Tag: pharmaceutical procurement intelligence

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Taking a Step Forward towards Better Inventory Management of Pharmaceutical Supplies

Inventory management in the pharmaceutical industry involves complex systems that consist of interrelated and interlocking subsystems. Changes made in one part of the inventory management system have both anticipated and unanticipated consequences in the other part of the system. In recent years, we have witnessed several pathbreaking discoveries in the pharmaceutical industry’s inventory management. However, even small mistakes in inventory management can quickly lead to confusion, increased turnaround times, unnecessary expenses or worse, prescription errors that endanger patient health. Furthermore, the advancements in the pharmaceutical industry also entail several challenges in the global health pharmaceutical delivery supply chain, particularly in meeting the demands for new and personalized therapeutics. 

Inventory related challenges affecting pharmaceutical companies

Inventory management

Inventory management in global health pharmaceutical delivery supply chain involves complex processes which include quantification and replenishment decisions. However, due to the lack of accurate information, there is often uncertainty that results in a negative impact on the company’s inventory management system.

Dependency on human resources

The lack of qualified individuals to fill the logistics-related positions in pharmaceutical companies is being recognized as a threat that results in heavy workload and ineffective role performance. Aside from this, it also leaves key responsibilities that include making supply chain calculations and decisions unattended. On the other hand, along with the utilization of accessible and user-friendly IT systems, pressure on HR capacity can be alleviated by hiring a dynamic team of responsible and trained people equipped with enough knowledge and skills.

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Order management

Demand information or data about the availability of products in the different levels of the supply chain are the primary decision-making factors in order management. This translates to the fact that lack of accurate information would make order management to solely rely on assumptions and experience. Consequently, orders may arrive incomplete, inaccurate or delayed, which can negatively affect product availability and overall inventory management of pharmaceutical supplies.

Warehouse management

Most warehouses do not possess adequate facilities to support large inventories. Relying on third-party logistics might not always be effective due to poor organization and not enough designated area for different functions such as receiving, shipping and storage for both damaged and expired products. In the long run, such unfavorable conditions may ultimately lead to discrepancies in logistics and inaccuracies in inventory management.

Temperature control

Factors such as environmental conditions, particularly temperature could greatly affect drug potency. Hence, failure to provide the right temperature during storage and shipment of pharmaceutical products may result in major product wastage. Refrigerated containers or storage rooms might be available in the warehouses. However, there are chances of gaps in ensuring and monitoring of temperature level. This makes cold chain difficult to maintain.

Shipment visibility

Once the manufacturer sends out the product for delivery, it becomes difficult to track its status at different levels of the supply chain. Besides, the exact date when the products will arrive becomes unknown to both the manufacturer and the recipient.

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Overcoming pharmaceutical inventory management challenges

Some of the top pharmaceutical companies are already doing a stellar job at inventory management, but almost everyone has some room for improvement. Here are some best practices for companies in the pharmaceutical industry to optimize their inventory levels:

Get an accurate count

Pharmaceutical companies can’t manage what they don’t measure. Also, a visual scan of the shelves often proves insufficient to provide the sort of accuracy needed. One of the best solutions to combat this is to conduct an annual physical inventory, supported by a computerized inventory system, and monitored by a designated employee.

Maximize the value of inventory management system

Most computerized inventory management systems lack a perpetual inventory management model. Such systems help in keeping tabs on all products in stock and automatically places an order for more product needed to maintain a certain inventory level. The company will need to adjust the parameters depending on the demand. This ensures that the order threshold and amount match the new future demand. Even a computerized system needs to be monitored and maintained for accuracy.

Shed excess inventory

Pharmaceutical inventory loses value as it ages. So, carrying excess inventory amplifies the risk of losing thousands of dollars on expired, unsaleable products. A pharmaceutical company can’t sell products once they pass their expiration date. Although demand can fluctuate from day to day, a week’s worth of inventory should be more than enough to accommodate even unusual spikes in daily demand.

With a capable supply chain and inventory management process in place, there is no looking back for companies in the pharmaceutical industry. But are you there yet? If not, SpendEdge is here to help. Request a free proposal now!

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Answers to the questions

Supply Market Intelligence Helps a Pharmaceutical Industry Major Drive Higher Efficiency and Savings

Overview of the Pharmaceutical Industry

The pharmaceutical industry firms are involved in the discovery, manufacturing, and marketing of legal drugs, vaccines, biologics (toxins, viruses, serums, and analogous products), and medical devices such as prosthetics and pacemakers. Products of the pharmaceutical industry which include prescription and over the counter (OTC), account for a significant share of the aggregate health care spending and represent major account items in international trade transactions across developed and developing countries. Most spending growth, across the globe, is expected to be fueled by innovations in oncology, autoimmune, and diabetes treatments.

