Supply Chain Analysis of Pharmaceutical Drug Surplus

In this paper, I analyze the pharmaceutical supply chain to identify the main causes of drug surplus. The main example I use throughout the paper is the current opioid epidemic, which has resulted in thousands of fatalities, caused by overdoses. After researching the industry players and their relationships in the supply chain, I have identified four main causes of drug surplus: the consolidation of pharmaceutical corporations with third-party manufacturers, along with consolidation within the wholesaler industry; the inappropriate pricing of opioid-based prescriptions negotiated by pharmacy benefit managers (PBMs); the significant influence of pharmaceutical corporations on physicians, leading to potentially unethical practices; and lastly patients openly distributing leftover prescriptions to the market, and looking for prescriptions elsewhere. To alleviate the drug surplus issue, I provide three solutions: implement both blockchain and reverse logistics into the pharmaceutical supply chain, improving transparency, and allowing patients to return incomplete prescriptions; and research the consolidation of PBMs with providers (hospital systems, clinics, etc.) to increase buyer power and appropriately price opioid-based prescriptions.