Study Considers Hopes and Fears of Drug Distribution



Pharma IQ
07/16/2010


When it comes to the pharmaceutical industry, few would argue that the biggest issue which drives success in the sector is the effectiveness of products.

However, a range of other factors can also come into play which impact on the success of medications, with supply chain issues playing a key role in cutting the costs that firms face while also boosting the efficiency of operations. After all, how can a drug reach its full market potential if it does not reach the right people at the right time?

A recent study compiled by Harris Interactive for logistics and transportation services provider UPS has shed light on the many distribution issues which affect pharmaceutical firms across the globe. The third annual Pain in the (Supply) Chain report is based on interviews with representatives from almost 150 pharmaceutical companies and reveals how they are feeling on a range of topics linked to supply chain services.

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One of the most obvious places to start when reviewing the figures is attempting to gauge the confidence which drug development firms now have in logistical support services. It found that 47 per cent of companies surveyed intend to expand into emerging countries in the next 18 months, with the likes of Argentina, China, India and Brazil being the top areas targeted.

The study also revealed that four in five companies currently do business with at least one country outside of the US, despite a range of factors being cited as potential barriers to such global expansion. Among the reasons put forward as obstacles are country-specific regulations, security, quality of products produced in-country and the limited scope of infrastructure.

In addition to shedding light on concerns over global distribution, the Harris Interactive study also hinted at worries in relation to regulatory pressure and compliance when it comes to the distribution of pharmaceutical products. In terms of general business concerns, the poll found that increasing regulations, the US healthcare reforms, intellectual property protection and patent expirations dominate many firms' thoughts at present. Three in five respondents alsosuggested that regulatory compliance is their top supply chain issue.

Pharmaceutical firms may have a lot on their minds at present when it comes to distribution, but the study also hinted that this has not stopped them from considering a range of strategies to get their products to the wider world.

Nearly seven out of ten go through wholesalers or distributors, while just over 60 per cent go direct to hospitals, pharmacies, retailers or physicians. Alternatively, a quarter approach patients before any other group or organisation. However, all of this looks set to change in the next 12 months, when 70 per cent expected to go straight to pharmacies and hospitals, while 68 per cent intend to boost their effort to contact patients directly.

The report added that healthcare and pharmaceutical companies are preparing to increase their outsourcing activities in a range of areas including distribution. More than a third plan to boost their decision to use third parties in the next two or three years, which is a significant increase from the figure of 13 per cent recorded in 2009. Another 26 per cent of companies plan to maintain their outsourcing at the same level in the near future.

Green issues have become a big part of the business world in a range of sectors and distribution appears to be no different. The study revealed 57 per cent of firms are using initiatives to increase efficient, while 52 per cent are also using eco-friendly packaging for their drugs as part of carbon reduction plans.

Overall, the study by UPS and Harris Interactive has effectively highlighted the issues that have affected the pharmaceutical sector and its logistical requirements in the past year, as well as its ongoing concerns.

The supply chain remains one of the most vital cogs in drug development, but it seems that the area is not immune from the constant cycle of evolution that the industry finds itself in. It is safe to say that the sector is reliant on it to ensure it can fully deliver on all of its promises.