Zenk recently joined Pharma Commerce to discuss the important job of today’s distribution networks to seamlessly connect manufacturers to care sites that range from large academic centers to rural pharmacies and physician offices. This “last-mile” delivery is essential because, as Zenk notes, “all healthcare is local.” Patients want access to advanced therapies close to home, and distributors play a critical role in making that happen.
A major component in this effort is maintaining product integrity, especially for cold chain items that must be stored between 2–8°C. Innovations in cold chain management now go beyond temperature tracking; they include predictive maintenance of infrastructure such as freezers and compressors. We dive into those and other thoughts from Zenk in the following conversation.
PC: As pharma products and treatments become more complex, how is the distribution strategy evolving to ensure timely, safe, and compliant delivery? Alongside that, what innovations in cold chain technology are setting the standard for ensuring product integrity across these complex distribution networks?
Zenk: We’re sitting between the manufacturers and the sites of care, and we really see ourselves as the connector. I’m connecting access from a manufacturer’s new and innovative therapy to a site of care, and that site of care could be an independent pharmacy in a small rural town, all the way to a large academic medical center in a huge urban area, to a physician-based office. We really look at all sites of care, because realistically, all healthcare is local.
You don’t go outside of your community to receive care. You like to see your physician at the grocery store. You like to see your pharmacist around town. It provides comfort, it provides the realness of human connection. We really take it seriously that we’re connecting new therapeutic ways to the sites of care. And with that, it’s how do we make sure their product is viable? With a lot of the sustainability and new products that are coming to market, we need to keep them in [the] 2-8°C [range], which, for the common person, is refrigerated. We also want to make sure that we have a way to track that. The manufacturer would know when they develop it, what the exclusion is, so if it gets to 9°C, how long can it be at 9°C, and still be viable if it gets to 1°C?
But realistically, if you keep it in 2-8°C, the expiry date that’s on the package would be the therapeutic window that a site of care could deliver it. A lot of what we’re doing is trying to connect—as we tend to do every day—the data with the time.
Most of the time, we have data from the manufacturer that can say that it’s viable. Then, two, we’re taking seriously what’s inside our four walls. It’s monitoring the temperature, yes, but it’s also monitoring the equipment that manages the temperature. Think of it as compressors. Think of it as HVAC units. Think of it as the entities that are running our freezers that have the basic material that goes into our reusable totes that we use every single day. We have reusable totes that are driving more than 90% of the US market. How do we freeze those? If a freezer’s equipment is going to fail, it’s us understanding this compressor is now at 70%, and we should have someone either fix it, look at it, stop it, or understand the risk that we have.
Monitoring temperature is table stakes. You have to be able to do that. It’s now how do I anticipate if a piece of equipment is going to fail? Does that piece of equipment need a preventative maintenance check by a maintenance team member? It’s setting those types of things up as much as we can to eliminate equipment failing or anticipate when it might, and take those signals.
PC: What advanced technology or data-driven solutions are proving most effective in enhancing real-time visibility and operational efficiency?
Zenk: You can use binary data loggers, which might be in a large quantity from point A to point B. Maybe I’m moving something warehouse to warehouse, so you can have a binary tracker. We use tools like Sensitech. We use data feeds—loggers that are feeding a system so that we can look at it from end to end.
We also are tracking with third parties, when we’re using next-day air freight.
When I’m putting a very sensitive, high-dollar specialty pharmaceutical for an oncolytic or for a retinologist into the airspace, tracking that packaging in near real-time with our third party also really matters. We know when it’s in the air, when it gets to a hub, when it gets sorted, and when it gets on a truck. And the value that Cencora brings is we’re doing all of that in a 12- to 14-hour period of time. From the moment that I’m putting it into a cold chain pack and inside a cold chain refrigerated asset to track that package, all the way through to the site of care getting the package, it is under an 18-hour to 24-hour window.
We know our cold chain materials have been qualified, certified, and we’re doing all of that high-quality work to know that they can stay from 2-8°C for up to 48 hours. We have different conditioning packages that last for different durations so we can meet the need. If I’m going to Guam, for example—there are patients in Guam that we service—we know we need a 48-hour pack out there. So making the right cold chain asset match the service that we need is some blocking and tackling you just have to be able to do in the pharmaceutical supply chain in today’s world.
