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Market Overview

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The global pharmaceutical logistics market was valued at USD 92.66 billion in 2021 and is projected to reach USD 146.71 billion by 2027, with a compound annual growth rate (CAGR) of 7.97% during the forecast period. Advancements in technology are disrupting logistics providers and improving the healthcare business model, especially in the pharmaceutical industry. The increased utilization of logistics optimization tools, artificial intelligence (AI), the Internet of Things (IoT), and intelligent logistics platforms are expected to drive the future growth of the pharmaceutical logistics market.

Pharmaceutical logistics encompasses the manufacturing, processing, and shipping of materials and resources, as well as activities related to the handling of manufactured goods by customers. Logistics companies play a crucial role in the operations of pharmaceutical companies. The adoption of water-based pharmaceutical logistics is a significant factor driving the growth of the pharmaceutical logistics market. Even prior to the COVID-19 pandemic, pharmaceutical logistics had been exhibiting a healthy growth rate. The sector is undergoing various changes as the aging population increases the demand for new pharmaceutical solutions. However, the COVID-19 pandemic has disrupted the global supply chain, impacting all modes of freight transportation, including air and rail cargo, which may take months or years to fully recover.

Clinical research has become increasingly globalized, with many studies being conducted on a global scale and a notable rise in clinical trials in developing countries. The focus of clinical trial researchers is shifting from developed markets such as Japan, Australia, South Korea, and Singapore towards emerging economies like Thailand, China, the Philippines, and Vietnam.

Leading companies are striving to offer cloud-based supply chain services and secure supply chain functions to help pharmaceutical manufacturers ensure the integrity of their drugs. These solutions are expected to prevent the production and distribution of counterfeit drugs. According to DB Schenker, a subsidiary of DB Group, the pharmaceutical logistics market requires a shift to digital rail operations and the digitalization of infrastructure and vehicles to enhance transport density and reliability. In 2019, TrakCel, a global leader in managing clinical supply chain logistics, partnered with Quick Group to provide industry-leading digital supply chain IT solutions for cell and gene therapies. The emergence of cell and gene therapy is also expected to create promising opportunities for the pharmaceutical logistics market.

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Market Segmentation

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The market is segmented based on various factors, including therapy area, origin, product, function, and geography.

Segmentation by Therapy Area
Communicable Diseases
Oncology
Diabetes
Cardiovascular Diseases
Autoimmune Diseases
Neurological Disorders
Pain Management
Respiratory Diseases
Others

Segmentation by Origin
Branded
Generic
OTC

Segmentation by Product
Small Molecule Drugs
Biologics

Segmentation by Function
Transportation
Warehousing
Others

Segmentation by Geography
North America – US, Canada
Europe – Germany, France, UK, Italy, Spain
APAC – China, Japan, India, South Korea, Australia
Latin America – Brazil, Mexico, Argentina
Middle East & Africa – South Africa, Saudi Arabia, Turkey

In the field of therapy area segmentation, the global pharmaceutical logistics market is dominated by the communicable diseases segment. This segment holds a share of 19.96%, largely due to the emergence of the COVID-19 pandemic and the subsequent increase in communicable disease cases. An ECDC report states that tuberculosis, the second deadliest infectious disease after COVID-19, continues to be a major concern, particularly drug-resistant strains. As a result, communicable diseases have become dominant in recent years. In 2019, communicable diseases ranked third in terms of the number of cases, but the COVID-19 pandemic propelled this segment to dominance in 2021. The surge in COVID-19 cases has led to increased demand for over-the-counter medicines and vaccines, contributing to the highest share of communicable diseases in the pharmaceutical logistics market.

The oncology segment is the second-largest in the pharmaceutical logistics market, accounting for a revenue share of 15.17%. This growth is attributed to the increasing prevalence of cancer and the demand for anti-tumor agents. It is expected to have the highest compound annual growth rate (CAGR) of 14.02%. Currently, the pharmaceutical pipeline is primarily focused on cancer-related treatments.

