Will drone delivery be the next big thing for pharma logistics in 2022?

February 4, 2022: During the pandemic, with limited access to transport and man-power, the challenges certainly gave rise to new opportunities and medicine, vaccines began to be delivered by drones. With the strengths in innovation, information technology and huge domestic demand, the government believes India has the potential to be a global drone hub by 2030 while some industry players have contradicting views about drone deliveries of pharmaceuticals and vaccines.

The Covid-19 pandemic affected many sectors and industries worldwide, but one industry that witnessed growth amid the crisis is the pharmaceutical industry.

The landscape of the Indian healthcare sector is a unique one. On one hand, rapid digitization and technological transformations are redefining the urban healthcare space. On the other hand, there is a rural populace that lives in hard-to-reach areas with no access to even primary healthcare facilities.

The concept of on-demand drone delivery has become the country's revolutionary innovation that can provide equal healthcare access to save and improve lives. But will drone delivery innovation for pharmaceuticals have a future in India?

"On a positive note, drones are very exciting because it's definitely a very good technology to use and to get into places. But my question is, in today's India, where every village is connected, do we require a drone? It has a maximum capacity of around 150 to 200 kilometers. But do we have enough air space available? The issue I foresee is more drones in the air, more accidents and more danger to human lives. And there are going to be more collisions. Even drones are made up of plastic and metals, which is going to add to the waste in the industry. So I think EV (electric vehicle) is a better option than drone, because what we really need to do is we need to save the earth with all the climate change happening," Arnold George, general manager, TPC Packaging, a GCCS Australia subsidiary.

The ministry of civil aviation (MoCA) in July 2021 announced updated drone rules for the development of drone corridors for cargo deliveries. "Coverage of drones under Drone Rules, 2021 increased from 300 kg to 500 kg. This will cover drone taxis also," reads the announcement.

"Well, to be honest, we are not yet up to that stage and those requirements that may happen for the developed countries, but when it comes to India, where there is a need and where there is a demand, these things should be fulfilled. So if things drastically change, if the human tangibility and the perceptions change, probably then we will have to bring up drones and robots in place and they will work on behalf of human beings. I believe we will look at a full-fledged drone delivery and technology in the next ten years, but not immediately," says Pavan Kumar, Director Business Development, Softbox Systems.

TechEagle, a Gurugram based DeepTech start-up drone recently partnered with the government of Meghalaya to carry out India's first hybrid e-VTOL Drone delivery of lifesaving medicines. It also got official approvals to deliver vaccines and medicines supply in the state of Telangana using drones in collaboration with the government of Telangana, NITI Aayog and the World Economic Forum.

"We also need to think about the shelf life of a drone and the shelf life of an EV and then calculated the risk. Apart from implementation, recycling of the drone needs to be put into place," adds George.

The year 2022 began with a high number of Omicron cases in India, bringing in new challenges for the pharma industry with on-time delivery of medicines and vaccines.

Talking about everyday logistics challenges, transparency and visibility in the supply chain has been the talk of the town. Supply chains have witnessed an unprecedented disruption all around the world. In fact, this represents one of the major challenges facing the pharmaceutical industry.

"Being a one stop solution, that's the need of the hour. In the domestic market I think, there is not much knowledge. If you go to a pharmaceutical drug store, do you know what temperature your medicine is being delivered to you? Do you have any visibility on that? No right. So, education is the most important thing that the domestic market requires," George says.

"In Singapore, Europe and in the US as well, right after manufacturing till delivery, there is this visibility on what temperature the product is maintained, right from the start till the end, till the time it is at the drugstore, the patient can just scan the QR code and he can know what temperature is maintained right after manufacturing. That's the kind of visibility available outside but for India to get to that level, it's going to take some kind of education," George continues.

Optimistic outlook towards 2022

In the New Year, pharma logistics is expected to bring in modernization and improvements. Here is what the industry players think about the market in 2022.

"EXIM (Export and Import) may play a vital role in the pharma logistics market in view of growing exports from India which registered an impressive 18 percent growth rate in FY21. This shall help growth in Air and Sea trade from a 3PL perspective. However, with the growth in export demand for generic medicine we are seeing some traction in quality warehouses domestically also. Many pharma companies are evolving and focusing on upgradation to the quality infrastructure and access to quality assurance services. Currently the infrastructure space is mainly price driven and lacks the desired quality standards. The New Year may bring new beginnings for them to shift base to modern warehouses which offers greater flexibility, efficient handling and optimisation of vertical space etc," says Sanjay Sharma, vice president, Coldman Logistics.

Coldman has observed a demand for change in warehousing requirements and a trend in micro delivery. Thus in this year they will be focusing on BTS project customizing to client requirements and temperature requirements.

Kumar says, "Since the last two years the pharma logistics industry has faced difficulty, especially the cold chain logistics, because the air freight rates significantly have gone up. So, in this year, if things become normal, I am optimistic that the air freight and sea freight challenges that we are facing will get resolved by the mid of 2022."

Innovation in the logistics sector is what the market leaders are looking out for. The manufacturers, producers, distributors, forwarders are anticipating to come level-headed and work towards a better supply chain management and smooth logistics.

"There are three areas where I see positive signs. One is the growth of the warehousing sector in India. The second, the growth in the logistic companies and the emphasis on temperature control. There's been a constant growth of at least 15 percent in reefer vehicles in India. So that's a very positive sign as well. And number three, the traditional use of packaging domestically first, I think even today, 80 to 90 percent of the domestic packaging and transfers happen in thermocol boxes and with four to six ice packs pouches. But people are updating. Our business approach is not about selling, but we want to educate the client, we tell them that this is what the box is going to do," George concludes.