The difficulty many healthcare providers faced during the pandemic was not mainly about lacking medical knowledge but lacking access to needed medicines and supplies. Several key weaknesses showed up during this time. According to Jayasree K. Iyer, CEO of the Access to Medicine Foundation, healthcare supply chains are at risk from many problems like shortages, running out of stock, sudden jumps in demand, and delays in shipping and transportation.
One big problem is relying too much on just a few suppliers, often in a small number of places. This makes supply chains weak. For example, many active pharmaceutical ingredients (APIs) for generic medicines used in the U.S. are made outside the country, mostly in China and India. A 2021 White House report found about 87% of FDA-registered API manufacturing sites for generic medicines are overseas. This means if there is a problem in one region—like a natural disaster, political trouble, or health crisis—the supply of important medicine can stop.
Diversifying the supplier base means spreading out manufacturing and buying across different places, countries, and companies. This lowers the risk of depending on one source. It can take several forms including:
These strategies aim to make supply chains more flexible and stronger. Producing in the U.S. costs about 30 to 50 percent more than in China or India, but steps are being made to lower these costs through new manufacturing technologies and government support.
The U.S. Pharmacopeial Convention (USP) encourages geographic diversification to help lower the risk of drug shortages. Their Medicine Supply Map shows that if manufacturing is focused in only a few countries, supply chains can be at risk from shocks in those areas that might delay or stop shipments of medicines.
Having a variety of suppliers helps hospitals and clinics in the U.S. stay prepared for unexpected problems, keep important medicines available, and help patients get better care.
Changing from a limited to a diverse supply chain is not easy. Manufacturers see several challenges:
Despite these problems, many experts agree that using a mix of onshoring, nearshoring, and friendshoring can spread risk and make supply chains more flexible. For example, the Government of India has started programs to encourage more API production inside the country to rely less on China, showing a similar approach in a big emerging market.
Procurement is how hospitals, clinics, and health systems buy medicines and supplies. It plays a strong role in shaping supply chains. More flexible procurement rules can help by:
This way matches global health security goals pointed out by the Access to Medicine Foundation. By asking for diverse and reliable suppliers, medical leaders can lower their risk of sudden shortages.
Diversification also ties into bigger health goals like the United Nations’ Universal Health Coverage (UHC) target for 2030. UHC means making sure all people can get health services they need without money problems. Weak supply chains, especially in poorer countries, make it hard to get affordable and essential medicines.
Improving supply chains by diversifying helps fix these problems by:
For healthcare managers in the U.S., knowing about these global trends helps their work fit with national and international health goals.
Using artificial intelligence (AI) and workflow automation gives medical managers and IT staff new ways to improve supply chain work.
AI systems can:
For healthcare groups in the U.S., these tools mean they can be proactive and ready instead of only reacting when crises happen.
Some companies offer AI tools to help with phone and communication work, so staff can spend more time on important supply chain decisions and avoid missed messages that might cause delays.
Medical managers, owners, and IT teams can put these ideas into action by:
By knowing the value of having many suppliers in different places along with smart technology, healthcare providers in the U.S. can make sure that essential medicines are more reliably available. This not only helps patients at local clinics and hospitals but also supports overall public health safety. The lessons from the pandemic and ongoing studies show that having a diverse and well-managed supply chain is necessary.
The pandemic highlighted vulnerabilities such as shortages, stockouts, sudden demand spikes, and disruptions to shipping. An over-reliance on a small number of suppliers, often concentrated in one region, was identified as a significant risk.
A transition from a ‘just in time’ to a ‘just in case’ model is crucial to ensure continuous delivery of critical medicines and vaccines, especially in response to potential disruptions.
1. Prioritize global health security in decision-making. 2. Widen and strengthen the supplier base. 3. Identify and fix the weakest links in access to medicine.
Changes in procurement policies should focus on ensuring continuity of supply by diversifying the supplier base and considering a wider range of suppliers in tender processes.
Technology can enhance smart forecasting, demand planning, and facilitate better communication between suppliers and procurers, improving the resilience of supply chains.
A diverse supplier base reduces dependency on single sources, mitigating risks of shortages. This expands access to essential medicines and ensures greater supply chain robustness.
Collaboration between multinational corporations and local manufacturers, along with technology transfers and capacity building, can enhance local production and availability of essential medicines.
The industry faced interconnections issues, sudden disruptions, and specific regional vulnerabilities that affected access to medicines, vaccines, and healthcare products.
The goal is to stimulate good practices and address vulnerabilities in the global supply of essential medicines and vaccines, by bringing various essential healthcare stakeholders together.
The Foundation plans to engage with companies, governments, and procurers to adopt best practices, and will expand its focus to key sectors like generic medicines, vaccines, and diagnostics.
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