In an era of patent expiry and global outsourcing, Pharma needs to rethink supply chain

Pharmas which are too focused on developing the next product in the age of patent expiry, often overlook planning supply chain, which is an important part of maintaining margins.

Supply chain is critical for delivering a value pharmaceutical product to the marketplace which in turn is vital for revenue generation. Any business which wants to maintain sustainable competitive advantage has to be able to provide customers with sustainable quality products. A lot of these issues faced by the industry are mainly because the industry has not done the underpinning work to increase effectiveness and efficiency.

Instead of supply chain efficiency, the drug industry has focused on bringing new products to market as quickly as possible to maintain revenues thereby missing out on easy wins that are provided by simply doing the basic improvements.

Drugmakers effort to find the best deals have created supply chains that are complex, disconnected and inefficient – and ironically, given the original motivation – can lock manufacturers into cost escalation and inefficient processes.

Engagement, Planning & Solution

Modernization: Instead of mass production, drug sector should focus more on lean model like the automotive industry, holding each person responsible for the quality of product he is making. Engaging with suppliers and forming closer bonds with contracts to enjoy greater efficiency gains.

Reintegration of the supply chain or building strong strategic partnerships with CMO’s, CRO’s & LSP’s would simplify the supply chain with fewer compliance gaps.

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