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Monday, 18 June 2012 20:21

India and Luxembourg Working Together on Pharmaceutical Supply Chain

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The CRP Henri Tudor in Kirchberg was the venue earlier this evening for the IBCL’s evening seminar on “The World Pharmaceutical Market: the role of the Supply Chain”.

Luxembourg has identified the logistics sector, and specifically in the pharmaceutical supply chain, as a market segment offering growth potential. The aim of the seminar was to highlight supply chain best practice/solutions and how Luxembourg-India can play a positive role in its development.

Pedro Castilho of IBCL welcomed the 75-strong attendance and introduced the topic and the guest speakers.

Marc Lemmer, CEO at CRP Henri Tudor, explained that his company reacts to market trends and its activities include experimental research and academic cooperation, as well as development of in-house knowledge base through continued training programmes.

He mentioned the issues of security of supply chains and the need to have increased awareness of the logistics sector, as well as the growing issue of sustainability. Therefore their educational programmes are wide and varied. One such project is WeastFlow which aims at durable logistics in Europe, primarily by road and rail. Another project looks at SMEs with limited logistics resources and is part-funded by the European Union. In addition, the company has linked up with a Belgian university to offer a Masters degree in global supply chain management.

Dr Ajit S. Shetty, Chairman of the Board of Directors at Janssen Pharmaceuticals in Belgium, explained that pharmaceuticals now constitutes 37% of company turnover (24.4 billion USD).

He explained that many national budgets have a healthcare budget of around 7-8% of GDP, with the US at around 15%: pharmaceuticals are a very cost-effective way of improving heath. The pharmaceutical market worldwide is looking forward to significant growth, particularly in emerging countries. On the other hand, the linked R&D operation is a very risky business, very hit-and-miss, but the benefits can be considerable. The cost of research in finding cures has risen significantly, partly due to the cost of clinical trials.

On the issue of counterfeit pharmaceuticals, this (illegal) industry constitutes up to 10% of the authentic pharma industry but normally preys on those who can least afford it. The pharmaceutical industry is under pressure to reduce costs, yet it remains a great opportunity for new medicaments in various areas, including Alzheimer’s, Diabetes, HIV/Aids and more. 60% of drugs are used by those over 60 years of age.

He finished off by explaining that the company’s aims are in prevention, diagnosis and treatment, particularly in the area of personalised medecine.

Regarding India, he described it as an awakening giant. He admitted that the issue of patent infringement is a problem but the opportunity is there to become a market that rewards innovation. With Luxembourg providing a gateway to the European market, the India-Luxembourg potential is significant.

Daniel Liebermann, Director at the Logistics Directorate at Luxembourg’s Ministry of Economy and Foreign Trade, explained that Luxembourg is already a hub for electronic products but is now looking to develop in other directions; not necessarily to redevelop from scratch, but to use existing resources, skills and knowledge.

The pharmaceutical supply chain is highly sensitive and is crucial to ensure that the patient receives the right drug in the right dosage at the right time. This complexity is within the government’s aim to provide added value services and activities.

Concerning the relation between India and Luxembourg, this is growing and the pharmaceutical industry is one in which Luxembourg can act as a gateway to European markets. An important issue is the level of quality and security required to ensure an appropriate high-level service.

Clemens Abt, President and CEO at Trust Advisory Services in Luxembourg, talked about Pharma and Healthcare logistics and developing a roadmap for Luxembourg, highlighting the opportunities and risks.

The first issue is the issue for the logistics service providers to enter into such supply chains; a detailed analysis of the market is therefore necessary to understand the environment, to recognise trends and to maintain competitiveness. The implications of relevant changes requires adaptation by Logistics Service Providers.

Regarding trends in global supply chain, he stated that the industry will evolve as more trade routes, including destinations in developing countries, will require servicing. This geographic diversification will present opportunities for logistics service providers to enlarge their businesses. On the other hand, current shipping lanes are expected to see a reduction in demand as the market dissipates. More logistics activities are expected to be outsourced as the focus will switch to emerging markets. The risks regarding counterfeiting may lead to better controls along the supply chain, reducing external participation along the way. Overall, the pharmaceutical industry will go through considerable change over the next few years, with Luxembourg positioning itself to take advantage of this opportunity by marketing its strengths.

The question and answer session started with a question of reducing costs along the supply chain in today world where austerity is key. Dr Ajit S. Shetty replied by explaining that the industry knows the costs but not necessarily the value of what they are providing. Clemens Abt said that it will cost to improve the supply chain, therefore opportunities are presenting themselves for cost efficiencies; this is where Luxembourg could fit in. Daniel Liebermann added that Luxembourg is expanding its activities into the BioHealth sector and personalised medicine.

Another issue concerned what other countries are competition to Luxembourg in positing for the new opportunities in the logistics sector. In answer to this question, Luxembourg needs to promote its benefits, including durable and environmentally-sustainable solutions.

Mr Sudhir Kohli, IBCL President, thanked everyone for attending and to Dr Shetty for travelling to Luxembourg for this evening seminar, Daniel Liebermann for promoting the Logistics sector in Luxembourg, Mr Abt for his insight into the logistics market, as well as Mr Lemmer for hosting the event and the event sponsors.

Photo by Geoff THOMPSON, (L-R): Sudhir Kohli, Marc Lemmer, Daniel Liebermann, Clemens Abt, Dr. Ajit S. Shetty

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