How pharmaceutical products get from the lab to pharmacy shelves

The Covid-19 pandemic thrust the pharmaceutical supply chain into the spotlight beginning in 2020, with grounded flights and port closures wreaking havoc and causing numerous drug shortages.

Nowadays, these Covid-related disruptions are (mostly) a thing of the past, but we’re still seeing shortages of commonly used drugs like Adderall. The number of US drug shortages rose almost 30% between 2021 and 2022, according to a report from the Senate Committee on Homeland Security and Governmental Affairs.

With drug shortages making headlines so often, Healthcare Brew put together a farm-to-table (or pharm-to-table…ha, get it?) explanation of the pharmaceutical supply chain and what makes it so complicated.

Step by step

On its face, the pharmaceutical supply chain doesn’t seem super complex: A manufacturer makes the drugs, then (usually, but not always) sends them to a wholesaler, which then sends the drugs to a pharmacy for dispensing. But within those steps are many, many smaller steps to make sure the drugs meet quality and safety standards that regulatory agencies set (in the US, that’s the FDA).

A lot of different companies have a hand in the pharmaceutical supply chain. Some of the main players include:

• Drug manufacturers
• Airlines
• Ocean freighters
• Third-party logistics companies
• Trucking companies
• Wholesalers
• Pharmacies

Drug manufacturers don’t wait until their drug receives FDA approval to begin the supply chain process. In fact, the FDA’s approval process actually requires drugmakers to submit their supply chain plans before a drug can receive approval, Hui Zhao, a professor of supply chain management at Penn State with expertise in pharmaceutical supply chains, told Healthcare Brew.

Drug manufacturers typically start by conducting an audit of every step of the supply chain, according to Amy Shortman, VP of product marketing at supply chain technology company Overhaul.

The goal is to “make sure they’re working with stakeholders who are going to be adhering to good distribution practice standards to move their products,” she told Healthcare Brew.

The manufacturer will send auditors to map the route the drug will travel, and complete risk assessments for each step. They have to verify things like proper temperature control, since drug products have to be kept in specific conditions.

“Mapping the network and doing risk assessments is a really key part in…doing correct due diligence of the third-party logistics providers,” Shortman said. 

Once the audit is complete and up to regulatory standards—and the drugs are in transit—it’s all about mitigating risks along the way, she explained. Manufacturers have to take precautions like putting serial numbers on drug packaging so counterfeit products can’t get mixed in.

“Packaging is really important, because that’s something organized crime groups do target,” Shortman said. “They can put fake medicines inside…There’s big money in pharmaceutical products and selling them on the black market.”

There’s no average length of time for drugs to go from manufacturer to pharmacy shelves, she added. It depends on many factors, including the drug’s shelf life. For instance, if a drug has a short shelf life and has to get to the pharmacy quickly, the manufacturer will probably use air travel. But if it has a longer shelf life, the manufacturer may use ocean freight to save money, she said.

Once the drug gets to a wholesaler, the wholesaler takes on the responsibility of safely transporting the drugs to pharmacies. Wholesalers purchase drugs in bulk from manufacturers and sell them to pharmacies for a markup.

Challenges

The pharmaceutical supply chain has some unique challenges that make it a different beast from other supply chains.

For one, a drug’s raw materials typically come from different parts of the world, Zhao said. That means manufacturers have to coordinate with many countries, which all have different regulatory standards.

There are no global regulations, Shortman said, which makes it challenging to keep drug products safe when so many different workers in different countries have to handle the drugs to get them to their final destination.

“Between ground handling agents and trucking companies and different people coming into contact with the product, it’s really critical that every single person along that route is working to those standards,” she said.

Another challenge unique to the pharmaceutical supply chain is the fact that “the impact of a product being delayed or not reaching the place at the right time in the right condition could be detrimental to people’s health,” she added.

“When the precious goods go out into the world, there’s a lot of risks and a lot of threats,” Shortman added. “Actually being able to mitigate those in real time is really important for that end patient to make sure that they’re getting the care that they need.”