Pharmaceutical Drugs Distributed: It has been pointed out by healthcare practitioners, patients, and lawmakers alike that the existing system is not efficient at all. According to a 2017 study from USC, $41 of every $100 spent on prescription medications goes to supply chain mediators.
Drug trafficking
Wholesalers sell pharmaceuticals to pharmacies, and manufacturers sell drugs to wholesalers. Wholesalers utilize a variety of pharma logistics and packaging techniques to ensure that prescriptions are received and delivered in perfect condition.
There is a movement of services.
Pharmacy benefit managers (PBMs) represent payers and use their size to negotiate lower prescription prices.
Pharmaceutical benefit managers (PBMs), medication makers, and insurance companies work together to create formulas of pharmaceuticals covered by insurers. Some PBMs may provide discounts and other incentives to place a specific manufacturer’s medicine in a favored position on their form.
Money Flow
Supply chain money flows can be inefficient and confusing at times.
- The patient pays a premium to the payer (typically his insurance company). Pays a copayment to PBMs while purchasing medicines. (It is important to note that when consumers pay this copay at the pharmacy, the pharmacy does not hold onto that money—it goes immediately to the PBM). When purchasing a particular medication, you may be eligible to get manufacturer-cost help.
- The wholesaler is paid by the pharmacy when it buys medications. When it sells drugs, it is produced by its PBM at an agreed rate.
- Buying medications in bulk, wholesalers pay manufacturers.
- Pharmacy purchases of wholesalers’ medicine inventory result in payments.
- When a patient buys medicine from a participating pharmacy, the PBM makes a pre-agreed payment to that pharmacy. PBMs are paid by payers, patients, and medication makers.
- The manufacturer may compensate patients for their purchases (in copay assistance).
- Pays wholesalers who buy its products.
Packaging and the integrity of the product
New pharmaceutical products like biologics, made from human blood or blood components or gene therapy, might be an excellent use case for supply chain analytics and “cold-chain” companies. Complex, costly, and more susceptible to temperature variations and microbial contamination than conventional medications are some of the drawbacks of these therapies.
Transparency and negotiation of drug prices
PBM’s earnings are under threat from several other businesses. These firms engage on behalf of their clients or the broader public, and they’ve been getting a lot of traction in recent years.
In early August, it raised its current round of investment to target a $2.8B unicorn value by providing up-to-date medicine pricing and negotiating reductions at pharmacies throughout the US. A rival business (gofreighthub.io) has received $170 million in announced investment in the last year and offers savings on over 15,000 drugs through its countrywide network of partner pharmacies.
Customers can order directly from the company’s website or by phone.
Companies like (which provides medications for hair loss, sexual dysfunction, etc.) and (which provides birth control) let patients buy immediately from their computers and smartphones.
Companies specializing in men’s and women’s health recruit people online and via apps, prescribing generic medications and over-the-counter remedies and shipping drugs discreetly to patients’ homes.
Streamlining the supply chain is not going to be a simple task.
In its current configuration, the pharmaceutical supply chain is exceedingly complex. Wholesalers, PBMs, pharmacies, and payers all profit from the scale and opacity of being a middleman in the supply chain.
Blockchain, logistics software, online pharmacies, and remote diagnosis can all assist cut costs and enhance dependability.
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