Healthcare reforms, shifting market demands, and increasing regulatory pressures are transforming the life sciences industry on a global scale. Patients, providers, payers, and regulators are demanding a higher quality of care and better therapeutic benefits, combined with reduced costs and enhanced transparency. Leading life science companies need to address these challenges, considering ways to improve organizational efficiency and encourage innovation as they do so.
In 2014, companies in the life sciences industry will continue to feel pressures to secure their supply chain and ensure the quality of their products. To the relief of many in the industry, Congress passed the Drug Quality and Security Act in November 2013, preempting the impending California E-Pedigree deadline. Will this shift the priorities of the pharmaceutical industry, or just provide leeway for implementations that are underway?
Pressure from Trading Partners
In 2015, wholesale distributors, dispensers, and repackagers must develop verification methods to determine whether a product is a valid, suspect or illegitimate. If an organization possesses a suspect or illegitimate product, it is their responsibility to notify trading partners in order to prevent further circulation. In addition, in the event of a recall or investigation, authorized parties in the drug supply chain must respond to requests for the transaction history of the pharmaceutical product from federal or state officials within 48 hours. Paper systems can support these efforts, but when considering the sheer volumes of product that pass through a wholesale distributor alone, it will be difficult to manage. Distributors, dispensers, and repackagers may require trading partners to share information electronically in order to drive efficiency and ensure compliance.
Aligning Operations with Plans for Growth
Industry mergers and acquisitions are not slowing down, but the era of the mega-merger has passed. Life science companies will continue to make targeted and precise acquisitions where there is alignment with the corporate strategy. As they transform their strategy, business leaders need to assess whether traditional operating capabilities will support their company’s new direction. In some instances, less mature organizations may find that the operations and the systems landscape of acquired entities do not align with their own, even though they are aligned therapeutically. These organizations will have to decide who the best owner of the acquired entity will be. More progressive companies are building integration playbooks and developing genuine competencies around mergers, acquisitions, and divestitures, which support their strategic vision and facilitate aggressive financial and operational integration.
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