[Senate Hearing 116-520, Part 2]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 116-520

                   PART 2: PROTECTING THE RELIABILITY
                    OF THE U.S. MEDICAL SUPPLY CHAIN
                      DURING THE COVID	19 PANDEMIC

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 30, 2020

                               __________


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            Printed for the use of the Committee on Finance

                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-633 PDF                 WASHINGTON : 2022                     
          
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                          COMMITTEE ON FINANCE

                     CHUCK GRASSLEY, Iowa, Chairman

MIKE CRAPO, Idaho                    RON WYDEN, Oregon
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming             MARIA CANTWELL, Washington
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio                    SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania      MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina            ROBERT P. CASEY, Jr., Pennsylvania
BILL CASSIDY, Louisiana              MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma             SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana                MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska

             Kolan Davis, Staff Director and Chief Counsel

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     3

                               WITNESSES

Denning, Cathy, R.N., MSN, group senior vice president, Sourcing 
  Operations, Analytics, and Center of Excellence, Vizient, 
  Irving, TX.....................................................     6
Wiehe, Robert J., senior vice president and chief supply chain 
  and logistics officer, UC Health, Cincinnati, OH...............     8
Johnson, Charles, president, International Safety Equipment 
  Association, Arlington, VA.....................................    10
Grant, Ernest, Ph.D., R.N., FAAN, president, American Nurses 
  Association, Silver Spring, MD.................................    12

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Denning, Cathy, R.N., MSN:
    Testimony....................................................     6
    Prepared statement with attachment...........................    39
    Responses to questions from committee members................    52
Grant, Ernest, Ph.D., R.N., FAAN:
    Testimony....................................................    12
    Prepared statement with attachments..........................    57
    Responses to questions from committee members................    65
Grassley, Hon. Chuck:
    Opening statement............................................     1
    Prepared statement...........................................    70
Johnson, Charles:
    Testimony....................................................    10
    Prepared statement with attachments..........................    71
    Responses to questions from committee members................    81
Wiehe, Robert J.:
    Testimony....................................................     8
    Prepared statement...........................................    85
Wyden, Hon. Ron:
    Opening statement............................................     3
    Prepared statement with attachments..........................    92

                             Communications

Center for Fiscal Equity.........................................   105
Healthcare Leadership Council....................................   108
National Association of Manufacturers............................   112
Premier Inc......................................................   129
City of York Healthcare Authority................................   134

                                 (iii)

 
                   PART 2: PROTECTING THE RELIABILITY
                    OF THE U.S. MEDICAL SUPPLY CHAIN
                      DURING THE COVID-19 PANDEMIC

                              ----------                              


                        THURSDAY, JULY 30, 2020

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 9:32 a.m., 
in Room SD-215, Dirksen Senate Office Building, Hon. Chuck 
Grassley (chairman of the committee) presiding.
    Present: Senators Crapo, Thune, Portman, Toomey, Cassidy, 
Lankford, Wyden, Carper, Cardin, Brown, Bennet, Casey, Warner, 
Whitehouse, Hassan, and Cortez Masto.
    Also present: Republican staff: Daniel Boatright, 
Investigative Counsel; Caitlin Soto, Oversight Counsel; and 
Jeffrey Wrase, Deputy Staff Director and Chief Economist. 
Democratic staff: David Berick, Chief Investigator; Peter 
Gartrell, Investigator; and Joshua Sheinkman, Staff Director.

 OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM 
              IOWA, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. Before I read a short opening statement, I 
want to explain that Senator Cassidy is going to--is it Senator 
Cassidy? Oh, Senator Roberts is going to take over while I do 
two things: one, go over and open the Senate up; and secondly, 
I have to be in Judiciary because we have some things where we 
have to have a majority to get things done.
    So I do not know to what extent I am going to be face to 
face with you folks, but usually I would have gotten here 5 
minutes early, and I would have come down and looked you in the 
eye and said ``thank you'' for participating.
    I want to welcome everyone to Part 2 of the committee's 
hearing on ``Protecting the Reliability of the U.S. Medical 
Supply Chain During the COVID-19 Pandemic.'' This is the second 
hearing to discuss COVID-19's effect on our Nation's medical 
supply chain.
    Two days ago, we heard from the Department of Homeland 
Security's Office of Procurement, U.S. Customs and Border 
Protection, and the U.S. Immigration and Customs Enforcement's 
Homeland Security Investigations on their efforts to shore up 
the integrity of our supply chain.
    Today we are going to hear from a panel of industry experts 
who represent all corners--maybe I should say various corners, 
but maybe you actually do represent all corners of the supply 
chain. These witnesses have an insider's perspective and will 
be able to tell us about the challenges that our Nation's 
health-care industry is facing right now. And we will also hear 
how the Federal Government is collaborating and communicating 
with its industry partners during the pandemic.
    Indeed, during our first hearing we heard that DHS is 
engaged in a whole-of-government response to combat the virus 
and is working with State, Federal, local, tribal, and 
international partners in a unified effort to ensure the 
integrity of our Nation's supply chain. Example: we heard from 
Homeland Security Investigations on their efforts to prevent 
and investigate criminal activity surrounding the pandemic, and 
how--it is unbelievable--they have seized hundreds of fake and 
faulty items of personal protective equipment, and they 
returned over $17 million to victims of COVID-19 fraud.
    We also heard from the Department's Chief Procurement 
Officer on their efforts to cut bureaucratic red tape so that 
FEMA could easily procure larger volumes of emergency services 
and supplies. These are things that front-line workers 
desperately need, and the Department answered the call by 
working with industry to review and vet companies offering 
COVID-19 solutions to the Federal Government.
    I want to highlight that this continues to be an incredible 
challenge, as thousands of really unscrupulous sellers claim to 
be able to produce safe and legitimate supplies when what they 
are actually selling is fake and faulty.
    Lastly, we heard from Customs and Border Protection on 
their efforts to speed up the delivery of high-demand personal 
protective equipment from manufacturers overseas. As a result 
of this agency's efforts, we have had over 1.3 billion pieces 
of personal protective equipment enter swiftly into the United 
States.
    The list can go on and on, with many of these efforts being 
initiated at the beginning of the virus's foothold in the 
United States. However, my colleagues on the left are not 
telling the public these success stories. They would rather 
spread doom and gloom, a narrative for purposes of, I suppose, 
winning elections. It is a fact that the Federal Government's 
approach to emergency preparedness has always been fraught with 
challenges, and this goes back to prior administrations--and 
that word is plural--and beyond.
    However, my Democratic colleagues would make you believe 
that these problems are just specific with this administration. 
So it is simply not true, and we have several witnesses before 
us today who will testify to the very fact which I will state 
simply here and now. The Federal Government has never been 
prepared to address a national emergency of this type or this 
scale--period.
    In closing, I want to thank the witnesses present today, 
and all the medical and professional and first responders who 
work day after day to keep Americans safe and healthy. Your 
dedication to your community is essential to the days and weeks 
ahead.
    Before Senator Wyden speaks as ranking member, I want to 
thank Senator Roberts and any other Senator who helps us out 
with this very difficult Thursday that I have, being three 
different places now. Thank you very much.
    [The prepared statement of Chairman Grassley appears in the 
appendix.]
    The Chairman. Senator Wyden, take over.

