3PL market entry strategy: For bulk and pharma segments

Abstract

The pharmaceutical industry in India consists of two primary sections: bulk and formulations. Logistics is a cause for primary concern for pharmaceutical companies in India as it forms 45-55% of the value chain of a drug1. The major pharmaceutical companies in India are witnessing a gradual shift in their minds as they are now opening up to more and more 3PL players to source their organized services. The industry was earlier dependent on CFAs (Carrying and Forwarding Agent) but is now moving to 3PL. A number of aspects are leading in this change: regulatory requirements, drug quality consistency, warehousing compliance, new designs for temperature-controlled drugs and economies of scale at large. Today, the pharmaceutical industry is growing at a rampant pace and is projected to go up to $55 Bn or $70Bn (in case of aggressive growth) by 2022.