LOUISVILLE, Ky. – The search for life-saving medical gear needed to battle the coronavirus pandemic is pitting state against state – and even against the rest of the world.
Frustrated governors across the U.S. are duking it out in a worldwide bidding war for face masks and other safety gear that doctors and nurses desperately need to battle COVID-19, which has already killed more than 1,500 Americans and infected more than 100,000 others, with no end in sight.
But the increasingly expensive supplies they’re so desperately searching for are selling out before they can get them – or are costing them exorbitant amounts when they can find them.
Kentucky Gov. Andy Beshear recently said his state had a line on some protective equipment when the Federal Emergency Management Agency “came out and bought it all out from under us.”
“I am willing to pay whatever it takes to protect the people of Kentucky to the maximum extent that we can,” he said.
The problem is, everyone else is willing to do the same.
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Illinois Gov. JB Pritzker called the struggle to obtain personal protective equipment, or PPE, a “Wild West” that’s forcing his state to overpay for the gear it’s able to secure.
And New York Gov. Andrew Cuomo told reporters “we’re savaging other states” as they all fight for fresh equipment.
“I’ll contract with a company for 1,000 masks,” Cuomo said. “They’ll call back 20 minutes later and say, ‘The price just went up,’ because they had a better offer.”
At a White House news conference this week, Vice President Mike Pence said the Trump administration is looking into reports that some states are unable to purchase equipment from the private market because the federal government is buying up supplies.
“We want to partner with every governor and make sure the left hand knows what the right hand is doing in terms of acquiring resources,” Pence said in response to a question from USA TODAY.
While the administration wants to make sure FEMA is able to buy as much of the equipment as possible, “as we work with the supply chain, we want to have full coordination with the states,” Pence said.
Demand for PPE has soared with the advent of the coronavirus pandemic. Meanwhile, experts say production and shipments from China, the world’s manufacturing powerhouse, were disrupted while that country fought to contain COVID-19.
“It’s kind of the worst possible combination of events,” said Tom Derry, CEO of the Arizona-based Institute for Supply Management, a not-for-profit professional supply management organization.
“It’s going to be a race against the clock to see if we can protect our health care workers. … We’re all just scrambling and trying to react.”
Health care workers need personal protection equipment – known as PPE – such as medical masks, gloves, gowns and face shields, to safeguard themselves against the virus as they treat a rising flood of patients.
Top-of-the-line face protection – specifically the N-95 respirator – is high on states’ and hospitals’ priority lists. So are ventilators that many COVID-19 patients need because they end up with respiratory problems so bad they have difficulty breathing.
But because places such as China and Italy were hit by the coronavirus first, Derry said, the supplies states are ordering now often end up at the back of the line behind requests other countries already made for the same items.
“Normally, in supply chains, the replenishment cycle is very tightly choreographed,” Derry said.
But production and shipping delays, along with abnormally high demand, have swamped the system.
And as states turn to American manufacturers for help, Derry said practical constraints are making it difficult to retool facilities to make different products.
“In two to three months we’ll be back to normal, but the crisis is right now,” he said.
The end result is a hyper-competitive PPE market that finds states, the federal government and foreign countries all in a frantic competition for resources.
It’s Kentucky and Illinois and Ohio and Indiana versus the world.
And lives are depending on how much equipment these states can acquire as COVID-19 keeps spreading.
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Bidding war for PPE
Exactly how states are trying to find and purchase PPE isn’t entirely clear.
The Illinois and Ohio governments did not respond to a USA TODAY Network request for information about their procurement efforts as of Friday afternoon.
And Kentucky’s state government did not grant an interview request with a state Finance and Administration Cabinet official who could provide specifics on their process.
However, governors from those and other Midwestern states have been vocal about their struggle to obtain more safety gear for their communities.
Pritzker said the Illinois government is working with manufacturers in the state in addition to battling in the market to buy supplies, according to Capitol News Illinois.
His office recently announced the state has contracts to buy supplies that include 2.5 million N-95 respirators, 1 million surgical masks and 11,000 gloves.
