The soaring popularity of weight-loss drugs is big business for some of the largest pharm distributors in the U.S. But the profits aren’t soaring, partly because of the complicated and costly logistics involved in shipping the refrigerated medications, reports The Wall Street Journal (Aug. 22, 2023). Drugs such as Wegovy and Ozempic cost around $1,000 for a month’s supply and are in hot demand, but their operating expenses are higher because of the cold-food supply chain nature of the product.
The medications help patients lose weight by mimicking gut hormones. The drugs are once-weekly injections that patients administer on themselves using a penlike needle, similar to using an EpiPen, that must be stored between 36 and 46 degrees Fahrenheit. For wholesalers, it means arranging industrial-scale logistics designed to keep the medications cold throughout transport and storage, including protecting the injections from unpredictable events such as a truck breaking down in a heat wave.
“You need to have the product in refrigerated trucks going from your point A to point B and then when it gets into a location, time from a material handling standpoint to collect the product and then store it in a refrigerator,” says an industry analyst. Shipping refrigerated products such as medicine and food is more expensive than moving dry goods like apparel or appliances.
Trucking companies handle the drugs on specific trucks that keep the shipments in a tightly controlled environment, ensuring temperatures are stable and the goods are also protected from odors that can affect them. The trucks must carry a higher level of insurance and are outfitted to keep the products secure to prevent theft, a particular risk with expensive drugs like Wegovy and Ozempic that are in big demand and have a high street value.
The challenges highlight the complications drug wholesalers face in building out supply chains for medications in high demand. During the pandemic pharm companies rapidly worked to develop, manufacture and distribute highly fragile Covid-19 vaccines around the world, all while keeping the inoculations at ultracold temperatures. That involved designing special packaging to keep the vials at stable temperatures for long distances.
For additional insights into cold food supply chains, listen to our OM Podcast #7, featuring Temple U. Prof. Misty Blessley.
Classroom discussion questions:
- How do “cold food supply chains” differ from traditional supply chains?
- List a dozen products requiring a cold food supply chain.