The pharmaceutical sector has seen significant growth in recent years—a trend that shows no signs of slowing down. The industry is already comparable in size to the gross domestic product (GDP) of countries like Spain, Mexico, and Australia, with revenue predicted to increase by 6.12 percent annually between 2023 and 2030. This expansion brings both challenges and innovative solutions to meet industry needs.
2025
As 2025 continues, the pharmaceutical industry will likely face a familiar challenge in the form of supply chain disruptions. Pharmaceutical leaders recently highlighted significant supply chain issues as one of their biggest concerns, citing increased pressures from raw material and labour shortages, geopolitical instability and extreme weather events.
These supply chain challenges are an ever-growing threat to the industry as they not only cause shortages of medicines but can lead to an increase in counterfeiting and diversion. As such, it is more important than ever for pharmaceutical organisations to build resilient supply chains while also ensuring they are compliant with the ever-evolving regulatory landscape.
Beyond regulatory requirements, there is a gap between consumer and patient demand for greater transparency—including product origin, materials, environmental impact, and recommended usage—and the data currently provided by pharmaceutical brands and supply chain stakeholders. By fully leveraging serialisation, aggregation, track-and-trace, and authentication solutions, many of which are already in place for the EU Falsified Medicines Directive (FMD) and the US Drug Supply Chain Security Act (DSCSA) compliance, pharmaceutical manufacturers can unlock valuable data to enhance supply chain effectiveness.
Partnering with an expert with deep industry knowledge can help pharmaceutical companies harness this data to improve supply chain transparency, streamline inventory management, strengthen connections with customers and patients, and protect brand reputation. Such experts can also help integrate the latest AI-driven innovations and machine learning capabilities, further enhancing predictive analytics, automation, and real-time decision-making across the supply chain.
Rise of counterfeit goods through pharmaceutical e-commerce
Counterfeiting and diversion continue to present a major challenge within the pharmaceutical industry, a problem exacerbated by the rise of online marketplaces. The growth of e-commerce in recent years has increased accessibility and convenience for consumers, providing an easy way to obtain medicine that otherwise would have been difficult to source from local vendors. However, the loosely regulated nature of online markets poses a threat to the legitimacy and safety of pharmaceutical goods.
The number of illicit online pharmacies has significantly increased in recent years, with many of these masking as trustworthy, easily accessible options for customers. For instance, a recent Royal Pharmaceutical Society investigation found that fraudulent internet pharmacies target vulnerable patients who are experiencing medication shortages, including hormone replacement therapy (HRT), ADHD medication, and obesity medications. Prescription medicine sales on these unregistered websites are unlawful and put patients’ health at risk.
The uncertainty and danger instilled in online markets confirms the importance for pharmaceutical organisations to implement solutions that can help them combat the rising number of counterfeit and diverted products entering the pharmaceutical supply chain.
Regulatory environment: a key driver for supply chain innovation
Regulatory compliance remains a major driver of pharmaceutical supply chain innovation, including the established EU FMD and the US DSCSA. These regulations have been introduced to safeguard patients and improve the safety of the pharmaceutical supply chain and manufacturing process. Nevertheless, even with the implementation of these regulations, counterfeiting and drug diversion continue to plague the industry.
Adhering to regulations strengthens supply chain visibility for pharmaceutical and moves them closer to achieving true traceability. Enhancing the transparency of production and shipping procedures can also improve operational efficiency. In a time when the development of a strong pharmaceutical supply chain depends on traceability, authenticity and transparency, digital track-and-trace technologies are becoming the norm.
Leveraging technology to address supply chain issues
New technological developments are transforming multiple sectors. This includes the pharmaceutical industry, where technology is leading the way in helping improve supply chain resiliency in the face of disruptions.
For example, the growing usage of artificial intelligence (AI) is set to have a major impact on the pharmaceutical supply chain. One notable development is AI-powered authentication technology, which uses machine vision and machine learning to create a digital blueprint of packaging artwork features—enabling precise product identification through pattern recognition. Additionally, AI will enhance real time monitoring and secure pharma supply chains by detecting irregularities and possible risks as they occur.
Moreover, smart packaging technologies, such as Radio Frequency Identification (RFID) and Near Field Communication (NFC), are increasingly being adopted by pharmaceutical companies, for speciality drugs. Although this innovation has been present in the pharmaceutical industry since the early 2000s, it has become more affordable and accessible in recent years. These technologies, which can scan large quantities of products, boosting efficiency in warehouses and distribution centres, have become more affordable and accessible in recent years. RFID technologies, along with RFID readers, can scan large quantities of products, boosting operational efficiency in warehouses and distribution centres.
Beyond efficiency, smart packaging technologies provide access to invaluable insights that can inform future decision making. Once a company has implemented the latest technologies and solutions, it can start exchanging data and capturing end-to-end data about a product’s journey. For example, access to information like inventory levels, item status, and location can help pharmaceutical manufacturers optimise production and meet customer demand efficiently. Smart packaging technologies also enhance interconnectivity and collaboration across the value chain. By providing in depth visibility and actionable insights, these solutions align production and supply chain requirements, streamline internal processes, and boost efficiencies, ensuring a steady product flow and addressing drug shortages.
An uncertain future
The pharmaceutical industry continues to face multifaceted supply chain challenges which compromise brand integrity, threaten patient safety and reduce revenue. To address this, businesses must go beyond regulatory compliance by leveraging advanced traceability and authentication technologies to unlock the power of their data.
This approach will not only be crucial in enhancing digital connectivity and strengthening brand protection—it will also support pharmaceutical organisations in creating a more resilient supply chain to safeguard patient health.
- AI in Supply Chain
