by
Gus Iversen, Editor in Chief | December 09, 2014
From the December 2014 issue of HealthCare Business News magazine
Growing markets
“Growth is in emerging markets,” says van Peteghem, “Clients want us to expand into new countries. We will build it or buy it, whatever seems right.” When doing that, he says it’s important to time the construction responsibly.
“We’ve had situations where we put a facility somewhere because there’s an interesting tax regulation that says if you build your warehouse here then you’ve got a massive tax benefit,” says van Peteghem, “then a few years later, the tax regulation changes and it no longer makes sense to be in the middle of the jungle where we’ve put up the building.”
Menna says GDP regulations in Europe have been accepted by most European companies, but the interpretation of those regulations remain unclear. “To some degree, they say products need to be moved and stored according to the temperature range on the label, but then the manufacturer has stability data that clearly illustrates that this product can be exposed to higher temperatures, so it’s unclear what exclusions are allowed and how they will be enforced,” says Menna.
“You might require a different distribution facility in every country due to different labeling, language, and regulatory requirements,” says Menna. “We are sorting products centrally in one warehouse in Western Europe and as orders are being placed, depending on the destination, we do the relabeling.”
One international trend that UPS has noticed is the growing cost disparity between shipping specialty therapies and standard medical products. “The push from the ACA and NICE in the UK is that in order for us to reimburse a product it needs to be differentiated enough from something already in the marketplace,” says Menna,
“It needs to be justified based on clinical data to support it.” Products that don’t fit that description face a lot of cost pressures. The specialty products, on the other hand, emphasize precision and a zero-tolerance for failure.
As the health care industry continues to undergo major revisions, many companies are rethinking their supply chain strategies. Whether or not it makes sense to utilize a third party logistics provider such as UPS may depend on the company, but the flurry of activity taking place in Kentucky may indicate a growing number of providers are happy to leave the shipping to someone else.
Back to HCB News
