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The Importance of Pharmacovigilance During a Pandemic

The Importance of Pharmacovigilance During a Pandemic 700 500 Xcelpros Team

At a Glance

  • The World Health Organization (WHO) emphasizes providing the most effective drugs that do not cause severe adverse effects.
  • Understand adverse effects and how to prevent them by assessing the right chemicals, quantities and processes in medical vaccine manufacturing.
  • Digital solutions and services are designed to help scientists and pharmaceutical company decision-makers detect, assess, understand and prevent adverse effects from their medicines.
  • Starting now, pharmaceutical companies are placing a greater emphasis on drug quality checks to avoid mistakes caused by rushing the production process.


Today, most people are familiar with terms like “clinical trials,” “safety assessment tests for vaccines” and “FDA approvals” because of COVID-19 media coverage over the last few years. While these terms have always been a part of any pharma and biotech manufacturing companies’ quality assurance program, the ongoing pandemic has made them part of everyday conversation.

People often wonder why it takes so long for a drug or vaccine to get approved for mass use, and rightfully so. The answer however, lies in the principles of pharmacovigilance, also known as drug quality control.

Pharmacovigilance is the science and activities relating to the detection, assessment, understanding, and prevention of adverse effects or any other drug-related problem. Source: The World Health Organization

The Primary Goals of Pharmacovigilance Guidelines

The goals of a typical pharmaceutical quality control program include:

  • Assessing a drug’s short-term and long-term adverse effects and any harm the drug might cause a patient.
  • Continuously collating and monitoring a particular drug’s safety data.
  • Assessing the risks and rewards of the drug to make a guided decision on the administration of the drug.
  • Communicating adverse drug reactions (ADRs) data between health professionals and clinical researchers while maintaining transparency at all levels.
  • Preventing the distribution and administration of unsafe drugs by medical bodies and drug companies.

All pharmaceutical companies require a team of professionals to carry on this constant quality check of their drugs. This team can include scientists, clinicians, biochemists, physicians and medical writers. The team’s job is to collect, collate, analyze and assess the safety profile of every drug.

This task requires constant alertness and unprecedented agility for an accurate and quick response. In today’s market, manual data reviews are no longer adequate. Combining finely tuned digital tools and well-trained employees is the best way to protect patients from severe injury or death.

A drug maker’s automated quality control program should be smart enough to help collect, analyze and check data. The software equipped with artificial intelligence can check a drug’s composition, verify safety profile mapping and perform other crucial steps required for necessary quality checks.

Pharmaceutical companies need to follow a wide range of procedures to ensure their pharmacovigilance is up to government and industry standards in order to remain compliant.

“The scope of the problem of poor-quality drugs transcends national borders because the manufacturing and supply chain of medical products thrives in an international market.” Elizabeth Ndichu, MD, and Kevin Schulman, MD

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To comply with new quality standards and still meet today’s demands for fast-track drug development and clinical trials, pharmaceutical and biotechnology firms need to strictly adhere to the process of end-to-end pharmacovigilance.

  • Carrying out detailed patient surveys for different age groups, countries and health conditions
  • Using consultants and experts to manage its quality control program
  • Using software such as Microsoft Dynamics 365 for the pharmaceutical industry to help ensure error-free data maintenance, analysis and report generation
  • Keeping all stakeholders in loop at all times to avoid any errors
  • Maintaining records of their quality control policies and procedures. These records are required for medicines plus other products such as cosmetics, nutritional supplements and dietary products
  • Formulating a plan for intervention, mitigation, assessment and resolution in the event of drug quality issues

Figure 1:Digital Ecosystem: Pharmacovigilance

Digital Ecosystem: Pharmacovigilance

Pharmaceutical companies need to take an agile approach toward pharmacovigilance. Leveraging technology for streamlining safety procedures and quality checks is no longer a matter of convenience but a necessity.

Solutions like Microsoft Dynamics 365 Finance and Supply Chain Management provide Quality Control functionality. Each of these computer programs has methods to collect, track and report quality test results. This software is a comprehensive solution that makes it easy to leverage technology to streamline quality check operations.

These solutions can pave the way towards regulatory compliance, stringent component mapping and monitoring of a drug’s safety profile. It reduces manual intervention by employees, allowing individual case safety reports (ICSRs) to be performed easily.

Microsoft Dynamics modules can be used by different departments by the likes of clinical researchers, scientists, medical writers, physicians, medical representatives and government drug governing bodies. These solutions for monitoring drug safety are considered one of the best investments a company can make today.

Key Takeaways

  • Technologically-enhanced pharmacovigilance is the need of the hour for today’s pharmaceutical companies.
  • The pharmaceutical sector continues to evolve on a large scale. This change requires gathering medicinal data at a global level to map drug safety.
  • Forming a blueprint to follow the pharmacological journey is a critical step for any pharma and biotech company.

References: Pharmacovigilance: Regulation and Prequalification

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How a Pharma CDMO can manage the Serialization Challenge

How a Pharma CDMO can manage the Serialization Challenge 700 500 Xcelpros Team

At a Glance

  • Today, serialization has moved from being a luxury option to a necessity.
  • Pharmaceutical companies are hiring contract development and manufacturing organizations (CDMOs) to develop solutions that maintain drug quality while avoiding supply chain problems.
  • Pharmaceutical serialization lets manufacturers keep accurate track of their inventory wherever it may be.

As more pharmaceutical and chemical companies move to digitize their operations, they’re looking for ways to track raw materials and finished products through the manufacturing cycle. One way to track these products is through serialization.

“Serialization is the assigning of a predetermined coding type to each product item, assigning it a distinct identity” for tracking and tracing its location in the supply chain,” states. A simple definition calls serialization, “the process of assigning a unique identity to each saleable product item,” according to

Pharmaceutical companies that have gone digital are starting to use serialization to track and trace their products throughout the supply chain. The industry is constantly looking to improve its tracking systems to combat counterfeiting, theft, packaging and storage errors. Companies are also worried about their products being altered after leaving their plants.

Pharmaceutical companies often hire contract development and manufacturing organizations (CDMOs). Using digital labeling methods such as barcodes and QR codes (a type of barcode) helps serialize the supply chain, making tracking raw materials and finished goods easier.

30-40% of all medicines circulated in the developing countries are counterfeit.
5-7% of all medicines circulated in the developed countries are fake. Source: WHO Report

Counterfeit drugs pose a serious threat to the public’s health. They also damage the reputations of legitimate companies and the pharmaceutical industry globally.

CDMOs worldwide face challenges when implementing a robust pharma serialization solution. Streamlining manufacturing and distribution processes while understanding their client’s unique requirements is challenging.

Serialization Challenges Faced by CDMO

Some of the challenges a CDMO faces while implementing pharmaceutical serialization for track and trace functionality include:

Seamless Serialization for Multiple Clients

CDMOs typically prefer to operate globally, providing comprehensive drug manufacturing and supply services to many pharmaceutical companies. Catering to a diverse client base has its unique set of challenges, especially when it comes to the serialization of individual drugs.

CDMOs need to equip themselves with the right technology to be able to modify their production or manufacturing lines and seamlessly label multiple drugs for different clients.

