Summary:
The healthcare value chain is evolving into an inter-connected and cost effective model – where pharmaceutical companies will focus on and invest in securing distribution management as well as complying with emerging regulations. Re-imagining business relationships with third-party service providers involved in packaging, labelling, distribution, storage, shipment, and transportation of goods can enhance supply chain operations.
The variations in the applicability of Good Distribution Practices (GDP) regionally, and thorough risk assessment with clear accountability have assumed primary importance. Challenges in demand supply management increase the supply chain risk due to node extension and necessitate increased (near) real-time supply chain visibility, multi-channel management, and trade compliance. With increasing segmentation, we foresee four distinctive models emerging in the context of Pharma distribution. They will be influenced by technological innovations, service focus, healthcare reforms, and progress in personalized medicine.
In this paper, we assess three high impact areas that pharmaceuticals companies should streamline for effective supply chain management. They are—inventory visibility, sensitive products’ storage and shipments and distribution network redesign
Overview:
The life sciences industry has been re-inventing itself over the last decade, with an increasing shift from a fully integrated enterprise enmeshed across the complete value chain to a virtually integrated pharmaceutical company (VIPCO) business model.
The distribution of pills and devices has not been immune to these changes. Distribution management in life sciences is complex and unique. Recent legislations —the Food and Drug Administration Safety and Innovation Act (FDASIA), the Drug Quality and Security Act of 2013, EU False Medicine Directive, Saudi Arabia’s Saudi Drug Code (SDC), the Drug Bar-coding Specifications, and the Brazilian ANVISA’s Resolution RDC 54/2013, as well as GDP updates such as the HPRA Guide to GDP of Medicinal Products for Human Use— aim to ensure the efficacy and safety of drugs being distributed and sold.
With regulatory agencies stepping up audits of the distribution network, there has been a sharp increase in the number of warning letters and non-compliance issues. However, the adoption of distribution management technology and best practices in life sciences companies has been overlooked or delayed when compared to other industries such as fast moving consumer goods (FMCG), retail, or hi-tech. Figure 1 depicts a typical Pharma distribution scenario. From the distribution perspective, there are four imperatives driving the change in Pharma distribution:
• Growth (in type and volume) of pharmaceutical products and medical devices;
• Globalization of pharmaceutical logistics with the rise in global trade of both active ingredients delivered to formulation manufacturing sites, and finished products delivered globally;
• A thorough and rigorous regulatory framework, with stricter specifications for GDPs and diligent enforcement of industry standards
• Managing Cost to Serve more effectively
