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Top Manufacturing Concerns for Pharma Companies

What are the Most Significant Challenges Impacting the Pharmaceutical Manufacturing Industry?

As of 2018, the global pharmaceutical industry was spending approximately $150 billion every year on research and development, but sales and profits have continued to decline. In 2020, the pharmaceutical manufacturing industry faced numerous challenges. Some of them were predictable, while others seemed to come out of left field.

Let’s take a look at the most significant challenges impacting the pharmaceutical manufacturing industry.

Rising prices

The ever-increasing cost of drug development is one of the main factors that contributes to rising prescription drug costs. Drug development is a long and expensive undertaking and new medicines are becoming harder and more expensive to produce. It can take as long as 12 years for a prescription drug to move from preclinical testing to final approval! Recent research

suggests that the average cost of developing and introducing a new prescription drug to the market ranges from $314 million to $2.8 billion. As a result, pharmaceutical companies are forced to increase prices.

Reluctance to Process Adaptation

The past two decades have experienced dramatic changes in the processes utilized by the pharmaceutical industry to discover and develop new drugs. Most pharmaceutical manufacturing companies have taken their time to fully capture the productivity and prospective opportunities of new processes and digitization. Effective execution and management of new digital processes can be challenging, but it’s imperative that companies take on the difficult task. The products the industry creates are requiring different manufacturing techniques and regulations than those produced years ago and failure to invest in new processes may cause bigger risks for companies.

For example, cleanrooms are an influential piece of pharmaceutical and medical manufacturing. In simple terms, a cleanroom is a controlled area used for processing bio/pharmaceuticals within a facility. The controlled area maintains a specific level of air particles and other contaminants. If the cleanroom design doesn't support the new processes and is not up to industry standards, it can cause major inefficiencies and setbacks.

Additionally, manual processes and spreadsheets are still widespread in many pharmaceutical industry processes. Unfortunately, these methods may lead to guesswork, inaccurate data, and error-prone outcomes. Customer and vendor relationships can be affected by these consequences and will likely move to competitors.

Pharmaceutical manufacturing companies who invest in upgraded digital processes, profit from better inventory management, decreased data challenges, improved workforce productivity, more efficient fulfillment processes, and enhanced customer and vendor experience.

Complex Supply Chains

For years, manufacturing supply chains have been moving away from the paper model of information management to an all-digital era. Automating the supply chain is a shift that has gone from optional to essential. Research suggests that, on average, companies that aggressively digitize their supply chains can expect to boost annual growth of earnings before interest and taxes by 3.2 percent. The right approach to digitizing supply chains integrates suitable, leading-edge technologies with revamped operations.

pharmaceutical manufacturing

The pharmaceutical industry supply chain is highly complex and more regulated than most other industries. Operating with a variety of suppliers in varied locations, strong, collaborative relationships are necessary to the industry’s elaborate supply chains’ success. This industry is tasked with the obligation to create complete transparency and digital transformation can do just that. Pharmaceutical manufacturers should shift to technology advancements that not only present a full picture of the supply chain, but also offer insight into smart inventory solutions and cost savings.

Mergers & Acquisitions

The pharma industry likely sees more merger and acquisition activity than any other industry, both in the number of deals and the amount of money spent on acquisitions and mergers. One of the most important drivers for change in this industry is the ever-increasing cost of drug development.

To create value, new drugs either need to solve a problem, which has previously been unmanageable, or they must be significantly better than what already exists on the market. Many times companies cannot afford to carry out the extensive research and development needed to meet the above criteria, which can lead to the demise of a company or often— a merger and acquisition.

Pharmaceutical industry mergers and acquisitions are not straightforward. They take time, skill and extensive knowledge to ensure a positive outcome. With so much depending on their successful execution, few can afford to get it wrong. Some pharmaceutical manufacturing companies, however; can see success after a company merger or acquisition. McKinsey notes that mergers and acquisitions can be a way of getting back into the race for companies that have fallen behind in digitization.


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