By Mathini Ilancheran, principal analyst, R&D, Beroe Inc.
The COVID-19 outbreak has had an enormous impact on the healthcare industry. One of the key areas where that impact has been most acutely felt is in the distribution of drugs and medical supplies to affected areas and in the transportation of test samples to diagnostic labs. During crises like this pandemic, bottlenecks in drug distribution and sample testing can be improved through automation, artificial intelligence, and robotics. This article provides an overview of the medical drone industry, with a particular emphasis on its adoption by the pharmaceutical sector to solve logistical problems in healthcare during times of heightened need.
An Overview Of Drone Delivery Services
Drone operators are providing delivery as a service to healthcare customers. They operate from distribution centers and warehouses stocked with medical commodities such as vaccines, blood units, test kits, and other medical supplies. Once they receive an order, the products are placed in a box and sent via the drone. On average, bigger operators have around 20 to 30 drones at each center, which allows them to simultaneously send more than one package when demand requires it. Additionally, some operators have set up drone stations near hospitals to facilitate fast and secure transport. While most of the drones and their technology are designed in developed countries, aerial drone technology is largely being implemented in developing countries, creating new markets in Africa, China, and India, in partnership with private operators, humanitarian organizations, and governments. The slow adoption among developed countries such as the U.S. is due to concerns about security risks as well as limited sensing technology within the drone delivery market.1
Benefits To Pharma Manufacturers
Drone delivery systems offer unique advantages, including enabling pharma companies to leverage real-time data to increase supply chain efficiencies for vital, high-volume medicines. They are also critical to help pandemic managers provide just-in-time availability of emergency products. A good example is how China used drones to transport medical samples and quarantine materials between Xinchang County hospitals and the disease control center during the COVID-19 outbreak. This delivery method significantly reduced contact between hospital staff and samples and improved delivery speed by 50 percent compared to road transportation.2
Within the healthcare industry, demand for medical drones is largely driven by the blood transportation segment, for transferring blood to patients and samples to testing labs in emergencies. This is followed by use of drones for delivery of critical drugs to emergency situations. Another growing demand is for delivery of vaccines, in conjunction with government organizations, to remote areas and during outbreaks. Figure 1 shows the market segmentation by application area.3
The emergency medical services (EMS) market for drone services is estimated to grow by 25 percent between 2019 and 2025. The use of drones in this segment addresses the need for timely delivery of drugs, blood, vaccines, and test samples for assessment to nearby hospitals. With drones having the potential to assist in emergency situations, continued technological advances in medical drones will drive the market demand.3 Additionally, the use of drones to deliver medicines and vaccines to remote locations is a key step forward in supply chain innovation by biopharmaceutical companies.4
Current Medical Drone Service Providers (DSPs)
Drone service for medical supplies is a niche market with over 20 players, the most prominent of which are Zipline, Flirtey, Matternet, Volans-i, Drone Delivery Canada, Antworks, and Wingcopter. Among all drone service providers (DSPs), Zipline has the largest market share, with about 88 percent; it focuses on delivering lifesaving medical products in multiple countries.5 It has made around 33,619 deliveries so far6 and is partnering with pharma companies such as Novartis and Pfizer, along with other associates, to deliver essential medical products to remote regions. Table 1 provides an overview of the drone service providers with a focus on emergency medical services and medical products supply.
