1. A Blizzard in the Forecast? The Changing Face of Regulations, Air Cargo Transport, and Logistics Driving Global Healthcare Distribution Kevin O’Donnell, Director and Chief Technical Advisor, ThermoSafe Brands and Chair IATA Time & Temperature Task Force HPCLC Long Boat Key, FL 14 October 2010 Tony Wright, CEO, Exelsius Cold Chain Management and member IATA Time & Temperature Task Force and PCCIG

2. Regulatory Drivers Increased scrutiny on the entire distribution supply chain Increased expectation in shipment monitoring Greater regulatory enforcement

3. Major Regulatory Changes, Standards & Guidance to be enacted in 2011 United States Pharmacopoeia – General Chapter Good Storage and Shipping Practices World Health Organization – Harmonized guidance for the storage and transport of time and temperature–sensitive pharmaceutical products Health Canada’s – GUIDE-0069 Guidelines for Temperature Control of Drug Products during Storage and Transportation

4. But Wait – There’s More! Parenteral Drug Association – Technical Report No. 39: Guidance for Temperature-Controlled Medicinal Products: Maintaining the Quality of Temperature-Sensitive Medicinal Products through the Transportation Environment – Technical Report No. 46: Last Mile: Guidance for Good Distribution Practices for Pharmaceutical Products to the End User

5. … and more – PDA Technical Report No ?: Recommended Best Practices for Manufacturers of Temperature Sensitive Products to Comply with TSA Cargo Screening Requirements – HDMA Managing Cold Chain & Temperature Sensitive Products – IATA Chapter 17: Air Transport Logistics for Time and Temperature-Sensitive Healthcare Products – And more on the way!

6. Why All the Attention? Substantial increase in temperature-controlled drug products due to: – Patent expiration on biological drugs – Surge in biologics – New product development – New global markets – Evolving manufacturing practices

7. Global Manufacturing Processes Courtesy: Exelsius/Zymogenetics

8. Market Statistics Market worth approximately US$680bn. Temperature-controlled market $168bn. Healthcare market forecast to grow to US$900bn by 2012. Nearly 100% of all vaccines and 65% of biotech products need temperature controlled storage and transportation. Biotech market fastest growth – majority by air cargo.

9. Air Cargo’s Changing Airscape Downsized Fleets Reconfigured Aircraft Utilization Airline Consolidation Abandon Lanes Trade Imbalances

10. The 2010 Turnaround

11. Air Freight Capacity is not Keeping up with Global Growth. Source: Boeing Report, June 2010

12. New Aircraft Orders are Up Source: Boeing Report, June 2010

13. Aircraft Demand by size 2009-2029 Size New Airplanes Value ($B) Regional Jets 1,92060 Single Aisle21,1601,680 Twin Aisle7,1001,630 Large720220 Source: Boeing Report, June 2010

14. Emerging economies and changing demographics will shift passenger traffic and consequently, cargo flows And at a time when outsourced production means greater logistical challenges to cold chain distribution……

15. The Overall Air Cargo Sector Approximately 12% of total airline revenues are from air cargo. By volume of cargo carried, only 5% is ‘perishable’. Healthcare products represent less than 0.5% of total air cargo. Total Airline Revenues US$50bn Source: :IATA

16. ‘Cold Chain’ Products Growing Faster Cold Chain Products +27% $773bn $187bn $147bn $877bn Total Market +13% $ Billions Global Biopharma Sales 2008-2011 Source: Pharmaceutical Commerce

17. How is the global air cargo sector reacting? Increased focus on the healthcare sector. Increased collaboration. New air cargo handling regulations. Improved technology.

18. Increased Sector Focus # Global Airlines offering Pharmaceutical ‘cold-chain’ products

19. Collaboration Mutual Physical Beneficial

20. Collaboration: Getting the entire cold chain working together to improve the way it operates Collaboration in the air cargo logistics process – who’s involved? Distributors & Consignees Origin Forwarders & Trucking Co’s. Origin-Destination Air Carrier Destination Forwarders & Trucking Co’s Manufacturers & Shippers Airport Ground Handlers Thermal Solution Providers Airport Ground Handlers

21. Distributors & Consignees Origin Forwarders & Trucking Co’s. Origin-Destination Air Carrier Destination Forwarders & Trucking Co’s Manufacturers & Shippers Airport Ground Handlers Thermal Solution Providers Airport Ground Handlers 23%57%20% Courtesy Exelsius Key Areas of Cold Chain Risk

22. Collaboration in Practice IATA Time & Temperature Task Force Manufacturers, forwarders, airlines, regulators, ground handling co’s, technology providers, etc Brought together into a commonly understood purpose – patient safety. Required immense time & effort

23. Collaboration resulted in a new set of Regulations... IATA Perishable Cargo Regulations, Chapter 17 Binding to all IATA members Specific to the handling of time and temperature-sensitive products.

24. ... and a vital new label

25. Gaining Industry Support Courtesy CSafe & ThermoSafe

26. Transportation Technology Advances Provides both heating and cooling. Reliable, compressor-driven technology. On-board temperature monitor

27. Summary Regulation, regulation, regulation Challenges of global manufacturing Air Cargo’s changing ‘airscape’ Capacity vs. growth Cold chain growing fast(er) The air cargo sector is reacting Collaboration & new technology

28. Who depends on us working together? They Do!

29. Thank You! Tony Wright tony.wright@exelsius.co.uk Kevin O’Donnell kevin.o’donnell@tegrant.com