Pharmaceutical Supply Chain Management: Key Steps & Challenges

With supply chain problems affecting many industries in recent years, including the pharmaceutical industry, developing ways to combat supply chain issues is essential. The pharmaceutical supply chain is a critical component of patient care. Problems with this process can have a negative impact on patient safety and the healthcare industry as a whole. Understanding the key steps involved in the end-to-end supply chain can help pharma companies in the United States (U.S.) produce effective solutions. 

Pharmaceutical Supply Chain: An Overview 

The pharmaceutical supply chain begins with the manufacturing process and ends with medication dispensing to consumers. Drug manufacturers, packaging companies, wholesale distributors, healthcare providers, and pharmacists are all key parts of the pharma supply chain in the U.S. The supply chain process contains several steps that are ultimately aimed at ensuring patient safety. For example, pharmaceutical manufacturers must have approval from federal agencies, such as the Food and Drug Administration (FDA), before they are allowed to manufacture over-the-counter or prescription drugs for consumers and patients. 

Key Steps Within the Pharmaceutical Supply Chain 

The supply chain in the pharmaceutical industry is a complex process due to regulations, safety, and high costs. Overall, each step in the process works to provide individuals access to safe pharmaceutical products, including generic drugs and prescription drugs. 


Pharmaceutical manufacturing is the first major step in the pharmaceutical supply chain. This process involves having medications produced in a manufacturing facility. According to the International Finance Corporation (IFC), the industrial-scale production process can be broken down into two main stages including primary processing (the production of the active ingredient) and secondary processing (the “conversion of the drugs into products suitable for administration”).

Whether developing prescription-only medicines (POM) or over-the-counter (OTC) products, pharmaceutical manufacturers utilize raw materials, innovative technology, equipment, and supplies to produce different forms of medications. This includes tablets, capsules, liquids, creams, ointments, and aerosols. The materials, technology, and equipment are what make this complex process possible, and any delay, shortage, or complication with obtaining items or keeping the process functioning will negatively affect the rest of the supply chain. 

Wholesale Distributors & Repackagers 

Wholesale distributors or repackagers receive pharmaceutical products from drug manufacturing companies. Wholesale distributors will purchase drugs from manufacturers to store and distribute to healthcare markets. According to the Common Wealth Fund, about 92% of prescription drugs in the US are distributed through wholesalers. A repackager will purchase large amounts of generic drugs and repackage the product into smaller quantities before reselling it in healthcare markets.

Problems with this part of the supply chain, from staffing to equipment to materials can result in delays in pharmacies being able to obtain the medications they need to stock.


Pharmacies are typically one of the last steps before the drug reaches the consumer. The specific process of distribution will differ depending on the type of pharmacy and healthcare market the pharmacy operates in.

Whether in hospitals, acute care facilities, integrated delivery networks, long-term care facilities, or specialty markets, it is essential that pharmacies get the right medication to the right patient at the right time.

Dispensed to Consumers 

The last part of the supply chain is having medications dispensed to consumers. This might involve having consumers purchase prescription medications from healthcare providers or pharmacies. In other cases, consumers are able to purchase over-the-counter medications from drugstores, supermarkets, department stores, and other retail businesses.


Packaging is a key step throughout the pharmaceutical process. Pharmaceutical packaging refers to the materials, designs, and systems that package, store, label, and help distribute the medications to their next destination. Medications must be placed in packaging that meets strict regulations including those set by the Food and Drug Administration (FDA). Packaging must also protect products from damage, such as exposure to extreme temperatures. Effective systems and materials can provide real benefits to each key stakeholder in pharmaceutical supply chain management including:

  • Reduction of medication errors
  • Protection of valuable product
  • Compliance with regulatory authorities
  • Traceability
  • Cost Reduction

Addressing Key Challenges in the Pharmaceutical Supply Chain

The pharmaceutical supply chain faces several challenges, from drug shortages to increased drug costs. Taking a closer look at a few of the key challenges in the supply chain can help pharmaceutical manufacturers, packaging companies, distributors, and pharmacies determine where efficient, cost-effective solutions might help.


