A four-year research project by INSEAD and
five other institutions sheds light on how understanding medical
criticality, supply chain risk and their interactions could help us
better address drug shortages.
FONTAINEBLEAU,
France, SINGAPORE and SAN
FRANCISCO, July 18, 2024
/PRNewswire/ -- Drug shortages are becoming an increasing
problem in Europe and other parts
of the world. When pharmacists in France walked out of their counters en masse
and marched into the streets on 30 May, it was not just over their
compensation and prospects, but a concern with wider implications
for the public – the unreliable supply of drugs. In the Netherlands, the estimated annual total
cost of drug shortages was about EUR220
million in 2023. In England, pharmacists have warned that drug
shortages are at such critical levels that patients are at risk of
immediate harm and even death.
While Covid-19 shone the spotlight on drug shortages, it's a
structural issue that exists even in the absence of demand and
supply shocks. Yet most shortages are managed reactively, without
accounting for the importance of supply chain risk. There needs to
be a simple way to think about the differences between drugs and
how that would lead to different interventions in addressing
shortages.
As a path to resolving these issues, Luk Van Wassenhove, Emeritus Professor of
Technology and Operations Management and Iman Parsa, postdoctoral researcher at the
Humanitarian Research Group at INSEAD, together with
researchers* from Tilburg University, BI Norwegian Business School,
Norwegian Institute of Public Health, Lancaster University and
the Rotterdam School of Management embarked on a four-year
project to study drug shortages in six European countries.
Under the "Measures for Improved Availability of Medicines and
Vaccines" (MIA#): funded by the Research Council of Norway, an analysis of Belgium, France, Norway, Sweden, The
Netherlands and the UK led to the development of the
Risk/Criticality Matrix (RCM).
It represents a pragmatic framework for classifying drugs and
guiding decision-making through a two-dimensional matrix: Supply
chain risk (e.g. exported vs. locally produced drug) vs. medical
criticality (e.g. blood thinners vs. erectile dysfunction
drug).
Refer to the Figure: Risk/Criticality
Classification Matrix developed under the Measures for Improved
Availability of Medicines and Vaccines (MIA)
project.
Drug supply chains involve many stakeholders with potentially
vastly different perspectives, incentives and objectives. The
simple, visual matrix is a powerful tool to align diverse
stakeholders – particularly policy makers and international
organisations – to consider how medical criticality and supply
chain risk interact dynamically.
Taking into consideration the context, regulations and costs,
the tool can help them to determine the most appropriate
intervention that is affordable, and which will not jeopardise
patient care.
The Risk/Criticality Classification Matrix is a first step in a
continuous improvement loop that ensures interventions stay
effective and aligned as conditions change, such as when a pandemic
strikes or when a brand-name drug becomes generic.
Ultimately, a systems approach is needed to tackle the chronic
drug shortage issue, exacerbated by the complexity and sometimes
opaqueness of drug supply chains. An evidence-based approach that
aligns stakeholders and brings clarity might eventually heal
medical supply chains of their structural woes.
*Collaborators of the projects are: Thomas Breugem, Tilburg University; Iman Parsa and Luk Van
Wassenhove, INSEAD; Kim van
Oorschot and Marianne Jahre,
BI Norwegian Business School; Christine
Oline Årdal, Norwegian Institute of Public Health;
Nonhlanhla Dube and Kostas
Selviaridis, Lancaster University;
and Harwin de Vries and Stef Lemmens, the Rotterdam School of
Management.
#More information on the MIA
project: https://www.bi.edu/research/centres-groups-and-other-initiatives/mia/the-mia-project/
For any queries, reach out to news@insead.edu
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SOURCE INSEAD