However, there a few factors influencing the growth prospects of the pharmaceutical industry in the coming years. They are:

  • Rising customer expectations: With the commercial environment getting harsher, healthcare payers enforce new cost constraints on healthcare providers and analyze the value medicines offer much more carefully. Customers today expect new therapies that are economically and clinically better than the existing alternatives, coupled with real-world outcome data to support any claim about a medicine’s
  • Capitalizing on knowledge: Finding a way to harness the full potential of technology adopted by an establishment, and the data in its possession, to benefit from the advantages it brings is crucial for firms across the pharmaceutical industry. Therefore, putting in place the essential tools and processes is a way to ensure sustainable profitability of investments.

Supply market intelligence is a perfect solution to the above factors as these solutions assist firms across the pharmaceutical industry in gaining an in-depth understanding of the latest trends, developments, risks, and recommendations on formulating procurement best practices.request free proposal These solutions also help companies develop superior product and service offerings while reducing their procurement spends.

The Business Challenge and Journey

A leading pharmaceutical industry client wanted to migrate from their current decentralized, manual procurement processes and multiple systems to a robust, centralized and automated procurement solution with the aim of increasing its spend under management and realizing higher productivity and savings. Additionally, the client wanted to improve productivity and efficiency of their procurement function while enabling a robust pre-purchase approval system to accomplish informed purchases.

To provide a single view of the enterprise-wide procurement spend and drive higher efficiency, the supply market intelligence specialists at SpendEdge tailored a wide-ranging research methodology. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures.

The supply market intelligence engagement helped the pharmaceutical industry client enhance integration with suppliers through portal connectivity. This helped them improve processes and manage indirect spend across the supply chain. The client was also recommended a faster payment cycle which aided them in capturing the early payment discounts and realize higher savings.

Fundamental questions answered in this supply market intelligence engagement

The Results

The supply market intelligence engagement assisted the client in gaining greater visibility on corporate spend across suppliers and categories, enhanced productivity, and achieved tighter control and compliance across their business units.

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Top 5 CRO Companies to Depend on for Drug Development

Typically, the cost of developing a drug costs pharmaceutical companies millions of dollars and sometimes even touching the billion dollar market. The development process goes through multiple stages which can last about 10-12 years. In the changing economy, pharmaceutical companies have to look for ways to control such costs and ensure compliance against stringent regulations. As a result, the pharma industry is looking to outsource the drug development process to Contract Research Organization (CRO) companies. CRO companies partner with various drug companies and thereby gather vast experiences in conducting clinical trials and testing out the efficacy of the new drug. CRO service providers offer services including drug discovery assistance, clinical data management, consultation, regulatory compliance, lead identification, clinical trials, and project management. The recent procurement market intelligence report on global pharmaceutical drug development services market estimates the market to grow at a rate of 7.35% during the forecast period.

Request Free SampleTop CRO Companies to Watch Out

IQVIA

IQVIA, formerly known as Quintiles IMS Holdings, is one of the leading CRO companies involved in the field of biopharmaceutical development and outsourcing services alongside depicting expertise in healthcare database and analytical services. The company is the world’s largest contract research organization and specializes in phase II-IV trials. The company was formed as a result of the merger between Quintiles Transnational and IMS Health in 2016. It is also the world’s largest CRO company based on market revenue with the company posting revenues of US$6.87 billion in 2016.

LabCorp

LabCorp is an American company and one of the leading CRO companies in the world. Currently, with close to 40 clinical laboratories in the US, it has one of the largest networks of clinical labs in the world. With more than 50,000 employees serving more than 220,000 clients across 60 countries, the company generated revenues of US$9.43 billion in 2016. The company is the pioneer in the field of using polymerase chain technology for genomic technology and also exhibits expertise in oncology trials, HIV genotyping, and phenotyping.

PAREXEL

PAREXEL is a world-renowned life sciences consulting firm that helps pharma companies develop approximately 95% of the 200 top-selling biopharmaceuticals on the market. Leading pharma companies such as Catalent Inc, Merck & Co. Inc., Pfizer Inc., ICON plc, and GlaxoSmithKline plc all depend on PARAXEL for new drug development. In June 2017, the company announced that it is set to be acquired by Pamplona Capital for US$5 billion.

