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PHARMACEUTICAL INDUSTRY
Business Perspectives for IT
Teams
- Satheesh Kadiam
ABOUT AUTHOR
The author of this document has extensive experience working on enterprise IT for
pharmaceutical industry.
This document draws heavily from the author’s experience, observations and reading.
Readers are invited to connect to the author on Linkedin by clicking on the below link:
The link is also on footer of all pages.
PHARMA CHALLENGES – IT CAN HELP
Pharma faces huge challenges.
IT can help.
To do that, IT teams need to understand pharma industry.
That is where this document comes in.
SCOPE
This document provides overview of pharmaceutical industry. It covers drug
development, manufacturing, distribution, sales, procurement, supply chains and
compliance. It also discusses several characteristics of pharmaceutical industry that set
it apart from other industries.
Since this is an overview document, advanced topics such as the below are out of
scope. Separate documents can be written if enough people are interested in these
topics:
 Global pricing strategies of drugs
 Challenges of patent cliffs and legal strategies to extend patent life
 Impact of macroeconomic events such as Brexit on pharmaceutical industry
 Recent legislation on drug safety in pharmaceutical supply chains and imperatives for IT
 How technology such as big data analytics, RFID, IoT etc. can help pharma
 And so on…
DISCLAIMER
This document is authored by an IT expert, not a drug production and distribution expert.
This document is for information of IT teams only. The author does not warrant that it is error-free and MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OR OF
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, regardless of what is mentioned elsewhere in this document.
INTRODUCTION
PURPOSE OF PHARMACEUTICAL INDUSTRY
The pharmaceutical industry discovers, develops, produces, and markets drugs or
pharmaceuticals for use as medications.
A drug is used to diagnose, cure, treat, or prevent disease.
HIGHLY REGULATED INDUSTRY
Pharma industry is highly regulated by regulatory agencies of governments
 E.g.: FDA is regulatory agency in USA
Regulations are required to ensure safety and efficacy of drugs.
All drugs have to be approved by regulatory agencies.
Regulations also apply to all aspects that affect safety and efficacy of drugs
 E.g.: production, procurement, quality control, distribution, IT systems, packaging,
tracking and tracing etc.
DRUG DEVELOPMENT
TOPICS
TARGET DISCOVERY
DRUG DISCOVERY AND DEVELOPMENT
PRECLINICAL TRIALS
IND PROCESS
CLINICAL TRIALS
GO TO MARKET
POST MARKET SAFETY MONITORING
DRUG DEVELOPMENT: TARGET DISCOVERY
Identify target for drugs such as
• Proteins in human body
• Proteins in body of disease-causing microorganisms
Confirm role of the target in disease
DRUG DEVELOPMENT: DISCOVERY AND
DEVELOPMENT
Discovery:
• High throughput screening, computer based design to find molecular compounds that bind to target
• If the compound interacts with target in a way that may cure disease, it is called a ‘hit’
Development (Conduct experiments to understand):
• Absorption, distribution, metabolism and excretion of drug
• Benefits and mechanisms of action
• Best dosage and way to administer drug
• Toxicity
• Efficacy when compared to other drugs
• Interaction with other drugs
DRUG DEVELOPMENT: PRECLINICAL TRIALS
Preclinical trials in animals to determine
• Dosage
• Toxicity
• Whether it is safe to conduct clinical trials on human subjects
Treat animals ethically.
3Rs - Refine, Reduce and Replace animals where possible.
DRUG DEVELOPMENT: INVESTIGATIONAL NEW
DRUG PROCESS
Next stage is to conduct clinical trials on human subjects. But before that, the drug
developer/sponsor must obtain approval from regulator to go ahead.
Drug developer/sponsor submits an Investigational New Drug (IND) application to
regulators including below information:
• Animal study data and toxicity
• Clinical trial plans
• Information about investigator
IND submission will be reviewed by regulator.
If regulator is satisfied that there will be no unreasonable and significant risks to
human subjects in clinical trials, it will give approval to start clinical trials.
DRUG DEVELOPMENT: CLINICAL TRIALS
Clinical Trials – Phase 1
• 20 to 100 healthy human subjects
• Several months
• To collect safety and dosage information
Clinical Trials – Phase 2
 Several hundred human subjects with disease
 Several months to two years
 To collect efficacy and side effects information
Clinical Trials – Phase 3
 300 to 3000 human subjects with disease
 1 to 4 years
 To collect efficacy information and monitor adverse reactions information
DRUG DEVELOPMENT: GO TO MARKET
Company files application with regulator for approval to market drug
It is called NDA (New Drug Application). It includes
• Data from all trials - Preclinical to Clinical Trial Phase 3
• Studies, data, analysis, results
• Proposed labelling
• Safety updates
• Drug abuse information
• Directions for use etc.
Regulator gives approval to go to market if it is satisfied with safety and efficacy of the drug.
DRUG DEVELOPMENT: POST-MARKET SAFETY
MONITORING
True picture of a product’s safety actually evolves over time in market.
Regulator reviews reports of problems with drugs and
 adds cautions to the dosage or usage information
 Takes other measures for more serious issues
In some cases, regulator might require Clinical Trails Phase 4 to be conducted during the Post-
Market Safety Monitoring
INTRODUCTION… CONTINUED
TOPICS
PATENTS
BRANDED DRUGS AND GENERICS
R&D AND PATENTS – IMPLICATIONS
MAJOR PLAYERS IN PHARMA INDUSTRY
PATENTS IN PHARMA
Patent:
A government authority or license conferring a right or title for a set period, especially
the sole right to exclude others from making, using, or selling an invention.
Please note:
 Patent holder of a drug has exclusive right to manufacture and sell it
 Patent is valid for a limited time
 Patent validity time typically lasts 20 years from the date of filing
BRANDED DRUGS AND GENERICS
Branded drug: A drug that is marketed under brand name of the pharma company
that developed it
Generics
 After patent expires even the companies that didn’t invent the drug are permitted to make and sell it.
