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The pharmaceutical industry is setting a new threshold for pain.
Pricing pressures and competition from patented and generic drugs
are being balanced with scientific discoveries and technological
change occurring at lightning speed. New products must make it to
market faster and conform to strict regulatory and quality standards
from major global regulating bodies. Structural changes are taking
place as a result of mergers and acquisitions, supply-chain integration,
production process improvements, and value-chain integration. Biotechnology
companies are emerging as the leaders in R&D and new product development,
resulting in an increased emphasis on partnering, alliances, and
licensing deals.
To complicate matters even more, pharmaceutical companies are being
forced to build highly complex electronic infrastructures to enable
and manage inherent changes related to the shift away from a mass
marketing orientation to one that is customized, consumer-oriented
and value-based. With operating margins razor thin, the need to
maintain uptime of business operations has never been higher. Hence,
the ability to minimize exposure and circumvent a potential threat
to day-to-day operations is essential. No; it is imperative.
The above-mentioned factors, along with a litany of others such
as shorter time-to-market cycles are altering traditional business
models. Many of these changes stem from restructuring efforts related
to mainstream manufacturing including utilization of sole suppliers
and outsourcing, Just-In-Time manufacturing techniques, and a growing
dependency upon domestic and international business operations and
manufacturing which increases exposure to political, economic, and
geographic risks.
There are also "industry-centric" trends responsible for subjecting
pharmaceutical companies to a host of additional adjustments and
potential risks. These include:
• Increased reliance upon information technology
• Implementation of process innovation techniques to move drugs
more quickly through clinical trials and speed up time to market
• OTC switching and the implications to existing business processes
• Implementation of discovery and drug development procedures
to improve performance
• Growing dependence and reliance on complex production and
transactional systems
• Research and development data accessibility and security
• HIPAA compliance and conformity
• FDA Code 21 CFR Part 11 and the specific requirements surrounding
logical security, safety and data recovery, and availability of
client or patient data
• Knowledge Management and the costs associated with the licensing,
monitoring, maintenance and renewal of patents
• The maintenance of critical information and documentation
to support audit and legal requirements
• Requirements to maintain unique manufacturing controls related
to content uniformity, cleaning and sterility
• Crisis Management procedures to manage drug recalls or contamination
• Implementation of security measures to reduce the threat
of terrorism aimed at key manufacturing facilities
| Losses in the pharmaceutical
industry as a result of the 1997 earthquake in Taiwan were mostly
due to raw materials and products falling off warehouse shelves,
making them unusable or unmarketable, as well as damage due
to the temporary loss of temperature and humidity control. Shou
Chan Industrial Co., located in Nantou city's Nan-kang Industrial
Park, was hit by losses estimated at NT$35 to $40 million. Its
production building was declared uninhabitable and in need of
demolishing and rebuilding. |
The devastation caused by Tropical Storm Allison in June
2001 hit the healthcare industry hard:
• Texas Medical Center and its 54 medical institutions
suffered extensive property damage, resulting in needing to
obtain more than $5.5 million to replace equipment and repair
facilities
• The University of Texas Medical School lost 4,700 research
animals due to flooding
• Memorial Hermann Hospital closed for the first time
in 76 years due to power failure, and had to evaluate over
500 patients
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About the Author
Gary E. Stevens is a member of the GE GAP Services'
Business Continuity Solutions team. He may be reached by calling
212-703-9659 or emailing Gary.Stevens@gegapservices.com
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