Alexandra Murphy

Portland-based Oregon Health and Science University is undergoing major transformation in its supply chain strategy, with a renewed focus on cost savings, automation and resiliency. 

Mike McCaffrey, vice president and chief supply chain officer at OHSU, spoke to Becker’s about how the role of supply chain has evolved at the health system.

Editor’s note: Responses have been lightly edited for clarity and length.

Question: What are some of the current top priorities for supply chain operations at OHSU?

Mike McCaffrey: With our transformation right now, one of our main goals is increasing our capacity to facilitate cost savings for the organization through our strategic sourcing and value analysis teams. We do this by partnering with clinical staff and leaders as well as decision-makers in key service areas across OHSU to drive opportunities. Through these partnerships and with their expertise, we have collectively grown annual savings contributions from $3 million annually to greater than $20 million.

We also have a small effort around AI and automation as another part of our commitment to reduce what we call our “cost to serve.” We’re evaluating automation opportunities across our functional areas and are just beginning to evaluate opportunities for the use of AI to support operations. And we’re prioritizing what automation activities will provide the most value to ensure we are expanding in the right places for the right reasons. Our process automation committee, with stakeholders from supply chain team and IT, is chartered to intake, analyze, develop and execute process automation projects. To date, we have automated three highly complex supply chain processes, and six more are in development. This work allows us to scale our labor effectively and direct our resources to value-add activities.

Another focus is documenting our current productivity levels and matching those up to available benchmarks so that we can set appropriate targets that will help us attain our goal to ensure non-linear growth, a mandate set by leadership at the onset of our transformation.

One other critical area focuses on resiliency. As part of our transformation, we started a resiliency program this past year. An early step in that effort was joining the Healthcare Industry Resilience Collaborative, a nonprofit consortium for patient-centric supply chain resiliency standards and best practices. It has helped us catapult forward given the resources it has developed and the peer community of members that are learning together. HIRC helps us with resources to evaluate item criticality criteria, score our suppliers on whether they have resilient supply chains, and provide guidance on supplier resiliency measurements that we can include in our supplier selection process. Ultimately, our goal is to eliminate the risk of supply outages or shortages that can contribute to patent risk when not properly managed and we all know very well how fragile our global supply chain is.

We’ve also invested in the supply risk solutions tool through our GPO, Vizient, that helps us understand where disruption activities are happening. Say a flood occurs across the country that could impact a manufacturing site; the tool can give us more insight or earlier notice so that we react faster and minimize risk. And we intend to start evaluating some broader tools that would support things like decision support for inventory management and establishing product risk profiles to more proactively address items at risk to avoid low-stock or out-of-stock situations.

Q: Why did OHSU decide to partner with HIRC, and how has that impacted resiliency efforts? 

MM: We joined HIRC because it brings our peers together, so we’re not going at this alone, and we’re able to leverage what others are doing. That’s one of the great things about the healthcare industry: We often are very open to sharing best practices.

An example of that is last week’s call talked about systems and tools that are available for various parts of resiliency, and it gave us a realistic picture of what’s out there and what can be done. Otherwise, we would be doing all that work ourselves.

It gives us access to some of the best and the brightest that are doing this, including major suppliers that are doing similar work to understand the environment upstream from a raw material standpoint. It just brings a level of expertise that would take years to create on our own.  The fragility of our supply chain is an industry-wide problem, and participating in HIRC allows healthcare providers and suppliers to work collaboratively on solutions together, with perspectives from all sides. 

Q: How has the role at OHSU evolved in recent years? 

MM: It has really exploded. Honestly, we came out of COVID and we realized our teams can create more value.

We were an organization that really prided itself around service levels and that helped us earn deep trust within the organization. And as we came out of COVID, we realized that when we wrap our arms around the end-to-end supply chain operation and put the full concentration of our team on a core supply chain function, we could drive more value for the organization.

Of course this started with PPE during COVID but re-emerged during the recent IV fluid shortage as a result of Hurricane Helene. When we embraced control of the purchasing and inventory management decisions and provided accurate reporting, we could add tremendous value when partnering with clinical leaders who were leaning on us to make critical care pathway decisions based on true supply availability.  

Through this work, our teams and the function have really propelled forward. What started with a business case and a strategic plan has resulted in exponential value creation. Support from leadership to bet on us has paid off and the partnerships are growing. We are committed to this work and it shows in our vision which is to bend the cost curve and to ensure that OHSU staff can operate at the top of their profession. We can achieve this by taking supply chain-related work off their plates and committing to doing it very effectively and efficiently. 

