Study: Pharmaceutical supply chain could experience more vulnerability

NEW YORK Risks of counterfeiting, contamination and intellectual property theft could increase with the globalization of the pharmaceutical supply chain, according to a new report.

Axendia, an analysis firm focused on life sciences and health care, published a study co-sponsored by PricewaterhouseCoopers in which 50% of surveyed pharmaceutical and life sciences executives said they saw imported raw materials as the greatest vulnerability in the supply chain, with 61% saying contaminated and substandard materials would be the top threat in the next five years. As recently as a decade ago, executives considered counterfeiting and diversion small-scale threats, but a growing number consider them major concerns.

According to the report, such emerging economies as China, India, Mexico and Brazil increasingly are becoming attractive markets for drug companies, but the drive to lower costs also means more raw materials are being sourced and more drugs are being manufactured in them, even though outsourcing drug development to companies in other countries carries operational risks.

“With manufacturing, sourcing and the sale of medical products expected to increase dramatically in the emerging markets, the geographical expansion of the supply chain will make it more difficult to manage, as well the industry’s changing product mix,” PwC pharmaceutical and life sciences advisory services partner Wynn Bailey said. “In order to meet the demands of globalization, the pharmaceutical supply chain will need to become much more flexible, with different manufacturing routes and distribution channels for the different kinds of products.”