Blogs
October 2, 2025 by Gina Breckenridge
The path medications take from manufacturer to point of care is complex and often spans the globe. It’s also subject to any number of shortages, delays, and diversions. Any weak points in this path are a liability that could negatively impact stakeholders and potentially compromise patient safety. Meanwhile, hospital systems and the technologies that power them are changing. New advancements are paving the way for optimizations and improvements in how hospitals manage medications while revealing how many hospital systems are unprepared for the changing tides.While medical systems often face pushback and challenges when veering from the status quo, regulators are increasing medication management inventory requirements, and the industry is at a crossroads. Further delays to technology updates could put hospitals at a significant and costly disadvantage. To cut through the noise associated with emerging technologies in this space, this whitepaper traces the path of medications from manufacturers to patients. Along the way, we highlight the key challenges relevant to each step and the technologies that we believe are most critical to enabling the next generation of medication management.
There is no single starting point for the medication journey because manufacturing spans the globe. The U.S. Food & Drug Administration (FDA) oversees over 23,000 prescription drug products approved for marketing in the United States. Over three-quarters of the active pharmaceutical ingredient (API) manufacturers are located outside the U.S. For biologic drugs, a total of 5,975 different facilities are registered as part of their manufacturing journey. This is just a small window into the complexity of modern biopharmaceutical manufacturing and the global distribution chain.Along with guaranteeing the quality of their products, manufacturers are responsible for ensuring medications emerge from their facilities with the labeling and information needed to meet ongoing product identity, quality, safety, and traceability requirements. Conversely, distributors move medications across states, countries, and oceans. Much like manufacturers, distributors are required to maintain thorough records of all their medications. They are responsible for the chain of custody. Any lapse in this system can result in unsafe or compromised medications arriving at hospitals, putting patients indirect danger.
Throughout the COVID-19 pandemic supply shortages, the 2021 Suez Canal obstruction, the Francis Scott Key bridge collapse in Baltimore, MD, and ongoing international shipping crises due to conflict in Eastern Europe and the Red Sea, patients have still needed their medications. These events have highlighted a new reality: medical supply chains will likely continue to face disruptions beyond the control of manufacturers and distributors.
The healthcare supply chain is a continuous feedback loop across the entire medication lifecycle. The relationship between manufacturers, distributors, and pharmacies is often built on the principle of “trust but verify.” Thus, supply chain shortages and disruptions are an ongoing concern for manufacturers, who are often seen as responsible for fixing shortages by increasing supply or overcoming disruptions. Along with optimizing processes to support operations when disruptions occur, it’s also critical for manufacturers and distributors to maintain visibility into the movement of medications all the way to the end-pharmacy. These records are particularly critical in the event of a recall when all impacted batches need to be located and removed from patient care areas immediately.
Several regulations enforced by the FDA, namely current good manufacturing practices (CGMPs),require manufacturers to follow strict standards when manufacturing, packaging, and labeling medications. More recently, the Drug Supply Chain Security Act (DSCSA) has placed additional expectations on how medications are labeled and tracked. The regulatory landscape that manufacturers and distributors must navigate becomes increasingly complicated with controlled substances due to specific requirements under the Controlled Substances Act (CSA) and additional enforcement by the Drug Enforcement Agency (DEA) regarding licensing, production quotas, security standards, and tracking.Together, these regulations ensure medications are safe and traceable once they enter the market. They also help ensure pharmacists ordering from various manufacturers can feel confident in the purity and quality of medications when they receive them. However, complying with this breadth of regulations complicates processes for manufacturers and distributors.
RFID tagging is often referred to as the “barcode of the future.” RFID tags use small radio frequency identification devices to track and identify products. Unlike barcodes, which require manual scanning, RFID tags don’t have to come into direct line of sight with sensors, allowing tagged items to be counted and monitored with minimal effort. As RFID-powered medication management systems continue to improve, it could also unlock additional security and safety by monitoring for changes in temperature to vials of medications, or even tampering.
