Abstract: The ultimate goal of healthcare systems is to offer care and the right treatment to patients. To achieve it, Pharmaceutical Supply Chain (PSC) in the healthcare system needs to be effective and efficient. This study aims to investigate the role of inventory level control and demand forecasting on PSC performance of hospital pharmacies. Data was collected from 171 respondents working in private hospitals in Bahrain using a survey questionnaire and was analyzed using a structural equation modeling approach. The study found a significant positive relationship between inventory level Control and PSC performance. Similarly, the relationship between demand forecasting and PSC performance was positive and significant. This research has implications for practice, including assisting hospital pharmacies to find the best practices to manage the pharmaceutical inventory and understanding the impact of inventory control and demand forecasting in PSC performance to ensure zero stockouts and withstand fluctuations in demand and supply. The results of the study can prove to be beneficial to hospitals and healthcare providers in establishing an appropriate PSC system and making better decisions in medicine supply.