THANK YOU FOR SUBSCRIBING
Pharma Tech Outlook | Friday, January 27, 2023
Factors such as the COVID-19 pandemic, inflation, geopolitics, new therapeutic modalities, and new ways of working make it vital for pharmacies to reconsider their long-term choices in sourcing, manufacturing, and supply chain.
FREMONT, CA:Traditionally, pharmaceutical companies prioritised other business constraints over operational strategy. Pharmacists must carefully reevaluate their long-term decisions in sourcing, manufacturing, and supply chain in light of factors like the COVID-19 pandemic, inflation, geopolitics, new therapeutic modalities, and new ways of working.
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
The current emphasis on continuous improvement, including cost savings, quality assurance, and constant delivery readiness, may need to give way for operational leaders to longer-term external issues. These include a high rate of inflation, an increase in complexity and risk, as well as the interactions between these forces. By achieving this change in focus, pharma operations leaders now have the chance to provide even greater value to their organisations, but they must move swiftly to stay on top of the issues facing the sector. Massive mobilisation and careful prioritising are required for the effort.
Rapid changes are also occurring in the product landscape. The drug research pipeline now includes new modalities at a rate of 21 per cent, which is the greatest rate of growth ever recorded in the industry. Examples include cell and gene therapy and mRNA vaccination technology. More technological fragmentation, novel supply chains, and distinctive product life cycles are anticipated to result from this transition.
Pharma has been impacted by both these industry-specific changes and more general global trends, like supply chain concerns. Even though the pharmaceutical business has a large inventory level and long-standing dual sourcing, the likelihood of supply chain interruptions still carries a potential loss of 25 per cent over a ten-year timeframe. Recent months have seen unprecedented levels of inflation, which has increased the price of labour, raw commodities, and transportation. This is in addition to the ongoing price pressures that pharma already faces, especially concerning generics. Profit margins are under strain because pharma clients aren't likely to fully absorb these cost hikes.
Due to broader labour market trends, such as the 20 per cent rise in demand for STEM-related positions, the pharmaceutical business is also experiencing a talent shortage. The demand for pharma digital skills is currently at least 14 per cent higher than the supply, and many businesses are having trouble finding technical talent. The rise of remote work, which has raised employee expectations for flexibility, exacerbates this problem. To address this, almost all pharmacies are testing with hybrid working models.
Pharmaco executives may now need to emphasise the significance of their operations strategy to address these difficulties. They are adopting a longer-term perspective and stepping up activities across four critical themes: network strategy and resilience, digital, operational model, and talent.
More in News