In today’s post-pandemic world, strained global supply chains have emerged as a new norm. But in the case of prescription opioids, namely oxycodone and hydrocodone in the early 2000s, that supply chain flowed freely without any kinks.
This is in part due to the influence of supplier pool pressure on pharmacy participation in oversupply, according to research conducted by Ednilson Bernardes, professor and program coordinator of global supply chain management at the West Virginia University John Chambers College of Business and Economics.
In other words, pressure from manufacturers and suppliers of opioids, particularly national corporations, influenced how pharmacies bought and distributed those prescriptions.
“We argued that when the pool of suppliers has cohesive expectations for how buyers should behave and sufficient power to dominate the supply relationship, then buyers are under pressure to act in line with those expectations,” Bernardes said.
Bernardes and co-author, Paul Skilton of Washington State University, analyzed transactions involving oxycodone and hydrocodone between 2006 and 2012. They chose those two drugs, Bernardes said, because they’re the most commonly abused, legally prescribed products and central to the American opioid epidemic. According to the Centers for Disease Control and Prevention, as of 2019, an average of 38 people die each day from prescription opioid overdoses.
The researchers tested a model using a dataset combining geographic, market and public health data. The study revealed that more than 90% of supply originated with three generics manufacturers that aggressively competed for shelf space in distributors and pharmacies. Their findings are published in the Journal of Supply Chain Management.
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