Why drug shortages are hitting hospitals harder than ever
It’s 3 a.m. in a busy ER. A patient needs epinephrine for anaphylaxis. The automated dispensing cabinet beeps-empty. The pharmacy has none. The regional distributor says they’re out until next month. This isn’t a worst-case scenario. It’s happening in 7 out of 10 U.S. hospitals every week, according to the FDA’s 2025 Drug Shortage Report. The same pattern plays out with insulin, antibiotics like vancomycin, and even basic IV fluids. These aren’t glitches. They’re systemic failures in a supply chain that’s been stretched thin by global manufacturing shifts, raw material shortages, and aging production facilities.
When a drug runs out, it doesn’t just delay treatment. It forces doctors to use alternatives that may be less effective, more toxic, or harder to dose. In cancer care, a shortage of doxorubicin can mean delaying life-saving chemotherapy. In neonatal units, a lack of phenobarbital can leave premature babies at risk for seizures. The human cost is real. And hospitals aren’t waiting around for Congress to fix it. They’re acting-now.
Building buffer stock: the new normal in pharmacy inventory
For decades, hospitals ran lean. Just-in-time inventory saved money. But when a single factory in India or China shut down for safety violations, the ripple effect crashed entire supply chains. Today, top health systems are reversing that model. Cleveland Clinic now keeps 90 days of critical drug stock on hand-up from 30 days in 2022. Mayo Clinic stores backup supplies of 14 high-risk medications in secure, climate-controlled vaults across three regional hubs. These aren’t luxury items. They’re insurance policies.
The cost? Up to 18% higher inventory expenses. But the ROI is clear. In 2024, Intermountain Healthcare avoided 117 clinical disruptions by having backup supplies ready. That’s 117 patients who got their treatment on time. They also use predictive analytics to track global supplier risks. If a manufacturer in Italy reports labor strikes, the system flags related drugs and triggers automatic reorder alerts. It’s not magic. It’s data-driven risk management.
Alternative sourcing: going global, but smarter
When the main supplier of a critical antibiotic went offline, Baptist Health didn’t panic. They called their secondary vendor-based in South Korea. Then they reached out to a Canadian distributor with FDA-approved equivalents. Within 72 hours, they had the drug back in stock. This isn’t rare anymore. Over 61% of large U.S. health systems now maintain at least two approved suppliers for every high-demand medication, according to the American Society of Health-System Pharmacists (ASHP) 2025 survey.
Some are going further. Johns Hopkins partnered with a European generic manufacturer to co-develop a stabilized version of a frequently shortage-prone sedative. The result? A version that lasts longer on the shelf and costs 22% less. The FDA fast-tracked approval. Now, 14 other hospitals are using it. This kind of collaboration between providers and manufacturers is still uncommon-but it’s growing. Health systems are no longer just buyers. They’re becoming co-investors in supply resilience.
Substitution protocols: not a last resort, but a plan
When metformin ran short in 2024, some hospitals told patients to stop taking it. Others had a better plan. They used a pre-approved substitution list. Metformin’s therapeutic equivalent? Repaglinide. Not ideal, but safe. Clinicians had already trained on dosing, side effects, and monitoring. The pharmacy had the alternative ready. The patient got care. No delay.
Today, 82% of major health systems have formalized, evidence-based substitution protocols for at least 20 high-risk drugs. These aren’t guesswork lists. They’re built by clinical pharmacists using FDA equivalence data, peer-reviewed studies, and internal outcomes tracking. At Kaiser Permanente, substitution decisions are embedded in the EHR. If a prescriber orders a shortage drug, the system auto-suggests alternatives with clinical notes and cost comparisons. Prescribers can override-but they have to document why. That simple change cut off-label substitutions by 41% in 2024.
Pharmacy-led triage: prioritizing who gets what
When a drug runs out, not every patient needs it equally. That’s where pharmacy-led triage teams come in. At Massachusetts General Hospital, a 5-person team-led by a clinical pharmacist-meets daily to assess who’s most at risk if a drug is delayed. For example, when the supply of propofol dipped, they prioritized ICU patients over outpatient procedures. They didn’t just pick patients. They used a scoring system: severity of condition, likelihood of harm without the drug, and alternative options available.
This isn’t rationing. It’s precision resource allocation. The team uses a tool called the Drug Shortage Impact Matrix, developed by ASHP and adopted by 38 health systems in 2024. It grades each drug by clinical impact (1-5) and supply risk (1-5). A drug scoring 5/5 gets emergency alerts. A 2/3 gets monitored. The result? Fewer last-minute scrambles. More consistent care. And less moral distress for nurses and doctors.
Technology is stepping in-where humans can’t scale
Manually tracking 300+ drugs across 12 warehouses? Impossible. That’s why health systems are turning to AI. Baptist Health’s IT team deployed an intelligent inventory system that scans supplier alerts, FDA notices, and shipping delays in real time. When a shipment from a Chinese vendor was delayed by customs, the system flagged 17 drugs that might be affected. The pharmacy reordered from backup suppliers before the shortage hit. No patient was impacted.
AI isn’t just for inventory. It’s optimizing dosing too. At the University of Michigan Health, an algorithm analyzes patient data to predict who’s most likely to need a high-risk drug next. That lets them pre-position supplies in the right units. The system reduced emergency orders by 39% in six months. And it’s learning. Every time a substitution is used, the model updates its recommendations.
Collaboration over competition: the new pharmacy network
When a hospital in rural Ohio ran out of insulin, they didn’t call their corporate office. They called the next town over. A 30-minute drive. They borrowed 50 vials. Two days later, the supplier restocked. That’s the new model: regional drug-sharing networks.
Since 2023, 19 states have launched formal drug exchange programs. In Minnesota, 110 hospitals and clinics share real-time inventory data through a secure portal. If one runs low, another can donate-no paperwork, no billing. The state covers shipping. In 2024, these networks redistributed over 22,000 units of critical drugs. No one lost treatment. No one paid extra. And no one had to call a patient and say, “We don’t have it.”
What’s still broken-and what’s next
Not all solutions are working. Small rural hospitals still can’t afford backup stock. Independent pharmacies get squeezed out by bulk buyers. And global manufacturers still operate in silos. But change is accelerating. The FDA now requires manufacturers to report potential shortages six months in advance-a rule that took effect in January 2025. And for the first time, Medicare is starting to reimburse hospitals for the cost of maintaining drug buffers.
The future isn’t about one fix. It’s about layers: smarter inventory, shared networks, AI alerts, clinical substitution plans, and policy pressure. The hospitals that survive the next shortage won’t be the ones with the biggest budgets. They’ll be the ones that planned ahead, collaborated openly, and treated drug supply as a clinical issue-not just a logistics problem.
What patients can do
If you’re on a medication that’s been in short supply, ask your pharmacist: Do we have a backup? Is there a generic alternative? Are we part of a regional sharing network? Don’t wait until your prescription runs out. Talk early. Your care team wants you to be part of the solution.
