Essay Sample on Key Issues in Pharmaceutical Industry Supply Chains

Introduction

The pharmaceutical industry has faced many challenges over the years. The greatest challenge has been to deal with counterfeit drugs that are supplied at the expense of the health of the patients in need of the medication. The rate at which counterfeit drugs are provided in the markets has been alarming, and therefore, it has become necessary that proper measures are put in place to counter the scourge. The pharmaceutical industry thus has ensured that the drugs that are supplied have to have a standardization mark that can be verified that separates the original, generic and counterfeit drugs. The FDA that approves the medicines that can circulate has further ensured that there are strict sanctions supported by the law if a company is found counterfeit advertising drugs (Bansal et al., 2013).

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Nonetheless, the supply chain management for pharmaceutical medicines remains to face more challenges even as they try to combat the supply and distribution of counterfeits (Mark, 2011). The health of the population is given due priority in all cases. However, the industry's main issues lie within its supply chains. As the medical institutions rely on the pharmaceutical companies to supply the required and requested drugs, the challenges encountered in the industry become the hindrance to the realization of the objectives. In this directive, the following will be a discussion of the critical issues that face the supply chain management of the pharmaceutical industry even as the war on counterfeit drugs continues to be tackled. These issues will be associated with the prevalence of cases of incompetence and conflict that are experienced in contemporary society as many lack access to medication in the different regions.

Lack of Coordination

Supply chain management requires that the parties involved in the supply chain observe discipline in their respective responsibilities within the chain. Practically, it is expected that the parties to a supply chain are coordinated to maximize the accurate and smooth flow of products and services from the manufacturer to the final consumer. The links within the supply chain, however, have become a center of confusion in the pharmaceutical industry. Cases of supplies reaching their required destination late or the lack of communication between parties have rendered some businesses and medical facilities to have to consider alternatives.

This lack of coordination has thus prompted a loophole that shrewd traders take advantage of and hence the emergence of the distribution of counterfeit drugs. The increased risks that arise from poor coordination of the supply chains have rendered the pharmaceutical industry to be on the spotlight for matters such as delayed supplies and even the lack of accountability in the supply and distribution of drugs. The supply chains have become a hub of confusion in the pharmaceutical industry resulting in the distribution chains failing to meet targets, the price of medicine going high and the reliance on generic medication taking the forefront. The supply chains, in essence, have lost their sense of achieving the desired goals and cooperation between the links which has been detrimental to some pharmaceutical companies that have lost business while others have gained prominence through uncouth means; manipulating the supply chains to favor some companies for profit purposes over others. The business aspect of the industry has become a factor in the supply chain and consequently affecting the quality of health.

Inventory Management

The pharmaceutical industry has to ensure that the supply of drugs is sufficient in terms of the supply meeting the demand. The inventory is among the most critical factors that have to be met and counterchecked. Ideally, the management of inventory becomes a problem when the distribution of drugs across the country fails to take into account the accuracy of the numbers (Larson, & Halldorsson, 2004). Primarily, due to reduced inventory management, some facilities end up getting more drugs than requested while others are subjected to having fewer drugs than was ordered. The consequences of such actions are that, while in some regions of distribution the facilities experience a surplus of drugs, others experience an acute shortage that places their patients in disarray. Poor inventory management in the pharmaceutical supply chain has also been associated with poor handling of the drugs leading to some getting misplaced, others being released to cartels for black market trade and others ending up destroyed out of poor storage and management (Todo et al. 2016). These damages caused often are expensive not only to the manufacturing companies but also to the final consumer who are the medical facilities and the patients in need of the drugs. The damages caused to the inventory and even mix-ups lead to the stock being harmful subject to its nature and even unnecessary when the drugs are mixed up (Todo et al. 2016). The critical quality of poor inventory management is reflected during emergencies when the facilities end up lacking the necessary drugs to attend to their patients due to lack of inventory or having the supplier supply the wrong medication in bulk to the detriment of the recipients. This is a crucial issue that can negatively affect the health sector.

High Dependency on Human Resource

The advent of technology has made it easier for industries to operate freely and manage their functions accordingly. Primarily, the pharmaceutical industry still relies heavily on human resource to oversee the operations of the supply chain. This approach is thus met with a significant number of potential errors that are bound to affect the overall performance of the supply chains negatively. Primarily, the inventories of drugs that are handled within the pharmaceutical industry supply chains are more often than not sensitive and therefore, should be dealt with utmost care. The supply chains by focusing on using human resource subjects the chains and the links in between, to errors of omission and even commission.