Given the increasing prevalence of diseases such as monkeypox, which has spread to over 60 countries, there is an expectation of future pandemics. This anticipation is likely to drive the demand for new medications and more clinical trials, leading to an increased need for logistics during clinical trials and product distribution.

When considering origin segmentation, branded drugs account for the highest revenue share in the global pharmaceutical logistics market. This is mainly due to the preference for branded drugs and their higher cost, resulting in a greater share of revenue for pharmaceutical logistics. According to reports from the Association for Accessible Medicines, branded drugs accounted for approximately 80% of spending between 2018 and 2020. However, the generic drugs segment is expected to have the highest CAGR of 72.25% during the forecast period.

In terms of product segmentation, small molecule drugs dominate the global pharmaceutical logistics market with a revenue share of 63.02% in 2021. This is attributed to the increasing demand for small molecule drugs due to their cost-effectiveness, ease of administration, and easy dosing. Small molecules continue to lead in terms of new drug approvals, with 97% of marketed drugs classified as small molecules. Biologics, on the other hand, are top-selling products and projected to generate new sales in 2022. In 2021, of the 50 new molecular entities approved by the US FDA, 72% were small molecules, while 28% were biologics.

Transportation plays a crucial role in the pharmaceutical logistics chain, accounting for the highest revenue share of 71.66% in the market in 2021. It is also expected to have the highest CAGR of 8.20% during the forecast period. The demand for temperature-controlled transportation is increasing to ensure product quality. Road transportation dominates this segment with a revenue share of 66.38% in 2021, followed by water transportation at 21.21%, and air transportation at 12.41%. The popularity of road transportation can be attributed to its lower costs in terms of workforce and operations. In fact, trucks accounted for over 58% of US-Canada cross-border freight in January 2021, followed by rail at more than 16%.

However, in 2020, European land transport experienced a decline due to the COVID-19 pandemic. From April to August 2020, prices and demand decreased but picked up from October 2020, reaching levels similar to the previous year. Air transportation has the highest costs compared to water and road transportation, resulting in lower demand for logistics via air.

Air freight is 78% more expensive than ocean freight and has the highest rate of temperature excursions for pharmaceutical products transportation, accounting for 80% of all excursions. In comparison, ocean transportation has a mere 1% temperature excursion rate, while road transport has an 18% excursion rate. The air cargo supply chain still has work to do in order to meet the growing global trade demands for pharmaceutical products. Despite this, the air segment of the global pharmaceutical logistics market is expected to have the fastest CAGR of 9.16% during the forecast period.

The North America region holds the highest revenue share of 38.70% in the global pharmaceutical logistics market in 2021. This region is home to many pharmaceutical suppliers, and the United States leads globally in terms of pharmaceuticals. In fact, five of the top ten pharmaceutical companies in 2020 were from the US. Branded drugs accounted for approximately 83.9% of spending in the US. In 2020, North America was responsible for about 8.1% of worldwide drug and medicine shipments.

Both North America and Europe dominate the monoclonal antibodies market, accounting for about 80% of the market share. The increasing demand for biologics, including vaccines and monoclonal antibodies, as well as investments in research and development, are major drivers for the pharmaceutical logistics market. Europe is the leading exporter of pharmaceutical drugs, with growing demand for biologics driven by the COVID-19 pandemic and investments from leading pharmaceutical companies. Germany, in particular, has more than 500 pharmaceutical companies, with small and mid-size enterprises constituting around 90% of drug manufacturers. In 2018, Germany had a production value of USD 42.1 billion, making it the leading pharmaceutical manufacturing country in Europe.