Regional Compliance

Every country around the world can have different regulations for exporting drugs. Labeling—or serialization—is part of that compliance. CDMOs are expected to take responsibility in terms of drug quality of drugs and compliance with various government rules. Being in compliance is challenging for CDMOs, especially considering the volume of information required to achieve it.

Figure: 1Key Serialization Challenges Faced by CDMOs

Key Serialization Challenges Faced by CDMOs

Picking the Right Labelling Solution

When it comes to drug serialization, a “one size fits all” approach to labeling solutions doesn’t always work. Assuming a CDMO has a preferred labeling software, there’s still the important decision of choosing:

  • Printer types such as thermal inkjet, thermal transfer, lasers
  • Printing materials such as paper, film or holograms
  • Special formulas to make counterfeiting harder

In terms of label design, everything must meet government codes and regulations. This applies to label layout, orientation, barcode configuration and other design elements. Every label must be printed in time to avoid delaying shipments. CDMOs are pressured to make the right choices for coding and labeling products.

Understanding Market Requirements

While larger pharmaceutical manufacturing companies use an in-house team of analysts and marketing specialists, smaller firms often rely on CDMOs for market intelligence.

When it comes to labelling client drugs, CDMOs need to understand the different markets and their requirements. Using market analysis, CDMOs must decide how many drugs need to be labelled for a particular market, including whether they’re choosing to label randomly or with a centralized approach.

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Overcoming Serialization Challenges

No two CDMO clients are the same and neither are the challenges each CDMO faces. In terms of how each company deals with its serialization issues, they should consider:

  • Equipping their workforce with the technical knowledge and details of serialization hardware and software
  • Making use of advanced technological applications like Big Data, cloud computing, the Internet of Things (IoT and advanced analytics)
  • Understanding how enterprise resource planning (ERP) software, like the Microsoft Dynamics 365 line of modular product, can help them maintain and monitor client data

With the right software and people skilled in its use, a CDMO can manage multiple production lines while meeting drug production requirements for different clients.

Investing in the right partner with experts that understand global pharmaceutical regulations will help CDMOs label and locate their products no matter where they are in the world.

Since CDMOs are not only vendors but also producers, they need to be in constant contact with their clients and suppliers. This includes dealers, wholesalers, packagers and transporters. Using the right ERP will help them maintain transparency at every level while avoiding recalls or stock-outs.

CDMOs benefit by developing flexible templates for their serialization solutions. These templates serve as a blueprint for any pharmaceutical client. Making them flexible lets a CDMO adjust a process to meet the client’s requirements, saving time, effort and money.

Final Thoughts

Drug serialization and labelling pose several challenges for CDMOs around the world. However, managing these challenges is an excellent opportunity for an organization to show its technological skills. When a CDMO has the right team and solution, it can overcome any challenge.

Taking advantage of products like Microsoft’s Dynamics 365 suite of solutions gives pharmaceutical companies access to powerful tools. Included is a way to track serialization, such as customer onboarding and lot traceability to toll manufacturing, from start to finish.

Using a powerful and effective ERP to enhance serialization will help a CDMO combat counterfeiting and theft while ensuring government compliance. At the same time, good software can also help a CDMO establish a more efficient supply chain.

Meeting serialization requirements for pharmaceuticals pose many technical and skill-based challenges. CDMOs worldwide are constantly looking for more efficient ways to handle these challenges. Investing in the right partner can make a big difference.

With the help of cutting-edge applications, a skilled team and a systematic approach toward serialization, CDMOs can establish themselves as leading end-to-end manufacturing and distribution partners.

References: What Is a CDMO (and Why Do You Need One)

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How Life Sciences CROs Are Changing To Strategic Partners: The Covid-19 Effect

How Life Sciences CROs Are Changing To Strategic Partners: The Covid-19 Effect 700 500 Xcelpros Team

At a Glance

  • The biotechnology and life sciences industry is at a cusp of significant changes due to COVID-19. A lot of fluidity is built up due to the pandemic and a significant dependency on government rules, FDA regulations, intricate drug production and overall research and development.
  • These firms are looking for Contract Research Organizations (CROs) who can take the role of strategic partners that can manage their life sciences research & development. The preference of CROs has already shifted from traditional to technologically adaption that can handle the rapid pace needed due to the existing COVID-19 emergency.
  • The call for innovation and increased collaboration among CROs has led to a new, more comprehensive project management era. It is improving customer engagement and experience.

The Role of a Contract Research Organization

Project management is the backbone of any contract research organization. Regardless of its specialty–biopharmaceutical development, commercialization, preclinical research, clinical research, clinical trial management or pharmacovigilance-all require project management. Pharmaceutical and life sciences companies outsource research and development work to CROs for better time management, test data maintenance and focus on concrete results.

While the role of CROs was not very well defined in the early 2000s, they have evolved from being mere project management vendors to strategic partners for life science organizations. Contract work is now common in various steps of the research life cycle. Adding contractors is now a necessity for the R&D wings of any biotechnology or pharmaceutical company.

Active engagement with CROs helps accelerate the drug development process. In the Covid-19 era, these CROs must be prepared to streamline their project work without a process breakdown.

CROs have evolved from a target-based model to become more a strategic partner to life sciences and biotechnology companies.

Pharmaceutical companies conduct sponsored trials, driving their products safely and quickly to the market. Initially, these projects were outsourced to CROs with a limited scope of time and budget management. Now the CROs are expected to manage risks and maintain transparency throughout the clinical trials. The rapidly expanding biochemical industry demands that CROs keep up with market conditions.

According to contract research organizations global market report, The global market for clinical trial services to biopharmaceutical, biotechnology and medical device companies is forecast to grow at 12% year on year up to 2021.

This stat is already obsolete. The need for contract research and development services is increasing as life science companies seek to find effective treatments and possible cures for the SARS Covid virus.

Figure: 1 Steps for Right Partner Selection

Steps for Right Partner Selection

Growth and general technological disruptions in project management are leading to a progressive change in the roles of CROs while managing sponsored clinical trials.

Situations affecting CRO evolution

  • End-to-End Strategic Partnerships: CROs are no longer just outsourced vendors for life sciences companies to carry out Pharma research or conduct clinical trials. CROs are now expected to become pharma companies’ strategic partners, helping make their clients successful. End-to-end coordination with pharmaceutical companies gives these organizations the time and stability they need to focus on core research. Coordinating from the start helps the CROs capture the right kind of clinical data required to make each drug commercially viable.
  • Bringing Innovation to the Table: CRO project management is not just about completing given tasks while meeting their client’s deadlines. Working closely with their customers means changing how they work. That, in turn, requires newer project management approaches that take research from start to finish. Pharmaceutical companies expect innovative, out-of-the-box solutions to manage risks, cut costs and push the boundaries of paramedical science while complying with the government’s rules and regulations. An important change is that CRO project management has moved from being reactive and solving problems to becoming proactive, anticipating problems and providing solutions.

Figure: 2 Key Parameters CROs are Assessed on

Key Parameters CROs are Assessed on

  • Being Technologically Ahead: Companies can start with three main technology initiatives: transitioning to cloud computing; creating strong workflows to move processes and procedures forward; using online collaboration tools.
  • Each of these above points leads to faster results, fewer errors, better team management and improved communication between the client and the CRO during the project life cycle.

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Customer Experience and Engagement

A crucial part of project management is actively engaging clients when a project requires collaboration. Customer experience and engagement can no longer be ignored. Making a strategic partnership work requires communication between everyone involved.

