The pharma industry is undergoing a profound transformation with the introduction of legislative reforms and the adoption of electronic patient information (ePI).

Indeed, ePI could allow for medicine packs to no longer be restricted for use in a single market due to language specific patient information leaflets, as multilingual text could be accessed on the medicines through a scannable barcode on the packs.

These changes have significant implications for supply chain management, creating both challenges and opportunities for pharmaceutical companies, promising significant improvements in efficiency, cost savings, and waste reduction.

These reforms have the potential to revolutionise the pharmaceutical supply chain and distribution networks.

The impact of legislative reforms – strengthening supply chain practices

Proposed legislative reforms will compel pharmaceutical companies to review and strengthen their supply chain processes, quality control measures, and transparency throughout the value chain.

The most noteworthy change being the transition towards the product level serialisation tracking the flow of individual items from the point of manufacture, across third parties and into the market.

These stricter regulations aim to minimise risk and ensure compliance through organisation across the end-to-end supply chain enhancing visibility, traceability, and quality assurance protocols.

But, if organisations are able to effectively capitalise on this increased detail right across the distribution channels and into market, they also have the opportunity to identify efficiencies and optimise orchestration both internally and with their partners. 

Streamlining operations with electronic product information

A significant aspect of the proposed reforms involves the introduction of ePI, which streamlines supply chain operations by replacing country-specific labelling with standardised electronic information.

This simplifies logistics and enables broader distribution of pharmaceutical products. Standardised packaging reduces costs associated with printing, labelling, and managing multiple versions.

It facilitates efficient cross-border operations, reaching wider markets with reduced costs and challenges. By embracing ePI, pharmaceutical companies can enhance market entry and improve the availability of pharmaceutical products to patients.

Removing the country specific requirements from the production and supply chain operations will eliminate current complexities caused at both operational and administrative levels.

In being freed from these requirements, organisations can re-evaluate how they supply products into markets and seek new opportunities to redesign to meet patient needs.

This will be especially beneficial for patients in small markets such as the Baltics and Nordics or with rare diseases such as Alkaptonuria, where the regulatory and supply chain burden currently make supplying products challenging.

Advantages of ePI in pharmaceutical supply chains

  • Simplified logistics: By replacing country-specific labelling with standardised electronic information, ePI simplifies the packaging and labelling processes. This eliminates the need for managing multiple language versions, reducing complexities in distribution logistics.
  • Cost reduction: Standardised packaging reduces costs associated with printing, labelling, and managing different versions of packaging materials. The reduced complexity will go beyond sourcing savings, the reduction in packaging changeovers inside the factory will also lead to greater levels of productivity.
  • Sustainability: From less material in the final packaging through to a more optimised movement of products, there will be a sustainability impact.  These changes open the potential for novel final packaging approaches which may have been previously restricted. This not only allows for less packaging, but also the potential to allow the same packs to be used in multiple markets.
  • Broader distribution: The adoption of ePI enables efficient cross-border operations by eliminating language-specific requirements. This agility allows supply chains to adapt their inventory strategies and moving away from building inventory at an individual market level.
  • World in motion: Moving to a regional or global inventory holding model will enable an overall reduction in inventory levels across the network, but this can only be achieved with stronger links between ‘in market’ commercial teams and the supply chain function.
  • Improved market entry: with standardised packaging and labelling practices, pharmaceutical companies can overcome language barriers and expedite market entry.  By reducing the complexities associated with multiple language versions, companies can reach new markets faster.

Revolutionising supply chain strategies with smart solutions

To navigate the evolving landscape and maximise the potential from the increased visibility and flexibility the regulation changes can bring, pharmaceutical companies must embrace smart supply chain strategies that leverage advancements in physical technologies, such as Internet of Things (IoT) and harness digital capabilities such as Machine Learning and AI.

For example, pharma companies are realising a next level of demand accuracy though employing AI to predict demand based on historical data, market trends and other external factors. 

These technologies offer transformative capabilities for supply chain optimisation, including cost reductions, faster reaction times, and sustainability gains.

Real-time tracking, traceability, and predictive analytics empower companies to achieve efficient inventory management, accurate demand forecasting, and proactive response to regulatory changes.

Cost reductions and efficiency gains through smart supply chains

Implementing smart supply chain solutions brings about significant cost reductions and efficiency gains.

Through collecting and contextualising exiting and new data sources from across the end-to-end supply chain, pharmaceutical companies can gain deep insights into demand patterns, inventory levels, and transportation routes.

This enables them to make data-driven decisions and start predicting outcomes, resulting in improved distribution efficiency, reduced lead times, and enhanced customer satisfaction.

Additionally, automation of routine supply chain tasks through robotic process automation (RPA) and more intelligent supply chain systems contributes to increased operational efficiency and reduced labour costs.

These improvements lead to overall cost reductions and help to address the increasing challenge of availability of resource being experienced within the industry.

Waste reduction and sustainability efforts

Digital solutions play a crucial role in waste reduction and sustainability efforts.

The cost-efficient orchestration of the supply chain will generally reduce its environmental impact, with excess production and shipping being minimised.

Real-time monitoring devices and IoT sensors enable pharmaceutical companies to closely monitor the storage conditions of medications during distribution.

This proactive approach minimises the risk of product spoilage, reducing waste and financial losses. By ensuring optimal storage conditions, companies can avoid the need to dispose of damaged or expired products, resulting in significant cost savings.

Moreover, IoT sensors provide valuable data on energy consumption and environmental conditions, allowing companies to identify opportunities for sustainability improvements and reduce their carbon footprint.

Enhanced Collaboration and Visibility in the Supply Chain

Smart supply chain solutions also facilitate enhanced collaboration and visibility among supply chain stakeholders.

Cloud based digital platforms and data-sharing initiatives unlock real-time information exchange, improving inventory management, demand planning, and order fulfilment.

This enables better coordination between manufacturers, Contract Manufacturing Organisations (CMOs), distributors, healthcare providers, and regulatory authorities, leading to smoother distribution processes and reduced delays.

But it is also worth highlighting that the most immediate and impactful changes will come from better collaboration within the organisation.

The ‘silos’ between internal functions such as regulatory, manufacturing and supply chain planning often lead to slow or disjointed decision making, so connecting and aligning between these teams will lead to an overall organisation which has the agility to efficiently react to requirements.

Conclusion: The Path to Agile and Efficient Pharmaceutical Supply Chains

The convergence of legislative reforms, ePI, and smart supply chain solutions presents a game-changing opportunity for the pharmaceutical industry.

By leveraging advanced technologies, pharmaceutical companies can revolutionise their supply chains and distribution networks, unlocking greater efficiency, cost savings, and waste reduction.

Through optimised distribution networks, enhanced efficiency, and proactive waste reduction measures, companies can achieve significant financial and environmental benefits. Embracing the smart supply chain era requires a strategic and collaborative approach.

Pharmaceutical companies need to link their overall strategy to invest in cutting-edge technologies, foster partnerships with technology providers, and engage with regulatory bodies to ensure compliance.

Those who embrace this change will be well-positioned to meet the evolving demands of the industry, deliver safe and effective medications to patients, and drive competitive advantage in a dynamic marketplace.

As the industry continues to evolve, the path to agile and efficient pharmaceutical supply chains lies in the integration of smart solutions and the collective effort of all stakeholders involved.

Martin Sowden is Management Consultant, Digital Supply Chain and Manufacturing Operations at
PA Consulting Group