Supply chains are higher profile right now than ever before. Recent shortages have highlighted that everyday products Americans rely on are delivered through complex, global supply chains that can easily break down. Of the many supply chains whose fragility was exposed by the COVID-19 pandemic, none are more vital to public health and safety than those for medical products. Shortages of medical supplies and medications can put lives at risk and compromise the U.S. healthcare system. Recognizing this, as part of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Administration for Strategic Preparedness and Response called for the National Academies to examine the root causes of medical product shortages and identify ways to enhance the resilience and security of U.S. medical product supply chains—both in so-called normal times and during public health emergencies.
Trigger events such as natural disasters, infectious disease outbreaks, or manufacturing process problems, can disrupt medical product supply chains in three primary ways:
An event drives demand well above the normal level for an extended period of time.
One or more production or transport processes are impeded by lack of assets, power, or people.
Events that prevent supply from being matched to demand can cause shortages even when total supply is sufficient to meet total demand.
These disruptions can overlap and interact—demand surges and capacity reductions may occur simultaneously, or capacity reductions may precipitate subsequent demand increases, and vice versa.
Shortages of medical products have pervasive consequences for all stakeholders involved in supply chains, including:
Shortages potentially lead to poor clinical outcomes caused by substitutions, medical errors, treatment delays, or lack of treatment if no alternative is available.
Shortages impose a variety of costs, from higher drug budgets to lost revenue to additional labor costs required to mitigate those effects.
Manufacturers and suppliers
Shortages increase pressure to compensate for supply chain disruptions, but manufacturers and suppliers are often unable to meet unpredicted surges in demand.
To prioritize the ways medical product supply chains can be made more resilient, the National Academies designed a framework that outlines various measures for protecting the public. Click here to read more about the framework.
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Awareness is the foundation for medical product supply chain resilience, and it is achieved through transparency (i.e., visible data), analytics (i.e., processes for turning data into information), and communication (i.e., channels for sharing information with the relevant actors in the supply chain).
Mitigation measures include actions taken prior to a disruptive event that help prevent the event altogether or reduce its magnitude. Mitigation measures include hardening, to reduce the likelihood or magnitude of disruptive events within stages of the system, and diversification, to create parallel versions of stages to reduce the risk of catastrophic failure.
Preparedness measures include actions taken prior to a disruptive event that will reduce the risks to health and safety if the event occurs. These actions include inventory stockpiling and capacity buffering, in which stock or productive capacity are held in readiness to fill a supply shortfall; contingency planning, which establishes plans for dealing with specific scenarios; and readiness, which builds capabilities for dealing with scenarios without specific plans made in advance.
Response measures include actions taken after an event to minimize harm from medical product shortages and resolve the disruption. Response measures at the global and local level are required to close the supply gap through demand reduction and/or supply increase, and ensure medical products reach the end user.
N95 respirators are face masks used in health care and construction settings, and early in 2020 they became one of the most critical and in-demand tools in preventing the spread of COVID-19. This surge in demand and the fact that half the world’s supply of N95s came for China caused a severe and enduring shortage of N95s.
Saline solutions are intravenous (IV) solutions used to maintain or replace fluids and electrolytes in the body, and to carry medications into the bloodstream. Due to capacity reductions and a market concentration in Puerto Rico, there was a severe shortage of saline after Hurricane Maria hit the territory in 2017.
The following points collectively summarize the necessary actions recommended by the committee that are needed to increase the resilience of medical product supply chains:
Make sourcing, quality, volume, and capacity information publicly available for all medical products approved or cleared for sale in the United States.
Establish a public database for the supply chain information acquired for medical products.
Resilience Contracting by Health Systems
Deliberately incorporate quality and reliability, in addition to price, in contracting, purchasing, and inventory decisions.
Modernize and optimize inventory stockpiling management to respond to medical product shortages at the national and regional levels.
Cultivate capacity buffering for supply chain critical medical products where such capacity is a cost-effective complement to stockpiling.
Negotiate an international treaty with other major medical product exporters that rules out export bans on key components of global medical product supply chains.
Establish a working group to examine last-mile and end user issues regarding medical product supply chains.