The government is planning to hire an agency that will help bring down the logistics cost, improve safety and reduce the regulatory bottlenecks affecting the pharma and medical devices sectors. The department of pharmaceuticals (DoP) is soliciting request for proposal (RfP) from consultancy firms to conduct a study that will map and analyse the entire logistics value chain in pharma and MedTech, including the domestic and export-import markets.
The study will entail mapping the end-to-end logistics flows – from raw material sourcing to the last-mile delivery. It would also look into aspects such as logistics costs covering transport mode, storage, handling and regulatory fees, etc.
It will also identify key operational bottlenecks that are being encountered by drugmakers across the supply chain such as cold-chain failures, customs delays, and transport connectivity issues.
What will the assessment include?
As per the DoP note, the assessment will include primary and secondary research such as engaging with manufacturers, third-party logistics providers, distributors, regulators (CDSCO, DCGI), healthcare institutions, various ministries (MoPSW, MoRTH, etc) and government departments.
“The mandate is to profile major manufacturing clusters in Gujarat, Maharashtra, Andhra Pradesh, Kerala, Himachal Pradesh, and Hyderabad), needle mover resolution in terms of most pressing issue, and identifying emerging clusters/opportunities (export),” the document said.
Rajiv Nath, forum co-ordinator of Association of Indian Medical Device Industry (AiMeD) said that a data-driven, risk-based logistics plan addressing cold-chain gaps, multimodal connectivity, and regulatory bottlenecks can significantly cut costs and improve patient access.
“Global benchmarking, digital adoption, and green logistics are vital for India’s export competitiveness. We are committed to collaborate with DoP and the selected consultant to ensure practical, timely interventions that balance compliance, affordability, and supply security,” he said.
The study has been initiated in the backdrop of major disruptions being faced by the pharma and MedTech companies owing to the West Asia conflict. Early this month, the industry body CII had flagged “abnormal” increases in freight and insurance costs for the domestic pharma players.
Doubling of freight charges
As per estimates, the conflict has led to the doubling of freight charges to $4000-$8000 per shipment since the cargo ships are forced to take alternative routes which is leading to delays and higher insurance premia.
“While the conflict has shifted the focus towards logistics costs, and there’s a strong need for the government to address that. We believe that the study must also address critical aspects like safety and storage of the medical products,” said Sudarshan Jain, secretary general of Indian Pharmaceutical Alliance (IPA).
Further, the firm will suggest policy interventions by the DoP and other ministry to address the gap identified during the course of analysis. “The policy should outline a roadmap for infrastructure development, including ports, logistics hubs, and innovative material handling solutions. It should develop holistic interventions for future considering evolving trade scenarios to bring down cost of logistics and developing a future plan of action,” the document noted.