Building Resilience into the Nation's Medical Product Supply Chains (2022) / Chapter Skim
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4 Causes and Consequences of Medical Product Supply Chain Failures
4 Causes and Consequences of Medical Product Supply Chain Failures
Pages 95-134
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From page 95... ...
This chapter begins by outlining the mechanics of shortages in medical product supply chains and then explores the three main causes of shortages: demand surges, capacity reductions, and coordination failures. Finally, the chapter examines the effects of these shortages from the perspectives of patients, health care facilities and providers, and medical product manufacturers and suppliers.
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From page 96... ...
For medical products, the levels in Figure 4-1 are usually operated by separate entities -- often with multiple entities at some levels. This means that supply chains are not centrally controlled systems but are instead distributed networks with multiple decision makers that have different objectives.
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From page 97... ...
. Under normal conditions, the bottlenecks in medical product supply chains can be the supply of raw materials, a production process of a supplier, a final assembly plant, or a distribution process.
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This could be the result of some nodes holding more buffer inventory or some receiving higher priority in the distribution of limited supplies. FIGURE 4-2 Schematic of a typical shortage found in a medical product supply chain.
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From page 99... ...
The time-phased nature of failures in medical product supply chains has important implications for building supply chain resilience. First, steps that increase the time from a disruption to a product shortage may help avoid shortages altogether; for example, if the length of the disruption is shorter than the timeframe covered by the inventory held in the supply chain, then inventory provides a buffer against a shortage.
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From page 100... ...
Whether a demand surge results in shortages or not depends on whether the various actors in the medical product supply chains have enacted mitigation and preparedness measures, such as hardening of the supply chain, building sufficient inventory or capacity buffers, and planning for contingencies (as will be discussed in detail in Chapter 5)
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From page 101... ...
These shortages highlighted the effect of demand surges in the context of a major public health emergency (Schondelmeyer et al., 2020) , the risks of having a single source for an item, the need to better manage supply risk, and the importance of endto-end transparency across the supply chain (NASEM, 2021)
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From page 102... ...
. Demand Surge During the COVID-19 Pandemic When COVID-19 initially spread in China in February 2020, China began importing and receiving donations of millions of N95s (Bradsher and Alderman, 2020)
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Manufacturer Prestige Ameritech ramped up production during the 2009 H1N1 influenza pandemic, and was left with excess product when that demand suddenly disappeared. The company did eventually ramp up their production in response to demand during the COVID-19 pandemic, but initial delays slowed efforts to increase the available supply of masks after they secured multiyear contracts (Noguchi, 2021)
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From page 104... ...
Behavioral Reactions to Supply Disruption Behaviors such as hoarding and panic buying can create demand surges and exacerbate existing supply disruptions. Hoarding can be both a result of a shortage and increase the likelihood that a disruption will become a shortage (Childs, 2019; Fox and McLaughlin, 2018)
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From page 105... ...
. Capacity Reductions Beginning in the 2013-2014 flu season, an increased demand for IV saline and several product recalls caused by poor manufacturing quality led to short ages (Fry, 2015; Lee, 2014; Wendelbo and Blackburn, 2018)
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Declines in Manufacturing Quality The single biggest cause of drug product supply chain disruptions under routine conditions is a failure to maintain manufacturing quality, according to an analysis by FDA (FDA Drug Shortages Task Force, 2020)
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From page 107... ...
. To address these challenges, FDA relies on a number of measures to ensure quality and safety of medical products in facilities around the world including preapproval inspections, surveillance inspections, and for-case inspections.2 FDA also relies on automated systems to screen import shipments of drugs, biologics, and medical devices at the U.S.
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. Fifteen companies worldwide recalled 11 drug products and 72 medical devices (The PEW Health Group, 2011)
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Civica Rx is a nonprofit pharmaceutical company formed by a group of health care systems that contracts with generic drug manufacturers to produce drugs in short supply, including heparin (Marsa, 2020)
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. The committee's examination of quality-related shortages highlights important observations that must be included in thinking about how to make medical product supply chains safer and more resilient: For nearly a decade, analyses have found that quality problems are responsible for a majority of the drugs that go into shortage.
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From page 111... ...
. However, in order for such a system to be successful for globalized supply chains, coordination between international health authorities, such as the World Health Organization, and regional or national authorities is crucial to maintaining the integrity and transparency of supply chains (Pascu et al., 2020)
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However, medical product manufacturers have little incentive to harden supply chains through updated techniques, processes, and controls that promote reliability and quality in medical products. The medical product industry will likely require additional incentives to spur investment in updated manufacturing technologies that promote reliability.
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If U.S. medical product supply chains depend heavily upon a few manufacturers, and one manufacturer exits the market, there can be a significant time lag before a new manufacturer can enter the market and increase the available supply.
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COORDINATION FAILURE A coordination failure leads to shortages of medical products when total supply is available to meet demand, but circumstances prevent the supply from being matched to the demand. Examples of coordination failures include disruption in transportation and delivery, geopolitical issues, and lack of transparency and information sharing.
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From page 115... ...
This poses particular challenges in transportation and delivery to rural and remote locations. This challenge was evident during the distribution of certain vaccines against COVID-19, but it has also been an ongoing challenge in delivering medical products around the globe for many decades (Lloyd and Cheyne, 2017; UNICEF, n.d.)
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. See Box 4-3 for a case study on heparin, highlighting the dangerous consequences of a lack of transparency in a medical product supply chain.
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Transparency is an issue for regulatory agencies, manufacturers, and consumers as medical product supply chains become more global and the supply chain networks become more complex. Regardless of supply chain type (e.g., global versus domestic)
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From page 118... ...
If a manufacturer needs to find a new API source -- either to increase production or because of a disrupted supply from another API source -- it can be challenging to find a foreign API source that complies with global regulatory requirements (FDA Drug Shortages Task Force, 2020)
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EFFECTS OF MEDICAL PRODUCT SHORTAGES Shortages of medical products have pervasive consequences that extend from the individual patient level through health care facilities, manufacturers, and suppliers (FDA Drug Shortages Task Force, 2020)
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. Facilities faced with shortages may need to ration drugs, devices, and other medical products that are in short supply based on patient characteristics and clinical evidence, potentially giving rise to difficult ethical decisions about how to prioritize patients (Fox and McLaughlin, 2018; Grimm, 2020; Hantel, 2014)
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From page 121... ...
. In another example, a 2016 shortage of bleomycin -- a palliative treatment for patients with cancer -- warranted the use of alternative regimens that required inpatient treatment, which is more stressful for patients and families, increases the risk of patients' nosocomial exposure to pathogens, and is more costly (FDA Drug Shortages Task Force, 2020)
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Effect on Health Systems Medical product shortages have a near-universal effect on all types of health care facilities and most of their personnel, from clinicians and pharmacists to buyers and facility administrators. For example, severe shortages
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. The example of the medical oxygen shortages encountered in California in December 2020 and January 2021 depict the broad effect of medical product shortages on health care facilities.
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From page 124... ...
. CONCLUDING REMARKS Although it can be difficult to identify the cause of a specific medical product shortage owing to the lack of transparency throughout supply chains, the root causes of shortages can generally be classified into one of three categories: demand surges, capacity reductions, and coordination failures.
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2020. Oncology drug shortages persist.
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2019. Re: FDA-2018-n-3272, identifying the root causes of drug shortages and finding enduring solutions; public meeting; request for comments, edited by S
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. FDA Drug Shortages Task Force.
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2012. Drug shortages delay cancer clinical trials.
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2021. Analysis of the advantages of and barriers to adoption of smart manu facturing for medical products.
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2021. The security of America's medical product supply chain: Considerations for critical drugs and devices: Proceedings of a workshop -- In brief, edited by A
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2018. Impact of drug shortages on patient safety and pharmacy operation costs.
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2020. Engage with health authorities to mitigate & prevent drug shortages.
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2021. Building resilient supply chains, revitalizing American manufac turing, and fostering broad-based growth.
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