Commentary: 4 Reasons Why Asia Pacific Drives the Life Sciences & Healthcare Supply Chain

Tags: Asia, Health Care Logistics, Logistics, Supply Chain

Scott Allison, President, Life Sciences & Healthcare Sector, DHL Customer Solutions & Innovation

The seeds were sown some 15 years ago, when a few pharmaceutical and biotechnology companies began investing in Asia Pacific.

Over several years of favorable growth conditions, the life sciences and healthcare (LSH) industry gradually matured across the region, becoming a hosting platform for the majority of LSH key players today.

So what makes Asia Pacific an economic growth vehicle for this industry? Here are the key reasons motivating the world’s LSH companies to establish and expand their supply chains in this geographical region.

1. The value of a holistic research platform

Asia Pacific is home to countries that propel growth and ignite success. A key example is Singapore. Singapore’s government attributes life sciences prosperity to the city-state’s integrated research ecosystem which enables companies to access multidisciplinary capabilities from one single location. This is particularly critical given the witnessed decrease in R&D productivity, the increased complexity in decision-making, and the urgent need to accelerate drug discovery and development.

2. The attractiveness of “pharmerging” markets

Numerous pharmaceutical and biotechnology businesses seek proximity to key markets and wish to expand into new “pharmerging” territories. While companies continue to rely on distributors to gain access into Asia Pacific, an increasing number of customers are adopting a multi-channel approach by considering complementary platforms such as e-commerce, direct-to-patient, and direct-to-hospital solutions to reach their patients.

3. Improved responsiveness

LSH entities are establishing their regional presence in order to shorten their lead times and get closer to customers. Numerous medical device and pharma companies have started setting up their own regional distribution centers, especially in Singapore, many of which showcase value-added and postponement activities.

4. Cost leadership

Lower-cost sourcing and manufacturing are undoubtedly key competitive advantages offered by Asia Pacific, which become even more relevant in the face of rising cost pressure and patent cliffs. LSH companies increasingly capitalize on established generics suppliers in India or China to enter the market, some of them going as far as setting up their own manufacturing facilities in these countries, as well as in Australia and Singapore.

Visit Our Sponsors