The Need for a More Strategic and Agile Supply Chain

Read time: 3 minutes

By: McKesson Editorial Team

Drug shortages can occur for many reasons, including manufacturing and quality problems, underestimated demand, supply chain delays, and discontinuations. These disruptions have forced healthcare leaders to turn to technology alternatives and the assembling of multidisciplinary teams to monitor medication shortages to help identify preferred alternatives and minimize impact to patients.

As a result, health system executives and supply chain leaders view data and analytics capabilities as an investment opportunity. However, organizations outside the hospital’s walls—such as those that supply pharmaceuticals and services—often have access to more comprehensive visibility into a health system’s spending and utilization than the system itself does. As a result, the health system may be unable to face challenges in effectively negotiating or identifying savings.

Health Systems Are Seeking Faster, Smarter, and Predictive Information

ASHP showed 301 active shortages at the end of Q1-2023¹, which is an all-time high in the five-year trend. Health systems on average are experiencing shortages of hundreds of different products, and the data suggest that not only are the shortages not resolving, but new shortages are also increasing—leaving ongoing and active shortages the highest since 2014.

Health systems are facing challenges as the workload required to manage these drug shortages increases. With added expenses and staffing issues, some health systems are struggling to get into place the needed pharmacy automation and updates to electronic health records. In fact, a 2019 Vizient study estimated that the annual cost of labor needed to manage drug shortages was $359M due to an additional need for 8.6M hours of labor.²

To help simplify the delivery process for health systems, suppliers are finding that automation contributes to a more fluid supply chain by streamlining the payments process and the delivery of supplies. Automation also creates seamless invoicing and payment interactions, resulting in greater visibility and accuracy into cash flow and cash management.

How McKesson Helps to Meet your Supply Chain Needs

As a trusted distributor, McKesson is able to leverage our scale with global suppliers, apply sophisticated modeling to forecast supply and demand, and seamlessly integrate new distribution strategies to help create a more transparent and equitable supply chain.

To meet the needs of our customers, McKesson has leveraged the considerable experience and clinical expertise of stakeholders throughout the company to create the Critical Care Drug Task Force (CCDTF). The group draws on the more than 100 years of combined experience of our health system pharmacists, procurement and regulatory experts, and other internal stakeholders to help manage the supply needs of critical drugs, to address and mitigate drug shortage concerns, and to educate our customers. Together, our experts provide the diversity of thought, coming together to answer big supply chain questions using real-time clinical research, customer feedback, and technology solutions.

Throughout McKesson, our experts take a holistic view of your unique organization and apply advanced analytics to reveal insights and opportunities to assist you in boosting your clinical and financial performance. We help connect the dots, between your drug utilization and tangible solutions from across our enterprise and partners, that move the dial on operations and patient care to:

• Help free up pharmacy staff time for more productive tasks
• Assist in capitalizing on increased cash flow to fund other important investments
• Smoothly incorporate McKesson technology using data and predictive analytics to drive maximum inventory turns
• Achieve improved contract item pull-through

To help meet your health systems unique needs, we have a variety of solutions, including:

• Connect
• ERA reporting
• Utilization Analytics
• 340B Impact
• Supply Chain/Distribution

Ready to learn more? Visit our page and find out how McKesson can effectively address your supply chain needs to help you achieve more.

¹https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics
²https://www.beckershospitalreview.com/pharmacy/drug-shortages-cost-hospitals-359m-in-labor-costs-survey-finds.html