Last week, the U.S. Supreme Court upheld the Affordable Care Act, which means insurance tax credits will remain or become available for Americans in all states. The ACA is projected to add 30 to 40 million more people into the healthcare market. Between patients recently added to the system and patients with new cost-sharing insurance plans, there has already been a huge increase in prescription drug use in the U.S. In 2014, Americans spent $275.9 billion on prescription drugs, up from $262.3 billion in 2013.
According to GlobalData, about 20 provisions of the ACA are expected to have an impact on sales of pharmaceuticals and biologics, and the pharmaceutical market is already on a growth streak. In 2014, 41 new pharmaceuticals were approved by the FDA, and with a projected growth rate of 5.6%, it doesn’t seem to be slowing down anytime soon. To stay competitive in the rapidly changing market, pharmaceutical companies need to anticipate expansion or risk falling behind. So how can better pharmaceutical storage help pharmaceutical manufacturers prepare their production and warehouse facilities for the upward trend?
You’re ramping up production to keep up with the increased demand. Increased production means increased raw materials, packaging, and finished products, but finite storage space. Leasing space or building an additional warehouse will store the overflow, but between construction, maintenance, and staffing costs, these options become capital-intensive. Mobile racking options such as ActivRAC have helped companies increase pharmaceutical storage capacity by 50% with sliding shelves that eliminate static aisles. Extra space means extra room for growth and revenue-generating activities such as increased production.
Control the Storage Environment
Much of the growth in pharmaceuticals has been in biologic drugs and therapies, many of which require specific temperature and humidity controls. The energy costs associated with climate control can add up to one of the most costly parts of pharmaceutical storage. Ensuring tight seals on cooled storage cabinets and adding high-density shelving can help stabilize the temperature to decrease ongoing costs of adding more cold storage for raw materials and finished products. With a more compact storage solution, you can save precious square footage in your cooler, further reducing energy costs – and, a densely-packed cooler storage space actually uses less electricity to maintain temperature, decreasing those costs as well.
Streamline Inventory Management
Increased production means a huge increase in incoming and outgoing inventory. Adding new warehouse facilities can make inventory management even more difficult, and locating and accessing materials can become a tedious activity that creates a bottleneck in the production process. With heavy-duty mobile shelving, pharma manufacturers can centralize fast-moving inventory and create easy accessibility and selectivity with the touch of a button.
Until now, many pharmaceutical manufacturers have been reluctant to make major decisions on capital expenses and investments such as improved or expanded manufacturing and warehouse facilities due to uncertainty about the future of the law. However, following last week’s Supreme Court decisions, pharma companies can move capital investment projects forward with confidence.
To stay competitive amid the changes in healthcare laws, pharmaceutical manufacturers need to prepare for growth now. We’ve helped large pharmaceutical manufacturers streamline their pharmaceutical storage and inventory systems with smarter storage solutions. Smart storage saves money and increases revenue. To learn more, download our White Paper on inventory management below.