Reverse Logistics in Pakistans' Pharmaceutical Sector

Pakistans' pharmaceutical sector consists of nearly 400 companies but top 100 companies handle 90 percent of the pharmaceutical business. The sector includes 30 multinational companies accounting for 50% of the business. The competition with multi-nationals has played a positive role in managing forward logistics through good supply chain practices. Management of returns is largely accommodated as a regulatory and customer service necessity and handled as a market and sales activity. The reverse logistics (RL) process if managed correctly can improve the efficiency of overall supply chain. This research found that medicines retrieved from the market often have residual life and due to improper management lose their value while lying in sales centers. In some cases where return is due to damaged packing full market value could be recovered. Donation of unexpired medicines to charitable hospitals can add to the corporate image. Proper management of RL will be helpful in ensuring security of supply chain and prevent infiltration of counterfeit medicines. Application of better inventory management through Radio frequency identification (RFID) and other information technology applications will improve RL as well as overall supply chain. It has been estimated that RL management could save at least 10% of the cost of present reverse logistics estimated at nearly Rs 5 billion.

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