Dive Brief:
- The Access to Medicine Foundation released a white paper outlining ways to strengthen the supply chain and improve antibiotic access for patients, including adopting better demand planning, procurement practices and inventory management techniques to deal with shortages stemming from higher demand and low production levels.
- The Netherlands-based group, which focuses on how drugmakers can help improve access in low and middle income countries, noted that better forecasting demand to align with inventory flow can lead to less waste and more accurate distribution.
- Reliance on local manufacturing could also ease pressure on the main four API manufacturers, the AMF advised, and make prices more competitive.
Dive Insight:
The business model for antibiotics is a challenging one, in part because amid rising resistance, doctors are advised to use less, depressing incentives for pharmas seeking profits from large volumes.
AMF suggests targeting supply chains as a way for drugmakers to cut costs, widen profit margins and distribute more antibiotics to populations that need them.
Demand planning, for example, goes hand-in-hand with inventory management. If manufacturers can better forecast and gauge demand to align with their inventory flow, then there will be less waste and more accurate distribution, which would lower costs.
"Pharmaceutical companies must bring a step change in their practices for stock and inventory management, improve their agility in response to shortages, and communicate information about their plans and stock data earlier and in more detail to more partners," the report said.
Sourcing and manufacturing locally could also strengthen the antibiotic supply chain, because it would allow supply chains to cut lead times and costs.
But strengthening the antibiotic supply chain is not just important for pharma. Failure to tackle the problem could result in "financial consequences" like increased hospital, pharmacy and patient costs, trickling back up to manufacturers.
"With little money to be made, more companies are exiting the market," the report concluded. "The majority that remain committed to producing these low-margin but crucial medicines are much smaller players. Smaller players may not be in a position to meet high demand, increasing the risk of shortages and adverse quality outcomes."