RFID Tagging at the SourceMany drug manufacturers still rely on barcodes, and RFID tags are placed retroactively when a medication arrives at a hospital pharmacy. However, RFID tagging at the source can vastly increase visibility into the medication pipeline while also making medication tracking easier and more robust. Some benefits of tagging drugs at the source include:
The future revolves around increased transparency in medication tracking. With the implementation of advanced DSCSA regulations in 2025, manufacturers are already required to include labels on products that make a wealth of information about the medication available with nothing but a barcode scan. We anticipate this technology will be the first step of many toward complete supply chain visibility, where suppliers can track medications down to the unit level in real-time.With this backdrop, we’re beginning to see more manufacturers adapting their medication labeling practices. This includes upgrading from traditional barcodes to tags that include RFID. This shift to RFID tagging at the source revolutionizes end-to-end electronic tracking while potentially cutting down on the manual labor associated with scanning medications and notating chains of custody. RFID tags also have much greater data capacity than 2D barcodes and are harder to counterfeit. Thus, this shift will facilitate compliance with the DSCSA regarding labeling while providing additional protection against drug counterfeiting and diversion.
Enhanced Visibility and Communication with Partner FacilitiesSoftware is central to enabling better medication visibility and tracking. We expect to see an increase in the adoption of more advanced software and systems that will allow communication throughout the medication pipeline. For manufacturers and distributors, this could take the form of software that supports proactive responses to shifts in demand.Central to this evolution is the concept of interoperability, or the ability of systems to “speak” to each other, and advanced analytics that maximize the data being fed into the system to support decision-making.
The arrival of medications at the pharmacy is the next major step in the medication journey. While many concerns for manufacturers and distributors persist as medications move through pharmacies, such as maintaining their integrity, pharmacy staff must be cognizant of some distinct considerations when moving medications forward.
Maintaining Transparency into Medication Stock and LocationPharmacies don’t just take ownership of medications when they are delivered at the hospital loading docks. They are also largely responsible for moving medications between hospital facilities and departments and ensuring crash carts and medication cabinets are adequately stocked.For large hospital systems, this can be millions of doses of medications being managed within a year. According to a 2021 CDC survey, 361.3 million drugs were given or prescribed in hospital emergency departments alone.
Pharmacy managers rely on clear documentation and visibility into the chain of custody to monitor medication integrity, order additional stock, bill accurately, and ensure the security of controlled substances. In addition to the physical location of medications, pharmacies must maintain visibility into their medications’ details, such as expiration dates, amounts available, and dosages. Recent regulatory shifts, such as the DSCSA, solidify expectations for pharmacies to possess increased visibility into the status and location of their medications. However, this transparency can be a major challenge, particularly when working within a larger hospital system where the chain of custody can be complex.
Managing Pharmacy Inventory and Avoiding Critical Drug ShortagesEnsuring the proper medications are available when providers need them is at the core of a hospital pharmacy’s mission. In a perfect world, pharmacies would have just enough medication to avoid running out, but not so much that the medication is at risk of expiring before it can be used. Thus, hospital pharmacy staff must walk a tightrope, avoiding running out of therapies in the face of widespreadshortages and supply chain disruptions while monitoring for recalls and removing expired or recalled medications from circulation. In a 2022 survey by the American Society of Health-System Pharmacists, 99.7% of pharmacists reported being affected by shortages of critical sterile injectables, and 7% reported at least one shortage-related medication safety event that caused some degree of patient harm. To manage these shortages, pharmacists reported taking actions like switching to therapeutic alternatives, converting from intravenous to oral dosage forms, or changing clinical order sets or protocols—all of which are changes that directly impact the day-to-day operations of pharmacy staff. Optimizing pharmacy inventory is essential to ensuring the “five rights” of care—this means making sure the right medication is given to the right patient, at the right dose, via the right route, and at the right time. It is also important for the hospital’s bottom line. Hospitals are often required to pay the cost of expired or unused medications, increasing the pressure on pharmacists to avoid over-ordering. In 2023, drug expenditures were $37.1 billion in nonfederal hospitals and $135.7 billion in clinics, and those numbers are expected to increase. If not managed intelligently, medication waste represents not only a major financial drain—but a missed opportunity to drive safety, efficiency, and enterprise value across the entire medication ecosystem.
