Pharma 2020: Supplying the Future - Which Path Will You Take?

Overview

The pharmaceutical industry is experiencing major upheavals, as PwC noted in earlier Pharma 2020 papers.

Many companies have responded by trying to discover, develop and market medicines more efficiently, but they've invested relatively little effort in reconfiguring their manufacturing and distribution operations to date. Yet the supply chain is just as important; it's the link between the laboratory and the marketplace.

Unfortunately, it's a link that frequently doesn't work very well. Most pharma companies have complex supply chains that are under-utilised and inefficient. Worse still, they are ill-equipped to cope with the sort of products that are coming down the pipeline. By 2020, many of the medicines the industry makes will be specialist therapies that require totally different manufacturing and distribution techniques from those used to produce small molecules.

In short, the pharmaceutical supply chain needs a radical overhaul, and we predict that it will undergo three key changes over the next decade:

• It will fragment, with different models for different product types and patient segments
• It will become a means of market differentiation and source of economic value; and
• It will become a two-way street, with information flowing upstream to drive the downstream flow of products and services.

We've identified four potential supply-chain options from which pharma companies can choose. Those that focus on specialist medicines can either delegate all their manufacturing and distribution to trusted contractors or build service-oriented supply chains to enhance their brands. Those that focus on mass-market medicines can either become low-cost providers or build supply chains that generate a profit by servicing both internal and external customers.

We'll discuss the main trends dictating the need for a new approach to the manufacturing and distribution of medicines, together with some of the techniques and technologies that will help the industry make the necessary changes, in more details. We'll also look at the key characteristics of each of the four routes we've identified, and the implications they carry.