Vizient Market Supply Update: January 2023
Inflation is declining due to lower demand – which could lead to global recession. China emerging from lockdown, and higher wages and energy prices could maintain higher costs. Medical product exceptions to the China tariffs have been extended.
Market conditions
Reduced demand is leading to recent declines in inflation rates and could lead to a global recession. We anticipate even with a recession, wages, as well as diesel and natural gas prices, will remain high, putting upward pressure on costs. In addition, China reversing its COVID-19 lockdown policies and opening its economy could also move global prices higher. Even though the lockdowns have resulted in high COVID-19 infections, only minor supply chain disruptions have been seen, and Vizient suppliers appear to be able to procure products and raw materials needed.
The Office of the U.S. Trade Representative (USTR) announced a 90-day extension of the COVID-related product exclusions related to the Section 301 China tariffs, effected through Feb. 28, 2023.
For complete supply update details, view the full PowerPoint presentation.
• Good news: Recovering markets include exam and surgical gloves, trocars, endomechanicals, facial protection, basic electrosurgery products and open suction catheters.
Updates by category
• Medical, surgical and integrated logistics: Monitoring electrodes are constrained, with 3M and Cardinal expecting some resolution this quarter, while diagnostic tabs electrode recovery has been extended to fall. Prefilled needles include BD releasing an additional 500 million units in March 2023 to January 2025, and Medline and Medefil have automation, while Smiths and Terumo have 10 mL syringes in surplus. Cardinal continues to add sharps container product lines with 95% recovery; remainder anticipated in spring. Cardinal suction canisters include some almost fully recovered, while others have delayed recovery. Tracheostomy tube shortage recovery is underway, with full recovery estimated in spring.
• Medical devices and physician preference items: Tourniquet cuff suppliers are doing rolling back orders with expected recovery in Q2. Johnson & Johnson has provided a cross-reference for gut sutures in short supply. Getinge IABP shortages include an updated product list, with a Q2 anticipated recovery of back orders; U.S. Food and Drug Administration recommendations are available. Getinge has limited supply of coronary artery bypass grafts with expected recovery in Q1; Medtronic is experiencing supply chain challenges in production of the Blower Mister products, with recovery expected to start in February. GI lab accessory, Spiration Valve System line, is experiencing supply issues with recovery anticipated Q1.
• Laboratory products: In hematology, immunoassay and/or clinical chemistry products, BD and Greiner are not accepting new customers with the constrained supply of blood collection tubes; Greiner has a new warehouse and new blood tube line that should help with recovery. There is no recovery date for Beckman Coulter’s iChemVELOCITY urine chemistry strips on allocation.
• Capital, facilities and construction: New lead times are available for Stryker LifePak external defibrillators; Philips and Zoll offer adaptors to fit several models. Philips is experiencing varying backlogs on HeartStart OnSite AED, HeartStart FRx AED, (EMS) Tempus Pro Monitor and (EMS) Tempus LS Defibrillator, and Zoll’s R series AED and crash cart R series defibrillators have lead times. Stretchers lead times are improving, while exam room equipment has updated lead times. Olympus provides availability updates for 1/2” tubing, Disposa-Filters, SafeTouch and Vacurettes; Berkeley VC-10 System.
• Pediatric products: Linet and Hard Manufacturing made-to-order crib lead times are eight to 12 weeks. Novum made-to-order crib lead times are six to eight weeks; standard cribs are out of stock, with recovery anticipated in Q2.
• Pharmacy: New shortage: ciprofloxacin injection and morphine PCA vials; improving: cetirizine oral solution, cyclopentolate/phenylephrine ophthalmic solution and valproate injection; worsening shortage: bupivacaine/epinephrine injection, dacarbazine injection, haloperidol lactate injection and octreotide injection.
As the nation’s largest member-driven health care performance improvement company, Vizient provides solutions and services that empower health care providers to deliver high-value care by aligning cost, quality and market performance. With analytics, advisory services and a robust sourcing portfolio, we help members improve patient outcomes and lower costs.
If you would like to learn more about Vizient, please contact Jeneen Ablan at jeneen.ablan@vizientinc.com or 507-313-1185.
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