RESEARCH METHODOLOGY (MBA 332)

C.I.A. – 1

A REPORT ON RESEARCH PROBLEM IDENTIFICATION

IN

PHARMACEUTICAL INDUSTRY

Submitted By

THANDRA RANI SAMYUKTHA

2227158

Under the Guidance of

PROF. RAJASHREE KAMATH

MBA PROGRAMME

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

MARCH 2023
Executive summary:

Pharmaceuticals are utilized in healthcare facilities to treat and prevent diseases, increase
population health, and save millions of lives. 20–60% of health spending in emerging and post-
industrial nations is on medications. The traded value of pharmaceutical supply chains has
expanded due to the globalization of the pharmaceutical sector over the previous two decades.
Many parties are involved in the supply chain's multiple tiers, which makes integration and
communication challenging. As a result, the sector encounters difficulties in the quality
distribution of biologicals, which affects the effectiveness of the products and causes end users to
worry about their health. Drugs that have expired, unused, spilled, withdrawn, recalled, damaged,
contaminated, or for any other reason are considered pharmaceutical wastes. Waste management
must be carried out more scientifically and encompass waste collection, packing, storage,
segregation, transport, treatment, and disposal.

Background:

The annual accumulation of pharmaceutical waste is enormous due to overconsumption,

overproduction, and overprescribing. According to numerous studies, there are trim levels of
medications in rivers and water supply systems. These active APIs reach the food chain due to
inappropriate disposal, where they are then passed on to people, animals, and plants. The most
critical flaws in pharmaceutical waste disposal include insufficient storage space, a lack of
resources, a shoddy infrastructure, and a lack of awareness among healthcare professionals,
patients, and the general public. To reduce the risks associated with pharmaceutical waste, it is
essential to implement national rules, find affordable disposal options, train staff, and inform the
general public. The pharmaceutical industry should balance pharmaceutical production and
consumption rates to prevent expiration.

A drug's expiration date is the time beyond which, likely, it will no longer be safe to use in its
manufactured form. By looking for an expiry date on the drug packaging of a medication,
consumers can determine the duration of its usability. Medicines beyond their expiration date may
degrade and become ineffective or even dangerous. Some treatments and drugs are left unused in
pharmacies for various reasons, such as when a prescription has expired or is no longer effective.
Most of these pharmaceutical lots that have passed are destroyed. The project's goal is to examine
the current pharmacy supply chain model for medications and offer a model for a solution to move
drugs that are getting close to their expiration dates to pharmacies with a need for that particular
medication. In addition, under the new solution model, the expense associated with the method
used to destroy them is saved and used to distribute the drug lots to other pharmacies.
Business problems with Practical / Scientific evidence:

1. Why is there some revenue loss each year for healthcare facilities?

As per ‘National Technology for Biotechnology Information,’ two of every three prescription
drugs were reported as being unused, with a total estimated cost ranging from 59,264.20 USD to
152,014.89 USD, the percentages of new medications that were out-of-date or had an ambiguous
expiration date in Palestinian hospitals were 32.7%, 17.7%, and 11%, respectively. The most
frequently found drug categories in homes were musculoskeletal, anti-infective, and alimentary,
whereas the most frequently found individual pharmaceuticals were paracetamol (8.5%),
ibuprofen (4.9%), and diclofenac (3.7%). 730 drug dosages were thrown away, according to a
study of medication waste at a tertiary hospital in Dar es Salaam. 18.9% of the medicines
prescribed were antibiotics, 8.9% were cardiovascular drugs, and 23.7% were from other
categories. Per additional research conducted in rural Ugandan hospitals, expired medications had
a value of 1584 USD (25 items) in 2000/2001 and 1307 USD (13 items) in 2004/2005. In hospitals
using auditable pharmaceutical and transaction systems in Ethiopia, the average wastage rate was
reported to be 1.1% in 2014–2015, amounting to 3,196,865 birrs in value. Another study on
Gondar town revealed that six healthcare facilities lost 1337.6 USD in revenue over six months
owing to expiration.

2. Why is there a significant increase in hospital costs?

A descriptive cross-sectional study examined how three hospitals handled biomedical waste under
the Bio-Medical Waste (Management and Handling) Regulations, 2011. Cost information for a
year was analyzed using retrospective research. Hospitals must pay expenditures for Bio-Medical
Waste management, which can be divided into capital and recurring costs. One-time or fixed costs
are capital costs. Purchasing plastic bins for waste disposal, transport trolleys for moving the waste
from the point of generation to the internal storage area, sharps containers for removal, and
personal protective equipment like rubber shoes for waste handlers to wear during packaging and
transportation are all included in capital costs. Recurring expenditure is one that consistently
occurs over time. Cost for consumables like color-coded bags, personal safety equipment including
plastic aprons, face masks, gloves, employee training expenses, waste handler salaries, and
outsourced expenses are included in recurring costs.

Research Problems:

Problem statement 1: “How to reduce pharmaceutical inventory waste at various pharmacies

due to their shelf-life expiration?”

This issue has an impact on subjects like:

 Supply chain agility: Destroying outdated medications takes longer, impacting the chain’s
competence and speed.
  Profit and revenue loss: Investing in the recycling of expired products may impact the
organization's profit.
 Inventory management: It may be negatively impacted by excess unused or surplus
expiring units in the warehouses and cause storage problems.

Problem statement 2: “How to reduce costs associated with disposing of expired medicines?”