ICON

ICON is a global provider of outsourced drug development services depicting expertise in the field of late phase services. In fact, it is the world’s second-largest player in the field of late phase services in terms of market share. Their services range from clinical, consulting, and commercial services, which incorporate trial design and full study execution. The company is renowned for its exceptional quality management system subjected to more than 1,700 successful audits by buyers, regulatory bodies, and ISO. They also offer knowledge, software, and systems for adaptive trials.

INC Research

INC Research is one of the leading CRO companies known for ‘The Trusted Process,’ a proprietary trial management methodology developed by the company. The company recently merged its operations with inVentive Health to expand the global scale and add capabilities. Their key services include early phase trials, phase II and III trials, late phase trials, consulting, and clinical monitoring.

Read more about the top CRO companies along with CRO services, clinical trials, drug development, pricing strategy, procurement challenges, and supplier evaluation criteria in SpendEdge’s upcoming report on the global pharmaceutical drug development services market.

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IR21

The Imperative Need of Procurement Process in the Pharma Industry

Today, we can see an increasing trend amongst top companies opting for better procurement management to save costs and remain competitive in the marketplace. Procurement is more than just a cost-cutting tool. By reducing waste and optimizing resources, pharma companies can significantly boost their efficiency. The pharma industry has to tackle a lot of modern-day challenges right from generic drugs, personalized medicines, rising research and development cost to expensive clinical trials. Improvement of the procurement process in pharma industry can solve such problems and improve the industry profitability.SE_Demo2

Why should the pharma industry opt for better procurement practices?

Driving Innovation

Innovation in Pharma industry does not concern only towards drug innovation. Innovation in procurement and sourcing processes could lead pharma companies to achieve monumental savings opportunities. For instance, successful pharma companies can create innovative incentive models for suppliers to suggest new ideas on ways to reach new market via new sales channel. By ensuring spend control and collaboration across divisions and functions with their supplier network as well as internal stakeholder’s, companies can create more opportunities for innovation.

Collaboration Across Business Functions

When it comes to conducting a clinical trial, business managers are looking to outsource the process to a capable strategic partner. However, they are quite reluctant to place such decisions in the hand of the procurement team. It has been evident that when procurement function takes over the execution of such activities, they strive to find the best partner and negotiate better terms that will drive the overall performance as well as the output. Additionally, clear procurement roles and responsibilities are a must to ensure smooth flow of operations.

Managing Indirect Spend

A vast majority of spend in a typical pharma company goes to indirect spend categories such as IT, MRO, office supplies, travel, logistics, and marketing. Such spends account for millions of dollars that could be saved because of a better procurement process. By improving the procurement process in the pharma industry with strict policies, proper tools, and providing full spend visibility, companies can improve savings from indirect spends and force regulatory compliance.

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IR33

Category Management Study Helps a Leading Pharmaceutical Industry Client Devise Superior Sourcing Strategies

Category Overview

In today’s challenging healthcare scenario, pharmaceutical industry players are primarily focused on aggressively cutting over costs across the supply chain to stay ahead of the competition. As a result, pharmaceutical industry players have started hiring professional procurement team, who specializes in reducing the cost of marketing spends.  Moreover, according to SpendEdge’s category management experts, the variation in commodity prices and shifting consumer attitude towards value products and services are expected to pose a significant challenge across the pharmaceutical industry space. Consequently, to reduce maverick spends and devise superior sourcing strategies across the supply chain, players in the pharmaceutical industry have started adopting category management studies.

Furthermore, SpendEdge’s category management solutions also assist pharmaceutical industry players in reducing overall inventory spending.

The Procurement Pain Point and Insights Offered

A global pharmaceutical industry client wanted to devise superior sourcing strategies across the supply chain and maintain a better relationship with their suppliers. Additionally, the client to gauge the key drivers and dynamics influencing the growth of the industry. Also, the client wanted to gain insights into the supplier’s pricing, diversity and evaluate their best practices to serve customers better.request free proposal

To address the business requirements of the client, the category management experts at SpendEdge tailored an all-inclusive two-step research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methods. During the course of this category management study, the client gained insights into the key drivers and dynamics influencing the growth of the pharmaceutical industry and evaluated supplier’s pricing best practices through a comprehensive SWOT analysis.

Fundamental questions answered in this category management study include

pharmaceutical industryBusiness Outcome

The category management study helped the pharmaceutical industry client improve their supplier selection decisions. Additionally, the client devised superior sourcing strategies which helped them reduce maverick spends across the supply chain.

