Strengthening drug security through a resilient and affordable pharmaceutical supply chain

The pharmaceutical market for generic drugs in India is pivotal in making healthcare accessible to millions. However, supply chain vulnerabilities—exacerbated by crises like the COVID-19 pandemic—can lead to critical drug shortages and jeopardise patient lives. In the first quarter of 2020 alone, there was an 8 per cent increase in active drug shortages. To safeguard public health, it is imperative for the state to adopt comprehensive strategies that mitigate these risks and ensure a consistent supply of essential medicines. Efficient state procurement, clear demand forecasting, and data-driven insights are key components in building a resilient pharmaceutical supply chain that benefits not only the procurers but also the companies bidding for contracts.

Efficient State Procurement: The Tamil Nadu model

Tamil Nadu’s Central Procurement Model, implemented by the Tamil Nadu Medical Services Corporation (TNMSC), stands as a blueprint for success in public healthcare systems. By centrally procuring essential medicines, Tamil Nadu has ensured a steady supply of drugs while significantly reducing costs—achieving savings of up to 82 per cent on some medications through a transparent tendering process.

This model guarantees the availability of essential medicines to over 77 million people in the state. Stringent quality checks and systematic distribution have minimised stockouts and inefficiencies, leading to lower out-of-pocket expenses for patients. The success of TNMSC has prompted other states like Rajasthan, Andhra Pradesh, and Kerala to consult with Tamil Nadu to replicate similar systems, aiming to enhance access to affordable healthcare.

Clear demand forecasting: A scientific approach

A major challenge facing most states is the absence of a scientific basis for assessing drug demand. Procurement based on outdated or inaccurate demand estimates leads to drug shortages and wastage. Implementing clear demand forecasting not only helps procurers ensure a reliable supply chain but also assists pharmaceutical companies in better planning and bidding for contracts.

States should integrate advanced analytics to predict drug requirements more accurately. By leveraging data-driven insights, they can optimise inventory management, improve demand forecasting, and proactively respond to potential disruptions. This scientific approach to demand assessment minimises wastage and ensures that essential medicines are available when and where they are needed.

Leveraging data-driven insights

Incorporating data-driven insights is crucial for building a resilient and efficient supply chain. Advanced tools such as big data analytics can help optimise inventory management, enhance demand forecasting, and enable proactive responses to potential disruptions. Digital technologies offer a clear path forward in reducing vulnerabilities in the generics supply chain, benefiting both the government and private sectors.

Case study: PMBI and the Jan Aushadhi Program

The Jan Aushadhi