Challenges that hospitals are currently facing justify the focus on this research subject. The sector has to balance the seemingly incompatible demand of cost reduction and quality improvement. Despite hospital supply chains having a great impact on hospital budgets, still opportunities for optimization exist. The prerequisite for hospital supply chain improvement is measurement. Therefore the purpose of this research is to identify performance indicators that allow the design of a hospital performance measurement system (HPMS) for the downstream pharmaceutical supply chain. This HPMS should answer the following question: to which degree the pharmaceutical supply chain in the hospital is efficient and effective and how to improve them? This paper is organized as follow: first, reviewing the literature on the hospital supply chain and the performance measurement. Second, we describe pharmaceutical Supply Chain within the hospital in order to gain profound understanding in its processes. Finally, designing a performance measurement system. Throughout the research, SCOR reference model is used for the selection of indicators for the HPMS. Furthermore, the field research has been conducted based on semi-structured interviews with hospital staff from Belgian hospitals.