Michael Christel is Group Managing Editor of Pharmaceutical Commerce, Pharmaceutical Executive, and Applied Clinical Trials. He can be reached at mchristel@mjhlifesciences.com.

Michael Christel

Since the dawn of the COVID-19 pandemic, pharmaceutical organizations and their partners have been tasked with establishing new innovations to keep supply chains running as smoothly as possible. Refining approaches in “smart pharma” has been one area of focus. Those could include, for instance, the application of smarter data management and storage methods, to the increased use of data automation to offset strained resources in manufacturing and distribution. The goal is to continue to advance broader industry efforts in digitalization.

 recently connected with Samantha Betancourt, head of strategy and marketing at UPS Healthcare, to discuss the pathway for smart pharma in helping address current and future supply chain challenges.

Betancourt has more than 20 years of experience in areas such as global logistics planning, supply chain analytics, as well as various commercial and operational roles. Before joining UPS, she held the position of vice president, supply chain and external operations at Ortho Clinical Diagnostics. Her industry involvement has ranged across contract manufacturing, telecommunications, technology, pharma, and medical device.

It’s no secret that over the past few years, factors such as the pandemic and less manpower or reduced resources at certain journey points have impacted the clinical and commercial supply chains. What do you believe industry leaders in pharma, logistics, distribution, etc. can do today to eliminate some of these continued challenges—and find creative ways to keep these supply chains flowing consistently?

The pandemic revealed the healthcare industry’s overdependence on offshoring sources, equipment, and material goods. The dependency on far away cross-border sources combined with lower in-house and supplier managed inventories became an Achilles heel when rolling stay-at-home orders impacted production and border shutdowns impacted product flows. This led to an increased need for deep-frozen and cryogenic storage. Storage at these temperatures is not new for the logistics industry but will continue to be an important requirement in the coming years.

Here are some steps UPS Healthcare is taking to optimize our customers’ supply chains:

 Weather disruptions and geopolitical disturbances will continue to impact manufacturing and the flow of goods. Whether it’s labor disruptions, shifts in manufacturing, or the added strain on the global freight market, problems and pressures within supply chains will remain.

Enhanced costs and complexities of scale: 

The growing focus on sustainability, changing trade agreements, combined with growing demand will continue to put pressure on the supply chain. Shipping compliance and costs can be a major barrier to growth, especially as companies continue to expand globally.

 Visibility, chain of custody, and quality control continue to be crucial in the healthcare industry. As the cold chain grows to include more players responsible for smaller pieces, coordination and collaboration are increasingly critical.

 While the initial investments may seem daunting, reusable packaging cuts down on single-use waste and can drive significant cost savings and better performance.

Intensified efforts to de-risk supply chains: 

To avoid future risk, companies are actively seeking flexible alternative sources that are closer to home for their drugs and devices. These types of operations can reduce expenses and complexity. It shows in enhanced control over products, and in moderation of the financial impact of restrictions on shipping and deliveries. Simply being in the same time zone as production and shipping simplifies business and improves collaboration. This relocation, called nearshoring, isn’t simply theoretical. It’s happening now. Friendshoring or lowering dependency on countries with instability while growing manufacturing presence in countries with favorable government policies, will also continue to increase.

 As healthcare needs around the globe grow increasingly complex, specifically with such emergent new diseases and faster degrees of spread, the industry will need continuously more sophisticated transportation logistics and networks that can be quickly executed and enabled with a reliable quality management system to ensure quality throughout the chain of control.

Leading cold chain providers are investing in futuristic cold storage facilities, along with high-standard, sustainable, innovative packaging and new active and passive transportation technologies. These are critical components in ensuring that biologics, pharmaceuticals, cell and gene therapies, and other contemporary treatments can be safely and efficiently delivered to all corners of the globe.

 By improving supply chain visibility, industry leaders can gain a better understanding of their supply chain and identify potential challenges and disruptions early on in the process. This can help them to create improved efficiencies and proactively address issues before they become major problems to ensure a steady flow of goods and services in a timely manner.

How are innovations in digitization, analytics, and automation working to improve approaches in pharma technical development? How, in turn, can they help enhance the patient experience?

Digitization, analytics, and automation mean better patient outcomes, driven by continued innovation. Dealing with a global pandemic, and subsequent and more frequent natural disasters, the healthcare industry has continued to build upon what it’s learned by surviving these crises, which have provided a solid foundation to help future generations thrive in other areas.

