Pharma Supply Chains (Part 2): The Optional Supply Chain

Posted by on Oct 17, 2011 | Comments Off on Pharma Supply Chains (Part 2): The Optional Supply Chain

We’ve discussed why the vast majority of pharma companies will have to build supply chains with new manufacturing, distribution and service-management techniques, and some of the developments that can help them.  But what route should they take? from the PwC White Paper “Pharma 2020: Supplying the future: Which path will you take?” Considering the concern relating to what some would refer to as the growing drug shortage, in which crucial treatments for diseases such as cancer are being negatively impacted (read my October 7th post “Whether created artificially or reflective of a very real and serious issue, pharmaceutical supply chain problems can have deadly consequences for patients“), the timing of the PwC paper (or for that matter any such paper of this nature) could not be better. Putting aside the possible origins relating to the shortages, there is little doubt that the pharmaceutical industry’s supply chains are experiencing a transformation of considerable magnitude. As we continue our series examining this seminal shift, starting today, and over the remainder of the week, I will review the four options highlighted in the PwC paper for “restructuring the pharmaceutical supply chain” which are; the virtual manufacturer, the service innovator, the low-cost provider and the profit center. What is most interesting is not so much the options themselves but the fact that they are divided into two distinct categories.  Specifically, the virtual manufacturer and service innovator are the strategies PwC recommends for pharmaceutical companies that focus on specialist therapies including the treatment for orphan drugs, while those focused on what the report calls mass market medicines are advised to consider the low-cost provider and profit centre options.  The interesting part of course is how these suggested strategies would be able to address the drug shortage question. For example, deficiencies with Ohio-based contract manufacturer Ben Venue Laboratories Inc. were cited in a recent Globe & Mail article as being responsible for shortages involving a number of cancer drugs including Caelyx, which is used to treat ovarian cancer.

Even through alternative treatments are being pursued they are being done so with considerable reluctance as factors such as potential side effects and the alternative medications’ overall effectiveness come into play in terms of patient confidence. While many believe that the problems are tied to the increasing concentration of drug production with a handful of companies such as a Ben Venue, which produces liquid and freeze-dried products, the Director of Government Relations and Public Affairs for the Canadian Pharmacists Association Jeff Morrison believes that they are more systemic in nature and as such could, if they haven’t already, become common. The possible problems to which Morrison is referring may, as some suggest, include; contamination or scarcity of raw ingredients, manufacturing glitches as well as regulatory challenges. In the case of Ben Venue, a company spokesman indicated that “manufacturing capacity restraints” are at the heart of the company’s current inability to fulfil orders. While all of the above may indeed be contributing factors, there are also indications that these shortages might be reflective of a product vacuum that includes manufacturers cutting back production on older and/or limited use drugs – also referred to as orphan drugs, in which the level of demand does not justify (at least financially) continuing production. Alternatively, shortages with newer drugs such as Caelyx present a problem in that while demand is not an issue, the lack of availability of generic versions means that production shortages leave doctors and their patients with little alternative but to pursue new courses of treatment. The extent to which the PwC paper takes these real-world situations into account and prescribes viable solutions will ultimately determine both the immediate and on-going viability of the options being presented. Over the next week we will determine the answers to these as well as other relevant questions. Next Installment: Pharma Supply Chains (Part 3): Virtual Manufacturing 30
adobe photoshop elements for mac

Comments are closed.