Published on February 13, 2018 by Tony Pelli
With growth in pharmaceutical revenues flat in the United States and Europe, pharmaceutical firms are increasingly looking to emerging markets as a growth strategy. Countries such as Brazil, China, India, and Mexico offer plenty of opportunity for pharmaceutical companies. China’s pharmaceutical market is expected to grow to $150 billion in 2020 and $210 billion in 2025, a growth rate that approaches ten percent each year. By comparison, the pharmaceutical market in the United States is expected to grow between two and five percent each year to 2021.
The rapid growth of emerging pharmaceutical markets comes with its own set of challenges, however. Pharmaceutical companies, which often grow through acquisition, have a tendency to “get out over their skis” in emerging markets, with sales outstripping the ability of security and business continuity teams to catch up to the risks the firm is now exposing themselves to. Unfortunately, emerging markets are often fraught with cargo theft risk. Brazil and Mexico are among the most dangerous countries in the world for cargo theft, and the complexity and scale of cargo theft, diversion, and counterfeiting operations in China and India is increasingly rapidly.
Finding a solution
Pharmaceutical companies can help insulate themselves by taking a more integrated approach towards supply chain security in new markets. Security and brand protection teams should work closely with logistics, supply chain, and procurement teams to identify and vet new business partners as they are brought on board. Emerging markets often have more fragmented distribution environments than the US (where a handful of major distributors control the market), which makes understanding the ‘touch points’ in the supply chain much more important.
In many cases there is no substitute for knowing who is carrying your cargo and building out robust standard operating procedures for the handling of your company’s shipments. Of course, understanding the risks inherent in operating in a country such as Brazil, keeping abreast of changes in those risks, and concentrating effort in the countries that will have the highest ‘cost’ in terms of risk is also crucial. While no one solution will work for all companies, applying sensible and cost-effective trucking security measures can help protect what is often the weakest link in pharmaceutical supply chains.