Medically Necessary: Growth of biologics and gene therapies means more cold chain

Georgia- based Tribe Transportation recently expanded its fleet of refrigerated trailers to meet growing demand from the life sciences industry. (Credit: Jim Allen/FreightWaves)

This is an excerpt from the April 13, 2021 edition of Medically Necessary, a health care supply chain newsletterSubscribe here.

The trend: The number of biologic drugs and gene therapies is growing, and logistics companies are increasing their capacity for temperature-controlled transportation to support them.

Biologics are drugs created from biological sources, such as blood or other cells. They’re usually much more complex than drugs produced chemically.

Gene therapies, which can be biologics, are drugs that replace or modify a patient’s gene to treat a disease.

Drugs in both categories require temperature to be carefully controlled during transportation. 

The future: About a quarter of all drugs currently require some kind of temperature control during transportation, according to Rnajeet Banjeree, CEO of the pharmaceutical logistics company Cold Chain Technologies.

— He expects that number to jump to about a third of all drugs within the next two years.

— “With the launch of biologics, with the launch of personalized medicine and … certain gene therapy formulations, that are happening now, the need for temperature and other condition monitoring is becoming even more acute,” he said.

Biologics: The market for temperature-sensitive biologics is growing faster than that of other types of drugs.

Spending on biologics through Medicare Part B, which covers drugs that patients recieve at a doctor’s office or hospital, jumped from about 56% of total drug spending in 2006 to 77% in 2017, according to a Health and Human Services Department report

— In large part, that growth is because biologic drugs tend to be very expensive. The report found that biologics accounted for almost all of the program’s drug spending growth during those years.

Spending on biologics through Medicare Part D has increased rapidly over the last decade. (Credit: Health and Human Services Department)

The number of patients receiving biologics also appears to be increasing. 

Data from Medicare Part D, which covers prescription drugs, shows that the number of beneficiaries receiving a group of seven common biologics increased by more than 75% from 2011 to 2018.

(Source: Centers for Medicare and Medicaid Services)

A 2017 report from The Biosimilars Council predicts that the growth of biosimilars — cheaper alternatives that have the same clinical effects as biologics — will further expand access to these types of treatments.

— Like biologics, many biosimilars require temperature control during transportation and storage.

Gene therapies: The cold chain logistics company Cryoport expects the value of the gene therapy market to increase sevenfold between 2019 and 2024.

— FDA approved the first gene therapy in the U.S. in 2017 and has approved six more treatments since then.

— The agency approved two of those seven treatments in the first quarter of 2021 alone.

(Source: Food and Drug Administration)

In 2019, former FDA Commissioner Scott Gottlieb said he expected the agency to be approving 10 to 20 cell and gene therapy products every year by 2025.

— “This trend has a couple of logistics implications,” Cedric Picaud, CEO of the Cryoport company CRYOPDP told FreightWaves. “The value of each shipment is very high. The cost of managing such medication is high. In terms of logistics, the lead time requirement is very challenging.”

The response: As the number of biologic drugs and gene therapies continues to grow, logistics companies are increasing their capacity for temperature-controlled transportation.

In March, Cold Chain Technologies, which previously focused on packaging, expanded the scope of its business.

— The company will now offer last-mile delivery services, warehousing and point-of-care storage for temperature-controlled drugs. The goal is to provide logistics from the manufacturer to the patient, Banjeree said.

Over the past two years, Cryoport has acquired several cold chain logistics companies to expand its reach.

— Cryoport acquired an Australian logistics company in April. That follows the acquisition of two cold chain logistics companies in August 2020 and another acquisition in May 2019.

— The company grew from 57 employees at the end of 2018 to more than 625 by the end of 2020.

Tribe Transportation, a temperature-controlled trucking company based in Georgia, recently added more than 100 trailers to its fleet to meet demand from the life sciences industry.

— “There are still life sciences customers out there looking for capacity to move shipments,” Executive Vice President Matt Handte told FreightWaves. “Post-vaccine, we’ve seen that continue to rise.”

— The past three years have been the company’s best years for growth of both revenue and fleet size, Handte said.

The virus: The coronavirus vaccine rollout has put the cold chain in the spotlight, but companies don’t expect this to be a flash in the pan. 

Cold Chain Technologies provides packaging for COVID-19 vaccines made by Moderna and Johnson & Johnson. The company opened a new manufacturing plant in Tennessee last year to meet the needs of the vaccine rollout, but Banjeree doesn’t expect that capacity to go to waste.

— “If we plan this carefully, we could use this capacity to support COVID vaccinations outside the U.S., which will have a longer ramp down … as well as taking care of the new drugs and biologics,” he said.

What’s next? Banjeree said he hopes the vaccine rollout will help logistics companies do a better job of transporting temperature-controlled drugs after the pandemic.

— “How do we make sure we transform … the cold chain so that the next time this happens we are way ahead?” he said. “And use all that learning for the day-to-day shipments of drugs and pharmaceuticals.”