Drug shortages, geopolitical pressures, fragmented inventory data and a growing expectation that pharmacy and supply chain work in lockstep — the pharmaceutical distribution landscape is changing fast, and health system leaders are grappling with the operational and financial implications.
At Becker’s 16th Annual Meeting, a group of supply chain, operations and clinical executives joined McKesson for an executive roundtable discussion on how health systems are reimagining pharmaceutical distribution, demand planning and inventory management to achieve more for the business of pharmacy.
McKesson representatives in the room included Chris Van Norman, senior vice president of supply chain operations.
Below are three key takeaways from the discussion.
Note: Quotes have been lightly edited for length and clarity.
1. Data quality is the foundation — and most systems aren’t there yet
Before AI, advanced forecasting or real-time demand sensing tools can deliver value, health systems need clean, centralized and accessible inventory data.
“You can’t forecast off poor quality data,” said a supply chain leader from a large children’s hospital in the South, who described a multi-year RFID implementation that brought visibility to pharmaceutical inventory across the system and reduced re-dosing losses significantly in the first year.
Several other leaders echoed the challenge of system-switching — pulling demand signals from the EHR, then manually updating inventory thresholds in a separate platform — as a major obstacle to efficiency.
Mr. Van Norman noted that McKesson is actively modernizing its approach to demand sensing, including through the Kinaxis ordering platform, which uses AI-enabled algorithms to help detect anomalies in customer demand patterns and proactively flag potential supply issues before they become stockouts — supporting health systems’ ability to achieve more through proactive supply chain management.
2. Pharmacy and supply chain integration is shifting from siloed to strategic
Across the room, leaders described efforts to break down the traditional divide between pharmacy and supply chain. A strategic sourcing leader from a mid-Atlantic health system described creating an algorithm to determine which purchasing decisions belong in pharmacy versus supply chain — and cross-distributing products accordingly, leveraging supply chain’s broader distribution capabilities even for items pharmacy purchases.
“We always were in this sort of ‘we-they’ mentality,” the leader said. “And then we kind of forced this conversation that has worked out very well for the organization.”
A leader from a federally qualified health center on the West Coast described piloting a model of embedding a pharmacist within the supply chain department to manage medication inventory accountability across 27 locations.
3. Resilience requires relationships, not just redundancy
Drug shortages have grown dramatically since COVID — one health system leader noted the weekly shortage list within their organization has grown from roughly 20 items pre-pandemic to more than 1,200 today — and tariff uncertainty is adding a new layer of risk. Leaders broadly agreed that multi-distributor hedging strategies and secondary sourcing contracts offer some protection, but that trusted relationships with primary distributors can be a key differentiator in navigating allocation crises
“A transaction is not a relationship,” said the supply chain leader from the Southern children’s hospital. “The distributor has to know your organization, they have to identify the values of the organization.”
Mr. Van Norman noted that McKesson works to get ahead of geopolitical and weather-related disruptions through strategic inventory positioning, and emphasized that McKesson’s ongoing modernization, including distribution center automation and improved delivery tracking visibility, is designed to drive operational efficiency, reduce waste, and strengthen the financial health of health system customers so they can achieve more of their goals today and into the future.
“It’s not a package, it’s a patient,” he said, describing the reminder that appears above the door of every McKesson distribution center — ensuring that the right drug is delivered at the right time, every time.
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