Pharma Manufacturers Collaborating With Drone Operators
Pharma companies are testing the use of drones to deliver medicines during crises such as natural disasters and pandemic outbreaks. This is also seen as an innovative supply chain solution to strengthen healthcare systems and achieve the U.N. goals of universal health coverage (UHC).4 Some examples include:
- Merck & Co., along with Softbox, AT&T, and DSP Volans-i, led by Direct Relief, tested the potential for drones to deliver temperature-controlled medicines and vaccines. The vaccines and medicines were maintained at a temperature of less than minus 70 degrees Celsius. Live continuous temperature tracking was possible using cloud-based real-time data analysis. Volans-i succeeded in flying its drones over the Bahamas to deliver the lifesaving medicine.7 Merck has also carried out successful test runs in Lugano, Switzerland, in 2017 and Puerto Rico in 2018.8
- Novartis is working with DSP Zipline to make sickle cell treatments available in rural areas. Zipline has two distribution centres in Ghana – in Omenako and Asante Mampong – and it plans to open two more in the future.9 In 2019, Zipline airlifted three packets of hydroxyurea capsules to an 11-year-old sickle cell patient at the Asamankese Government Hospital. Novartis, in partnership with the Sickle Cell Foundation and Zipline, plans to supply sickle cell drugs to every patient in Ghana.10
- Novo Nordisk, with its partners Vodafone Ireland, led by NUI Galway, used DSP Wingcopter 178 Heavy Lift to deliver medications for diabetes and to collect blood samples from a remote island off the west coast of Ireland. Drone delivery can help ensure diabetic patients in remote areas have access to the insulin they need at all times, including during natural disasters.11,12
- Pfizer announced a four-year agreement in 2019 with Zipline to leverage drone technology to strengthen healthcare systems, expand care access, and reach the last mile in remote areas. Alongside Gavi Alliance, the Bill & Melinda Gates Foundation, and the UPS Foundation, Pfizer is working to support the government of Ghana in establishing a medical drone delivery system to ensure access to crucial medical products in difficult to reach areas. Zipline is delivering around 150 medicine products to approximately 2,000 to 2,500 health facilities and 15 million citizens in rural Ghana.4
Logistics Companies Increase Investments In Medical Drone Delivery
Logistics companies such as UPS, DHL, and FedEx are also actively partnering with drone operators and manufacturers in the supply of test samples and medical products to improve lab logistics and delivery lead times.
- DHL introduced the Parcelcopter – the first drone built in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit and DSP Wingcopter. This was used to deliver emergency medicines and blood supplies to a hospital in Ukerewe, Tanzania. It also can transport temperature-sensitive medicines with its temperature-controlled storage unit.13
- FedEx, in partnership with DSP Wing and drugstore Walgreens, is using drones to deliver medical products such as nonprescription medicines to consumers in Christiansburg, VA as part of a pilot project. If the pilot produces positive results, the company intends to offer delivery throughout the U.S.14
- UPS, in collaboration with WakeMed hospital system in Raleigh, NC, and DSP Matternet, transported specimens from WakeMed’s courier network to its central lab for testing. Since March 2019, 1,500 successful deliveries have been completed. It is also collaborating with vaccine alliance Gavi and Zipline to strengthen the healthcare infrastructure in Africa. In 2016, emergency blood supplies were transported to women living in Rwanda who suffered hemorrhage following childbirth. Currently, Zipline delivers over 65 percent of Rwanda’s blood supply outside the capital. This program was extended to Ghana in 2019 for the transport of critical drug products and vaccines.15,16
Drones are revolutionizing the delivery of essential drugs to rural communities and remote areas worldwide. They are often the best way to ship a product with the shortest transit time where road transportation is limited or congested or during a disease outbreak. With pharma companies focusing on innovative drug delivery and expanding their geographic reach, partnering with drone service providers can help achieve these goals.15 During a pandemic such as COVID-19, delivering patient samples faster to central labs for testing is crucial, as it enables physicians to make treatment decisions faster and improve patient outcomes. Evolving drone regulations could allow drones to be adopted more widely as a logistics solution to increase efficiency in healthcare. All of this could eventually improve the direct-to-patient supply chain and boost cold chain solutions.16
- S&P Global, “Need for safer drug delivery during pandemic may spur use of drones,” S&P Global, March 2020. [Online]. Available: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/need-for-safer-drug-delivery-during-pandemic-may-spur-use-of-drones-57723725. [Accessed March 2020].
- T. Cozzens, “China fights coronavirus with delivery drones,” GPS World, March 2020. [Online]. Available: https://www.gpsworld.com/china-fights-coronavirus-with-delivery-drones/. [Accessed March 2020].
- Market Watch, “Growth of Medical Drones Market Report Till 2025,” Market Watch, January 2020. [Online]. Available: https://www.marketwatch.com/press-release/growth-of-medical-drones-market-report-till-2025-2020-01-29. [Accessed January 2020].