These drugs are called generics
 Generics are low cost
 Branded drugs rapidly lose market once generics come to market
 Some generics also use their own brand names
R&D AND PATENTS – IMPLICATIONS
R&D is risky, costly and time taking
• Out of 10,000 molecules that are ‘hits’ during drug discovery, only about 1 reaches market as drug
• It can take up to a couple of billions of US dollars to develop a drug
• It takes about 12 years to develop a drug
Implications of patents
 Patent rights enable companies to charge high enough prices to recover high R&D costs
 Patents are valid for a limited time - 20 years
 Since R&D takes 12 years, effective life of patent is rendered much smaller
MAJOR PLAYERS IN PHARMA INDUSTRY
Large R&D based multinational companies
Large generic manufacturers
Local manufacturers in individual countries under
license or contract
Contract manufacturers
Drug discovery and biotechnology companies
Wholesalers
Retailers
 Major retail chains
 Hospitals
 Online or mail order
PHARMACEUTICAL MANUFACTURING
TOPICS
DRUG MANUFACTURING OVERVIEW
MANUFACTURING BIO CHEMICAL API
MANUFACTURING CHEMICAL API
MANUFACTURING BULK
PACKAGING
GOOD MANUFACTURING PRACTICES
WHAT MATERIALS GO INTO MAKING DRUGS
API Starting Material: Raw material, intermediate, or an API that is used in the production of an
API
API (Active Pharmaceutical Ingredient): Material that gives a drug its medicinal properties
Excipients: Inactive ingredients added to drug to give it properties such as: better taste, slow
dissolution, physical bulk etc.
Bulk: unpackaged drug such as tablets, capsules etc.
Packaging materials
Finished Packs: the labeled, packaged, final product
The terminology for these materials can be confusing. E.g.:
 'API' is also called ‘Bulk Drug Substance'.
 'Bulk' is also called ‘Formulated Drug Product'.
DRUG MANUFACTURING PROCESS - OVERVIEW
SECONDARY
MANUFACTURING
API
starting
materia
ls
Excipie
nts
Packa
ging
materi
als
Finished
Pack
PRIMARY
MANUFACTURING
PACKAGING
BulkAPI
DRUG MANUFACTURING PROCESS - OVERVIEW
API is a chemical that can be obtained by chemical or bio chemical synthesis
Bulk is obtained typically by mixing API with excipients and pressing the resulting
mixture into tablet form
Packaging is typically blister packaging of tablets. Packaging includes labelling and
may include repackaging
Processes of API manufacturing, bulk manufacturing and packaging are entirely
different. This is one of the reasons why they are typically carried out in separate
plants
Any part of manufacturing can be outsourced to contract organizations. Raw
materials or semi-finished goods at any stage of manufacturing can be purchased.
For example, no company manufactures all API it needs and procures the same from
outside vendors.
MANUFACTURING BIO CHEMICAL API
TOPICS
FERMENTATION
HARVESTING
RECOVERY
PURIFICATION
API MANUFACTURING: BIOCHEMICAL
Cells such as Bacteria, fungi or specific cells from mammals, plants or insects can
make chemicals.
These biologically obtained chemicals, or bio chemicals form API
Bio chemicals are produced by cells using the following mechanisms:
 Bio chemicals produced by cells naturally
 Bio chemicals produced by genetically modified cells
 Bio chemicals in metabolic waste product of cells
BIOCHEMICAL API MANUFACTURING PROCESS
Fig: Biochemical API manufacturing process – biochemical synthesis
Cells multiply and produce bio chemicals during fermentation.
The bio chemicals are separated and purified during harvesting, recovery and purification.
FERMENTATION HARVESTING RECOVERY PURIFICATION
BIOCHEMICAL API: FERMENTATION IN BIO
REACTOR EXPLAINED
Fermentation of cells happens in equipment called bio reactor or fermenter
Bio reactor needs cells, nutritious growth medium for cells to multiply
Bio reactor may need additional ingredients to aid cell growth
Bio Reactor has
 Ports for pumping/adding ingredients
 Ports for drawing samples for process control
 Sensors and meters for temperature, pressure etc.
 Ports for Pumping out output product
BIOCHEMICAL API: FERMENTATION PROCESS
BIO REACTOR
PROCESS
- Mix ingredients
evenly
- Cells grow and
multiply
CELLS MULTIPLY IN
GROWTH MEDIUM IN
SHAKER FLASK
CELLS MULTIPLY IN
GROWTH MEDIUM IN
BIGGER CONTAINER
SET UP:
CLEANING AND SANITIZING EQUIPMENT
STERILIZING EQUIPMENT
PROCESS CONTROL SOFTWARE LOADED AND VERIFIED
CHECK ALL VALVES, CAPS, LINES
TIGHTEN HOSES AND CHECK FOR LEAKS
ADD
COMPONENTS TO
BIO REACTOR
- Pump cells from
container
- Pump growth
media
- Add stabilizers,
antibiotics,
antifoaming
agents etc.
BIO REACTOR
PROCESS
MONITORING
- Meters for
measuring
glucose, ph.,
pressure,
temperature
- Periodic
samples for
process control
OUTPUT OF FERMENTATION:
Broth is pumped into broth tank
BIOCHEMICAL API: SEPARATION/RECOVERY
EXPLAINED
Equipment used:
 Centrifuge: It uses centrifugal action to separate mixture of solid and liquid
 Homogenizer: this contains orifices smaller than cells. when cells pass through these orifices under high
pressure, body of cells are ruptured
 Micro filter: filter very tiny remaining solids from liquid
Materials
 Broth from fermentation contains cells which are solids and spent medium which is liquid
 Bio chemical is contained in body of the cell in example process described here.
BIOCHEMICAL API: SEPARATION/RECOVERY:
PROCESS
SET UP:
Area cleaned and
disinfected
Equipment sanitized
Any updates to process
control software verified
BROTH TANK
BROUGHT TO
RECOVERY AREA.
BROTH PUMPED INTO
CENTRIFUGE
CENTRIFUGE
EXTRACTS CELL PASTE
WHICH IS SOLID AND
DISCARDS SPENT
MEDIUM WHICH IS
LIQUID
CELL PASTE IS
WASHED WITH
WATER. CENTRIFUGE
EXTRACTS CELL PASTE
FROM WATER
CELL IS DISRUPTED
USING
HOMOGENIZER
RESULT IS MIXTURE OF
SOLID CELL DEBRIS
AND LIQUID CELL
CONTENTS (LYSATE)
CENTRIFUGE
EXTRACTS LYSATE
REMAINING CELL
DEBRIS IS FILTERED
OUT USING MICRO
FILTER
RESULT IS CLARIFIED
LYSATE.