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman. And----
    The Chairman. Senator Wyden, are you there?
    Senator Wyden. I am right here, Mr. Chairman. Can you hear 
me?
    The Chairman. We need to turn up your volume.
    Senator Wyden. Okay.
    The Chairman. You have volume now. Go ahead. And, Senator 
Wyden, I am sorry I am not going to be able to hear your 
testimony.
    Senator Wyden. Thank you, Mr. Chairman. Thank you for your 
courtesy.
    The Finance Committee, as the chairman indicated, is 
focusing this week on issues dealing with the lack of high-
quality PPE and other equipment during the pandemic. Now the 
chairman has made the focus China, and China, and China some 
more. And I want to be clear. I agree that counterfeiting is a 
problem.
    What I also want to point out is, if you are focused 
entirely on that aspect of the issue, you skip right past 
something that is much bigger, which is the Trump 
administration's casual disinterest in leadership when it comes 
to getting PPE and making sure that our health-care heroes are 
equipped. And it goes back quite some ways.
    Now the chairman said that Democrats just are spreading 
doom and gloom here. So what I am going to do, just for a few 
minutes this morning, is to spread some facts, some facts that 
are not in dispute.
    In 2019, the Federal Government conducted a pandemic war 
game called ``Crimson Contagion.'' In it, a hypothetical 
airborne virus originated in China made its way to the United 
States, infecting 110 million people and killing nearly 
600,000.
    The exercise concluded that the United States would need 
3.5 billion N95 masks to fight a large-scale pandemic. The 
Trump administration took no action to acquire them. The 
coronavirus arrived just months later.
    On March 19, 2020, with the cases beginning to go skyward, 
the President said the following when asked about buying and 
distributing PPE, and I quote: ``The Federal Government is not 
supposed to be out there buying vast amounts of items and then 
shipping. Governors are supposed to be doing it,'' unquote.
    On March 29th, Donald Trump said nurses and doctors--he 
actually said this--were stealing PPE. He said, and I quote, 
``Something is going on. You ought to look into it, as 
reported. Where are the masks going? Are they going out the 
back door?''
    In mid-April, Donald Trump called reports of PPE shortages 
``fake news.'' On May 6th, a nurse told reporters gathered in 
the Oval Office that the availability of PPE was sporadic. 
Donald Trump said--and this was in the Oval Office--Donald 
Trump said: ``Sporadic for you, but not sporadic for a lot of 
other people. I've heard we have a tremendous supply in almost 
all places.''
    Just last week, Donald Trump said, ``My administration 
currently has zero unfilled requests for equipment, for 
anything else that they need from the Governors. We are stocked 
up and ready to go.''
    So those are the facts. And the statements that the 
President has made are just wrong, wrong, wrong.
    In the last few days, the Democratic Finance Committee 
staff has gathered direct accounts from health-care workers 
around the country about PPE shortages that devastate 
communities, given the recent spikes we have seen across 
America.
    The committee, for example, heard from nurses in Dallas, 
TX, where COVID cases are surging, who recently began buying 
their own surgical masks since the hospital was requiring staff 
to re-use old ones for days at a time.
    The committee heard from an administrator of a 33-bed 
hospital in rural Alabama, serving a majority black community, 
who told the committee her hospital is so low on PPE that she 
keeps an emergency supply stashed in her office for 
safekeeping.
    One Oregon home health-care nurse who did not want to 
provide their name for fear of retribution from an employer, 
told the committee they have so few disinfectant wipes that 
they are cutting them in quarters to last through the week. 
Imagine that. Cutting disinfectant wipes in quarters so they 
will last through the week.
    Finance Committee Democrats want to make sure these 
important stories still get heard, so I encourage doctors and 
nurses and first responders and nursing home staff who are 
dealing with shortages and defective equipment to submit 
personal stories for the hearing record at 
[email protected].
    If we have learned one thing, it is that getting these 
stories into public view and in front of Senators can really 
make a difference. This week, the National Nurses Union 
released a survey of 21,000 hospital nurses. Eighty-seven 
percent of the nurses reported having to re-use PPE that is 
