Strategic Procurement Models for Achieving Cost Reduction in Global Pharmaceutical Supply Chains
Author(s): Olatunde Taiwo Akin-Oluyomi, Michael Efetobore Atima, Oluwafunmilayo Kehinde Akinleye
DOI: 10.54660/STMJRD.2019.1.5.01-18
Abstract:
Strategic procurement has become an essential function in global pharmaceutical supply chains, where cost pressures, regulatory requirements, and patient access imperatives converge. Pharmaceutical supply chains are uniquely characterized by stringent quality standards, extended research and development (R&D) cycles, and complex global logistics networks. In this context, procurement is no longer a tactical cost-saving exercise but a strategic enabler of competitiveness, efficiency, and innovation. This paper examines the development and application of procurement models designed to achieve cost reduction within pharmaceutical supply chains, drawing exclusively on literature published up to 2018. By synthesizing contributions from operations management, supply chain strategy, and health economics, the paper highlights how frameworks such as total cost of ownership (TCO), category management, supplier relationship management (SRM), and multi-criteria decision-making models have been adapted to the pharmaceutical sector. Special emphasis is placed on the role of globalization, risk management, and regulatory compliance in shaping procurement strategies. The review reveals that while strategic procurement models deliver cost efficiencies, their implementation is challenged by data complexity, supplier consolidation, and evolving industry regulations. Ultimately, the paper argues that achieving sustainable cost reduction in pharmaceuticals requires a balance between cost, compliance, and collaboration. This work contributes to both academic and practical discourse by consolidating knowledge on procurement frameworks and identifying methodological and application gaps for future research.
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How to cite this article:
Akin-Oluyomi, O. T., Atima, M. E., & Akinleye, O.K. (2018). Strategic Procurement Models for Achieving Cost Reduction in Global Pharmaceutical Supply Chains. The Scholars Time: A Multidisciplinary Journal of Research and Development. 01 (05). 1-18.