Q: What trends are you watching in the healthcare supply chain that you think will define the next year or two? 

MM: One of them is the use of AI in the supply chain. And I say that because the supply chain is obviously very process oriented, so it appears to be a strong ground for the use of AI. There are opportunities in contracts review, tail spend negotiations and even inventory management. This can help manage workload for staff, allow them to contribute more value-add activities and ultimately contribute to higher engagement.
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Dexcom is recalling 19 models of its continuous glucose monitoring receivers due to a speaker malfunction that could prevent alerts for dangerous blood sugar levels. 

The affected devices are models Dexcom G6, G7, ONE and ONE+ receivers, according to a July 17 news release from the FDA. The recall has been classified as Class I by the agency due to the risk of injury or death. 

The receivers are used to alert users when their blood sugar is dangerously high or low and if the speaker fails, individuals could miss critical warnings, the release said. 

The company began notifying customers June 9, urging them to check their receiver’s serial number and request a free replacement if affected. Fifty-six injuries have been reported. 
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An analysis from the Congressional Budget Office warns that cuts to the National Institutes of Health and FDA drug reviews could significantly reduce the number of new medications reaching the U.S. 

The report, requested by Democratic lawmakers, examined a hypothetical 10% permanent reduction in NIH funding and a nine-month increase in FDA approvals for new drugs. The report shows how even modest changes in funding and approval timelines could impact the pharmaceutical pipeline. 

Here are five notes: 

The 10% cut to NIH funding, especially to external preclinical research, would lead to roughly 4.5% fewer new drug approvals, or about two fewer drugs per year, once fully phased in over 30 years.

The reduction would slow the supply of drug candidates entering clinical trials, resulting in nine fewer drugs approved annually in the second decade after implementation and 20 fewer per year by the third decade.

The NIH has rescinded more than $3.2 billion in research funding so far in 2025, terminating 2,548 grants nationwide, according to a June report from Grant Watch, a volunteer project tracking scientific funding. President Donald Trump’s proposed fiscal 2026 budget would also slash NIH funding by $18 billion, from $46.4 billion to $27.5 billion.

The report also showed that the nine-month increase in FDA review times for new drug applications would both delay market entry and raise development costs, reducing drug approvals by 2% annually.

While some lawmakers asked the CBO to analyze NIH cuts as high as 35% to 38%, the agency noted that it has not assessed whether historical trends can reliably predict the impact of reductions of that magnitude.

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Sarepta Therapeutics said it will continue shipping its gene therapy Elevidys for Duchenne muscular dystrophy patients despite an FDA request to pause distribution following multiple patient deaths. 

The FDA’s request July 18 came after Sarepta confirmed the death of a third patient from acute liver failure tied to its gene therapy programs. 

The drugmaker said the death involving a 51-year-old patient occurred in a separate early stage trial for a different gene therapy, not Elevidys, according to a July 18 news release from the company. However, two deaths earlier in 2025 were linked directly to Elevidys, which is the only FDA-approved gene therapy for Duchenne. 

Citing its own analysis of safety data, Sarepta said there were no new or changed safety signals in the ambulant patient population and that it will continue to ship the medication to those patients. 
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340B Health is raising objections to new Medicare payment proposals from CMS, which includes deeper cuts to outpatient payments and the possibility of future drug reimbursement reductions. 

Under the newly released 2026 outpatient rule, CMS said it plans to accelerate reimbursement cuts to 340B hospitals for non-drug items and services, according to a July 16 news release shared with Becker’s. The move is part of the agency’s effort to recoup funds redistributed following a Supreme Court ruling that found CMS unlawfully slashed 340B drug payments between 2018 and 2022. 

CMS also proposes launching a drug acquisition cost survey in 2026 that could lead to new drug payment cuts by 2027, 340B Health said in the release. The group said using cost survey data to set future payment rates could result in hospitals losing the benefit of 340B pricing. 
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The FDA oncologic drugs advisory committee voted against the approval of GSK’s blood cancer treatment Blenrep, delivering a setback to the drugmaker’s efforts to reintroduce the drug to the U.S. market, The Wall Street Journal reported July 17. 

