Pharma supply chains need radical overhaul, says report
PwC says the ability to integrate data, products and services is vital
The global pharma industry needs to radically overhaul its supply chains if it is to meet the demands of a changing market, a new report from PwC warns.
The manufacturing and distribution operations of many pharma companies are under-utilised, inefficient and ill equipped to cope with new medicines, according to the report, Pharma 2020: Supplying the future. Which path will you take?
Supply chains are also being put under pressure by six main trends, identified by PwC as:
- new product types, including biologics, bioengineered vaccines and advances such as stem cell research and nanotechnology
- ‘live’ licensing, which would make the interval between the initial launch and peak sales point much longer; the revenue curve climb more slowly; and the payback period for capital expenditure on plant and equipment more protracted
- increasing emphasis on outcomes, which means that pharma companies will have to provide demonstrable value for money
- new modes of healthcare delivery, such as greater use of electronic health records, e-prescribing and remote monitoring, which are moving healthcare delivery into homes, communities and direct to patients, will mean pharmaceutical manufacturers will have to manage wider distribution networks
- growing importance of emerging markets, which will mean building a supply chain that is both more geographically dispersed and more secure
- greater public scrutiny as globalisation increases the risks and greater public awareness and more diligent enforcement identifies contamination risk and counterfeit medicines
‘In a world where outcomes now count for everything, the ability to integrate data, products and services in a coherent business offering that delivers increased value and better understands the needs of the patient is vital,’ says Simon Friend, global pharmaceutical and life sciences leader, PwC.
‘Companies must now work hard to get closer to their patients as by 2020, there is little doubt that the data behind a product will as valuable as the product itself.’
The global pharma industry will therefore need to develop different supply chain models for different product types and patient segments, learn to use their supply chains as a means of market differentiation, all while recognising the importance of information over product.