Regulators have become increasingly more cautious when improving innovative medicines. As pharmaceuticals have become more successful in prolonging life and treating illness, many medical conditions are now chronic. Today healthcare providers have become increasingly interested in measuring the outcomes of pharma performance and basing pricing accordingly. There has been a dramatic increase in prescription volume and an increased production and use of generic drugs.
Producing pharmaceuticals in other countries can be complicated. Customs, local regulations and other factors impact products and require brands to adapt. Generic pharmaceuticals are becoming the dominant category globally, especially in developing rather than just industrial countries. Adding to the complexity, a large number of pharmaceutical products are made by multiple countries. These factors and the move towards specialty pharmaceuticals and greater production of pharmaceutical products globally have resulted in more pressure on global supply chains. Because the pharmaceutical supply chain has moved from local to global in operation, even one significant event can interrupt the global supply chain.
Events such as hurricanes and typhoons, earthquakes, political and economic upheaval can have serious impacts on the global pharmaceutical supply chain, adding unforeseen costs and delays. Health care reform magnifies the effect of longer supply chains and increases the intense cost pressure on drug manufacturers. In order to reduce costs, more production as well as research and development are being offshored and outsourced.