Since the widespread outbreak of Covid-19 in the US, there has been a back-and-forth struggle between the federal and state governments over equipment necessary to fight the outbreak. Everything from personal protective equipment (PPE) like masks and gowns, life-saving ventilators, testing kits and testing equipment like swabs, are in short supply across the country. Governors and mayors are demanding these necessary supplies from the federal stockpile, while the White House is claiming it is filling orders, and blaming states for not having their own stockpiles. Meanwhile a handful of companies have ramped up production on all of this equipment, some even receiving federal contracts, and are set to make huge profits off of the states that are seeing spikes in infections and deaths due to the outbreak.
At the moment, states have realized they are on their own when it comes to supplying necessary, life-sustaining equipment to fight this pandemic. As the president stated his office is not “a shipping clerk” states were trying to place their own order for PPE and test kits, with private companies and China. However, as states are scrambling for equipment, they are engaging in bidding wars with each other, and even with the federal government. Larger states that are seeing larger outbreaks, like New York, are spending millions to outbid other states in order to keep up supplies. Governor Andrew Cuomo referred to it as “like being on eBay with 50 other states, bidding on a ventilator”. Meanwhile the federal government is also outspending states in order to get shipments of equipment. Governors have reported having their orders cancelled they day they are meant to be shipped, only to find out they had been outbid by the federal government.
On top of outbidding states for equipment, according to reports from LA Times and New York Times, federal workers are seizing shipments of medical equipment across the country as they come in on the state level. Many of these reports are coming from medical personnel who ask to remain anonymous out of fear of retaliation from the administration. But there are reports coming from all over the country, from Florida to California to Washington about federal officials seizing large amounts of thermometers, masks and ventilators. FEMA officials have claimed they are distributing necessary equipment based on data about infection hot-spots and reported shortages in different states. However, there has been no transparency in this process of distribution. Many states are having shipments intercepted with no warning, and not being told where that equipment goes. The fact that the federal government is not reportedly depleted of equipment and no longer distributing it to states raises more red flags about these recent seizures of it.
Just this week White House officials told congress that the federal stockpile has been officially depleted, with 90% of the stockpiles distributed to states, and the remaining 10% to be reserved for federal workers. This is despite the small amount of equipment provided by the federal government relative to requests by states. Of the 3.5 billion N95 masks officials estimate are needed to fully supply hospitals, only 11.5 million were distributed by the federal government. And only 7,920 ventilators were sent out at all. This has left many states high and dry just at the point they are seeing a peak in the curve of infections. Many southern states and more rural areas are still weeks away from that peak, and will presumably receive no aid from the federal government as it approaches. This shortage as also left state officials and medical personnel asking basic questions, like where has all the equipment gone?
That is because most of the equipment the federal government is shipping in does not go to FEMA, or the federal stockpile or directly to states. According to Admiral John Polowczyk when he was asked in a press conference, the federal government is distributing this equipment to the private sector. The emergency equipment being order into the country to combat this pandemic, is going to private companies. That is why states are having to engage in a bidding war in order to obtain it. Instead of bringing that equipment directly to the states through FEMA, the government is using the private sector as a middleman, who gets to make as much money as states are willing to pay in order to save lives.
Meanwhile, doctors and nurses are having to resort to desperate measure to protect themselves from infection while they fight this deadly pandemic. Across the country healthcare workers are sharing images masks made out of scarfs, bandannas or hockey masks. As the virus spread these healthcare workers will be at the highest risk of infection, and the government is unwilling or unable to provide them with sufficient protection.
Among the companies making profits off of this equipment, are those tapped by the Defense Production Act in order to fill demand. It wasn’t until March 18th, when the spread of the virus was rampant in many parts of the country, that the President agreed to invoke the DPA. Part of the hesitation, according to the President, was the concern that using the DPA resembles socialism or nationalization of industry. This is despite the fact that the government pays companies for production under the DPA, and in landing large government contracts most companies see a rise in profits and stock. Even still the White House has limited its use of the DPA to few select companies like General Motors and Royal Philips, who notably were already acrambling to produce ventilators before the President’s order. And reportedly many of these companies are still waiting on final instructions about the type of ventilators needed before starting production. It is unclear when we might see these products start to actually roll out, and when they do, how they might be distributed.
It is unclear why the use of the DPA has been so limited so far. Even more perplexing is why a company that was contracted by the government to provide low-cost ventilaros five years ago, has contributed none to the government stockpiles during this pandemic. According to reporting by Propublica the company Trilogy Evo Universal landed a multi-million dollar contract with the HHS in 2015 to develop a low-cost ventillator. The design was approved last year, and HHS ordered 10,000 ventilators at a price of $3,000 a piece. However none were ever contributed to the stockpile. Instead late last year the ventilators were being sold to other countries at a much higher price, up to $17,000 according to one New York hospital that tried to get their hands on them. While there has been no explanation as to what happened to the original order of ventilators, or why Trilogy Evo Universal has not been ordered to provide them under the DPA, Propublica reports that the company is in talks with Jared Kushner to produce mass amounts of a much more expensive model to provide to American hospitals.
For every action the White House, HHS and FEMA have taken to respond to this crisis, it seems there is a catch to ensure private companies reap a profit. Even the federal government is spending money to get equipment, just to send it to private industries who sell it a market price. That is tantamount to the federal government funneling money into the private sector, except they are doing so at the cost of thousands of lives. On top of all of this, the government is pulling back from funding the insufficient national response they did mount. Just this week the White House announced that it would be pulling funding from the drive-through testing sites it promised to set up in early March. Many of the sites have only been active for a week or two, and local officials have emphasized how important they are to track the growth of the virus and detect if social distancing measures are proving effective. Most states are moving to keep the sites active through their own funding, just as they are having to pay for their own protective equipment and implement their own emergency response measures.
In this moment everything is moving so fast, it is hard to tell exactly what it going on at the federal or state level. All that is clear is that there is not enough equipment, there is a lot of money floating around, and there are bodies piling up. Even as this crisis develops there are new companies being established for the sole purpose of distributing this equipment. Right now the priority is to obtain it, get it to hospitals and doctors that need it, and make sure the spread of the virus is tracked and stemmed wherever possible. But once we are past this, or at least have a manageable handle on it, there will need to be some serious investigation into what happened here. And somebody is going to have to answer for what happened to all the ventilators.
Write To Know 