An effective customer experience approach requires knowing what to do, how to do it and using every available tool to create acceptable results.

Connect your processes, customer data and tools with Dynamics 365 and the Microsoft Cloud

Customer Experience (CX) and Customer Engagement (CE) can be made better for a CRO

01.Process and Procedures

Some ways to improve the customer experience and boost customer engagement are:

  • Improving team management
  • Quick onboarding of clinical trial experts
  • Using effective cost management techniques
  • Proactively managing clinical trial risks
  • Mitigating probable risks strategies
  • Using detailed analytics to monitor, report and understand research data
  • Using resource planning tools to optimize resources for multiple projects
  • Simplifying milestone-based billing
  • Improving deviation-tracking methods to remove unknowns early in the project lifecycle.

Life science CROs should consider using a next-generation customer experience platform to accelerate development and drive demand. Microsoft Dynamics 365 is one such system that offers the essential tools and capabilities in one comprehensive ecosystem.

The seamless integration between Dynamics 365, robust cloud computing, artificial intelligence and tools such as Office 365 can help. Dynamics 365 is a class-leading life science customer engagement platform that functions across mobile devices, which is a large market need.

02.Digital Advancement

To enhance their customer experience and engagement, companies should:

  • Move from legacy systems to the cloud
  • Use advanced analytics for risk prediction and mitigation
  • Systematically manage their R&D database with digital applications
  • Use software tools to Improve collaboration with clients
  • Reduce human intervention and automate project management workflows
  • Create customer and supplier self-service portals to engage both
  • Use in-line reporting through key project milestones to build trust and visibility with customers

03.The Inevitable Evolution

The changing role of CROs is leading to greater expectations from life sciences clients. Pharmaceutical companies are looking for CROs that are not afraid to push boundaries and are adept at using the latest tools and techniques.

Companies aiming for greater customer satisfaction can use cutting-edge technologies to engage with CRO’s at an integral level. As a result, CROs are becoming be more innovative and agile in their project management approach.

An interdependent relationship helps with clinical trials while improving the client company’s overall research and development. A well-managed and organized workflow-based environment helps contractors and clients.

Two tools that can help build this interdependency are Microsoft Dynamics 365 Finance combined with D365’s Supply Chain Management. The two modules can help create a comprehensive system to aid a CRO in becoming better strategic partners with Pharma and Biotech companies.

Figure: 3How to Create Successful Sourcing Partnerships?

How to Create Successful Sourcing Partnerships

Increase your speed of business with unified processes and predictive analytics

The speed of doing business is increasing. As companies seek to stay competitive, they must rely on technology to provide agility and the capabilities needed to excel. However, many organizations are still running on ERP systems that are complex, inflexible and impede their ability to innovate and grow.

Microsoft Dynamics 365 helps you to

  • Elevate your company’s financial performance and streamline its supply chain management
  • Innovate with connected operations in an extensible platform
  • Drive HR operational excellence through organizational agility and centralized data
  • Unify the processes listed above with predictive analytics and intelligence
  • Track and trace inventory management
  • End-to-end customer project management

Key Takeaways

CROs are transforming from time-bound project management consultants into performance and results-oriented firms.

  • As technology evolves, so do project management tools. CROs are equipping themselves with these tools for better time management, budget management and risk mitigation.
  • Technology allowing smoother customer and supplier onboarding for clinical trials is needed today.
  • Pharmaceutical companies are looking for CROs to manage R&D projects end-to-end while providing innovative solutions.
  • While time management and cost management will always be top priorities for CROs in any project, they must also offer greater returns to their clients.

References: Overview of CROs

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Using AI & ML in the Pharmaceutical Industry – Key Considerations

Using AI & ML in the Pharmaceutical Industry – Key Considerations 700 500 Xcelpros Team


Artificial intelligence is one of those science-fiction-sounding phrases, but what does it mean to people in the pharmaceutical industry? What is the difference between AI and its cousin, ML, which means machine learning? How can the two types of computer software make pharmaceutical companies more efficient and profitable?

The answers are in what they do and how AI and ML work together.

AI can be defined as using computer algorithms—math—to perform tasks requiring human intelligence. IBM defines AI as “leveraging computers and machines to mimic problem-solving and decision-making capabilities of the human mind.”

“It is the science and engineering of making intelligent machines, especially intelligent computer programs. It is related to the similar task of using computers to understand human intelligence, but AI does not have to confine itself to methods that are biologically observable,” John McCarthy was quoted as saying in a 2004 paper.

So if AI acts like somewhat like a human mind to solve problems, how is machine learning different?

“Machine learning is the study of computer algorithms that can improve automatically through experience and by the use of data. It is seen as a part of artificial intelligence,” Wikipedia states.

In essence, the two types of programs work together to analyze information.

For example, say the first 100 production runs of product XYZ1000 have a 70 percent success rate in terms of meeting basic quality standards. Analysis shows the difference between success and failure is one step. Every run where the temperature was kept within a 0.2-degree range succeeded. Every run where the temperature exceeded 0.5 degrees failed. Logic says that keeping the temperature within that narrow range boosts success which, in turn, improves productivity.

Machine learning tells operators, “keep the temperature within 0.2 degrees for this one step.” Artificial intelligence builds on machine learning. It says, “by keeping everything else the same and keeping the temperature in this single step within 0.2 degrees,” the company will see:

  • More efficient use of raw materials
  • Less waste
  • Greater profits
  • A host of other benefits

So how does a pharmaceutical manufacturing company benefit by using AI and ML? Let’s look at the numbers.

By the Numbers

  • $100 billion: The amount of money AI and ML can generate in the US health care industry alone.
  • $161 million – $2 billion: The estimated cost of getting a new drug through clinical trials and obtaining FDA approval.
  • 72 percent: The percentage of healthcare companies believing that AI will be crucial to how they do business in the future.
  • 62 percent: The percentage of healthcare companies considering investing in AI soon.
  • 61 percent: The percentage of companies believing that AI will help them identify opportunities they will otherwise miss.
  • 13.8 percent: A study from the Massachusetts Institute of Technology estimates the number of drugs successfully passing clinical trials.
  • 11 percent: The percentage of businesses who have not considered investing in AI.

Sources: Digital Authority Partners and PharmaNews Intel.

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How AI Helps the Pharmaceutical Industry

Add in a third element—large data sets created by Internet of Things (IoT) sensors wired into a company’s network—and the result is a technology-savvy, company that can see ways to improve efficiency. AI runs computations that estimate probabilities based on known numbers.

Going back to our earlier example, 30 percent of the production runs failed quality standards. That’s the new baseline. Having computers that can finely tune machines reduces tolerances.

Another way pharmaceutical companies are using AI is to speed up drug discovery. It sifts through large datasets from clinical studies and other sources to detect hidden patterns, performing tasks in seconds that once took months. Learning every time they perform a task, AIs run through millions of tasks.

“Drug discovery is being transformed through the use of AI, which is reducing the time it takes to mine the vast amounts of scientific data to enable a better understanding of disease mechanisms and identify new potential drug candidates,” says Karen Taylor, director of the Centre for Health Solutions at accounting and consultancy group Deloitte. “Traditional drug discovery has been very fragmentary, very hit and miss,” she adds in The Guardian article.

