The Visibility Crisis in Health System Pharmacies

Executive summary

Health system pharmacies are facing a visibility crisis in their supply chains.

The issue goes beyond any single drug shortage, cost spike or technology failure. Findings from the Tecsys Health System Pharmacy Supply Chain Survey show that many organizations are effectively operating without a clear, real-time view of medication demand, inventory position and emerging risk — forcing leaders to react to disruption rather than prevent it.

Our national survey of healthcare executives and pharmacy leaders reveals a widening gap between perceived preparedness and operational reality. Although most respondents say their organization is prepared to manage a major disruption, just 20% report full, real-time visibility across care settings. Most health systems and their pharmacies are still making mission-critical decisions using manual processes or siloed systems that do not connect with each other and provide conflicting data that hides risk until it’s already too late.

As a result, leaders are often making high-stakes decisions with delayed, partial or manually reconciled information, even as disruptions occur with increasing frequency. Pharmacy teams are left to manage shortages tactically while the broader financial and clinical consequences remain obscured.

The operational impact is readily apparent. Inventory expires in one location while another issues urgent requests for the same medication. Rush orders replace planned purchasing. Substitutions and delays disrupt clinical workflows. Drug shortages remain the most disruptive force, while pricing volatility continues to strain financial performance.

Many organizations are looking to AI and advanced analytics for relief, but ambition is outpacing readiness. Only 15% report fully deployed AI or ML use cases in areas such as demand forecasting and inventory optimization. The constraint is foundational: Most organizations still lack full integration between clinical systems, ERP and pharmacy supply chain platforms, leaving data too fragmented to support reliable prediction. The challenge is less about access to new tools than the ability to align data, workflows and accountability across pharmacy, supply chain and finance.

These findings reinforce that visibility is the dividing line between organizations that can anticipate disruption and those forced to manage it after the fact.

This report examines where the visibility gap is largest, what it is costing health systems and how pharmacy leaders are shifting from reactive shortage management toward more resilient operations.

Visibility is the most critical and persistent constraint

Only 20% of leaders report full, real-time visibility across care settings. The remaining 80% rely on delayed, partial or manual tracking.

Preparedness collapses under pressure

77% are not, or are only somewhat prepared for managing major disruptions, with only 23% feeling very prepared.

Drug shortages remain rampant and consistently escape line of sight

Four in five (79%) say shortages caused the most disruption to their pharmacy operations in the last 12-24 months.

Tariff and pricing pressures are building

Two-thirds (65%) are preparing for pharmaceutical tariffs by diversifying suppliers or nearshoring, and more than 80% say rising drug costs are having an impact on their organization’s financial performance.

Data readiness – not a lack of ambition – is slowing AI adoption

Only 15% report fully deployed AI or ML use cases for demand forecasting, inventory optimization, drug shortage prediction or risk modeling. 35% are still in pilot phases while 17% currently have no plans at all.

Pharmacy sees itself as strategic, but the C-suite doesn’t

Nearly half (48%) of pharmacy leaders say their function is strategic, but only 15% of other senior leaders agree.

Why visibility is the defining challenge

Health system pharmacies are not struggling because they lack solutions. They’re struggling because their solutions don’t work together.

Over the past decade, pharmacies have added automation systems, analytics platforms, controlled substance cabinets, carousel technologies, drug-diversion tools, sterile-compounding software, and more. Yet despite these tools, our survey found that 75% of systems still lack full integration between their clinical systems, ERP and pharmacy supply chain platforms. Even fewer, just 13%, have full integration between automation, software, robotics and pharmacy supply chain platforms.

The visibility gap is undermining preparedness and resilience

Nearly three-quarters (74%) of hospital executives and pharmacy leaders said they are prepared to manage a major disruption from natural disasters to drug shortages, but fewer than one in four (23%) feel they are very prepared. And with 80% lacking full, real-time visibility, that confidence is shaky at best.

If most U.S. pharmacies are relying on delayed, partial or manual tracking of supplies and inventory, care delivery becomes nearly impossible to predict or confirm.

The leadership gap is also significant. Executives and pharmacy leaders feel pressure across the organization. C-suite leaders are more likely to cite regulatory disruption (60% vs. 49% of pharmacy VPs/SVPs), while frontline and supply chain teams are more likely to feel acute pressure from production delays or product shortages (59% vs. 48% of executives).

Here’s what leaders are concerned about

Financial and operational impacts of drug shortages

Drug shortages are having a significant impact on health systems’ financial and operational performance.