Consequently, the supply chains end up being compromised if mistakes are made or corrupt dealings are made between parties (Lam, 2018). The significance of using technology over human resource is the availability of records to advance accountability and confirmations. However, human resource dependence offers an opportunity for alterations to be made in terms of figures and quantities of drugs to be supplied. Further, accountability in this regard becomes difficult as it is easy for those within the supply chain to cover up for each other and their misdeeds making it challenging to affirm or correct concerns accurately. This vital issue, therefore, renders it almost impossible to purposefully take into account where the errors emerged due to the sensitive nature of the human resource to alter the records. The human resource is also prone to fail to make accurate distributions compared to a technological approach to the matter.

Shortage Avoidance

Health is a factor that is unpredictable. The possibility of a person falling ill suddenly is as high as them not falling ill. The unpredictable nature of maintaining good health essentially makes it impossible to determine the rate of illnesses occurring in a given time. The medical facilities in this regard use estimations to the highest figures based on the history of certain illnesses and even look into the periods that the illnesses occur mostly. These predictions and estimations are aimed to help with determining how much medication would be fit to sustain patients in the event of an emergency and even an outbreak. The facilities have to consider their itinerary from the extremes to not be caught unawares. However, pharmaceutical supply chains have suffered the challenge of shortages which are re-occurring (Singh et al. 2016). The defects within the supply chains, in essence, have rendered them susceptible to abuse and therefore, shortage avoidance has become difficult to achieve. Shortage avoidance has become a scourge that continues to affect the reliability of the pharmaceutical industry supply chains. The difficulty in avoiding shortages has been associated with the growing commercialization of the industry where the drugs are hoarded on purpose to have their prices increase as per the laws of demand and supply. This issue has rendered relying on the private sector for drugs supply and distribution to be reconsidered as the government takes over and offers subsidies on the supplied drugs. However, while the intentions are worth it, the fact remains that the government still requires the participation of the private sector in curbing shortages and thus assuring of the supply and distribution of the drugs.

Expiration

The products associated with the pharmaceutical industry are all sensitive and bear strict expiration dates. In this regard, it is anticipated that the drugs are shipped and distributed within the prescribed time to avoid them from expiring. However, despite knowledge of this factor, the supply chains and links in between have contributed to the expiration of several packages for shipment before they reach the destined locations. As a consequence, the manufacturing companies and the final consumers suffer immense losses on having to wait for the delivery of other batches to replace the expired batches (Narayanan, & Raman, 2004). The expiration of the drugs is usually since the shipment took longer than prescribed to be delivered to the required destinations. The stalling and wastage of time in one location thus has critical consequences on the supply chain of the pharmaceutical industry. This is because unnecessary delays result in steep losses within the industry and jeopardize the lives of the patients relying on expired medicine (Singh et al. 2016). Also, the expiration of the drugs renders it necessary for the associated supply chains to require the pharmaceutical industry to spend more money in the supply and distribution of drugs with early expiration dates. This issue has further resulted in the increased costs of the medication which is used to cover the losses suffered by the manufacturer to facilitate for a faster means of delivery of the drugs (Narayanan, & Raman, 2004). Ideally, the expiration of the inventory has double consequences that affect the final consumer. Either the prescriptions expire before they are delivered and the patients have to suffer longer without the medicine or the drugs are delivered faster thus increasing their costs.

Warehouse Management

Storage facilities are often a troubling factor for corporates as they require either to be booked or bought to avoid the congestion of having to compete for space with other companies. The pharmaceutical industry supplies and distributes drugs globally from their point of manufacture to the various medical facilities internationally. This is done in a bid to ensure that the health of the global population is catered for and risks are reduced significantly. Therefore, most of the drugs are usually shipped to different ports to ensure that they are distributed and transported to the principal destinations for the benefit of the populations. The supply chains that are involved therefore have to ensure that they secure sufficient warehouses that will be used as storage facilities for the shipments as they continue to be transported to the final consumers (Singh et al., 2016). However, the management of warehouses is often in a conflict where the suppliers bringing in the drugs expect that the local suppliers receiving the inventory would handle and facilitate for the warehouse management (Liker, & Choi, 2004). Ensuring that there are enough storage facilities to cater...