Shortage of medical gear sparks bidding war among states

A shortage of life-saving medical gear has pitted states against each other and the federal government as they scramble to try to purchase the medical equipment needed to fight COVID-19.

Governors have been pleading with the Trump administration to take charge and make sure states can access enough equipment, but President Trump has been reluctant to do so, urging states to order their own personal protective equipment.

Experts and governors said the lack of a central coordinating authority has turned the medical supply market into a free-for-all. 

The competition has driven up prices, and governors argue they are continually being outbid by the federal government. 

During a press briefing earlier this month, Vice President Pence acknowledged the tension between the federal government and the states.

“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. 

But governors said the situation has not improved.

“We’re in a situation where you have 50 states all competing for supplies. The federal government is also competing for supplies. Private hospitals are also competing for supplies. So we’ve created a situation where you literally have hundreds of entities looking to buy the same exact materials,” New York Gov. Andrew Cuomo (D) said Monday.

In a joint op-ed in The Washington Post on Monday, Maryland Gov. Larry Hogan (R) and Michigan Gov. Gretchen Whitmer (D) urged better coordination from the federal government. 

“The Federal Emergency Management Agency (FEMA) needs to better coordinate the distribution of supplies based on need. Right now, there is no single authority tracking where every spare ventilator is or where there are shortages,” they wrote. 

Massachusetts Gov. Charlie Baker (R) raised the issue during a call with Trump earlier this month. Last week, he reported the same problems. 

During a press conference, a visibly emotional Baker said Massachusetts has ordered “millions” of pieces of equipment such as masks but has watched the federal government take them away.

“I stand here as someone who has had confirmed orders for millions of pieces of gear evaporate in front of us, and I can’t tell you how frustrating it is,” Baker said.

“We’ve literally got the point where our basic position is until the … thing shows up here in the Commonwealth of Mass, it doesn’t exist. I’m telling you we are killing ourselves trying to make it happen,” Baker said.  

As supplies have dwindled, prices have risen. 

Soumi Saha, senior director of advocacy at Premier, a company that purchases equipment and supplies for 4,000 hospitals, said N95 masks typically cost about 30 cents each but now cost between $3 and $15 each. 

She said face shields typically run $1 apiece and are now selling for about $12 each.

Saha said it’s too soon to tell if the increase is due to price gouging or just market dynamics when new companies are trying to enter the marketplace.

Governors have been urging Trump to step up and use the Korean War-era Defense Production Act (DPA), saying it is the fastest way to get competition under control. 

After spending weeks resisting the pressure, Trump late last week announced he would use the DPA to force General Motors to manufacture ventilators.

Trump appointed trade adviser Peter Navarro as the national policy coordinator for the DPA going forward. Navarro told reporters that the administration is working with Ford and General Electric (GE) on ventilator production but ran into “roadblocks” with GM that prompted the use of the DPA.

State leaders have warned they are running dangerously low on the breathing machines as hospital capacity fills up in areas dealing with significant outbreaks. 

Cuomo has projected the state will need 30,000 ventilators, while Louisiana Gov. John Bel Edwards (D) has indicated the state will run out of the machines in early April.

But it’s still unclear what impact the DPA will have, especially since GM claimed it was already in the process of making ventilators before the Trump order.

Ben Petok, director of corporate communication at medical device manufacturer Medtronic, said the company directs its ventilators wherever the need is greatest. He would not specify if that means the federal government, states or private hospitals receive more machines. 

However, he said the company has not increased prices.

“Price gouging is abhorrent in the face of a global pandemic and not something Medtronic will engage in,” he said.

Saha said prices for some equipment are rising because new companies might not have the same production efficiencies as established companies. 

She said the government should establish control of the marketplace through the DPA or price controls or by being very specific about what supplies are needed.

“The government needs to be very clear about what they need, how much they need, where it needs to go and when,” Saha said. “It would help level the playing field.”