Outsourcing challenges in pharmaceutical supply chains

The worldwide Covid-19 pandemic has revealed the vulnerabilities of supply chains in several critical sectors that have been subject to successive waves of outsourcing since the 1990s. This is particularly true of IT and electronics manufacturing, electrical equipment manufacturing, machinery and capital goods, and the food and pharmaceutical industries. In this sector, awareness of the fragility of value and supply chains has led some governments to take measures to diversify supply sources in order to limit drug shortages, but also to stimulate reindustrialization by encouraging manufacturers to relocate production closer to consumers.

The current vulnerability of pharmaceutical supply chains is largely explained by the wave of deindustrialization in the European Union since the 1990s, which has led to massive outsourcing of production to lower-cost countries, and the creation of global value chains, made complex by the number of players involved both upstream and downstream, and by the lengthening of flows and the use of multimodal transport.

This article explains the factors that have led pharmaceutical industry players to adopt outsourcing strategies in the pharmaceuticals market, and analyzes the consequences of these choices for the French market. Based on an in-depth analysis of the pharmaceutical value chain, it examines the issues raised by outsourcing and their impact on players and processes. It then analyzes the industrial stakes involved in the successive waves of outsourcing in this sector, setting out the causes and consequences of these strategic choices for the various categories of players.