The rapid creation of effective Covid-19 vaccines is a direct result of AI and ML in the pharmaceutical industry, Taylor states.

Figure: 1 Funding in Artificial Intelligence in the Pharmaceutical Industry

Funding in Artificial Intelligence in the Pharmaceutical Industry

How valuable is AI to big pharma? Britain’s two largest drug makers—AstraZeneca and GSK—recently funded the Cambridge Center for AI in Medicine at the prestigious university. GSK already opened a £10 million (roughly $13.5 million) in central London. This lab is near Google’s DeepMind AI lab.

DeepMind founder Demis Hassabis recently unveiled Isomorphic Labs, which intends to use an AI-first approach to discovering new drugs. DeepMind’s AlphaFold2 AI system solved the 50-year-old challenge of protein folding. AlphaFold is capable of predicting the 3D structure of protein directly from its amino acid sequence to atomic-level accuracy, Hassabis said in a recent Isomorphic blog post.

“One of the most important applications of AI that I can think of is in the field of biological and medical research, and it is an area I have been passionate about addressing for many years,” he said.

Hassabis considers biology an extremely complex and dynamic information processing system, making it a perfect match for AI.

“But just as mathematics turned out to be the right description language for physics, biology may turn out to be the perfect type of regime for the application of AI,” he said.

The Guardian article also looks at the money: Using older methods, nine of every 10 drugs in development will fail. The average drug development time is 10-12 years. With AI, the success rate is expected to at least double and possibly boost success from 1:10 to as high as 1:2.

How Can SMBs Benefit from AI?

While having $13 million in labs devoted to research is a great idea, many companies don’t have that large of an R&D budget. At least one well-known company has enterprise resource planning modules that integrate AI: Microsoft.

Figure: 2 AI Powered Insights by Microsoft

AI Powered Insights by Microsoft

AI Powered Insights by Microsoft

One example is Microsoft Dynamics 365’s Customer Insights is one of several modules that has AI built in. When pharmaceutical companies combine Dynamics’ Business Intelligence module with its Integrated Chemical Management (iCM), the two work together to mine your pharmaceutical data.

iCM is specifically designed to handle tasks like System of Record (SOR) for chemical and regulatory data plus compliance with cGMP regulations.

Add in Dynamics’ Supply Chain Management module and pharmaceutical manufacturers and suppliers can know to the second how much of any given product they have. Using AI and other information mined from a thorough inventory review, companies can accurately predict how much of any given precursor chemical they need to meet forecast demands. With this information, companies can place orders when costs are low or keep just enough on hand.

The Bottom Line

Pharmaceutical companies already create mountains of data. Instead of losing valuable nuggets of information such as trends and insights, artificial intelligence can sort through it. AI can:

  • Perform comparatively mundane tasks extremely fast
  • Provide your company with ways to create new products at lower costs
  • Produce new drugs much faster than before
  • Reduce the number of new drug failures

Using Microsoft Dynamics 365 modules equipped with the power of AI will ultimately help boost your bottom line.

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Reshaping Procurement within Pharmaceutical Supply Chain

Reshaping Procurement within Pharmaceutical Supply Chain 700 500 Xcelpros Team

Procurement in the Pharmaceutical Industry

The procurement of raw materials in any pharmaceutical company is a source of inventory. An established method to improve visibility, track, and trace product quality is a must-have, regardless if it’s a manual, electronic, or a hybrid purchase-to-pay process. Procurement in the pharmaceutical industry is thoroughly scrutinized, and businesses have become more cautious of raw material and service spending. Many companies are evaluating different suppliers, who can fulfill their requirements at a lower cost, with attention to overall spending and quality requirements.

A robust supply chain management system is needed to:

  • manage on hand inventory, and
  • build a more reliable end-to-end pharmaceutical supply chain.

What are some considerations when revisiting purchasing functions?

This question shines a light on companies’ need to organize their purchasing process, include more visibility for senior management, and increase traceability of purchasing transactions for streamlining the procurement process. A comprehensive supply chain management solution with low-code and customizable workflows to modernize the pharmaceutical procurement process will be an incredibly valuable asset.

Figure: 1Checklists to Turn Your Supply Chain More Efficient

Checklists to Turn Your Supply Chain More Efficient

Businesses can benefit through a supply chain management system with advanced procurement processes to help accomplish the following objectives.

01.Ensure Compliance:

Failure in quality compliance can result in hefty penalties and may jeopardize customer trust, especially when activities, such as buying from approved vendors or segregation of duties between the buyer and invoicer, are compromised. Your procurement management system should provide the ability to perform required audits with controls, and enable only authorized users to perform their appropriate functions. Preferably, a pharmaceutical supply chain management system needs to be in full compliance with 21 CFR part 11.

02.Support Strategic Vision:

Successful life science companies focus on strategic planning and development to boost their bottom line. Any modern supply chain management system should help an organization achieve its strategic goals. Functions like a streamlined buying process are possible with spend analytics, derived from multiple dimensions of purchase transactions. Factors, such as the success rate of higher quality materials from approved suppliers, competitive pricing details, and gauging on time and in full payments from preferred suppliers, are a few key analytics that can help improve decision-making within the purchasing department of the organization to meet their goals.

03.Effective Supplier Relationship Management:

Long-lasting supplier relationships are crucial to procuring higher quality products at the lowest prices. Building a strong relationship with a familiar supplier is far more effective than continually switching vendors to lower costs. Frequently changing suppliers places an additional burden on the entire procurement ecosystem. Suppliers put a lot of effort into understanding your business’ needs over time, including feedback on the quality of raw materials purchased and the speed of shipments delivered, allowing them to make any necessary corrections to their processes. A supply chain management system that supports collaboration in such cases, helps integrate suppliers as partners to add value to the overall supply chain process.

Figure: 2Supplier Relationship Management

Supplier Relationship Management

04.Reduce Operational Costs:

Buyers or purchasing managers should be able to quickly analyze products offered by various suppliers spread across multiple geographical locations in order to secure the best pricing and reduce expenses.

The right kind of solution should eliminate wasteful spending—a critical factor in calculating the performance of any organization.

A detailed view of supplier insights can help make decisions while identifying the best supplier for various materials. Identifying solutions to balance the cost and quality of purchased materials, can help significantly reduce operational overhead without compromising on any KPIs of pharmaceutical procurement. Result-oriented companies in the life science industry should have a well-thought-out method in place to manage procurement functions, allowing them to maintain highly competitive prices without compromising the quality of a lot.

Figure: 3Better tools for modern supply chain management

Better tools for modern supply chain management

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Improving Organizational Efficiency is Your Key Metric:

Streamlining procurement in the supply chain, as well as identifying all possible failure points in your workflows, can significantly improve your organizational efficiency and increase the overall performance of the business. Every organization requires the ability to identify areas of their business that need improvement. Enhancing procurement in the supply chain, directly affects the utilization of materials and labor appropriately without compromising quality or cost. Optimizing resource time and inventory management together, increases efficiency. A well-planned purchasing procedure will make it easier to show incremental results on crucial analytics, such as vendor performance and spending analysis.

