Accounting Finance Pharma & Healthcare Procurement

From Prescription to Payment,

Automated and Paper Free

As the health crisis continues, so does our series of articles on how P2P automation and record management platforms can help businesses withstand the market’s fluctuations. We hope these articles can offer you a way to keep both your employees safe and your business intact. In our previous episode we’ve tackled the multiple issues the retail industry is facing right now. In this one, we will talk about an industry on which the crisis had a similar effect, although its problems are a bit more specific. Whether producers or distributers, companies from the pharma industry have been burdened by exceptionally high demand and inefficient process management that made the road from storage to patient far more difficult than ever.

The Burden of Demand

While a few companies managed to make a profit from their involvement in finding a Covid-19 cure or vaccine, the truth is that most producers and distributers in pharma found themselves overwhelmed by the reality of the pandemics. And, unfortunately, the same went for private healthcare providers whose supply chains were dependent on the aforementioned pharma companies. In fact, a Forbes article from last year warned that the pharmaceutical and healthcare industry is not recession proof and is dependent on its relationship with government authorities and producers. This proved to be true, as many companies asked for government subsidies during the current crisis.

 

Unlike retailers, whose predictions were overthrown by a large number of customers buying a large number of items from a restricted number of categories, pharma companies found themselves in front of a flood of people who bought, well… just about everything! The few employees behind pharmacy counters were faced by customers who not only desired sanitary products such as face masks, gloves, or hand sanitizer, but also by those who wanted any type of drug they thought would run out of stock. Everything from Vitamin C and aspirin to specialized medicine flew off the shelves until, as predicted, many pharmacies did run out of stock. Even more, not all clients were ‘’regulars’’. Some were government agencies or affiliated hospitals and healthcare units whose purchasing patterns weren’t anticipated earlier on. This, unfortunately, also made the price of drugs to go up, even that of common ones such as paracetamol.

Moreso, unlike retail, drug stores never really had any touchless processing systems in place, nor did they invest that heavily in their online presence. Why would they? Pharmacies have always been a face to face business, where the seller also acted as a direct advisor and where nobody wanted to buy large quantities of medicine. The same goes for private healthcare providers, whose main source of revenue has always been based on direct consultantion, not online check-ups. Sure, online pharmaceutical providers have always existed but, because of the restrictive prescription system, many of these providers focused on over-the-counter drugs and cosmectic products. Even retailers with significant experience in this field had to extend their delivery dates to accomodate the general situation.

These issues have been tackled multiple times in the media, with some countries installing electronic prescriptions systems, while others thinking of temporarily banning paper prescriptions and any costs related to them. The third main problem is that, just like some retailers, pharmaceutical companies and certain healthcare providers are considered essential services, so they can’t just reduce their activity overnight. Patients are depending on it.

 


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7 Pressing Issues for the Pharma and Healthcare Industries

The truth is that, unlike with the retail market, the pharma and healthcare market is probably not going to go back to normal after the safety measures will be relaxed. The demand will still be high and stock management will still be difficult for a while, as fear and anxiety will unfortunately dominate the public domain for a while. To better understand these issues, we’ve split them in a few actionable directions we shall discuss below. It’s worth noting that many of these issues existed in the past and that the recent crisis only made them more visible, as offline customers dwindled and large online orders became the new normal.