The pharmaceutical supply chain can impact the cost of pharmaceutical products. Complexities within the supply chain can lead to higher costs for every stakeholder, including consumers. Finding cost-effective solutions and innovative technology are a few ways to simplify the supply chain and improve operational efficiency to help reduce the cost of medications and drug production. 


Companies and organizations that are part of the pharmaceutical supply chain often have multiple regulations to meet for safety purposes. Although these regulations are an important part of patient safety in the U.S., complying with them can result in delays or other issues that disrupt the supply chain. Utilizing systems and partnerships that provide speed-to-market regulatory and technical support is one way to speed up the process. Another area to address is finding ways for the FDA and other federal agencies to streamline the regulatory process as a whole. 


Safety is the most important element of the supply chain. Drug manufacturing companies are required to ensure product safety and quality during the manufacturing process. Packaging solutions play a vital role in health systems to ensure that medications avoid contamination or medication errors. Utilizing effective packaging and labeling solutions is key for manufacturers, repackagers, wholesalers, and pharmacies to provide safe and traceable medications.

Drug Shortages 

Drug shortages are among the biggest supply chain challenges. Without adequate amounts of certain medications to meet customer and patient demands, consumers face difficulties in treating health issues. From reducing fevers to managing chronic conditions, drug shortages can have a wide range of negative effects on public health. Pharma companies that are able to find effective solutions to these shortages, as well as ways to prevent them from happening, can end up having a distinct competitive advantage over other drug manufacturers. Pharmacies and wholesale distributors can also ensure that they have enough medications available to meet customer and patient demand when drug shortages are reduced or prevented. 

Why Drug Shortages Happen

Drug shortages in the U.S. or the global supply chain can occur for many reasons. Problems with manufacturing quality for pharmaceutical products are among the top reasons that shortages happen, possibly compromising patient safety. In some cases, pharmaceutical manufacturers experience problems obtaining the raw materials needed to manufacture medications. For example, a pharmaceutical company may need to delay production if it is unable to obtain the active pharmaceutical ingredient for a medication. Other reasons for drug shortages include drug discontinuations and limited production capacity for some pharmaceutical products.

Preventing Drug Shortages 

Federal agencies, including the FDA, take steps to prevent potential drug shortages before they occur. Depending on the cause, this might include addressing issues that affect the manufacturing quality or approving new sources for raw materials that pharma companies need. Drug manufacturers, distributors, and pharmacies can also take steps to lower the risk of drug shortages. Technology has been a huge part of efficiency throughout the supply chain and finding innovative solutions throughout the process is essential. 

Promoting Efficiency Within the Pharmaceutical Supply Chain

Although some supply chain disruptions are difficult to prevent, working toward greater efficiency overall can help minimize their negative impact. Pharmaceutical supply chain management involves multiple steps that can be adjusted as needed in order to address potential or actual supply chain problems. Promoting efficiency along the supply chain can help offset any delays or other disruptions that occur. 

Packaging: A Key Step Within the Pharmaceutical Supply Chain

As mentioned before, packaging is a crucial component of the pharmaceutical supply chain. Pharmaceutical products require quality packaging with accurate labels to ensure patient safety and reduce the risk of medication errors. The packaging used for these products must meet regulations issued by federal agencies in the U.S. Optimizing the packaging process helps ensure that products meet these regulations, while also improving safety and reducing costs. From primary packaging, such as blister packs and prefilled syringes, to shipping containers used as tertiary packaging, the packaging process provides many opportunities to improve efficiency.

Unit Dose Medication Packaging Solutions

Medical Packaging Inc., LLC (MPI) offers effective, unit dose packaging solutions for key stakeholders in the pharmaceutical industry. These solutions include different types of packaging systems and materials that are designed to improve safety, promote efficiency, and reduce costs in pharmaceutical supply chain management. 

Our offerings include oral solid packaging systems, labeling solutions, overwrapping systems, oral liquid packaging systems, medical packaging materials, and more

Our completion of a Type III Drug Master File (DMF) submission to the U.S. Food & Drug Administration (FDA) allows us to rapidly support customers’ compliance and filing needs within the pharmaceutical industry. It also helps us meet the needs of pharmaceutical drug manufacturers and contract drug manufacturing organizations (CDMOs) for FDA-compliant liquid cup packaging capabilities.

For more information on MPI’s packaging solutions, please contact us