Analyzing Branded and Generic Pharmaceuticals

In a video interview with Pharma Commerce, Jonathan Colehower, managing director, global operations & supply chain practice at UST, discussed how the East and Gulf Coast port strikes highlighted the contrasting dynamics between branded and generic pharmaceuticals. Branded drugs, which offer higher profit margins, are produced at limited manufacturing sites, creating potential vulnerabilities. In contrast, generics have multiple supply sources but operate with tighter margins, leading to less robust business controls and raising concerns about safety. This disparity underscores the complex challenges faced by both sectors in the pharmaceutical industry. Colehower also spoke on the valuable in pharma supply chain transparency and visibility.

A transcript of Colehower’s conversation with PC can be found below.

PC: How did the East and Gulf Coast port strikes bring to light the differences between branded and generic pharmaceuticals?

Colehower: I think it’s a fascinating space because of the differences, and when I say the differences, there are a couple things that I'm talking about. One is just the difference between brand and generic pharmaceuticals. It's feast or famine. The brands have lots of margin that they can throw at the problem, but at the same time, they're so proprietary, it's restricted, so you may only have one manufacturing operation that's producing that brand. That's a point of failure that has to be managed.

On the other hand, there’re the generics, where you may have lots of sources of supply, but they don't have the margin. Because they don't have the margin, they don't have some of the same business controls that in other cases might be a luxury, so you then start worrying about things like safety.