More Supply Chain Woes as Contrast Agents for Medical Imaging in Short Supply

“There has been no improvement to any extent within the to manufacture items, so we still predominantly rely on international supply. In addition, the distributors are allocating supply by their individual customers, and at times that can lead to other outages.”

Christopher O’Connor. President and Incoming CEO of Yale New Haven (Conn.) Health, Becker’s Healthcare Interview
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In what should probably be categorized in the “we never learn our lesson” department, we now hear of a temporary shortage of GE Healthcare’s iodinated contrast media—specifically, all concentrations and formulations of its Omnipaque™ (iohexol) products that are manufactured in a single facility in Shanghai, China (Shanghai is currently under COVID-19 lockdown). While the facility has reopened and ramped up production, GE anticipates an 80% reduction in supplies for the next 6-8 weeks. General Electric’s (GE.N) healthcare unit said on Tuesday it had increased output of contrast media used for medical scans and tests at its factory in Ireland and shipped products by air to help combat shortages caused by the suspension of its Shanghai factory.

Supply chain issues have dominated the news for months now as the pandemic slowed international trade and applied pressure on critical items. Usually only felt if it goes wrong, supply chain management has become an increasingly important consideration. Hospitals and health systems have faced significant issues with their supply chains, from personal protective equipment shortages at the start of the pandemic to a lack of crutches now. According to a Kaufman Hall study, ninety-nine percent of hospitals and health systems report challenges in supply procurement as of October 2021.

“I truly believe that we’re probably going to be faced with these challenges for another 12 to 24 months. I would suggest that the trend is that there’s going to be price pressures, we’re anticipating energy challenges throughout the next six to eight months.”

Michael McCullough. Senior Vice President of Supply Chain at Wellstar Health System, Becker’s Healthcare Interview

The vitality of the supply chain is undoubtedly among the top concerns facing hospitals and medical providers today. ECRI’s Top 10 Health Technology Hazards for 2022 rank supply chain shortages among the top three risks facing healthcare organizations. Unfortunately, it’s a multifaceted issue with no easy solutions. We are all aware of the backlog of cargo ships waiting to be unloaded on the West Coast. On top of that, we see COVID-19-related manufacturing disruptions in some Asian countries that produce many of the everyday items we use in the healthcare setting. We also have pressure on the trucking industry in this country due to the increase in e-commerce over the past two years. Traditional reliance on industry partners (manufacturers and distributors) for product availability and order fill can no longer be the norm. The list of scarce items is long. It includes latex and vinyl examination gloves, surgical gowns, laboratory reagents, specimen-collection testing supplies, saline-flush syringes, and dialysis-related products, according to the U.S. Food and Drug Administration.

“We’ve got the wrong products in the wrong location with the wrong shipping. It’s not one disruption; it’s a series of disruptions.”

Abe Eshkenazi, CEO, Association for Supply Chain Management

But what’s frustrating to me is that this latest problem feels a lot like a scene from the movie Groundhog Day. We keep repeating the same patterns over and over again. Today it’s iodinated contrast media. In the past, it’s been a shortage of radioisotopes for nuclear medicine studies. Or a previous shortage of gadolinium-based contrast agents for MRI studies. In each instance, critical imaging studies had to be postponed, and patient care suffered. The American College of Radiology (ACR) has published a list of recommendations on dealing with the current shortage, which is commendable. But, as before, we are not trying to solve the root causes of the problem.

Moving manufacturing offshore – Drugs used in the U.S. involve inputs from all over the world. Many of those chemical inputs are manufactured in India and China, and they’re shipped to the U.S. That gets tied up in all of the disruptions around shipping affecting all industries right now. A factory shutdown caused the current contrast media shortage in Shanghai. China’s shutdowns have a lag time of 45 to 90 days before their effects show up in the U.S., so supply-chain challenges will most likely continue well into 2023. The radioisotope shortage was caused by the decommissioning of the Chalk River reactor in Canada. Shortages in aluminum, semiconductors, wood and paper pulp, and resin disrupt medical devices’ supplies. Those shortages have led to uneven supplies of medical monitors, CT scan devices, packaging for medical supplies, and gloves.

