Although “onshoring” medical manufacturing is part of a strategy to bolster the US medical supply chain, doing so for the entire supply chain is not realistic, and a combination of actions is needed to build resilience into the system, according to a new report from the National Academies of Sciences, Engineering, and Medicine (NASEM).
During the COVID-19 pandemic, shortages of masks and personal protective equipment for health care workers, medical products and devices used to treat patients with COVID-19, and medications to treat related conditions thrust supply chain vulnerabilities into the spotlight, but these vulnerabilities are not new. Over the past several decades, disruptions in the medical product supply chain have jeopardized the health and lives of patients, cost health care systems millions of dollars per year, and posed a threat to clinical research, the report says.
There is no single “silver bullet” to solve this problem, noted Wallace J. Hopp, PhD, chair of the NASEM Committee on Security of America’s Medical Product Supply Chain, which produced the report. A “host of coordinated activities by medical product supply chain managers, government agents, and medical providers” will be needed to make the US safer in the next crisis, he wrote.
The NASEM report is the product of a year-long study by an ad hoc committee established as a measure that Congress included as part of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act. The committee was charged with examining the causes of shortages of medical supplies and proposing ways to enhance resilience during public health emergencies and other disruptive circumstances.
Although long supply chains with different stages of production over many locations have more opportunities for failure than short domestic supply chains, blaming globalization for supply chain failures is a “knee-jerk response,” the report notes. It explains that there are reasons why supply chains have become increasingly globalized, including achieving lower prices, higher quality, and a wider variety of choices.
For example, onshoring could increase costs and reduce affordability of medical products, the report said. US companies that stepped up to produce N95 masks early in the COVID-19 pandemic struggled to survive financially after health systems resumed purchasing from non-US suppliers to reduce costs when access to those suppliers improved. And concentrating production within the US means supply could be threatened by local or regional disasters, such as hurricanes.
The committee recommended a series of actions to make supply chains for medical products more resilient, starting with boosting awareness of supply chain vulnerabilities by requiring transparency from manufacturers and regulators.
To promote such transparency, the committee urged the US Food and Drug Administration (FDA) to make information about sourcing, quality, volume, and capacity publicly available for all medical products approved or cleared for sale in the US. This would require drug manufacturers and device makers to publicly disclose their manufacturing locations and other data and manufacturers of the active ingredients in drugs to disclose the sources of raw materials.
The NASEM committee also said that the FDA, working with other US government agencies, should create a publicly accessible database containing this gathered supply chain information for medical products. The database could be used as a tool to help federal agencies assess risks to the total supply of particular medical products in both normal circumstances and emergency scenarios.
The committee also envisions that such public data could be used to help health systems make better decisions about product purchases and enable policy makers to focus on supply chain vulnerabilities.
Other recommendations focused on mitigation actions to help avoid or minimize the effects of supply chain disruptions. The committee advised health systems to deliberately incorporate quality and reliability into their purchasing systems and in contracts with medical suppliers, in addition to price.
Given that a high percentage of shortages of medical products, such as generic drugs, occurs during normal times because quality-related problems create disruptions, the committee said that health systems should include “failure-to-supply” penalties in contracts, secure contracts with suppliers that can demonstrate superior quality and reliability, and award contracts to multiple suppliers of the same product.
The report also details other actions the federal government should take to improve preparedness for unexpected events that disrupt the medical product supply chain. The committee urges the Office of the Assistant Secretary for Preparedness and Response (ASPR) to make management of the Strategic National Stockpile more effective and calls on ASPR and the FDA to develop strategies for “capacity buffering” to complement stockpiling.
Capacity buffering could include advance arrangement contracting with specific manufacturers to provide emergency capacity, as automakers did during the pandemic by assembling medical ventilators. It also could include developing and maintaining a list of supply chain critical medical products with guaranteed “crisis prices” that the government would pay for under specified conditions.
“This would provide incentives for firms to find creative ways to deliver pop-up capacity during emergencies,” the committee noted.
The report also said that improving medical supply chain resilience requires improving response measures after an event occurs, noting that such measures are needed at both the local and global levels.
At the local level, the committee pointed to the need to ensure that critical medical products navigate the “last mile” of the supply chain and are distributed to the end users, including hospitals, clinicians, pharmacies, and patients. To address this need, they recommend that ASPR and the Centers for Disease Control and Prevention establish a working group to identify strategies “to ensure that end users are able to respond in the event of medical product shortages.”
At the global level, the committee urges the US government and other countries that are major exporters of medical products to negotiate an international, plurilateral treaty that prohibits bans or restrictions on critical medical products and components. “Any country that violates the terms of this agreement should be subject to sanctions by other signatories of the agreement,” the report said.
Published: March 29, 2022. doi:10.1001/jamahealthforum.2022.1038
Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2022 Stephenson J. JAMA Health Forum.
Corresponding Author: Joan Stephenson, PhD, Consulting Editor, JAMA Health Forum (Joan.Stephenson@jamanetwork.org).
Conflict of Interest Disclosures: None reported.