IT IS COLLECTED INTO A
TRANSFER VESSEL. THAT IS
TAKEN FOR FURTHER
PURIFICATION
BIOCHEMICAL API: PURIFICATION EXPLAINED
Column chromatography equipment, typically housed on mobile skid, has the
following:
 Supply hose to feed clarified lysate to the column
 Pre-filter to remove remaining particles
 Column with beads for purification by
 Size exclusion, ion-exchange chromatography, Hydrophobic interaction chromatography
 Auto-switching valves for directing processed solution (waste/product)
 Pumps to move clarified lysate through the process
Tangential flow filter with horizontal ultra-filtration membrane
 Flow across the filter separates solution into permeate and retentate
BIOCHEMICAL API: PURIFICATION PROCESS
Set up
Clean, disinfect, organize
purification area.
Remove any unnecessary
equipment or materials
Clean, sanitize and setup
equipment as per SOP.
Gather materials
TRANSFER TANK
BROUGHT TO
PURIFICATION AREA.
CLARIFIED LYSATE
PUMPED INTO
CHROMATOGRAPHY
EQUIPMENT
CLARIFIED LYSATE
PASSES THROUGH
PREFILTER
PURIFICATION BY
COLUMN
CHROMATOGRAPHY.
(BUFFER SOLUTION
ADDED AS REQUIRED.)
RESULTING ELUATE
PUMPED INTO TFF
FILTER
MATERIALS ADDED TO
ELUATE TO AID
FILTERING – E.G.-
SALTS, BUFFER
SOLUTION ETC.
FINAL FILTRATION
RESULT IS BIOCHEMICAL
API.
API IS PACKED INTO
BOTTLES
OR
FREEZE DRIED AND PACKED
INTO BAGS
MANUFACTURING CHEMICAL API
TOPICS
CHEMICAL REACTIONS
PURIFICATION
CHEMICAL API MANUFACTURING PROCESS
Fig: Chemical API manufacturing process – chemical synthesis
Series of chemical reactions are carried out on organic/inorganic chemicals
The result of reactions is purified using techniques such as extraction, filtration,
crystallization
The above diagram is highly simplified. The series of chemical reactions is typically a
multi-step process
CHEMICAL
REACTIONS
PURIFICATION
CHEMICAL API: CHEMICAL REACTIONS IN
REACTOR
Chemical reactions happen under controlled temperature and pressure in chemical
reactor
API starting materials such as reactants and catalysts required to make API, are input
to reactor.
Chemical reactor is reinforced pressure vessel with stainless steel, glass or metal
alloy linings
Chemical reactor has
 Inlet valves
 Outlet valves
 Agitator for mixing
 Sensors and meters
CHEMICAL API: PURIFICATION
Filtration
Decantation
Centrifuge may be used to remove solids from solutions
MANUFACTURING BULK
TOPICS
GRANULATION
TABLETING
COATING
BULK MANUFACTURING: ALSO KNOWN AS
FORMULATION
Most common form of bulk is tablet. Others are syrup, injectable, orally disintegrating
strip etc.
Bulk is made using API and excipients.
Tablets are made by
 Granulation of API and excipient mix.
 Tableting
BULK: MANUFACTURING OF TABLETS
FIG: bulk: manufacturing of tablets
GRANULATION TABLETING COATING
BULK: MANUFACTURING OF TABLETS
The API and excipients must mix well into a powder
API and excipients mix must be granulized
Most common form of granulation is wet granulation
Tablet press compresses the granulized mix into tablets and ejects them
BULK: WET GRANULATION
The machine used to blend powders and add liquid is called granulator
 The API and excipients weighed and blended together.
 Liquid binding solution is added to blend while tumbling. This makes blended materials bind together
 Then liquid is removed by drying the blend
Milling is done in Miller machine to enhance drying
Final blending is done in blender.
BULK: WET GRANULATION
Fig: Unit operations in granulation
PREBLENDING
LIQUID
BINDER
ADDITION
DRYING MILLING
FINAL
BLENDING
BULK: TABLETING
Tableting is performed in tablet press
 Granules flow into molds that are in the shape of tablets
 They are compressed into tablets and ejected from the tablet press
COMPRESSION EJECTION
BULK: COATING
FIG: COATING
Coating is performed in coating system.
LOAD TABLETS
TUMBLE TABLETS
IN WARM AIR
SPRAY COATING
COLLECT DUST
IN COLLECTION
BIN
MANUFACTURING - PACKAGING
PHARMACEUTICAL PACKAGING
Two types of packaging
 Primary packaging
 Secondary packaging
Characteristics of packaging
 Protect tablets
 Take care - Packaging materials should not react with tablets
 Highly regulated - Mention approved usages, serial numbers, proper dosage, instructions, warnings,
expiry date etc.
PACKAGING: BLISTER PACKAGING
Fig: Blister Packaging of Tablets: (see fig from right to left)
PACKAGING: BLISTER PACKAGING
Blisters are formed on a sheet of forming web, using heat
Tablets are loaded into blisters
Lidding sheet is sealed on top
Blister packs are cut off
GOOD MANUFACTURING PRACTICES
GMP: GOOD MANUFACTURING PRACTICES
Basically the government regulatory agency should be convinced that the
manufacturing process guarantees safety and efficacy of drugs.
A GMP is a system for ensuring that products are consistently produced and
controlled according to quality standards.
GMP: GOOD MANUFACTURING PRACTICES
GMP covers all aspects of production:
 Starting materials
 Premises and equipment
 Training
 Personal hygiene of staff
GMP works by:
 Detailed, written procedures for each process that could affect the quality of the finished product.
 Systems to provide documented proof that correct procedures are consistently followed
 at each step in the manufacturing process
 every time a product is made
PHARMACEUTICAL DISTRIBUTION
TOPICS
LOCATIONS
LOW COST LOCATIONS
CMOs AND OTHER VENDORS
3PL
PHARMACEUTICAL DISTRIBUTION: LOCATIONS
The locations between which goods physically flow are selected based on factors
such as proximity to end sales market, labor cost, taxation etc.
Domestic outsourcing, nearshoring or offshoring are possible.
A company may buy from its own subsidiary for optimizing taxes.
Generally financial flows and stock flows are maintained same.
PHARMACEUTICAL DISTRIBUTION: LOCATIONS
Most of world’s API sourced mostly from India and China
Packaging or repackaging is typically done in location near the end sales market
PHARMACEUTICAL DISTRIBUTION : LOCATIONS
Contract manufacturing is common in pharma. Contract Manufacturing Organizations
(CMOs) can make API or Bulk or Packaging or Repackaging for Big Pharma
companies
Contract manufacturing can be done by third parties in same country, nearshore or in
low cost locations such as China.
