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What affects the supply of medicine in the Pharmaceutical Industry?

What affects the supply of medicine in the Pharmaceutical Industry?

One of the main reasons that prescription drug costs make headlines is because of the actors in the supply chain. This study aims to investigate the reasons for the lack of medicines and their effects on the supply of medicines. We could learn more about the impact of supply and demand on supply chains of medicines and the role of pharmaceutical companies in this. While sales continue to rise in the pharmaceutical markets, over-the-counter pain medicines are experiencing an unusual increase in demand. Sources: 6, 9, 10

There is simply not enough information on what manufacturers produce and how this disease will affect the entire range of medicines available. The only way to investigate the reasons for the shortage of medicines is to ensure that pharmaceutical companies and wholesalers have only knowledge of the reasons for the shortage. Sources: 6, 7

Another factor contributing to uncertainty in the pharmaceutical supply chain is the expectation that demand will change. Pharmaceutical companies are looking at the economic situation and note that market demand does not currently justify production costs. From this perspective, we see no basis for claiming that the pharmaceutical industry is overly profitable – motivated by comparison with pharmaceutical service providers, which would seem disingenuous given the extent to which pharmacy revenues are disguised in overall drug prices. Sources: 2, 11, 13

There is no evidence of a significant difference in the supply chain between pharmaceutical companies and service providers in terms of prices. The pharmaceutical industry is dominated by large pharmaceutical companies such as Pfizer, Merck and Eli Lilly, suggesting a strong correlation between the price of drugs and the number of pharmacies in a market. Sources: 0

Drug consumption can be influenced by the brand of the prescribed drug and the number of pharmacies in a market. Adebayo et al. point out that expensive drugs are prescribed more often in the United States than cheap drugs, and that there are benefits from prescribing these drugs, as these factors increase drug use. Sources: 5

This further complicates the relationship between the pharmaceutical industry and patients, as drug manufacturers in the US are allowed to market their products to patients without a list price so that patients can be informed about available therapies, which has been shown to contribute to over-prescribing of advertised medicines. Although the small molecule branded drugs are considered to be the most traditional pharmaceutical drugs, other companies can also produce generic versions of these drugs for this purpose. If six or more generic manufacturers are on the market for a particular medicine, the drug will cost more than a branded medicine, and pharmaceutical companies will offer a variety of discounts on list prices depending on the drug buyer. Sources: 1, 8

If a market is heavily saturated with medicines to treat a particular disease, new medicines for the same disease can be offered at a higher price than the current market price for that medicine. If a drug is underpriced, doctors may conclude that it should be offered in a cheaper form as a replacement for a more expensive drug that already exists. Sources: 15

However, numerous economic studies indicate that, while price controls reduce the return pharmaceutical companies receive from the sale of their medicines, they also reduce the number of new medicines placed on the market. Some proposals that would lead to lower prices, such as the Affordable Care Act (ACA), emphasize reducing future innovation. Sources: 3, 4

Pharmaceutical companies like GSK have promised to reform their methods, and Big Pharma and regulators are working on reforming the supply chain to make drugs safer in the first place. However, more country-specific research is needed to explore how to address the global shortage of medicines. In the rest of this article, I will describe some key topics that could help pharmacy students pursuing pharmacy careers in the community to understand the key factors that affect the availability of medicines and their impact on the health of the US economy. I also present the study context to understand what is discussed in the studies and the possible implications for future research and development. Sources: 6, 12, 14

A shortage of medicines can be defined as a problem of drug supply that requires changes that affect patient care or require the use of alternative active ingredients. Sources: 6

A large part of the cost of producing medicine is spent on the research and development that produces the medicine, as opposed to the cost of producing the pill. The time, effort and money a pharmaceutical company invests in research and development for each drug and the amount invested in the development of new drugs must be weighed when determining the price of medicines. Brand name drugs are medicines marketed by a company with a patent owned by one or more major pharmaceutical companies, such as Pfizer or Eli Lilly. Pricing of medicines can depend on several factors, but most importantly what pharmaceutical companies take into account when pricing medicines. 

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