Optimizing Hospital Pharmacy ProcessesEnsuring safe, effective, and efficient medication use for optimal patient outcomes is the number one goal for pharmacy staff. Stocking or medication management errors can directly impact the pharmacy’s ability to serve patients. On the other hand, there is ongoing pressure to operate more efficiently. Hospital pharmacy staff can find themselves caught in a catch-22 as a result. Moving quickly to optimize their time can result in human errors that put patients at risk. Slowing down, however, can cost workers time, translating to lost money.
Technologies to watch include pharmacy automation systems and centralized medication management software. Pharmacy systems that use technology, such as RFID, to simplify medication counting can cut down workflow steps and potentially scan hundreds of medications in under 10 seconds. These systems have the potential to track medications with a high degree of accuracy with less time and energy.Centralized medication management software helps pharmacies monitor medications across an entire hospital system in one central place. This helps pharmacies integrate data from a wide range of course and can improve visibility into the entire medication supply chain.
DSCSA and HospitalsThe DSCSA, passed by the FDA in 2013, is regarded by many as an opportunity to improve patient safety. The regulation enables traceability by specifying that pharmaceutical products must be marked with four data elements:
While the DSCSA allows for this information to be stored using two-dimensional (2D) barcodes (e.g., GS1 DataMatrix barcode), it also allows the use of more advanced labels that utilize RFID instead.Driven by DSCSA requirements, pharmaceuticals in packages or homogeneous cases can be tracked and traced from the manufacturer to the pharmacy. Yet, the management of medicines through hospitals—from receipt to administration—is not within the scope of DSCSA.
While medication management is not required at the unit level within hospitals, many anticipate that the future of medication management and the DSCSA will require full supply chain visibility.
Historically, hospital systems have managed various disconnected systems, each with a different function and goal. The result was a system where data was collected and then kept siloed. This approach limits visibility into what is truly happening with inventory and reduces system-wide efficiency. Today, technology makes it possible to link systems to create a connected environment where data is exchanged and organized.
Two essential functions are necessary to make this work:
Together with more granular medication inventory management tracking, interoperable smart systems can help generate actionable insights. Specifically, this integration gives hospital pharmacy systems the framework required to establish one source of truth for medication management and insights needed to replace time-consuming manual steps with automated workflows.
Smart systems that increase visibility without increasing labor can address safety and efficiency challenges. We anticipate a rise in the number of hospitals utilizing systems that facilitate medication inventory counting, track the location of medications within the larger hospital network, and provide quick and more comprehensive insights into inventory levels.
Many of these systems use a combination of hardware (such as RFID tags and smart medication dispensing systems) and software with built-in analytics that can maximize the use of the available data. With this technology, hospital decision-makers can have accurate, synchronized data from a variety of sources, such as automatic dispensing cabinets and narcotic vaults, in one place. Applying advanced analytics to this data can then provide insights into ordering, utilization, and future use forecasts. Ultimately, this information can reveal opportunities for reducing medication waste and facilitating improved billing practices, such as more accurate charge capture, both of which have financial benefits.
After a long journey from manufacturer to pharmacy, the point of care is the last stop for medications. Point-of-care medication management can take different forms across various hospital departments, but a common purpose unites each care provider—to administer medications to patients safely.
Let’s focus on the importance of accurate medication administration. Ensuring the medication being given to a patient is correct and that it is not counterfeited, expired, or recalled is essential to medication administration. In reality, however, care providers might juggle multiple manual steps in a hectic environment when administering medications, leaving room for human error.
Some studies estimate that more than 200,000 patient deaths annually are due to preventable medication errors.
Facilitating Accurate Record-KeepingIn addition to administering medications, care providers are responsible for documenting their use—potentially in multiple places, such as the patient’s electronic health records (EHR) and the hospital billing system. If a controlled substance is being administered, additional records are required, along with follow-up disposal steps when medication is left over. It is essential for hospitals to maintain an accurate and transparent chain of custody to ensure 340B compliance, which affects reimbursement, ensures accountability at every hand-off, and clearly documents which patients received which medications.