Transshipment costs: The factor that can affect the cost of medical waste disposal is the frequency
of collections. More transportation costs brought on by frequent pickups can raise the overall cost
of waste disposal. On the other hand, infrequent pickups can cause a buildup of garbage, posing a
risk to public safety and violating the law.

Research Objectives:

Problem statement 1: “How to reduce pharmaceutical inventory waste at various pharmacies

due to their shelf-life expiration?”

Objectives:

 To conduct an in-depth study of the existing flow of medicine

 To identify the drawbacks of the current flow, the need for the new flow, and the
stakeholders involved.
 To examine the expired goods return policy in detail and comprehend all the processes
involved in eliminating all the expired drugs.
 To collect data (personally visit pharmacies and gather information) which includes:
 Determination of medicines
 Manufacturing date
 Expiry date
 Stock details etc.
 To estimate the highly prescribed or used medicines at the national level

Problem statement 2: “How to reduce costs associated with disposing of expired medicines?”

Objectives:

 To study the existing transportation model

 To examine the drawbacks of the current model and the need for optimization
 To conduct an in-depth study of the legal & compliance policies related to the
transportation of expired drugs.
 To identify the precautionary measures related to the transportation and disposal of
medicines.
Keywords & concepts:

 Supply Chain Management: Supply chain management is the management of the

movement of commodities, information, and money associated with a good or service,
from the sourcing of raw materials to the delivery of the good at the ultimate location.
 Shelf-life: The term "shelf life" refers to the time you can anticipate a product to appear,
behave, and be safe for use. The time varies depending on the product's type, intended
usage, and storage method.
 Waste Management: The entire process of managing waste, from inception to disposal,
is called waste management or waste disposal. Collection, transportation, treatment, and
waste disposal are included, along with monitoring and regulation. It also comprises the
legal and regulatory framework related to waste management covering guidelines on
recycling etc.

Hypothesis:

Problem 1: “How to reduce pharmaceutical inventory waste at various pharmacies due to their
shelf-life expiration?”

Null Hypothesis: There is no significant effect on a firm's revenue due to pharmaceutical

inventory waste caused by shelf-life expiration.

Alternative Hypothesis: There is a significant effect on a firm's revenue due to pharmaceutical

inventory waste caused by shelf-life expiration.

Problem 1: “How to reduce costs associated with disposing expired medicines?”

Null Hypothesis: There is no significant effect on the costs of a healthcare facility due to the
disposal of expired medicines

Alternate Hypothesis: There is a significant effect on the costs of a healthcare facility due to the
disposal of expired medicines

Review of Literature:

The research done for the literature review includes looking at supply chain agility, lean, agile,
resilient, and green paradigm trade-offs, among other things like difficulties with transshipment,
supply chain sustainability, and current drug flow in various settings and
circumstances, investigating many SCM techniques, including TOPSIS, SCM dangers, and
uncertainties, etc. The quick Dexterity in the supply chain has been considered much more recently
as a means for organizations to quickly respond to the evolving business environment and advance
their degrees of client care. To understand this concept, it's crucial to describe what an agile
company is first. The concept of readiness has addressed the substantial levels of complexity and
vulnerability in cutting-edge markets (Christopher and Juttner, 2000). "Agility implies applying
market information and a critical corporation to exploit profitable chances in a rapidly changing
environment," according to Naylor et al. (1999). Several writers have discussed the relationship
between agility and adaptability (Christopher, 2000; Swafford et al., 2006). The PSC addresses
how essential drug products are distributed to end users in a way that ensures the highest quality,
optimal location, and optimal timing (Mehralian et al., 2012a). Due to the only concept of market
interest in medications, the drug market is strictly regulated in many countries (Garattini et al.,
2007). Governments should compromise clinical and economic interests in light of the competitive
nature of the drug industry (Hakonsen et al., 2009).

Timeline for Research Project:

Month Activity

February 2023 – March 2023 Collection of data related to current supply chain
management of medicine and models of
transportation

March 2023 - April 2023 In-depth study of the existing flow of medicine
and the transportation model

April 2023 To identify the drawbacks of the flows

May 2023 To study and understand the legal and

compliance policies such as expired goods return
policy and transshipment policy

June 2023 – July 2023 To personally visit pharmacies and gather

information about stock details, expiry dates,
manufacturing details, etc.

August 2023 – September 2023 Estimating the most prescribed medicines at the
national level

October 2023 – November 2023 Identify the costs incurred due to transportation
and disposal in the current flow
 December 2023 Examine the precautional measures related to the
transportation and disposal of expired drugs

January 2023 Data Analysis and Interpretation

February 2023 Preparing the research report and review

March 2023 Presenting findings to stakeholders

Preparing Budget for Research project:

S.No Details Amount in Rs. Total in Rs.
1 Salary for 3 Research Rs. 40,000/month per Rs. 14,40,000
associates head

2 Travel and fuel Rs. 12,000/month Rs. 1,44,000

expenses

3 Internet Services Rs. 5000/month Rs. 60,000

4 Equipment (Files, Rs. 25,000/month Rs. 3,00,000
printers, stationary
etc.)

Total 19,44,000

References

Bryal D'souza, A. M. (2016). Comparative Analysis of cost of biomedical waste management in rural
india. International Journal of Research Foundation of Hospital and Healthcare Administration, 5.

Jeevitha D, A. C. (2021). Conceptual Framework to Reduce Inventory of low shelf-life medicines.

International Journal of Engineering Research and Technology, 6.

S. Chand Basha, K. R. (2015). Recycling of drugs from expired drug products: Comprehensive Review.
Journal of global trends in pharmaceutical sciences, 4.