Spend management in the pharmaceutical sector has undergone some major changes in the past couple of years. As fewer block buster drugs come to market and pass FDA scrutiny -- and as existing drugs come off patent -- a range of global pharma giants are scrambling to reduce costs. This has led many to become more serious about tackling procurement and operations led cost reduction programs that extend beyond indirect spend and procurement operating efficiencies. Now, pharmaceutical companies are even considering global sources for active pharmaceutical ingredients and other more strategic spend categories and areas.
If you’re curious to learn more about one particular pharmaceutical spend management transformation that's currently a work-in-process, check out this article from Supply Management that examines the latest changes at AstraZeneca. In less than a year on the job, the new CPO has pushed forward a major shake-up in the operating structure and culture which includes "a new structure for the procurement department (with buyers closer to their customers), a capability review of all current core purchasing staff and roles (with some departures inevitable) and some 'challenging but achievable' savings targets." Now that's some tough medicine. In pharma Spend Management, no one said that a single pill would do the trick!
- Jason Busch