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The pharmaceutical warehousing sector is going through a series of noticeable changes and trends, with a major aspect being the health area. Because of new technologies, changing government regulations, and the lasting effects of the COVID-19 epidemic, pharmaceutical firms are now reviewing their supply chain approach. The main market trend that can be observed here is the widened interest towards using state-of-the-art technologies for the reconstruction of warehouses. Organizations are taking into account modern automation systems, robotics, and artificial intelligence to impact efficiency, accuracy, and overall operations.
Increasingly, a pharmaceutical warehouse's attitude towards compliance and security is elevated in the processes of reconstruction. Like the rest of the pharmaceutical industry, companies operating in the warehousing sector should follow strict regulatory standards in order to ensure that their warehouses meet the requirements. Such activities include temperature-controlled storage, real-time monitoring, and market leading quality control systems. The reconstruction of the pharmaceutical warehouses is not only about building additional physical infrastructure, but also about making the entire supply chain more resilient and preventing risks to avoid the loss of integrity of pharmaceutical products.
Finally, it is the increasing demand for personalized treatments and the emergence of biopharmaceuticals that heavily influences the development patterns in pharmaceutical warehousing. The needs for the storage and handling of biological and specialty drugs are different from conventional pharmaceutical products making companies to be guided to redesign their warehouses appropriately. This pattern is pushing the architect and creation of facilities which are enriched with cold chain management systems in order to ensure the integrity of the temperature-sensitive biopharmaceutical products.
Covid-19 pandemic has too accelerated some aspects in market trends to which pharmaceutical warehouses reconstruction is subject. The reality has enforced companies to go an extra mile in terms of infrastructure in order to hold vaccines, drugs, and medical supplies, hence widening the size of their warehouses. Furthermore, COVID-19 has demonstrated the need for supply chains to be more adaptive, which has pushed companies to put money in mobile and modular warehouse structures that can easily adjust to different situations.
The environmental sustainability movement has prompted pharmaceutical warehouse rebuilding to dissolve into green practices. Nowadays, businesses are going green by installing green technologies e.g. efficient energy lighting or solar panels and eco-friendly packaging materials to limit their carbon footprint. That trend depicts an increased interest within industry to sustainable development and responsible business behaviour.
Pharmaceutical Warehousing Market Highlights:
Global Pharmaceutical Warehousing Market Overview
Pharmaceutical Warehousing Market size was valued at USD 48.57 billion in 2022. The Pharmaceutical Warehousing Market industry is projected to grow from USD 51.62 billion in 2023 to USD 89.31 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.28% during the forecast period (2023 - 2032).
The macro factors that are positively contributing to the growth of pharmaceutical warehousing are the rapid growth of the pharmaceutical industry and the increasing demand for temperature-controlled storage.
FIGURE 1: PHARMACEUTICAL WAREHOUSING MARKET, 2019 to 2032 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Pharmaceutical Warehousing Market Trends
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Growth of the Pharmaceutical Industry
The growth of the pharmaceutical warehousing market has been driven by multiple factors such as increasing demand for pharmaceutical products, rising global health concerns, and increasing investments in research and development. According to the Congressional Budget Office (US), the total R&D investment in the pharmaceutical industries was USD 83,000 million in the US in the year 2019. Moreover, the factors influencing the R&D spending are increasing private spending on R&D through programs which increases the demand for drugs. Furthermore, as per the European Pfizer Policy, it has been estimated that the R&D investment in pharmaceutical industries was USD 37,800 million in Europe in 2019 and USD 39,000 million in 2020.
Additionally, the increasing demand for temperature-controlled storage is burgeoning the growth of the pharmaceutical warehousing market. This is due to the biological nature of pharmaceutical products, complex molecules & biologics, and rising demand for vaccines in both developed and developing regions. According to the United Nations International Children's Emergency Fund, the East Asia-Pacific region exhibited significant recovery in vaccination and immunization up to 7% from 82% in 2021 to 89% in 2022 due to increasing coverage. This positive trend has been seen in Indonesia, the Philippines, Vietnam, and Myanmar.
