An Overview of the Pharmaceutical Supply Chain

​A pharmaceutical supply chain is the manufacturing and delivery mechanism that supplies patients with necessary prescription medication. The processes involved in this chain are essential and must be done with the utmost care. An inefficient supply chain could lead to problems with the patient's health, which affects customer satisfaction and could result in a loss of profits for the company.

There are six basic processes involved in the American pharmaceutical supply chain to ensure that prescription drugs get to the intended user. These processes include manufacturing of the product, price regulations, transfer to wholesale distributors, sale to pharmacies, price negotiations due to insurance coverage, and sale to final consumers.

There are individuals and groups that facilitate these processes in a supply chain at different levels. The manufacturer plays an integral role in the first step of the pharmaceutical supply chain by supplying medical products according to consumers' demands. Manufacturers are also world regulators of medication prices due to their ability to assess the prospective market, probable competitors, and estimated marketing value before selling to wholesalers.

Wholesalers are the next link in the supply chain. Depending on the type and purpose of the product sold, wholesalers may sell to the general public or target a particular sector of the market. For example, wholesalers can sell analgesic products to a broad market and sell biologic products to specific consumers. Wholesalers mostly sell to pharmacies, who can make the product available to many users.

America has introduced insurance to protect the user from price hikes in medicines. Insurance companies employ pharmacy benefit managers to determine the prices users under insurance policies would pay for manufactured goods in pharmacies. These managers look into cost-saving models that help final consumers pay for prescriptions without running into debt, especially long-term prescriptions like asthma inhalers or medicine in large amounts for patients suffering from accidents or severe injuries.

The division of the pharmaceutical supply chain has paved the way for numerous challenges to affect the distribution of products. After the primary distributor (manufacturer) sets a price and sells to the wholesaler market, there are several corrupt businesses and unlicensed wholesalers willing to dismiss product testing results or overlook product testing entirely to make an illegal profit. The substandard drugs sold may be harmful and addictive to the user, reducing their standard of living.

Another challenge pharmaceutical supply chains face is temperature regulations. A large number of pharmaceutical products have a short shelf life and require storage at a particular temperature for them to remain viable. Most biologic products require storage at 77 degrees Fahrenheit, except otherwise recommended by the manufacturer. Biologic products are highly susceptible to temperature and need specific environmental conditions, so they do not decompose.

Deterioration of products due to temperature instabilities leads to massive losses for pharmaceutical companies. In some cases, spoilage is not detected early, and this can affect the health of thousands of customers that use them. Temperature fluctuations can occur for different reasons like weather delays, poor documentation of drugs which could make sending them to their final destination difficult, and careless handling while unloading and offloading the packages.

Chad Beene, ProfessionalTopics; Hobbies&Interests

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