Investigators find that offshoring is largely to blame

Sep 29, 2011 13:49 GMT  ·  By
This is Clemson University professor Aleda Roth, the leader of the new study
   This is Clemson University professor Aleda Roth, the leader of the new study

According to the latest research by Clemson University investigators, it would appear that over-the-counter drugs and prescription medication sold throughout the United States are not as safe for users as the latter are led to believe.

The team determined that the offshoring of pharmaceuticals production is directly tied to an increased risk placed on consumers' health, as well as with a decrease in the overall quality of the products.

This investigation was led by the Clemson Burlington Industries professor of supply chain management, Aleda Roth. She and her team published the findings in a paper called “Quality risk in offshore manufacturing: Evidence from the pharmaceutical industry.”

Details of the work appear in the latest issue of the Journal of Operations Management. One of the most important conclusions that were made obvious from the analysis is that pharmaceutical industry executives tend to underestimate the potential costs of putting sub-par merchandise on the market.

Quality risks are oftentimes not of concern for these people, who hold the fate of millions of Americans in their hands. If batches of low-quality medicine make their way into the country, then the public health repercussions would be massive.

Such a scenario would be made even worse by the fact that the affected drugs are of the kind that can be easily obtained by anyone. As such, the potential of uncontrolled dispersion of these chemicals among the general population is massive.

“Policymakers should strengthen the Food and Drug Administration’s authority and overall ability to intensify its inspection focus on international manufacturing as well as to tighten the overall security of pharmaceutical supply chains,” Roth argues.

“It is not unreasonable for companies wishing to sell drugs in the United States that are manufactured elsewhere to pay for the incremental costs of maintaining the same level of product integrity,” she adds.

“It is often difficult for executives to fully understand the day-to-day challenges faced by operations managers as they attempt to meet delivery pressures with both low cost and low quality risk,” the team leader goes on to say.

She explains that many industry executives are probably too mesmerized by the perceived economical advantages of offshoring that they simply fail to take such important issues into account.

“The operational task of managing and transferring knowledge is extremely challenging, and the actual costs are likely to be dramatically underestimated,” Roth and her team conclude in their journal entry.