From U.S. and global politics to pioneering scientific advances, there’s not much happening in the world today that is not having an impact on pharmaceutical manufacturing. As a result, what has historically been an industry resistant to transformation is now undergoing change on all fronts.
Following are a just a few of the pressing changes and challenges most affecting pharmaceutical manufacturing today:
- Higher consumer expectations
- Increase in number of prescriptions
- Increase in consumer acceptance of generics
- Increase in challenges to patents
- Need to focus on emerging markets for growth
- Inability to sell high-price drugs in markets essential for growth
- Possibility of less regulation
- Upcoming new regulation
- Technological advancements
- Protest and court battles over price increases
- Decrease in potential for blockbuster drug
- Increase in the need for specialization
The question is: How must pharmaceutical manufacturers adapt – not merely to respond to these changes and challenges in order to survive, but to leverage them for a competitive advantage and greater overall success?
Here’s what companies on the frontline of change are doing to succeed in what has always been an extremely complex manufacturing environment:
Revisiting the Business Model
Traditionally, pharmaceutical companies have relied on regular price increases to bolster sales growth and remain attractive to investors. But public outcry (along with a couple of high-profile lawsuits), increasing numbers of prescriptions being written and rising consumer confidence in generics, have all resulted in a new focus on volume over price in order to achieve sustainable growth.
While focusing on volume makes a much stronger case to investors who generally prefer to fund growth based on something substantive, this potential shift is only one of many aspects of the pharmaceutical business model worth reexamining. What makes doing this especially challenging is that the culture, strategies and methods on which pharmaceutical manufacturing companies have long relied have already been surpassed by new ways of working. This means that – just as in every manufacturing industry operating today – it will be those companies willing to invest the most in taking on the future that will rise above.
Reinventing Inventory Management
Successfully entering emerging markets for new sources of revenue, along with addressing drug-specific challenges such as temperature control for biologics, meeting the fast-approaching serialization regulations and much more, are requiring pharmaceutical manufacturers to apply new thinking to inventory management.
From ensuring each geographic region served has the least overhead possible and consolidating their ERP footprint to realizing end-to-end visibility and employing blockchain technology, pharmaceutical manufacturers are exploring all kinds of ways to be on the cutting edge of inventory innovation. And, of course, it is impossible for them (or any manufacturer) to bring inventory management to the next level without also transforming the supply chain.
Activating the Supply Chain
There is a great need for pharmaceutical manufacturers to activate their supply chains, enabling them to make predications and take appropriate action independently. Supply chain automation tools that rely on and apply cloud, big data and machine learning promise serious return on investment and have pharmaceutical manufacturers more ready than ever before to put the future of smart technology to work for them today.
Unlikely Partnerships
High-tech drugs and drug delivery systems are becoming ever more important aspects of patient safety, as well as essential players in ensuring scientific breakthroughs are able to be implemented in the first place. As a result, pharmaceutical manufacturers are becoming more and more dependent on advances in medtech to help them remain competitive – and this is leading to some very unusual new partnerships.
Thanks to collaborations with unlikely partners such as mobile device manufacturers, for example, pharmaceutical manufacturers are now developing holistic products that not only treat patients but also help with diagnostics, monitoring and compliance.
The Bottom Line
In the face of significant pressure to change from multiple directions and in multiple ways at once, the pharmaceutical manufacturing industry provides a great example for all manufacturers seeking to thrive in today’s complex, uncertain and competitive environment.
In fact, what’s happening in pharmaceutical manufacturing provides ample proof that the future is indeed approaching fast and being prepared to respond (and being one of the first to do so) may truly be the deciding factor of survival for many manufacturers over the next decade.
While publications and conferences in all manufacturing sectors have long been providing forums for discussing the future, action is what’s needed now.
It’s no longer viable to wait to employ new technologies, increase efficiency and reduce risk – and it will be those who make the commitment to always remain on the frontline of change that consistently realize the biggest return.
Helping manufacturers determine the best path forward and implement the equipment, processes and systems that will allow them to seize opportunities, increase efficiency, reduce risk and achieve next level growth is our strength. If you’re a manufacturing company seeking a partner you can count on, contact Jim Solich at info@efigroupllc.com
