Medical Device Supply Chains: An Overview and Description of Challenges During the COVID-19 Pandemic (10/13/21)
Peggy G. Chen, Edward W. Chan, Nabeel Qureshi, Shoshana Shelton, and Andrew W. Mulcahy (Payment, Cost, and Coverage Program, RAND Health Care, RAND Corporation)
Prepared for the Office of the Assistant Secretary for Planning and Evaluation (ASPE), HHS
https://aspe.hhs.gov/reports/medical-device-supply-chains
This report provides an introduction to the supply chain for COVID-19 relevant medical devices and related challenges faced in ramping up their production during the COVID-19 pandemic. The authors first present an overview of medical device supply chains in general and then describe how supply chains for specific COVID-19 relevant devices (ventilators, PPE, and COVID-19 diagnostic testing equipment and supplies) differ from that general approach. These devices and the experiences of some device makers are used to conceptualize larger lessons and identify areas of potential future research related to supply chains of medical devices.
Conclusion (p. 52):
In this report we have examined the supply chain for certain medical devices that are in high demand during the COVID-19 pandemic and the challenges involved in increasing their production. One thing is certain: It is not easy for a supply chain to cope with a multifold increase in demand. There are economic disincentives for hospitals or health care organizations to keep large amounts of inventory sitting unused “just in case.” Similarly, manufacturers will not want to keep large amounts of finished goods inventory, nor will they keep large amounts of supplies, production equipment, and labor sitting idle. Improving supply chain response to public health emergencies will require a combination of policies and incentives to change the decision calculus for the entities involved so that they are willing to keep more inventory on hand and more capacity in reserve, as well as to develop processes and procedures to more flexibly move resources as needed. This may also require government to play a role in coordinating across companies and adjudicating across competing customers. These are areas that HHS may want to consider in future policymaking and future research.
