Supply Chain in the Pharmaceutical industry.

Reading a bit about what is happening now in Venezuela and its major supply problems I encountered the critical situation in the pharmaceutical industry due to lack of inputs. This industry must maintain exemplary performance because lives depend on it.

The pharmaceutical industry is the part of the healthcare sector that deals with medications. The industry comprises different subfields pertaining to the development, production, and marketing of medications. These more or less interdependent subfields consist of drug manufacturers, drug marketers, and biotechnology companies.

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The main goal of the pharmaceutical industry is to provide drugs that prevent infections, maintain health, and cure diseases. This industry directly affects the global population, so a number of international regulatory bodies monitor things like drug safety, patents, quality, and pricing.

Supply chain

The supply chain of the pharmaceutical industry is similar to that of any other industry in the manufacturing sector. However, in the US, the pharmaceutical industry has only two drug distribution channels: prescription and OTC (over-the-counter). The US Food and Drug Administration regulates both of these channels.

Here is a typical pharma industry supply chain:

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Because pharmaceuticals directly affect millions of people’s health, industry manufacturers are very strict about ensuring the safety and quality of drugs at each level of the supply chain. These companies use fixed, regulator-certified suppliers of raw materials. Companies also store the raw and packaging materials in separate warehouses.

After a company processes the raw materials, it makes the final drug at the manufacturing unit. A company that has a single manufacturing unit uses only one warehouse, while a company with multiple manufacturing units stores its drugs in central and regional warehouses.

Next, distributors and super stockists receive the drugs and supply them to entities in the retail segment:

  • Hospitals
  • Pharmacy stores
  • Health care centers
  • Clinics

Then, retailers sell OTC drugs directly to consumers. A prescription drug purchase requires authorization from a qualified doctor.

If you want to read more about how this industry works, the rest of the article is here:



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