Drug Shortages in US Highly Concentrated, Yet Disruptive

Recent drug shortages in the US underscore the complexities, interdependencies and volatility of modern global supplier networks.

According to an IMS Institute for Healthcare Informatics study released last week, most of the 168 products on the drug shortage lists compiled by the US Food and Drug Administration and American Society of Health-System Pharmacists have only one or two manufacturers. Thirteen companies have stopped supplying products on the shortages lists within the past two years. As Murray Aitken, executive director, IMS Institute for Healthcare Informatics, points out, this leaves a growing number of products open to possible production disruptions that cannot be offset rapidly by other manufacturers.

"Patients throughout the US, including hundreds of thousands being treated for cancer, may be at risk of treatment disruption due to drug shortages," Aitken said. "Understanding the nature of these medicines, their suppliers and the supply volume dynamics and focusing sharply on the market and supply chains that are most impacted are essential to formulating meaningful solutions to this complex, and often misunderstood, issue."

The new study, Drug Shortages: A Closer Look at Products, Suppliers and Volume Volatility, also found that:


The drug shortage problem is highly concentrated. More than 80 percent of products impacted are generics, and more than 80 percent are injectables. Although these drugs represent only a small part of the overall medicines market, the affected products include a number of critical drugs used to treat cancer (16 percent), infection (15 percent), cardiovascular disease (12 percent), central nervous system conditions (11 percent) and pain (9 percent).


For a group of 75 drugs, supply volume has fallen substantially. A subset of products has experienced supply declines of more than 20 percent in recent months, compared with a three-year base period ending in 2009. The per-capita supply of injectables has fallen more than 30 percent in 13 states, suggesting significant treatment protocol disruption for patients.


By contrast, total supply volume for many impacted products has been stable or growing although significant volatility exists. The total monthly supply volume for all products on the shortages lists has increased 4 percent over the past five years, and, for more than half of the listed drugs, total supply is relatively stable or has increased. However, there are recent signs of increased volatility in the month-to-month supply of impacted products by specific suppliers, resulting in disruption to providers.


The IMS Institute recommends applying a more systematic approach across the entire supply chain. Ideally, this approach would include a volatility index, risk identification, demand forecasting and predictive modeling all of which could help establish an early warning system to improve drug supply monitoring.

The full report can be downloaded here. (Registration required.)