Innovators and Transformers: When supplier counts mislead about pharmaceutical supply resilience

Purpose Approved supplier counts are used as signals of supply capacity in pharmaceutical markets. This article shows that such counts record administrative visibility, measure the gap between administrative and operational visibility in the US drug shortage records, and show that neither count is a valid measure of operational redundancy without normalization by market type and volume. Design/methodology/approach The analysis links United States Food and Drug Administration (FDA) drug shortage records, Orange Book approvals, drug listing records and inspection classifications for 3,344 active ingredient-by-dosage form markets in a cross-section. It tabulates the share of approved applications with no active listing and no linked firm. A temporally aligned comparison measures approved applicants for shortage markets at shortage onset and for comparison markets at pseudo-onset dates drawn from the same onset distribution. Findings Across markets, 12.8% of approved applications that are not formally discontinued are absent from the drug listing directory and 59.6% of all approvals are either discontinued or unlisted; the shares are nearly identical in shortage and comparison markets. Under temporal alignment, shortage markets have a median of seven approved applicants at onset against a pseudo-onset median of one for comparison markets and the count of linked firms shows the same inversion: markets with no linked firm are the least likely to be in shortage. Among approvals that predate onset, the median lead is 20 years (83% of approvals in shortage markets). Practical implications Shortage-risk classification should not rest on approval counts, and a count of linked firms is not a substitute without normalization by market type and volume; a low linked-firm count in a high-volume generic market is the configuration to watch. Originality/value The article separates administrative visibility from operational visibility as distinct constructs. It quantifies the wedge between the public approval register and the active counts that the regulator and the Government Accountability Office build internally. It documents that statute, policy metrics, guidance and published studies use register counts as the count of competitors.