Climate scientists and environmentalists have sounded the alarm bells about the dangers of man-made climate change and the hazards of greenhouse gases for years. That’s led governments and private companies to search for innovative solutions that help reduce their carbon footprint as part of an effort to protect the environment.
The pharmaceutical industry requires an exceptionally high energy-intensive supply chain to transport medical products to healthcare facilities. Many medical products must be kept in specific conditions and storage facilities to prevent them from degrading. It’s, therefore, no surprise that the pharmaceutical industry is at the forefront of devising creative supply chain solutions that minimize its environmental impact.
Many consumers overlook the complex systems and technologies that facilitate sophisticated pharmaceutical supply chains and the solutions that make them more environmentally friendly. Let’s explore the different aspects of pharmaceutical supply chains and what big pharma can do to minimize their carbon footprint.
What is the Pharma Supply Chain?
The pharma supply chain is a set of logistics, practices, personnel, and technologies that facilitate the transportation of pharmaceutical products from manufacturers to healthcare facilities and patients. Many companies must build and maintain supply chains to get the products from manufacturers to retailers. Still, some industries face unique challenges in doing so responsibly and staying in line with regulatory requirements.
The food and beverage industry, for example, must build supply chains that keep food products safe to eat and often below certain temperatures. These supply chains are crucial for ensuring the preservation and freshness of the food to prevent foodborne illness outbreaks or other public health hazards. Regulators exercise vigilant oversight to ensure that food and beverage companies are taking steps to uphold food safety standards.
Similarly, the pharmaceutical industry must preserve medical products from manufacturers to healthcare facilities throughout their journey. Regulators play an active role in ensuring that medical products are stored responsibly to protect patients.
Setting up a pharma supply chain requires considerable planning and data gathering. Companies must plan for the storage facilities where products are housed at each phase of their journey. Making these storage facilities support the environmental conditions that preserve products while minimizing their carbon footprint is an ongoing challenge for big pharma. Many pharmaceutical companies turn to supply chain and logistic management software to solve these crucial problems.
How Does it Affect the Environment?
Making supply chains more carbon neutral is one of the most impactful steps business leaders can take to preserve the environment. According to the business management consulting firm McKinsey, supply chains have the most significant room for improvement when it comes to the environment. Global supply chains account for over 80% of greenhouse gas emissions and over 90% of the impact on biodiversity, air, water, land, and geological resources.
McKinsey shows that consumer-packaged goods companies were responsible for 33 gigatons of CO2 emissions. These enormous emissions affect not only the environment but also companies themselves. The company Unilever, for example, estimates that it loses roughly 300 million euros per year due to environmental issues such as increasing water scarcity and decreasing agricultural productivity.
One comparative analysis published by the Journal of Cleaner Production found that the pharmaceutical industry emitted more carbon than the automotive industry. The analysis indicated that the sector emitted some 48.55 tonnes (metric tons) of carbon for every million dollars of revenue it produced. That figure was about 55% greater than the carbon-intensive automotive industry.
What is Cold Storage for Pharmaceuticals?
Creating safe, environmentally-friendly supply chains is particularly difficult for big pharma since they must store many medical products at specific temperatures or in certain environmental conditions. Many medical products rapidly degrade if stored at temperatures that are too high.
A relevant modern-day example is the COVID-19 vaccines, which require extremely low storage temperatures. The Pfizer COVID-19 vaccine, for example, must be stored at a temperature of roughly negative 70ºC or a range between minus 90º and minus 60ºC. If exposed to higher temperatures, it will degrade or destabilize, to the detriment of patients.
Moreover, strict guidelines require handling temperature-sensitive products with extreme care. Management must provide supply chain employees and healthcare professionals training in the proper procedures for transporting and storing these products.
An essential part of temperature-controlled supply chains, also known as cold chain storage, is the collection of temperature data from each storage facility that the products pass through. To collect and record temperature and environmental data, pharmaceutical companies use data loggers.
According to info.dicksondata.com, data loggers are electronic devices that measure and record environmental data such as temperature, humidity, or differential pressure. They play a vital role in cold storage for pharmaceuticals. This data is housed in the data logger’s internal storage to be collected later or transmitted to an external computer or hard drive over the internet.
Data loggers are crucial for pharma supply chains since they automate temperature monitoring. This temperature data is then formatted and submitted to regulators, meaning that pharmaceutical companies must make their temperature data transparent to abide by regulatory requirements.
How Can We Reduce the Environmental Impact?
The first step for pharmaceutical companies to reduce their environmental impact is to be more transparent about the data related to their carbon emissions. Pharmaceutical companies must also consider and report on other adverse effects on the environment, such as the pharmaceutical contamination of water supplies, packaging waste, and logistics inefficiencies.
Many climate experts confirm that the first step towards minimizing harm is conducting an honest and transparent analysis of all environmental impacts the sector is having. The difficulty with this is that the pharmaceutical industry is made up of several different sub-sectors, leading to various misconceptions about global supply chains. Each company has its own unique supply chain structure, leading some experts to believe that a total rethink of global supply chains might be necessary for the industry.
Big pharma should carefully analyze their space utilization to reduce excessive space in packaging and storage facilities. Research from Forbes indicated that roughly 24% of space in shipping containers goes unused. Pharmaceutical companies should minimize this unused space to reduce their carbon footprint.
Pharmaceutical companies must also consider what materials they are using in the packaging of their products and the carbon footprint of different kinds of packaging. Corrugated packaging, for example, is often more environmentally friendly than industrial plastics.
How Can More Pharma Companies Adopt Renewable Energy?
Fortunately, many pharmaceutical companies are making commitments and taking steps to minimize their CO2 emissions. Many of the largest pharmaceutical companies have organized into groups and collectives dedicated to pursuing more sustainable supply chain management.
The European Federation of Pharmaceutical Industries and Associations is one of the largest organizations to work on climate change mitigation efforts. The Innovative Medicines Initiative is another organization doing important work in this space. The COVID-19 pandemic and COP26 climate summit have brought these environmental issues to the forefront of big pharma’s strategic goals.
Experts emphasize the importance of uniform regulatory requirements for pharma companies in contrast to the current regional conditions. Ultimately, more pharma companies should commit to striving for a net-zero strategy, as many already have. Big pharma should also invest in research and development to create green energy power sources that power refrigeration and transportation systems.
To sum up, it’s clear that supply chains play a tremendous role in carbo emissions today and that big pharma must play a key role in striving towards a net-zero future. Luckily, many pharmaceutical companies have already made public commitments about adopting more climate-friendly practices and technologies.