  1. The demand is at an all-time high, while selling points are fewer and fewer. As we’ve mentioned before, the demand for pharma products is high for all products, from hospital and sanitary supplies to regular vitamin suplements. And the most demanding part for sales and purchasing? Some of these clients are large companies who require large portions of stock to be delivered as fast as possible.
  2. A Lack of efficient online presence. In part, this is due to the prescription system that we’ve mentioned above. A solution for it might be an online prescription platform, doubled by a cloud-based invoicing platform. However, this cannot work if the company does not shift its mindset from a “contact point” selling mentality to a fully digital one. In other words, digitalization should occur at all levels.
  3. Delayed payments – This is mostly due to working with large buyers such as the government and healthcare providers, buyers that buy in bulk and, in many situations, only pay after a long and strenuous bureaucratic battle. P2P automation would be the perfect solution for this.
  4. Difficult supply chain management & logistics, along with difficult stock management affects many pharma companies. However, the worst hit might be the companies that are also the producers of their distributed drugs. These are now in the position of replacing an entire acquisition chain that was, until a few months ago, powered by multiple small and individual buyers.
  5. An exposed agent network, which is not only dangerous to your employees, but also to your business. In close connection to the previous point, this issue pertains to the fact that many manufacturers still have physical agents and delivery people visiting every selling point and do stock management on the spot.
  6. A constant flow of invoices that are difficult to manage, classify and introduce in ERPs, holding back your already busy accounting departments. While this might seem like a minor issue, keeping your company’s accounting department busy with menial tasks while orders come from all directions can be a serious problem.
  7. A lack of funds and manpower for R&D Departments. This is important not just for the companies themselves, but for all of us, as the number of companies involved in the Covid-19 effort is staggering, according to The Association of the British Pharmaceutical Industry. Furthermore, in countries such as the United States, legislators have allowed Covid-19 testing in phramacies. This is a great measure for the general public, but a challenge for pharmacies, which will have to manage both selling medicine and performing tests.

How P2P Automation can Help You Alleviate Them

  1. Digitalize non-essential processes, thus freeing your staff of any work that does not pertain to bringing your clients the care and medicine they need. Purchasing and contract management are two of the most easily automatable processes in your supply chain and their digitalization would not only mean less errors and wasted time, but also less paper.
  2. Onboard your suppliers quickly, and turn your partner network into a centralized hub where invoices, orders, and delivery notes are merely a click a way. This is important, as your current supplier network is in a state of continous change, with companies that previously manufactured other products now focusing on masks, gloves and other prime necessity health supplies.
  3. Instate a supply chain & logistics solution for your delivery partners. This will not only help create a lean supply chain, but also free your employees of additional work. Your objective would be to protect your employees and limiting their direct contact as much as possible.
  4. Use legally compliant electronic invoicing. This is important especially if you deal with government agencies whom, starting with April 2019, are obligated to use compliant electronic invoicing according to the 2014/55/EU European Directive. Ideally, this solution should be combined with an electronic prescription system that should automatically match the products on the prescription with those on the invoice.
  5. Prevent speculation by using an e-catalog. Electronic catalogs can help you not only manage product prices and discounts, but also trace spikes in essential product prices and rate your suppliers on the spot. This has been a highly common occurence, unfortunately, with some large retailers actually buying all the overpriced stocks from their suppliers and selling them at a lower price to offer their clients a good experience.
  6. Use effective contract management. This is especially valid since during this period your company might be in contact with new and large corporate and governmental clients and trying to trace the clauses of each new contract could be a burden. Combining contract management with supplier reputation management is the most efficient way to protect your business.
  7. Pay your suppliers in time with a combination of electronic invoicing, order management and electronic catalogue management. In close connection to the previous points, this will help maintain a healthy relationship with your most valuable suppliers.

The Next Steps

At this point, more than half of global business leaders think that the market reconstruction period will last well into 2021, while 72% of them declared their companies were already undergoing strong transformations, in order to permanently adapt to the new landscape.

As a company that builds business ecosystem automation solutions, we help companies digitalize business processes both within and among their network of partners (buyers, suppliers, financial institutions). We work with companies in the retail, automotive, professional services, logistics, healthcare, pharma companies, and utilities verticals and serve over 3500 clients and more than 25 000 users. Our solutions take away the hassle of paperwork and manual operations, giving managers and employees alike full control over their time and finances. Our vision is that all companies, irrespective of size, will work with one another, 100% digitally, paperless and in real-time. So, why not give our consultants a call?