Q&A: Why Predicting Drug Shortages Isn’t the Answer for Pharmacy Leaders

Q&A: Why Predicting Drug Shortages Isn’t the Answer for Pharmacy Leaders

We talked with OrbitalRX CEO Adam Orsborn, PharmD, and Chief Product Officer Nate Peaty, PharmD, about predicting and managing drug shortages in the age of artificial intelligence. Their answers, based on real-world experience in hospital health systems, may surprise you.

With technology such as artificial intelligence and big data, can’t we predict drug shortages yet?

Peaty: We’re excited to bring capabilities like advanced data analysis, AI and machine learning to help hospital pharmacy leaders. Ask a pharmacy leader, “Would you like the ability to predict shortages?” and of course they would say yes. But how possible is that? It’s debatable. It’s unlikely you can conclusively identify an impending shortage – for example, say with 100% certainty that six weeks from now, a specific med is going to go short.

But we can identify risks and probabilities and provide tools for your health system to effectively manage shortages, so the pharmaceuticals you need are there when you need them.

What about app vendors who claim to predict drug shortages?

Orsborn: It’s much easier to say in marketing materials that you’re using AI to do something really cool, than it is to actually do it. Anybody can dial up AI or machine learning, but you must have a robust and appropriately organized data set for these sophisticated tools to work for you.

You not only have to focus on the data, you also have to take those insights and make sure they fit with your hospital’s workflow. The way each hospital actually works is somewhat unique, and if a software solution doesn’t fit your workflow, and doesn’t work the way you work in the real world, what good is it to you?

Let’s say you could actually predict a drug shortage. What would happen?

Peaty: First ask, “How would knowledge of that impending shortage shape the decisions you make and the actions you take as an organization?” If there’s a 75% chance this med may go short, do you stock up? Do you spend an extra $50,000 to $100,000 stockpiling that med to try to protect yourself from a potential shortage?

If the shortage doesn’t happen, then you just needlessly went over budget on that product. There’s a real financial risk to you acting in a preventative way, anticipating the probability of a shortage that isn’t guaranteed.

Beyond that, if you predict a shortage next week and spook every pharmacy buyer in the country to stock up, it’s going to take out the supply chain. You’re going to go from the possibility of a shortage next week to a guaranteed shortage today, where the system is triggering shortages in the supply chain that may have been otherwise managed. That’s panic buying, and there’s enough panic buying in the marketplace already.

So predicting a drug shortage isn’t the best approach?


The challenge is to use big data, machine learning and AI collaboratively to stabilize, not destabilize, our national health system. We have to think beyond panic buying, which becomes a self-fulfilling prophecy of medication shortages, and instead focus on broader, higher-level objectives.

For us, those objectives are to understand the overall infrastructure that every hospital in this country is working in and depending on, and help health systems navigate that to ensure every health system is getting what they need for their patients.

As we continue to grow and expand the data we’re bringing into the system, we believe AI and machine learning will be best deployed to help identify where you have strategic risks, rather than an acute risk that tends to be addressed through a panic buy or hoarding type of behavior.

What will help health systems manage medication shortages?

Peaty: Our approach at OrbitalRX is to stabilize your pharmacy and health system. We can give you advanced awareness of a supply chain risk, for example, and give you tools to take useful actions with that knowledge.

Let’s look at what inventory you’re carrying in your hospital. How consistently have those products been available in the past? Are there certain items you’re dependent on just one supplier to provide? We help you proactively identify strategies around that, which includes finding additional suppliers for those meds and exploring alternatives.

Helping you easily see, organize, and put all of that information together, in a way that fits your workflow, will enable you to better manage drug shortages.

I want us to consider a more thoughtful approach discussing the harm that comes trying to anticipate shortage, from hoarding and not having solid information about all of the sources available to you in your market.  LogicStream is still saying that they have an “early warning” system.  While that is not prediction, it has the same negative downstream impacts of potentially creating or worsening a shortage where none exists.  At OrbitalRx we partner with health systems and industry stakeholders to make the problem of shortages better for everyone.  The more organizations that join our cause, the better it gets for everyone.  We work to ensure you have all of the information that you need to make the most responsible decision for your patients and all patients who need these medications.

