Pharmaceutical supply chain gaps force $230M in drug shortage costs upon healthcare providers
- A 2017 joint study by the Pew Charitable Trust and the International Society for Pharmaceutical Engineers (ISPE) revealed that improved supply chain management and better partnership are the best means of avoiding drug shortages, PharmTech.com reported Tuesday.
- As a result of shortages, both hospitals and treatment centers spend approximately $230 million on drug substitutions, despite their potentially reduced in effectiveness.
- The greatest supply chain gaps within pharmaceutical companies are a lack of best practice implementation, meaning that such common measures as maintaining backup supplies, procuring from multiple sources, or even increasing manufacturing, happens neither consistently nor in standard fashion.
More than any other industry, medical supply chains require careful coordination at every step of the chain, for a drug shortage in a hospital or a lack of medical device could make a world of difference for the client's health. As the healthcare industry pushes personalized treatment, and the pharmaceutical industry develops more gene-specific biologic drugs, increased supply chain visibility is becoming a requirement.
For example, a recent report from Berlinger reveals poor handling and storage during the logistics stage could cause a drug to not only lose potency, but also possibly become toxic due to degradation triggers within the formula. For that reason, many cold chain logistics providers are expanding their offerings to promise real-time visibility, alerts in temperature changes, and other such tools that may help spot a compromised drug or shipment before it reaches a provider. Given enough lead time and this information, a pharmaceutical supplier could help its buyer avoid a drug shortage by earlier notification, and potentially a second shipment.
Implementing traceability, then, can provide great benefits for the supply chain — but it comes with challenges. To make drug batches traceable and safer, the Food and Drug Administration is pushing serialization and unique device identification regulations upon the industry, yet this requires changes in labeling, processing and sometimes production techniques. Recent reports indicate more than half of manufacturers are already fully compliant, but for the other half, time is beginning to run short given the scale of change.
Deriving value from traceability is also a challenge, for even if each medical product includes a specific number, supply chain partners must have the technology in place to process it in order to grant visibility to the supplier and reap the benefits. Yet it appears the logistics market appears to be responding to the need for technology and cold storage.
Drug shortages are costly and inefficient. Fortunately, the solutions appear to be at arm's reach for supply chain managers.
Follow Jennifer McKevitt on Twitter