2010 in review
PharmTech: Looking back on 2010, what were the most important issues for the bio/pharmaceutical industry as a whole and for manufacturing specifically?
Bailey (PwC): Understanding larger industry issues and macro-level business drivers is the right place to start for effective supply-chain executives, and we see several big-picture things happening that have significant implications for bio/pharma supply organizations.
First, companies are struggling with volume declines associated with weak pipelines, increasing generic competition, and price pressure from government and private buyers. For supply organizations, this heightens the need to create lean and adaptive cost structures that can preserve and improve gross margins at all points in a product's life cycle.
Second, the decline of the blockbuster and the emergence of ever smaller patient and market segments means that supply organizations have to build and manage multiple supply chains in parallel—each with unique product, channel, customer, and patient attributes—but all responsive from the end-customer back to the pharmaceutical company.
Third, shorter product life cycles create an even greater need to optimize economics during market exclusivity and to differentiate products at all stages of their life cycle. For supply organizations, this highlights the need to create more seamless alignment of activities not only across supply-chain functions, but between the supply chain and sister groups that touch all aspects of the product life cycle (research and development [R&D] and new product introductions most obviously).
Finally, heightened public and regulatory attention to risk and quality (and severe consequences for failure to act accordingly) means that supply organizations need to have robust risk-assessment and risk-management capabilities and practices that cover the entire extended supply chain (from your suppliers' suppliers all the way through to end customers).