Digitalization allows for the collection, storage, and analysis of large amounts of data that can be used to inform the drug development process. By analyzing data from multiple sources, companies can gain insights into patient preferences, outcomes, and unmet needs to develop drugs and treatments that better meet patient needs and enhance their overall experience.

With the help of new data, we are also seeing shorter cycles from development to deployment of new vaccines, therapeutics, and technology like cell and gene therapy to fight whatever comes next. Vaccine delivery continues to create long-term value in future access to new drugs, but only constant new investment in innovation will give patients around the world the medical access they need, when and where they need it.

Companies such as yourself are proponents of using smarter data analytics to provide a so-called smarter pharma experience. Can you elaborate on this concept of “smarter pharma”—is it basically about manufacturers applying technologies such as 5G, blockchain, sensors/AI, cloud, etc. across the product lifecycle?

The concept of “smarter data” refers to the application of advanced technologies and data analytics to the pharmaceutical industry to optimize drug development, manufacturing, and distribution processes, leading to an improved patient experience. UPS’ portfolio of solutions drives value to our customers by protecting critical healthcare shipments, whether they’re going across the country or across the world.

We continue to focus on smart pharma to enhance the overall patient experience. RFID and 2D barcodes are two items added to each package and throughout facilities to create a smart pharma network that allows for end-to-end visibility along with easy adaption to technologies currently developed for use within our facilities and transportation network. Both sensor technologies allow for all data (SKU, lot/batch, serial number, expiration, etc.) to be captured with one scan or a single movement to accurately capture all movement data.

UPS has deployed smart package smart facility (SPSF) technology for preloading RFID tags and scanners to 100 US facilities, will deploy this technology to another 500-1,000 centers in 2023, and are installing this technology on package cars as part of the second wave of the SPSF initiative, in 2023.

As far as automation specifically, with the emergence of more complex injectable drugs, gene therapies, and medical device combinations, is pharma packaging automation evolving fast enough to meet the growing demand? How are manufacturers and their partners meeting the higher regulatory requirements for packaging development?

The pharmaceutical packaging industry is rapidly evolving in terms of automation to meet the growing demands for complex injectable drugs, gene therapies, and medical device combinations. Automation in pharmaceutical packaging can significantly reduce the risk of human error, improve production speed and efficiency, and increase product quality and consistency.

As demands grow for more complex packaging, manufacturers and their partners are responding to the higher regulatory requirements for packaging development by investing in advanced automated systems and processes that meet regulatory requirements, as well as R&D to create new packaging designs and materials that can better protect drugs and medical devices from damage and contamination.

The first step to successfully transport critical biologics is to implement a packaging solution built around each customer’s temperature requirements and shipping route, including distance and time parameters. 

To what levels have your pharma customers and supply chain partners embraced the concept of smart data? How much are they incorporating it in their day-to-day activities?

Our healthcare customers rely on us to provide them with accurate, real-time, and smart data to help them make timely decisions to support their supply chain needs.

Proactivity is key to providing the best customer and client service. Having detailed information regarding the integrity of the shipment (temperature) before it arrives to the consignee allows our customers to be prepared if an issue arrives. Receiving smart data that notifies and provides information ahead of delivery (i.e., temperature data) solely benefits the customer, which lets them know if there is a disruption or issue with their shipment.

Predictive analytics on inventory, financials, and forecasting is an area we are reviewing to provide additional insight our customer’s need. Customers want to be fed information that makes sense and alerts them to what they need to do if there is a problem.

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 focused on the world of third-party logistics (3PL) providers. You know, those companies or business units who handle the often unheralded but critical tasks of product storage, fulfillment, transport, inventory management, and more along the pharmaceutical supply chain. And as we explore in our 

, and reference on the cover, a new dawning of sorts in the highly competitive field of healthcare/pharma logistics support is emerging (see more coverage 

Change hasn’t happened overnight, of course, but you get the feeling when absorbing fresh insights from 3PL executives and supply-chain experts—and factoring in a playing field fundamentally altered by a global pandemic—that real strides are afoot. The “rise of specialized” has continued, with companies expanding 3PL services and new-tech offerings in temperature-controlled storage, sample collection and drug serialization, just to name a few; all designed to meet the evolving demands of specialty pharmaceuticals—whether vaccines, biologics, cancer-fighting immunotherapies, or cell and gene-based drugs. 

This has necessitated the movement of products through alternative distribution channels, requiring specialized monitoring, handling, storage and transportation. Thus, the mission of today’s 3PL provider is clear: “Work in lockstep with their pharma clients, to be a necessary part of the business,” as ICS’s Albert Cooksey tells contributing editor Suzanne Shelley (ICS is a division of AmerisourceBergen). 

