Introduction:
In this essay, the discussion will focus on the vertical chain of a major pharmaceutical company as well as TCE and its effect on make or buy decision.

The vertical chain is ‘’ the process that begins with the acquisition of raw materials and ends with the distribution and sale of finished goods and service.’’ (Besanko et al, 2010, p119)
The term vertical integration is used to describe firms that produce and sell their goods without relying on external co-ordination. Firm’s vertical boundaries can identify what to make (internally inside the organization) and what to buy (externally by using the market).

Some of the pharmaceutical companies like Pfizer have strong vertical chains. So as to market its drugs in 150 countries, it gives high importance for production that starts by acquiring active pharmaceutical ingredients (API) and shifting them to manufacturing sites all across the globe. These manufacturing sites are either approved under the stringent laws of FDA or EMEA (2 important bodies responsible in monitoring the quality of registered products across the globe). Sometimes Pfizer also uses loan-licensing companies as external manufacturers when in-house facilities are not available or feasible.
Once the product is manufactured, it is sent for quality control release and then packed and shipped to the first point of distribution (global hubs). From these locations; depending on the demand from each region; packed products (formulated products) move to the regional hubs.
These hubs in turn will supply to either local hubs (within the country) to cater within the country of operations for private markets and local government institutions, or to regional institutions through tender supply.
Finally the pharmacies and private hospitals receive the product ready to be used by the customers (Healthcare professionals, patients and