Needs for Shortening the Supply Chain in Pharmaceutical Marketing

Abstract

The ultimate price of pharmaceuticals is a function of the elements of the supply chain: the intermediaries between the manufacturer and the patient for whom the medication is intended. Assuming that each intermediary incurs some costs for performing their function in the supply chain, it must charge a price or fee for the work they do. These additional charges, when added to the manufacturer's sale price, can increase the price to the patient significantly. These additional elements in the channel of distribution represent market evolution. As the number of drug manufacturers has increased significantly and as the role of intermediaries has increased concerning the number of pharmaceutical insurance plans, the supply chain has become more complex and more expensive. Given concerns over pharmaceutical pricing for individuals and chain pharmacies, hospitals and insurance plans, it would seem timely for concerted efforts to streamline the channels of distribution to reduce costs to patients. Some entrepreneurial endeavours would seem to hold promise in this regard. There will most likely be several developments shortly that strive to reduce supply chain costs and may be certain combinations of these efforts.