Supply chains leaders are facing unprecedented pressures as they navigate challenges such as policy changes, rising costs and tariff implications. This is causing health systems to rethink traditional sourcing and procurement strategies.
Below are responses from five pharmacy leaders who were asked: What is the most significant supply chain challenge or transformation you’re seeing in 2025 and how is your health system responding to it?
Editor’s note: Responses were lightly edited for clarity and length.
Amanda Chawla. Chief Supply Chain Officer at Stanford (Calif.) Health Care: As we navigate the complexities of healthcare supply chains in 2025, it is clear that the organizations must continue to invest and transform the way in which the healthcare supply chain operates both at the strategic value and operational level. Increasing cost pressures and the imperative for greater efficiency are reshaping how we measure and optimize supply chain performance. While traditional benchmarks, such as negotiating better prices, remain important, many organizations are now focusing on maximizing value and minimizing waste. Ensuring the right item at the right time and reliability is table stakes although the market continues to remain fragile.
To address these challenges, the Stanford Health supply chain organization is focused on three key areas:
- Financial headwinds: In response to changing landscapes, Stanford has accelerated its efforts through an existing non-labor expense management program, supported by a strong governance structure. While the work of Strategic Sourcing and Supplier Relations is to improve pricing, it is equally important to partner with the business to drive efficiencies and bring greater value. As such, our focus has shifted to providing insights and collaborating on waste reduction and utilization management. Non-labor spend encompasses everything that is purchased by the organization (i.e., goods and services).
- Supply reliability: Recognizing the ongoing challenges related to supply shortages and disruptions, Stanford has embarked on a multi-year journey to develop a comprehensive resiliency program. This initiative is further enhanced through partnerships with third-party organizations that provide insights into disruption workflow management. Additionally, we collaborate closely with our clinical partners to identify and utilize clinically equivalent products, ensuring that we maintain high standards of care while optimizing our supply chain.
- Data and systems transparency: In 2024, Stanford made significant investments in transitioning to a cloud-based ERP system. This move aims to integrate solutions such as contract life cycle management, which will enhance overall efficiency and visibility across our supply chain operations. By focusing on real-time data access and transparency, we can respond more agilely to challenges and improve decision-making processes. The work of insight and automation this year centers around visibility and the management of business processes within the supply chain functions. It is about removing friction in business processes, making it easier to do the right thing, reduce errors and support our people.
In summary, the healthcare supply chain landscape in 2025 demands a proactive approach that goes beyond cost-saving measures. We must recognize that to do any of this work requires a people-first strategy; this means prioritizing how we support our teams, customers, and collaborate with our suppliers and the greater industry. By focusing on financial management, supply reliability, and data transparency Stanford is positioning itself to navigate these challenges proactively, effectively, ultimately delivering better value, high reliability, and service to the healing hands that care for our patients.
Bruce Mairose. Division Chair of Supply Chain Management Sourcing and Networks at Mayo Clinic (Rochester, Minn.): Clearly the most significant challenge in the first half of 2025 has been managing the dynamics associated with U.S.-based tariffs. A great deal of supply chain and operational resources have been invested toward risk mitigation, with a focus on two primary risks: increasing cost and supply chain disruption. Team members have been pulled from other priorities to focus on the ever-changing dynamics. Mayo Clinic Supply Chain has created a task force which serves to monitor and mitigate all risk factors that present and shift some resource time to these efforts due to suppliers declining to respond to RFPs on a number of product categories. We are being told the uncertainties are too high to respond to an RFP at this point. As a result, we have had to terminate the RFP and create short term extensions with contracted suppliers when the supplier is willing to hold price and absorb any tariffs over the term of the extension.
Mayo Clinic Supply Chain is looking to our supply partners to qualify and quantify potential tariff impacts and provide country of origin by SKU to begin the discussion. This information is utilized to validate that proposed tariff/fees increases are appropriately applied absent of additional margin. We are also comparing proposed tariff impacts between competing suppliers to validate accuracy and level of tariff expense assumed by the supplier. The task force is also assessing the category markets for products that either have no tariff or have a lower tariffed country of origin. This work identifies alternatives in the event of supply interruption as manufacturers continue to move manufacturing to low-cost, lower-tariff regions of the globe for selected categories of products. Based on the outcome of supplier discussions, Mayo Clinic is already converting some products within contracts to lower-tariffed SKU and are prepared to switch to alternative suppliers to ensure clinicians have high-quality, cost-effective products for patient care. Meeting the needs of the patient is first and foremost at Mayo Clinic.
Finally, the challenges tariffs appear to have reduced the energy behind transformation across the industry. Post-COVID-19, the industry experienced forward movement in sophistication and advancement in how it manages inventory, backorders, and bilateral communication between providers and suppliers. While industry shortages and backorders are at an all-but-crippling level for many providers, progress was being made across AI to infrastructure. Transformational discussions and initiatives appear to be slowed with most trading partners focused on risk mitigation of cost increases and disruptions.
Meena Medler. Chief Supply Chain Officer at Sutter Health (Sacramento, Calif.):
Managing supply costs without impacting operating margins has been our most critical challenge, especially as inflation, pandemic-related disruptions, and tariffs continue to drive up prices.
Our approach to transformation focuses on a holistic, value-based strategy—moving beyond traditional supply chain models to create preferred partnerships with suppliers. By structuring our health system supply chain more like a manufacturing supply chain, we aim to build strong upstream collaborations that eliminate waste and drive value. It’s not just about price; it’s about creating the infrastructure to collectively address costs from multiple angles. The GE partnership, as announced by our CEO, exemplifies this shift, and we continue to progress with various other strategic alliances.
Andrea Poulopolos. Senior Vice President of Supply Chain at Corewell Health (Grand Rapids and Southfield, Mich.): Driven by unforeseen natural disasters and increased trade pressures, Corewell Health is seeing a powerful transformation in how our clinical and supply chain teams collaborate. By working closely with key clinical resources who support the work of the supply chain team, we’ve been able to close complex sourcing decisions and gain consensus and alignment through partnership and trust. It’s a true testament to what’s possible when we operate as one team.
Bob Taylor. Senior Vice President of Supply Chain at RWJBarnabas Health (West Orange, N.J.): One of the most significant supply chain challenges we are seeing in 2025 is continuing to drive value and savings when macro forces such as the economy, tariffs, product shortages, and inflation are creating a crescendo of increasing costs across all categories of spend. These macro drivers affect all areas of the health system and the supply chain is tasked with mitigating and reversing them to the best of our ability. This is happening while simultaneously working to make strategic advances in operations and use of technology, creating additional resource constraints.
We are responding to this by evaluating all areas of spend to determine opportunity for cost reductions from utilization, commodities, indirect spend, and physician preference items with no area of spend off limits for review. We are leveraging relationships with our partners to increase the breadth of initiatives we pursue concurrently, and to help with identification and quantification of opportunities.