Reportedly, the pharma logistics market is expected to more than double in size from $71.9 billion in 2020 to $159 billion by 2030. So there appears to be plenty of room and opportunity for companies to make their mark, if they can differentiate what they bring to the table. That includes 3PLs. Indeed, a new dawn.

 on our website, but I would be remiss not to mention a leadership change at 

. I’ve been promoted to group managing editor, and taking the helm as 

 editorial director is Julian Upton, a longtime editor at sister publication 

. I’m very proud of what we’ve accomplished at 

 since our parent company, MJH Life Sciences, acquired the brand in July 2020 (many thanks to my 

 colleagues in editorial, sales and production).

 remains in capable hands, and I look forward to its continued growth under Julian’s stewardship. Look for his formal introduction on these pages in the next issue.

Michael Christel is Pharmaceutical Commerce's former Editorial Director, and is currently Group Managing Editor at MJH Life Sciences. He can be reached at

 Introducing our first deep dive into pharma's indispensable partner—the 3PL

The Lowdown on Logistics

Prospects of an M&A resurgence—or indeed a rebound to more “normal” dealmaking levels pre-Covid—has been a hot topic entering the new year when forecasting biopharma business fortunes. In fact, EY finds in its new M&A Firepower report that only 9% of biopharma firepower—defined as a company’s capacity to do M&A based on the strength of its balance sheet—was deployed on M&A in 2021. Hence, substantial capital is at the ready to allocate to M&A and strategic partnership-type pursuits this year. The goal is twofold: access new products, innovation and talent, while offsetting risks from patent expirations, pricing pressures and other headwinds; ultimately, of course, to secure future, value-driven revenue channels. Other advisors in healthcare and the life sciences, such as the global consultancy Numerof & Associates, agree that an expected surge in dealmaking is in the offing, citing contributing factors such as the impending federal legislation on drug pricing in the US.

“We describe the healthcare environment as an industry in transition on steroids, if you will,” says Michael Abrams, co-founder and managing partner of Numerof. “The pace of technology, the changes in regulation, the changes in the customer base—patients are becoming consumers. All of that is huge.” Then, throw in the pandemic for good measure, and “we’re not going to go back to where we were,” Abrams adds.

The ability, therefore, for drugmakers, and their supply-chain partners­, to adapt to the demands of the changing climate and implement a clear commercial strategy accordingly, is critical. 

caught up with Abrams to discuss that and more—and dig deeper into the broader M&A scene.

1. What drivers are you seeing now in the biopharma/healthcare space that make you believe there will be an uptick in larger M&A dealmaking this year?

I think there is more going on than some people in the media have really pointed to. Broadly speaking, the risks in the business environment are increasing for the sector, and I see that as the underlying driver for M&A activity in ’22; because it’s shaping up to be a risky year for pharmaceutical manufacturers in particular. One of the factors is that the healthcare sector is under increased financial pressure due to the pandemic. They’ve been impacted heavily from things like staffing problems and higher patient counts than they’re really geared for. Many of them have had to curtail the high-margin activities that usually shore up their financial health.

The other issue with healthcare delivery is that consolidated organizations are beginning to use their increased size to obtain more power in the market, which means every supplier, not least of which is pharmaceuticals, is going to feel the pain.

Then the other factor, I think, is a political one—the [US midterm] elections coming up are going to spotlight the issue 

of drug pricing with a level of intensity that will probably be exceptional. There are other things that are also on the radar that are policy threats—corporate and global tax reforms, the FTC’s new focus on regulating M&A; we’ll see what those turn out to look like, but they’re out there.

All of these threats raise the risk for the industry and increase the attraction of M&A to enhance market clout and to provide deeper pockets to weather competitive and policy shocks.

2. At the same time, small and mid-sized biopharma in the last couple years, amid the pandemic, have seemed to be at an advantage in initiating a lot of deals in more of a seller’s market (Evaluate Vantage reports that volume of takeovers and spend by these companies hit at least a five-year high in 2021). Do you think that will continue?

I don’t necessarily see a massive bias toward larger deals. Larger deals come with larger risk and smaller deals, generally speaking, come with smaller risk because you know more precisely what you’re buying. With larger deals, it’s really about the strategic fit at the portfolio level, or even at the business level, and that can’t be detailed and nailed down nearly as precisely as you can when you’re buying a single or a couple of assets.

