Hidden pharmacy risks squeeze hospital margins and long‑term health costs
Drug shortages now hit hospitals so often that a single disruption can trigger tens of thousands of dollars in unplanned spend, delayed surgeries and last‑minute workarounds – and most health system leaders still make these calls with only a partial view of what is happening in their pharmacies.
A new Tecsys survey points to a structural “visibility crisis” inside hospital pharmacy supply chains.
Most respondents say they are prepared for disruption, but the underlying numbers tell a different story.
Only 20 percent of healthcare executives and pharmacy leaders report real‑time visibility across care settings.
The other 80 percent rely on delayed, fragmented or manual tracking when they make pharmacy and patient care decisions.
Inventory expires in one location while another unit urgently requests the same drug.
Rush orders replace planned purchasing.
Substitutions and delays disrupt clinical workflows.
Drug shortages remain the most disruptive force.
Since 2018, hospitals have faced more than 200 active drug shortages every quarter, and 79 percent of survey respondents say shortages caused the greatest disruption to their pharmacy operations in the past 12–24 months.
Yet only 24 percent feel very prepared for shortages they see as inevitable, while 76 percent feel only somewhat or not prepared at all.
Executives are even less confident than pharmacy leaders.
The operational and financial consequences intersect.
When a shortage hits, teams often turn to higher‑priced alternatives, accelerate orders or delay procedures, which erodes revenue and strains already thin margins.
Survey respondents identify several drivers of shortages: high demand spikes, raw material shortages, pricing and reimbursement challenges and regulatory changes.
They also say drugs and pricing have a severe or moderate impact on financial performance in most organizations, with only a small minority reporting minimal or no impact.
Managing shortages and substitutions, ensuring compliance with frameworks such as DSCSA and 340B, and managing the high cost of speciality pharmaceuticals emerge as top pharmacy supply chain challenges.
Despite this, leaders express relatively high confidence in their overall preparedness.
Nearly three‑quarters say they are prepared to manage a major disruption, from natural disasters to drug shortages, but fewer than one in four describe themselves as very prepared.
With 80 percent lacking full, real‑time visibility, that confidence appears to rest on manual workarounds and siloed fixes rather than integrated insight.
The visibility problem does not stem from a lack of technology.
Over the past decade, health system pharmacies have layered on automation systems, analytics platforms, controlled substance cabinets, carousel technologies, drug‑diversion tools and sterile‑compounding software.
According to the survey, however, 75 percent of systems still lack full integration between clinical systems (including EMRs), ERPs and pharmacy supply chain platforms.
Only 13 percent report full integration between automation, software, robotics and pharmacy supply chain systems.
In practice, that fragmentation shows up in routine but consequential failures, including:
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Incomplete or inaccurate inventory data
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Point‑of‑use data that does not flow into purchasing systems
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Hours spent reconciling spreadsheets with dispensing machines and EMR data
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Disconnected workflows between central and satellite pharmacies
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Limited visibility into supplier disruptions and backorders until a clinician tries to administer a drug that is not available
Tariffs add another layer of volatility.
Respondents say they are already diversifying suppliers or nearshoring, accelerating automation and digital transformation, building larger inventory reserves and, in some cases, planning to raise prices.
A minority report having no strategy yet for tariff‑driven uncertainty. These moves signal that leaders see continued pressure on acquisition costs, lead times and availability for critical medications and supplies.
Many see AI and advanced analytics as the way out of this pattern.
Pharmacy supply chain teams are exploring demand forecasting, inventory optimisation, drug shortage prediction and risk modelling.
The survey shows that 15 percent have fully deployed AI or machine learning, 35 percent are in pilot or limited rollout, 33 percent plan implementation within 24 months and 17 percent have no plans.
C‑suite leaders are more likely than pharmacy vice‑presidents and senior vice‑presidents to say their organizations intend to adopt AI or machine learning, pointing to a gap between executive expectations and frontline readiness.
Data quality and integration form the main bottleneck.
With 75 percent of organizations lacking full integration across clinical, ERP and pharmacy supply chain platforms, and 80 percent still without real‑time visibility across care settings, AI tools must operate on scattered, inconsistent data.
In that environment, even sophisticated models will generate unreliable forecasts and risk signals.
Not surprisingly, respondents rank advanced analytics and predictive modelling as their top technology investment priority, followed by accurate cost and data, end‑to‑end visibility platforms, transportation and logistics management, point‑of‑use automation and robotics, and warehouse and consolidation pharmacy service centre modernisation.
Another theme runs through the survey: pharmacy’s impact on enterprise performance remains under‑recognised.
Nearly half of pharmacy and supply chain leaders describe their function as strategic, but only 15 percent of hospital executives agree.
Pharmacy drives a large share of operating expenses, touches almost every patient, and sits at the centre of safety, compliance, risk management and cost control, yet its contributions often remain buried in siloed data and departmental metrics.
Persistent disruption – shortages, cost volatility, regulatory pressure and manual workarounds – is not just an environmental fact; it reflects limited visibility that health systems can address.
Moving from disruption response to disruption anticipation depends less on adding new systems and more on reducing fragmentation, eliminating manual reconciliation and building data that is consistent, timely and usable across the enterprise.
