Persistent U.S. drugs supply chain vulnerabilities, troublesome even before the COVID-19 pandemic, are drawing new attention in Washington. Now, with growing calls to increase supply chain resilience and a Biden administration executive order calling for an assessment of the situation, experts are looking for new paths to limit the risk of drug shortages, protect patient health, and to address pandemic preparedness and other national and health security threats.

A good way to think about supply chain resilience is in terms of ability to withstand shocks, said Marta Wosińska, deputy director for policy at the Duke-Margolis Center for Health Policy. Wosińska, recently appointed as director of the Federal Trade Commission's Bureau of Economics, described shocks as taking two potential forms: demand shocks, like that posed by the COVID-19 pandemic, and supply shocks, such as those arising due to manufacturing quality problems, natural disasters or geopolitical disruptions.

Those shocks impact a highly complex and sometimes difficult-to-document system, Wosińska and others said April 19, during a webinar held to discuss ways to improve the situation. The discussion followed issuance of a Feb. 24 executive order by Biden calling for an immediate 100-day review across federal agencies to address vulnerabilities in the supply chains of four key sectors – drugs and active pharmaceutical ingredients; critical minerals; certain batteries; and semiconductors and advanced packaging.

"Just to level set, we have lived through a worldwide pandemic," said Rena Conti, associate research director for Boston University's Institute for Health System Innovation and Policy. "When you look at statistics on drug supply and drug demand, we actually look pretty good! Our supply chain has been remarkably resilient for the products that people use every single day in the States.” Still an investment in identifying the policy problems in need of solving is needed, she said.

Though much of the thinking on drug supply resilience has revolved around developing abilities to recover and fix supply chains as quickly as possible after a failure has led to a drug shortage, industry increasingly needs to look at an additional paradigm: "predict and adapt,” said Stephen Schondelmeyer, co-principal investigator for the University of Minnesota's Resilient Drug Supply Project. A significant challenge to getting there will be in developing a true map of the entire U.S. drug supply system. "No one really has a market-wide view of the entire drug supply chain in the U.S.," he said.

Progress is being made, suggested panelist Dan Kistner, group senior vice president for pharma solutions at Irving, Texas-based Vizient Inc. Last year saw the lowest number of U.S. drug shortages since 2007. But significant work remains, especially around transparent and reliable quality metrics for generic medicines, particularly sterile injectables, he said.

Michael Levy, senior vice president of digital and innovation for USP, an independent, scientific nonprofit focused on building trust in the supply of safe, quality medicines, suggested one way forward: "We think a good way to improve the quality of information available about supply chain resiliency is to have an independent third party to take in all of this data, much of which is proprietary, and to identify potential points of failure and strategies for mitigation, without needing to reveal confidential information," he said. Management of the U.S. Assistant Secretary for Preparedness and Response's Strategic National Stockpile might offer a model for doing so, he said.

Another important piece of gaining greater visibility into complex supply chains might be found in technology, said Bill Falstich, vice president of biopharma hospital supply for New York-based Pfizer Inc. Matching supply chain designs to operational and market realities is key, he told attendees of the webinar. "What we've seen, especially over the past few years, is with technological advances it's become much easier to monitor actual performance against design parameters in real time. So, we're able to act more quickly to address issues," he said. Now, "when a crisis might come up – whether a hurricane or a pandemic – manufacturers are able to really understand what the situation is and adapt and react more quickly," he said.

Carlo de Notaristefani, president of CDN Advising LLC, said he has spent “most of my life trying to build a compliant, resilient, cost-effective supply chain." Balancing the three requirements is not easy, but government may play a role, he said. Looking at shortages over the years, de Notaristefani said, "many have been the consequence of conscious decisions by manufacturers to exit the supply of certain products because the financial incentives couldn't justify staying there.” Government may be able to play “a tremendous role as a buyer," he said.

"The executive order from the current administration will allow for the creation of transparency and visibility and will generate data," he said. "But I am under no illusion that a complex supply chain like the pharmaceutical global supply chain can be centrally microplanned and micromanaged. The answer, for me, lies in redesigning the incentives to drive behaviors that will bring the supply chain to a new equilibrium point."