I don’t see that really changing the nature of what will happen going forward. When the pandemic was in full force, that did tend to make [larger] companies a little more conservative. And that perhaps trended to smaller deals for that reason. But it’s really more about individual companies and what comes their way in terms of opportunities. Because, at the end of the day, it’s about products. It’s about being out there early with the best technology in order to really deliver the value that nets the margins.

3. According to CB Insights, funding for digital health startups grew 79% last year and M&A activity jumped 44% from 2020 levels. Do you see more pharma deals picking up around digital health types of applications?

There is tremendous interest in that space and I do see more deals around digital health; I see more deals around healthcare services. That’s been exploding. Big pharma has a lot of capital that they can use to further their acquisition activities in areas like these. Some of them have also freed up cash because they narrowed their portfolio and spun off parts of it, deciding that they want to be more focused on a particular area. It’s time to put the cash that they realized to work and hopefully make themselves a more innovative operation as consequence.

4. More specifically exploring the implications from federal legislation on drug pricing, including provisions in Biden’s Build Back Better (BBB) plan to lower Rx prices, have those developments already started prompting a spending spree among large pharmas?

I don’t know that it’s prompting a spending spree, but it’s not as though the big pharmas have ignored the popular sentiment. There are very few issues that have such strong support from a population point of view, from a bipartisan point of view. Whether this is right or wrong, everybody agrees that drugs cost too much. There is tremendous support to do something, we just haven’t been able to agree on what exactly to do.

The proposed legislation in BBB may not survive in its initial form, but given the level of support for recognition of the problem, it wouldn’t be a shock if some sort of price controls came out the other end of this process.

If we do wind up seeing additional controls that resemble what’s been proposed, it would certainly increase the importance of those first few critical years in the market when a new product is exempted from price controls. That would incentivize companies to increase their go-to-market entry pricing in order to compensate for the price concessions they might be forced to make later in the product lifecycle. It’s a bit of a balloon problem—squeeze it here, it expands over there.

5. Would those controls compel some companies to look for quick acquisitions?

I think it would put that much more pressure on companies to be early in the market with the latest technology, because that’s where they can collect a premium for being there and offering the value, assuming the value is really there.

6. Do you see these developments—as you alluded to, under the proposal, starting in 2023, Medicaid price negotiations could begin on expensive drugs: treatments for cancer, rheumatoid arthritis and others—giving companies the impetus to protect cash reserves by targeting the smaller deals that have been more prevalent during the pandemic, over larger ones?

I don’t see that as being a big factor in building cash reserves. There is enough free cash flow out there that it probably would not put a dent in efforts to acquire new technology, if that technology appeals to a potential buyer to have important implications for their future commercial success. That’s always been the go-to route, and I don’t see that model changing.

Cash reserves right now are so large that I just don’t see it making a meaningful difference in what they have to spend on acquisitions. I think there’s a bit of pent-up demand even now—even though M&A last year was not nearly as depressed as the prior year.

7. What about factors that emerged in recent months around the Covid Omicron variant? Did that impact board M&A decision-making in pharma, with the thought being that before Omicron, it was starting to look like large pharma players who spent the better part of the last two years working on pandemic relief could start to shift focus back to dealmaking?

Covid made boards certainly more conservative in ’20, and even though ’21 was a bigger M&A year than ’20, they were still being careful and keeping their acquisitions a little on the smaller side—not really making the big bets. I think that was a function of uncertainty. It’s hard to commit a big chunk of capital to an acquisition when you’re not sure that the sky won’t fall next week.

I think with Omicron I do feel like we have more predictability into the future, and that makes it more feasible, I believe, to commit capital to growth at this point than it has historically [during the pandemic]. I think we’ll see more attention to that, and that’s at least partly behind the M&A surge that is generally expected in ’22.

8. Does Numerof & Associates examine M&A and other business trends in pharma subsegments such as those in logistics/supply chain? What related trends are you seeing in those areas?

We do—we support clients, for example, in the distribution space. They’re all about small margins, big volume—and they’re feeling squeezed. Like most pharma players, when they’re feeling the pressure, they look for ways to either increase their margins by providing additional value, or they look to see what adjacent spaces they can enter where they can utilize the capabilities they’ve already developed—but in an area that isn’t quite subject to the same level of pressure.

The pandemic has upended so many assumptions. One of them in particular being relevant to distribution is the whole “just-in-time” idea. The assumptions guiding that idea, historically, suddenly no longer hold; so you can’t count on that going forward. That means going back to the strategic drawing board, if you will.

