PwC Warns Pharmaceutical Industry to Reassess Manufacturing, Distributing Model in 10 Years

Lucas Gilmore, “Big 4″ observer
February 21, 2011 /

Having observed the inefficiency of the global pharmaceutical industry to cope with the changing market demands and the shift from product to patient outcomes, PricewaterhouseCoopers (PwC) has released a pharma industry report warning of the need to revamp the industry’s manufacturing and distributing model.

Recently, Ernst & Young has also released a pharma industry report saying 78 percent of the pharmaceutical industry is shifting from simply producing new medicines to innovating new business models to better deliver healthcare services. According to its report, these companies have resorted to smartphone applications, educational websites, social media, and wireless devices, collaborating with non-pharma companies to improve business models.

On the other hand, PwC’ report, ‘Pharma 2020: Supplying the future. Which path will you take?’ says the asset bases of the pharmaceutical industry, which faces the need to supply approximately 150 drugs to US hospitals according to the American Society of Health-System Pharmacists, have been unable to cope with complex manufacturing and distribution processes for different product ranges and shorter life cycle of pharmaceutical products.

Furthermore, PwC’s pharma industry report adds the pressure coming from emerging markets, new healthcare delivery models, live licensing developments and environmental issues, will require the pharmaceutical industry to consider changing its existing manufacturing and distributing models.

“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,” said Simon Friend, PwC’s global pharmaceutical and life sciences leader.

He advises the pharmaceutical industry to establish a deeper relationship with patients by 2020.

PwC’s report predicts that over the next decade, the pharmaceutical industry will be facing “a vast network of service providers” which it has to manage.

In the next 10 years, pharma companies will have to manage the information transfer from products to patients and healthcare provider and understand deeply the needs of these patients, the report noted.

PwC concludes that the different types of products and various patient segments will push the pharmaceutical industry to develop and use different supply chain models that will answer their needs while prioritizing information over product.

Steve Arlington, global advisory pharmaceutical and life sciences leader, PwC, said pharma companies that learn to recognize the importance of information over product “is the currency of the future.”

Recognizing the importance of supply chains and how they differentiate brand and value apart from being costs will bring success to the pharmaceutical industry over the next decade, Arlington said.

 

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