Drug shortages reveal healthcare logistics risks

Strait of Hormuz disruption drives persistent U.S. pharmaceutical supply shortages

Drug shortages in the United States have been trending up in the first quarters of 2026, according to the American Society of Health-system Pharmacists. These disruptions affect the availability and pricing of essential medications, including antibiotics, diabetes and blood-pressure drugs, and statins. Shortages have become more pronounced as global supply risks intensify due to the tension in the Strait of Hormuz. 

What’s going on

• Approximately three quarters of active drug shortages began in the last four years, reflecting ongoing instability in the supply chain. Disruptions in the Persian Gulf have affected the supply of critical drugs even more.
• India, which supplies roughly 47% of all generic drugs dispensed in the United States by volume, depends on the Strait of Hormuz for key petroleum-based manufacturing inputs. Air freight rates out of India have increased 200% to 350% for some routes, and shipping delays tied to the closure are straining refrigerated cargo operations. This disruption affects the cold-chain supply for certain pharma treatments. 
• Many other active pharmaceutical ingredients pass through Gulf-region hubs before reaching Indian manufacturers. Chemical inputs produced in China are often consolidated by distributors in places like Dubai and other parts of the United Arab Emirates before reaching Indian manufacturers. 
• Disruptions around the Strait of Hormuz quickly ripple into global pharmaceutical supply chains and eventually affect U.S. consumers. To date, 15% of shortages involve controlled substances, creating challenges for patients with long-term drug needs. Generic drugs are disproportionately affected due to their already tight margins. 

What to do next

Build geopolitical risk into routing strategies

Gulf disruptions can quickly re-price air and ocean lanes. Diversify routings and modes to maintain continuity for critical shipments.

Secure upstream inputs and flows

Pharmaceutical supply chains depend on multi-country chemical and energy inputs. Strengthen supplier diversification and inventory buffers to mitigate chokepoint exposure.

Protect cold-chain resilience

Longer transit times and capacity constraints increase spoilage risk. Prioritize visibility, tighter handoffs, and contingency capacity for temperature-controlled freight.

Old public health threats resurface 

Public health is facing a paradox: While the science keeps getting better, population health behaviors regress. As a result, dangerous and preventable diseases are on the march again in the United States.

Behind the trend

• The U.S. Centers for Disease Control and Prevention (CDC) note that childhood vaccination rates in the United States continue to decline. This means diseases such as measles are moving beyond isolated communities and often overwhelming public health departments.
• One example is the measles, mumps, and rubella (MMR) vaccine. At 92.5%, the nationwide immunization rate has fallen well below the 95% threshold to preserve herd immunity. For the 2024–25 school year, state vaccination rates varied from 78.5% in Idaho to 98.2% in Connecticut. 
• Immunization gaps have led to measles outbreaks in multiple states for a disease that was considered eliminated in 2000. During the first six months of 2026, the United States had already surpassed the 2025 total of 2,000 cases of measles, which had been the largest outbreak since 1992. 
• Vaccination rates for other illnesses such as whooping cough and polio have also dropped. More children are now receiving non-medical exemptions for vaccines. In Idaho, 15% of children have a non-medical exemption for at least one childhood vaccine. The national average is also increasing, with 3.6% of children receiving non-medical exemptions. 

What to do next 

Prepare for recurring surges

Lower vaccination rates will drive episodic spikes in demand for treatments, testing, and hospital supplies—requiring more flexible distribution networks.

Rebuild rapid-response distribution models

Measles and similar outbreaks will increase the need for fast, localized delivery of vaccines, therapeutics, and personal protective gear.

Tighten allocation and shortage management

Growing case volumes and uneven uptake will force more active prioritization and coordination across manufacturers, distributors, and care providers.

U.S. supply chain challenge aims to fix issues exposed by COVID-19

The Department of Health and Human Services (HHS) has launched the Digital Stockpile & Manufacturing Response Network Challenge. Led by the Administration for Strategic Preparedness and Response, which has put $2.04 million in prize money on the line, the competition aims to prepare the United States for future supply-chain disruptions.

The COVID-19 pandemic revealed significant weaknesses in U.S. medical supply chains, which are heavily reliant on foreign sources for materials and manufacturing. This challenge seeks proposals for a future network that would connect pressing medical needs with vetted domestic manufacturers capable of producing and distributing critical medical products quickly during public health crises.

The competition is open to participants from academia, industry, government, and the non-profit sector.

New Section 301 tariff investigation on pharmaceuticals

On June 18, 2026, the U.S. Trade Representative initiated a Section 301 investigation into Germany’s pharmaceutical pricing practices to assess whether they are unreasonable or discriminatory and restrict U.S. commerce. The trade representative has requested consultations with Germany and is gathering input, with written comments due by August 10, 2026, and a public hearing scheduled for September 22.

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