Many companies (including but not limited to health care organizations) experienced the negative effects of supply chain shortages during the COVID-19 pandemic. However, there are other reasons for such supply issues.
The most recent shortage has impacted many prescription medications and is attributed to a tornado damaging a Pfizer factory in North Carolina. Hospitals were particularly anxious about this incident, which led some of these large organizations to overbuy. This response only worsens supply concerns and makes it more difficult for medications to be equitably distributed across the nation’s hospitals.
This event proved the importance of redundancy in helping to avoid such large-scale drug shortages. For example, an incident that impacts production at the sole manufacturing site for a certain drug only magnifies medication supply chain shortages. The prescription drug industry benefits from having multiple factories producing the same drug, so there are options in light of unforeseen circumstances.
Unfortunately, the occurrences of drug supply shortages seem to be persisting. In 2022, the American Medical Association’s Council on Science and Public Health (CSAPH) found there have been fewer new drug shortages in recent years. Yet, the amount of active drug shortages has stayed mostly the same. These results indicate it is taking manufacturers more time to remediate drug shortages.
While much of the onus for these production workflows lies with the manufacturers themselves, there are ways insurers can help lessen the blow when supply chain shortages do occur.
- Insurers can focus on maintaining sufficient numbers of pharmacists in their provider network (or establishing relationships with more pharmacists during network development). This will ensure all members can receive medication consultations and adjustments in the interim.
- Health insurance companies should develop robust education and protocols for their hospital provider network – including doctors, pharmacists, and allied health professionals – to take advantage of when drug supply chain concerns arise.
- Discourage providers from obtaining medications through the ‘gray market’ during drug shortages, as the quality of these substances is rarely verified, they are often counterfeit, and the prices are drastically inflated.