 Total costs such as taxation, transportation, regulatory and supply risk and supply disruptions have to
be considered
Manufacturing locations of all contract manufacturers should be approved by
regulators
Likewise, all other vendors should be approved by regulators
Marketing authorization holder is responsible for any quality lapses of vendors
including contract manufacturers
PHARMACEUTICAL DISTRIBUTION : 3PL
Pharma companies may utilize services of 3PL for
 Transporting
 Freight Forwarding
 Storing stock in 3PL owned DCs
 Managing company’s own distribution centers
DRUG SAFETY IN PHARMACEUTICAL
SUPPLY CHAIN
DRUG SAFETY IN SUPPLY CHAIN
Counterfeits can enter supply chain in following ways:
 Adulteration
 API or excipients Reduced, substituted or omitted
 Drugs not manufactured as per GMP
 Drugs manufactured at unapproved plants
 Genuine products with altered labels
The problem is compounded with packaging and printing technologies that can make
packs and labels nearly identical to original.
DRUG SAFETY IN SUPPLY CHAIN
Motives for threats to integrity of supply chain:
 Monetary gain – profit from selling counterfeits
 Terrorism – use profits from selling counterfeits to fund terror activities
 Theft – steal regulated drugs and divert them for substance abuse
DRUG SAFETY IN SUPPLY CHAIN
Some recent trends to ensure safe drug distribution:
Serialization
Authentication
Chain of custody software solutions
RFID tags: To identify genuine products and spot counterfeits
PHARMACEUTICAL SALES AND
MARKETING
HOW PHARMA COMPANIES INFLUENCE SALES
HOW PAYERS INFLUENCE SALES
HOW PROVIDERS INFLUENCE SALES
PHARMACEUTICAL SALES AND MARKETING
Pharma companies influence demand by
 Detailing by pharma sales reps
 Meaning promotion by sales reps in offices of doctors, and hospitals
 Detailing is regulated
 Managed care
 Direct-To-Consumer campaigns
 Advertising in medical journals
PHARMACEUTICAL SALES AND MARKETING
Pharmaceutical companies provide the below to healthcare providers
•Pharmaceutical marketing information
• Educate healthcare providers about new drugs, risks and benefits
• Reliable, valuable information
•Samples
• To help begin treatment sooner
• To help find right medicine
•Gifts to healthcare providers
• Care taken to ensure that gifts do not, and do not appear to, induce healthcare providers
• Legal requirements and ethical standards
PHARMACEUTICAL SALES AND MARKETING
Actions of payers also influence demand:
Examples of payers: insurance companies, Pharma Benefit Managers (PBMs)
Typical actions of payers that influence demand:
•Counterdetailing: Involves advising doctors of cheaper alternative
• Generics
• Therapeutic alternatives
•Sending letters to doctors
•Giving financial incentives to doctors to prescribe cheaper drugs
•Formulary design and utilization management
PHARMACEUTICAL SALES AND MARKETING
The below factors influence the drug prescribing decisions of doctors:
• Doctor’s knowledge and experience
• Patient’s unique situation
• Information from medical journals
• Inputs from colleagues and peers
• Patient’s financial situation
• Actions taken by pharma companies and payers, as discussed earlier
• and so on
PHARMACEUTICAL SALES AND MARKETING
Uncertainty of demands caused by:
 Risk in pipeline drugs
 Competition for patented drugs
 Patent cliffs
 Uncertainty in patent life extension strategies
 Pricing pressures
PHARMACEUTICAL SALES AND MARKETING
Demand sensing challenges
 Point of Sale data is not readily available
 Purchased data from 3rd parties on filled prescription has a time lag of at least two weeks
PHARMACEUTICAL SALES AND MARKETING
Diversification of distribution channels increasing complexity of demand forecasting
 Wholesalers, mail order, chain warehouses, stores, secondary wholesalers, specialty wholesalers,
hospitals and clinics – all providing demand data with varying degrees of completeness, timeliness and
accuracy
Consolidation of customer base decreasing complexity of demand forecasting
 3 largest wholesalers account for 90% of US pharma distribution
FACTORS INFLUENCING PHARMA
INDUSTRY
FACTORS INFLUENCING PHARMA INDUSTRY
R&D challenges on the rise
 Huge drug discovery costs
 Really long lead time in drug discovery and development
 Declining R&D productivity
Product lifecycle is long. However
 Effective patent life is short
 Competition-free patent life is even shorter
Onslaught of cheap generics
Therapeutic alternatives
FACTORS INFLUENCING PHARMA INDUSTRY
While regulation is really important to ensure drug safety and efficacy, it also throws
a host of challenges for pharma industry:
 It slows down decision making
 It introduces compliance risk into supply chains
 Marketing Authorization Holder is responsible for noncompliance by suppliers
 Getting dreaded warning letters from FDA seriously jeopardizes not only share prices, but also supply chains
 Regulatory agencies have powers to close down entire plant if found non-compliant
 It makes standardized operations, documentation and auditing really important
 Innovation in manufacturing is fraught with regulatory risk and in many cases need regulatory
approval
 It adds additional costs
FACTORS INFLUENCING PHARMA INDUSTRY
Flexibility is not easy
 Because of audits, approvals, concerns about safety and efficacy of drugs, activities such as below are
slow and laborious:
 Constructing new facility
 Changing formulations
 Inducting new vendors
 Expanding to new geographies etc.
 This affects agility and profitability of companies. For example, in case one raw material supplier does
not supply required materials, switching to new supplier is not easy
FACTORS INFLUENCING PHARMA INDUSTRY
Pharma companies growing by mergers and acquisitions
 That influences demand, supply, economies of scale, opportunities for new synergies on the positive
side
 It has associated complexities, risks and uncertainties on the negative side
FACTORS INFLUENCING PHARMA INDUSTRY
Pharmaceutical companies hold high inventory levels because:
R&D costs are huge compared to manufacturing costs
Patent period is limited to recover R&D costs
Need to maintain high customer service levels. Reasons being:
 Steady supply essential for life saving drugs
 Regulatory pressures to maintain steady supply
 Penalties for supply disruptions
FACTORS INFLUENCING PHARMA INDUSTRY
Products have long lead times and limited shelf life
Temperature and humidity levels have to be carefully controlled during storage,
transportation etc.