Where do health systems need to focus in order to better manage drug shortages?

Orsborn: We focus on these key areas: your inventory, your supply chain, and how you organize your workflow and communicate your strategy throughout your organization.

In the first area, we help you conserve the inventory you have, using a real-time view of your inventory. What product you have, where it’s at, how fast it’s moving out of your system, and what has happened with this product historically. This helps you better manage what’s happening internally, without affecting the market more broadly.

In the second area, we give you a bigger and better view into what else might be available. We show you all the potential options, in terms of medication alternatives and available suppliers across catalogs. In this way you can spread out your buying strategies, be more secure in them, and quickly see at any time all the options available to you.

The third area, workflow and communication, is about giving you the tools to help you organize and automate all of this information so it’s readily available, wherever you are. Much better than the old way of manually organizing it into spreadsheets that then sit in people’s inboxes.

By focusing on all three of those areas, you can be as responsive as you need to be to effectively manage shortages, regardless of whether there’s an early warning or not.

Are there clues pharmacy leaders should pay attention to?

Peaty: There are data signals that help our clients stay alert to when things are starting to change. It’s all about situational awareness, which means taking the information we make available to you currently and staying alert to where things may be starting to change.

The trick is to identify which data signals and patterns are most consistent with supply chain risk, and then take informed action. With awareness of your current inventory situation, as well as the external supply options in terms of alternative drugs and suppliers, you can use that information to make faster and more informed decisions.

When it comes to managing drug shortages, does what works for one hospital health system also work for another?

Orsborn: The situational awareness around inventory and supply chain is important for every health system. What’s key is for a drug shortage management system to work the way hospital pharmacy departments actually work today. We hear that in every demo we do: the importance of aligning with the health system’s real-world workflow.

Peaty: Most hospitals follow a fairly consistent process: Everybody is contacting their suppliers, their buyers are shopping online, they’re meeting regularly to update stakeholders, and they’re communicating out to external stakeholders. But each site is different and has their own unique challenges, and their workflow has its own special flavor.

We have to be flexible enough to allow sites to work the way they work best, and recognize the things that have worked best for them in the past. But we also have to allow enough structure across each site so we can provide a consistent service and solution for all of our users. With that balance, we can help your health system, as well as the overall national health system, work better.

What’s next in terms of better managing medication shortages?

Peaty: We believe we can do more things collaboratively, and with more transparency, that will help stabilize the national health system, make your health system site the best it can be, and do that in a way that results in a better, more sustainable supply chain.

Things like panic buying and stockpiling don’t help. Our focus is to help you make smarter and more strategic decisions, and to connect those efforts of pharmacy leaders as well as medication suppliers to make the whole system better.

Interested in learning more? The OrbitalRX drug management solution helps reduce complexity, proactively manage data and workflows, and better communicate with hospital leaders and other departments for effective drug shortage management.

To schedule a demo of the OrbitalRX solution, send us a message.


Nate Peaty
Adam Orsborn
6 Steps for Managing Your Drug Shortage Strategy During COVID-19

6 Steps for Managing Your Drug Shortage Strategy During COVID-19

Drug Shortage Strategy | Medication​Hospitals nationwide have struggled with their drug shortage strategy during the COVID-19 pandemic, from tests to personal protective equipment (PPE) to other supplies, such as ventilators. While hospitals are beginning to get these shortages under better control, they are confronting a growing challenge: The outbreak has placed a significant strain on the drug supply chain, leading to warranted fears about drug shortages and their effects on patients and providers.

There are many factors contributing to current shortages of drugs. These include reduced global production and distribution, increased use of medications to help treat COVID-19 patients, and people stocking up on drugs for various reasons. In late February, the U.S. Food & Drug Administration (FDA) announced the first shortage caused by COVID-19. In the weeks that followed, medical and industry experts have been increasingly sounding the alarm about drug shortages.

