Symptoms of Disruption in the Pharmaceutical Supply Chain

Art of Supply

Pharmaceutical supply chains are never far from news headlines. Regular drug shortages affect our families, friends, and neighbors when they can’t access their chemotherapy treatments, ADHD medication, and pain medication - just to name a few.

In 2023, Americans spent over $600 Billion on prescription drugs. That’s more than ever before — and more than any other country in the world. 90 percent of the prescriptions are for generic drugs, although they represent only 20 percent of spending.

Pharmaceutical supply chains are complex, highly regulated, global, and associated with HUGE profit margins - but not for all medicines, and the R&D costs are just as astronomical as the profits.

In this week’s episode of Art of Supply, Kelly Barner attempts to distill one of the most complex supply chains in the world down to some very familiar dynamics:

• Profitability, supply chain resilience, and negotiating leverage
• The differences between brand name and generic drug profit margins
• Production issues that exist thanks to global producers, consolidated negotiators like GPOs and wholesalers, and the exacerbating role of insurance companies
• And what a few groups - including well known Shark Tank investor Mark Cuban - are trying to do about it

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter
• Art of Supply on AOP
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