The FDA’s Oncologic Drugs Advisory Committee voted July 17 after evaluating Blenrep in combination therapies for adults with relapsed or refractory myeloma who received at least one previous treatment. 

The drug showed positive overall survival data in a late-stage trial, GSK said in December. The drugmaker withdrew the drug from the U.S. market in 2022 after a clinical trial showed it did not outperform an existing treatment when used alone. 

The FDA is expected to make a final decision on Blenrep’s approval by July 23, according to the Journal. 
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AHA has filed a legal brief in support of a Colorado law that ensures 340B discounted drugs can be delivered to contract pharmacies. 

The brief comes amid a lawsuit brought by drugmaker AbbVie, which argues that Colorado’s law is preempted by federal law and constitutes an unconstitutional taking of property, according to legal documents reviewed by Becker’s. 

In its filing with the U.S. District Court for the District of Colorado, the AHA argues that the state acted within its traditional authority to protect public health and fill the gap left by the federal 340B statute. 

AbbVie, which has argued in other cases that federal law did not address delivery, now claims that Colorado’s statute intrudes on federal authority. The brief filed by the AHA asserts that the law does not regulate pricing but aligns with the original intent of the 340B program, which is to support hospitals serving vulnerable populations. 

This is one of several briefs filed by the American Hospital Association in defense of 340B laws. Also in July, the AHA and three other healthcare organizations filed an amicus brief in defense of Tennessee’s 340B law. 
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Sandoz has issued a nationwide recall of two lots of cefazolin for injection due to a labeling error. The mislabeled vials were sent to wholesalers for nationwide distribution. 

The error was found after a complaint showed that the cefazolin vials were packaged and labeled as penicillin G potassium for injection, according to a July 15 news release from the FDA. 

Although both drugs are antibiotics, they treat different infections and have different dosing regimens. Mistaken use of the drugs could lead to serious health risks, including ineffective treatment, allergic reactions and other complications. 

The FDA urges healthcare providers to stop using the recalled products immediately. No injuries have been reported so far, but one instance of the wrong drug being administered has been confirmed. 
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Medical devices are essential to patient safety, addressing critical issues in devices that may pose health risks. 

Here are some of the latest recalls reported to the FDA: 

Integra LifeSciences recalls Codman disposable perforators due to risk of disassembly

Integra LifeSciences has recalled certain Codman Disposable Perforators and Craniotomy kits due to a weld defect that may cause the device to disassemble before, during or after use. This issue may result in damage to the dura, bleeding, cerebral injury or irreversible brain damage. Ten injuries have been reported. Users are advised to stop using the product, quarantine inventory and return affected lots. 

Drive DeVilbiss Healthcare recalls iGo2 car charger cords due to overheating risk 

Drive DeVilbiss Healthcare is recalling certain DV6X-619 Rev E DC car adapter cords used with the iGo2 Portable Oxygen Concentrator after reports of the cords becoming hot or melting during use. The issue may result in burns or thermal injuries; as a result, users were advised to destroy impacted cords and request free replacements through the company’s recall website. Two injuries have been reported. 

Dexcom recalls G6, G7, ONE and ONE+ receivers due to speaker failure

Dexcom has recalled certain models of its G6, G7, ONE and ONE+ glucose monitor receivers because of a speaker malfunction that could prevent critical audio alerts from sounding. Affected units may fail to warn users about dangerously low or high blood glucose levels, posing a risk of seizures, unconsciousness or death. Dexcom has urged customers to test the speaker during charging, check their device serial number online and request a free replacement if needed. At least 56 injuries have been reported.
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Hospital supply chain leaders are calling for strategies to future-proof supply operations, reduce uncertainty and protect patient care amid rising costs. 

Here are responses from five supply chain leaders who were asked: What innovations or operational changes is your health system exploring to future-proof its supply chain? 

Motz Feinberg. Vice President and Chief Supply Chain Officer at Cedars-Sinai (Los Angeles): Cedars-Sinai Health System is exploring end-to-end supply chain collaborations from providers to manufacturers. By leveraging techniques developed and successfully demonstrated in many industries outside of healthcare, we are building capabilities around demand and supply planning that stretch well beyond our Los Angeles campus. By collaborating with key distributors and manufacturers as well as exploring opportunities with other healthcare providers, we are finding ways to improve fill rates, reduce working capital and reduce uncertainty in the supply chain.

