6 drug shortage predictions for 2022 and beyond

How regulatory and financial trends may shape the future of drug shortages in healthcare

By , Arti Bhavsar PharmD, and Chris Virgilio, PharmD, BCPS | 5 minute read | October 14, 2021

Hospital Pharmacist taking inventory of medications

IBM Watson Health is now Merative™: Explore Merative clinical decision support

While the COVID-19 pandemic caused several drug shortages and supply disruptions in the US, hospital drug shortages are nothing new.1 Other disruptions causing drug shortages include natural disasters, manufacturing problems, and a short supply of raw materials, to name a few.

Regardless of the root cause, a shortage means clinicians sometimes use costlier and less-effective medications or therapies, and hospital pharmacists may spend hours seeking alternatives. In some instances, hospital pharmacies must compound and modify the products, which adds significant workload and risk. Hospitals are looking for better ways to predict and manage drug shortages since they can negatively impact patient safety, patient care, and clinical outcomes.2

Explore technology to help manage drug shortages

In our work with clients, we’ve identified several trends that may shape the future of drug shortages. Here are six predictions for 2022 and beyond:

1. Some innovations from managing pandemic drug shortages won’t last

The coronavirus pandemic put immense pressure on the hospital supply chain, including distributors for certain drugs and medical supplies like ventilators and personal protective equipment (PPE). In response to this public health crisis, some US hospital groups, startups and nonprofits began making their own sterile injectables and other medicines to combat persistent drug shortages.3 We expect this to be a short-term workaround.
We anticipate that efforts by hospitals to have more direct control over their critical drug supply chains will continue to evolve as they work to find a sustainable, cost-effective, and safe model. Joint efforts between public/private sectors such as the creation of a Strategic Active Pharmaceutical Ingredient Reserve (SAPIR) will be instrumental in defining how these products are supplied in the future.4

In the face of uncertainty, we’ve also seen some innovative collaborations. For example, a public benefit drug manufacturer partnered with 11 top pediatric hospitals to address shortages by making generic oncology medicines in child-size doses as well as several drugs for other life-threatening conditions.5

The best way to improve drug supply chain management and develop better mitigation strategies is for the pharmaceutical industry to take a more collaborative approach. It must include all stakeholders – hospitals, health care professionals, manufacturers, wholesalers, governments, consumers – to execute on a vision for a safer supply chain for American patients. If these groups can work together on a large scale, they will set the course for a better future.

Questions hospital pharmacists should ask when managing drug shortages

2. Transparency will be essential as consolidation continues

Healthcare has seen tremendous consolidation, and for decades, that pace has been accelerating. But running leaner organizations has an unintended consequence: less redundancy and fewer back-ups.

For the drug supply chain, consolidation to reduce waste and increase profitability has also eliminated redundancy in generic drug manufacturing that historically provided a ‘cushion’ of resiliency for drug supplies. Now, manufacturers need to consider how resiliency can be maintained so that leaner manufacturing doesn’t require health systems and health providers to absorb additional risk and financial burden.

We believe that transparency will matter more in this leaner ecosystem. Health systems must have better visibility into areas that are vulnerable–both inside and outside of their organization–so they can anticipate and prepare for shortages. Manufacturing and quality issues are inevitable, and in a system with less redundancy the consequences can have widespread impacts. Increased transparency across stakeholders can help mitigate some of this.

3. The Drug Supply Chain Security Act (DSCSA) may improve transparency and inventory

The DSCSA outlines steps to build an electronic, interoperable system to track and trace prescription drugs.6 The original aim of the DSCSA was to enhance the ability of the US Food and Drug Administration (FDA) to regulate drug safety and help protect patients. But this system could improve how drug product shortages are managed too. An FDA official confirmed7 manufacturers will have to comply by 2023.

