Globalization and Regulations Are Top Industry Concerns

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ePT--the Electronic Newsletter of Pharmaceutical Technology

Healthcare companies are eager to do business in emerging markets, but believe the initiative poses challenges, according to UPS's "Pain in the (Supply) Chain" survey.

Healthcare companies are eager to do business in emerging markets, but believe the initiative poses challenges, according to UPS’s “Pain in the (Supply) Chain” survey. Almost half (47%) of survey respondents said they planned to expand into new or emerging markets in the next 18 months.
The top four markets into which healthcare companies are most likely to expand in the next two to three years are China, India, Brazil, and Argentina, according to the survey. Most companies already perform activities such as selling, manufacturing, and sourcing abroad, but 21% of respondents said that their companies did not engage in any of these activities outside the United States.
Roughly 22% more respondents reported concerns about their ability to access new global and emerging markets in 2010 than in 2009, apparently indicating that this topic is a growing concern for the industry. Entry into new markets seems to have been elusive, as well. Only 32% of respondents were successful in accessing global markets. About 54% of respondents named countries’ regulations as the largest barrier to global expansion.
Healthcare reform was among the other topics of the survey, and one third of respondents said that reform would either open up new markets or create new customers. Significant pluralities expressed reservations about the new law, however. For example, 20% of respondents were unsure that their companies could afford to operate under the new regulations. About 26% of respondents said that healthcare reform would hamper their research and development programs, and 22% already had concluded that their firms did not have the necessary infrastructure to compete in the future.
The survey asked supply-chain professionals to rank their business concerns, and 58% of respondents said that “increasing regulations” were their biggest worry. This concern received a higher ranking than other subjects such as intellectual-property protection, increasing competition, and patent expirations.
Survey respondents named managing supply-chain costs as their top supply-chain concern for the third year in a row. About 64% of respondents said they were "very" or "extremely concerned" with managing these costs, compared with 55% in 2009. Only 44% of companies reported success in managing costs.
Respondents ranked regulatory compliance as their second largest supply chain concern. About 60% of companies are “very” or “extremely concerned” with this matter.
The UPS survey consisted of a blind, in-depth phone poll of approximately 150 pharmaceutical, medical-device, medical-supply, and biotechnology companies. Respondents were senior-level decision makers responsible for supply-chain and logistics. The survey was designed to identify the greatest challenges and future trends in the supply chains of companies in these industries. UPS conducted the survey in March and April 2010.

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