The procurement value in life science

And the key challenges to efficient execution.

The days of rapid growth and high margin levels are no more for the pharmaceuticalindustry. In order to continue delivering high and attractive profitability ratios, the industry is now faced with the same pressure to achieve excellence in cost optimization facing other industries.

Pharmaceutical companies need to gain improved control over their overall cost base and a greater ability to variabilize fixed costs.

Across pharmaceuticals, external spend is largely untapped and significant in size. However, reaching maximum benefits will require going beyond the traditional negotiations, obvious panel consolidations and basic suppliers’ relationship models. Successful companies will need to explore the full set of purchasing and value sourcing levers and build truly optimized outsourcing strategies and enhanced capabilities to manage these complex partnerships.

Oliver Wyman has developed a truly unique value proposition to support our clients in the pharmaceutical industry, built on the combination of state-of-the-art capabilities, a well-tested transformational approach, and deep industry knowledge.

When successfully executed, pharmaceuticals can gain up to 500+ basis points in EBITDA. Optimized procurement also results in additional benefits, such as improved risk management and new growth opportunities through enhanced supplier relationships.

The procurement value in life science