Pharma supply chain impacted by low tech innovation and lack of transparency: Akshay Hegde

Bengaluru, September 27, 2022:

Pharma supply chain is impacted by low technology innovation and lack of transparency. Considering India’s importance in the global supply chain, the country has to overcome challenges in quality and regulatory issues, product proliferation, supply chain fragmentation, and incompetent infrastructure, said Akshay Hegde, co-founder of ShakeDeal.

Due to the complex structure of inbound logistics, outbound logistics, warehousing, and distribution, the pharma industry suffers from reduced visibility and end-to-end product management, he added.

The reasons behind supply chain disruptions are that Indian pharmaceutical companies pay critical attention to reverse engineering and low-cost manufacturing to combat sheer competition and curtail the cost of drugs. However, the pharma supply chain needs restructuring to be flexible, agile, and harmonious. The primary hurdles to attaining a robust supply network are: complexity, poor infrastructure and reduced agility, Hegde told Pharmabiz in an email.

Noting that the India ranks 3rd in global pharmaceutical production by volume and is the largest generic drug provider worldwide, he said according to IBEF report, vaccines produced in India meet 50% of global demand, with medicines covering 40% of the drug market in the US and 25% in the UK. Moreover, over 3,000 drug companies and 10,500 manufacturing units in the country encompass a complex network to promote best-in-class production in the global market. “Still, the pharma supply chain is yet miles behind from keeping pace with the diversifying portfolio of the industry,” Hedge pointed out.

Delving on the current pharma supply chain in India, the chief of ShakeDeal which is a B2B-commerce and supply chain company quoted the study conducted by Organization of Pharmaceutical Producers of India (OPPI) and the Indian Pharmaceutical Association (IPA) stating that it reveals the lack of a defined long and short-term supply planning, suboptimal routes, high transportation costs, inadequate cold storage facilities for high-risk and conditioned products, and lagging informational transparency leading to supply chain disruption.

The complexity in supply chain comes about because of lack of communication between suppliers, manufacturers, and distributors affects the sector's integrity. Complex management of raw materials and products in every layer adds to the impediment. India imports over 75% of pharmaceutical ingredients from China, managed by 10,000 facilities clustered in zones across five to six states solely at the manufacturing level. There is poor service levels, delay in distribution, lack of contact with the manufacturer, and quality issues that hinder strategic operations, said Hegde.

India struggles with the cold chain storage network due to outdated equipment, high operating costs, and the need for innovative technology. Moreover, the transportation of pharma products is affected by poor highways, inadequate railway systems, and underutilised airways, augmenting costs and time. With rapidly evolving market demands and shifting disease patterns, pharma companies must be responsive and react to drug shortages with agility. Lack of high-quality products, delayed product recall, and poor competence are inertia to the sector's growth, he stated.

Even as India’s pharma industry holds a promising potential to exhibit a steep growth trajectory, shortening the gap in its supply chain management is key. This is where new-age companies like ShakeDeal are in the spotlight to streamline the supply network on the procurement and distribution front. Our objective is to address the challenges of the pharmaceutical ecosystem and integrate siloed operations with a robust technological framework, said Hegde. Pharmabiz