“My administration continues to work day and night to scour the globe,” Pritzker said.
Pritzker also is welcoming donations of PPE from tattoo parlors and other places.
In Indiana, Gov. Eric Holcomb has emphasized how companies across the state are stepping up during this pandemic. His office says RV and auto manufacturers are switching lines to help make shields, masks and other supplies.
Asked about competition between states, Holcomb’s spokeswoman, Rachel Hoffmeyer, said: “Indiana is exploring a number of options to manufacture our own PPE to reduce reliance on the market.”
A promising source for ventilators state officials recently touted would involve retooling an idled General Motors plant in Kokomo, Indiana, to produce tens of thousands of those devices.
President Donald Trump said Friday he would use his authority under the Defense Production Act to require GM to accept federal contracts for ventilators, and GM said plans were in motion to put its Kokomo facility to work.
In Kentucky, Beshear said the state government is looking everywhere for supplies and procuring items in ways it never has before.
“We’re having to put dollars in escrow at different times so we have a product come in, because you don’t know that you’re going to get the amount that they say they’re going to send you,” he said at a press conference Thursday.
“You then have to make sure that it meets the specs as they come in, and sometimes you make an order and they call you back and they say that it is not available.”
And many businesses are trying to help, such as by retooling their operations to produce medical equipment.
Federal government stockpile under fire
Some states also say they haven’t gotten what they need from the federal government’s Strategic National Stockpile, which is intended to provide medical supplies in emergencies like this.
And Michigan Gov. Gretchen Whitmer warned that the gear her state has received, from the stockpile and through its own efforts, won’t be enough for the crisis at hand.
“Had the federal government really started focusing when it became clear that the whole world would be confronting this, we’d be in a stronger position right now,” Whitmer said. “Lives will be lost because we weren’t prepared.”
Indiana Health Commissioner Kristina Box said Wednesday that Indiana recently got its second allotment of supplies from the national stockpile and planned to distribute it to hospitals with the greatest needs.
In Ohio, state health director Dr. Amy Acton said recently that the state had received gear from the national stockpile, but “it’s box loads, not truckloads.”
FEMA’s administrator has said the federal government is prepared to “go to zero” with the stockpile to meet the demand for supplies.
Hospitals in Ohio and other states across the Midwest know a surge of cases could deplete the stock they have before more can arrive.
So they’re requesting donations and making plans to conserve their equipment and even reuse some of it if necessary.
The ‘gray market’ for medical gear
With high demand squeezing the supply of PPE, agencies in search of this equipment may be turning to the “gray market,” said Mike Alkire, president of Premier, a group purchasing company that hospitals and medical clinics rely on for supply needs.
Gray markets involve products being sold outside of the manufacturer’s approved channels.
Premier is exploring that market, too, but Alkire said it’s made up of unauthorized or unofficial sellers and fraught with fraud.
Alkire said that’s also where he thinks the bidding war governors have talked about is happening.
His company is working with its clinical clients (not state governments) to get them what they need during the pandemic, but it’s also looking into every lead in the hope of finding a little more equipment until an emerging supply chain can begin to deliver.
“You get hundreds of calls a day, maybe 200 calls and emails about people that have masks and all this stuff,” he said. “And 99% of them are false. … It’s like (the movie) ‘Groundhog Day.’ It’s that every single day.”
With evidence that manufacturing in China is returning and as American manufacturers start to retool facilities to make medical equipment, Mike Schiller, senior director of supply chain at the Association for Health Care Resource Materials Management, said he doesn’t think the supply chain will run dry.
But it will be tight.
As for spiking prices, Schiller said hospitals, states and the federal government are tapping into suppliers that have PPE but typically don’t sell to hospitals, such as veterinarian, dental and construction suppliers.
But that brings with it a lack of contracts and set prices.
“So what you’re seeing here is some market-driven pricing,” he noted. “Supply and demand. Economics 101.”
Contributing: Tony Cook and Tessa Duvall
Follow Morgan Watkins on Twitter: @morganwatkins26.