The APAC region’s pharmaceutical logistics market was valued at USD 20.79 billion in 2021. This region is the largest manufacturing hub and provider of generic drugs, vaccines, over-the-counter drugs, biosimilars, custom research manufacturing, and active pharmaceutical ingredients. Many countries in the APAC region import pharmaceuticals, leading to a growing demand for transportation and warehousing activities. India, in particular, has the largest share of about 20% of the global supply volume and contributes to around 60% of global vaccines. Biologics account for about 75% of total pharmaceutical exports from India. Additionally, Latin America, the Middle East & Africa, and the APAC region are considered emerging markets for the growth of the pharmaceutical logistics market. Rapid population growth, an increase in the elderly population, and a rise in chronic non-communicable diseases are major factors driving the growth of the pharmaceutical logistics market in these regions.

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Competitive Landscape

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AmerisourceBergen, CEVA Logistics, Deutsche Post DHL, FedEx, Kuehne + Nagel, DB Schenker, and United Parcel Service (UPS) are the prominent vendors in the pharmaceutical logistics market. These companies have a wide geographical presence, a strong emphasis on logistical innovation, and a diverse range of services. The emergence of advanced technologies and the increasing demand for personalized medicines present lucrative opportunities for stakeholders to elevate these companies to new heights. Technologies such as data mining, mobile cloud, real-time analytics, and blockchain hold the potential to enhance application interfaces and cloud infrastructure, thereby offering improved growth prospects in the post-pandemic pharmaceutical logistics market.

Key companies profiled in this report include AmerisourceBergen, CEVA Logistics, DB Group, Deutsche Post DHL, FedEx, Kuehne + Nagel, United Parcel Service, ABS Logistics, AWL India, Alloga, BOLLORÉ LOGISTICS, Cardinal Health, C.H. Robinson, Cold Chain Technologies, CRYOPDP, DPD, DSV, Farmasoft, Jeena & Company, Lufthansa Cargo, Maersk, Medline, Nippon Express, Noatum Logistics, Owens & Minor, Oximio, Pharma Logistics, PHOENIX Group, Parexel International, SEKO Logistics, Singapore Post, SINOTRANS, XPO Logistics, Yourway, YUSEN LOGISTICS.

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Recent Industry Developments

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On June 2, 2021, the prominent company, AmerisourceBergen, successfully concluded the acquisition of a significant portion of Walgreens Boots Alliance’s Alliance Healthcare businesses for a cash amount of USD 6.27 billion. This strategic move aims to enhance the company’s market presence and broaden its offerings in the field of pharmaceutical distribution.

In August 2021, the leading company Deutsche Post DHL Group entered into an agreement to acquire 100% ownership of J.F. Hillebrand Group and its subsidiary companies. This acquisition is part of Deutsche Post DHL Group’s growth strategy and will further strengthen its position in the industry.

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Key Questions Answered

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What is the size of the pharmaceutical logistics market?

The pharmaceutical logistics market was valued at USD 92.66 billion in 2021 and is projected to reach USD 146.71 billion by 2027.

What is the growth rate of the pharmaceutical logistics market?

The global pharmaceutical logistics market is growing at a compound annual growth rate (CAGR) of 7.96% from 2021 to 2027.

What are the current trends in the global pharmaceutical logistics market?

The current trends in the global pharmaceutical logistics market include growing demand for clinical trials logistics, digital transformations in pharma logistics, and increasing demand for cell and gene therapy logistics.

Which region has the largest market share in the global pharmaceutical logistics market?

North America holds the largest market share in the global pharmaceutical logistics market. This region has a significant presence of pharmaceutical suppliers, and factors such as high acceptance, prevalence of chronic diseases, and a growing geriatric population contribute to its growth.

Who are the leading companies in the global pharmaceutical logistics market?

The leading companies in the global pharmaceutical logistics market include AmerisourceBergen, CEVA Logistics, DB Group, Deutsche Post DHL, FedEx, Kuehne + Nagel, and United Parcel Service (UPS).

Which product category dominates the pharmaceutical logistics market?

Small molecule drugs dominate the global pharmaceutical logistics market, accounting for a revenue share of 63.02%.