While these records are essential to the hospital’s operation, they representmultiple hurdles that can impede workflows, increase burnout, and hamper the patient-care provider relationship.
Anesthesia providers are often in an operating room environment in which medications must be administered in seconds. While anesthesia providers aren’t technically hired to monitor operating room (OR) medication inventory, they often double as medication managers. And when medications are unavailable, it isn’t out of the question for surgical staff to cancel or delay surgery.
Even if providers have the medications they need, the functionality of the medication dispensing systems can impede their work. A clunky workflow that makes it hard for anesthesiologists or anesthesiology techs to get to medications quickly can cost precious time. in some cases, anesthesiologists might carry medications with them or pull them from trays ahead of time to avoid being unable to get to a medication.
In this environment, it is more critical than ever that providers have an intuitive process that ensures they have constant visibility into stock, quick access to the right medications, and streamlined administration recording processes.
Drug diversion, or the intentional removal of medications from the healthcare system for unlawfuldistribution or use, is an unfortunate reality. While diversion can happen at any point in the medicationjourney, the point of care is a particularly vulnerable moment for some of the most frequently divertedmedications, such as opioids. In fact, experts believe the ongoing opioid crisis in the U.S. is a major driver of diversion in medical facilities.
Healthcare providers (HCPs), including physicians and nurses, are 10-15% more likely to abuse substances, including opioids and other prescription medications, than the general public.Diversion can have far-reaching impacts on patients, HCPs, and medical systems, including the risk of death from overdose, removal of critical medications, and erosion of trust in medical providers. For patients, there are the additional risks of receiving inadequate care or exposure to unsafe materials, such as contaminated syringes or medications that have been tampered with.
In one instance, at least 12 cases of hepatitis C viral infections were identified in patients who received opioid injections from a nurse who admitted to diverting injectable narcotics.
For the same reasons that medication inventory can be hard to track, drug diversion can be even harder to spot. A study estimated that nearly 33% of healthcare institutions investigate 11 or more drug diversion cases each year, yet 4 in 5 healthcare executives believe that most drug diversion goes undetected.
Fortunately, technologies such as AI, medication management analytics, and RFID-tracking labels can help systems establish anti-diversion programs.
We anticipate that integrating medication management systems with EHRs and hospital billing systems will be essential in the near future. This level of centralized integration has the potential to remove manual steps from provider workflows while providing visibility into the chain of custody and administration of medications. Instead of retroactively filling in medication information, potentiallyhours or days after the administration takes place, hospital staff can more seamlessly record all necessary information at the exact moment care takes place.
By helping these disparate systems “talk” to each other, hospital pharmacy managers will be able to acquire data that can help them ensure the right meds are on hand at the right time, whether at the patient’s bedside or in an operating room. It can also close the loop on the location of medications, particularly in the event of a recall or suspected diversion event.
Medication errors can be fatal, and many current workflows focus on preventing them. Technology systems enabling providers to function confidently and spend more time on patient care will be essential in the future. These systems, such as smart medication administration stations, have the potential to facilitate safe medication administration by flagging when medications are expired, presenting clear medication information on a screen, and providing a clear station inventory of what medications are on hand at any given moment.
Technologies to watch in the future include smart medication workstations with integrated labelers. Workstations are essential to medication administration, and workstations that simplify providers’ workflows are becoming increasingly advanced. Some workstations can already integrate with EHRs and include integrated medication labelers that meet the Institute for Safe Medication Practices (ISMP) guidelines for safe medication handling.
Today’s medication pathway is more complex—and more critical—than ever before. As the demands on health systems grow, hospitals must evolve beyond fragmented workflows and legacy tools. Modern digital technologies offer the opportunity to transform medication management from a series of disconnected handoffs into a unified, intelligent ecosystem.At the heart of this transformation is the patient. Safe, effective, and equitable care depends on real-time visibility, proactive decision-making, and seamless coordination across every step of the medication lifecycle. By embracing innovation and elevating standards, healthcare leaders can reduce waste, improve compliance, and, most importantly, safeguard patient outcomes in every moment that matters.