Drug Shortage Strategy: Key Steps to Take

Since these and other challenges are not likely to be resolved any time soon, health system pharmacists must strive to improve their ability to effectively manage their organizations’ drug shortages during this difficult period. Here are six steps to follow to help make this demanding task a little easier.

Step 1: Stay current with external and internal drug shortages

First and foremost, pharmacists must ensure they remain current with the latest drug shortages and discontinuations. There are several good websites that actively monitor the supply chain and provide updates on shortages. These include those from the FDA, American Society of Health-System Pharmacists (ASHP), GoodRx (which sources FDA and ASHP), and Drugs.com.

While staying current on external drug shortage data is critical, so is staying current with internal data. Pharmacists can leverage technology to enhance their management ability. For example, the OrbitalRX platform provides pharmacists with organized, easy-to-assess data about their health systems’ shortages and availability. This knowledge is critical to making educated decisions that can help systems mitigate the ongoing impacts of shortages.

Step 2: Monitor regulatory developments

As part of the effort to combat the chaos unleashed by the pandemic on the U.S. healthcare system, the federal government has undertaken regulatory initiatives. Some have been directed toward addressing the drug shortage.

For example, provisions included in the March “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) are directed at drug shortages, notes ASHP. These include the FDA prioritizing reviewing applications for generic drugs in shortage and enhanced reporting requirements for manufacturers with drug shortages.

As another example, as FiercePharma notes, the FDA announced in April that it would “… temporarily allow hospitals to source hard-to-find drugs from compounding pharmacies to treat certain patients hospitalized with severe COVID-19.”

In the announcement, FDA stated, “… FDA generally tries to address potential and actual drug shortages by working through the global pharmaceutical supply chain, rather than relying on compounded drugs, and focuses on restoring supplies of FDA-approved drugs. However, in light of unprecedented disruptions to, and demands on, the global pharmaceutical supply chain as a result of the COVID-19 pandemic, and in order to respond to evolving regional conditions, additional flexibility is temporarily needed to help ensure that treatment options are available when hospitals are unable to obtain FDA-approved drugs used for hospitalized patients with COVID-19.”

Pharmacists should work to stay abreast of new regulatory developments and understand how these developments may affect their ability to secure drugs facing shortages.

Step 3: Follow production and accessibility developments

While regulatory developments such as those noted above can help improve the ability for pharmacists to acquire and compound the drugs they need, other significant contributors to drug shortages include disruptions to importing of critical medications and the ability for U.S. manufacturers and distributors/wholesalers to keep up with demand.

In late March, the Center for Infectious Disease Research and Policy (CIDRAP) announced preliminary findings from its Resilient Drug Supply Project — an effort to define and address vulnerabilities to the public health resulting from medical drug shortages. Among the findings: There are more than 150 critical drugs needed for acute care within a few hours to days or patient mortality rises and many of these drugs are made, formulated, packaged, or have an active pharmaceutical ingredient (API) made in China, India, Italy, or other countries severely affected by the pandemic. The pandemic has not only led to curtailed production and shipment of medications in these countries, but also led to countries restricting how much they export in the interest of maintaining enough drugs for their own population.

In April, the Drug Enforcement Administration (DEA) raised production quotas for many medications used to care for patients placed on ventilators. However, as the Advisory Board notes, “… it’s not clear whether companies will be able to adequately ramp up production of the medications to meet the increased demand.” DEA has also announced plans to increase importation of several of the drugs (e.g., ephedrine, pseudoephedrine, phenylpropanolamine).

Drugmakers are issuing their own statements concerning potential shortages. Some are warning of shortages. Others are promising no shortages.

The better that pharmacists and their departments can keep a finger on the pulse of the rapidly changing developments concerning production and accessibility, the better positioned they will be to execute an effective response plan.

Step 4: Step up communication and collaboration with wholesalers and distributors

Due to the rapid and significant developments impacting the drug supply chain, the availability of many vital medications seems to experience frequent, substantial changes. This is a time when communication with a pharmacy’s sources for medications is essential.

