Healthcare executives in the USA, Europe and Asia plan to expand into new international markets andinvest in the supply chain but are also concerned about changing business risks, according to a new
UPS survey.Top managers are seeing both risks and opportunities as the pace of change in the healthcareindustry accelerates globally, the annual UPS “Pain in the (Supply) Chain” survey, which questionssenior-level healthcare supply chain executives at pharmaceutical, biotech and medical devicecompanies, found. The survey of some 250 companies was broadened this year from the USA to includeEurope and Asia for the first time.
Facing unprecedented demands to reduce costs, keep up with fast-changing regulatoryrequirements and ramp up innovation in the age of patent expirations and increased competition,executives are making investment plans and looking to protect their intellectual property andmarket share, UPS said.
The top business concern for healthcare executives globally is change in healthcarelegislation/reform, cited by 52 per cent of respondents, followed by increasing regulations at 48per cent. A focus on intellectual property protection emerged as a global healthcare industrypriority, cited by 43 per cent of respondents as a top business concern. Patent expirations alsoranked high among pharmaceutical and biotech company concerns, cited by 43 per cent of theserespondents.
Yet healthcare executives also are focused on investing in their supply chains to increasetheir competitiveness. Technology investments ranked as the No. 1 strategy, with 86 per cent ofrespondents reporting that they would invest in new technologies over the next three to five years.
Tapping into new global markets was the second top strategy for increasing competitiveness,with 81 per cent of respondents reporting plans to expand in new areas in the next three to fiveyears. The top five growth markets cited are the USA, China, India, Japan and Brazil. Asiancompanies are more focused on global expansion than those in the USA, with 75 per cent of Asianleaders having recently expanded into new global markets versus 58 per cent in the USA.
The main supply chain concerns, although with significant regional differences, areregulatory compliance, intellectual property protection, product security and product damage alongwith cost management.
Regulatory compliance is the No. 1 supply chain concern cited by 73 per cent of respondents.Product security was cited as a concern by 61 per cent and product damage / spoilage by 56 percent. Managing supply chain costs came in second overall, with 64 per cent of healthcare executivesrating this as a top supply chain concern.
Comparing year-over-year trends, companies remain highly concerned about the issue of supplychain cost management but report limited success in addressing this issue. Only 42 per cent ofglobal executives surveyed in 2011 reported success in supply chain cost management. In the USA,however, companies appear to be getting better at cost management, with 53 per cent of USexecutives reporting success in this area in 2011 versus 44 per cent in 2010.
“Change is the only constant in healthcare today and it is happening on a global scale,driven by factors such as cost, regulatory pressures and global expansion,” said Bill Hook, vicepresident, global strategy, UPS Healthcare Logistics. “Going forward, companies have to find newways to innovate and adapt to rapid market changes and this is where the supply chain plays apivotal role. UPS helps healthcare companies leverage logistics to do things such as expand intonew markets faster, implement greater supply chain efficiencies and improve the customerexperience, leading to competitive advantages.”
