources, the system sharing of the entire industrial chain, and the designation of logistics plans through big data, will all occur faster in China.

And you will be the recipient and beneficiary of the pharmaceutical cold chain.

Resources:

"On the day of SF's listing, pharmaceutical people felt that it was simply a "shame"" Logistics Times Weekly

"Pharmaceutical Cold Chain Research - Third-Party Logistics Enterprises Accelerate Layout, and the Competitive Landscape Is Expected to Reshape" Head Leopard Research Institute

"SF cut into the pharmaceutical cold chain logistics, Wang Wei holds the chip geometry? Times Weekly

"Exploration of Innovative Pharmaceutical Cold Chain Solutions Driven by Markets and New Technologies" China Logistics and Procurement

"Design and Implementation of Cold Chain Monitoring Platform for Medical Supplies Based on Internet of Things" Science and Technology Horizon

"Deep ploughing of medical testing, entering the harvest period after running a horse race - the depth of Jinyu Medical Company" Guoyuan Securities

"Is it difficult to break through the online purchase of refrigerated drugs?" This chain has made a move" The first pharmacy caizhi

"Sino-US and Japanese Pharmaceutical Logistics Model and Comparative Enlightenment" Logistics Technology

"Interview with China Resources Pharmaceutical Huo Peiqiong: Where is the pharmaceutical vaccine cold chain industry going in the post-epidemic era? 21st Century Business Herald

"Strict management of the "cold chain": cold chain logistics "closed loop" still needs time, and operational standards need to be introduced urgently" Voice of China

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