It’s that time of year. Cold and flu season. And I have started the season with a whopper of a flu. Naturally I went to get cold and flu medication. But in every store I went to the Cold medication shelves were virtually empty.
Why on earth would there be a shortage of this specific medication so early in the season? To my knowledge there was no cold or flu epidemic that was suddenly driving demand.
Was this a Supply Chain issue, a manufacturing or distribution issue, or was something else going on?
In my search for this type of medication I went to retail stores large and small, pharmacies, drug stores, variety stores and everywhere else I could think of. In only a couple of stores did I find any reasonable supply of cold medication. In most cases that section of the store shelves was empty.
Many of these stores were national, if not global, brands. As such I knew that they had enormous purchasing power with the suppliers as well as being recognized sources of supply by millions of customers. How could these companies not be able to get this essential product? I could see how any supply disruptions may shortchange smaller, lesser know stores, but not the big guys.
Reporting
In Canada, according to CTV News, “These are not widespread manufacturing shortages of medications. Products are arriving in pharmacies, but it’s the soaring demand and the needs from patients that are causing the empty shelves.”
Does that make sense? Manufacturers should very easily, and proactively, see in historical demand patterns that demand would start to spike at this time of year. As such they would increased manufacturing output far in advance to ensure that all of their channels were filled by this time of year.
Annual Demand for Cold and Flu Medication
Is there a spike in cold and flu viruses this year?
Is this a post-Covid reaction to stocking up on product in anticipation of higher demand and to avoid later shortages? Also reported in the CTV article, the decline in demand for standard cold and flu medication during the Coronavirus pandemic meant that any product that was ordered and in stock soon expired.
As a result stores reduced the amount of product they subsequently ordered. This in turn would lead manufacturers to reduce production and cut capacity and costs. With less capacity on line manufacturers would not be able to later to support increased demand and consumption due to a lack of capacity.
HBW Insight reports that 2022-2023 will be the strongest Cough and Cold season in the past 10 years. A combination of the highest level of cough and cold prescriptions since 2017 and reduced interest in receiving flue vaccines is spiking demand for cough and cold medication.
So the increased demand that is being experienced along with supply shortfalls helps to explain the empty stores shelves.
Suppliers of this Medication
According to ibisworld.com, the biggest manufacturers of cough and cold medication are Pfizer, Reckitt-Benckiser, and Medique Products. Others included GlaxoSmithKline, First Boston Pharma, Bayer, and AccuMed. Brands include Tylenol, Benylin, Vicks, Sudafed, and many more.
State of the Supply Chain
James Crean declares that the Supply Chain issues that are contributing to the cold and flu medication shortages will continue for some time. These issues include labour shortages, material shortages, logistics issues, and weather related delays.
Despite a temporary setback that we would expect when there is a spike in demand however, we would still expect that the industry would respond aggressively in all respects to ramp up production and distribution in short order and restore product availability for consumers.
These manufacturing facilities would be largely automated. Increasing capacity may entail merely running those facilities on a 24-7 basis, if they are not already, to increase capacity.
Extra logistics capacity should be secured, even if requiring government intervention and prioritization, given the very real health and welfare issues that are at hand.
From a materials standpoint some of the ingredients in cold and flu medication include: analgesics (eg. acetaminophen), antihistamines (eg. diphenhydramine), cough suppressants (eg. dextrosethorphan), decongestants (eg. phenylephrine), and expectorants (eg. guanfenesin).
While it is unclear which, if any, of these materials are in short supply relative to the current demand levels, it is clear that the manufacturers should be taking all steps to proactively and quickly resolve those shortages.
All of these actions must be taken to both restore short term supply and to ensure long term product availability in the face of any unanticipated demand spikes.
Thoughts and Conclusion
No industry, and in turn no aspect of our lives, has been able to avoid the Supply Chain disruptions of the Covid and Post-Covid environment. It started with toilet paper, masks and medical supplies, household goods and more. Now it has touched on the medication that so many of us rely on to weather the cold and flu season.
The shortage of cold and flu medication seems to have been occurring through much of 2022 and will likely continue into 2023. And that is what is most disconcerting. It should not take that long to restore supply and stock store shelves for such a vital and common health related product set.
If the shortages are a result of a short term imbalance in demand and supply we would expect this to be restored rather quickly. If the spike in demand has been more persistent we would still expect an increased level of supply.
But the apparent persistence of empty store shelves raises a concern that there is either a lack of focus or perhaps there is another “single point of failure” in the cold and flu medication Supply Chain. If that is true then it exposes a vulnerability in this Supply Chain that must be addressed with strategic steps to increase the resilience and robustness of this industry’s Supply Chain.
Without some more overt and visible action taken by the manufacturers of these products it is reasonable to expect that any future spikes in demand will result in persistent store shelf shortages.
There were a lot of Supply Chain lessons that companies should have learned and acted on from the pandemic. Let’s see if this industry acts and reacts! We certainly all need them to respond.