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Future Of Drug Distribution

Every delay & shortage is an opportunity for falsified or substandard products to infiltrate the market or for life-saving drugs being sold at premium prices


As medicine supply has started crossing international borders, the long product delivery chain from a pharmaceutical company’s factory to the consumer is plagued with many challenges notably logistic, meeting demand-supply, product expiry, product damage, maintaining cold-chain, packaging and re-packaging, quality control and regulatory framework that wholesalers and distributors must navigate. Every delay & shortage is an opportunity for falsified or substandard products to infiltrate the market or for life-saving drugs being sold at premium prices. Therefore, it is crucial for everyone involved in the drug supply chain to consistently analyse what works and what does not.

A very crucial step in supply chain management is maintaining effective drug inventory, which can affect drug supply and pricing in more than one way. Maintaining unnecessary inventory at primary and secondary levels of stock-keeping results in a lot of expired or damaged products making way back to the manufacturer. A good solution is to maintain real-time inventory using pharmacy management software and based on tracking drug sale pattern over a time-period. This reduces the need for general and specialized storage space at every pharmacy as all drugs sold in a geographical area are stored centrally. Pharmacies can have access to online ordering and tracking platforms through use of bar codes, electronic product codes, radiofrequency identification, and mobile verification.

The delays resulting from keeping a lot of inventory can be overcome by using a Direct to Pharmacy or Direct to Patient approach or the third-party logistics model.  These models allow the pharma companies to shorten the supply chain.

With the advent of online pharmacies, drug delivery supply chain is ripe for disruption. Manual drug inventory and distribution process, that is expensive and prone to error, can be replaced by encouraging drug distribution through online pharmacies. The e-commerce model allows instant data sharing among partners in the supply chain, fosters trust in the market and reduces operational cost.

Wholesalers/drug manufacturers can forge closer relationships with large retail chains. Usually large retail chains have an automated product inventory and tracking system, and adequate storage space and cold chain which can be effectively utilized by the wholesalers/drug manufacturer. Though in nascent stage in India, organized retail pharmacies have started making way in the drug distribution system and are gradually gaining acceptance. 

Patent awareness also plays a big role in the drug distribution chain. While branded products have only one manufacturer in play, generic market has several players. A generic manufacturer with the cheapest version, good supply, and giving the best margin to wholesaler overtakes others in competition thus disrupting the chain. However, this competition can cause sub-quality drugs to hit the market. Therefore, there should be strict regulatory guidelines for the generic market that allow only registered manufacturers to enter the supply chain. 

India is a vast country with constantly evolving regulatory framework, difficult to reach terrains, and low income that cannot afford branded drugs. In these situations, cheap counterfeit or sub-standard drugs may enter the drug supply chain, online pharmacies and retail stores. Hence patient safety and awareness become imperative and this should be addressed on priority through national advertisements, strong regulatory framework, patient education, insurance coverage and national health schemes. Some patients often acquire knowledge about their medicines from online blogs, websites or from their local chemists, but majority of the patients in India need strict regulatory control mechanism to prevent such illicit instances.

India needs low cost technological advancements to help drug supply in remote terrains where e-commerce cannot reach. However, technology advancements will definitely change the way in which medicines are being made available to patients. One of the examples is, since 2016, a Silicon Valley based company, Zipline International, is using drones to deliver life-saving drugs and blood in remote areas of Rwanda, a country with poor infrastructure in Africa. With the penetration of technology, it seems a very near possibility that this model can be replicated in India too. 

Experts in home healthcare such as HealthCare atHOME (HCAH) have identified these advancements as the future of healthcare and are going the extra mile to ensure a smooth drug delivery chain through their medicine distribution services. Such services are not only aimed at delivering medicines at home but also about training, counselling, adherence & compliance tracking of patients to ensure that patients get clinically benefited out of their prescribed therapy.

Today pharmaceutical companies are looking for innovative cost-effective ways to supply drugs to their end users. New technologies and e-commerce are paving way for a better drug distribution system. In this evolving world of new drugs, mergers and acquisitions and cross-border transactions, the future of drug distribution is constantly evolving and improving. Key players in this business should thus keep up with the future of drug distribution in India.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Gaurav Brahmbhatt

The author is the Vice President & Business Unit Director at HealthCare atHOME.

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