The “single-point-of-failure” effect – Shortages among pharmaceuticals tend to primarily affect sterile injectable drugs and usually drugs that are older and less profitable. They tend to be drugs manufactured in and around the U.S., where companies maybe, over time, didn’t find it as profitable to make these older injectable drugs. They got out of the business, to the point where there’s just one manufacturer left. Any disruption happens there, and then the supply does dry up. Now there appears to be no end in sight to America’s baby formula shortage, according to the most recent data from a retail tracking group. The share of baby formula out of stock across the U.S. hit 40 percent on April 24, according to Datasembly. That’s up from 29 percent in March. The shortages were prompted in part by the shutdown of a key production facility in Michigan this year. The plant, owned by Abbott Nutrition, has been the subject of an FDA and CDC investigation following reports of contaminated formula that was linked to the deaths of at least two infants.

“Unfortunately, we don’t see this (shortage of baby formula) slowing down any time soon.”

Ben Reich, CEO, Datasembly

Time to rethink “Just in Time” ordering practices – For the often-used stocked items required to treat patients, the industry used to have fill rates of 96% to 98%, meaning that just a tiny percentage of orders remained unfilled. Today, the industry’s fill rate for these items is in the high 80s. According to industry experts, it used to be that hospitals would deal with 50 to 100 back-ordered items per day. Many institutions now deal with 800 to 1,000 backorders per day.

What’s the solution? – In 2020, the National Academies of Sciences, Engineering, and Medicine looked at the causes of medical-product shortages and ways to improve medical supply chains, both in normal times and in public health emergencies. Its 364-page report, Building Resilience into the Nation’s Medical Product Supply Chains, which came out earlier this year, called for the FDA to publicly track sourcing, quality, volume, and capacity information and to establish a public database; for health systems to include failure-to-supply penalties in contracts; and for the federal government to optimize inventory stockpiling to respond to medical-product shortages, among other things.

In their report, the NAS created a medical product supply chain resilience framework. They used this framework, which contains four tiers that address awareness, mitigation, preparedness, and response, to craft and inform their recommendations.

Under the awareness category, they proposed measures to collect, compile, and disseminate information about medical product supply chain risks and vulnerabilities. The committee recommends the U.S. Food and Drug Administration (FDA) make sourcing, quality, volume, and capacity information publicly available for all medical products approved or cleared for sale in the United States and establish a public database to share this information and to promote analyses of these data by interested parties

Under the mitigation category, they advocated steps to reduce the likelihood and magnitude of supply disruptions. The committee recommends that health systems deliberately incorporate quality and reliability, in addition to price, in contracting, purchasing, and inventory decisions

Under the preparedness category, they describe a range of options for preventing a supply shortage from impacting patients and medical personnel. The committee recommends the Office of the Assistant Secretary for Preparedness and Response (ASPR) modernize and optimize inventory stockpiling management as protection against medical product shortages at the national and regional levels and that ASPR and FDA complement stockpiling with capacity buffering policies to enhance cost efficiency and to improve protection in major emergencies.

Under the response category, they suggest policies for building organizational capabilities that protect health during emergency disruptions. The committee recommends negotiating an international, plurilateral treaty with other major medical product exporters to make more effective use of limited global supplies by ruling out export bans on vital medical products and components and that ASPR and the Centers for Disease Control and Prevention establish a domestic working group to examine ways to improve the effectiveness of the final delivery stage within the United States (“last mile”) of medical product supply chains and to engage end-users in planning for an emergency response to medical product shortages.

These are all excellent recommendations, to be sure. But none of these fixes will happen in the short term, and in the meantime, hospitals and health systems are trying to cope. Some of the best recommendations I’ve seen to date on how hospitals and health systems that want to improve their supply chains can manage the current situation come from the team at Kaufman Hall in their State of Healthcare Performance Improvement Report, 2021. Their key recommendations include:

  • They are identifying historically challenging supplies and developing acceptable substitutes.
  • They are diversifying suppliers and partnering with several alternative suppliers.
  • Focusing on inventory management and using technology to gain early insight into supply chain issues.
  • Gathering supply chain data and building supply-demand models per category or supply items, as well as sharing this data with vendors and requesting the same visibility from them.
  • Managing vendors and thoroughly vetting all vendors.

For the remainder of 2022 and potentially 2023, enhanced healthcare supply chain management will require transparency, collaboration, and frequent communication between distributors and suppliers. Organizations across the medical supply chain must work together to help improve production and smooth out problem areas to achieve a “new normal.” Flexibility, teamwork, and planning will prove critical components of effective supply chain management in the months ahead.

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