Supply Chain implies the upstream and downstream flow of products, services, finances, and data from a source of supply/production to a customer. Supply Chain Management was developed initially within the context of producing. It aimed to optimize the resources of any participants along the pharma supply chains. In the context of the bioscience sector, it covers a broader arena to incorporate chemists/pharmacies, healthcare centers – hospitals, and dispensaries in addition to individual customers.
In recent times, pharma supply chains are evolving themselves in line with the high-level megatrend shifts within the environment, namely:
- Increased consumerism also as demographic and lifestyle changes.
- Shifting patterns of economic activity
- Climatic and environmental changes
Megatrends being all-enveloping, irreversible external forces, they inevitably achieve associated challenges and shifting paradigms, which leaves a protracted-lasting impact. The pharma supply chains industry is facing new challenges as well as opportunities.
- Demographic changes by way of accelerating lifetime mean global communities have an upward shift within the median age. Even the erstwhile younger population bases of Asian countries now have an increased proportion of the elderly. Inevitably, this brings a few trends of increased market size because the senior citizens are more likely to be requiring various sorts of healthcare products – from OTCs to prescribed drugs and even medical devices and implants. Informatively in Japan, which is one of the top valued pharma markets in Asia, the median age has today risen to 47 years from 35 years within the mid-eighties. The same is the case of most developed and developing nations globally.
- Shifting patterns of economic activity, globally from West to East and specifically in India from urban to rural areas, means a challenge also as a chance to satisfy the logistical requirements from/ to the new geographies and hinterlands. It’s estimated that the BRIC economy would grow at nearly thrice the pace of the developed world right up to 2050, and this may drive the shift of demand and, consequently, the pharma production centers to those new locations. Medicine production was highly concentrated within industrialized countries. Just five countries – the USA, Japan, Germany, France, and therefore the UK – accounted for two-thirds of the worth of all medicines produced. Countries like China, India, Brazil, Turkey, Argentina, Chile, Jordan, and Egypt are acknowledged as upcoming pharma production centers. Supply chain networks need to be established and strengthened in these areas.
- Many formulations and API items require cool chain transport. Lack of adequate temperature-controlled warehouses/transport medium with increasingly differentiated temperature requirements may be a significant challenge. Nowadays, aside from the most normal 15 to 25-degree Centigrade temperature range, there’s an increasing demand for two to eight degrees Centigrade, frozen, and cryogenic temperature regimes.
Maintaining precise temperature control throughout the transport, primarily while the products are being handled at the airport tarmac before loading and after unloading, maybe a major challenge for Passive mode shipments.
The other challenges faced by cool chain practitioners and suppliers are:
- Rising cost pressures mean that forwarders and shippers are compelled to develop and check out newer modes of packaging and transport. A shift from Active mode to Passive mode, diversion from air freight to sea reefer containers, LCL consolidation, are a number of the responses to the value pressures faced.
- The emergence of newer markets and price pressures have pushed many established pharma manufacturers towards Contract Manufacturing Organizations (CMOS). The global marketplace for Contract Manufacturing of Pharmaceuticals, which was USD 54 Bn, is predicted to succeed in USD 79 Bn by 2019. This brings with it the challenge of ensuring the same exacting standards of GDP & GMP to be used by the CMOS also as their vendors and provide chain partners.
- To cater to increased competition and resultant volatility in demand, the manufacturers themselves have to look at innovations like “Delayed differentiation” for certain niche products to decide the dosage, concentration, packing, flavoring, etc. The pharma supply chains practitioners in the pharma science industry have to adapt to become nimble and geared towards pull drove supply chains.
- The pharmaceutical industry is suffering from an enormous issue of counterfeit medicines. The worldwide sales of spurious medications are estimated to be worth over USD 75 Billion, an increase of over 90% in five years. Thus, pharma supply chains partners need to be extra vigilant to stop any unscrupulous elements having access to the products at any stage during the transit. This also involves increased capabilities of individual pack level tracking and tracing. Item level serialization and barcoding etc. are getting quite ever important.
The opportunities offered by the bioscience industry has attracted many new forwarders and provide chain companies into the fray. For the shippers, it’s’ becoming harder to differentiate and choose the pharma supply chains partner adequately.