The Ideal System

  • helps organizations streamline their pharmaceutical procurement process and get deep visibility into product inventory.
  • easily and quickly identifies product and service needs, and procure products, post receipts, invoices, and payments through included procurement and sourcing management modules.
  • defines purchasing policies and workflows to configure procurement processes that meet your business needs.
  • manages product catalogs and procurement channels based on demand and vendor pricing and capabilities.
  • defines spending limits to constrain requisition spending and the purchasing workflow.
  • protects the privacy of the business and its customers.

Procurement management 2.0—Revamping technology

Any advancement in market dynamics has a direct impact on the buyer’s journey. Because of this, the need for procurement department heads to play a more strategic and tech-enabled role increases significantly. Early life science procurement departments had only two primary objectives: cost reduction and risk mitigation. Now, digital technologies have revolutionized procurement in the supply chain in companies to expand focus into different areas, like efficiency, accessibility, sustainability, and metrics for generating better purchasing decisions.

In the five years immediately following the 2008 global financial crisis (GFC), total return to shareholders (TRS) for companies with top-quartile procurement capabilities was 42 percent higher than for companies whose procurement operations were in the bottom quartile.
Source: Mckinsey

To stay on top, companies must move past the traditional buyer mindset, and deliver value to businesses by keeping their procurement teams collaborative with their suppliers by internally driving productivity and increasing savings, and externally maintaining better supplier relationships, and reducing unnecessary supply chain risks.

As technology continues to advance, we will continue to see new applications giving new life to the pharmaceutical supply chain in order to promote business functions.

01.Cloud-Based Platforms:

Moving procurement to the Cloud enables life science organizations to operate with more agility and with benefits, including enhanced collaboration, security, and data privacy. A growing number of traditional enterprises are already embracing the Cloud’s capabilities to accelerate their businesses. Buyers can be a lot more agile at moving materials through the supply chain if they’re managing procurement functions on the Cloud. Embracing portals and well-defined workflows, allows better engagement with suppliers, allowing the acceleration of tasks like request for quotations (RfQs).

Gartner reports that the procurement industry has an anticipated growth of up to 3.2 billion dollars by the end of 2020, fueling the Cloud procurement sector.

02.Data Analytics:

Adopting an analytically driven approach might not be revolutionary, but it’s certainly an evolution for the pharmaceutical procurement management that we know today. The significant challenges that organizations face today are primarily related to a lack of visibility.

A survey by Deloitte Global CPO showed that analytics would play a significant part in shaping procurement in the supply chain over the next two years. According to the study, the respondents use analytics in different ways:

50%for Cost optimization

45% for Management reporting

48%for process improvement

As procurement departments’ spend vs quality goal is often to exceed expectations for their businesses, turning to integrated analytics can offer innovative solutions to enable efficient resolution of ongoing buyer challenges. For best results, these teams need analytics as a core function in their decision-making process instead of treating it like a checklist submission to management. With the right reporting and analytics, life science companies should have an easy preview of the quality of raw materials per supplier. Categorizing suppliers into the proper buckets, based on supplier evaluation criteria or consuming specific lots based on customer potency/quality requirements, helps make better purchasing decisions.

03.Enhancing Collaboration:

The previous decade has seen a relatively large shift in procurement-based technology, with solutions moving from on premises to completely collaborative Cloud platforms. The initial extension of legacy ERP software systems, which included purchasing modules in the 1990s, has now evolved to easily accessible systems with enhanced collaboration and procure-to-pay solutions.

As businesspeople start exploring the pharmaceutical procurement process further, the focus is moving to niche functions, like strategic sourcing, asset acquisition, and others. These standalone technological products did nothing to solve a significant challenge: collaboration. Integrated tools, such as Microsoft Flow integrated with Microsoft Teams, are providing seamless collaboration between buyers and suppliers.

04. Mobility

With the increasing population of millennials entering the workforce, the demand for mobile devices continues to steadily rise. Deloitte predicts that nearly 42 percent of companies invest in mobile phone technologies to support their procurement strategies, meaning mobile devices should now be considered an integral part of every procurement strategy going forward. With the help of the Cloud and mobile enabled services, companies can better manage their operations and analyze real-time functions and processes, leading to more proactive decision-making.

The Role of Microsoft Dynamics 365 Supply Chain Management

Microsoft Dynamics 365 Supply Chain Management helps organizations streamline their procurement process and get deep visibility into product inventory by:

  • easily and quickly identifying product and service needs and procure products, post receipts, invoices, and payments through included procurement and sourcing management modules.
  • defining purchasing policies and workflows to configure procurement processes that meet your business needs.
  • managing product catalogs and procurement channels based on demand and vendor pricing and capabilities.
  • defining spending limits to constrain requisition spending and the purchasing workflow.

Figure 4 Optimize your supply chain with Dynamics 365

Optimize your supply chain with Dynamics 365

Key Takeaways

  • Modern pharmaceutical and life science companies have digitized their operations and processes within the procurement department to help streamline the buying process.
  • Advanced digital approaches, such as using Microsoft Dynamics 365 Supply Chain Management or automating the pharmaceutical procurement process, can help accomplish the goal of well-stabilized procure-to-pay cycles.
  • A revamp in the Microsoft ecosystem’s overall procurement process enables life science companies to identify and eliminate inefficient, time-intensive aspects.

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Fraud and Pharma: Inventory Control Tech Reduces Rip-offs

Fraud and Pharma: Inventory Control Tech Reduces Rip-offs 700 500 Xcelpros Team

At a Glance

Making and selling fake versions of drugs for treating erectile dysfunction, high cholesterol, hypertension, cancer and other illnesses is big business.

  • $75 billion – $200 billion: The current annual revenue lost to counterfeiters
  • 13: The number of new drugs not produced in one year because of fake drugs

By the Numbers: Counterfeit Medicines

Reports by and Statista show just how much money counterfeit costs legitimate pharmaceutical manufacturers. Statista estimates the global market for fake drugs alone at $200 billion, accounting for 13 new drugs not being brought to market each year.

Other numbers of note include:

  • $100 billion – $431 billion: The estimated sales value lost to counterfeit drugs worldwide in 2020
  • 6–28: The number of new drugs not brought onto the market because of the effects of counterfeits through the impact on intellectual property rights
  • $103 billion (€92): The amount of money lost to European producers from 2012-2016 for counterfeit products including medicines
  • $19.45 billion (€16.5 billion): The amount lost to European pharmaceutical manufacturers, which was second only to clothing, footwear and accessories
  • 80,459: The number of pharmaceutical jobs affected by counterfeiters


The National Crime Prevention Council has its own statistics on the cost of fake drugs:

  • 10%: The amount of all drugs in the global supply chain that are fake
  • 70%: The percentage of fake drugs in some countries
  • $75 billion: An estimate of global counterfeit drug sales from the Center for Medicine in the Public Interest quoted by the NCPC
  • 15,000: The number of illicit drug factories in India accounting for 75 percent of the world’s counterfeit drugs with other producers primarily in under-developed countries

Spotting a Fake

The Food and Drug Administration protects consumers from counterfeit medicines. “Drug safety and quality no longer begin or end at our border. The U.S. government works with foreign regulatory counterparts when possible to disrupt or close illegal operations involving the production and distribution of counterfeits,” the FDA states.

Figure: 1Identifying counterfeit medicine

Spotting a Fake pharma product

Identifying counterfeit medicine:

  • Packaging different that expected
  • New or unusual side effects
  • Medicine is available for purchase online

Resellers can protect themselves and their customers by only buying from authorized and licensed companies.