Order filling accuracy has to be close to 100 percent. Especially expired drugs,
components or intermediate products should be timely identified, segregated and
discarded; not an easy task in huge warehouses
Warehouses should follow First Expiry First Out (FEFO) sequencing to improve
utilization of stocks
FACTORS INFLUENCING PHARMA INDUSTRY
API manufacturing has the following challenges
 High cost
 Long cycle times
API is manufactured in campaign manufacturing mode to:
 Reduce set up costs
 Reduce downtime costs
The challenges in API pose below risks pharma
 Poor end to end responsiveness of pharma supply chains
 Vulnerability to bullwhip effect
CONCLUSION
CONCLUSION
Pharma faces huge challenges.
IT can help.
To do that IT teams need to understand pharma industry.
That is where this document comes in.

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Pharmaceutical Industry - Business Perspectives for IT Teams

  • 1. PHARMACEUTICAL INDUSTRY Business Perspectives for IT Teams - Satheesh Kadiam
  • 2. ABOUT AUTHOR The author of this document has extensive experience working on enterprise IT for pharmaceutical industry. This document draws heavily from the author’s experience, observations and reading. Readers are invited to connect to the author on Linkedin by clicking on the below link: The link is also on footer of all pages.
  • 3. PHARMA CHALLENGES – IT CAN HELP Pharma faces huge challenges. IT can help. To do that, IT teams need to understand pharma industry. That is where this document comes in.
  • 4. SCOPE This document provides overview of pharmaceutical industry. It covers drug development, manufacturing, distribution, sales, procurement, supply chains and compliance. It also discusses several characteristics of pharmaceutical industry that set it apart from other industries. Since this is an overview document, advanced topics such as the below are out of scope. Separate documents can be written if enough people are interested in these topics:  Global pricing strategies of drugs  Challenges of patent cliffs and legal strategies to extend patent life  Impact of macroeconomic events such as Brexit on pharmaceutical industry  Recent legislation on drug safety in pharmaceutical supply chains and imperatives for IT  How technology such as big data analytics, RFID, IoT etc. can help pharma  And so on…
  • 5. DISCLAIMER This document is authored by an IT expert, not a drug production and distribution expert. This document is for information of IT teams only. The author does not warrant that it is error-free and MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OR OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, regardless of what is mentioned elsewhere in this document.
  • 7. PURPOSE OF PHARMACEUTICAL INDUSTRY The pharmaceutical industry discovers, develops, produces, and markets drugs or pharmaceuticals for use as medications. A drug is used to diagnose, cure, treat, or prevent disease.
  • 8. HIGHLY REGULATED INDUSTRY Pharma industry is highly regulated by regulatory agencies of governments  E.g.: FDA is regulatory agency in USA Regulations are required to ensure safety and efficacy of drugs. All drugs have to be approved by regulatory agencies. Regulations also apply to all aspects that affect safety and efficacy of drugs  E.g.: production, procurement, quality control, distribution, IT systems, packaging, tracking and tracing etc.
  • 9. DRUG DEVELOPMENT TOPICS TARGET DISCOVERY DRUG DISCOVERY AND DEVELOPMENT PRECLINICAL TRIALS IND PROCESS CLINICAL TRIALS GO TO MARKET POST MARKET SAFETY MONITORING
  • 10. DRUG DEVELOPMENT: TARGET DISCOVERY Identify target for drugs such as • Proteins in human body • Proteins in body of disease-causing microorganisms Confirm role of the target in disease
  • 11. DRUG DEVELOPMENT: DISCOVERY AND DEVELOPMENT Discovery: • High throughput screening, computer based design to find molecular compounds that bind to target • If the compound interacts with target in a way that may cure disease, it is called a ‘hit’ Development (Conduct experiments to understand): • Absorption, distribution, metabolism and excretion of drug • Benefits and mechanisms of action • Best dosage and way to administer drug • Toxicity • Efficacy when compared to other drugs • Interaction with other drugs
  • 12. DRUG DEVELOPMENT: PRECLINICAL TRIALS Preclinical trials in animals to determine • Dosage • Toxicity • Whether it is safe to conduct clinical trials on human subjects Treat animals ethically. 3Rs - Refine, Reduce and Replace animals where possible.
  • 13. DRUG DEVELOPMENT: INVESTIGATIONAL NEW DRUG PROCESS Next stage is to conduct clinical trials on human subjects. But before that, the drug developer/sponsor must obtain approval from regulator to go ahead. Drug developer/sponsor submits an Investigational New Drug (IND) application to regulators including below information: • Animal study data and toxicity • Clinical trial plans • Information about investigator IND submission will be reviewed by regulator. If regulator is satisfied that there will be no unreasonable and significant risks to human subjects in clinical trials, it will give approval to start clinical trials.
  • 14. DRUG DEVELOPMENT: CLINICAL TRIALS Clinical Trials – Phase 1 • 20 to 100 healthy human subjects • Several months • To collect safety and dosage information Clinical Trials – Phase 2  Several hundred human subjects with disease  Several months to two years  To collect efficacy and side effects information Clinical Trials – Phase 3  300 to 3000 human subjects with disease  1 to 4 years  To collect efficacy information and monitor adverse reactions information
  • 15. DRUG DEVELOPMENT: GO TO MARKET Company files application with regulator for approval to market drug It is called NDA (New Drug Application). It includes • Data from all trials - Preclinical to Clinical Trial Phase 3 • Studies, data, analysis, results • Proposed labelling • Safety updates • Drug abuse information • Directions for use etc. Regulator gives approval to go to market if it is satisfied with safety and efficacy of the drug.
