Why care about medical supply chains?

Unexpected shortages of medical products do not fit neatly into any single quality domain, but can affect all of them. We cannot provide effective, efficient or timely care when medicines and other supplies required for crucial elements of care become difficult or impossible to acquire. Many shortages seen during the COVID-19 crisis clearly affect safety, and they can exacerbate widespread problems with equity.

Just as critical incidents afford the opportunity to identify not just obvious active errors but also latent safety problems,6 crises such as COVID-19 expose general supply chain weaknesses. In fact, product shortages often exhibit the combination of active and latent errors (or ‘system problems’) seen in investigations of critical safety incidents. Hurricane Maria in 2017, for example, converted a chronic shortage of sterile saline solutions (for intravenous administration) into an acute shortage when manufacturing capacity concentrated in Puerto Rico was damaged.7 The current amplified risk of generic drug shortages follows from several decades of chronic shortage associated with fewer firms and concentrated sites of production.8 These critical incidents are unlikely to abate, given the continued threat of future infectious disease outbreaks,9 and the accelerating climate crisis, which will increase extreme weather, violent conflicts and other events that provoke acute shortages.10

The vulnerability of medical product supply—and its converse, resilience—has historically attracted little interest from clinicians, healthcare executives or those engaged in improving healthcare quality. Yet, as the COVID-19 pandemic has made obvious to even the casual observer, product shortages affect clinical practice, organisational performance and patient outcomes.

In this article, we outline what is known from the extensive literature on supply chain resilience and medical product shortage and use examples from both healthcare and non-healthcare industries to illustrate key vulnerabilities. As well, we offer examples of how these vulnerabilities have been exposed by the COVID-19 crisis. We consider some of the reactive adaptations forced on clinicians and administrators, most notably by PPE shortages, and identify several common failures of pandemic planning.

Because the vulnerability of medical product supply long pre-dates the pandemic, we also highlight the need for remedies that extend beyond pandemic response capacity—including from bold experimentation at the front line and by governments. Such reforms are contested and their prospects uncertain—no problem of this nature is amenable to easy solutions. Yet successfully addressing any quality problem begins with understanding its contributing factors. Thus, while we identify some promising reform directions, our main goal lies in outlining current knowledge about the factors contributing to supply chain disruptions and highlighting the need for broad and sustained engagement with the challenge of resilient medical product supply.

Understanding supply chain vulnerability for medical products

Quite a bit is known about what makes complex, contemporary global supply chains so vulnerable. Because no single, widely used framework for characterising supply chain vulnerabilities exists, particularly from the perspective of the supply user, we discuss examples in two broad categories—threats to product manufacture (table 1) and threats to local availability (table 2).

Manufacturing problems as risks to product supply chains

The consumers of medical—or other—products are often unaware of vulnerabilities in supply until shortages occur—when manufacture of the product has ceased or no longer occurs in sufficient quantities (table 1). Either event can occur when production is concentrated among few firms, which may elect to exit the market, or in few places, such that political or geophysical events disrupting local manufacture have global consequences.11 For example, severe flooding in Thailand in 2011 puts factories producing 43% of the world’s hard disk drives underwater, reducing production of personal computers for months and reducing global industrial output by 2.5%.12

The ability to manufacture products is also threatened by shortages of inputs, whether of raw resources or component parts. Input shortages may result from tightly coupled production arrangements, which limit inventory or increase complexity.13 The severity of a shortage depends on the input’s ‘criticality’, including its importance and the availability of potential substitutes or other mitigation strategies.14

Production vulnerabilities during the COVID-19 pandemic partly reflect drastically elevated demand, such as for PPE.3 But production vulnerabilities can arise even with normal demand, especially when production is geographically concentrated, as with medical gloves and generic drug manufacture in India.15 Moreover, the lean nature of the medical products industry is likely to challenge the capacity to produce sufficient quantities of any therapeutics that are shown to be effective in treating the disease.16

Other threats to local product availability

Even when manufacture occurs normally, multiple vulnerabilities can reduce availability of the right product in the right place (table 2). Lengthy transportation routes can prove fragile in times of need.17 Additional challenges arise where companies fail to comply with the regulatory requirements that aim to reduce the risk of flawed products (eg, from the US Food and Drugs Administration or European Medicines Agency).18 Conversely, inadequate regulatory arrangements can mean that available products are unsafe or product shortages are unexpected.8

Vulnerabilities affecting the availability of products during the COVID-19 pandemic have included movement limitations due to the reduction of international transportation capacity as well as the imposition of border controls and export restrictions, as countries prioritised the needs of their own citizens over those of international clients.19 Further, those charged with sourcing products have been exposed as ill-prepared. Few had sourced supplies with a view to long-term resilience (eg, by favouring reusable products or domestic suppliers), managed PPE as a critical sector requiring vendor monitoring and risk management, or maintained supplies sufficient to avoid stockouts and shortages, including of goods such as generic drugs, for which demand has not been markedly elevated.20 21

Reactive and proactive solutions for medical product shortage

Shortages during the COVID-19 crisis have forced reactive adaptations. For clinicians, this has included shifts in normal standards of PPE use, such as extended use (eg, wearing the same PPE for encounters with different patients), reuse after sterilisation, alternative products (eg, positive pressure airflow helmets rather than N95 respirators) and even non-use.22 The health and safety risks such reactive changes have created remain unclear. But shifts in policy on PPE use have challenged healthcare professionals’ trust in system leaders and governments.23 For healthcare administrators, product shortages make sourcing efforts much more complex. Many have had to deal with unknown and sometimes fraudulent suppliers or compete with other care delivery organisations for needed supplies, with concerning implications for care quality and equitable access.24 Virtually all have faced increased costs as well as operational, legal or reputational risks.25

To an important extent, reactive efforts by clinicians and administrators have been made necessary by pandemic planning policy failures. Many health systems had not built or adequately sustained national or regional stockpiles. Many agencies tasked with coordinating national or regional joint procurement efforts lacked capacity. Much of the information infrastructure needed to fairly allocate supplies to users across countries or regions has proven insufficient.26 27And the pandemic has again exposed the weakness of market access regulation with respect to manufacturers’ obligations to notify about, or provide assurances of, reliable and quality supply.28

Yet while necessary, more effective pandemic planning will not be a sufficient response. The underlying causes of supply chain vulnerability are not specific to the pandemic. They include the economic and regulatory arbitrage that lead brand name manufacturers to restrict generic competition, generic manufacturers to discontinue (or underinvest in) less profitable product lines, product supply chains to metastasise into complex networks of global manufacture and transport, and healthcare buyers to undervalue resilient supply.

Importantly, the pandemic has increased experimentation with proactive solutions, some of which take aim at these systemic challenges. The most promising, in our view, include increased interest in medical products that can be reused or repurposed, alongside the free and open-source hardware principles that support distributed and locally responsive refurbishment and manufacturing. Such experimentation has been most notable for PPE, often driven by front-line clinicians.29 For more complex medical products, such as therapeutics or vaccines, governments and international agencies have experimented with ways to ensure adequate manufacturing capacity. This includes coordinated global strategies, such as advance market commitments for novel vaccines,30 and the turn to enhanced domestic manufacturing and reduced dependence on limited suppliers of critical inputs for pharmaceuticals.31 Less prominent but not absent have been challenges to the intellectual property rights that protect companies’ monopoly control and high prices, through efforts to create global technology access pools and national threats of compulsory licensing.16 30 Such moves are not uncontested, nor is their effectiveness assured.32 Yet they represent an important expansion of opportunity for reform—an opportunity whose potential will rest, in part, on the collective engagement of the healthcare community