Introduction

Drug shortages have become an increasingly urgent issue within the global healthcare system, affecting millions of patients and healthcare providers. ORB aims to gain a deeper understanding of the underlying factors driving these shortages, with the goal of developing solutions in the future to enhance the availability of essential medications. ORB strategy focuses on addressing the challenges of the pharmaceutical supply chain and exploring ways to mitigate drug shortages in the coming years.

Disruptions in the Pharmaceutical Supply Chain

The global pharmaceutical supply chain is highly complex, involving various stakeholders across different regions for sourcing raw materials, active pharmaceutical ingredients (APIs), and finished products. This intricate system is susceptible to numerous disruptions, which can contribute to significant shortages of critical medications.

ORB plans to focus on understanding the vulnerabilities in this supply chain, including the heavy reliance on key markets like China and India for over 60% of APIs used in essential drugs. This dependence presents a substantial risk when these regions experience geopolitical tensions, natural disasters, or pandemic-related shutdowns. ORB's goal is to eventually address these risks by promoting diversification in the supply chain.

Key Drivers of Drug Shortages

In analyzing the various factors contributing to drug shortages, ORB has identified several key drivers that will inform our future efforts:

• Sourcing Limitations: ORB recognizes that the pharmaceutical industry is heavily reliant on a small number of suppliers for many essential drugs. In the future, ORB aims to explore strategies that promote sourcing from multiple suppliers to reduce vulnerabilities in the supply chain. This will help mitigate risks posed by natural disasters, manufacturing failures, and geopolitical disruptions.
• Manufacturing Challenges: Manufacturing issues, including capacity limitations and quality control problems, are often at the root of drug shortages. ORB intends to work towards improving production infrastructure in the coming years by advocating for more efficient, scalable manufacturing technologies, particularly for complex biologics that are susceptible to production delays and quality issues.
• Global Recalls: Product recalls due to contamination, quality issues, or safety concerns can lead to significant drug shortages. ORB plans to focus on improving early detection of these issues in the future by working towards more stringent regulatory compliance and advocating for increased transparency in the supply chain.
• Natural Disasters: Disruptions caused by natural disasters, such as hurricanes and earthquakes, have led to the shutdown of production facilities, exacerbating shortages. ORB aims to eventually support the development of more resilient pharmaceutical production systems that can withstand or quickly recover from such disruptions.
• Product Rationalization and Generic Deflation: Shrinking profit margins in the generic drug market have caused some manufacturers to discontinue certain drugs, placing additional pressure on the remaining suppliers. ORB plans to explore ways to incentivize the continued production of essential but less profitable drugs by collaborating with policymakers and industry leaders.
• Pricing and Market Pressures: Competitive pricing strategies can inadvertently contribute to drug shortages by reducing profitability, which disincentivizes manufacturers from maintaining or expanding production. ORB is planning to investigate sustainable pricing models that ensure long-term supply chain stability without compromising patient access.

Impact of Drug Shortages on Healthcare

The ripple effects of drug shortages are felt across healthcare systems, impacting both patient outcomes and operational efficiencies. ORB acknowledges that shortages can force healthcare providers to resort to alternative medications that may be more expensive or less effective, thus inflating healthcare costs and creating administrative burdens.

Our future vision involves developing tools and strategies to mitigate the negative impact of drug shortages. This includes planning for robust inventory management systems and alternative supply networks to ensure a consistent flow of essential medications to healthcare providers and patients.