  • 16. DRUG DEVELOPMENT: POST-MARKET SAFETY MONITORING True picture of a product’s safety actually evolves over time in market. Regulator reviews reports of problems with drugs and  adds cautions to the dosage or usage information  Takes other measures for more serious issues In some cases, regulator might require Clinical Trails Phase 4 to be conducted during the Post- Market Safety Monitoring
  • 17. INTRODUCTION… CONTINUED TOPICS PATENTS BRANDED DRUGS AND GENERICS R&D AND PATENTS – IMPLICATIONS MAJOR PLAYERS IN PHARMA INDUSTRY
  • 18. PATENTS IN PHARMA Patent: A government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention. Please note:  Patent holder of a drug has exclusive right to manufacture and sell it  Patent is valid for a limited time  Patent validity time typically lasts 20 years from the date of filing
  • 19. BRANDED DRUGS AND GENERICS Branded drug: A drug that is marketed under brand name of the pharma company that developed it Generics  After patent expires even the companies that didn’t invent the drug are permitted to make and sell it. These drugs are called generics  Generics are low cost  Branded drugs rapidly lose market once generics come to market  Some generics also use their own brand names
  • 20. R&D AND PATENTS – IMPLICATIONS R&D is risky, costly and time taking • Out of 10,000 molecules that are ‘hits’ during drug discovery, only about 1 reaches market as drug • It can take up to a couple of billions of US dollars to develop a drug • It takes about 12 years to develop a drug Implications of patents  Patent rights enable companies to charge high enough prices to recover high R&D costs  Patents are valid for a limited time - 20 years  Since R&D takes 12 years, effective life of patent is rendered much smaller
  • 21. MAJOR PLAYERS IN PHARMA INDUSTRY Large R&D based multinational companies Large generic manufacturers Local manufacturers in individual countries under license or contract Contract manufacturers Drug discovery and biotechnology companies Wholesalers Retailers  Major retail chains  Hospitals  Online or mail order
  • 22. PHARMACEUTICAL MANUFACTURING TOPICS DRUG MANUFACTURING OVERVIEW MANUFACTURING BIO CHEMICAL API MANUFACTURING CHEMICAL API MANUFACTURING BULK PACKAGING GOOD MANUFACTURING PRACTICES
  • 23. WHAT MATERIALS GO INTO MAKING DRUGS API Starting Material: Raw material, intermediate, or an API that is used in the production of an API API (Active Pharmaceutical Ingredient): Material that gives a drug its medicinal properties Excipients: Inactive ingredients added to drug to give it properties such as: better taste, slow dissolution, physical bulk etc. Bulk: unpackaged drug such as tablets, capsules etc. Packaging materials Finished Packs: the labeled, packaged, final product The terminology for these materials can be confusing. E.g.:  'API' is also called ‘Bulk Drug Substance'.  'Bulk' is also called ‘Formulated Drug Product'.
  • 24. DRUG MANUFACTURING PROCESS - OVERVIEW SECONDARY MANUFACTURING API starting materia ls Excipie nts Packa ging materi als Finished Pack PRIMARY MANUFACTURING PACKAGING BulkAPI
  • 25. DRUG MANUFACTURING PROCESS - OVERVIEW API is a chemical that can be obtained by chemical or bio chemical synthesis Bulk is obtained typically by mixing API with excipients and pressing the resulting mixture into tablet form Packaging is typically blister packaging of tablets. Packaging includes labelling and may include repackaging Processes of API manufacturing, bulk manufacturing and packaging are entirely different. This is one of the reasons why they are typically carried out in separate plants Any part of manufacturing can be outsourced to contract organizations. Raw materials or semi-finished goods at any stage of manufacturing can be purchased. For example, no company manufactures all API it needs and procures the same from outside vendors.
  • 26. MANUFACTURING BIO CHEMICAL API TOPICS FERMENTATION HARVESTING RECOVERY PURIFICATION
  • 27. API MANUFACTURING: BIOCHEMICAL Cells such as Bacteria, fungi or specific cells from mammals, plants or insects can make chemicals. These biologically obtained chemicals, or bio chemicals form API Bio chemicals are produced by cells using the following mechanisms:  Bio chemicals produced by cells naturally  Bio chemicals produced by genetically modified cells  Bio chemicals in metabolic waste product of cells
  • 28. BIOCHEMICAL API MANUFACTURING PROCESS Fig: Biochemical API manufacturing process – biochemical synthesis Cells multiply and produce bio chemicals during fermentation. The bio chemicals are separated and purified during harvesting, recovery and purification. FERMENTATION HARVESTING RECOVERY PURIFICATION
  • 29. BIOCHEMICAL API: FERMENTATION IN BIO REACTOR EXPLAINED Fermentation of cells happens in equipment called bio reactor or fermenter Bio reactor needs cells, nutritious growth medium for cells to multiply Bio reactor may need additional ingredients to aid cell growth Bio Reactor has  Ports for pumping/adding ingredients  Ports for drawing samples for process control  Sensors and meters for temperature, pressure etc.  Ports for Pumping out output product
  • 30. BIOCHEMICAL API: FERMENTATION PROCESS BIO REACTOR PROCESS - Mix ingredients evenly - Cells grow and multiply CELLS MULTIPLY IN GROWTH MEDIUM IN SHAKER FLASK CELLS MULTIPLY IN GROWTH MEDIUM IN BIGGER CONTAINER SET UP: CLEANING AND SANITIZING EQUIPMENT STERILIZING EQUIPMENT PROCESS CONTROL SOFTWARE LOADED AND VERIFIED CHECK ALL VALVES, CAPS, LINES TIGHTEN HOSES AND CHECK FOR LEAKS ADD COMPONENTS TO BIO REACTOR - Pump cells from container - Pump growth media - Add stabilizers, antibiotics, antifoaming agents etc. BIO REACTOR PROCESS MONITORING - Meters for measuring glucose, ph., pressure, temperature - Periodic samples for process control OUTPUT OF FERMENTATION: Broth is pumped into broth tank
  • 31. BIOCHEMICAL API: SEPARATION/RECOVERY EXPLAINED Equipment used:  Centrifuge: It uses centrifugal action to separate mixture of solid and liquid  Homogenizer: this contains orifices smaller than cells. when cells pass through these orifices under high pressure, body of cells are ruptured  Micro filter: filter very tiny remaining solids from liquid Materials  Broth from fermentation contains cells which are solids and spent medium which is liquid  Bio chemical is contained in body of the cell in example process described here.
