The pharmaceutical cold chain has experienced increasing demand in recent years due to rapid developments in biopharmaceuticals and regenerative medicine, a trend that looks set to grow with the rollout of vaccines and other treatments for COVID-19.
Initially established for the fresh, refrigerated and frozen food industries, cold chain logistics focus on the timely distribution of products within a constantly controlled temperature and humidity environment. Ensuring quality from the point of production to consumption, the system is now used in the transportation of electronic components including semiconductors, as well as chemicals and pharmaceuticals. The following is a bird's eye view of the pharmaceutical cold chain, which is expected to support the supply of vaccines to be developed and distributed in the future.
Expanding Japan's Pharmaceutical Trade
Demand for capacity in the pharmaceutical cold chain is particularly increasing in relation to biopharmaceuticals, vaccines and clinical trials. As its population ages, Japan's pharmaceutical trade is on the rise: in 2019 imports grew 4.4% y-o-y to JPY 3,092 billion while exports grew 13% y-o-y to JPY 733 billion.
Source: Trade Statistics of Japan
Japan’s pharmaceutical imports exceed exports in volume and value, in part due to a marked increase in import values since 2008. This is partly due to the importation of the latest biopharmaceuticals, anti-cancer drugs, and advanced medical devices. For example, the surge in import value in 2015 was partly due to a more than five-fold increase in the import of antiviral drugs, rising to a total of JPY 869 billion. These antiviral drugs include the hepatitis C drug Harvoni (then priced at about JPY 80,000 per tablet), launched in September 2015 by the leading biopharmaceutical company, Gilead Sciences. Hepatitis C is said to affect 1.5 to 2 million people in the country, including asymptomatic people, and the drug has been long awaited by medical professionals and patients.
Though smaller in scale, pharmaceutical exports have also been strongly increasing in recent years. Nominal exports nearly doubled between 2014 and 2019, including a striking 35-fold increase in the export of anti-cancer drugs. This is due to the development of Opdivo, a prescription medicine for enhancing immune function against cancer cells, which was launched in September 2014 by Ono Pharmaceutical. Opdivo was developed based on the research findings of Tasuku Honjo of Kyoto University, who was awarded the Nobel Prize in Physiology or Medicine in 2018 for his significant contributions to the advancement of cancer immunotherapy.
International Airports as Pharmaceutical Trade Hubs
Air freight is commonly used for international transportation of biopharmaceuticals and vaccines, which have precise requirements regarding both handling and temperature and humidity controls. In Japan, Narita Airport and Kansai Airport are the two major bases for pharmaceutical trade, both import and export.
Source: Trade Statistics of Japan
Source: Trade Statistics of Japan
There are multiple regulatory guidelines for pharmaceutical logistics, of which the most commonly employed are the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/S), a framework for international cooperation established by pharmaceutical inspection authorities, and Good Distribution Practice (GDP), standards for the wholesale distribution of medicinal products which comply with regulations established by the EU and WHO. In Japan, the Ministry of Health, Labour, and Welfare issued PIC/S-GDP-compliant domestic guidelines in December 2018. It establishes a code of practice for quality control and traceability at all stages of the pharmaceutical supply chain, from manufacturers to pharmacies and medical institutions. Also in the air cargo industry, the International Air Transport Association (IATA) has established a pharmaceutical transport quality certification called "CEIV Pharma" that reflects GDP and country standards.
Cold chain logistics involve refrigerated containers, trucks, and warehouses specifically tailored for various temperature requirements including frozen, chilled, and controlled room temperatures. Pharmaceutical shipments, whilst typically being of small volume and light weight, often have delicate and time-sensitive handling requirements. Biopharmaceuticals, for example, are essentially proteins produced using recombinant technology or cell culture techniques. They are thus susceptible to light in addition to temperature changes and must be handled in an indoor environment. Depending on type, vaccines also generally require either storage at -50°C to -15°C or 2°C to 8°C to ensure effectiveness. About half of all temperature deviation incidents occur during airport ground handling, and efforts are being made inside and outside international airports to strengthen the link between air cargo and ground transportation.
- KIX-Medica, a joint pharmaceutical warehouse at Kansai International Airport in Osaka
Launched in September 2010, Kansai Airport's KIX-Medica is Japan's first joint temperature-controlled warehouse dedicated to pharmaceuticals to be built within an airport. Kansai, also known as the Greater Osaka region, has always been home to many pharmaceutical-related firms’ research and development centers and production sites. Nippon Express, one of Japan’s major global logistics companies, has been operating a pharmaceutical trade facility since 2005. KIX-Medica’s distinction is that it is a joint warehouse open for use by any airline, cargo operator or shipping firm, and it has been utilized by more than 60 companies to date. 750 sq.m. of floor area is divided into two temperature-controlled areas of 20°C and 5°C, and the maximum handling capacity is approximately 1,200 tons per month. The location on the tarmac allows for quick loading and unloading of aircraft. With the completion of KIX-Medica, Kansai International Airport can now process large quantities of raw materials, semi-finished products and medical devices without compromising quality, enabling a more robust pharmaceutical cold chain. In 2017, the airport took an initiative to form KIX Pharma Community, which is the first of its kind in Japan, and all six participating international air transport operators obtained IATA’s CEIV Pharma certification in 2019.
