Most people with regular prescriptions likely take for granted that medication refills will be ready at the pharmacy counter when expected. Similarly, if diagnosed with strep throat, an ear or sinus infection, or another common illness requiring antibiotics, it's assumed that we’ll be able to pick up the necessary medicine right away and get on the road to recovery. When these assumptions turn out to be incorrect, however, the situation can quickly move beyond minor frustration. The results can be life-threatening — and even a matter of national security.
This week, the U.S. Senate released a report on the extreme number of active drug shortages, which peaked at 295 at the end of 2022. And a survey by the Pharmaceutical Group of the European Union found that 100% of the 29 member countries reported drug shortages last year, including anti-infectives and respiratory medicines.
In the United States, affected medications include albuterol, commonly used in inhalers; the antibiotic amoxicillin; IV saline; semaglutide, a diabetes treatment; and, perhaps most devastating, cisplatin, etoposide, fluorouracil and methotrexate — all cancer drugs.
Dr. Andrew Shuman, a cancer surgeon, is quoted in The New York Times explaining that he’d been forced to choose which patient would receive a life-saving drug in the Michigan hospitals where he works: “As a doctor who has devoted my life to fighting cancer, it’s hard to express how horrible that is.”
For once, this isn’t an issue caused by COVID, though the pandemic exacerbated shortages at its peak. The Senate report mentions major undersupply dating back to 2019, and reporters at CNN found recorded scarcities going back to 2007.
The Wall Street Journal states that the “low-cost, low margin nature of many of these medicines” means that companies aren’t incentivized to keep extra product on hand or even have basic backup plans. In the United States, this is compounded by an overreliance on foreign manufacturing, a lack of resilience in the face of natural disasters and an opaque supply chain. Homeland Security and Governmental Affairs Committee Chairman Gary Peters remarked during the hearing that overreliance on foreign suppliers "remains an unacceptable national security risk."
The Senate report continues: “End-to-end supply chain visibility is essential to identifying and mitigating risk. Neither the federal government nor industry has end-to-end visibility of the pharmaceutical supply chain.” Furthermore, the U.S. government lacks the data necessary to even figure out who is sourcing the raw materials and finished drugs. One pharmaceutical can use up to 20 key starting ingredients, and even the manufacturer might not know where they’re coming from. By comparison, New Zealand has a public database that lists all drugs on the market, their corresponding active pharmaceutical ingredients and their manufacturing locations.
Supply chain stability
Even if your supply chain doesn’t include pharmaceuticals, the message of this drug shortage is clear: Supply chain organizations need visibility to build resilience. To that end, ASCM developed the Resilient Supply Chain Benchmark, in collaboration with the Economist Intelligence Unit, to enable businesses to determine what they’re doing right, assess resilience-building capabilities, and identify and respond to both sudden shocks and longer-term structural shifts.
Complement this with KPMG and ASCM’s Supply Chain Stability Index, which examines the impacts of unprecedented volatility in our supply chains. Using a set of machine learning algorithms, your organization can gain insights into the sources of stress and how to respond.
In addition, you can take this a step further and lead the way to more resilient supply chains by defining and aligning your team’s performance with ASCM transformation learning programs. You’ll discover how to establish sustainable processes for implementing change, driving growth and streamlining operations. And if the outcome is readily available medication to all who need it, then that’s a transformation worth making.