designed for one use.
    According to data from the Centers for Disease Control, 
hundreds of nursing homes did not have PPE in mid-July, and 
thousands more had less than a week's supply.
    States like Oregon, cities, and health-care providers have 
been forced to compete against each other and pay a real ransom 
for equipment on the open market. This has opened the door to 
junk sold by scam artists and incompetent vendors.
    A group of health systems was so concerned about losing 
access to PPE that it actually bought a minority stake in a big 
PPE manufacturer just to keep the pipeline open.
    So the question becomes--and we have a lot of Senators who 
represent areas with small hospitals--what about the small 
hospital and the independent doctor's office and nursing homes 
that cannot afford to go out in the open market and buy their 
own manufacturer?
    The Trump administration has touted Jared Kushner's Project 
Air Bridge as a PPE game changer, but Project Air Bridge 
brought in just 4.5 million N95 masks over the course of 3 
months this spring.
    The Department of Health and Human Services' estimate--this 
is the Trump administration--their estimate said that the 
United States needed 300 million N95 respirators every month. 
The fact is, these shortages of PPE have put our doctors and 
nurses and caregivers in grave danger. An ongoing study by 
Kaiser Health News and The Guardian has identified at least 851 
deaths among front-line health-care workers, likely due to 
COVID-19.
    From sea to shining sea, Americans are desperately hoping 
now that there are going to be safe and successful vaccines on 
the market in the coming months. They need to be distributed in 
a fair and methodical and medically sound way.
    Unfortunately, the country's experience over the past 5 
months, particularly with PPE, raises serious concerns about 
whether or not Americans can have confidence that the 
administration will handle things in that fashion.
    So there is a lot to talk about today. Before I wrap up, I 
would ask unanimous consent--I gather, Chairman Roberts, you 
are going to be running things, so Kansas is out there on both 
the majority and the minority side. Mr. Chairman, I ask 
unanimous consent to enter statements on PPE shortages into the 
record at this point.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    Senator Roberts [presiding]. Without objection, it is so 
ordered.
    [The statements appear in the appendix beginning on p. 93.]
    Senator Wyden. And one last thought, Mr. Chairman. I want 
to also thank Chairman Grassley for adding, at our request, the 
second hearing on this important topic. We requested it because 
we felt it was important to hear directly from people who are 
on the front lines having to face these kinds of difficult 
choices, and I would just like to close by giving a thanks to 
Chairman Grassley for agreeing to hold the second hearing on 
the topic.
    Thank you, Mr. Chairman.
    Senator Roberts. The statement with regard to Senator 
Grassley is duly noted. It is my privilege now to introduce the 
witnesses.
    First we have Cathy Denning, the senior vice president for 
Vizient's Sourcing Operations, Analytics, and Center of 
Excellence. In her role, she provides strategic and operational 
leadership that guides the philosophy and methodologies for the 
company's contracting process and related technology, as well 
as its sourcing, focused research initiatives, and training 
activities.
    We also have Robert Wiehe, senior vice president and the 
chief supply chain and logistics officer for UC Health. He is 
responsible for providing both strategic and operational 
direction for all supply chain and pharmacy operations within 
the UC Health Enterprise, including the flagship University of 
Cincinnati Medical Center, Westchester Hospital, and the Daniel 
Drake Center for Post-Acute Care.
    Our next witness is Charles Johnson, who is the president 
of the International Safety Equipment Association, the trade 
organization for personal protective equipment and 
technologies. Mr. Johnson previously served as vice president 
of policy for the Aluminum Association, acting as their 
strategic advisor to the industry.
    Finally, we have Dr. Ernest Grant, currently serving as 
president of the American Nurses Association. He has over 30 
years of nursing experience and is a recognized burn care and 
fire safety expert. Dr. Grant has previously served as the burn 
outreach coordinator for the North Carolina Jaycee Burn Center 
at the University of North Carolina hospitals in Chapel Hill.
    We will proceed with Cathy. We have two present and two 
virtual. Cathy, please.

