Once the FDA has approved a medicine, it must go through the manufacturing process. However, transitioning from small-scale to large-scale production is a significant task.
Because the production process varies from medicine to drug, businesses must frequently create new facilities or remodel existing ones.
The Process
Patent Pending
Depending on some considerations, a company may apply for and be granted a patent for their newly approved drug or the process of producing the drug, granting exclusivity rights for approximately 20 years.
Patent protection enables the patent owner to recover research and development costs through high-profit margins for the branded drug. When the drug’s patent protection expires, any business can produce and sell a generic version.
To acquire a competitive advantage in the generic medication market, the owner of a branded drug will often develop a generic version of the drug before the patent expires.
Marketing A Drug
Pharma firms often hire salespeople to sell directly and personally to physicians and other healthcare practitioners, but advertising in healthcare publications and more mainstream media is also prevalent.
When a new medicine is promoted, it is done in two ways: to healthcare professionals and directly to consumers.
Pharmaceutical Manufacturers
Manufacturers are the source of prescription drugs in the pharmaceutical supply chain.
Manufacturers oversee medication distribution from manufacturing facilities to drug wholesalers and, in certain circumstances, directly to retail pharmacy chains, mail-order and specialty pharmacies, hospital chains, and some health plans.
Manufacturers may also distribute medicines directly to government buyers such as the Veterans Administration, AIDS Drug Assistance Programs (ADAPs), and Vaccines for Children (VFC), who often enjoy the highest price savings.
A manufacturer may send pharmaceuticals directly to a self-insured employer with an on-site pharmacy in a few exceptional situations, but the normal employer-sponsored plan does not go this route.
Wholesale wholesalers are the most important buyers for manufacturers, and relatively few pharmaceuticals are delivered directly to consumers.
Manufacturers also play a vital role in assuring the safety of the pharmaceutical supply chain by creating informational labelling for prescribers and consumers that is compatible with the terms and conditions of a drug’s approval by the US Food and Drug Administration.
Food and Medicine Administration (FDA), as well as by incorporating electronic bar-coding technology into drug packaging, which may be used to trace specific production lots and avoid prescription mistakes.
Wholesale Distributors
Wholesale distributors buy pharmaceutical items from manufacturers and resell them to clients such as pharmacies (both retail and mail-order), hospitals, long-term care homes, and other medical institutions (e.g., community clinics, physician offices and diagnostic labs).
While conventional distribution services remain the foundation of the sector, the industry has evolved a complete range of services in response to the expanding marketplace.
Specialty medication distribution, drug repackaging, computerized order services, reimbursement support, and drug buy-back programs are just a few of the services offered by wholesale distributors today.
The wholesale distribution business has seen tremendous transformation and consolidation in the previous 30 years, partly due to increased cost-cutting demands.
Stocking Pharmacy Shelves
Before pharmaceuticals reach the patient, pharmacies are the last stop on the pharmaceutical supply chain. Pharmacies purchase drugs from wholesalers, occasionally directly from manufacturers, and then physically possess the drug products.
Pharmacies have responsible for medication storage and distribution to customers after acquiring them.
Maintaining an appropriate stock of medication items, informing customers about the safe and effective use of prescription pharmaceuticals, and enabling invoicing and payment for consumers participating in group health benefit programs are all part of pharmacy operations.
PBMs, medication makers, and wholesale distributors rely on pharmacies for information.
Unlike most other sections of the United States healthcare delivery system, the pharmaceutical supply chain is highly automated, with practically all claims transactions conducted electronically rather than on paper.
Because pharmacies are the last point of sale for medicines and the link between the supply chain and the customer, they create the prescription medication claims information that PBMs, health plans, employers, governments, and other payers rely on to track consumer behavior.
The pharmaceutical supply system is complicated, with various entities involved in medication distribution and contracting that perform distinct but often overlapping functions.
