Pharmaceutical Distribution Systems – A Strategic Opportunity – Asrar Qureshi’s Blog Post #1215

Pharmaceutical Distribution Systems – A Strategic Opportunity – Asrar Qureshi’s Blog Post #1215

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1215 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com  for publishing your contributions here.

Credit: Antonius Natan

Credit: Lidia Volovaci

Preamble

This blog post is based on insights from a McKinsey article. Link at the end.

From Warehouse to Wellness: What Modern Pharmaceutical Distribution Means for Pakistan

For decades, pharmaceutical distribution in Pakistan has been viewed largely as a logistics function, warehouses, trucks, stockists, and retailers moving cartons of medicines across cities and districts. Yet, as global healthcare systems evolve toward specialty medicines, biologics, and patient-centric care, this traditional view is becoming dangerously outdated.

Insights from McKinsey’s discussion with Bob Mauch, CEO of Cencora, highlight a global shift: pharmaceutical distribution is no longer just about storage and delivery; it is becoming a strategic enabler of patient outcomes. When this global perspective is applied to Pakistan, the implications are profound.

Pakistan stands at a crossroads. With one of the largest pharmaceutical consumption markets in South Asia, a rapidly growing population, and rising burden of non-communicable diseases, the country must decide whether its distribution system remains a low-value logistics layer, or transforms into a modern healthcare infrastructure pillar.

Pakistan’s Pharmaceutical Distribution: Where We Stand Today

Pakistan’s pharmaceutical distribution model is largely fragmented and volume-driven:

• Thousands of independent distributors and stockists

• Heavy reliance on manual processes

• Limited cold-chain penetration beyond vaccines

• Weak integration between manufacturers, distributors, hospitals, and pharmacies

While this system has historically ensured broad geographic availability of basic medicines, it is increasingly ill-suited for modern therapies, especially oncology drugs, biologics, insulin analogues, and future cell-based treatments.

The system works reasonably well for oral solids, generics, and high-volume, low-complexity products. But it struggles with temperature-sensitive medicines, just-in-time hospital supply, traceability and anti-counterfeiting, and demand forecasting and inventory optimization. 

This mismatch between evolving therapy complexity and legacy distribution models is the central challenge Pakistan now faces.

Why Distribution Is Becoming a Strategic Issue

The McKinsey article underscores a key insight: distribution failures are patient-care failures. This is particularly relevant in Pakistan, where medicine availability often determines whether treatment happens at all.

In oncology, endocrinology, and infectious disease management:

• A delayed shipment can cancel a chemotherapy cycle

• A cold-chain breach can destroy an insulin consignment

• A stockout can force patients to skip or ration doses

As Pakistan’s disease burden shifts toward chronic and specialty conditions, the distribution system is no longer peripheral; it directly shapes health outcomes.

The Rise of Specialty and Biologic Medicines

Pakistan’s pharmaceutical market is quietly but steadily changing:

• Oncology medicines are growing at double-digit rates

• Biologics (e.g., monoclonal antibodies) are entering routine practice

• Diabetes prevalence is increasing sharply

• Hepatitis and autoimmune treatments require controlled handling

Yet distribution capabilities have not kept pace.

Most distributors are optimized for ambient storage, bulk handling, and credit-driven sales models. 

Very few are equipped for advanced cold chain (2–8°C with monitoring), cryogenic logistics (future need), and real-time temperature and location tracking.

Without upgrading distribution, Pakistan risks becoming a market where advanced therapies exist on paper but fail in practice.

Cold Chain: The Achilles’ Heel of Pakistan’s Distribution System

One of the strongest messages from McKinsey’s discussion is that modern pharmaceutical distribution is increasingly defined by cold-chain excellence.

In Pakistan, cold chain is largely limited to EPI vaccines. Private-sector cold-chain infrastructure is uneven and unregulated and temperature excursions often go undocumented

This is not just a quality issue; it is a patient safety and economic issue. A single temperature breach can render a biologic product ineffective while remaining visually unchanged.