   STATEMENT OF CATHY DENNING, R.N., MSN, GROUP SENIOR VICE 
   PRESIDENT, SOURCING OPERATIONS, ANALYTICS, AND CENTER OF 
                EXCELLENCE, VIZIENT, IRVING, TX

    Ms. Denning. Good morning, Senator Roberts, Chairman 
Grassley, Ranking Member Wyden, and members of the committee. 
And thank you for holding this critically important hearing and 
giving me the opportunity to testify today.
    My name is Cathy Denning, and I am the group senior vice 
president of Sourcing Operations at Vizient and a registered 
nurse. Prior to joining Vizient, I worked as a nurse in both 
the acute care and home care settings.
    Before we start today, I would like to tell you a little 
bit more about Vizient, the Nation's largest member-driven 
health-care performance improvement company. Our members 
include more than half of all the acute care hospitals, 
including pediatric facilities, community hospitals, and almost 
all of the Nation's academic medical centers.
    Through our group purchasing arm, we help providers by 
negotiating discounts and other terms resulting in greater 
value than individual hospitals can typically negotiate on 
their own. We offer other services which I have outlined in my 
written testimony.
    Today I am focused on the critical issue of the U.S. supply 
chain during the pandemic, and specifically counterfeit PPE in 
the gray market that exploits hospitals, patients, and the 
government with false and often harmful claims of having 
medical supplies to offer.
    When COVID-19 hit, one of our first actions was to set up a 
war room to field our member providers' requests. We received 
more than 1,000 inquiries each week, including requested 
products that members were considering purchasing from 
nontraditional manufacturers or brokers.
    From March 29th through July 13th, we received 1,320 unique 
member requests for new manufacturers and products. Ultimately, 
we found that more than 500 of these products failed to meet 
the applicable FDA or NIOSH standards. And as emergency use 
authorization changes, so does the complexity of these issues.
    This study and validation process was only one piece of our 
overall pandemic response. And I have included additional 
examples of our efforts in my written testimony.
    Despite our efforts, bad actors still reach out to 
providers in need, and our members continue to search for the 
vitally needed safe supplies wherever they can. I will 
highlight two examples, and there is another in my written 
testimony.
    First, in late March our member Yale New Haven Health 
learned of possible counterfeit Dasheng KN95 respirators in the 
market. Combing through their donations, they in fact found 
that they did have a significant number of these respirators.
    They also had placed an order with Dasheng for KN95s, so 
they immediately canceled those orders. Later, Yale learned 
that most of PPE vendors with whom they had been engaging were 
not actually dealing directly with factories in China, but 
rather third-party distributors or gray market brokers.
    Yale also discovered that many of these vendors had sent in 
false test results. So that prompted them to send out their 
masks for their own testing, identifying that only 85-percent 
efficiency was rated with the mask. And this led Yale to become 
even more skeptical of these vendors.
    Second, one of the large acute-care systems in the Pacific 
Northwest is still currently sorting out a questionable 
situation in which they were sent small-sized Halyard N95s from 
a third-party company. They were in baggies with a seal on 
them, which was not like they were used to receiving. Halyard 
usually sends them in a box.
    So when they questioned the company about it, they found 
out that this company said they had a ``reallocation process'' 
for those N95 masks. They continued to press. They still have 
not been able to identify what the issue is. This company is 
normally a sterilization solutions company, so you can draw 
your own conclusions from that.
    Another burden our members face is the gray marketeers 
offering products that typically go for 84 cents and trying to 
sell them to them, like an isolation gown, for $8.50. And when 
the same masks that I talked about normally would go for 80 
cents, we had offers for as high as $11 per mask.
    There are countless other stories out there like this. But 
despite the contemptible actions of these bad actors and the 
overall challenges presented by COVID-19, I would like to end 
my remarks today with a hopeful outlook to the future.
    The health-care supply chain needs three things to be more 
resilient: enhanced transparency, redundancy, and 
diversification. We also need to take lessons we learned 
regarding the strategic national stockpile and do better to 
ensure that it is truly a resource.
    First, we need more transparency into manufacturing 
locations, raw materials, and storage locations. This 
information should be made available to the public as well as 
to the private sector, and not just government entities, so 
that we can all work towards resilience efforts.
    Redundancy of manufacturers is the next step. The best way 
to achieve availability and cost savings is to encourage 
competition. The industry needs multiple manufacturers 
producing the same product so that we do not have one event 
wipe out the entire supply chain.
    Regarding diversification, our supply chain should be 
global in nature, but we also should strive to significantly 
increase our domestic footprint across the United States, as 
well as across the globe.
    Finally, I believe the strategic national stockpile does 
need to be bolstered. The stockpile should have at least 90 
days of supply for key items, and the government should 
continue to engage the private sector to help provide feedback 
on appropriate quantities and the best storage and management 
practices. Health-care systems in States need to be able to 
quickly access these products during a disaster.
    With that, thank you again for the opportunity to testify 
today. I am passionate about these issues and strongly believe 
that working together, we can all help health-care providers, 
their patients, and the public get through this crisis.
    I would also like to offer my absolutely sincere 
appreciation for all the front-line health-care workers out 
there who have given all of themselves tirelessly throughout 
the pandemic, and I look forward to your questions.
    [The prepared statement of Ms. Denning appears in the 
appendix.]
    Senator Roberts. Thank you, Cathy.
    Our next witness is Robert Wiehe. He is senior vice 
president, chief supply chain and logistics officer for UC 
Health. Robert, why don't you now proceed? Robert is also with 
us virtually.