Pharmacists should keep open lines of communication with their primary wholesalers and secondary distributors and ensure these sources are well-informed about current inventory and the medications in highest demand in the hospital.

Furthermore, wholesalers and distributors should be encouraged to keep pharmacists informed about developments, such as those highlighted earlier, to ensure nothing of importance missed. Pharmacists should also explore how they can collaborate better with wholesalers and distributors within and outside of their health systems to help ensure medications are directed to the sites where vital drugs are needed most.

Step 5: Strengthen communication and collaboration with clinicians

Strong communication about shortages with affected clinicians — and other stakeholders, including administrators — is also crucial. The Institute for Safe Medication Practices (ISMP) produced a helpful document about managing a drug shortage crisis in 2010 that offers a great deal of information applicable to our current situation. It includes a section on how to establish ongoing communication with staff.

ISMP recommends regularly sharing information with clinicians about the following:

  • Drug shortage, causes, and expected duration (if known)
  • Assessment of current drug availability
  • Temporary therapeutic guidelines, including use limitations for the shortage drug
  • Alternative products and how they will be supplied to units
  • Dosing, preparation, and administration guidelines for alternative products
  • Error potential with alternative products and how to reduce risk
  • Additional patient monitoring and safety steps that may be required when using an alternative drug.

ISMP advises pharmacists to prepare and update daily a report that includes this information on the most critical drug shortages and use this report to keep clinicians and other stakeholders informed. In addition, the organization recommends that pharmacy staff receive daily briefings concerning all aspects of drug shortages so they can serve as a resource to others in the organization.

Pharmacists should also communicate and work more closely with prescribers to coordinate the most effective use and conservation of drugs in short supply. Ways to do so include identifying clinically appropriate alternatives for shortage drugs and developing protocols to guide decisions concerning usage of such medications.

Step 6: Be diligent about diversion

Drug diversion remains a considerable challenge for pharmacists. Pharmacy Times recently reported on findings from Kit Check’s latest “Hospital Pharmacy Operations Report.” It showed that more than half of survey respondents reported having a diversion event within the last year. In addition, 37% were aware of at least one colleague who diverted controlled substances.

The COVID-19 pandemic opens up opportunities for diversion, including of drugs in short supply. Individuals looking to steal medications may try to take advantage of any disorder and reduced oversight in pharmacies and hospital departments. Drugs in high demand often command a high price on the black market, further enticing individuals thinking about diverting drugs to take risks. Some individuals may be interested in diverting shortage drugs for their own needs and the needs of family and friends.

In the rush to secure and distribute shortage drugs to departments and patients who need them, do not let your guard down as this can lead to the loss of vital medications and large penalties. If you’re concerned about diversion, considering implementing some of the recommendations from this HealthLeaders article.

Managing Drug Shortages: Stay Vigilant

Drug shortages were a fact of life before the COVID-19 pandemic. Now shortages are growing worse, putting increased strain on pharmacists and prescribers, particularly since some medications currently in high demand and short supply can be the difference between life and death for patients. Pharmacists must work with everyone involved in the drug supply and administration chain to best minimize interferences with patient care.

As emergency physician Dr. Jeremy Samuel Faust writes in his column titled “Medication Shortages Are the Next Crisis” and published in The Atlantic, “Doctors are only as good as our teams, our equipment, and our medicines. If we get the PPE we need, our teams will stay safe. If we receive much-needed equipment — tests, ventilators, IV pumps — in time, fewer of our patients will die needlessly. But if we can’t provide medications that make what we do effective, all our efforts will be for naught.”

About the Author:

Adam Orsborn PharmD, MS

Adam brings his experience as a successful health-system executive at a top academic medical center; a trusted design, development, and customer success advisor for pharmacy technology companies; and a pharmacy practice leader with extensive experience in specialty pharmacy, finance, operations, and organizational and leadership development to OrbitalRX. As the CEO, Adam is driving the vision and strategy of the company, while following market trends to ensure the product aligns with the needs of pharmacy teams.

Juniper Alcorn, PhD