  • 32. BIOCHEMICAL API: SEPARATION/RECOVERY: PROCESS SET UP: Area cleaned and disinfected Equipment sanitized Any updates to process control software verified BROTH TANK BROUGHT TO RECOVERY AREA. BROTH PUMPED INTO CENTRIFUGE CENTRIFUGE EXTRACTS CELL PASTE WHICH IS SOLID AND DISCARDS SPENT MEDIUM WHICH IS LIQUID CELL PASTE IS WASHED WITH WATER. CENTRIFUGE EXTRACTS CELL PASTE FROM WATER CELL IS DISRUPTED USING HOMOGENIZER RESULT IS MIXTURE OF SOLID CELL DEBRIS AND LIQUID CELL CONTENTS (LYSATE) CENTRIFUGE EXTRACTS LYSATE REMAINING CELL DEBRIS IS FILTERED OUT USING MICRO FILTER RESULT IS CLARIFIED LYSATE. IT IS COLLECTED INTO A TRANSFER VESSEL. THAT IS TAKEN FOR FURTHER PURIFICATION
  • 33. BIOCHEMICAL API: PURIFICATION EXPLAINED Column chromatography equipment, typically housed on mobile skid, has the following:  Supply hose to feed clarified lysate to the column  Pre-filter to remove remaining particles  Column with beads for purification by  Size exclusion, ion-exchange chromatography, Hydrophobic interaction chromatography  Auto-switching valves for directing processed solution (waste/product)  Pumps to move clarified lysate through the process Tangential flow filter with horizontal ultra-filtration membrane  Flow across the filter separates solution into permeate and retentate
  • 34. BIOCHEMICAL API: PURIFICATION PROCESS Set up Clean, disinfect, organize purification area. Remove any unnecessary equipment or materials Clean, sanitize and setup equipment as per SOP. Gather materials TRANSFER TANK BROUGHT TO PURIFICATION AREA. CLARIFIED LYSATE PUMPED INTO CHROMATOGRAPHY EQUIPMENT CLARIFIED LYSATE PASSES THROUGH PREFILTER PURIFICATION BY COLUMN CHROMATOGRAPHY. (BUFFER SOLUTION ADDED AS REQUIRED.) RESULTING ELUATE PUMPED INTO TFF FILTER MATERIALS ADDED TO ELUATE TO AID FILTERING – E.G.- SALTS, BUFFER SOLUTION ETC. FINAL FILTRATION RESULT IS BIOCHEMICAL API. API IS PACKED INTO BOTTLES OR FREEZE DRIED AND PACKED INTO BAGS
  • 36. CHEMICAL API MANUFACTURING PROCESS Fig: Chemical API manufacturing process – chemical synthesis Series of chemical reactions are carried out on organic/inorganic chemicals The result of reactions is purified using techniques such as extraction, filtration, crystallization The above diagram is highly simplified. The series of chemical reactions is typically a multi-step process CHEMICAL REACTIONS PURIFICATION
  • 37. CHEMICAL API: CHEMICAL REACTIONS IN REACTOR Chemical reactions happen under controlled temperature and pressure in chemical reactor API starting materials such as reactants and catalysts required to make API, are input to reactor. Chemical reactor is reinforced pressure vessel with stainless steel, glass or metal alloy linings Chemical reactor has  Inlet valves  Outlet valves  Agitator for mixing  Sensors and meters
  • 38. CHEMICAL API: PURIFICATION Filtration Decantation Centrifuge may be used to remove solids from solutions
  • 40. BULK MANUFACTURING: ALSO KNOWN AS FORMULATION Most common form of bulk is tablet. Others are syrup, injectable, orally disintegrating strip etc. Bulk is made using API and excipients. Tablets are made by  Granulation of API and excipient mix.  Tableting
  • 41. BULK: MANUFACTURING OF TABLETS FIG: bulk: manufacturing of tablets GRANULATION TABLETING COATING
  • 42. BULK: MANUFACTURING OF TABLETS The API and excipients must mix well into a powder API and excipients mix must be granulized Most common form of granulation is wet granulation Tablet press compresses the granulized mix into tablets and ejects them
  • 43. BULK: WET GRANULATION The machine used to blend powders and add liquid is called granulator  The API and excipients weighed and blended together.  Liquid binding solution is added to blend while tumbling. This makes blended materials bind together  Then liquid is removed by drying the blend Milling is done in Miller machine to enhance drying Final blending is done in blender.
  • 44. BULK: WET GRANULATION Fig: Unit operations in granulation PREBLENDING LIQUID BINDER ADDITION DRYING MILLING FINAL BLENDING
  • 45. BULK: TABLETING Tableting is performed in tablet press  Granules flow into molds that are in the shape of tablets  They are compressed into tablets and ejected from the tablet press COMPRESSION EJECTION
  • 46. BULK: COATING FIG: COATING Coating is performed in coating system. LOAD TABLETS TUMBLE TABLETS IN WARM AIR SPRAY COATING COLLECT DUST IN COLLECTION BIN
  • 48. PHARMACEUTICAL PACKAGING Two types of packaging  Primary packaging  Secondary packaging Characteristics of packaging  Protect tablets  Take care - Packaging materials should not react with tablets  Highly regulated - Mention approved usages, serial numbers, proper dosage, instructions, warnings, expiry date etc.
  • 49. PACKAGING: BLISTER PACKAGING Fig: Blister Packaging of Tablets: (see fig from right to left)
  • 50. PACKAGING: BLISTER PACKAGING Blisters are formed on a sheet of forming web, using heat Tablets are loaded into blisters Lidding sheet is sealed on top Blister packs are cut off
  • 52. GMP: GOOD MANUFACTURING PRACTICES Basically the government regulatory agency should be convinced that the manufacturing process guarantees safety and efficacy of drugs. A GMP is a system for ensuring that products are consistently produced and controlled according to quality standards.
  • 53. GMP: GOOD MANUFACTURING PRACTICES GMP covers all aspects of production:  Starting materials  Premises and equipment  Training  Personal hygiene of staff GMP works by:  Detailed, written procedures for each process that could affect the quality of the finished product.  Systems to provide documented proof that correct procedures are consistently followed  at each step in the manufacturing process  every time a product is made
  • 54. PHARMACEUTICAL DISTRIBUTION TOPICS LOCATIONS LOW COST LOCATIONS CMOs AND OTHER VENDORS 3PL
  • 55. PHARMACEUTICAL DISTRIBUTION: LOCATIONS The locations between which goods physically flow are selected based on factors such as proximity to end sales market, labor cost, taxation etc. Domestic outsourcing, nearshoring or offshoring are possible. A company may buy from its own subsidiary for optimizing taxes. Generally financial flows and stock flows are maintained same.
  • 56. PHARMACEUTICAL DISTRIBUTION: LOCATIONS Most of world’s API sourced mostly from India and China Packaging or repackaging is typically done in location near the end sales market
  • 57. PHARMACEUTICAL DISTRIBUTION : LOCATIONS Contract manufacturing is common in pharma. Contract Manufacturing Organizations (CMOs) can make API or Bulk or Packaging or Repackaging for Big Pharma companies Contract manufacturing can be done by third parties in same country, nearshore or in low cost locations such as China.  Total costs such as taxation, transportation, regulatory and supply risk and supply disruptions have to be considered Manufacturing locations of all contract manufacturers should be approved by regulators Likewise, all other vendors should be approved by regulators Marketing authorization holder is responsible for any quality lapses of vendors including contract manufacturers
  • 58. PHARMACEUTICAL DISTRIBUTION : 3PL Pharma companies may utilize services of 3PL for  Transporting  Freight Forwarding  Storing stock in 3PL owned DCs  Managing company’s own distribution centers
  • 59. DRUG SAFETY IN PHARMACEUTICAL SUPPLY CHAIN
  • 60. DRUG SAFETY IN SUPPLY CHAIN Counterfeits can enter supply chain in following ways:  Adulteration  API or excipients Reduced, substituted or omitted  Drugs not manufactured as per GMP  Drugs manufactured at unapproved plants  Genuine products with altered labels The problem is compounded with packaging and printing technologies that can make packs and labels nearly identical to original.
