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Administration Officials Describe COVID-19 Supply Chain Efforts to House Panel

July 10, 2020

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Tannaz Rasouli, Sr. Director, Public Policy & Strategic Outreach

House Democrats pressed administration officials at a July 2 hearing to address ongoing shortages of personal protective equipment (PPE), diagnostic testing equipment, and other supplies, citing a memo released the same day by Oversight Committee Chair Carolyn Maloney (D-N.Y.) that outlined discussions with six medical equipment distribution companies.

Rep. James Clyburn (D-S.C.), chair of the committee’s Select Subcommittee on the Coronavirus Crisis, opened the hearing by highlighting concerns with the federal government’s chain of command, contracting practices, and deference to the private sector, which, he stated, “has forced states, cities, and even individual hospitals and businesses to compete for scarce resources, driving up prices.”

Ranking Member Steve Scalise (R-La.) took a different perspective, highlighting progress in the nation’s response as the country learns more about COVID-19. “The hard-won lessons – including the lesson that we need to keep learning – are underscored by the spike in cases in particular areas of the country,” he said. He encouraged individuals to make responsible choices, urging the use of masks in accordance with guidelines from the Centers for Disease Control and Prevention (CDC).

In their testimony, Rear Adm. John Polowczyk, vice director for logistics on the Joint Chiefs of Staff and lead for the Supply Chain Stabilization Task Force; Adm. Brett Giroir, MD, assistant secretary for health at the Department of Health and Human Services; and Kevin Fahey, assistant secretary of defense for acquisition at the Department of Defense, acknowledged challenges resulting from the pandemic but also emphasized the global factors driving such challenges.

Rear Adm. Polowczyk noted that it quickly became apparent that the Strategic National Stockpile would not be sufficient to meet national demands because “the bulk of the stockpile was shipped to states, leaving essentially no direct federal resources.”

 “The supply chain and network that delivered to every hospital, nursing home, first responder in the country at speed was available to be leveraged in a public-private partnership. However, the domestic consumption of an array of supplies was far greater than usual, and rapidly depleted supplies on hand led to a need to expedite shipments from, regrettably, overseas,” he said.

To address shortages, the Federal Emergency Management Agency (FEMA) established “Project Air Bridge,” in which FEMA covers, on behalf of six major medical distributors that have partnered with the government, the costs to transport supplies from global manufacturers to the United States.

As part of the agreement, the companies have given the federal government visibility into where supplies are being distributed and have directed 50% of supplies transported through the program based on a federal prioritization process.

“The commercial supply chain was both geographically orientated based on CDC outbreak data, and further refined by point of care prioritization: public hospitals first, then VA hospitals, then private hospitals and nursing homes,” Rear Adm. Polowczyk said.

But Chairwoman Maloney balked at the approach, indicating that the committee staff’s discussions with distributors suggest that “the administration completely and utterly failed to provide the private sector with guidance on PPE during the first three critical months of the coronavirus crisis, from January all the way through March. … They told us that they were pleading with you for guidance on how to prioritize the distribution of PPE and a host of other critical questions.”

With respect to actions moving forward, Rear Adm. Polowczyk testified that the administration will continue to use the Defense Production Act (DPA), which he said has been leveraged more than 10 times already, and other tools “to increase domestic production of supplies and pharmaceuticals,” though he also pointed out that the “DPA cannot be used to force companies to make medical supplies.”

In advance of the hearing, AAMC President and CEO David J. Skorton, MD, sent a letter on July 1 to subcommittee Chairman Clyburn and Ranking Member Steve Scalise, summarizing challenges that academic medical centers have faced in securing PPE and testing supplies, including the need for stronger delineation of the federal versus state and private sector roles.

The letter urged policymakers to accelerate domestic production of supplies and to pursue “a transparent and data-informed process to determine the allocation of scarce resources, with clear leadership from the federal government in partnership with states and individual stakeholders as appropriate.”

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