Over the coming decade pharma will transition away from the ‘blockbuster’ model to other, more diversified revenue streams. This shift must be accompanied by a radical overhaul of supply chains that, as it stands, are neither flexible nor cost-effective, says PricewaterhouseCoopers (PwC).
“The current pharmaceutical supply chain worked well when the 'blockbuster' paradigm prevailed, but pharma's focus in a post-health reform world is shifting from products to patients”, said Wynn Bailey, head of supply chain strategies, PwC.
Factors driving the need for change include: new products with more complex manufacturing processes and shorter shelf-lives; greater public scrutiny; environmental pressures, in terms of regulation and resource-related issues; and adoption of incremental regulatory approval.
Successful adaptation to this new environment will require fast and flexible manufacturing and distribution networks, more akin to those in consumer industries than the current pharma sector. PwC highlights five broad areas of the supply chain that can be adapted to the new environment.
Development, manufacturing, distribution and patient interface technologies must all be improved, says PwC. Technological advances should be supported by greater collaboration between the pharmaceuticals, medical device and healthcare services supply chains.
Manufacturing improvements will be underpinned by adoption of Quality by Design (QbD) principles and use if process analytical technologies (PAT). PwC expects this to be the norm by 2020 and for scale-up to be achieved by using microreactors in parallel arrays.
Use of multiple microreactors makes it easier to control key parameters and eliminates the need to devise a process for scaling up chemical reactions. Furthermore, using disposable modular components will help manage sudden shifts in demand, reduce clean water use and lower costs.
PwC also predicts micro-processing of active pharmaceutical ingredients (API) will lead to formulation of some products occurring at pharmacists. In this scenario pharmacists will mix medicines individually on the premises using validated formulation equipment.
The benefits of having a flexible, rapid-response manufacturing realised through use of distribution data. Sharing real-time data over cloud computing networks will allow companies to identify changes in demand and respond by modifying their manufacturing output.
How pharmaceutical companies use new technologies will depend on their business model. PwC expects the industry to be divided between those supplying specialist medicines and those focused on mass-market treatments. Each approach requires a different supply chain.
Within each business model PwC sees two possible supply chains. Suppliers of speciality medicines can either adopt a virtual model or enhance its brand using a service orientated supply chain.
Likewise, providers of mass-marker medicines can build a reliable, low-cost supply chain or aim to make a profit from its infrastructure. The second, revenue generating option provides services to other companies.
in-PharmaTechnologist will take a closer look at each model in an upcoming article.