 STATEMENT OF ROBERT J. WIEHE, SENIOR VICE PRESIDENT AND CHIEF 
 SUPPLY CHAIN AND LOGISTICS OFFICER, UC HEALTH, CINCINNATI, OH

    Mr. Wiehe. Thank you, Senator. Chairman Grassley, Ranking 
Member Wyden, and members of the committee, thank you for the 
opportunity to speak today about protecting the reliability of 
the U.S. medical supply chain. As the senior vice president and 
chief supply chain and logistics officer for UC Health, 
southwest Ohio's only academic health system, my 
responsibilities include strategy and oversight of sourcing, 
acquiring, and distributing all supplies and capital equipment 
within our health system. Challenges that have emerged from the 
COVID-19 pandemic are unlike anything we have encountered in 
our lifetime.
    Coronavirus-related disruptions to supply chains, combined 
with dramatic increases in global demand, are among the many 
challenges that hospitals and systems are facing in today's 
environment. While there is substantially more detail in my 
written testimony, I would like to highlight for you a few 
challenges and opportunities to be considered by the committee.
    As for the challenges, first: hot spots. While southwest 
Ohio was not an initial hotspot, and that allowed us the 
benefit of learning from others, it also meant that the region 
was not prioritized in terms of obtaining limited resources.
    As resources were distributed to national hotspot areas, we 
often needed to engage our elected leaders to intervene on our 
behalf with Federal leaders and/or manufacturers in order to 
obtain the items we needed to provide a stable and ongoing 
COVID-19 response in southwest Ohio.
    We view the current medical supply chain for PPE, testing 
supplies, and machinery as comfortable, not confident. We 
continue to advocate for a national and State distribution 
strategy, public and private, that allows resources to be 
distributed to all geographic regions.
    Second: rapid changes in our supply chain strategy. With 
limited supplies and increased demands, we see how we had to 
quickly pivot to source PPE from non-standard suppliers. The 
change was dramatic. It shifted from supplies on automatic 
replenishment with one vendor to reaching out and making over 
500 new sourcing inquiries in a 30- to 45-day period to vendors 
we had no prior experience with. This presented the unique 
challenge of balancing the urgent need for product and the 
inherent risk in dealing with unknown third parties.
    Third: avoiding fraudulent suppliers. Through procuring 
large items or quantities of PPE in partnership with other 
regional hospitals, we learned that there were many scams and 
promises of large quantities of supplies coming in from outside 
of the United States. These scams involved large sums of money 
being placed into escrow or cash-in-advance purchases for goods 
that did not materialize. We saw how quickly it pivoted into a 
mitigated risk by scrambling multiple smaller orders over 
various vendors versus trying to rely on a single large 
purchase to meet our needs.
    The majority of the product we successfully sourced came in 
from China or other Asian Pacific countries. During our vetting 
process, we found that a significant number of the FDA and 
third-party testing certificates presented by potential 
suppliers were not able to be authenticated or verified.
    For overseas products during the initial months of the 
pandemic, we saw several shipments delayed, and our suppliers 
communicated to us that this was due to supplies being either 
purchased or seized by the Federal Government. We were not 
direct recipients of this communication, and we can only attest 
to what we were told by our suppliers.
    Another frequent communication from suppliers was 
concerning the lack of available capacity with commercial air 
freight companies instead of limited stockpiles. UC received 
communication from the ODH in March that the regional and State 
stockpile was very limited due to expired or destroyed 
supplies.
    In early March, we received our first supplies from our 
regional stockpile. In late March, we received our first 
shipment of PPE from the strategic national stockpile.
    Lastly: price gouging. I have provided more detail in my 
written report, but UC Health has experienced increases on 
price for PPE up to 6 to 10 times the original price.
    As for the opportunities, the first is innovation. A great 
example is the virtual stockpile that was created by the Ohio 
Hospital Association in partnership with Governor DeWine 
whereby the hospital industry contributes supplies to a virtual 
stockpile to ensure that Ohio's economy could open and remain 
open.
    The Ohio Hospital Association coordinates this effort on 
behalf of their membership. While it is in its infancy, it 
shows the promise of what true collaboration could look like 
during any disruption in the medical supply chain. This could 
expand to a national level and include all parties: government, 
suppliers, and end users.
    Second: greater transparency in the critical supply chains. 
Reporting of critical raw materials, finished goods, and 
production capacity for major suppliers would help the Federal 
Government to better understand critical supply chains and 
their capacity and ability to react in a crisis.
    Third: we favor a more regional approach towards 
manufacturing of raw materials for critical supplies. Supply 
chain resiliency must outweigh low cost for critical items. A 
more regionalized approach to manufacturing would allow for a 
quicker response when disruptions occur.
    Lastly: improved transparency and communication on the 
national stockpile. Trust is essential for a supply chain to 
function efficiently. A better understanding at all levels of 
the supply chain would help to eliminate both fear of the 
unknown and competition between government and the private 
sector.
    Thank you for the opportunity today to share my insights 
and experiences. I believe we have already learned many 
valuable lessons that we can use to improve our health-care 
supply chain resiliency moving forward.
    I am happy to answer any further questions, should you have 
any. Thank you.
    [The prepared statement of Mr. Wiehe appears in the 
appendix.]
    Senator Roberts. I thank the witness.
    Our next witness is Charles Johnson, president of the 
International Safety Equipment Association. President Johnson--
if I can refer to you in that vein--you are here with us. Thank 
you so much for being here. Please proceed.

