Safety IV Catheters: Building Healthier Markets and Tackling Shortages

Key Takeaways:

• Essential to the management of patient care, IV administration products have long faced supply constraints – with global disruptions exacerbating pressures for providers in recent months.
• Safety IV catheters are a heavily concentrated market with two primary suppliers comprising the overwhelming majority of market share with limited equivalents for >60% of product types.
• Premier and our direct sourcing company S2S Global remain committed to helping reduce supply and inflation risks across critical categories, including clinical preference items, to help build a stronger healthcare supply chain for the future.

The COVID-19 pandemic alerted the world to raw materials and finished healthcare products in short supply – and the resulting impact on operations in price spikes, quality issues and/or care delays.

As one example: Used by 99 percent of all patients in the hospital setting, medication delivery products, including tubing, IV catheters and syringes, have long faced supply constraints in markets with limited production capacity.

This begs the question: what can healthcare industry stakeholders do to fix it?

Providers require innovative strategies to mitigate shortages, build healthier markets and tackle cost pressures in today’s disruptive environment.

To help address these issues, Premier's direct sourcing company S2S Global, partnering with a proven manufacturer, Medsource, Inc., has recently launched a new line of high-quality safety IV catheters in its product offerings. And for more than 15 years, Premier has been a leader in supply chain resiliency, taking innovative steps to disrupt un-healthy markets and ensure continuous supply.

The Anatomy of an Unhealthy Market

Safety IV catheters are used to access the peripheral vascular system to administer treatments, including intravenous fluids, drugs or blood transfusions. Raw materials availability (plastics and resins) coupled with ongoing global disruptions have exacerbated recent supply and inflationary pressures for safety IV catheters and an array of other products vital to patient care.

Shortages in many categories also have an outsized impact as a result of two or fewer manufacturers producing these products. For example, PINC AI™ data shows two primary suppliers comprise the overwhelming majority of market share for safety IV catheters, with limited equivalents for >60% of product types within the category.

Since May 2022, PINC AI™ data shows that safety IV catheters have experienced ongoing shortages across all primary suppliers.

As of January 2023, the predicted risk of future shortages has been increasing for each supplier.

Source: PINC AI™ analysis

The shortage condition score notes the severity of a shortage based on metrics such as lead time, percent of orders past-due, order cancellation rate and backorders. These metrics and additional signals are used to predict the probability that individual products will be in shortage 3-6 weeks into the future. The shortage condition score and probability of future shortage are aggregated across all Safety IV Catheter products to the level of supplier and week in the charts above. Refer to the link below for PINC AI™ Margin Improvement if you are interested learning more about this analysis.

Solutions to Target Product Availability and Supply Chain Resiliency

Alongside limited capacity, Premier and S2S Global are providing an alternative product choice to help spark healthy market competition and a more stable, reliable supply of safety IV catheters for the U.S. healthcare system.

Guided by data to prioritize the greatest-need products at scale, we remain committed to helping reduce supply and inflation risks across critical at-risk categories, including clinical preference items, to build a stronger healthcare supply chain for the future.

• PremierPro™ branded ClearSafe Comfort® Safety IV Catheters by Medsource are available both through S2S Global and Premier’s AscenDrive™ program for participating members, which is designed to drive the highest-level commitment and savings for members through aggregated purchasing of high-quality products and services. S2S Global will seek to provide safety IV catheters across all designs to match clinical preference and provide for both patient and clinician safety. The initial line of products has launched, and S2S Global remains committed to complete a comprehensive portfolio of safety IV catheters to meet the clinical needs of our members.
• Together with some of the nation’s leading health systems, we are helping to create a more resilient and geographically diverse supply chain. Hundreds of member health systems have stepped up, co-investing alongside Premier to incent U.S. manufacturers, including Prestige Ameritech for N95 respirators and face masks, DeRoyal Industries for isolation gowns, Honeywell for nitrile exam gloves and Exela Pharma Sciences for pharmaceuticals, including some critical shortage drugs. Notably, these efforts prioritize collaborations that leverage existing production capacity, providing a more sustainable approach to U.S.-based production rather than building from the ground up.
• S2S Global and direct sourcing overall enables access to top, high-quality supplies, creating a more frictionless and direct relationship between these suppliers and their buyers. Going forward, “going direct” is primed for advancement as it helps increase efficiency, decrease lead time to procure hard-to-source products and realize cost savings.
• S2S Global can also execute forward buys ahead of a shortage situation. As the backbone for our PPE forward buy program, S2S Global delivered more than 166 million masks and respirators and 66 million gowns during the height of the pandemic and continue to serve as a key supplemental source of supply today.
• Going factory direct doesn’t mean sacrificing quality. All products come from validated and inspected suppliers and are made according to our members’ specifications, building a formulary of high-quality products that meet providers’ stringent clinical standards.
• Historically, hospitals lacked the ability to predict when a product might become short. Backed by machine learning and Premier’s clinical expertise, PINC AI™ technology can help mitigate supply chain risk by pinpointing when the specific products a health system depends on are anticipated to become unavailable. The tool’s predictive capabilities can help providers increase preparedness and maintain operations to avoid quality issues or care delays. Premier continues to mine our data to identify unhealthy markets and pursue sourcing strategies in the areas of greatest need and opportunity.

Major opportunity areas, accelerated by the pandemic, are three-fold:

1. Greater diversity of manufacturing and suppliers, including greater domestic production;
2. Rethinking inventory management and safety stock as well as more dynamic and demand-driven strategies, including direct-to-manufacturer sourcing, forward buys and special distribution arrangements; and
3. Technology enablement and automation: both for greater end-to-end visibility and within the production process.

These strategies are vital for a future-forward supply chain – to build resiliency, mitigate risk, increase efficiencies and realize cost savings. Together with our members, we’re expanding to match the evolving needs of the healthcare supply chain – today and for tomorrow.

For more on this topic:

• See how Premier's S2S Global is working to create greater diversity in sourcing products, along with long-term resiliency.
• Stay ahead of supply chain shortages. Learn more about how the PINC AI™ Supply Disruption Manager can help you increase preparedness and maintain operations to avoid quality issues or care delays.
• Learn more about Premier and our members’ efforts to build a more resilient supply chain.