TriRx Pharmaceutical Services, one of That's Nice's Road to 2021 sponsors, discusses how the company is evolving its partnership models or geographic footprint to meet the future of healthcare?
As we look forward over the next decade, there will be an increase in outsourcing to maximise utilisation and efficiency and to reduce operating expenses. An anticipated annual growth in outsourcing greater than 10% will be driven by companies reducing internal capability and consolidating their supply base.
The relationship between pharma and biotech companies will continue to evolve, with CDMOs increasingly working as a part of the teams of those companies. Companies will seek to achieve more through their relationships, including development, methods, materials acquisition, inventory management, manufacturing, and distribution.
The market will continue to gain critical mass through consolidation, aiming to ensure that effective capability meets demand. Finding new ways to create efficiencies and reduce costs is going to be critical, along with implementing processes in ways that reduce the time to market.
TriRx is focused on building additional capabilities to service the full supply chain, including the acquisition of materials (as well as natural ingredients), having a broader capability of dosage forms, and providing additional supply chain services through distribution to end-users. We will be adding capability in both facilities and technology so that we can provide development capability and sterile solid dosage forms and semi-solids, as well as biological capabilities. This will all be supported by capabilities for supply chain management and the implementation of global S&OP and Lean 6 Sigma processing with real-time online systems.
We plan to expand in North America and Western Europe, focusing on these regions specifically because of the far reaches and difficulties in interactions in other markets. Latin America and Asia are currently more restrictive and require larger investments to reach.
Our strategic plans align with some geographic restrictions apparent due to COVID-19. For instance, there is a growing concern about access to medicines coming from different markets. The supply chain is adjusting, which is going to result in U.S. companies being more U.S.-centric and European companies focusing on European supply chains. The impact will be most acute in Asia: we predict an overall reduction of sourcing from China and India because of the virus and global fears regarding the supply chain.
These geographic restrictions will very likely increase prices. There will be requirements for investment to make these shifts happen, including updating and adding to existing facilities and constructing new facilities. While these restrictions will likely affect price, there will be continued pressure to manage and reduce costs. It will be a challenge to strike a balance between the forces of globalisation and the push to streamline the supply chain. The solution to this challenge may involve considering more efficiency upfront, utilizing and supplementing existing capabilities, and implementing Lean 6 Sigma processing throughout the business operation to ensure that companies are conducting operations in a way that reduces costs, increases efficiency, and improves the timeliness of delivery.
Strategic partnerships are the key to the future for delivering product efficiently and cost-effectively. Accelerated consolidation is likely because the current supply chain is unwieldy, underutilised, inefficient, and time-consuming. A more streamlined supply network is critical going forward, including partnerships between owned and contracted facilities, with competent professionals who have knowledge and experience, and the ability to be a part of one team that delivers.