Pharmaceuticals & Life Sciences
Demand for medicines is growing rapidly, with aging populations in established markets. The global pharmaceuticals market is still dominated by the US, which is double that of the EU – which saw growth in parallel market in the order of more than €5 billion.
There are some real change drivers that will alter the face of the market. Demand, for example, is also increasing due to new markets including China putting added pressure on capacity. The industry is experiencing heightened regulation and a resounding stagnancy in the innovation cycle. In recent years the market has not seen any real significant blockbusters. Patients, insurers and governments are rightly posing the question – why are we paying for medications that do not work?
Pharmaceutical companies are examining their key performance metrics and in terms of financial performance and value are re-thinking how they do their business. The pharma value chain is now being re-shaped, as companies refocus and reinvest in higher value R&D activities after a long lag in scientific productivity.
The emerging economies such as Brazil, China and India, are fast becoming centres for pharma activities including research and contract manufacturing, migrating from Europe to these fast-growing markets.
The role of The Clearview Group
The focus on efficiency and meeting bottom-line pressures must continue. Merger activity continues to demonstrate the importance of these objectives. Procurement will be drawn upon to prune inefficiency and support the spend to value that shareholders will expect.
As organisations jettison in-house manufacturing for the favoured contract manufacturing model (CMO) they need to implement more advanced SRM capabilities to manage these providers. This will have significant implications for their direct procurement of raw materials, packaging, engineering, and other indirect expenditure. The transition will present significant challenges and risks.
A top 15 global pharma engaged Clearview during a radical overhaul of its broader strategy. They shifted to a global model, with a focus on R&D, a narrower but higher value precision product portfolio, and a higher supplier/partner dependence. In support of this strategy Clearview completed an EU-wide procurement capability review developing a first-class procurement strategy and transformation plan. Our team also developed EU regional category strategies for direct and indirect categories including raw materials, packaging, contract manufacturing, and engineering.
With the emergence of the CMO and Partner models Pharma will demand more from its systems to deliver against its Procurement and Supplier Management objectives. It is crucial, now more than ever, to gain insights into their Tier 1 suppliers and sub-suppliers. Clearview’s SeeR technology is poised to do just that. We are geared to enable pharma companies to develop a total view of the supplier relationship for their key suppliers from the basic company details, to key certifications, contracts, performance measures, market insights, and broader risk to enable supply chain decisions.
