Navigating Pharmaceutical Procurement Challenges in Europe

Pharmaceutical procurement in Europe faces unique challenges due to the region’s diverse healthcare systems, regulatory frameworks, and market conditions. As healthcare organizations strive to deliver effective and cost-efficient patient care, they must navigate these complexities to ensure a steady supply of essential medicines. 

This blog post will explore the three most pressing challenges in European pharmaceutical procurement and provide insights into potential strategies for overcoming them, including our contribution to resolving these challenges with the power of Artificial Intelligence-driven data systems:

Challenge 1: Tendering

Tendering is a complex and time-consuming process, and it can be difficult for pharmaceutical companies to compete in European tenders. Companies face several challenges in tendering for pharmaceuticals in Europe. These challenges include: (1) Tendering processes: EU Member States vary significantly in tendering processes and practices, particularly in hospital settings and purchasing pharmaceuticals for specific public functions. Often companies rely on manual ways of doing tenders locally without helping those colleagues with better resources and template-based automation for smoother execution. These people end up spending much time chasing internal teams to get all the pieces of information together to submit a tender; (2) Environmental, social, and governance (ESG) criteria: The growing momentum of ESG criteria in tender awards presents the pharmaceutical industry with increased scrutiny of their environmental footprint, both in Europe and internationally; (3) Rising operational complexity and increasing risk: Global trends have led to higher operational complexity and risk for pharmaceutical companies, which in turn impact their tendering processes.

Solution:

Pharma companies will need to consider solutions that offer a combination of data on markets while automating and streamlining the procurement process internally within the organizations. This will require a platform that can connect with internal systems and data sources and provide a single view of the market: Vamstar offers this and more with its end-to-end tendering platform.

Challenge 2: Pricing and Reimbursement

One of the significant challenges in pharmaceutical procurement in Europe is managing pricing and reimbursement systems. Each European country has its policies and regulations, leading to discrepancies in drug prices and reimbursement rates. As a result, parallel trade and price referencing practices can create pricing pressures and supply shortages.

Solution:

Collaboration between stakeholders, including governments, pharmaceutical companies, and healthcare providers, is essential to address pricing disparities and develop harmonized pricing and reimbursement policies that balance cost containment with the need to incentivize innovation.

Vamstar works closely with key stakeholders across the ecosystem to bring new insights to create better pricing and reimbursement policies and help stakeholders collaborate more efficiently.

Challenge 3: Supply Chain Disruptions

Pharmaceutical supply chains are complex and global, leaving them vulnerable to various disruptions, including manufacturing issues, raw material shortages, and geopolitical events. In addition, the recent COVID-19 pandemic has further highlighted the need for resilient supply chains to ensure medicine availability during crises.

Solution:

Diversifying suppliers and implementing robust risk management strategies can help mitigate supply chain disruptions. Fostering regional cooperation and investment in local production capabilities can strengthen the European pharmaceutical supply chain.

Vamstar has developed a proprietary database that tracks shortages of medicines across 50+ countries, including key policies that impact shortages in various markets. Additionally, we are using Machine Learning to identify signals in the tendering frequency to spot shortage issues across the supply chain.

Challenge 4: Regulatory Heterogeneity

Different regulatory requirements across European countries can create complexities in pharmaceutical procurement, including varying approval processes, labeling, and packaging requirements. This fragmentation can result in delays and additional costs for pharmaceutical companies, ultimately impacting patients’ access to medicines.

Solution:

Efforts to harmonize regulatory requirements across Europe through initiatives driven by the European Medicines Agency (EMA) can streamline pharmaceutical procurement processes and improve access to medicines. Collaboration and coordination between European countries can help reduce regulatory barriers.

Vamstar is using AI to track policies across every member state to understand barriers to standardization. Working closely with key regulatory bodies, Vamstar brings best practices to life and ensures a consistent approach across the EU.

European pharmaceutical procurement faces numerous challenges that require a multifaceted approach to address. By fostering stakeholder collaboration, investing in supply chain resilience, and aligning regulatory frameworks, Europe can ensure a more efficient and reliable pharmaceutical procurement system that benefits patients and healthcare providers. Vamstar invests in the future of pharmaceutical procurement in Europe by building AI systems to create a more efficient and harmonized procurement ecosystem.

Europe | Pharmaceutical | Medicine | Tender Process | Patient Care | COVID-19 | Procurement Challenge | Risk Management | Data Source | Drug | Global Trend