Supply Chain Disruptions Continue to Strain America’s Health Care System

Written By: Shaili Banerjee, Legislative Issue Manager and Zoe Salzberg, Legislative Issue Manager

There has been an unprecedented strain on America's health care system, and it's expected to get worse. The U.S. health care system faces supply shortages that out-size the problems experienced earlier in the pandemic when obtaining personal protective equipment (PPE) was nearly impossible to obtain. Now the country is experiencing a wider array of equipment shortages. This goes back to backlogged ports, issues with transportation, and lockdowns.

While much of the attention is focused on automakers and manufacturers of electronics, the effects of medical supplies and medical devices are severe. The device shortage list includes dialysis-related products, personal protective equipment, testing supplies, and ventilation-related products. Industry-wide supply disruptions made it necessary for stockpiling to become essential.

The supply chain shortage has affected pharmaceuticals too. This comes from dependence on certain key ingredients from Asia. This includes anesthesia medications, antibiotics, nutrition, electrolyte products, chemotherapy agents, and pain medications that have been in shortage.

The pandemic has exacerbated the states' ability to deliver essential medical supplies, which will urge state legislators to respond to this issue if they have not done so already. States are increasingly introducing legislation addressing supply chain shortages and preventing ones in the future. This includes establishing stockpiles, reviewing current supply chain programs, and creating offices within the legislature to address arising supply chain issues.

There are some proposed solutions to tackle the shortage. Still, we expect to see more in the future, largely because this is a federal issue emerging in the states. We can expect states to make plans to publicly track the sourcing of demanding resources, volumes of information, and health systems providing failure-to-supply contracts. Hospitals and health systems may begin to focus on the need for purchasing and having a single department be the point of contact to coordinate with supplies and donors. We can also expect to see emergency preparedness drills to prevent any unprecedented supplier disruptions.


In Colorado, Governor Jared Polis signed HB 1352, which requires that the Department of Public Safety maintain a stockpile of essential materials available for distribution should the governor declare a disaster emergency. The Department would ensure that the stockpile has enough PPE to ensure sufficient supply until nation supply chains can meet the demand for the equipment. 

The New York Legislature introduced AB 3305, which would mandate the Commissioner of Health to maintain a stockpile of drugs, vaccines, biological products, medical devices, and other supplies in amounts as determined by the governor. The measure also mandates the commissioner to conduct an annual review of the stockpile of supplies and make additions as deemed necessary. According to the Sponsor, the purpose of this bill is to ensure that New York is prepared if any emergencies ever arise.

California introduced AB 1044, which would require the Office of Emergency Services to review and make recommendations on enhancing the effectiveness of the Strategic National Stockpile. This measure died in committee. Hawaii introduced SB 515, which would establish a location for the construction of a stockpile storage facility, making it critical for the state's efforts to prepare for future natural disasters and pandemics. This failed upon adjournment.

The federal government already maintains stockpiles of medical equipment and other materials that state governments can draw upon amid any supply disruptions. The Strategic National Stockpile (SNS) contains a wide range of medical supplies and equipment, including antibiotics, antivirals, vaccines, ventilators, and beds, which can all be deployed to another part of the country. The stockpile was initially designed and funded to handle chemical, biological, and nuclear attacks. Experts have concluded that necessary funding for pandemic preparedness was not received. Experts also believe greater transparency is needed to understand how the SNS is managed, including the costs of different stockpiled products. SB 3799 which was introduced, improves medical preparedness and response coordination for the COVID-19 pandemic and future pandemics.

Pandemic Response Programs

In response to supply chain shortages, some states have created executive departments and programs to better prepare for future emergencies. 

In Tennessee, Governor Bill Lee (R) signed SB 2429 to establish emergency service coordinators for executive departments. The emergency service coordinator will be responsible for reporting to the Tennessee Emergency Management Agency on emergency preparedness issues and preparing and maintaining emergency preparedness and post-disaster response and recovery plans. 

California introduced a measure appointing a Supply Chain Senior Advisor in the Governor's Office of Business and Economic Development. AB 1679 would establish the role of the advisor to be the principal advocate for the interests of supply chain development and operation and advise the director on legislation, administrative regulations, and other issues affecting the state's supply chain. This measure was held under submission, and committee members will work on or discuss the measure further. 

Utah SB 194 establishes requirements for the Department of Health when adopting, modifying, requiring, facilitating, or recommending criteria related to the rationing of scarce health care resources. This measure was signed into law on March 22.

Shortages of essential supply chains exposed the need for states to develop comprehensive distribution programs. Several states have introduced legislation taking the first steps to improve the distribution of essential goods and services. 

Minnesota HF 3862 directs the Commissioner of Health to administer a program to efficiently distribute medical supplies. Similarly, in Rhode Island, SB 2332 requires the Department of Health to establish a program to distribute COVID-19 rapid test kits and N95 masks to all residents.

States have also created more efficient distribution programs to respond to the pandemic. To improve transparency in vaccine distribution Governor Brad Little (R) of Idaho signed an executive order requiring routine data collection from vaccine providers. In Utah, Governor Spencer Cox (R) signed an executive order imposing requirements on vaccine providers to improve distribution. 

In Conclusion

Fixes to the supply chain will likely not happen in the short term. However, states, hospitals, and health systems are implementing legislation to cope. We expect to see an increase in legislation establishing new executive departments, which will create supply chain experts that can better respond to future pandemics. In addition, the stockpiling issue has shifted from a federal-only viewpoint to the state's taking the initiative to address the issue.