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Regulatory Framework Guiding the Pharmaceutical Packaging Industry

Pharmaceutical packaging is a matter of serious concern for both the drug manufacturers and consumers. The primary objective of pharmaceutical packaging is to protect the medicine from external factors such as heat, moisture, oxygen, and contamination to Request Free Sampleensure drug efficacy, patient safety, and extended shelf life. Since pharmaceuticals are sensitive to fluctuations in environmental conditions and contaminations, suppliers must comply with government rules and regulations regarding the packaging of medicines. Here are some of the regulatory frameworks that pharmaceutical packaging suppliers must comply by:

Anti-Tampering Regulations

Drug tampering cases like Tylenol tampering with potassium cyanide in the past have resulted in deaths. After the Tylenol case, the FDA issued the Federal Anti-Tampering Act, requiring OTC drug manufacturers to create tamper resistant packaging. FDA rules for OTC drugs are relatively simple as well. For instance, two-piece hard gelatin capsules need a minimum of two tamper resistant packaging features, whereas one feature is sufficient for everything else. Shrink wrap, blister wrap, bubble packs, HIS liners, sealed metal tubes, and aerosol containers are some of the options available for manufacturers to develop tamper resistant packaging.

Labelling Regulations

The pharmaceutical packaging industry is highly regulated in terms of labeling requirements. Key players in the pharmaceutical packaging industry must adhere to the Fair Packaging and Labeling Act (1967) in the US, which mandates the label to include product identity, manufacturer and supplier address, contents, net quantity, and prescription information.

Pharmacopoeia Standards

Pharmaceutical packaging suppliers must comply with the global pharmacopeia standards set by WHO to ensure product quality. For instance, water used in packaging processes should be EP grade as it ensures high purity of water and meets worldwide specifications. Although WHO standards are globally accepted, countries can modify the standards to suit their own needs; thus, forming standards such as European Pharmacopoeia – 5.12 and British Pharmacopoeia chemical reference substances (BPCRS).

Read more about the rules and regulations in the pharmaceutical packaging market along with supply market landscape, pricing, and procurement insights in SpendEdge’s upcoming procurement report on the pharmaceutical packaging market.

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IR3

Industry Best Practices Benchmarking Study helps Disposable Syringes Manufacturer Formulate Better Negotiation Strategies

Category Overview

Lately, the pharmaceutical industry has witnessed astonishing growth due to the increase in the demand for long-acting formulations and devices with lower adverse effects and high efficacy. According to our industry best practices specialists, it has been noted that the pharmaceutical industry is facing substantial operational and economic challenges. As a result, many pharmaceutical firms have started adopting industry best practices studies to make the most of the opportunities and gain a stronger foothold this market space.

The industry best practices benchmarking studies offered by SpendEdge help pharmaceutical industry players adopt best-in-class procurement and sourcing strategies.

The Procurement Pain Point and Insights Offered

A leading pharmaceutical industry player wanted to identify peer group companies and their key suppliers. Additionally, the client also wanted to cut down costs by implementing a best-in-class and efficient procurement process. Furthermore, they also wanted to assess their peer group company’s success stories and approach towards innovation.request free proposal

The industry best practices specialists at SpendEdge carried out a blended research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies to cater to the specific category requirements of the client.

During the course of this industry best practices benchmarking study, the pharmaceutical industry client specializing in disposable syringes was provided with a list of the peer group companies and their key suppliers. The list provided helped the client identify the key drivers to enhance their procurement process. Additionally, the client was also able to optimize their techniques and implement an efficient procurement process.

Key questions answered in this industry best practices study include

pharmaceutical industryBusiness Outcome

This industry best practices benchmarking study helped the pharmaceutical industry client implement best-in-class procurement and sourcing strategies. Additionally, the client was able to formulate a better negotiation strategy with their suppliers. As a result, the leading pharmaceutical industry player specializing in disposable syringes was able to cut down their overall costs.

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IR21

Leading Pharmaceutical Client Leverages Supplier Relationship Management to Improve Savings

Category Overview

In today’s challenging environment, aggressive cost control has become a primary goal in the pharmaceutical industry. As a result, most of the pharmaceutical companies have a professional procurement team, which is devoted to reducing the cost of marketing spends. Additionally, leading companies deliver value beyond cost from supplier relationship management by integrating suppliers into the company’s processes and using various methods to streamline supply chains, including integrated operations planning, collaborative cost reduction, collaborative capacity management, and virtual inventory management.

