The increase in drug shortages since the COVID-19 pandemic has put the pharmaceutical industry in the spotlight, and regulators worldwide want to help pharma companies increase resilience and minimize risks to hospitals and patients. U.S. regulators are the latest to propose legislation intended to identify and mitigate supply chain risks. The goal is to reduce the negative impact drug shortages are having on patient care – including delays in treatment, increased risk of medication errors, and a reliance on less-effective alternative treatments.
The Mapping America’s Pharmaceutical Supply (MAPS) Act aims to strengthen the U.S. Government’s and pharmaceutical industry’s knowledge of these critical supply chains, including any potential risks and delays that may occur across the highly-complex drug manufacturing supply chain. By understanding the ongoing state of supply chain resilience, regulators will be able to make strategic decisions to strengthen domestic manufacturing operations for critical drug products.
Understanding the MAPS Act
The U.S. Government and regulators are keenly aware of the impact that medical and drug supply chain disruptions have had on the population. The FDA’s Annual Report on Drug Shortages for Calendar Year 2022 points out that shortages in cancer medications, antibiotics, and more, as well as an early flu season in 2022 posed serious risks to patients. Furthermore, earlier this year U.S. Senator Gary Peters, Chairman of the Senate Homeland Security and Governmental Affairs Committee, released a report on the risks inherent in pharmaceutical supply chains. The report found that an over-reliance on foreign sources for critical drugs and materials, as well as a lack of ongoing supply chain information from pharmaceutical companies, is creating serious health and national security risks.
Figure 1: The MAPS Act addresses the number of annual ongoing drug shortages in the U.S., shown above per calendar year (source: FDA).
Because early notification of potential disruptions, supply chain transparency, and thorough risk assessments are key to supply chain resilience, the U.S. now intends to create resources that will inform critical supply chain risk mitigation actions.
The MAPS Act, introduced at the end of July, has a few key stipulations that will affect supply chains:
- The Secretary of the Department of Health and Human Services (HHS) creates a federal database of pharmaceutical supply chains.
- This database would include the origin of each drug, including the manufacturing locations, volume of product produced, and any related risks and alerts.
- HHS will be required to report to Congress on any risk mitigation actions that stem from the database, as well as any ongoing gaps in data.
There is significant support from the medical industry for the MAPS Act, with the Michigan Health & Hospital Association, the American Society of Health-System Pharmacists, the American Society of Clinical Oncology, the American Hospital Association, United States Pharmacopeia (USP), and CivicaRx all backing the bill.
The bipartisan legislation follows the Pharmaceutical Supply Chain Risk Assessment Act of 2023, which was introduced at the beginning of June. The Act would require the HHS Secretary, in conjunction with the Secretary of Defense, the Secretary of Homeland Security, and the Director of the Office of Pandemic Preparedness and Response Policy, to provide a yearly comprehensive risk assessment of the U.S. pharmaceutical supply chain.
These two acts demonstrate the U.S. Government’s interest in protecting and supporting pharmaceutical supply chains, creating a framework in which supply chain vulnerabilities can be identified and proactive decisions can be made regarding domestic manufacturing and other risk mitigation actions. These actions will be key to preventing supply chain disruptions from causing harm to patients.
The prescription for pharmaceutical companies
While the MAPS Act will require significant reporting from pharmaceutical companies, these requirements fall into line with supply chain mitigation actions that leading organizations already are putting into place. With similar legislations and regulations currently underway around the world, most notably Canada, pharmaceutical companies will benefit from adopting supply chain risk management and reporting practices sooner rather than later.
Figure 2: Provisions in the MAPS Act would support pharmaceutical supply chain risk management and resilience.
Pharmaceutical companies already have ongoing visibility into their Tier 1 supply chain operations, from raw material availability to manufacturing to final product shipments. Without this, it is nearly impossible for companies to effectively manage their supply chains, adjusting elements when needed and making proactive risk mitigation decisions.
A comprehensive view into the full supply chain – including second- and third-tier suppliers – comes next. Then, that network visibility should be mapped against a risk matrix that includes climate, geographical, geopolitical, and economic risks to completely understand any potential delays or disruptions. For example, a recent tornado in North Carolina hit a critical Pfizer plant that manufactures dozens of key medicines, leading to a frenzy of buying to stave off an immediate shortage in hospitals. Organizations that had clear and early notification of this event, and potential alternative suppliers or contingency plans in place would have benefitted from the ability to take early action.
Many supply chain disruptions can be tracked and scored as risk signals appear. Strike actions or other political and economic circumstances often present early warning signs that can be followed and acted upon as necessary.
The MAPS Act may require more reporting than has been traditionally obligatory, but we’re no longer operating in a traditional world. Global supply chains are more interconnected and dependent than ever, and events halfway around the world can drastically impact product manufacturing and shipping. Compliance with these new regulations will not only benefit healthcare outcomes and national security, but also pharmaceutical companies as well because they lower risk and increase supply chain resilience.
Network mapping with AI
When trying to put supply chain visibility and mapping in place, organizations often run into one common problem: there is simply too much risk data to manually sift through. Even the most talented team can’t be on top of every possible ongoing risk factor and potential disruption in the world.
Luckily, there’s an easier way to track and manage supply chain risk now.
With advanced analytics technology and Artificial Intelligence (AI), supply chain management professionals can now fully visualize an entire supply chain, including sub-tiers, with personalized alerts for specific risk factors and suggested mitigation actions. Real-time monitoring provides up-to-date information on the state of suppliers, manufacturers, shipping, and more, while automated data collection from a variety of sources rounds out the risk framework.
Supply chain risk management isn’t just about preventing disruptions – it can also allow organizations to spot potential opportunities. Pharma companies can gain first-mover advantage in the face of delays, and potentially identify areas to leverage efficiencies within their larger supply chain.
Using AI and machine learning, risk scoring and alerts can be automated in line with business goals, strategies, and operational priorities, making it easier for supply chain teams to make quick, effective, and sometimes critical decisions. These decisions can be key to ensuring customer satisfaction, while protecting reputation, and revenue.
Looking beyond compliance
Supply chain resilience is a continuous project, and is not always an easy undertaking, but has benefits beyond compliance to global regulations. In fact, supply chain resilience will be key to an organization’s longevity and success. Pharmaceutical companies that create systems and integrate advanced technologies that will aid in supply chain tracking and risk mitigation will be able to maintain agility in an unpredictable world.
The U.S. MAPS Act is just one of many legislative actions and regulations that will be passed globally as countries grapple with the health and national security consequences of drug shortages. While compliance may seem like a difficult task initially, the supply chain risk mitigation actions for pharmaceutical companies will ultimately benefit business practices. And, with the application of advanced analytics and AI, Chief Procurement Officers, strategic sourcing teams, and those leading risk management initiatives will have an expanding set of tools. Those tools will enable supply chain visibility which in turn will create opportunities for optimizing risk management.
Download our white paper to learn how supply chain risk management works.
Henry Ames is the Director of Global Life Sciences and Healthcare for Everstream Analytics. He has spent more than 25 years optimizing operations at the intersection of risk, investment, regulatory compliance, and sustainability.