The pharmaceutical industry is constantly evolving, and one of the most critical areas of transformation is in the supply chain. The importance of a well-functioning supply chain has never been more evident than in recent years. A pandemic, geopolitical conflict, increased costs, and uncertain availability have had fundamental implications for pharmaceutical organizations.
As we move further into the future, the industry must continue to adapt to the changing landscape, embracing new technologies, regulations, and practices. In this article, I will explore the first half of the top 10 trends shaping the pharmaceutical supply chain and discuss how they are impacting the industry’s future.
“Industry cloud” accelerates pharma cloud-native supply chains.
Executives are increasingly recognizing that on-premises solutions hinder growth in the pharmaceutical industry. Industry clouds, tailored cloud services for specific sectors, offer a solution to address this challenge by providing contextualized cloud offerings and reducing the risks and costs associated with cloud migration. These industry clouds offer APIs, common data models, industry-specific applications, and third-party solutions through a platform marketplace. Leading pharmaceutical companies are considering industry clouds to accelerate the transition of critical workloads to the cloud. They aim to achieve lights-out manufacturing, where autonomous machines can cut costs, reduce manpower, lower power consumption, improve product consistency, save space, and scale up faster. Companies like Johnson & Johnson and Pfizer have made strides in adopting Industry 4.0 technologies, earning recognition for their innovations.
Consumers and governments demand ESG practices.
With manufacturing contributing to over 20% of CO2 emissions in the U.S., pharma is facing increased pressure to provide a plan for how their organizations will address environmental and social issues.
Integration into the broader supply chain network core suppliers, manufacturing, and CMOs will be required to gain visibility into what the problems are and how to fix them. Organizations are partnering with collaboratives like the Carbon Reduction in Manufacturing Initiative to accelerate the cutting of global emissions in the industry.
For pharma organizations to move forward, they will be required to weave ESG into their supply chain strategies as a foundational requirement.
New Modalities Will Require Innovation
Different drug modalities, including biologics, gene therapies, and mRNA, are shaping the pharmaceutical landscape with unique technology requirements. Biologics demand single-use bioreactors, advanced purification systems, and real-time temperature monitoring. Gene therapies rely on closed-system bioreactors, gene editing tools like CRISPR, robotic handling, and cryopreservation. The emerging mRNA modality necessitates specialized synthesis platforms, cold chain logistics, lipid nanoparticle formulation tech, and large-scale production capabilities. These advancements are essential as the markets for biologics, gene therapies, and mRNA are projected to reach $719.84 billion, $93.78 billion, and $38.15 billion, respectively, by 2030, enhancing patient care and pharmaceutical innovation.
Composability Becomes A Fundamental Requirement
Pharmaceutical supply chains are vital for ensuring medication availability but face challenges of complexity and adapting to market changes. Leading companies are turning to a composable business approach for autonomy, agility, predictive insights, and resilience. Key technologies include Platform-as-a-Service (PaaS) cloud modularity for rapid solution development, event-driven micro-services to create modular supply chain architecture, and blockchain for trust and interoperability, enabling standardized protocols, data formats, and APIs across supply chain partners. These approaches enhance the pharmaceutical industry’s ability to meet evolving demands and optimize its critical supply chains.
Disruptions Make Cybersecurity a Top Priority
According to Cybersecurity Ventures, the total cost of cybercrime will exceed $8 trillion by the end of 2023. This poses a clear and present danger to pharmaceutical organizations that have already lost $14 billion through intellectual property cyber theft. A recent survey found that 84% of all companies worldwide believe software supply chain attacks represent the biggest cyber threat within the next 24 months.
Pharma organizations must prioritize cybersecurity strategies that define measures like risk assessments and management, a cybersecurity framework (e.g., NIST cybersecurity framework), data classification, policy, and monitoring. But remember, it’s not just vulnerable technology to blame—humans are culpable as well. Human error continues to be a key cybersecurity risk with 95% of successful cyberattacks coming from human negligence or a deliberate attack. It’s important to focus on acquiring talent and ensuring that employees are trained on cybersecurity-proven practices. In 2022, around 10% of cyberattack attempts were thwarted because employees reported them, but if they don’t know how to spot them, they can’t report them.
Immersive Experiences
The pharmaceutical industry is embracing augmented reality (AR), mixed reality (MR), and virtual reality (VR) to revolutionize its supply chain and manufacturing processes. These immersive technologies offer various benefits, such as enhanced training and skill development, with examples like Novartis using VR for employee training in sterile environments. AR streamlines processes and boosts efficiency by overlaying real-time data on physical environments, as Pfizer does for warehousing optimization. MR facilitates remote collaboration and support, exemplified by Johnson & Johnson. Quality assurance and compliance are enhanced through real-time monitoring, as Merck uses AR for inspections. Additionally, VR simulations foster a culture of continuous innovation, with AstraZeneca predicting a dominant role for AR and VR in the industry’s future.
Digital Twins Driving Digital Pharma 4.0
Pharmaceutical companies are increasingly adopting digital twins, leading to a projected 27% market growth to $1.2 billion by 2030. These digital replicas of manufacturing processes offer several advantages. They reduce time-to-market by simulating and optimizing drug manufacturing, accelerating product development. Improved yield and operational efficiency result from better process understanding and predictive capabilities, cutting costs and enhancing profitability. Moreover, digital twins enhance supply chain management by proactively identifying and mitigating risks, enabling sustainable inventory reductions of up to 5% and capex reductions of up to 10%. This technology is poised to revolutionize the pharmaceutical industry, optimizing production and supply chain operations.