- Pfizer, “Innovation in Medicine Delivery,” Pfizer, April 2019. [Online]. Available: https://www.pfizer.com/purpose/global-health/strengthening-health-systems/innovation-in-medicine-delivery. [Accessed March 2020].
- DRONEII.com, “DRONEII: The Drone Delivery Market Map,” dronelife.com, November 2019. [Online]. Available: https://dronelife.com/2019/11/07/droneii-the-drone-delivery-market-map/. [Accessed March 2020].
- Zipline, “Lifesaving Deliveries by Drone,” Zipline, March 2020. [Online]. Available: https://flyzipline.com/live/. [Accessed March 2020].
- R. Staines, “Merck & Co and others test vaccine delivery drone,” pharmaphorum, July 2019. [Online]. Available: https://pharmaphorum.com/news/merck-co-and-others-test-vaccine-delivery-drone/. [Accessed March 2020].
- Merck, “When Disaster Strikes,” Merck, May 2019. [Online]. Available: https://www.merck.com/about/featured-stories/drone-delivery-program.html. [Accessed March 2020].
- “Government of Ghana Makes Hydroxyurea Available,” 3BL Media, November 2019. [Online]. Available: https://www.3blmedia.com/News/Government-Ghana-Makes-Hydroxyurea-Available-People-Sickle-Cell-Disease-Through-First-Its-Kind. [Accessed March 2020].
- MarketWatch, “Ghana: Zipline Drone Makes Delivery of Sickle Cell Medication,” MarketWatch, June 2019. [Online]. Available: https://www.marketwatch.com/press-release/ghana-zipline-drone-makes-delivery-of-sickle-cell-medication-2019-06-23. [Accessed March 2020].
- M. Murison, “Diabetes Drone: Ireland Team Completes BVLOS Insulin Delivery,” dronelife, September 2019. [Online]. Available: https://dronelife.com/2019/09/16/diabetes-drone-ireland-team-completes-bvlos-insulin-delivery/. [Accessed March 2020].
- A. Frangoul, “Autonomous drone delivers diabetes medication to a remote Irish island,” CNBC, 2019 September. [Online]. Available: https://www.cnbc.com/2019/09/18/autonomous-drone-delivers-diabetes-medication-to-a-remote-irish-island.html. [Accessed March 2020].
- DHL, “Saving Lives, One Drone Delivery at a Time,” DHL, January 2019. [Online]. Available: https://lot.dhl.com/saving-lives-one-drone-delivery-at-a-time/. [Accessed March 2020].
- M. Murphy, “Alphabet is partnering with FedEx and Walgreens to bring drone delivery to the US,” Quartz, September 2019. [Online]. Available: https://qz.com/1712200/google-wing-launching-us-drone-deliveries-with-fedex-walgreens/. [Accessed March 2020].
- UPS, “Drone delivery is fundamentally changing healthcare logistics,” UPS, October 2019. [Online]. Available: https://www.ups.com/us/en/services/knowledge-center/article.page?name=drone-delivery-is-fundamentally-changing-healthcare-logistics&kid=art16e18ea6b61. [Accessed March 2020].
- W. Wheeler and R. Feeney, “Podcast: Healthcare logistics in the age of coronavirus,” Longitudes, March 2020. [Online]. Available: https://www.ups.com/us/en/services/knowledge-center/article.page?name=podcast-healthcare-logistics-in-the-age-of-coronavirus&kid=art1711824544c&articlesource=longitudes. [Accessed March 2020].
About The Author:
Mathini Ilancheran is the principal analyst of R&D for Beroe Inc. She specializes in understanding market scenarios and industry dynamics across the globe in the outsourcing arena. Her analysis has enabled global fortune 500+ companies in their strategic decisions on service outsourcing contracts, category management and efficient sourcing. She has written for several publications related to R&D procurement opportunities. With her category knowledge, she has published 25+ articles in leading journals, co-authored with industry experts. She has a master's in management from University College London (UCL) and has worked as a consultant in the U.K. You can contact her at email@example.com and connect with her on LinkedIn.