The pharmaceutical industry is constantly being pushed to work faster and cheaper. At the same time, customers, investors, and regulatory bodies are demanding greater environmental responsibility. Packaging stands at the forefront, as it costs a lot of money and leaves behind barely recyclable waste. The conflict can't be ignored.
Medicines must be protected according to strict hygiene and safety regulations, while the law now mandates circular supply chains. That's why packaging is more than just boxes or blisters - it's considered a valuable lever for green corporate goals. In Europe, the pressure will soon become even more noticeable, as the revised EU Packaging and Packaging Waste Regulation (PPWR) demands higher proportions of recycled materials and promotes reusability.
The question remains:
How can procurement in the pharmaceutical industry bring sustainability, data-driven decisions, and cost control under one roof? The answer lies in modern tools, partnership thinking, and the courage to change.
Pharmaceutical packaging can be broadly divided into three categories:
Each of these categories is subject to highly specific requirements: temperature control, light protection, sterility, and complete traceability along the supply chain. Additionally, packaging must increasingly be designed multilingually and compliant with international markets.
Added to this are operational challenges: Contract Manufacturing Organizations (CMOs), which many pharmaceutical companies rely on, often follow their own packaging standards. These different requirements make it difficult to introduce sustainable systems. Central control of packaging types, suppliers, or return systems is barely possible - especially when there's no consistent data structure in place.
The cost ratios in pharmaceutical packaging are complex: Primary packaging accounts for about 15-20% of total packaging costs but requires the highest quality standards. Secondary packaging dominates the cost base at 40-50%, as this is where multilingual requirements, compliance texts, and country-specific adaptations come into play. Transport packaging, especially cooling systems, can cause up to 35% of packaging costs for temperature-sensitive biopharmaceuticals - with an increasing trend due to mRNA vaccines and biologics.
Particularly critical: The pharmaceutical industry records annual cost increases of 8-12% for specialty packaging, while regulatory requirements are simultaneously increasing. Systematic categorization and digital recording of all packaging types thus becomes a business necessity.
A circular approach - the reuse or recycling of packaging - is hardly established in practice yet. The reasons are manifold. The data basis is missing, packaging types are not standardized, and processes are often designed for single use. Moreover, packaging is often viewed as a purely logistical topic, although it accounts for over 10% of indirect procurement costs.
Especially in areas like biotechnology, where temperature-sensitive products (e.g., mRNA vaccines) require high cold chain standards, enormous costs arise, with potential for savings through circular packaging systems.
There's a gap between theory and reality: Although circular packaging concepts in the pharmaceutical industry appear economically and ecologically sensible, practical implementation often fails already in the planning phase. The reasons are multifaceted and often begin where companies least expect them.
The transition to circular packaging solutions usually fails due to structural problems:
Hidden Costs amplify the problem: The true costs go far beyond the material price. Regulatory redundancy (15-20 packaging variants per global product), temperature chain inefficiencies (up to €50,000 compliance costs), and data silos (180 hours of manual consolidation per month) add up to 25-40% of visible packaging costs.
Without an integrated data and control logic, procurement remains blind and thus reactive instead of strategic.
Digital technologies can help address exactly these structural weaknesses. AI-supported procurement platforms offer concrete levers:
Classification of Packaging Types via NLP
Through Natural Language Processing (NLP), free-text tenders can be automatically analyzed and packaging types systematically assigned. This recognizes whether it's primary, secondary, or tertiary packaging. Combined with machine learning, sustainability criteria can also be stored. For example, packaging with recycled materials or reusable concepts can be prioritized.
AI-supported Supplier Search for "Returnable Packaging"
Intelligent algorithms scan global supplier pools for providers offering circular packaging models. Based on historical orders, temperature requirements, and delivery locations, AI can suggest which suppliers are technically and economically viable.
Demand Consolidation Across Plants
Often similar requirements exist in multiple plants but are procured in isolation. Digital platforms bundle these needs and thus increase negotiating power. It also becomes possible to introduce standardized packaging solutions and efficiently design return systems.
