The U.S. faces an unprecedented medical device shortage crisis—here’s how we can fix it

Medical device shortages represent a critical challenge for global healthcare systems, disrupting patient care and exacerbating health crises. A report from July 2024 stated that the U.S. faced significant shortages, with at least 140 medical products at insufficient levels. Perhaps most shocking is that those shortages impact nearly 20% of the US population. As the status quo of American healthcare comes under increasing scrutiny, what’s clear is that the country must adopt a multifaceted approach. Efforts ranging from public-private partnerships, more robust regulatory reforms, supply chain digitalization, and a commitment to reshoring and decentralizing manufacturing are crucial to addressing life-threatening shortages today and ensuring our supply chains are protected in times of crisis.

The root causes of medical device shortages

The hyper-concentration of manufacturing for medical devices poses stark disadvantages for supply chain resiliency. Enabling a limited number of manufacturers to be the designated producers of critical components, often located in specific regions, reduces costs but creates significant vulnerabilities. Natural disasters, political events, or energy disruptions affecting one region can ripple through the entire supply chain and lead to significant shortages. A notable example is the aftermath of Hurricane Helene in October 2024, which severely damaged Baxter International's manufacturing plant in Marion, North Carolina, the facility responsible for producing approximately 60% of the nation's intravenous (IV) fluids. The hurricane didn’t just devastate one manufacturing plant—it disrupted care nationwide, prompting critical care rationing.

Another issue is the insufficient flagging of early shortage risks. Given the complexity of the medical device ecosystem—which includes consumables, wound care products, screening equipment, and pharmacological tools—robust monitoring and tracking of potential shortages are crucial. Currently, medical device companies are disincentivized from long-term planning and instead focus on meeting near-term commercial needs.

While supply chain monitoring tools are available, they are often underutilized due to the absence of regulatory mandates requiring comprehensive reporting. Without early risk detection and contingency planning, the system struggles to respond to sudden spikes in demand caused by now all-to-common disasters or widespread medical events, from pandemics to harsh flu seasons.

Regulation and digitalization build resilient supply chains
Regulatory reform must be a top priority in addressing supply chain vulnerabilities. Recently announced FDA plans, influenced by lessons from the European Union’s regulatory advancements, highlight the need for more stringent and transparent supply chain oversight. The FDA aims to amend the CARES Act to require year-round reporting on medical device availability, as its current six-month reporting window is insufficient given the long lead times required for developing many medical devices.

Of course, it is necessary and welcome to enable the identification of potential shortages months in advance and provide a much-needed window to ramp up production. However, for regulation to work, it is essential to ensure the market creates incentive structures that enable companies to maintain inventory, given the increased costs associated with greater inventory redundancy.

But regulation is not enough. Supply chain digitalization in service of real-time monitoring is an absolute necessity. Digital tools that automate reporting and track supply chain metrics can enhance transparency and preparedness. A great example of the industry transforming can be seen in future-leaning vendors like Supply Chain Wizard out of Princeton, USA. The company consolidates real time sensing data for large global pharmaceutical and medical manufacturing customers, allowing a consolidated source of truth across materials, inventory, digital regulatory documentation, manufacturing workforce and uptime. These new tools that offer real-time data from material origins to Point-of-Care can be layered with predictive modeling, can identify system vulnerabilities and enable a swift response to potential disruptions.

Onshoring medical manufacturing means better outcomes & economic benefits
Yet, even dramatically improved monitoring cannot solve the problems created by a hyperlocalized supply chain. To solve this, the U.S. must take active steps to decentralize how medical devices are manufactured by prioritizing reshoring efforts that bring medical device manufacturing back to the USA by investing in local advanced manufacturing hubs, such as those that have emerged in the Brooklyn Navy Yard and other U.S. superclusters in recent years, the US can reduce reliance on overseas suppliers while creating new jobs in cutting-edge sectors.

Supply chain management cannot be done by any one company or by the public sector alone. Public-private partnerships are crucial for creating the incentive structures that will enable us to strengthen our supply chains. I have seen firsthand the power of private-public partnerships when, in 2020, my team at 10XBeta partnered with Newlab and Boyce Technologies to develop the Spiro Wave, an emergency bridge ventilator. With support from the NYCEDC, we produced and delivered thousands of ventilators in just weeks, helping prevent a dire ventilator shortage in New York City.

Looking to the future of medical device supply chains
To ensure high-quality, low-cost care even amid disasters and rid itself of foreign dependencies that could have deadly consequences, the U.S.’s medical device supply chain must transform. Decentralization and localized manufacturing need to be a key part of the regulatory environment and market incentivization, and predictive analytics tools that already exist simply need to be applied and utilized. Our healthcare system’s resilience depends on the steps we take now. By investing in reshoring, digitization of our supply chains, and embracing public-private partnerships, we can ensure that no patient is left waiting for lifesaving care during the next crisis. The time to act is now.