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A new way of looking at the biopharma industry

My new book comes out this month, which focuses on the biopharma supply chain and the numerous trends and challenges that exist today, and which will continue to occur down the road..

Titled “Distribution, Regulatory, Systems, and Structural Changes in Biopharmaceutical Supply Chain”, the book covers the major themes and changes in the biopharmaceutical supply chain. It provides an overview of the key challenges and discusses how leading biopharma companies are dealing with these challenges.

The biopharmaceutical industry is in the throes of disruptive change.  The nature of this change can be traced in some measure to the evolution of the industry and the bizarre combination of third party distribution, global regulation, government healthcare policy, and the very nature of healthcare funding and how the general population views the biopharmaceutical industry.  This book was written in an effort to expose some of the bizarre structures that underlie biopharmaceutical distribution in the United States.

First, the book focuses on biopharmaceutical distribution – which refers to the point at which manufacturers release a finished product, to the time that it is administered (whether by the individual to themselves or by a physician), and the complicated set of distribution channels that exist between these two points.  Implicit in this boundary are the numerous decision points and third parties that play a role, including manufacturers, payors, physicians, hospitals, pharmacies, transportation companies, healthcare education providers, third party marketing organizations, government regulators, and numerous other enterprises all seeking to influence the demand and sale of drugs.  We should also note that the term “biopharmaceutical” is used in this context to both biologics, pharmaceuticals and vaccines.  With the merging towards a single network of therapy, we no longer differentiate between solely “biopharma” or “pharma” interests.  In the standard vernacular, biopharma pertains to larger molecules only (ie biological) hich includes vaccines and biologicals (blood products, etc.). “Pharma” focuses on pills – solid single dose tablet formulations, etc).  more companies are utilizing solutions that span both small and large molecule solutions.  Many companies with a large molecule historical focus (e.g. GSK, Pfizer, AstraZeneca, Merck, Roche) are being drawn more into the small molecule space, which has been dominated by start up firms which grew quickly (e.g. Genzymes, BiogenIdec, Genentech, and others).By including all of these elements into a single distribution model, this simplifies not only the dialogue, but also reflects the merging of biological and pharmaceutical treatment methods under the broader rubric that is coming in the era of “pay for performance”.

Second the book focuses on the United State biopharmaceutical distribution network.  Why?  Quite simply, the US is the largest market for pharmaceuticals in the world.  The brand name pharmaceutical industry generates approximately $165B in sales in 2011, but growth is estimated only at 1% despite an aging population to $185B in 2016.

Third, the nature of biopharmaceutical distribution is becoming exponentially more complex.  Part of this challenge is due to the rise in generics, which are sold at a discount to brand-name drugs.  Brand name companies are seeking to adapt to expiring patents by producing generic medicines, which includes follow-on biologic drugs or “large molecule” pharmaceuticals that are made from living matter.  Large pharmaceutical companies such as Pfizer, GSK, Merck, and others are acquiring licensing, or developing biological-based biopharma products into their R&D pipelines.  These biologics are expected to make up almost half of the market by 2016.

One of my struggles is that the information in the book although up to date, continues to change as we speak….guess I’ll have to try to cover these changes in the next project I’m working on over the summer:  Patient-centric Healthcare Value Chains….