Analyzing the Supply Chain Effects of Stericycle’s Closure

Rundown of the Story

At the beginning of 2019, quality regulators ordered Stericycle to stop sterilizing medical products due to quality issues. The gas used to sterilize the products, ethylene oxide, has been found to have adverse environmental effects and has also been identified as a cancer-causing gas (Paavola, 2018). 

Another company that has closed its facilities as a result of using hazardous gas is Sterigenics.  Its contract sterilizers in Viant, Grand Rapid, and Michigan have been closed due to quality issues identified by the environmental quality regulators.

The Stericycle issue began in 2014 when whistleblowers accused the organization of dumping deadly medical waste into the environment.  A study conducted on residents who live near Stericycle Company revealed that despite access to quality healthcare, Utah population experienced high rates of bone, colon and joint cancer (Engkilterra, 2014). Women experienced higher rates of breast and anal cancer while men suffered from prostate cancer.  The health department, however, refuted the claims that the high rates of cancer among the people living in the Utah area were as a result of environmental pollution. After a long wait, the company will be leaving Utah and it is a high relief to eco-activists and the residents (Means, 2019).    

Unfortunately, many manufacturers of medical devices and healthcare facilities rely on the company’s stylization services.  

Effects on Surgical Disposable Market

Supply chain disruption can have adverse impacts on inventory supply. The closure of giant medical equipment sterilizers such as Stericycle has detrimental effects on the supply chain. Hospitals and medical centers relying on their services can be vastly affected. 

Lack of Inventory in the Market

Stericycle operates in 12 countries including the United States serving over 540,000 customers. The company provides medical waste disposal services, manages reusable surgical devices, pharmaceuticals, and hazardous waste disposal. Healthcare organizations use a large number of specialized devices, medications, and materials to serve patients. Closures of giant contract sterilizers can, therefore, affect the availability of inventory in the market.

Higher Prices

Higher demand than supply makes product prices to climb. Stericycle’s closure can lead to a shortage of medical equipment and other services compared to the level of demand. Prices of the surgical instruments are therefore expected to rise. 

Additional Pressure on Purchasers

The Stericycle closure can influence the flow of disposable surgical devices and medical waste services within the supply chain. Many frontline clinicians confess that inventory management is already a complicated process. Additional pressure on the inventory management processes in healthcare facilities and scarcity can only worsen the situation.

Patient Care 

Supply problems can be directly linked to negative impacts on patient care.  Robust supply chain management is critical to cost reductions and patient support in the operating room.  Medical device shortages lead to case cancellations, higher costs of surgical procedures and delayed surgical cases. 

Alternatives to Stericycle

Supply chain impact may entail the inability of suppliers to complete an order. Companies that depended on Stericycle must look somewhere else.  To prepare for such risks in the future, the buyers must consider strategies to diversify the supply disruption risk by sourcing from multiple suppliers. 

Other Sterilizers

Hospitals and other healthcare organizations could turn to other sterilizers to prevent the impact of a potential shortage of medical devices.  The closure of Stericycle can interrupt the distribution of devices to end-users including patients. 

Third-Party Distributors

Operating rooms ought to consider third-party distributors of medical devices to reduce stress and delays caused by the unavailability of surgical supplies.  Third-party distributors such as Surgishop are transforming medical device distribution in healthcare. These distributors feature an array of surgical supplies from leading manufacturers (Ethicon, Covidien, Medtronic, etc.) at discounted prices. Other third-party providers have also joined to tackle the turbulence in the medical equipment supply industry.  The goal of the distributors is to ease the supply chain disruptions in the expanding disposable medical supplies market.

If you’re looking to know the benefits you can reap from using a third-party distributor/vendor check out our previous article Benefits of Using Third-Party Vendors in Healthcare.

Wrap up

Many contract sterilizers have long relied on ethylene gas to sterilize medical equipment. Recent discoveries linking the gas to negative health effects has led to the closure of sterilization facilities causing disruption to the healthcare supply chain. Healthcare organizations should take steps to combat the shortages by turning to third-party distributors of sterilized medical devices.


Engkilterra, S. (2014, February 14). Physicians Group Rips Apart “Offensive” Stericycle Cancer Study at the State Capitol. Retrieved from EnviroNews Utah:

Means, S. P. (2019). Medical waste company Stericycle is leaving Utah; ‘Hallelujah,’ says eco-activist. The Salt Lake Tribune.

Paavola, A. (2018, March 27). FDA braces for medical device shortages: 9 things to know. Retrieved from Becker’s Hospital Review: