Sufferers and hospitals routinely cannot access the most basic and essential prescription medications because of shortages of medicine resembling amoxicillin, Adderall, saline, and epinephrine. The latest COVID-19 pandemic and related geopolitical challenges have additional highlighted the necessity to proactively identify and address vulnerabilities in US pharmaceutical supply chains.

Quite a few experiences have been written by authorities businesses, lecturers, suppose tanks, consulting corporations, and different business individuals to systematically determine causes of and potential options to those challenges. One in all these efforts was Constructing Resilience into the Nation’s Medical Product Provide Chains, from the National Academies of Sciences, Engineering, and Medicine (NASEM) , to which this text’s authors contributed as authors or consultants. (The report was commissioned in response to Congress’ enactment of the Coronavirus Aid, Relief, and Economic Security[CARES] Act in October 2020.)

To synthesize for coverage makers among the greatest considering on drug provide chain resilience, we characterize the suggestions of a complete, though not exhaustive, checklist of the experiences on the subject. We additionally describe some latest actions by the federal government and personal business to bolster provide chains. We conclude with potential subsequent steps to advance three areas: transparency, stock administration, and onshoring. On this context, we talk about the necessity to develop monetary incentive mechanisms and prioritize efforts.

What Makes A Resilient Provide Chain?

Provide chains are resilient if they’ll keep away from shortages regardless of shocks to provide or demand. Set off occasions which will trigger or precipitate shortages embody an surprising demand surge, a provide capability discount, and failures of coordination.

There are lots of methods private- and public-sector actors could make provide chains extra resilient to such set off occasions. The 2022 NASEM report aggregates these into 4 layers, outlined as follows:

  • Consciousness is the possession by the suitable folks of the knowledge wanted to evaluate, mitigate, put together for, and reply to dangers of pharmaceutical shortages;
  • Mitigation actions are taken previous to a disruptive occasion to keep away from the occasion altogether or to cut back its magnitude;
  • Preparedness are actions taken previous to a disruptive occasion to cut back unfavorable results on well being and security; and
  • Response actions are taken post-event to reduce hurt from the scarcity and to resolve the scarcity.

Every of those layers could be additional subdivided into classes, as illustrated in Exhibit 1 beneath.

Exhibit 1: Medical product provide chains resilience framework: potential set off occasions and resilience measures

Supply: Hopp WJ, Brown L, Shore, C, editors. Building Resilience into the Nation’s Medical Product Supply Chains. Washington (DC): Nationwide Academies Press; 2022. Determine S-3, abstract, p. 9.

Widespread Suggestions

We reviewed suggestions included in 22 experiences. The appendix on the backside of this text describes these experiences. On this part, we reference the experiences utilizing the identifiers within the appendix. Though the experiences differ in focus and scope, they comprise recurring suggestions.


Transparency in provide chains helps patrons to evaluate product high quality and amount obtainable for buy, producers to evaluate shopper demand for his or her merchandise, and different members of provide chains to make sure the product reaches the appropriate shopper. Many of those actions are unimaginable within the US prescription drug market due to a scarcity of transparency into provide chains hyperlinks, which makes identification of weak hyperlinks troublesome. Growing transparency of provide chain maps—who makes what, the place, and the way a lot—is subsequently a key advice throughout many experiences.1,11,14,19,20 One other oft-proposed transparency enhancement is manufacturing quality-rating programs.1,2,6,12,15,20,21

Superior Manufacturing

Outdated manufacturing know-how is one other generally recognized reason for prescription drug provide disruptions.1,2,21 Studies suggest selling using superior manufacturing applied sciences as a result of they’ll cut back the probability of set off occasions and promote responsiveness and flexibility.1-4,6,8,14,15

Onshoring Of Provide

Many experiences suggest onshoring (or nearshoring or friend-shoring) manufacturing amenities to decrease the danger of geopolitical disruptions.2,3,8-10,12,14,15,18 Nonetheless, a number of counsel that onshoring shouldn’t be a panacea for attaining dependable and resilient provide chains, because of larger prices from native sourcing.1,9,19 Others counsel that concentrating manufacturing onshore could make provides extra susceptible to regional disruptions (for instance, hurricanes, regional local weather change, or geopolitical occasions).1,15

Stock Administration

The COVID-19 pandemic emphasised stock administration challenges, with pharmacies, hospitals, and clinics competing for important prescription drug provides from non-public suppliers and the US Strategic Nationwide Stockpile (SNS). Some experiences argue that the SNS—beforehand focused for regional public well being threats and pure disasters, however not nationwide pandemics3—is outdated and inadequate for addressing disruptions.3,8,9,17 Stock-related points lengthen to the final mile, the place suppliers continuously need to allocate scarce pharmaceuticals to sufferers. Quite a few experiences criticize the dearth of equitable allocation of important pharmaceuticals throughout the pandemic.9,12,13,17

A number of experiences suggest that uncooked materials suppliers, producers, distributors, pharmacies, and well being care organizations enhance their very own security inventory to buffer towards set off occasions.2,6,7,9,13,17-19 Just a few reports1-3 introduce stock administration fashions that provide chains might undertake, resembling vendor-managed stock, during which the provider (for instance, drug producer, wholesale distributor) takes full duty for sustaining an agreed-upon stock stage of the product on the end-user’s location.1 Many experiences suggest modernizing and optimizing stock stockpiling administration for SNS.1-3,8,9,14,15,17,22 As well as, a number of experiences name for regional SNS’s to handle regional shortages extra successfully.1-3,14

Financing Resilient Provide

Through the pandemic, authorities funds have been deployed to underwrite chosen prescription drug provide chain resiliency efforts. Quite a few experiences suggest offering related monetary incentives to non-public corporations concerned in resiliency efforts resembling bettering manufacturing high quality;1-4,5,6,9,10,15,20-22 adopting twin sourcing (having a number of suppliers);1,2,5,10 diversifying suppliers and manufacturing websites;2,3,9 creating contingency plans;2,5,6 and putting in superior manufacturing applied sciences and holding extra stock.1-4,6,8,14,15,22 Different experiences suggest updating authorities reimbursement insurance policies for provides to drag improved high quality and resiliency.2,4,6,9,15,22

Current Progress

There may be progress towards implementing among the suggestions within the experiences, notably throughout the Administration for Strategic Preparedness and Response (ASPR), which issued a nationwide plan.3 We describe among the latest progress in three areas: transparency, superior manufacturing, and stock and capability administration.


The ASPR established a cross-sectoral joint supply chain resilience working group (179 business and authorities companions) to facilitate info sharing and collaboration to sort out end-to-end provide chain points. The Meals and Drug Administration’s (FDA’s) Heart for Drug Analysis and Analysis (CDER) developed tools to achieve higher visibility into the provision chain; for instance, CDER expanded its surveillance capabilities to develop early warning indicators of impending shortages. The FDA has been pursuing some legislative proposals to assist reduce gaps in surveillance actions.

Different stakeholders have additionally been increasing transparency into provide chains. Suppliers have been providing greater information to patrons to extend upstream transparency. US Pharmacopeia, an unbiased, scientific, nonprofit group that establishes requirements for the standard and purity of pharmaceuticals, has used its information, coupled with different information sources, to map out many provide chains and assess their resilience.

A serious aspect of transparency is expounded to manufacturing and product high quality. The FDA’s Workplace of Pharmaceutical High quality is working to develop a system to measure and rate quality management maturity. RISCS, an unbiased nonprofit ranking and certification group, has been creating a rating system that makes use of private manufacturer-reported information on the Nationwide Drug Code stage.

Superior Manufacturing

The ASPR established an industrial base and supply chain management program and made investments in superior, steady, and platform manufacturing of some important pharmaceuticals. The FDA has been working the Emerging Technology Program, which helps take away among the regulatory uncertainty round new superior manufacturing all through the product life cycle.

Stock And Capability Administration

The ASPR has been working with federal, state, native, tribal, territorial, and private-sector companions on stockpiling and vendor-managed inventory systems. The pharmaceutical business has been creating an expansive checklist of various contingency scenarios and growing flexibility to assist extra fast shifts if wanted. Producers are diversifying suppliers, growing using contract development and manufacturing organizations and surge capacity, and increasing digital tools for real-time monitoring throughout the provision chain. Distributors report that they’ve been working on allocation practices primarily based on higher measures of demand. As an illustration, throughout the pandemic, distributors cooperated with the federal authorities for vaccine and therapeutic distribution.

Subsequent Steps

When excited about subsequent steps, there are three necessary traits of US prescription drug provide chains that stakeholders ought to preserve prime of thoughts.

First, these chains are huge and complicated: There are greater than 20,000 authorised prescription drug merchandise and greater than 13,000 amenities registered to make both energetic pharmaceutical components (APIs) or finished-dose drug merchandise. Greater than three-quarters, 78 %, of APIs are made exterior the US. These statistics underestimate complexity as they don’t account for uncooked components, elements resembling vials, elements resembling machine elements, or for that matter medicine that predate present FDA approval programs.

Second, the foundation causes of provide challenges are diverse and interconnected. One implication of those traits is expounded to the coverage of onshoring. Even when we transfer amenities to the US to handle potential geopolitical dangers, home manufacturing alone doesn’t assure reliability. In any case, manufacturing disruptions in US-based amenities are the most typical reason for shortages.

Third, the social advantages from constructing provide chain resilience are a lot higher than the non-public advantages from such efforts. For a producer, a scarcity means misplaced gross sales and maybe weakened market place relative to competitors, however that price pales in comparison with the fee confronted by sufferers, suppliers, and society at giant. Closing the private-social advantages hole can not depend on goodwill from producers alone; they’ve fiduciary tasks to their shareholders and subsequently a drive to hunt price benefits that include international sourcing, carrying restricted stock, forgoing extra capability, and protecting the make-up of their provide chains confidential.

Taken collectively, these traits counsel there is a vital position to play for the federal authorities in prescription drug provide chain resilience. The federal government can tackle duties the place it’s unimaginable or too pricey to depend on the non-public sector, and it could possibly prioritize and financially assist particular provide chains which might be most necessary to the well being and well-being of Individuals, together with essentially the most susceptible. We describe how the federal authorities can apply these parts to enhance transparency, stock administration practices, and onshoring. We additionally determine the position of different stakeholders in these efforts.


Step one towards transparency is assessing who wants what info and for what goal. For instance, the federal authorities wants higher transparency into provide chains to prioritize which of them want intervention or assist. The FDA wants higher transparency into when producers face a requirement spike to implement prevention or mitigation efforts. Group buying organizations must assess provide reliability to decide on distributors and to create contingency plans. Physicians want info to find out whether or not and the right way to change care protocols for his or her sufferers.

A lot of the knowledge these stakeholders want is enterprise confidential. The federal government has the ability to mandate a few of this info be launched. Alternatively, it could possibly assist course of information in a manner that confidentiality issues are minimized, for instance, by high quality ranking programs. For its personal scarcity mitigation efforts, the federal government may ask producers to supply details about demand spikes and provide disruptions much like the executive order throughout the Obama administration asking corporations to report shortages. Different alternatives embody exploring cost fashions that reward higher transparency in addition to info applied sciences resembling blockchain that may make information alternate safer.

Stock Administration

Simply-in-time manufacturing makes good enterprise sense however not good social sense. That is one motive the federal government maintains a nationwide stockpile. However the sheer scope of US prescription drug provide chains means that the SNS neither can nor ought to undertake to resolve all provide chain points alone. The non-public sector is best suited to take care of extra routine issues, which might allow the SNS to handle emergent wants associated to catastrophic occasions.

With its superior entry to information, the federal government can set the stage for higher stock processes by collaborating with stakeholders to constantly determine and replace which merchandise ought to be prioritized, at which stage (producer versus wholesaler), and during which varieties (uncooked materials, API, completed product). The federal government can be within the place to mandate or financially encourage corporations to carry enough inventories and to arrange “resiliency plans,” with auditing compliance as wanted.

Establishing programs and frameworks for allocation of scarce stock can be a ripe space for presidency engagement. There are lots of classes realized from the distribution of COVID-19 monoclonal antibodies and vaccines which might be value exploring as templates for future disasters. The existence of clear and agreed-upon plans is efficient in responding to an occasion and likewise builds belief amongst stakeholders, discourages hoarding, and encourages sharing.


Onshoring as a resilience technique highlights the significance of prioritization. Seventy-eight % of API merchandise are made exterior the US and the speed for excipients (inactive drug components resembling coloring brokers and preservatives) and uncooked supplies could also be even higher. It will be unimaginable to provide all these substances within the US, so assessing which provide chains are most necessary to the well being and well-being of Individuals is essential, as is assessing that are essentially the most susceptible.

As Congress and federal businesses contemplate onshoring incentives or mandates, they need to guarantee that any such efforts are pursued together with different efforts, particularly those who enhance reliability of producing. Each monetary and regulatory incentives could be leveraged to extend public-private partnerships on onshoring and diversification. These efforts require leaders with distinctive multidisciplinary experience in areas resembling economics, operations administration, commerce coverage, and pharmaceutical manufacturing.

Summing Up

The social prices of poor prescription drug provide chain resilience are super, however we can not depend on market forces alone to handle gaps as a result of present challenges are themselves a results of market forces. It’s in the end non-public business that should take steps to create resilience. Nonetheless, the federal authorities performs an necessary position in prioritizing business efforts and offering the information, incentives, and mandates to steer the business to make these investments. Congress performs a job in funding these steps.

Appendix: Reviewed Studies And Publications

Studies and publications written between 2017 and 2022 that present particular suggestions associated to pharmaceutical provide chain resilience have been chosen and reviewed for this text.

Notice: Report quantity is used for quotation within the textual content of the article.

By Editor

Leave a Reply