Today's Pharmaceutical Supply Chain

Submitted By wdisher
Words: 4216
Pages: 17

Today’s Pharmaceutical Supply Chain

Buad 3130

I. Pharmaceutical Supply Chain Structure
Pharmaceutical Setups
II. Emerging Medicines and their effects
Buy and Bill Trends
III. Emerging Supply Chains
Infusion Centers
Ambulatory Surgery Centers
IV. Weaknesses in Supply Chain
Lack of Innovation


Pharmaceutical Supply Chain

So we start as a patient walking into a physician office, we often leave with a prescription for a medication. It may be a paper prescription or it may be an electronic script that is emailed over to the pharmacy, or it may even be a script that is called into the pharmacy over the phone.
Whatever the means of receiving the prescription, (which will be referred to as an Rx in this paper), the mystery to us patients is; How does the Rx turn into the medication we leave the pharmacy with? In this complex paper the pharmaceutical supply chains will be discussed. How is supply chains currently structured? What are the effects of new medicines and globalization having on the supply chains? Are there areas of weakness? We will start with the typical supply chain and then move into the more complex questions mentioned above.

The global pharmaceuticals market is worth $300 billion a year, a figure expected to rise to $400 billion within three years. The 10 largest drugs companies control over one-third of this market, several with sales of more than $10 billion a year and profit margins of about 30%. Six are based in the United States and four in Europe. It is predicted that North and South America,
Europe and Japan will continue to account for a full 85% of the global pharmaceuticals market well into the 21st century. Companies currently spend one-third of all sales revenue on marketing their products - roughly twice what they spend on research and development.

In the US there are many pharmaceutical companies. Many of these manufacture their own products while others outsource the production of its medicine. In the US there are many communities banking on pharmaceuticals as the next manufacturing boom for their communities.

The Research Triangle Park (RTP) in North Carolina, as well as areas in the northeast,
California, and some areas in the Midwest are common sights where the actual medicines are produced. The Research Triangle Park has gained reputation as a pharmaceutical hub. Large
Pharmaceutical companies include: GlaxoSmithKline, Cisco Systems, Cree, Bayer CropScience,
NetApp, BASF, Fidelity Investments, Credit-Suisse, Biogen IDEC, United Therapeutics, Viiv,
Dupont and Syngenta.

Public-private partnership remains vital to RTP. The Park’s three

founding universities (UNC-Chapel Hill, Duke University and N.C. State University) are a mere
15 minutes away and provide a steady flow of talented graduates. These facilities help keep
America in the manufacturing and distribution supply chains. These sights must go through rigorous testing prior to being able to produce medicines for humans to utilize.

From manufacturing, pharmaceuticals are then sent to warehouses where they are stored and waiting to be sold. Once they are sold, they are shipped out. But where are they sold? Are they sold to the common pharmacy on the street corner? No, they are typically sold to large pharmacy distribution warehouses. These distribution centers are called many things and there are many companies that are in the business of being pharmacy distribution centers. About 30 years ago, pharmaceutical wholesaling became a business in which it was difficult to succeed without really trying; that is, merely tweaking some legacy distribution model was insufficient.
AJ Fein, leading pharmaceutical insider, says there wasn’t a single factor behind the massive reconfiguration of drug wholesaling at the end of the 20th century but rather a set of complementary innovations. Some innovations were