Resellers should also read the packaging. Potential fake products from unlicensed sources can be misbranded, adulterated, contaminated, improperly stored and transported, ineffective or unsafe, the FDA states. Some counterfeits have been spotted without a National Drug Code (NDC) number. Others have misspelled labels.

Among the medicines reportedly being copied and sold in the U.S. during the last five years are:

  • Symtuza ® from Janssen Pharmaceuticals (Dec. 24, 2020), used in the treatment of HIV
  • BiCNU ®, a cancer-fighting drug from Emcure Pharmaceuticals, Ltd.
  • Botox ® from Allergan
  • Cialis ® from Eli Lilly

Dangers of Using Counterfeit Drugs

Counterfeit drugs affect more than just legitimate companies: they harm people using them. Citing a 2017 World Health Organization (WHO) study, the OECD iLibrary states the effects on individuals of counterfeit medicines include:

  • Adverse—and possibly toxic—effects from incorrect active pharmaceutical ingredients
  • Ineffectiveness by not treating the targeted disease
  • Loss of confidence in health care professionals and health systems
  • Lost income by users from extended illness or death

The OECD report also referenced a 2019 Novartis in Society Report. Forensic tests of counterfeit medicine samples showing patients could be harmed by 90 percent of the counterfeits.

Fighting Counterfeit Drugs

Pfizer, one of the world’s largest drug manufacturers, supports the international “Fight the Fakes” campaign raising awareness of the dangers from using counterfeit medicines. Pfizer states that counterfeit versions of 105 Pfizer products were found in 113 countries. The company works with law enforcement agencies, wholesalers, pharmacies and others to increase inspection coverage, monitor distribution channels and use other methods to fight back.

One way pharmaceutical companies are fighting back is through the Drug Supply Chain Security Act (DSCSA). Enacted in 2013, the act requires manufacturers, contract manufacturers, repackagers, wholesale distributors and other meet compliance requirements.

A large part of this involves labeling.

For example, a warehouse receiving clerk can print labels after receiving raw materials but before putting them away.

Using Wave label printing, labels are available before workers run the work order on a mobile device. Workers then attach the labels during picking instead of after picking. Label printing options include:

  • According to the number of cartons on a single work line
  • With different sequences such as carton and pallet labels
  • Creating a unique serial shipping container code (SSCC) for each carton and including it on the label
  • Creating globally usable GS1-compliant numbers for bills of lading and SSCCs

Using Labels to Combat Counterfeiting

Among the labeling and packaging methods used to fight counterfeiting are holograms, 2-D barcodes, radio frequency identification tags (RFID) and packaging features that are either visible (overt) or hidden (covert).

NeuroTags, which makes these types of tags, states that it is easy for counterfeiters to make simple holograms and copy legitimate images. Luminescent topcoats revealing patterns and colors under special lighting are difficult to imitate, making it a good anti-counterfeiting solution for pharmaceutical products.

Smart Labels—also known as Smart Tags—have an RFID tag with a computer chip, antenna and bonding wires under a conventionally-printed barcode label. Among their benefits for the pharmaceutical industry —beyond being difficult to copy—is their ability to track temperatures. This is critical for some medications, such as the current Covid-19 vaccines from companies such as Pfizer and Moderna.

Another benefit of smart label technology is letting companies track items in real time. “It fulfills the requirement of tracking objects remotely, effectively, and most importantly at an affordable price,” Packaging states.

Combined with Microsoft Dynamics 365 Supply Chain Management, these types of labels make it difficult for counterfeiters to substitute cheap, ineffective and dangerous knock-offs for real medications.

D365 Supply Chain Management functions let companies track products from the moment raw materials arrive in the warehouse, through the production process and on to the sales floor.

Customers with equipment required to read the labels—and personnel trained in what to look for—will be able to distinguish legitimate goods from the fakes.


Counterfeiting pharmaceuticals costs the industry billions every year. It affects not only sales profits but intellectual property rights. Combining different types of labels such as Smart Tags with inventory tracking software lets pharmaceutical manufacturers know when real goods arrive at their destinations. It also lets them know when someone along the supply chain stole their products and replaced them with fakes.

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Standard Costing in Pharmaceutical Manufacturing : Industry Challenges & Solutions

Standard Costing in Pharmaceutical Manufacturing : Industry Challenges & Solutions 700 500 Xcelpros Team

At a Glance

Costing methods for pharmaceutical manufacturing, especially the standard cost method, can significantly help reduce hidden costs.

  • On average, 30% of costs go undetected due to poor business practices and the inability to detect them.
  • Improper habits of recording data can be a major culprit in accumulated hidden costs.
  • The Standard Cost Method provides a simpler solution, offering insights into daily cost, cost variance and profitability analysis for pharmaceutical manufacturing companies.


Forecasters are projecting more opportunities for mid-market pharmaceutical companies operating in the US. These opportunities will require more streamlined processes within pharmaceutical manufacturing and contract development and manufacturing organizations (CMOs and CDMOs). The most recent projections included the following:

  • The global medicine market is expected to top $1.4 trillion by the end of 2021, Grand View Research states. Anticipated spending on medicine in the U.S. alone is expected to grow to $655 billion at a rate of 4% – 7% by 2023. followed by pharmerging countries —emerging nations in areas such as Africa and parts of Asia—hitting $385 billion (5% – 8% compound annual growth rate) and the top five European countries at $225 billion (1% – 4%). Japan will either lose 3% or stay even, a report from the IQVIA Institute for Human Data Science notes.
  • Rising research and development (R&D) costs are being accompanied by more stringent testing requirements.
  • American companies introduced 138 new chemical or biological entities (NCEs and NBEs) between 2016-2020, according to Europe produced 64, Japan released 38 and the rest of the world generated 48 for a total of 288 during that span. This compares to 226 from 2011-2015 and 146 a decade earlier, IFPMA states.

Figure: 1Global Pharmaceutical Market sales in 2019

Global Pharmaceutical Market sales in 2019

Change Accounting Methods

Adapting to these changing market dynamics requires changes in accounting across the pharmaceutical industry. Companies will need to become more sophisticated when it comes to their methods of costing, profitability analysis and production variance calculation and reporting.

A few ways to achieve these goals include standard costing methods, following best practices and optimization within a pharmaceutical batch manufacturing company. Also fairly critical in today’s highly-regulated environment will be much more accurate reporting of data.

The Never-Ending Challenges of C-Level Reporting

Determining the overall profitability for a product is a major concern for any C-Level executive. Calculating cost structure in the pharmaceutical industry is especially tough to determine when it involves fast-moving raw materials, labor, overheads and other indirect costs.

For pharmaceutical companies, one prime objective is following standard operating procedures (SOPs) in adherence with the FDA’s compliance reporting rules. In the past, companies have placed so much focus on staying compliant it becomes easy to lose sight of key indicators that drive profitability and organizational goals.

In continuous production and batch manufacturing processes, the multitude of activities involved requires costing for each activity. This can be tough as many moving parts make it hard to identify the right cost breakdown structure. Despite the difficulties, companies must measure true costs for stakeholder reporting.

True costs vary from those assigned by traditional cost-accounting methods by 30 to 100 percent.Source: -Per McKinsey

What matters to the CFO?

