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Healthcare Strategic Stockpile Management Remains a Big Challenge

Beginning in 2015 the National Academies of Sciences, Engineering and Medicine led a standing committee to inform Strategic National Stockpile (SNS) decision-making. This committee included “…state and local public health officials, representatives of medical manufacturing and distribution companies, logistics managers, representatives of emergency medical services and emergency medicine practitioners, and experts in relevant fields, such as risk modeling and Food and Drug Administration (FDA) regulatory issues (National Academies of Sciences, Engineering and Medicine,. In 2018 the National Academies standing committee held a workshop entitled, “Impact of the Global Medical Supply Chain on SNS Operations and Communications”.[i] This workshop included discussions around known gaps in the global medical supply chain, issues between the SNS and state and local governments for delivering needed assets, and concepts around SNS strategic communications. The committee noted in summary:

1) The SNS is well run and effective, but the mission has grown while supply chains have leaned out and budgets have not increased to support these challenges.

2) Last mile distribution is jeopardized by underfunded and disorganized state and local public health departments.

3) National health security is dependent on medical supply chains.

4) The SNS should have the critical function of communicating with partners across the supply chain, and with policy makers who influence the supply chain.

5) There are strategic issues behind the tactical challenges faced by the SNS.

6) Research around pediatric medical countermeasures is sorely needed.

7) Studying and monitoring previous disaster response can improve preparedness.

One of the most telling quotes from these proceedings came from the committee’s chair, Tara O’Toole, Vice President of In-Q-Tel:

…obsession with cost and profit has now infiltrated our sense of public health and how we are going to take care of each other in the most dire circumstances.[ii]

Many of these issues noted by the committee still exist today, and everyone recognizes the shortfalls in response to the crisis.  We observe that current COVID-19 supply strategies are insufficient to meet the need and we require new forms of governance to address these shortfalls.

Earlier today, U.S. Senator Tammy Baldwin (D-Wis.) and U.S. Senator Chris Murphy (D-Conn.), both members of the U.S. Senate Health, Education, Labor and Pensions Committee, as well as Senate Democratic Leader Chuck Schumer, on Wednesday announced legislation that lays out a framework for an effective COVID-19 response by federalizing and adding critical oversight and transparency to the supply chain for critical medical supplies and equipment. The Medical Supply Transparency and Delivery Act requires the president to utilize all available authorities under the Defense  Production Act to mobilize a federal response to the pandemic through an equitable and transparent process.   Senator Baldwin claimed that “The president’s failure to federalize the medical supply chain has left states operating in a Lord of the Flies environment in the middle of a global pandemic. Governors are forced to compete against each other while suppliers price-gouge. There’s zero transparency from the White House about how they’re allocating critical medical supplies, what is being produced, and how much is sent to the private market for purchase.”

The Act would:

  • Require publicly reported national assessments on a weekly basis to determine national critical equipment supply and requirements.
    • These reports will also identify industry sectors and manufacturers most ready to fill orders, stockpiles that can be refurbished or repaired, manufacturers that could expand production into PPE and medical supplies, and supplies and equipment that can be redistributed to new hotspots.
  • These reports would also include direct outreach with essential employees and healthcare workers.
    • Establish an Executive Officer to oversee acquisition and logistics for COVID-19 equipment production and delivery.
    • The Executive Officer will have all the authorities available under the DPA.
    • The Executive Officer is required to issue major purchase orders under DPA for supplies identified in the assessments, oversee all distribution of critical medical supplies, and make recommendations to the President on increasing national production capacity of supplies.

This is an important change in federal priorities or ensuring a better national supply chain response to potential threats.  However, the act fails to consider the fact that a centralized market intelligence acquisition function is needed to identify potential suppliers, validate them, and understand capacity requirements.  The other challenge is that most medical suppliers are in low cost countries, and there is no way to prevent countries from shutting down borders.  There will need to be specialized procurement managers to develop category strategies for key areas of need.  This is an area where the government has not traditionally excelled…

[i] National Academies of Sciences, Engineering, and Medicine Impact of the Global Medical Supply Chain on SNS Operations and Communications: Proceedings of a Workshop. Washington, DC: The National Academies Press, 2018.

[ii]  National Academies of Sciences, Engineering and Medicine, 2018, p. 44