![]() Meanwhile, increased state interventions and protectionist trade policies are creating new pressures on manufacturing networks and could drive increased regionalization. Since pharma customers are not expected to fully absorb these cost increases, profit margins are under pressure. This is over and above the persistent price pressures pharma is already facing, particularly in generics. Inflation has risen in recent months to levels not seen for decades, leading to increasing costs for labor, raw materials, and transportation. While the pharma industry is considered somewhat protected by its high inventory levels and long-standing dual sourcing, over a given ten-year period, the likelihood of supply chain disruptions still represents a potential loss of 25 percent of EBITA. In addition to these industry-specific trends, pharma has also been affected by broader global trends, such as supply chain pressures. This change is likely to bring more fragmentation of technology, new supply chains, and unique product life cycles. New modalities, such as cell and gene therapy and mRNA vaccine technology, have increased from 11 to 21 percent of the drug development pipeline-the fastest growth ever seen in the sector. The product landscape also is changing swiftly. The industry’s ability to find innovative solutions to deliver COVID-19 vaccines while still meeting overall demand is a remarkable achievement, but rising global demand is still a significant challenge for the industry in the long term. Global demand is growing rapidly, and the unprecedented need for COVID-19 vaccines and therapeutics has put additional pressure on the industry. The pharma industry is facing a multitude of challenging trends (Exhibit 1). It presents questions leaders can ask as they design the solutions needed to make sure operations can protect enterprise continuity while still delivering to patients. ![]() ![]() This article explores the challenges facing pharma leaders and the steps they can take to develop a more strategic, long-term, and integrated approach to operations strategy. This task will fall to leadership only the CEO and head of operations are in the right positions to make it happen. The effort will require enormous mobilization and thoughtful prioritization. Pharma operations leaders now have an opportunity to deliver even greater value to their organizations by achieving this shift in focus, but they must act quickly to keep abreast of the challenges confronting the industry. These include high inflation and an increase in complexity and risk, as well as the compounding effects these forces have on each other. The focus for operational leaders may need to shift from the prevailing emphasis on continuous improvement-including cost savings, quality assurance, and constant readiness to deliver-to longer-term external challenges. ![]() Succeeding in pharma under these new and challenging conditions will require succeeding in operations. Now is exactly the right time for this renewed emphasis on operations strategy, as pharmacos emerge from two years of intense firefighting. Factors such as the COVID-19 pandemic, inflation, geopolitics, new therapeutic modalities, and new ways of working make it vital for pharmacos to carefully reconsider their long-term choices in sourcing, manufacturing, and supply chain. In the past, many pharmaceutical companies (pharmacos) deprioritized operations strategy in the face of competing business pressures.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |