Under the deal UPS will handle a significant proportion of Merck’s pharmaceutical and vaccine distribution needs in the US, as well as providing package transportation services.
The deal is similar in some respects to Merck’s recent agreement with PPD, as on both occasions the pharma giant has handed over a facility and then used it on a contract basis.
By signing these deals Merck removes the overheads of running the facility from its budget sheet and potentially gains from the expertise of its new partner. In turn the outsourcing firm can use any extra capacity to serve other clients.
Bill Hook, UPS vice president of global strategy, healthcare logistics, said: "Our latest initiative with Merck marks the next step in our relationship to meet this customer's evolving needs.
“UPS has invested heavily to provide healthcare customers such key advantages as integrated supply chain solutions combining multiple modes of transportation, plus dedicated healthcare facilities that help them speed new products to market, navigate regulatory compliance and respond to evolving industry demands."
The two facilities are located in Atlanta, Georgia and Reno, Nevada and the majority of Merck’s pharmaceuticals and vaccines pass through these sites.
UPS will use the sites provide Merck with temperature-sensitive storage, packaging and transportation services. Any spare capacity can be used to provide similar services to other clients.
Through the acquisitions of the two facilities USP gains an additional 200,000 square feet of logistics space, taking its total global healthcare capacity to over 3.5m square feet.