Therefore, increasing demand of pharmaceutical products and rising need of vaccination and immunization is burgeoning the growth of Pharmaceutical Warehousing Market.
A brand-new, cutting-edge temperature-controlled warehousing system from Catalent was introduced in 2023 specifically for the storage of medications that are sensitive to temperature. This facility has computerized inventory management and cutting-edge monitoring technologies.
A brand-new AI-driven warehouse management system (WMS) designed specifically for pharmaceutical storage was unveiled by Warehousing1 in 2023. Artificial intelligence is used by this system to maximize order fulfillment, inventory control, and regulatory compliance.
Pharmaceutical Warehousing Segment Insights
Pharmaceutical Warehousing Service Type Insights
The Pharmaceutical Warehousing Market is segmented, based on service type, into storage, distribution, inventory management, packaging, and others. The storage segment held the majority share of the market, with a market share in 2022 and is the fastest-growing segment during the forecast year. The demand for storage services is increasing owing to rising demand for pharmaceuticals and the need for temperature-controlled storage. There are major players such as Thermo Fisher Scientific, Inc. (US), UPS (US), and SGS S.A. (Switzerland), which provide cost-effectiveness, efficiency, security, and improved product stability services in pharma warehouses.
Pharmaceutical Warehousing Mode Insights
The Pharmaceutical Warehousing Market segmentation, based on mode, includes cold chain warehouses and non-cold chain warehouses. The non-cold chain warehouses segment dominated the market in the base year, i.e., 2022, and cold chain warehouses segment is the fastest-growing segment during the forecast period, 2023–2032. This is due to the wide range of advantages offered by cold chain warehouses, such as maintaining the integrity of pharmaceutical products, preventing product recalls, ensuring compliance with regulations, and improving efficiency.
Therefore, the broad range of advantages of cold chain warehouses for pharmaceutical products and the fact that, as the demand for pharmaceutical products continues to grow, the use of cold chain warehouses is likely to increase are propelling the cold chain warehouse segment's growth.
FIGURE 2: PHARMACEUTICAL WAREHOUSING MARKET, BY MODE, 2022 & 2032 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Pharmaceutical Warehousing End User Insights
Based on end user, the Pharmaceutical Warehousing Market has been segmented into pharmaceutical companies, hospitals & clinics, research institutes & government agencies, and others. The pharmaceutical companies segment dominated the market in the base year, i.e., 2022, and is the fastest-growing segment during the forecast period. Furthermore, the factors influencing the growth of the pharmaceutical companies’ segment are increasing demand for pharmaceutical products, rising approval of new drugs, and increasing incidences of chronic diseases. The US Food and Drug Administration has reported that the Center for Drug Evaluation and Research (CDER) has approved 37 novel drugs.
Hence, high demand for innovative drugs to treat illnesses requires a customized environment for storage, fostering the pharmaceutical company segment's growth.
Pharmaceutical Warehousing Regional Insights
By region, the study segments the market into North America, Europe, Asia-Pacific, and the rest of the world. In North America, the pharmaceutical warehousing market held the largest market share in 2022 due to the increasing need for pharmaceutical products. As per the IQVIA (US) 2022 report, new pharmaceutical medicine sales were up 67.7% in the US during the 2016–2021 period. In addition, the rising incidences of chronic diseases, including cancer, obesity, diabetes, and cardiac diseases, are raising the demand for pharmaceutical products in hospitals & clinics. According to the American Heart Association, cardiovascular diseases (CVD) are the leading cause of death among the US population and accounted for 928,741 deaths in 2020.
Hence, the rising demand for pharmaceutical products and increasing incidences of chronic diseases are fueling segment growth in the North American pharmaceutical warehousing market.
Further, the major countries studied are: The US, Canada, France, Germany, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
FIGURE 3: PHARMACEUTICAL WAREHOUSING MARKET, BY REGION, 2022 & 2032 (USD BILLION)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
The European pharmaceutical warehousing market accounted for the second-largest market share due to increasing launch of pharma warehouses. For instance, in September 2020, Maersk Line (Denmark) launched pharmaceutical warehouse in Poland which is fully compliant with European Good Distribution Practice and has carbon neutral facility to meet increased customer needs. Moreover, the European Commission 2020 report on Pharmaceutical Strategy for Europe revealed that expenditure on medicines in hospital settings accounted for 20% to 30% of hospital expenditure and is growing rapidly. Furthermore, the France pharmaceutical warehousing market held the largest market in 2022, and the UK pharmaceutical warehousing market is projected to be the fastest-growing market in the Europe region.
The Asia-Pacific pharmaceutical warehousing market is the fastest-growing region from 2023 to 2032, owing to the launch of pharmaceutical warehouse services and the rising geriatric population in the region. For instance, in March 2023, Cargo-partner (Austria) launched the Pharma Competence Center in Shanghai, China, to meet the demand of customers in the increasingly important consumer market in China for pharmaceuticals and healthcare products. Furthermore, as per the Asia-Pacific Report on Population Ageing 2022, there were approximately 672 million people aged 60 or older in Asia-Pacific in 2022; further 886 million and 1,340 million will be in 2030 and 2050, respectively. The growing geriatric population is increasing the demand of pharmaceutical products in hospitals & clinics. Moreover, the China pharmaceutical warehousing market accounted for the largest market share in 2022, and the India pharmaceutical warehousing market is projected to be the fastest-growing market in the Asia-Pacific region.
Pharmaceutical Warehousing Key Market Players & Competitive Insights
The pharmaceutical warehousing market is highly competitive due to factors such as increasing demand of pharmaceutical products from hospitals & clinics and government agencies. Moreover, global logistics companies such as UPS (US), SGS S.A. (Switzerland), and DB Schenker (Germany) offer pharmaceutical warehousing services as part of their comprehensive supply chain solutions. They leverage their extensive networks, technology infrastructure, and international reach to provide end-to-end pharmaceutical logistics. These companies excel in offering scale, reliability, and integrated solutions for pharmaceutical companies with extensive global operations.
DB Schenker (Germany) is the world's leading logistics provider. It offers warehousing services in more than 100 countries, which include both contract and value-added services. It has a presence in all regions, namely the Americas, Europe, Asia-Pacific, and the Middle East & Africa. Furthermore, in September 2020, the company launched its largest warehousing facility in Gurugram, India, in order to strengthen its footprint in India. This warehouse provides pharmaceutical services to meet the demands of customers.
Key Companies in the Pharmaceutical Warehousing Market include
- DB Schenker (Germany)
- Thermo Fisher Scientific, Inc. (US)
- UPS (US)
- SGA S.A. (Switzerland)
- Cargo-Partner (Austria)
- FedEx (US)
- CEVA Logistics (France)
- DHL (Germany)
- Agility (Kuwait)
- Kuehne + Nagel (Switzerland)
- Others
Pharmaceutical Warehousing Industry Developments
March 2023: Cargo-partner (Austria) launched the Pharma Competence Center in Shanghai, China, to meet the demand of customers in the increasingly important consumer market in China for pharmaceuticals and healthcare products.
September 2020: DB Schenker (Germany) launched its largest warehousing facility in Gurugram, India, in order to strengthen its footprint in India. This warehouse provides pharmaceutical services to meet the demands of customers.
Pharmaceutical Warehousing Market Segmentation
Pharmaceutical Warehousing Service Type Outlook
- Storage
- Distribution
- Inventory Management
- Packaging
- Others
Pharmaceutical Warehousing Mode Outlook
- Cold Chain Warehouse
- Non-cold Chain Warehouse
Pharmaceutical Warehousing End User Outlook
- Pharmaceutical Companies
- Hospitals & Clinics
- Research Institutes & Government Agencies
- Others
Pharmaceutical Warehousing Regional Outlook
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Africa
- Latin America
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