The Future Pharma Supply Chain: Be Very Afraid?

Big consulting groups like to publish big reports on big topics, to establish their authority and expertise, and of course to impress potential clients with how smart and visionary they are. The glossy PDFs have big titles, and are punctuated by bold statements about industry transformations. “In the next decade, the pharma world as you know it will change.”

As readers, we can be forgiven if we feel ill-equipped to face the future—at least without the calming, reassuring hand of a high-paid consultancy.

Whatever their ulterior motives, however, the reports do serve a valuable purpose: Paradigms are shifting, and they jostle our own paradigms just enough to allow us to entertain a future much different from the present we know.

PriceWaterhouseCoopers is good at this, and has just released the latest in its Pharma 2020 series: “Supplying the Future: Which path will you take?”. The report calls for a “radical overhaul” of the drug supply chain, and has its share of paradigm-challenging statements:

  • “Most pharma companies have complex supply chains that are under-utilised and inefficient.”
  • In the future, “Some personalised medicines and poly-pills will have to be ‘finished’ at the pharmacy or point-of-care . . . such challenges will not be enough to prevent product lifecycles getting shorter, though.”
  • Increased access to patient data will require drug companies to “build demand-driven supply chains in which healthcare packages for different patients are assembled at ‘super hubs’ before being delivered to their homes.”

Super hubs, by 2020? If you’re a supply chain professional, you may be breaking out in hives.

I spoke yesterday with Wynn Bailey, a partner in PwC’s Pharmaceuticals & Life Sciences Advisory practice and one of the report’s authors. He admits that the document has its share of tease and torment about what the future holds, but also suggests that its main point—that supply chains of the future will look very little like those today—is valid and important.

One of the biggest differences, he notes, is that drug supply chains will be much more fragmented and disparate than the traditional model developed in the blockbuster-drug era. “The supply chain that we’ve built historically in the industry . . . will continue to exist for a time, and in pockets,” he said. “But we see the products of the future being a combination of needs that are going to vary according to the patient population, to the delivery site—whether it’s acute care, in the home, or somewhere in between—and that will differ according to the technology that it’s based on—whether it’s gene-therapy, nano-pills, or other kinds of not-too-distant future technologies.”

He continues: “And, critically, it’s going to be important that drug companies are closely linked with diagnostic and other kinds of device technologies because it’s in those packages that we see the ability to deliver value in the future. We think it’s going to be a challenge for companies to do those things simultaneously, to have and manage multiple kinds of supply chains depending on the multiple markets that they’re in.”

We'll have a podcast of the interview with Bailey up on soon. In the meantime, enjoy the PwC report. Let us know if you take issue with any of its claims.

--Paul Thomas