A modern Pakistan distribution model must include validated cold-storage facilities, temperature-controlled vehicles, continuous data logging, and accountability for excursions.

This will require both capital investment and regulatory enforcement, areas where collaboration between industry and Drug Regulatory Authority of Pakistan is essential.

Technology: The Biggest Untapped Advantage

Unlike infrastructure, digital transformation does not require decades. This is where Pakistan has a unique opportunity to leapfrog. The McKinsey article highlights how AI and data analytics are reshaping inventory planning and demand forecasting. In Pakistan, where demand variability is high, cash flow pressures are acute, and stockouts are common. Data-driven distribution could be transformational.

What This Looks Like in Practice:

• AI-based forecasting to predict demand spikes (e.g., dengue season)

• Inventory optimization to reduce expiry losses

• Digitized order-to-delivery systems

• Integration with hospital consumption data

Even modest digital upgrades could reduce working-capital pressure, improve medicine availability, and increase trust between manufacturers and distributors.

Pakistan does not need Silicon Valley-level systems. It needs appropriate, scalable, and enforceable digital tools.

From Product Movement to Patient Enablement

A central theme in McKinsey’s conversation with Bob Mauch is that distributors must see themselves as patient-enablers, not just intermediaries.

In Pakistan, this mindset shift is overdue.

A patient-centric distribution system would prioritize lifesaving and time-critical medicines, align delivery schedules with hospital treatment plans, support specialty pharmacies and home-care models, and improve transparency on availability and pricing

This approach is especially relevant for cancer patients traveling long distances for treatment, Insulin-dependent diabetics, and hepatitis and transplant patients

Distribution that fails these patients fails the healthcare system.

Regulation: From Control to Capability Building

Pakistan’s regulatory framework has traditionally focused on licensing, pricing, and compliance documentation. While necessary, this approach must evolve to include capability development.

Regulators can play a catalytic role by setting clear cold-chain standards, accrediting specialty distributors, mandating traceability for high-risk medicines, and encouraging consolidation and professionalization.

Rather than seeing regulation as a barrier, Pakistan should view it as a tool to modernize distribution, just as global regulators have done.

Implications for Pakistani Pharmaceutical Companies

For local manufacturers and multinationals alike, the message is clear: distribution strategy is now a competitive advantage.

Forward-looking companies should invest in distributor capability audits, co-develop cold-chain infrastructure, share demand data responsibly, and pilot direct-to-hospital and specialty models

In a market where product differentiation is shrinking, availability, reliability, and speed can define brand trust.

A Strategic Opportunity; Not a Cost Burden

One of the most important reframing from the McKinsey article is this:

Distribution investment is not a cost; it is a healthcare investment.

For Pakistan, modernizing distribution can improve treatment adherence, reduce medicine wastage, strengthen health system resilience, enable access to advanced therapies, and support export credibility in regulated markets.

In a country where healthcare resources are constrained, efficiency gains in distribution can translate directly into lives saved.

Sum Up

Pakistan does not need to replicate the US or European distribution models. But it must absorb the principles highlighted by McKinsey. The shift from warehouse to wellness is not theoretical; it is already happening globally. The question is whether Pakistan will follow or fall behind.

If policymakers, regulators, and industry leaders act together, Pakistan can build a pharmaceutical distribution system that is modern, resilient, patient-centered, and fit for the therapies of tomorrow

And in doing so, ensure that innovation in medicines is matched by innovation in how those medicines reach patients.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, any claim is lodged, it will be acknowledged and duly recognized immediately. 

Reference:

https://www.mckinsey.com/industries/healthcare/our-insights/warehouse-to-wellness-bob-mauch-on-modern-pharmaceutical-distribution?stcr=CE8B21ED9B15474581598372160DB9B7&cid=mgp_opr-eml-alt-shp_hc-mgp-glb--&hlkid=612c52f9f6e54125b069c143836d78eb&hctky=15999472&hdpid=6fcd89ba-376d-4ebb-a242-849eb8356f20