Some pharmaceutical companies are facing tremendous pressure to increase production to meet the growing demand for anti-obesity drugs while maintaining drug efficacy and safety standards. This dual pressure brings quality issues to the fore as a major cause of drug shortages.
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Recently, the FDA (Food and Drug Administration) FOUND that the ongoing shortage of IV fluids has been exacerbated by damage from Hurricane Helene at a manufacturing plant in North Carolina, which produces about 60% of the IV fluids used in US hospitals. As a result, they began importing products from abroad to help meet the needs of patients.
The European Medicines Agency (EMA) has reported growing shortages of essential medicines, including antibiotics and cancer treatments driven by production disruptions and regulatory challenges. In response to the ongoing crisis, the EU has launched alliance to increase cooperation between its 23 member countries.
These disjointed and geographically dispersed examples highlight the pharmaceutical industry’s reliance on fragile supply chains, highlighting the urgent need for reassessment and restructuring.
What is behind the drug shortage?
A report from KPMG shows that the US leads the market for generic drugs, with prescription rates reaching approx 90%showing a similar trend in prescription practices across Europe.
“Worldwide demand for generic drugs continues to grow as payers and consumers look for ways to lower healthcare costs,” according to KPMG. “Even as demand increases, however, buyers are consolidating and thus creating more leverage when it comes to pricing. This means intensifying profit pressure on suppliers and an increasing likelihood that manufacturers will move away from unprofitable products.
As a result, some companies are facing tremendous pressure to increase production to meet growing demand while maintaining drug efficacy and safety standards. This double pressure brings quality issues at the forefront as the main cause of drug shortages.
Additionally, many drug manufacturers lack real-time inventory data, which hinders their ability to manage supply effectively. Inadequate communication between manufacturers, pharmacies and hospitals further complicates efforts to predict and address shortages.
Strategies to improve the global pharmaceutical supply chain
Visibility and collaboration are key words that address these inefficiencies to enable resilience. From raw materials to finished products, real-time inventory tracking enables pharmaceutical companies to significantly increase visibility and facilitate agile decision-making.
Let’s say a manufacturer anticipates potential shortages by analyzing current stock levels of active ingredients; this allows them to adjust production schedules proactively.
It also enables healthcare providers to manage stock levels effectively, preventing overstocking or stockpiling of critical drugs. This enables the industry to detect disruptions earlier – such as resource or material delays – and take proactive action before these issues turn into major shortages.
Also, the use of predictive analytics enables companies to simulate different scenarios and develop contingency plans, ensuring they are prepared for potential disruptions. By analyzing historical data, market trends, production capacity, regulatory changes and previous shortage incidents, pharmaceutical chains can provide accurate forecasts.
This proactive approach allows health care systems to adjust inventory levels or secure alternative suppliers in advance. If one facility is affected by a natural disaster, others can continue operating, ensuring essential medications remain available.
However, visibility alone cannot unlock the full potential of supply chains. Better communication is essential for the flow of drugs from manufacturers through distributors to hospitals.
The full circle of communication—between various stakeholders including suppliers, health care providers, and regulatory bodies—is required in order for manufacturers to match their production rates with actual usage rates. This is quiet data flow enables organizations to better coordinate responses during an absence.
What is the future of AI in the pharmaceutical industry?
only 14% of drugs in clinical trials receive FDA approval, resulting in an average development cost of 1 billion dollars for approved grass. This financial burden emphasizes the need for more efficient processes and Business AI has the potential to be the missing ingredient,
Gilead Sciences, Inc.a biopharmaceutical company, is co-innovating with SAP to develop the SAP Cluster Release Center for Life Sciences. This tool performs control checks on manufactured pharmaceutical batches, helping organizations maintain compliance with regulatory standards in different regions.
The rise of generative artificial intelligence is enabling researchers to explore a wider range of possible compounds than traditional methods allow. It can be used to uncover patterns of disease within vast data sets, helping to identify optimal drug combinations for different conditions.
By using artificial intelligence, the pharmaceutical industry can reduce research and development costs, minimize human error and shorten research timelines, making essential medicines more accessible, affordable and more profitable.
While global drug shortages are a complex challenge that will not be solved quickly, prioritizing collaboration, transparency, and proactive strategies can help build a more resilient pharmaceutical supply chain.
If you want to learn how AI can make a real difference to your supply chain, check out our IDC Infobrief that provides insight into harnessing the power of AI while navigating the complexities that come with it: Importance of AI in supply chain and operations