Express Pharma

Re-setting the pharma procurement value chain

Procurement experts highlight how increasing the resilience and agility of supply chains, with technology as a pivot, is crucial for the pharma sector to move up the value chain

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Almost three years after the COVID pandemic put the world into lock down, we are still not yet free of COVID-19. In fact, we now have steadily increasing cases of monkeypox, which was previously confined to endemic regions.

Are we better prepared for the next health threat? Have we plugged the gaps to respond faster? Let’s not forget the many obstacles in this path.

For one, analysts point out that India Pharma Inc is still heavily dependent on imports for key raw materials. More than 70 per cent of its raw material requirements and in the case of certain drugs, more than 90 per cent are imported. Nearly 70 per cent of APIs are imported from China, and the cost has reportedly jumped by orders of magnitude, thanks to geo-political concerns. This has impacted the margins of pharma drugs.

While higher raw material, freight costs as well as pricing pressures in the US business due to high channel inventory will continue to drag overall performance for the pharma sector, how will the first two challenges hamper the development of medicines and diagnostics for future health threats?

Corporate boardrooms have been in re-set mode to prepare themselves for this scenario, incorporating the hard lessons of the COVID pandemic into business-as-usual practices. This exercise has been enriched with direct feedback from cross-functional heads who were never part of boardroom discussions in the pre-pandemic era.

This is vital because some vital benchmarks have not yet – and probably will not – revert back to pre-pandemic times.

Express Pharma, as part of SAP India’s Industry Knowledge Exchange (IKEX) Series, in partnership with the Indian Pharmaceutical Alliance (IPA), has culled some of these insights over a series of interactions. In May, we met up with CFOs, IT heads and CRAMS leaders for an overview of how collaborations and technology are driving business innovation in the lifesciences sector. (https://www.expresspharma.in/collaboration-tech-driving-business-innovation-in-life-sciencessector/).