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Stockpiling at the Onset of the COVID-19 Pandemic: An Empirical Analysis of National Prescription Drug Sales and Prices

Author

Listed:
  • Minje Park

    (Decision, Risk, and Operations, Columbia Business School, New York, New York 10027)

  • Anita L. Carson

    (Operations and Technology Management, Questrom School of Business, Boston University, Boston, Massachusetts 02215)

  • Erin R. Fox

    (Drug Information, Pharmacy Informatics, Safety and Quality, and Support Services, University of Utah Health, Salt Lake City, Utah 84132)

  • Rena M. Conti

    (Markets, Public Policy, and Law, Questrom School of Business, Boston University, Boston, Massachusetts 02215; Technology & Policy Research Initiative, Boston University, Boston, Massachusetts 02215)

Abstract

At the onset of the coronavirus (COVID-19) pandemic, hospitals experienced a demand surge for COVID-19–related medical care while simultaneously struggling to source prescription drugs needed to manage COVID-19 patients. This is worrisome as shortfalls in the supply of essential drugs can negatively impact patient outcomes. The popular press reporting on these challenges suggests that they are caused by supply chain disruptions. However, rigorous research on the relationship between the pandemic and prescription drug supply is limited. To address this gap, we leverage a quasi-experimental design and IQVIA’s National Sales Perspectives™ data from 2018 to 2020. We focus on prescription drugs indicated for the management of COVID-19 patients and a set of control drugs (i.e., drugs not used for COVID-19). We find that in the early phases of the pandemic, hospitals stockpiled prescription drugs indicated for the management of COVID-19, making this behavior an under-recognized cause of the sourcing challenges. The sales volume of drugs indicated for COVID-19 management was concentrated in the first two months of the pandemic, after which sales decreased significantly despite a nationwide increase in COVID-19–related hospitalizations. We investigate another potential cause of stockpiling: expected price increases. Counter to concerns of price gouging, we find little evidence of price inflation for these drugs. An implication for drug manufacturers is that orders due to stockpiling by downstream buyers early on in a pandemic may need to be discounted when predicting future demand. Our results have implications for drug suppliers, hospitals, and policymakers interested in improving medical product supply chain resilience.

Suggested Citation

  • Minje Park & Anita L. Carson & Erin R. Fox & Rena M. Conti, 2024. "Stockpiling at the Onset of the COVID-19 Pandemic: An Empirical Analysis of National Prescription Drug Sales and Prices," Management Science, INFORMS, vol. 70(10), pages 6483-6501, October.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:10:p:6483-6501
    DOI: 10.1287/mnsc.2021.04150
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    Cited by:

    1. Minje Park & Anita L. Carson & Rena M. Conti, 2025. "Linking Medication Errors to Drug Shortages: Evidence from Heparin Supply Chain Disruptions Caused by Hurricane Maria," Manufacturing & Service Operations Management, INFORMS, vol. 27(4), pages 1008-1024, July.
    2. Yixin (Iris) Wang & George Ball & Gopesh Anand & Hyunwoo Park, 2025. "Obligatory Responses to FDA Inspection Outcomes and Future Drug Shortages," Manufacturing & Service Operations Management, INFORMS, vol. 27(3), pages 789-807, May.
    3. Li, Shanshan & He, Yong & Jin, Shibo & Yan, Xue, 2025. "Strategic buyer stockpiling in supply chains under uncertain product availability and price fluctuation," Omega, Elsevier, vol. 133(C).

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