- Airport initiative acceleration at Narita Airport
Narita Airport handles about half of all pharmaceutical trade in Japan. In February 2018, Cargo Climate Control Terminal (CCC) began its operation as one of Japan’s largest temperature-controlled airport sheds. It is located on the first floor of Cargo Building No.4 on the airport grounds and operated by International Air Cargo Terminal (IACT), which is responsible for ground handling at Narita. The facility has a total floor area of 2,507 sq.m., of which 141 sq.m. is dedicated to secure storage for medicines. In October 2019, an airport-based community of nine international freight handlers was formed and received CEIV Pharma certification in November 2020. An expansion project underway at Narita Airport, targeted for completion in 2029, will include the construction of new sheds on newly acquired land by 2021 and subsequent reconstruction of old freight facilities. By improving the overall environment of its cargo area, Narita aims to further strengthen its position as the largest hub for pharmaceutical trade in the nation.
- Haneda Airport turns its focus towards pharmaceutical logistics after internationalization
Haneda Airport, which handles the fourth-largest volume of pharmaceutical trade in the country, is also developing a dedicated pharmaceutical warehouse. Tokyo International Air Cargo Terminal (TIACT) began operations as a PFI project following the internationalization of the airport in September 2010, and created a 600 sq.m. pharmaceutical-dedicated area called Medical Gateway in the airport’s International Cargo Building No. 1 facing the tarmac. It functions as a combined import/export facility and commercial warehouse, and houses companies including logistics service providers for clinical trials. In June 2013, a new 250 sq.m. shed dedicated to pharmaceuticals and medical devices, Pharma Transit, was created in the same building. Following this expansion, Haneda’s handling of pharmaceutical products in 2019 stood at JPY 14.5 billion worth of exports and JPY 35.8 billion worth of imports, 8.5 and 103 times their respective values in 2013.
- Opening of first pharmaceutical warehouse facility at Chubu Centrair International Airport
In 2018, DHL Global Forwarding Japan opened the first dedicated temperature-controlled pharmaceutical logistics facility at Chubu Centrair International Airport in Aichi prefecture. With this GDP-compliant warehouse with approximately 124 sq.m. of floor area, it is now possible to directly import and export pharmaceutical cargo in the Greater Nagoya region, an area which was previously routed through airports in Tokyo and Osaka. Transportation time was reduced by more than 24 hours, and local pharmaceutical companies will benefit in their future transportation needs. DHL also has a dedicated GDP-compliant pharmaceutical warehouse at Narita Airport.
In addition, Nippon Express has been developing medical hubs for the international pharmaceutical trade near Narita and Kansai International Airport, and will further strengthen their domestic pharmaceutical supply network by opening four new large-scale, GDP-compliant warehouses by February 2021. The first completed was Kyushu Pharmaceutical Center in October 2020 with a floor area of approximately 17,300 sq.m, located in Kitakyushu city in Fukuoka prefecture. It will be followed by West Japan Pharmaceutical Center in Neyagawa city in Osaka in December 2020 with an area of approximately 63,600 sq.m. In January 2021, East Japan Pharmaceutical Center in Kuki city in Saitama prefecture and Toyama Pharmaceutical Center in Toyama city in Toyama prefecture are scheduled to open with floor areas of approximately 65,400 sq.m. and 9,900 sq.m. respectively.
Pharmaceutical cold chain development fostered by government-led medical innovation
Efforts have been made to establish a seamless pharmaceutical cold chain in Japan, but development remains to be done.
Pharmaceutical imports exceed exports, and this imbalance is growing. One reason for this is the global tendency for pharmaceutical firms to locate their production functions in countries that provide tax incentives and better development-to-market infrastructure, such as Switzerland and Ireland. Especially in the field of biopharmaceuticals, including insulin and antibody drugs for cancer treatment, overseas cities often offer a more attractive manufacturing environment compared to those in Japan.
Alarmed by the danger of losing international competitiveness, the Japanese government drew up five-year strategic plans in 2007 and 2012 with the aim of increasing Japan’s presence in the global pharmaceutical sector. The first strategy, set out in 2007, focused on developing frameworks for areas ranging from research and development to practical application. It included centralization of research funds, fostering new ventures, improving clinical trials and research environments, and expediting the pharmaceutical approval process.
This research-to-market approach to infrastructure development continued in the subsequent Medical Innovation Five-Year Strategy formulated in 2012. New emphasis was placed on the latest pharmaceutical fields including regenerative medicine that uses stem cell technologies such as ES and iPS cells, as well as individualized medical care based on genetic characteristics. With regards to regenerative medicine, a new law was enacted in 2014 to create an institutional framework for its practical application in the future.
As new medicines are developed domestically and COVID-19 vaccine distribution begins in the near future, pharmaceutical cold chain systems will be highly in demand for both import and export flows. Among the COVID-19 vaccines under development, Pfizer/BioNTech and Moderna will require transport temperatures of -70°C and -20°C respectively.
The pharmaceutical cold chain is expected to adapt as needed to meet the specifications unique to each medicinal product. Biopharmaceuticals and vaccines in particular require swift logistics due to their time sensitivity, thus increasing demand for a specialized supply chain, from airport hubs to regional pharmaceutical companies and hospitals. While it is still a niche, highly specialized sector, interest in pharmaceutical logistical facilities can be expected to grow well into the future.