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Extra info for Supply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and Biologics

Sample text

The definition used here refers to the latter, which is the way in which the trade associations are organized. For example, the majority of members of the UK BioIndustry Association are companies working with small-molecule compounds. Observations, Views, and Experiences of the Author My first experience of biotech was when joining the company British Biotech in the mid-1990s. My principal responsibility as head of logistics was to establish a panEuropean supply chain for two upcoming compounds in clinical development.

I asked Robin what he would suggest was different between pharmaceuticals and other sectors. He thought for awhile and then came out with this insight. “When, say, an aerospace company launches a new plane to its airline customers, that is the beginning of a second phase of product development. The plane must obviously be commercially attractive to airlines, safe, and fit for its purpose at entry into service, following several years of certification testing with air-worthiness authorities, but based on in-flight experience and feedback from airline customers and consumers experiencing the product, there is a second rapid introduction of improvements: sometimes to fine-tune the original concept, often to push its performance envelope further to enhance the value for the airline and the consumer.

5 The Driver for Changed Business Models So in an environment of higher costs and lower returns, how has the industry evolved in response? Until the late 1970s/early 1980s, pharmaceutical companies tended to own much of the infrastructure required to bring a drug to market. From then onward, this concept of a traditional, vertically integrated business model was challenged severely as the big pharmaceutical companies began a wholesale exit from activities that were regarded as noncore to their business.

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