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Your patients are our priority
At Cencora, we know how critical it is for every patient to get the medications and therapies they need, when they need them, and we partner with manufacturers to maintain consistent availability.
Our system is designed to safeguard the stability of the pharmaceutical supply chain
To provide your patients with a steady, reliable supply of the treatments they need, we base our product inventory on the past and current ordering trends of our customers, as well as product availability issues and changes in business. We forecast projected changes as accurately as we can. And we continually monitor for spikes in demand or dips in availability.
When unexpected factors cause a fluctuation in supply, we may implement a product allocation system so as many patients as possible can continue to receive the therapeutic products they need, until supply levels can adjust.
Product allocation protects the supply chain
What is product allocation?
Product allocation is a standard procedure for every wholesale distributor. When an unexpected product shortage occurs, we put that product on “allocation.” This helps spread all available product as evenly as possible across the country to as many providers as possible, including pharmacies, physician practices, hospitals, and health systems.
Why do product shortages occur?
A product shortage can occur for many reasons — from raw material shortages to manufacturing problems to changes in FDA regulations to sudden spikes in demand. When any of these factors occur, product allocation allows healthcare providers to receive as much of the needed medications and supplies as possible.
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What if a product I need is put on allocation?
This will mean a few things:
- No one will be able to hoard this product.
- The amount of product any single customer can purchase will be limited until the shortage ends.
- The amount of this allocation may be determined by the manufacturer. If not, it will be proportionate to that customer’s size, order history, and current need.
We’re committed to fair share distribution
When a product is placed on allocation, we understand how serious this can be for your patients. You can be assured we are working tirelessly behind the scenes, and our highest priority is to fulfill every order so you can support every patient. In the meantime, we must safeguard the stability of the supply chain.
What is fair share distribution?
Fair share distribution enables us to get as much product as possible to as many providers as possible across the country, so the current supply is evenly distributed.
When there is a market event or a major impact to healthcare (like COVID-19), we allocate equitable portions of all available product to our customers.
We ship product to providers as soon as we are able.
All customers have equitable access to an amount of product that is proportionate to what they have purchased in the past and what they currently need.
Default quantities are set so all customers have access to some amount of a given product.
Extra product won’t inadvertently get “stuck” on the shelves of pharmacies or providers. Instead, it can be evenly distributed from our warehouses. Our capabilities enable us to distribute medications around the country in less than 24 hours.
Allocation amounts will be determined based on market conditions and customer needs. These settings are reviewed daily and adjusted as needed, based on changes in demand, inventory levels, and market intelligence. Your allocated quantities may be adjusted to accommodate new or changing dynamics.
FAQs
Typically, a product is placed on allocation because there is a product shortage in the marketplace. There are many reasons for shortages, including FDA issues, supplier manufacturing issues, raw material shortages, a sudden spike in demand, or multiple other challenges. When shortages occur, products are put on allocation to prevent hoarding behavior and enable us to get as much product as possible to as many providers as possible across the country.
Allocation amounts are determined by the manufacturer or by Cencora based on a historical usage.
Allocation amounts are determined by the manufacturer or by Cencora based on a historical usage.
Depending on the shortage, the allocation may be limited to a specific product from a certain supplier. If the shortage is more severe, it may apply to all similar therapeutic products across multiple suppliers.
There are three different types of precautionary allocation:
- If we see surges in ordering and inventory, we may implement an AB Allocation (A).
- If a manufacturer implements a Restriction (R), we will follow the policies set by the supplier.
- When limited supply occurs, a Market Shortage Allocation (S) is implemented for all customers.
We understand the severity of this challenge for you and your patients. If you receive an allocation amount that doesn’t meet your need, you can request an override. Allocation increases will be reviewed on an individual basis, and the severity of the supply constraint and the availability of product will determine whether an increase is feasible.