CFOs don’t look at a single product or product line. Instead, they often prefer a much broader view when determining what matters the most, like the details needed to determine actual costs and how any variances came to be.

Since the manufacturing process is so heavily intertwined with product costing, the need to highlight different elements that aid in standard cost determination and variance reporting becomes even greater. Some reporting structures use backflush costing methods to delay costing until an item is manufactured. This can be a reporting nightmare when it comes to analytics and production performance metrics.

It’s common for some people to analyze these costs and variances using things like Microsoft Excel spreadsheets with complex macros and v-lookups. Analyzing true costs this way is extremely challenging, especially when your system doesn’t keep track of perpetual costs until the completion of a production job.

Data Capture Discipline and Lost Visibility

Longer production campaigns in continuous processing can have individual processes taking days, weeks or sometimes months. Recording actual numbers based on material and resource consumption to report standards compared to actuals becomes tedious. Enforcing process discipline is one way to help streamline this part of the job.

Gaining clarity and determining actual costs can take hours of data crunching, the process becomes harder and more complex when you take into account any reworked batches or lots. All the different moving parts of reworked jobs can make it tough to determine the additional cost of starting materials, line clearance, labor and machine hours that get compounded to the original batch cost.

Human capital, machine or work center hours need to be planned across multiple production jobs. Proper planning helps accurately source and schedule labor while allocating machines to each production run.


High-performance pharmaceutical companies have about 3% of rework products when compared to the average companies that have about 8%

Source: -Per McKinsey

People and Processes Impact Costs and Profitability

A large amount of time and resources are spent trying to recover inefficiencies caused by following improper procedures in day-to-day operations. These inefficiencies may be due to the lack of any properly identified key performance indicators (KPIs), processes or methods to track efficiencies.

Understanding the total cost of each batch helps proactively plan for producing other similar “A” grade items. The Production Planner cares less about cost and more about capacity roadblocks. They want to know how additional material and resource requirements could lead to unplanned downtimes.

Warehouse operators need to record consumption. Their figures are based on when Quality Control (QC) tells them to proceed with the job, how much to consume on the batch and how many hours were already recorded. CEOs want to know if the operators have systems and processes in place to capture critical data in real-time.

Many equipment operators tend not to record data during operations, waiting instead till the end of the production run to capture any data.

Production managers constantly look for ways to substitute materials to meet timelines, quality standards and batch potency, all while following existing company rules. At the same time, they need to accurately record batch data. Using Internet of Things (IoT) sensors that capture this data as it occurs in real-time and feed it directly into the ERP system provides this accurate, continuous data flow.

Batch Manufacturing – An Example

Some long-running batch manufacturing processes require hourly quality control tests. Depending on the PH values and other data, operators add chemicals and make other changes to achieve the desired results. From a cost accounting perspective, the quantity of materials consumed from inventory may not be recorded. This causes inventory records to become out of sync and inaccurate. Not knowing what and how much is used may cause a controller to categorize these additions as overhead costs.

Some practical solutions to ensure materials added during ongoing production testing are accurately recorded include:

  • Having an industrial grade tablet or mobile device on the shopfloor to aid in data capture. Products and quantities are captured when operators have the time to input them.
  • A more accurate method uses IoT sensors that tracks starts, stops and inputs within each tank. IoT sensors can also generate an alarm when deviations occur.
  • Barcode readers and scanners are also helpful in capturing product use data on the shopfloor, and can be easy to operate.
  • Training staff on simple new production processes helps ensure every team is performing the right task at the right time.

Tracking electronic signatures helps ensure the right people are performing each process and can help prevent incorrect practices.

High-Level Production Process

High-Level Production Process

Standard Cost Calculation

How are standard costs determined in a sophisticated mixed-mode manufacturing ERP system, where process manufacturing and discrete processes occur within the same operation facility? These costs are derived from standards set on the formula or build of materials (BOM) depending on a combination of the:

  • Batch being manufactured
  • Contents of each container
  • Hours spent on each operation
  • Standard resource costs per unit price

The calculated cost of materials using a formula or a BOM is derived from individual raw materials or intermediate costs. The cost of operations comes from resources and machines assigned to the task.

Past history helps set accurate standards to proactively manage production runs and accurately record production costs.

C-level executives tracking profitability and plant managers whose bonuses depend on higher margins are constantly looking to reduce redundant spending caused by operational and resource inefficiencies.

Figure: 2Standard Costing Formula

Standard Cost Calculation

Standard Cost Calculation Results

What Should Happen When Estimating Production Costs

The first step in estimating production costs is planning the size of each batch. Your ERP system should automatically scale from the standard batch size and identify the standard cost. Using the ERP data provides an insight on other decisions about the batch such as identifying the right margin and setting an appropriate selling price. These figures can appear on customer quotes and sales orders.

As production jobs are released to the production floor, operators allocate all appropriate raw materials for consumption. When this happens, a good inventory tracking system such as that in Microsoft Dynamics 365, marks those specific raw material lots as unavailable for other batches.

Allocating raw material lots and resources correctly and timely recording data in a modern Pharmaceutical ERP has benefits. They include controlling unnecessary mistakes and coverups, providing a true picture of product costs.

Standard Cost Rollup

The standard cost rollup for a manufactured product is made up of direct material, direct labor, overhead and indirect costs.

Following actual raw material consumption, there is a tendency to not record point-in-time information for fear of making mistakes or making errors while not tracking what was altered from standards and causing a variance.

The Consumption Process

During raw material consumption, physical inventory is relieved by directly booking material costs to Work-In-Process (WIP). If we were to assume that the only changes on a production run is to the overall labor and machine time on operations, then all standards relieved from WIP would book production and quantity variances based on standard.

raw material consumption Process

Using a Multi-Tier Formula or BOM

A more complicated scenario occurs when there is a multi-tier formula. The production produces intermediate products that are then used in the next tier. Additional raw materials are added. This process continues until the product is finished, in some situations, yields are tallied before moving to the next step.

In others, the shop floor goes by standards, recording adjustments to materials and operations after the final finished lot is produced. In this scenario, all tiers in the multi-tiered process are only closed at the end. This process can cause a complicated cost calculation considering all the elements involved plus any variances.

Multi-Tier Formula or BOM for Production Process

Key Takeaways

With proper record keeping and accounting methods, it’s possible to streamline operations and reduce or eliminate unpredictable variances. If you’re not sure where to start, these three steps will help.

  1. 1.Examine your current manufacturing practices and calculate their downstream impact on costing.
  2. 2.Understand how competitors outperforming the market are becoming more efficient.
  3. 3.Identify different methods to improve both productivity and worker efficiency.

Organizations can take advantage of ERPs like Microsoft Dynamics 365 to help pinpoint areas for improvement and focus on company goals. It includes production cost buckets including quantity, substitution and lot variances.

Contact Xcelpros to learn more. Xcelpros loves to show customers how they stand to benefit from the sophisticated analytics and business intelligence tools embedded within D365’s Finance and Supply Chain Management systems. These tools provide the necessary insights to grow and stay ahead of the market.