  • 61. DRUG SAFETY IN SUPPLY CHAIN Motives for threats to integrity of supply chain:  Monetary gain – profit from selling counterfeits  Terrorism – use profits from selling counterfeits to fund terror activities  Theft – steal regulated drugs and divert them for substance abuse
  • 62. DRUG SAFETY IN SUPPLY CHAIN Some recent trends to ensure safe drug distribution: Serialization Authentication Chain of custody software solutions RFID tags: To identify genuine products and spot counterfeits
  • 63. PHARMACEUTICAL SALES AND MARKETING HOW PHARMA COMPANIES INFLUENCE SALES HOW PAYERS INFLUENCE SALES HOW PROVIDERS INFLUENCE SALES
  • 64. PHARMACEUTICAL SALES AND MARKETING Pharma companies influence demand by  Detailing by pharma sales reps  Meaning promotion by sales reps in offices of doctors, and hospitals  Detailing is regulated  Managed care  Direct-To-Consumer campaigns  Advertising in medical journals
  • 65. PHARMACEUTICAL SALES AND MARKETING Pharmaceutical companies provide the below to healthcare providers •Pharmaceutical marketing information • Educate healthcare providers about new drugs, risks and benefits • Reliable, valuable information •Samples • To help begin treatment sooner • To help find right medicine •Gifts to healthcare providers • Care taken to ensure that gifts do not, and do not appear to, induce healthcare providers • Legal requirements and ethical standards
  • 66. PHARMACEUTICAL SALES AND MARKETING Actions of payers also influence demand: Examples of payers: insurance companies, Pharma Benefit Managers (PBMs) Typical actions of payers that influence demand: •Counterdetailing: Involves advising doctors of cheaper alternative • Generics • Therapeutic alternatives •Sending letters to doctors •Giving financial incentives to doctors to prescribe cheaper drugs •Formulary design and utilization management
  • 67. PHARMACEUTICAL SALES AND MARKETING The below factors influence the drug prescribing decisions of doctors: • Doctor’s knowledge and experience • Patient’s unique situation • Information from medical journals • Inputs from colleagues and peers • Patient’s financial situation • Actions taken by pharma companies and payers, as discussed earlier • and so on
  • 68. PHARMACEUTICAL SALES AND MARKETING Uncertainty of demands caused by:  Risk in pipeline drugs  Competition for patented drugs  Patent cliffs  Uncertainty in patent life extension strategies  Pricing pressures
  • 69. PHARMACEUTICAL SALES AND MARKETING Demand sensing challenges  Point of Sale data is not readily available  Purchased data from 3rd parties on filled prescription has a time lag of at least two weeks
  • 70. PHARMACEUTICAL SALES AND MARKETING Diversification of distribution channels increasing complexity of demand forecasting  Wholesalers, mail order, chain warehouses, stores, secondary wholesalers, specialty wholesalers, hospitals and clinics – all providing demand data with varying degrees of completeness, timeliness and accuracy Consolidation of customer base decreasing complexity of demand forecasting  3 largest wholesalers account for 90% of US pharma distribution
  • 72. FACTORS INFLUENCING PHARMA INDUSTRY R&D challenges on the rise  Huge drug discovery costs  Really long lead time in drug discovery and development  Declining R&D productivity Product lifecycle is long. However  Effective patent life is short  Competition-free patent life is even shorter Onslaught of cheap generics Therapeutic alternatives
  • 73. FACTORS INFLUENCING PHARMA INDUSTRY While regulation is really important to ensure drug safety and efficacy, it also throws a host of challenges for pharma industry:  It slows down decision making  It introduces compliance risk into supply chains  Marketing Authorization Holder is responsible for noncompliance by suppliers  Getting dreaded warning letters from FDA seriously jeopardizes not only share prices, but also supply chains  Regulatory agencies have powers to close down entire plant if found non-compliant  It makes standardized operations, documentation and auditing really important  Innovation in manufacturing is fraught with regulatory risk and in many cases need regulatory approval  It adds additional costs
  • 74. FACTORS INFLUENCING PHARMA INDUSTRY Flexibility is not easy  Because of audits, approvals, concerns about safety and efficacy of drugs, activities such as below are slow and laborious:  Constructing new facility  Changing formulations  Inducting new vendors  Expanding to new geographies etc.  This affects agility and profitability of companies. For example, in case one raw material supplier does not supply required materials, switching to new supplier is not easy
  • 75. FACTORS INFLUENCING PHARMA INDUSTRY Pharma companies growing by mergers and acquisitions  That influences demand, supply, economies of scale, opportunities for new synergies on the positive side  It has associated complexities, risks and uncertainties on the negative side
  • 76. FACTORS INFLUENCING PHARMA INDUSTRY Pharmaceutical companies hold high inventory levels because: R&D costs are huge compared to manufacturing costs Patent period is limited to recover R&D costs Need to maintain high customer service levels. Reasons being:  Steady supply essential for life saving drugs  Regulatory pressures to maintain steady supply  Penalties for supply disruptions
  • 77. FACTORS INFLUENCING PHARMA INDUSTRY Products have long lead times and limited shelf life Temperature and humidity levels have to be carefully controlled during storage, transportation etc. Order filling accuracy has to be close to 100 percent. Especially expired drugs, components or intermediate products should be timely identified, segregated and discarded; not an easy task in huge warehouses Warehouses should follow First Expiry First Out (FEFO) sequencing to improve utilization of stocks
  • 78. FACTORS INFLUENCING PHARMA INDUSTRY API manufacturing has the following challenges  High cost  Long cycle times API is manufactured in campaign manufacturing mode to:  Reduce set up costs  Reduce downtime costs The challenges in API pose below risks pharma  Poor end to end responsiveness of pharma supply chains  Vulnerability to bullwhip effect
  • 80. CONCLUSION Pharma faces huge challenges. IT can help. To do that IT teams need to understand pharma industry. That is where this document comes in.