CO₂ Footprint Simulations and Lifecycle Costs
Modern systems simulate the CO₂ footprint per packaging unit - across production, transport, and return.
Platforms like Mercanis address exactly this: They analyze free-text requirements, suggest alternative packaging options, evaluate suppliers according to sustainability criteria, and enable central control across all plants - in real time.
A mid-sized biopharmaceutical manufacturer had major problems with cooling packaging in five plants:
Project Goal: Introduction of a closed cooling packaging system with return logic
Approach:
Results:
Through the data basis, sustainability and costs could be linked and specifically optimized.
Packaging offers a concrete entry point for strategic sustainability in procurement. Those who procure circularly today think holistically tomorrow, from material cycles to traceability.
The importance of packaging will continue to rise in the future: on one hand through the increase of biopharma products with high cold chain requirements, on the other hand through regulatory requirements like the EU directive on Extended Producer Responsibility (EPR), which increasingly holds pharmaceutical products accountable.
A circular model in procurement doesn't just mean returning packaging, but the systematic recording of packaging categories, materials, supplier scopes, and ESG metrics. Procurement transforms from orderer to control organ:
Digital platforms enable this transformation: They aggregate data, simulate scenarios, and standardize processes. They make sustainability in procurement controllable.
In Europe, the new EU Packaging and Packaging Waste Regulation (PPWR) sets new standards for packaging solutions, including in the pharmaceutical industry. By 2030, all packaging on the European market should be reusable or recyclable.
Additionally, the Corporate Sustainability Reporting Directive (CSRD) requires larger companies to provide detailed information about packaging waste, returns, and material use, including Scope 3 emissions.
This development massively increases pressure on procurement departments: Those who don't start treating packaging as an ESG topic today will be overtaken by regulation in a few years. At the same time, digital solutions offer the chance not just to go along with this change, but to shape it strategically.
Packaging is more than logistics. It's a cost factor, sustainability driver, and strategic lever. The pharmaceutical industry has the potential to convert its packaging strategy to circular models with digital solutions, faster than other industries.
But those who continue thinking linearly will come under pressure not only regulatorily but also economically in the long term.
Digital tools are no longer an option. Digital tools are a prerequisite.
Those who want to take new paths in procurement need the right questions and a system that can provide answers.
Circular packaging refers to packaging solutions that can be used multiple times, returned, or completely recycled. In the pharma environment, this is particularly challenging as the highest hygiene and temperature requirements must be maintained. The goal is to conserve resources, reduce CO₂, and comply with regulatory requirements
Because packaging can account for up to 50% of indirect procurement costs - especially for temperature-sensitive products like biologics or mRNA vaccines. Added to this: packaging is in the focus of ESG guidelines and is heavily regulated - companies need reliable data, transparency, and a future-proof procurement strategy here.
Main problems are lack of transparency about packaging types, manual processes, disconnected IT systems, non-standardized data structures, and missing ESG metrics. Many processes are designed for single use and can't be efficiently controlled without digital tools.
For example, through: - Automatic classification of packaging via NLP - Simulations of CO₂ footprint & lifecycle costs - AI-supported supplier search for "Returnable Packaging" - Demand consolidation across plants These levers ensure better decisions, less waste, and lower costs.
Central requirements include: - EU PPWR (Packaging and Packaging Waste Regulation): All packaging must be reusable or recyclable by 2030 - CSRD (Corporate Sustainability Reporting Directive): Companies must transparently report packaging data, returns, and CO₂ emissions. Those who don't act now risk not only regulatory penalties but also reputational and cost disadvantages.
Fabian Heinrich is the CEO and co-founder of Mercanis. Previously he co-founded and grew the procurement company Scoutbee to become a global market leader in scouting with offices in Europe and the USA and serving clients like Siemens, Audi, Unilever. With a Bachelor's degree and a Master's in Accounting and Finance from the University of St. Gallen, his career spans roles at Deloitte and Rocket Internet SE.
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