Typology of Upstream Pharmaceutical Supply Chains

University essay from Uppsala universitet/Industriell teknik; Uppsala universitet/Industriell teknik

Abstract: Antimicrobial resistance (AMR) is the process where the bacteria develop resistance towards the treating effect of an antibiotic drug. AMR poses an alarming threat to human health causing around 700,000 deaths per year around the globe. If appropriate measures to combat the resistance are not taken, the number of deaths globally could increase to around 10 million by the year 2050. There are various factors driving the growth of AMR of which antibiotic shortages are common. A clear insight into the pharmaceutical supply chain is necessary to understand the reasons causing antibiotic unavailability. Ensuring access to medicines is one of the major objectives of pharmaceutical supply chains. Pharmaceutical firms compete in a volatile market to increase their profits. Antibiotics render slim profit margins to pharmaceutical firms; declining profits and increasing costs of production have led to firms outsourcing their operations to suppliers in different geographical locations. This in turn forms complex supply chain structures with various actors of a single drug chain being dispersed across the globe. The complexity in these supply chains lead to antibiotic supply interruptions. National drug shortages drive the risk of AMR, and these shortages are caused when pharmaceutical supply chains are weak or fragile. Therefore, the pharmaceutical supply chains need to be thoroughly analysed. This thesis aims to explore the different possible upstream supply chain structures that could exist in pharmaceutical supply chains. The study also highlights the factors that motivate the firms to choose different supply chain structures. This research is based on the existing literature on pharmaceutical supply chains. Qualitative semi-structured interviews, reports and existing research articles guided the authors in building a typology of upstream pharmaceutical supply chains based on: how different processes are handled by the MAH, the geographical location of operations in the chain, and the sourcing strategy of the Market Authorisation Holder (MAH) who owns the license for the drug. The findings of this study outline how a pharmaceutical firm could possibly structure the upstream supply chain based on its strategies. This study is limited to conceptualizing only the actors involved in the direct supply chain of the focal firm (MAH), further research including actors in the extended supply chain needs to be performed to get deeper insights into pharmaceutical supply chains.

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