Medicines supply ‘spot audits’ considered to address shortages risk

The Department of Health and Social Care said it is exploring the option as part of a wider package of measures aimed at reducing the risk of future medicines shortages. Increasing resilience of UK medicines supply chains is a priority of the government, it said.

In a new report, the Department acknowledged the often complex and global nature of medicines supply chains, where manufacturing and distribution of those medicines is heavily regulated. It said medicines shortages can arise “from a wide range of multifaceted causes not specific to the UK and with far-reaching impact across the world”.

The impact of geopolitics and conflict on trade routes and access to medicines and active pharmaceutical ingredients (APIs) are examples of the potential causes of medicines supply issues. A further example is the impact the Covid-19 pandemic had in spiking demand for certain products and APIs globally at a time when many countries shuttered industry and closed their borders, in an attempt to curtail the spread of the virus.

Following the outbreak of Covid-19, the government introduced a new online reporting tool, known as the Discontinuations and Shortages (DaSH) portal. Medicine licence holders can use the portal to meet their legislative obligations to provide the government with information on anticipated supply shortages and discontinuations for medicines supplied to the NHS.

In its report, however, the Department said that not all suppliers report disruption in a timely manner. It is considering altering the reporting obligations as a result.

The Department said it plans to consult on “how we can ensure the information provided by suppliers on shortages and discontinuations is sufficient to allow us to put timely measures in place to manage supply and mitigate the impact on patients”. Further proposals concerning the penalties for non-compliance with those obligations will also be consulted on, it added.

Life sciences expert Tracey Roberts of Pinsent Masons said: “The Department said that around 60% of notifications it received through the DaSH portal in 2024 concerned manufacturing issues. This demonstrates requirements for better resilience in the system. It pointed to issues where multiple suppliers rely on the same manufacturer, which highlights that while it may appear that medicines come different sources, this is not always the case.”

“Greater transparency might be a solution, as might requiring more detailed consideration of manufacturing resilience in tenders. There is also an argument for higher safeguards for so-called tier 4 products, where supply issues are considered to carry high impact and high patient safety risk,” she said.

Certain medicines suppliers could also face “spot audits”, according to another of the measures the government is considering, to improve the resilience of UK medicines supply chains.

In 2022, NHS England introduced a new contractual requirement on suppliers that have obtained contracts to supply their medicines to hospitals and other secondary care settings in England. That requirement is that they are obliged to maintain eight weeks’ worth of stock in reserve. The Department said: “The buffer stock (which is calculated from eight weeks’ previous purchases) allows for the ‘ebb and flow’ of demand fluctuations and short-term supply chain breaks. This drives better supplier chain performance and helps ensure supply remains available. Where the buffer stocks are in place, tier 1 issues (shortages that are deemed to have a low impact on the system and population) have stabilised and reduced.”

According to the Department, however, while most suppliers comply with their contractual requirements, it is “continuously seeking to improve this to a 100% compliance rate”. It sees spot audits as a potential option in this regard.

“We will issue communications to all relevant suppliers to reinforce the need to oblige and are exploring the potential use of spot audits to drive compliance further,” the Department said.

Roberts said: “The buffer stock requirement applies to secondary care medicines which are on the medicines procurement and supply chain (MPSC) NHS frameworks and includes: newly available generic medicines used in hospitals; branded medicines, biosimilar medicines and intravenous (IV) fluids; as well as blood products and dose banded chemotherapy and flu vaccines for hospitals. These are critical medicines – ensuring continuity of supply is important for patients.”

In its report, the Department described NHS England’s 2022 move to value-based procurement as “an important shift from price-based procurement” that “introduces an increased level of supplier accountability across a broader base of criteria, which now includes suppliers holding buffer stocks”. It highlighted how the change in approach is now underpinned by public procurement law reforms included in the Procurement Act 2023, which came into force on 24 February 2025. Under value-based procurement, it said, “suppliers are more likely to be selected for contracts if they operate a well-managed buffer stock programme that has sufficient reporting, compliance and utilisation”.

“Resilience is an important part of the tender assessment, and value based procurement rewards strong performing suppliers who provide the most overall value,” the Department said. “Non-complying suppliers who do not hold or share data on buffer stocks face penalties and their future contract awards can be impacted.”

In the EU, a new Critical Medicines Act has been proposed as part of efforts to enhance the resilience of the bloc’s pharmaceutical supply chain post-Covid.