Derek Imars, PharmD. Executive Director of Pharmacy Supply Chain at Indiana University Health (Indianapolis): We are building on our strong drug shortage response foundation, which includes dedicated staff, clear communication and robust data tracking. To future-proof our pharmacy supply chain, we are focusing on three key areas: advanced data utilization, proactive critical product management, and strategic allocation programs. We believe accurate and enhanced data is our most vital tool; we are exploring new technologies that not only provide real-time inventory and utilization insights but also integrate global-, economic- and weather-related factors to forecast potential disruptions more effectively. Furthermore, establishing a systemwide critical pharmaceutical product list allows us to shift from retrospective to prospective shortage mitigation, ensuring patient care remains uninterrupted and reducing caregiver burden.

Finally, we are leveraging our Pharmacy Integrated Service Center to implement proactive pharmaceutical allocation management. This involves securing critical product allocations, both internally and with vendor partners, for several months in advance. This strategy guarantees access to vital medications during shortages, enhances emergency response, reduces waste, improves cost management, and protects revenue by minimizing procedure cancellations. By combining our foundational strengths with innovative technology, a strategic critical product list, and proactive allocation programs, we are better equipped to navigate and mitigate the clinical and operational challenges of drug shortages.

Meena Medler. Chief Supply Chain Officer at Sutter Health (Sacramento, Calif.): In response to industry-wide challenges such as shifting reimbursement models, rising costs and workforce dynamics, Sutter Health is embracing innovation to build a more resilient, efficient and agile supply chain. These efforts allow the organization to seize opportunities that enhance operational excellence and support the continued delivery of high-quality care. 

1. Tiger teams: Inspired by NASA, Sutter Health has created “tiger teams” to enhance operational excellence. These teams consist of experts who focus on securing products and managing supply disruptions through sprints. The sprints include establishing well-defined deliverables over 30, 60 and 90 days to drive incremental improvements.

2. Stock control department: This department acts as a strategic hub to proactively help manage and mitigate supply disruptions including medical supply buyers, analysts and logistics experts. The aim is to enhance stock control precision and improve distributor integration. This will lead to better inventory management across facilities and warehouses, laying the foundation for a “control tower” approach by leveraging upstream demand signals and informing predictive back-order reports.

3. Predictive back-order reports: These reports help monitor inventory levels and flag potential shortages, allowing for timely interventions.

4. Innovation technology advancements: Sutter Health’s supply chain is collaborating with technology partners, industry experts and clinicians to explore new technologies while the organization continues to build a strong foundation. AI and analytics will enhance visibility and enable proactive decision-making, thereby boosting supply chain efficiency and reducing costs.

5. Sustainable practices: Sutter Health is moving toward a more transparent, resilient and sustainable supply chain by developing and implementing standard best practices, streamlined processes, and improved inventory management through the newly created supply chain excellence team.

John Mikesic. Executive Director of Supply Chain at University of Missouri Health Care (Columbia): To future-proof our supply chain, we’re pursuing a range of strategic innovations and operational improvements focused on transparency, automation, and stronger integration with enterprise functions.

We’re exploring the use of bill-only automation software to streamline implant and procedural billing, while upgrading our crash cart platform to enhance readiness and inventory control. We’re also advancing our dashboard capabilities beyond traditional med-surg supplies to include deeper visibility into all non-labor expenses.

Operationally, we’re phasing out third-party inventory management within perioperative services in favor of more accountable, internally managed models. At the same time, we’re increasing collaboration with our business planning and strategy teams to better align sourcing efforts with growth and service line priorities. Finally, we’re broadening our internal RFP processes to bring competitive discipline and measurable cost savings to all categorized medical product categories — not just capital or high-spend items. We are additionally going live with an AI-enhanced contract lifecycle management platform that automates and streamlines the creation, negotiation, approval, and tracking of contracts to improve compliance, efficiency and visibility across the enterprise.

Sarai VanderWood. Vice President of Supply Chain Operations at Corewell Health (Grand Rapids and Southfield, Mich.): To future-proof our supply chain at Corewell Health, we are investing in scalable and adaptable goods-to-person automation at the new Consolidated Service Center we are establishing in Wyoming, Michigan. This automation enables us to safely and accurately increase throughput, improve operational efficiency and respond swiftly to evolving demands and growth without major disruptions. The system also optimizes vertical space utilization, allowing us to expand capacity without expanding our footprint.
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