The pharmaceutical logistics business is poised to grow at a faster pace in the near future with the growth of generic market opportunities the Indian companies expected to leverage in the regulated western markets, say supply chain experts.

The exports of drugs, pharmaceuticals and fine chemicals in the country is the third largest revenue generating business, which grew at a rate of 30 per cent in the past two years and expected to carry on a compounded annual growth rate (CAGR) of 18.5 per cent. The growth in exports clearly shows the increased opportunity for logistics and supply chain management companies in the Indian pharma market, said Samuel G Riskin, managing director - sales - Middle East, Indian Subcontinent and Africa, FedEx Express Corporation.

In 2010, the Indian pharma exports is expected to outperform the domestic medicines business and to grab almost 11 per cent share of the US generics market, he averred referring to various market studies in a symposium conducted by DDN, the US-based third party logistics and supply chain management service provider, on supply chain and logistics in pharmaceuticals in Mumbai.

"More than 50 per cent of the Indian exports is to US and 29 per cent of ANDAs (abbreviated new drug applications) filed in US till December 2008 are from India. The growth in pharmaceutical exports will increase the need of value based logistics services for the Indian companies," he averred. The competent workforce with fluency in English and excellence in chemistry and process engineering are the strengths of Indian companies.

However, there are challenges in the pharmaceutical logistics in the country, which should be addressed promptly for better growth of the industry. The average cost of transportation in the country currently accounts for almost 13 per cent of the Gross Domestic Product (GDP), which is much higher than the normal transportation cost of 9 per cent recorded in various other countries. The cost in one per cent itself will reflect billions in transaction.

The poor connectivity to the hinterland and poor temperature controlled warehousing facilities in the country are the issues related to the air freight. Keeping ambient temperature, time sensitivity, visibility of product delivery are some of the other challenges faced in the logistics segment. The increasing freight rates and accessorial issues are also rated as the top challenge for pharma logistics. The India government is slowly improving the infrastructure including new airport facilities and increased cargo area to support the industry, he added.

Ross Bjella, president, DDN and Jim Etter, vice president - operations, DDN detailed the Indian pharma companies on the regulatory aspects to be taken into consideration for exports to US and other regulated markets. The lack of new medicines entering into market and the increased presence of generics due to patent expiry of a large number of pharma products has compelled the US regulatory body to tighten their standards. The Indian companies should take these facts into consideration to grab the opportunity, said Ross Bjella. He added that the companies should prepare plans to send consignments to US for better cost management and optimize business.

The two-day symposium was conducted with the support of the Mumbai-based Prescription Pharma Support - a company conceptualise and organize training programmes for pharma and biotech professionals. The symposium will be conducted in Hyderabad on May 1st and 2nd to address the pharma companies in Andhra Pradesh and Karnataka, informed Karen Carvalho, business head - Pharma Services, Prescription Pharma Support.