The Top Five Pharmaceutical Supply Chain Trends


The ability for resistance and recovery defines a resilient supply chain. Every company’s supply network has been tested by Covid-19, but none is more important than the pharmaceutical supply chain. Many pharmaceutical companies are stuck attempting to discover ways to engage with suppliers to boost their factory’s output due to poor continuity planning and single-source suppliers. Supply chain resiliency is required to continue treating patients. The Healthcare Industry Resilience Collaborative (HIRC), a resiliency program led by Spectrum Health, Mayo Clinic, and a number of other health systems and suppliers, is examining the impact of supply chain disruptions on patient care. Initiatives like these that strive to identify key performance metrics for resiliency are important so that manufacturers can understand where they are and begin increasing their resiliency so that they may continue to provide the best possible care to their patients.

Government involvement is looming

With the pandemic drawing worldwide attention to the pharmaceutical business and proving the importance of the supply chain, it’s no surprise that the US government is focusing more on measures to increase supply chain resilience to prevent consumer impact after learning of Covid-19. While there are proposals in Congress to lower prescription prices in order to make medicines more affordable to Americans, huge corporations expect to spend less on research, resulting in fewer studies into lesser-known ailments. Smaller companies facing prescription pricing pressures run the danger of not having enough income to survive price reductions, reducing the number of small and innovative businesses. Aside with drug price, an executive order on US supply chains was issued, highlighting the need to strengthen domestic manufacturing capabilities. In August 2019, 72 percent of active pharmaceutical ingredients (APIs) in the United States were made outside the country, with 18 percent coming from India and 13 percent from China. Consumers began to notice the over 100 container ships waiting to enter the port of Long Beach, California in the week of October 18 as the country’s reliance on foreign supplies became clear. The average wait time is seventeen ships. Only time will tell if the US government’s interest in the pharmaceutical business will decrease as supply chains return to normal or if it will remain to prevent future disruptions. Meanwhile, other corporations are examining what it would take to expand manufacturing operations in the United States or to ‘nearshoring’ closer to the country.

In the final quarter mile

The requirement for speed owing to the ‘Amazon effect,’ paired with the need for a quick Covid-19 vaccine rollout, altered the pharmaceutical landscape and typical last mile distribution sites. In the past, most cold chain medicines were transported straight to hospitals or pharmacies, with the exception of insulin, which was occasionally supplied to homes. With the Covid-19 vaccination, there was an increased need to meet patients wherever they were, such as at work, a community center, or even at their homes. The final quarter mile of delivery was more hyper-focused than it had ever been. During the pandemic, e-commerce was on the rise, and the need for speedier pharmaceutical and consumer goods deliveries necessitated the expansion of urban storage, but the last mile infrastructure was not designed to bear the strain. Many significant participants in the final mile are investing to close the gap between themselves and major cities like the MHRA approved warehousing UK. The emphasis on urban storage to support the last quarter mile will continue to rise in all industries, as it has this year.

Data traceability from beginning to end

The pharmaceutical industry’s insatiable appetite for data is nothing new, but in the last year, companies have begun to employ master data and artificial intelligence to address the difficulties posed by the pandemic. Data access enables supply chain professionals to make proactive decisions that can conserve drugs and ensure on-time delivery to patients. Manufacturers can use data from hospitals on pharmaceutical usage rates to create forecast models that can better estimate demand and necessary ingredient volumes than models based on historical data. With the different opportunities that come with data, there is a tremendous need for data scientists within pharmaceutical businesses, although more so within supply chain groups than in centers of excellence. This year has shown how data may be used to enhance forecasting, save expenses, and provide proactive patient assistance. Increased internal data scientists assisting the supply chain will result in increased efficiencies.

Strategic alliances

The pandemic taught us that it brought together all parties involved in the pharmaceutical supply chain. Pharmaceutical companies collaborated with API companies to explore ways to enhance output, while manufacturers worked with hospitals to understand their needs and ensure that medicines were delivered to the exact location where they were needed to avoid stockouts. Because of the unique nature of the business and the sensitive patient information that stakeholders oversee, partnerships in the pharmaceutical industry can take decades to create. In the past, the requirement to preserve patient data or hide flaws from customers led in a rising distance between manufacturers and logistical providers or hospitals. The desire to handle a specific problem drew the industry together during the pandemic, and it swiftly built a degree of trust that still exists today. When each stakeholder can share facts or constraints with others, it indicates true cooperation and how to best use resources or address deficiencies in order to properly focus on the patient’s best interests.

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Jerome Dodson