Pharma Purchasing and Outsourcing Approach Needs Overhauling, Supply Chain Expert Asserts

Regulatory pressure and “true cost” understanding will push pharmaceutical firms to reverse the current outsourcing trend and gain back more control of their critical ingredients and components, supply chain expert Andrew Cox asserts.

Cox, a university professor and Advisory Board Chair at the International Institute for Advanced Purchasing & Supply (IIAPS), provided his insights on drug supply chain challenges at an FDA/Xavier University-sponsored Global Outsourcing Conference in Cincinnati in early October.

Supply chains in the pharma industry are “very different” from other industries and have “unique problems,” he stressed.  These problems are compounded by a lack of realism around outsourcing, reflecting the manner in which purchasing decisions are made and who is involved in those decisions.

In the long run, the IIAPS official pointed out, it is a mistake to pursue “short-term quarterly cost reductions based on headcount reduction targets, and not think about the strategically critical assets in your business.”

[Cox’s analysis of the current state of pharma outsourcing and supply management, the mistakes firms have made in copying other industry models and how they will need to change is provided for subscribers here.  Non-subscribers can purchase the full story for $195 by contacting Jonathan Trethowan (  For subscription/license information, click here.]

See recent related IPQ story:

Suppliers See Cost/Quality Disconnect in Big Pharma Decision Making