  Drug shortages occur frequently and are often caused by supply chain
disruptions. For improvements to occur, it is necessary to be able to estimate
the vulnerability of pharmaceutical supply chains. In this work, we present the
first model of pharmaceutical supply chain reliability. We consider three key
approaches that companies may use to improve reliability: configuration, risk
of disruptions, and speed of recovery. Key metrics include expected drug
shortages, average time-to-shortage, and average time-to-recovery. We
parametrize the model using data from major drug shortage databases and a case
example of a generic injectable oncology drug. With a lean supply chain
configuration, we observe that expected shortages at status quo conditions are
10%. By either doubling the speed of recovery or halving the disruption rate,
expected shortages could drop to 5%. The most influential single change would
be to add a back-up supplier to a lean configuration, leading to expected
shortages of 4%. We also consider profitability and present the breakeven
prices for different configurations. The results from our analyses could lead
to immediate policy impact, providing evidence of the benefits of redundancy
and improving facility quality.
