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1. Introduction
The pharmaceutical industry can be defined as a combination of processes, organizations and operations involved in the development, design and manufacture of useful pharmaceutical drugs (Shah, 2004). According to Xie and Breen (2012, pharmaceutical supply chain is a special supply chain in which drugs are produced, transported and consumed. Papageorgiou (2009) has observed that enterprises cannot be competitive without considering supply chain management (SCM) activities. According to Lee (2002), management of supply chains is a complex and challenging task because of the changing trends in expanding variety of products, short product life cycles, increased outsourcing, continuous advances in information technology and globalization of businesses. It also includes expenditure of high cost and time in conducting clinical trials with low success rate in product discovery and clinical development, generic competition at the end of product patent life followed by high uncertainties in demands and capacity planning (Lainez et al., 2012). Narayana et al. (2012) have concluded that slow growth for the industry had also been a major challenge in the recent past. Talias (2007) has observed that innovation rates in the industry have shown considerable decline because of the long time of 15-30 years spent in the development of new drugs. WHO (2009) has noticed that drug prices rise as high as 650 per cent than the acceptable international standard in under-developed countries in addition to the low availability of cheap medicines in the market. Insufficient funding, inability to forecast accurately, lack of incentives for maintaining stocks, inefficient distribution systems and pilferage of medicines for private resale have led to the low availability of cheap medicines that are essential for the primary healthcare sector (WHO, 2009). Porter (1980) has considered input pricing, uncertainty in product demand, actions of competitors, actions of governmental bodies, bargaining power of suppliers and buyers, threat of new drugs in the field and global economic dynamics as the major challenges for the pharmaceutical industries.
To meet challenging requirements, companies must find new sources of competitiveness and engage in developing unceasing innovation techniques (Ageron et al., 2013). Srivastava (2008) pointed out risks and uncertainties related to the recovery of pharmaceutical drugs such as timing, quality, quantity and variety of returns; estimation of operation and cost-related parameters for reverse supply...