Hospital Supply Chain
Hospital supply chains stretch across the globe to provide hospitals with the steady supply of diverse resources they need to remain operational—from sophisticated medical equipment and medicines to the protective equipment and cleaning supplies that are required to keep patients safe during their stay. The materials that used to manufacture these resources begin with raw materials sourced from nearly every continent and travel along a highly complex worldwide manufacturing and supply chain before they reach their final destination.
When lives are at stake, the consequences of a supply chain disruption in a hospital supply chain can be more dire than a delayed shipment or a strained business relationship. Hospital supply chains bring life-saving medicines and treatments to the patients that need them, which means that a missed delivery can cost lives.
Some components of a hospital supply chain are similar to other industries. Like a hotel, a hospital requires food for patients and staff; office supplies; and linen or laundry services. However, hospital supply chain management includes additional layers of complexity that are unique to medicine. For example, a patient receiving care in the United States could be treated with medicines manufactured in China or have an x-ray taken on a machine manufactured in Germany—while the attending nurse wears personal protective equipment made in Malaysia. Healthcare is a truly global undertaking.
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The unique concerns of the healthcare supply chain
Supply chain management practices that try to make a supply chain less prone to disruption generally avoid having to rely on a single supplier for any critical components. Relying on one source for required supplies means that if the that source is unable to meet demand, an organization's operations could be put in jeopardy. When it comes to medications, however, hospitals often require specialized medicines that may only be available from a few or even just one supplier. For example, a new drug that is still under patent or for which generics are unavailable may only be provided by one pharmaceutical company. This means that there may be no choice but to rely on a single source for some supplies.
Hospital supply chains also often have demanding shipping and storage requirements for medicines and other biologically vulnerable materials. Organs for transplantation should be kept just above the freezing point of water, and a human heart needs to be transplanted within four to six hours of being donated. As we've seen with the recent COVID-19 vaccines, the cold chain for pharmaceuticals can require even colder temperatures, with some drugs and vaccines needing to be transported at negative 70° Celsius. Pharmaceutical cold chain management requires that every step of transportation and storage from production to the point of administration can maintain the correct temperatures.
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The need for supply chain security
High demand for medicines means that there is a large—and profitable--market for counterfeit and black-market drugs.
Knock-offs and stolen products can enter the medical supply chain at many different points. And, of course, the safety and efficacy of counterfeit drugs will not meet the same quality standards as genuine medicines. This can greatly complicate the pharmaceutical supply chain arm of hospital logistics, where the consequences of using illegitimate products can be dire. Fake medicines can be ineffective or even dangerous for a patient.
The effort to combat these problems in the hospital supply chain includes sophisticated product serialization and track-and-trace systems, where serial numbers are created, applied to individual units of medicines, and tracked through the pharmaceutical supply chain. Rather than having to rely on the due diligence of every contractor that handled the pharmaceuticals, pharmaceutical serialization requirements give hospitals a way to ensure that drugs have been properly handled from the manufacturing plant to the patient.
Learn how Agile Process Teams can make your supply chain more resilient.
Tools to track medications from the source
With so many medicines, suppliers, and complicated parameters to track, hospital administrators need specialized software tools. Cloud-based Healthcare supply chain management software, easily deployed on local systems, makes it possible to confidently verify the authenticity of pharmaceutical products—or any serialized medical device. Tracking medications through the pharmaceutical supply chain with track-and-trace software from TraceLink™ gives hospital supply chain managers confidence that they are delivering legitimate medications to their patients.
FAQs: Why are cold chains so important for hospital supply chains?
Why are cold chains so important for hospital supply chains?
The consequences for a disruption in a cold chain can be life-threatening. For a patient on a transplant list, there can be a months-long wait for an organ that matches their health requirements. If that organ gets outside of the ideal temperature window during transit, the person waiting for the organ transplant could end up suffering serious health consequences.
In the rush to find treatments and save lives, the first breakthrough drugs and vaccines often require deep freeze chains to remain effective. When creating a new drug, wide temperature stability comes after efficacy and safety, so the first treatments available often require lab-grade freezers to remain viable. Getting a drug from the lab it is produced to the patient it will treat requires a robust cold chain.
Are there regulations for hospital supply chains?
Many countries and regions have implemented hospital supply chain regulations to ensure the safety of medical and pharmaceutical products. For example, the European Union Falsified Medicines Directive requires verification and transparency of pharmaceuticals imported and sold within the European Union. In the United States, the Drug Supply Chain Security Act (DSCSA) serves a similar purpose.
Why is there a market for counterfeit drugs?
Many new drugs that remain under patent protection command a high price premium at market. This is driven by the fact that these drugs may represent the only way to treat a patient, and the company that holds the patent enjoys a monopoly. This creates a strong incentive for bad actors to produce imitation medicines, as the payoff is high.
Why is it difficult to track counterfeit pharmaceuticals?
To make production and transport easier, pharmaceuticals may be produced and shipped in larger batches than which they will be administered. Large public and private health systems often acquire medicines in bulk. If a single serialized container or lot number is the only way to verify a large shipment of medicine, then replacing parts of the shipment with counterfeits becomes far easier than if each unit bears a unique serial number.
What are the results of a disruption in a hospital supply chain?
Drug shortages that result from supply chain disruptions can cost patent lives or negatively affect patient outcomes.