For many health systems, a single shortage can trigger tens of thousands of dollars in unplanned spend as teams turn to higher-priced alternatives, rush orders or even delay or cancel procedures, eroding revenue and straining already thin margins.

During the IV fluid shortages after Hurricane Helene in 2024, hospitals were forced to ration supplies and even delay elective surgeries. Many had no alternate plan in place because they lacked early insight into supplier constraints and vulnerabilities and had to resort to replacing IV with Gatorade in some cases.

The financial consequences of drug shortages and pricing pressures are just as significant as the operational ones and leaders are feeling it across their organizations:

• 46% said drugs and pricing have a severe impact on their organization’s financial performance
• 36% said it has a moderate impact on their organization’s performance
• Only 16% said it had minimal or no impact

Pharmacy cannot be strategic if its impact is invisible

Pharmacy and supply chain leaders overwhelmingly see their function as strategic – 48% consider it to be integral to enterprise performance and strategic initiatives – but only 15% of hospital executives agree.

This misalignment is not a perception issue. It is a visibility issue. Executives cannot see the financial, operational and safety impact of pharmacy decisions because the data is dispersed across disconnected platforms, spreadsheets and departmental workflows.

Without visibility

With visibility

For pharmacy leaders

For supply chain leaders

For C-suite executives

The path forward: From visibility gaps to proactive pharmacy leadership

by Dr. Valerie Bandy, VP Pharmacy Solutions at Tecsys

The findings in this report reflect a reality hospital pharmacy leaders know well: Persistent disruption has become normalized. Drug shortages, cost volatility, regulatory pressure and manual workarounds are often treated as unavoidable features of modern healthcare rather than indicators of a deeper structural problem.

This lack of visibility has pushed pharmacy teams into a largely reactive posture. For years, organizations have built processes to manage shortages after the fact rather than prevent them before they affect care. This approach consumes staff time, operational capacity and financial resources while still exposing patients and clinicians to last-minute substitutions and delays. As shortages persist and supply chains grow more complex, that model no longer holds. The path forward requires moving from disruption response to disruption anticipation.

Making that shift depends on the ability to see what is happening across the pharmacy supply chain in real time: how medications are being used, where inventory resides, how demand is changing and where risk is emerging upstream. When demand planning, forecasting and inventory data are integrated across care settings, pharmacy leaders can act earlier and with greater confidence. Early signals make it possible to adjust purchasing strategies, reallocate stock, coordinate with suppliers and clinicians, and reduce emergency spending before a shortage escalates into a clinical or financial event.

Achieving this level of foresight is not about adding another system to an already crowded technology environment. Many hospital pharmacies have invested heavily in automation and software yet still struggle with blind spots because those systems do not work together. Progress depends on reducing fragmentation, eliminating manual reconciliation and establishing data that is consistent, timely and usable across the enterprise. Without that foundation, advanced analytics and AI initiatives remain limited in scope and effect.

As pharmacy operations grow more complex each year — shaped by specialty drugs, evolving regulatory requirements and ongoing supply volatility — the cost of standing still will continue to rise. Processes that feel barely manageable today will be increasingly strained tomorrow.

In that context, maintaining the status quo becomes a strategic risk. Organizations that rely on delayed or partial information will find it harder to control costs, support clinicians and maintain continuity of care as conditions change.

Responding to that risk also requires a broader view of how solutions are evaluated. No single system or vendor can address pharmacy’s challenges alone. Effective pharmacy supply chains are built on connected ecosystems, where partners integrate, share data and evolve together. Health systems should seek partners that understand the regulatory and operational realities of hospital pharmacy, support ongoing improvement, and are willing to work across technologies rather than operate in isolation. The objective is not perfection on day one but an approach that can adapt as pressures and expectations continue to shift.

Visibility is key to making sure pharmacy’s contributions are understood at the enterprise level. When pharmacy data is integrated and transparent, leaders can clearly show how pharmacy decisions affect financial performance, compliance, risk and patient care. That clarity changes how pharmacy is viewed. It moves the function from a department reacting to shortages to a strategic partner helping the organization navigate ongoing disruption.

The escalating visibility crisis marks an inflection point. Health systems can continue to accept disruption as inevitable or invest in the insight required to anticipate and manage it. As pressures on healthcare delivery intensify, pharmacy’s role will only expand. Whether that role is defined by constant crisis response or by strategic leadership will depend on how clearly pharmacy, and the systems it relies on, can see what lies ahead.