Serialization in the drug supply chain could also vastly improve an organization’s ability to manage inventory. Many questions remain around execution – such as how data will be collected, stored and used. A pilot DSCSA program with the FDA showed the potential for using IBM blockchain technology to connect disparate data for tracking and tracing prescription medications and vaccines in the United States.8

4. We may see alignment around meaningful metrics

Measuring drug shortages and discontinuations is not an easy problem to solve; it’s difficult for all stakeholders to align on common metrics. Hospitals on the front lines continue to see drug supplies ebb and flow, yet their numbers often don’t match high-level national metrics.

For example, the FDA reported 43 new shortages in 2020 after a peak of 251 shortages in 2011.9 On the surface, this looks like tremendous progress and in many ways it is. However, this measurement doesn’t consider the scope, scale or severity of the shortage. The FDA metric measures every shortage the same way, whether a drug is dispensed 20 times or 20,000 times a month. But not every shortage is the same.

Stakeholders must come together to develop consistent, meaningful metrics that reflect a sophisticated approach to managing and preventing shortages that pose risks to health systems and patients.

5. “Stockpiling” will prove to be a self-defeating strategy for hospitals

Anecdotally, we’ve heard from a few hospital clients that there seems to be increased scrutiny on drug volumes from the Joint Commission, which may impact buying practices. Government agencies are encouraging hospitals to consume inventory on the shelf first before trying to protect themselves from future shortages. Because if every hospital “stockpiled” medication, it could cause a drug shortage.

Hospitals are doing the best they can with the limited resources available to them. Many have increased their holdings of critical drug supplies, but this comes at a great expense when hospitals are fighting decreased revenues and increased costs from COVID-19, plus the constant battle to control inflationary costs of drugs in general.

Unfortunately, without better visibility into their supply chains, hospital drug buyers are often forced to take the most conservative approach in shortage scenarios and overbuy to protect their organizations interests – regardless of the impact this practice has on availability for hospitals elsewhere.

See 3 ways technology can support your hospital pharmacy

6. Final prediction: 2022 will continue to strain global supply chains and the drug supply isn’t immune

As the world wrestles with the pandemic and climate change, it’s hard to predict new challenges. Globally, supply chains are struggling to keep pace in most industries. Everything from mattress producers to car manufacturers to aluminum foil makers are buying more material than they need, attempting to keep pace with demand, and raising concerns about inflation.10

Unfortunately, drug shortages will continue to be an issue in healthcare.  We believe the new normal will have persistent supply interruptions that hospitals must manage and navigate, and that technology can play a role in building up resiliency that can help mitigate the impact of shortages on patients.

  1. FDA Report to Congress “Drug Shortages for Calendar Year 2020” www.fda.gov
  2. Tucker EL, Cao Y, Fox ER, Sweet BV. The Drug Shortage Era: A Scoping Review of the Literature 2001-2019. Clin Pharmacol Ther. 2020 Dec;108(6):1150-1155. doi: 10.1002/cpt.1934. Epub 2020 Jul 8. PMID: 32521038.
  3. Phlow Corporation Awarded $354Million HHS/ASPR/BARDA Contract to Manufacture Essential Medicines in Shortage. PR Newswire, May 19, 2020. www.prnewswire.com
  4. FACT SHEET: Executive Order on Promoting Competition in the American Economy, Jul 9, 2021  www.whitehouse.gov
  5. Drug Supply Chain Security Act (DSCSA), FDA.gov, www.fda.gov
  6. “FDA official: Agency will not extend 2023 DSCSA interoperability deadline.” Regulatory Focus, Aug 11, 2021 by Joanne S. Eglovitch.
  7. How the FDA is piloting blockchain for the pharmaceutical supply chain. IBM, May 2020 by Mark Treshock. www.ibm.com
  8. Report to Congress: Drug Shortages for the Calendar Year 2020, FDA.gov www.fda.gov
  9. The World is Suddenly Running Low on Everything. Bloomberg News. May 16, 2021. www.bloomberg.com