The Realities of Medical Supply Chain in 2022: Why We Have to be Resilient Now

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The Realities of Medical Supply Chain in 2022: Why We Have to be Resilient Now

To most people, the medical supply chain probably doesn’t seem overly complicated. If they ever take the time to think about it, they likely come up with four general categories which are involved in the process: manufacturers (drugmakers, scientists), distributors (wholesale, third-party logistics), providers (pharmacies, hospitals), and the patients. That covers every step from creation to delivery to prescription to consumption.

Before the COVID-19 pandemic, it seems that many in the medical field looked at the supply chain in a similar way, and this thinking may have contributed to some of the major issues with shortages of PPEs, ventilators, and other supplies that we saw during the pandemic. While those basic functions hold true, there are factors that are often overlooked which can break the chain and cause delays and supply chain challenges. Often a distributor or provider doesn’t know where a manufacturer produces its products or sources its raw materials. A natural disaster or the outbreak of a war in another part of the world could disrupt the production of a needed drug or device without warning for those down the chain.

Supply Chain Issues During COVID-19 and Before

Issues with the supply chain hit the national spotlight during the early days of the pandemic. In March of 2020, CNBC reported that the Department of Health and Human Services announced the US only had about 1% of the masks needed for medical professionals for the COVID-19 pandemic. 

But this wasn’t something new to the industry, unfortunately, there was a trend in drug shortages over recent years. A study by the American Journal of Emergency Medicine found that annual drug shortages had risen from 4 in 2016 to 31 in 2019.

The US even had to deal with a drug shortage during World War II. In 1942, the Japanese occupied the East Indies cutting off our supply to the most effective antimalarial drug at the time, Quinine. Without access to the drug, the US military was impacted by malaria throughout the war.

The New Shortages, Worse Than Before?

More than two years after the initial shortages of masks and ventilators created a national crisis, the healthcare industry is grappling with another supply chain crisis. While this one is not capturing nearly the number of headlines or the amount of airtime as the last, it may be even more impactful. 

Forbes recently looked at the shortages facing the medical supply chain in 2022 and said they “dwarf” those from the beginning of the pandemic because there is so much equipment currently on backlog. The FDA released an updated medical device shortage list in July and it contains 30 items.

There are several causes for the current supply chain issues, including COVID-19 and the shutdowns in China, understaffing across industries, shipping delays and crowded ports, and the war in Ukraine. This also means there is no one quick fix or easy solution because of the interconnectedness of the global supply chain with global events. If a factory shuts down for a COVID outbreak, once it reopens it can take up to three months for a product to get back to full supply. 

ECRI ranked the top 10 risks facing healthcare organizations and the supply chain was number 2. A look at some of the real-world impacts shows exactly why it appeared so high on the list. The Association of American Medical Colleges tells the story of a shutdown of a plant in China that manufactures the contrast media (dye) used in CT scans. This caused a shortage at the University of Arizona Health Network and forced them to delay any CT scans which were deemed to be non-urgent.

How Can We Strengthen the Medical Supply Chain?

The shortages and issues with our medical supply chain are happening at a time when the health system can least afford it. According to Kaufman Hall’s National Hospital Flash Report for July 2022 hospitals and health systems are spending 19% more on drugs, 18% more on supplies, and 21% more on labor compared to two years ago.

The example from Arizona highlighted a few creative ways the industry can be better prepared for future breakdowns in the supply chain. When the health system didn’t have their normal amount of contrast media (dye) on hand to perform CT scans, they looked for other ways to care for patients. This included using lower doses when possible, doing some scans without contrast media (dye), and triaging so the most urgent exams were done first. They also had more meetings with residents to explain the crisis, its causes, and the possible responses. This is something doctors may need to do more of in the future.

In the early days of the COVID-19 pandemic, when supply chain issues were causing major problems and creating national headlines, many were already working to figure out how to strengthen the supply chain and improve management so we would be better prepared for the next pandemic and even just the complexities of our everyday healthcare system.

As part of the 2020 CARES Act, Congress put together a committee to examine the resilience of the medical supply chain. The National Academies of Medicine, Sciences, and Engineering conducted a year-long study and released a report called Building Resilience into the Nation’s Medical Product Supply Chains.

They looked at previous shortages caused by the supply chain and found that one after Hurricane Katrina was unexpected because many companies didn’t realize they were buying materials sourced from the Gulf Coast. To prevent this from happening again, there must be greater transparency in the supply chain.

Globalization of trade and production means geopolitical issues could lead to a shortage if steps aren’t taken ahead of time to be prepared.

Here are the recommendations from the final report of actions needed to strengthen the medical supply chain:

  • Awareness
    • Public Transparency
    • Public Database
  • Mitigation
    • Resilience Contracting by Health Systems
  • Preparedness
    • Stockpiling
    • Capacity Buffering
  • Response
    • International Treaty
    • Last-Mile Management

This framework is not the only way to strengthen the supply chain. Others believe the technology, led by AI and Internet of Things, will play a big part in any advancements in the healthcare industry. For others, it depends on the doctors and nurses treating patients on a daily basis. Still, others will look at how the industry players work together across fields and international borders. Most likely, each of these areas will play its own part. As we strive to build a stronger, more resilient supply chain, it’s important that we – drug manufacturers, distributors, pharmacies, and providers- come together to build new partnerships. This is how we can ensure every patient receives the care they need, even with delays and shortages which seem likely to last well into 2023.


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