Internet of Things will Revolutionize how Healthcare is Delivered

The big technology shift sweeping the global connection of healthcare is the supply chain becoming part of the Internet of Things.
Technology advancements in the healthcare industry

By Karen Reddington, President, FedEx Express Asia-Pacific

Like nearly every other area of commerce, healthcare is now a global market. It is projected to be worth US$3 trillion in 2015 (Global Industry Analysts, Inc., 2014) and tipped to grow at 5.3% per year on average between 2014 and 2019, driven by an aging global population and chronic diseases; improving healthcare access around the world; and advancements in technology (Deloitte Touche Tohmatsu Ltd, 2014). In the ten years to 2012, the global trade in medical devices and pharmaceuticals grew four times faster than commerce overall (WTO & McKinsey, 2012). And crucially, the distinction between foreign and domestic healthcare products is fading: for instance, a growing share of medical devices used in Asia are imported; while some 80 percent of active pharmaceutical ingredients used in the United States are manufactured outside of the country (FDA 2015).

While the healthcare industry was previously squarely based on the US and Europe, it has been rapidly shifting to Asia Pacific. In recent years, Asia’s healthcare and pharmaceutical industry has been growing exponentially. The total size of Asia’s healthcare market now stands at US$279 billion and is expected to grow at an average 12.8% per year between 2012 and 2018 – more than double the rate for growth for the global market as a whole (Frost & Sullivan, 2013). Within the region, certain healthcare hubs are poised to reap the benefits: Singapore’s combined pharmaceutical and healthcare market is tipped to be worth US$1.6 billion by 2022.

Global and borderless

FedEx sees the healthcare industry as global and borderless.

But the healthcare industry needs to adapt to this new environment of distinct healthcare clusters dotted around the world. These hubs need to be connected seamlessly and securely through advanced technology if the true benefits of globalized healthcare are to be realized. Even a decade ago, it would be difficult to imagine what’s now possible through the intersection of global trade, healthcare and technology. For instance, a heart patient in Taiwan receiving a pacemaker made half way around the world, in just one night; or transporting sensitive biomaterials such as human liver cells between Japan and the US – and having them arrive in perfect condition.

The globalization of healthcare and the varied needs of different subsectors bring a greater degree of complexity to how it is connected through the healthcare supply chain. More is being demanded from a technological perspective, whether it is unique needs like temperature control, light sensitivity and humidity – or simply an efficient supply chain that meets the needs of cost, speed, reliability and security. It’s estimated that the global cold chain logistics market will grow at nearly 16% per year on average between 2014 and 2019 (, Feb 2015). By 2016, more than half of the top 50 best-selling drugs are likely to require temperature sensitive transport (Logistics Portal). Asia Pacific is leading the charge, with the region expected to account for nearly 30% of the global healthcare cold chain logistics market by 2017 (iMarc Group 2013).

But while medical technology has made stunning advances in the last three years, many medical and life-science products are still being transported the same way they were 30 years ago.

Think about this: a typical pharmaceutical manufacturer has a lead time of about 75 days to deliver to distribution centers out of a formulation and packaging plant (McKinsey, 2013), whereas a typical laptop manufacturer can accept an order on a Monday and deliver a pallet of newly assembled customized computers to a European customer on Tuesday of the following week. And much of the industry is still using the dated method of dry ice and styrofoam as a deep frozen shipping method. While technology now allows clinical trial samples to be shipped in a liquid nitrogen dry-vapor container at -150° c for up to days. The possibilities this new technology opens up were previously unimaginable.

Internet of Things and healthcare

The big technology shift sweeping the global connection of healthcare is the supply chain becoming part of the Internet of Things. Pieces of the supply chain are already connected so packages can be tracked and monitored but in the future, more tiny embedded sensors will enable more pervasive tagging and an unprecedented degree of real-time tracking and tracing. This will provide unique visibility of critical information such as location, temperature, light exposure, humidity, barometric pressure and shock. It will also ensure the integrity and security of healthcare goods. Fraud and security is a widespread problem in the industry; according to the World Health Organization, 8% of medical products are estimated to be counterfeit and pharmaceutical theft is becoming more widespread and sophisticated.

While supply chain control and visibility is important for all industries, it’s absolutely vital for the healthcare industry. From biologic manufactured items to pharmaceuticals, the items the healthcare industry ships are important, sensitive and difficult to replace. Imagine if a shipment holding medicine that was personalized for the DNA of a cancer patient was spoiled or stolen. You can’t pull a substitute off the warehouse shelf and ship it overnight. The complete visibility of healthcare shipments is needed as medicines become more personalized and more potent. This is why connecting every element of healthcare shipping industry is critical to delivering the huge potential globalized healthcare can offer.

The future of global healthcare is on building out smart, connected healthcare supply chains that are efficient, flexible, accessible, compliant, and economically viable. In spite of all our knowledge, and scientific and technological breakthroughs, it doesn’t do human kind any good if we can’t access and disperse the benefits of healthcare advancements – and it doesn’t do the industry any good if it can’t get products to people that want and need them.

In the end, no other industry affects the well-being of people like the healthcare industry does and connecting the global healthcare industry isn’t just a matter of economic opportunity, it can dramatically improve and save lives.