9. As a result, is it tougher now for your clients in pharma distribution to differentiate their services, such as “just-in-time” delivery, for example, from their competitors?

I think it means going back and examining the assumptions that you’ve always made and never looked at before, and asking yourself, do you feel comfortable continuing to work under those old assumptions? Or has the pandemic proven that they’re not as certain as you thought? And if that’s the case, then you need a strategic alternative. So, yes, it has changed a lot of things, and those players have to rethink the assumptions that they’re operating under, and, in many cases, come up with alternative approaches.

10. You hear the word a lot these days, particularly amid the pandemic, about the need for supply-chain “resiliency.” How do you advise your distributor clients—many dealing with current supply-chain challenges and frustrations —on being resilient in managing and moving products along?

It depends very much on the products, the portfolio, the customer base, and so on—and any resiliency approach needs to be customized to the circumstances. But just the very fact that executives are asking the question, “what can we do so that we don’t get caught in this bind again?” is important, and it wasn’t being asked before. A lot of the underlying assumptions used to be taken as axiomatic, and you didn’t need to think too hard about them. That’s all changed.

It now requires a customized response based on factors such as what part of the business environment does a company sell into—is it to hospitals, to the consumer, how does it work? All of that goes into the question of how do we make ourselves more resilient to shocks like this.

Some companies, when things feel like they’ve gotten back to normal, they may or may not continue to pursue this whole strategic idea of having alternatives. But some of them will because they really felt the pain.

11. Your bio states you’re an advocate for data-based business decision-making. How would you define that approach in practical terms—and how do you support pharma clients on decision-making strategies based on those kinds of analytics?

It goes really beyond analytics. You’re right, we, as a firm, advocate for the importance of value—this ability of value and the importance of the market in evaluating and pricing products that is in line with the value that they provide. This is not really far at all, generally speaking, from the way certainly the pharmaceutical and the biopharma sectors operate.

Our focus on data means that claims of value need to be backed up with data that demonstrates those benefits. Our business is about strategy at the enterprise level, the commercial-operations level and the product level.

We help clients frame and communicate their value proposition, whether it’s for the enterprise as a whole or is for a single product. Oddly enough, the ability to do that is not really as common as you would expect, because for many years in the pharmaceutical arena, a new product was embraced because it was new. The claims of benefits didn’t really need to be backed up with data. But that’s changed because the healthcare delivery sector is under such pressure, with every new purchase scrutinized. And in many cases, the margin that a company pays on a new product comes right out of its bottom line; and, at the same time, others might say, “Well, I was fine with the current standard of care, why do I need this?”

So a value story not only needs to be data-based, but it has to be customized to fit the concerns of the intended audience, and there are many different audiences—clinicians, payers, administrators, and more; each one has their own perspective on what’s important to them. So we help clients develop and communicate that value narrative, whether, again, it’s just for one product or whether it’s for the entire enterprise. And when we’re talking about an M&A kind of situation, it’s more than an elevator speech—every organization needs to have a way to explain what they’re about and why they’re valuable—whether you’re selling a product or you’re selling the whole firm.

12. It’s safe to say, then, it’s even more important for drug manufacturers these days to share that value story with all those different healthcare entities, correct?

Absolutely. I think what’s going on can only put more emphasis on that. And it’s not just at product launch, but it’s all through the lifecycle of the product. As far as selling it to the people they need to write the check, they need to see the value. Whereas before, they didn’t scrutinize the purchase as heavily. Maybe that was a time when their margins were fatter and they didn’t think that hard about every dollar that went out the door. But that’s all changed.

A conversation with Michael Abrams, co-founder and managing partner,  Numerof & Associates

For Industry in Flux, is M&A Jolt in Store?

Matthew W. Reynolds, vice president, real-world solutions, at IQVIA, dives into the implications of FDA’s recent draft guidance on using real-world data from electronic health records and medical claims data to aid in drug development and regulatory decision-making—and shares specific steps pharma companies can take to assess the relevance and quality of their data in light of this guidance.

How FDA’s new guidance on real-world data reshapes critical “fit-for-purpose” evaluations

RWD ‘Fitness’ Steps for Pharma

Casey McTigue, managing director of professional services at SRS Acquiom, which provides support for M&A transactions across various sectors, discusses the firm’s recently released study on milestone payment and earnout trends in life sciences M&A, including during Covid; their influence on sales and development milestones; how parties account for transaction disputes; and the potentially shifting power dynamic in pharma dealmaking post-pandemic.

Administrator on how pandemic has affected milestone events—the so-called “biodollars”—in life sciences’ deal structures