Life Sciences

Pharma companies are facing increased pressures from regulators, competitors and patients while bio-tech, generics and diagnostics are changing the operating model

Unrelenting pharma industry image & financial pressures

• A number of product withdrawals did not go unnoticed
• Demanding shareholders force short-term changes in management and business model. Global Mergers & Acquisitions intensify to leverage scale and drive down costs, L&A with smaller Biotech must increase, consolidation in the generics industry is ongoing

New and existing competitors blur traditional sales

• Despite double digit growth in the 90s, total small molecule sales will slow down between 2008 and 2010 to less than 4%. The high number of blockbuster patent expiries damages Big Pharma
• Biologics outperform the market by growing. Increasing pressure from public and private payers drive the fast of generics consumption

The Pharma industry faces productivity problems and powerful cost pressures from Payers

• New product development expenses are still rising, however the number of approvals is falling
• Cost containment will impact drug pricing and reimbursement. Change is accelerating, agility and innovation are required to stay in business
• Customer power moves from GP’s towards patients, hospitals and institutions. The business model shifts from mass primary care products to more focus on outcomes based medicine
• Beside the low value/high volume, the supply of high value/low volume products becomes a significant element in the business model. Supply chain needs to fight 2 monsters at the same time: maximize efficiency to compensate gross profit erosion and prepare to increase collaboration (3rd party integration)

Lodestone has built expertise in several key areas to help Pharmaceutical companies address the following challenges

• Supply Chain Planning Global/regional/local Planning, Global Demand Planning, aligning with tax optimized flows, integration between upstream (API, biological) and downstream manufacturing
• Sourcing Supplier integration, supplier rationalization
• Logistics Execution, new distribution models, central and regional distribution centres, collaboration with external logistic service providers, distribution in emerging countries
• Tracing & tracking, E-Pedigree & RFID in a regulated industry
• Manufacturing execution and optimization through integrated MES and process data management, product costing in manufacturing networks dealing with changing complexity
• Quality Management Globalization of quality management , integration of LIMS and manufacturing execution systems, electronic batch management and recording
• Finance & Controlling Business controls, reporting
• Master Data Management: Extending to cross functional areas such as planning, quality, finance, third parties
• Supply Chain Strategy: Integration between supply chain, product development and marketing, reduction of supply chain risks, inventory and cost reduction programs, lean and 6 sigma projects
• Customer and Market Strategy: Customer Relationship Management, Product Pipeline Management and valuation, pre-launch and life cycle pricing strategies
• Clinical Trial Management: Implementing supply chain and accounting best practices in clinical trials