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References: Pharmaceutical manufacturing market 

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Top 8 Challenges of Pharmaceutical Supply Chain in 2021

Top 8 Challenges of Pharmaceutical Supply Chain in 2021 700 500 Xcelpros Team

Top 8 Challenges of Pharmaceutical Supply Chain in 2021

Pharmaceutical supply chain challenges have been a major cause of concern for the industry throughout 2020. The challenges are still very much prevalent, even as the world moves ahead in the era of the new normal. 2021 will probably push the pharmaceutical supply chain to its limit. With the right strategy, technology and solutions, however, the pharmaceutical sector can undoubtedly rise to the occasion. For more information see the full article here.

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Latest Trends in Pharmaceutical Manufacturing Industry 2021

Latest Trends in Pharmaceutical Manufacturing Industry 2021 700 500 Xcelpros Team

By the Numbers

In a July 2021 report, Grand View Research estimated the 2020 global pharmaceutical manufacturing market value at $405.52 billion. Key metrics include:

  • 11.34%: The industry’s expected compound annual growth rate (CAGR) from 2021 – 2028
  • $957.59 billion: The revenue forecast for 2028
  • 77.95%: The retail segment market share in 2020

The IQVIA Institute for Human Data Science used a five-year estimate from 2018-2023 in its 2019 report. This report estimated spending on medicine to top $1.4 trillion by the end of 2021. Looking ahead to anticipated global medicine spending and growth in 2023 shows the top individual regions in terms of spending and 5-year CAGR as being:

  • United States: $625 – $655 billion, + 4% – 7%
  • Pharmerging: $355 – $385 billion, + 5% – 8%
  • Top 5 Europe: $195 – $225 billion, + 1% – 4%
  • Japan: $89 – $93 billion, – 3% – 0%

“Pharmerging” is a term given to emerging nations in areas such as Africa and parts of Asia.

Figure: 1Estimated medicine spending by companies in 2023

Estimated medicine spending by companies in 2023

Figure: 2Estimated growth rate of medicines by 2023

Estimated growth rate of medicines by 2023

5 Topics to Ponder

Despite all the problems and deaths caused by Covid-19, along with its impact on pharmaceutical manufacturing and the U.S. trade war with China, the market for medicines and related products is staying strong.

Looking several years out, one question CEOs and CFOs must ponder is what changes can we make now to prepare for a profitable future?

According to The Medical Futurist, the Top 5 trends for leaders to consider in the coming years include:

  1. 1.Using artificial intelligence to speed research & development. Spending on AI in healthcare alone is expected to hit $31.3 billion by 2025.
  2. 2.Empowering patients to aid in drug design and advisory boards. TMF notes the Food and Drug Administration has its own patient engagement advisory committee. The FDA states the committee considers different topics including the design of clinical investigations, communicating device benefits and risks, digital health technology and more.
  3. 3.Conducting experiments using computer simulations or “in silico,”. This is another digital trend in pharmaceutical manufacturing. This method eliminates animal testing and side effects on humans and animals. So far, this technology is less than halfway to becoming a reality, though.
  4. 4.Boosting the supply chain with technology such as blockchain to enhance security and improve inventory tracking. “Counterfeit drugs might make a cheaper alternative but are the cause of tens of thousands of deaths worldwide while the fake drug trade continues to be a profitable multi-billion dollar business,” according to TMF.
  5. 5.Using technology to appeal to more providers and payers. TMF mentions a wearable monitoring device and an app for feedback from doctors plus the app itself. Another technology is 3D printed pills such as Spritam that gained FDA approval in 2015.

Another topic mentioned in a different report is using real-world-evidence (RWE). A 2018 report by Deloitte defines RWE as, “clinical evidence about a product’s usage, potential benefits and risks derived from real-world data.”

However, Deloitte’s survey also highlighted three potential barriers to RWE adoption by pharmaceutical companies:

  • 75 percent: Major lack of receptivity by external stakeholders
  • 70 percent: Lack of understanding by internal stakeholders
  • 65 percent: Lack of access to necessary external data

AI and ERPs

Enterprise Resource Planning (ERP) software such as Microsoft Dynamics 365 Finance can support different AI modules, as needed. Depending on a business’ requirements, AI can help conduct research more efficiently, automate manual processes and perform other repetitive tasks.

AI benefits researchers through natural language processing and reasoning, learning from data and optimization addressing problems. One example cited by the Royal Society is using “deep” neural networks to identify features required to solve problems. Another uses reinforcement learning to examine many scenarios and assigning credit to different moves—such as chemical combinations—based on performance.

When it comes to research and manufacturing of pharmaceutical products, AI helps researchers use genomic data to predict protein structures, improving diagnosis and developing new treatments. Using machine learning—one part of AI—to predict the three-dimensional structure of proteins from DNA sequences is another example. This is quickly becoming one of the biggest trends in the pharmaceutical industry in 2021.

By creating a highly-detailed computer model that replicates a human organ, pharma companies can see the effectiveness of different drug therapies on specific diseases.

When it comes to pharmaceutical manufacturing technology, which versions work? What are the side effects? What changes can we make to reduce the side effect’s severity? These are some of the questions AI can help answer quickly and efficiently without experimenting on humans or animals.

In terms of business, “artificial intelligence technology allows businesses to automate a variety of processes, frees up employees’ time and helps improve productivity.” The result is greater output in less time at lower cost, according to Intellspot.

AI also helps capture competitive research and analysis. One tool with that capability is Microsoft Power Bi. This software has three types of AI transformations:

  • Text analytics tags images and extracts key phrases
  • Vision analyzes images
  • Azure ML helps generate insights and predictions

ERPs and Regulatory Compliance

A major obstacle unique to technology in pharmaceutical manufacturing is dealing with FDA regulations. Many of these rules require strict recordkeeping. Modern ERPs, which share data between departments, allow companies to keep more accurate documentation and inventory. ERPs allow executives to review data for accuracy, ensuring that information from Inventory Control matches what Finance says it should report.

A key feature of sharing information between different departments such as Inventory Control and Finance, companies can spot areas for improvement. Are FDA documentation requirements being met? A simple query can give a CEO the answer for any department anywhere in the world.

ERPs can also ensure that product communications meet the FDA’s stringent requirements for truth under the Federal Food, Drug and Cosmetic Act (FD&C Act). These laws can result in severe fines for conveying important information the FDA considers misleading.

Labelling is another major part of FDA rules, one where D365’s Inventory Control Module for Dynamics Supply Chain Management stands out. This lets businesses generate barcodes and other labels, tracking products and batches from the moment they arrive through production to their delivery to customers.


Pharmaceutical manufacturing technology, like the use of AI or ML in research & development, are quickly becoming leading pharmaceutical industry trends since 2020, helping make pharmaceutical companies leaner and more efficient. Modern software like tier 1 ERPs lets them gather, sort and analyze information obtained from the continuous manufacturing of pharmaceuticals much more rapidly than ever before.

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Making Pharmaceutical Supply Chains More Resilient

Making Pharmaceutical Supply Chains More Resilient

Making Pharmaceutical Supply Chains More Resilient 700 500 Xcelpros Team

Making Pharmaceutical Supply Chains More Resilient

Pandemics, natural disasters, cyber-attacks, political turmoil, and other actions are beyond any company’s control. Any one or combination of these can thoroughly disrupt a smoothly running supply chain. Before making changes to their current supply chain, however, there are some critical points that CFOs, chief technology officers, and other executives should be aware of. For more information see the full article here.

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