PC: What lessons have been learned from recent drug shortages and global disruptions, and how are supply chain leaders building resiliency to prevent future challenges?
Zenk: The process there is to get others in the boat with you. How do we leverage public-private partnerships? How do we make sure we understand our public policies driving the way the marketplace is reacting to product availability, or are there public policies that are hindering a manufacturer’s ability to bring product to market?
Then, also looking at using technology and data to make a finished pharmaceutical. You may have 100 components that go into that—if not more—and it can be anything from an active pharmaceutical ingredient to an excipient, to a key starting material, to something as simple as the cotton swab that goes inside the bottle. The manufacturer tracks all of those materials that go into the finished good; it’s what they do. That’s why they’re a manufacturer. We said, how can we help identify—if we’re selected with a partner that has that start to happen—how do we go further up the supply chain?
If key starting material is in a war-torn country or in geopolitical unrest, is there another manufacturer that has less risk in that space that we could be able to procure product on behalf of our customers or on behalf of their patients? And allow the manufacturer that might have a material or product that’s in a place of geopolitical unrest some time to think of a different way to source their product.
We also want to continue to support manufacturers. We don’t want to switch so quickly between manufacturer No. 1 and manufacturer No. 2 that there isn’t a good, stable supply chain coming out of it on the other side. We’re really looking at, how do we give extended contracting in the business space so they have committed inventory, committed volume, and so that the manufacturer can plan better? How do we collaborate differently with them to give them some support, but allow them time to find a different way to source it, still having product available for the marketplace, and allowing that to happen?
The supply chain is very complex. Business drives decisions. Product availability drives decisions. When humans get involved, relationships drive some decisions. How do we optimize all of those things together to make sure that we’ve got enough product available to support patients in the US and globally?
PC: Reducing Scope 3 emissions remains a major challenge for pharma supply chains. What practical steps can be taken in transportation, packaging, and warehousing to meet sustainability goals without compromising reliability or cost-effectiveness?
Zenk: There are some basic things. One, inside the warehouse space. How are we using energy? Can we use solar? Can we do something as simple as having motion detector lights that come on and off? If you’re not having to go down three aisles in a warehouse, could we have the lights shut off? It sounds very basic and very kind of 1981, but not everyone’s doing it. And those are things that are available to do. You just got to put in a little bit of elbow grease and do it. And looking at newer HVAC models that have new ways where they can use water to recycle, to heat, and cool—those types of pieces of equipment cost 10% more, but your return on investment on that is under two years.
The other is, when can we use a returnable transportation package that can either be in the cold chain space or that can be in the ambient space, and where do we continue to use that to move through the channel?
The other thing, too, is any of the materials that go inside a cold chain asset—so phase-change material, which are the gels or the packs that go into the cold chain—we see those come in with ambient at times. We may need to use those to keep something in an ambient temperature or check the humidity.
It’s not the most pretty to use—things like that inside the warehouse. I think outside, it’s other things. Can we consolidate totes? That also sounds very basic, but there could be a customer placing four orders a day because they have four different sites of care, or in a building, four different RNs or four different pharmacies are ordering. Could we consolidate that all into one shipment instead of sending four different packages?
We’re asking those kinds of questions of our customer base, too? Just considering some of those savings. Then, of course, we’re looking into the big things like electric vehicles. We’re looking into new ways of packaging. Some of the new packaging isn’t right at the economical price point that it needs to be at its scale and volume—but when will it get there? How do we stay on top of that? AI is a big topic in that, too. Can AI help us consolidate orders, or can it alert the site?
We’re letting them make those choices where before those weren’t choices they could make. We also started to talk to some of the sites. Would you like, for example, shipments two times a week, instead of five days a week? We’re really working on, how do we integrate further into the supply chain?
Those are the things we’re all looking at, if we can make the economics the same and make everything viable. And those aren’t easy things. Those are just collaborative, grind-it-out areas, but they help immensely with Scope 3.
