The Hill’s Steve Clemons interviews Michael Alkire, president of Premier.
Read excerpts from the interview below.
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Clemons: Where is America is strong and where is it weak right now on the supply chain, when it has come to this virus and the needs that we have.
Alkire: Premier is a global health care supply chain. We have been actually contract manufacturing for goods and PPE for almost 10 years, all across Southeast Asia. From a report card standpoint, to answer your question, I think that obviously, with the first surge, we were able to get the appropriate PPE, the masks and the gowns and other capabilities probably four or five weeks into the virus, and we had a lot of troubles up front, and it really sort of exposed the weaknesses of the industry at large that we really didn’t have this resilient supply chain that we obviously needed to ensure that our health care providers were safe. … So, where we are from a sort of a progression standpoint. Obviously additional networks have been set up. We’ve created additional logistics. There’s been these brokers that have sort of stepped into the middle, who are also obviously getting access to the product. But we’ve got a long way to go. We need to continue to think about how we are creating more resiliency in the supply chain. We’ve gotta have a much more diversified manufacturing base. We’ve got too much exposure in China. We’ve got to continue to diversify into other areas in Southeast Asia. Just as importantly, we’ve got to diversify much more domestically, as well as near-shore. So, we’ve got to really got to be thinking through what are those strategies that we need to be embarking upon to actually diversify those supply chains. … So I think we’re in the early innings, but from a report card standpoint, we’re progressing. You know, I’ve been now talking about PPE, I do worry about the scenario playing out with pharmaceuticals. That’s a little bit, in some cases, a bigger lift. So we’ve got to be very, very thoughtful around the transparency of where not only the finished goods are being produced, but also the raw materials and that active pharmaceutical ingredients. We’ve got to make sure we understand where all of those products are being produced. And we’ve got to make sure we’ve got more resiliency in the supply chain there.
Clemons: What do public policy leaders need to understand if they’re going to draw production back into the United States? What do they need to do to be competitive?
Alkire: So I think there’s five steps that we want to really think about. We want to educate senators and Congress folks around. First, is we need to have continued diversification in terms of where these products are being produced. So it’s not good enough that we’re diversifying out of China and into Southeast Asia. We’ve got to do more diversification into near-shore and domestically. So that’s number one. Number two, we’ve gotta have more transparency. So the FDA has done a pretty good job of understanding where the active pharmaceutical ingredients are being produced for the finished goods of drugs. But we need to know where those other ingredients are being produced. We worry at Premier that we’ve got a disproportionate majority of other materials that go into those finished goods that are being produced in China. Third, we’ve gotta have an ability to connect from a data standpoint so that we can dynamically allocate products when there is a surge. So you know, everybody right now is racing to create stockpiles and that’s putting an incredible pressure on the supply chain. We’ve gotta manage this more effectively and have the states talk to the federal governments and the federal government’s and the state’s talk to the health care systems because everybody’s in this market now trying to buy at the same time that’s driving the price up. And the last area that I think we need to focus on, and it goes right to the heart of your question is we call it sort of this idea of infrastructure 2.0. So over the years we’ve talked about infrastructure, 1.0, which is we’ve got to rebuild the bridges and the roads that make those investments. I think we’ve got to create that same infrastructure for domestic manufacturing. And if that means we need to have different policies with the EPA or with the FDA in terms of getting approvals and those kinds of things. We need to be much more open to allowing us to be, quite frankly, a bit more entrepreneurial and bringing more businesses back here and think of it in terms of “these are products that our communities absolutely have to have.”
Clemons: What do you think laypeople need to hear to understand the strengths and the reason why supply chains are multinational operations and why they won’t just work inside one country?
Alkire: I think that we’ve had these two phrases. … We say we want generic drugs. What are generic drugs? The expectation by the public is it’s going to be the lowest cost. We also use the term commodity and a PPE, for the most part, is a commodity item. And so what the public needs to understand is when we use those two terms, we’re going to create the most efficient mechanism and I mean, we the manufacturers, are going to try to create the most efficient mechanism possible to actually produce those products, which means oftentimes you’re gonna have a very narrow supply chain without the level of resiliency. What I think we need to do is we need to reframe the terms of PPE and some of these generic drugs. They aren’t the generics or the commodities, if you will, that have to have these really narrow supply chains that expose us to an issue like a pandemic. But instead we need to be thinking about the importance of having those products and building some resiliency around those supply chains.
Clemons: Can you tell us a little bit about Premier’s activities with its early warning system and how that might improve the ecosystem on health goods provision?
Alkire: So today we know that there was an article that came out in the Annals of Internal Medicine a couple weeks ago. There was another one that came out in the New England Journal of Medicine and it talked about the false negatives that are occurring, meaning that the closer that a COVID patient is to actually acquiring the virus, and when they get the test. In the Annals, they actually said there are false negatives of 100 percent. That means that these patients, they truly have COVID but they tested negative for it. So we don’t think testing is the only way for various health officials and the governors and others to really measure what’s happening from a community aspect as it relates to COVID. We actually think another important attribute is looking at this sort of syndromic surveillance. We’ve developed a technology at Premier that actually gets into the electronic medical record and we look at the symptoms of a patient that presents to a doctor. So you think of COVID, it’s a dry cough, it’s a fever, they lose their sense of taste, and there’s like eight or nine of them. Anyway, we want to look at those symptoms in real time because there’s a pretty high probability that those patients actually have the virus. But we get that data, that information, very quickly, and we could get it at a ZIP code level. And the reason that’s so important is that you know, as states are contemplating the next potential surge of the virus and the importance of opening the economy back up. With all that information, we can now inform health officials at a ZIP code level that you may have another surge or you may have a higher prevalence of the virus. So the point is you don’t have to shut the whole state. You don’t have to shut a whole city. There are certain pockets by ZIP code where we’re starting to see a surge, and that information, I think, is something that these health officials can rely on to really balance the community health needs versus opening the economy.
Clemons: If you were to advise the White House on how to get this right the next time, what would be some of the things you’d like to see the federal government do in anticipating either future waves of this virus or anticipating something as systemically impactful as a future pandemic?
Alkire: Yes, I think there’s three things. One I would advise them — I’m creating a data infrastructure to allow for us to dynamically allocate critical products. So think of ventilators, think of other PPE. So number one is, let’s create some technology that sort of overlays utilization patterns of those various products. Number two, obviously this idea of, and I’m gonna call it efficient stockpiling. You know, there are certain things that I think the federal government needs to stockpile, ventilators come to mind. And there are certain things probably the states need to stockpile. I think about PPE because it’s used for multiple industries. And so, a large part of the communities use that. The final thing I tell the administration is look, we need to create a syndromic surveillance capability to help inform our states and local governments on how to open appropriately with additional surges and those kinds of things. But I think we’ve got to do a better job of leveraging the technology that already exists today in the form of syndromic surveillance to really inform those important and critical decisions.