The Procurement Pain Point and Insights Offered

A leading pharmaceutical firm wanted to reshape the relationship with suppliers, create a win-win situation, and increase their profitability. The client also wanted to cut down the costs by improving the relationship with their current suppliers. Furthermore, they also wanted to categorize the potential areas of risk in the value chain and wanted to gain an in-depth understanding of the latest trends and developments in the market space.request free proposal

The supplier relationship management experts at SpendEdge carried out a blended research approach, which involved primary and secondary research coupled with qualitative and quantitative data collection methods to cater to the specific category requirements of the client. During the course this study, the client could identify the potential areas of risk in the value chain and areas of potential growth for the company, customers, and its suppliers. The client also gained insights on the scope and economic flows in the relationships and the value currently being created and captured. Furthermore, SpendEdge’s portfolio analysis provided the client with a clear presentation of the likely prioritization and relative merits of the opportunities.

Key questions answered in this supplier relationship management study includesupplier relationship management

Business Outcome

This supplier relationship management engagement from SpendEdge, helped the client understand latest trends and developments in the market and identify the potential areas of risk in the value chain. Additionally, the client could also identify a huge number in savings and boost revenue opportunities across all the suppliers.

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Sourcing of Pharmaceutical Supplies: A Best Practices Study by SpendEdge

Category Overview

The global pharmaceutical packaging industry is rapidly growing due to the use of biodegradable materials as it adds to the sustainability of the packaging through all the stages of the pharmaceutical supplies lifecycle. However, the unpredictability in the price of the raw materials used in this industry may pose a significant challenge to the key market stakeholders.

The Procurement Pain Point and Insights Offered

A global pharmaceutical products company wanted to cut down the costs of the goods associated with pharmaceutical supplies. Furthermore, they also wanted to incorporate the best practices and consolidate their procurement strategies with suppliers from different countries. The client also wanted to streamline their existing procurement process for pharmaceutical supplies and identify potential cost saving opportunities.

SpendEdge carried out an in-depth research process consisting of primary and secondary research methodologies coupled with qualitative and quantitative data collection methods to cater to the specific category requirements of the client. Furthermore, theRequest Free Proposal suppliers were also graded based on the standards and allotted weights. The final supplier selection was carried out on parameters including geographic coverage, qualitative assessment scores, previous experience with the vendors, and product development and tooling costs. Moreover, we collaborated our research with a huge database of exclusive resources such as industry journals and reports, white papers, and news articles. The best practices study on the sourcing of pharmaceutical supplies also helped gain a better understanding of the procurement best practices for pharmaceutical supplies and the vital service offerings of the medical suppliers.

Business Outcome

This best practices study on the sourcing of pharmaceutical supplies helped the client identify and reduce the list of the major suppliers offering pharmaceutical packing solutions. This list offered by SpendEdge also helped the client achieve better high-cost savings compared to the current spend. Additionally, material cost indexing and steady conversion costs were also negotiated.

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IR18

Assessment and Optimization of Current Supply Base for a Leading Pharmaceutical Company

The Procurement Pain Point

To understand the procurement best practices/gain specific procurement insights, a leading pharma company with operations in several countries across the globe – approached SpendEdge to engage in a procurement market intelligence study to help them with end-to-end support for assessment and optimization of the current supply base for their indirect categories. Capture- SE 6Moreover, the procurement market intelligence engagement also helped the client with actionable insights to develop robust procurement strategies..

To gain an in-depth understanding of the market, SpendEdge’s team of procurement market intelligence experts followed a blended research methodology consisting of quantitative and qualitative research followed by the discussion with category experts about client’s current state. In addition, the category experts also provided key insights into managing sourcing and procurement activities and identified the critical areas such as tail spend assessment, spend optimization, among others. The supply market intelligence study also helped the client set up strict quality and process control measures.

Procurement Insights Offered and the Outcome

To address the procurement market intelligence requirements specific to the needs of the client – a leading pharma company – we deployed a dedicated team of two FTE analysts with experience in procurement support services and Capture - SE- 6experience of working with pharma clients. The process helped the client set the best benchmarking standards to categorize key improvement areas and strategize category development. The analysts followed a blended research methodology to offer category-specific insights on procurement activities and managing sources.

In a mere span of five weeks, the client gained a clear understanding of detailed procurement market insights specific to end-to-end process support. Furthermore, this study also helped the client with increased cost savings through identification of consolidation and tail spend optimization opportunities. The study also facilitated the client with improved process management practices based on benchmarking against industry best practices.

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This procurement market intelligence case study offers information on how we helped a global pharmaceutical  identify major suppliers.

 

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