 STATEMENT OF CHARLES JOHNSON, PRESIDENT, INTERNATIONAL SAFETY 
              EQUIPMENT ASSOCIATION, ARLINGTON, VA

    Mr. Johnson. Thank you, Senator Roberts, and thank you, 
Chairman Grassley, Ranking Member Wyden, and members of the 
committee, for this opportunity to present the industry's 
experience during the COVID crisis.
    I am the president of ISEA, the International Safety 
Equipment Association, representing makers and distributors of 
safety equipment and technologies. For more than 85 years, this 
industry has stepped forward to aid the United States in the 
face of emergencies of all types, and certainly for public 
health emergencies.
    When these events occur, ISEA members provide the equipment 
that protects responders, the medical professionals, and the 
public. We have battled two major challenges since the onset of 
the pandemic.
    The first is that the safety and effectiveness of the PPE 
used to combat the COVID-19 pandemic have been compromised, 
most notably by incredible increases in opportunistic market 
behavior such as counterfeits, fakes, and fraudulent products.
    The second is that the ability of the industry to get the 
equipment to the people who need it, both in terms of the gross 
amount of product and the systems which efficiently distribute 
the products to the end users, has been sorely tested. We have 
submitted detailed testimony which outlines our experience and 
our recommendations in these areas. I would like to highlight 
just a few.
    The safety equipment industry is built on a foundation of 
standardization and trust. Standardized performance is central 
to the value of the PPE we provide to the wearer. They must 
understand the parameters of performance for this equipment, 
and they must trust that it will occur when needed.
    Fake, fraudulent, and counterfeit products erode and steal 
that trust. These illegal products do not just harm the 
financial interests of our members, they put the end user at 
risk of injury, sickness, and death. The various efforts to 
control these activities range from the public sector to the 
private.
    Our own association manages a standardization process which 
can confirm the legitimacy of products. Those tools and others 
have been used by various government agencies from CBP to 
Homeland Security to stop fraudulent and counterfeit products 
at the U.S. border.
    In the U.S. market, the CDC and other agencies have stepped 
in to surveil the market and to identify fraudulent products. 
Our own companies have policed the market. 3M Company has taken 
down 10,000 false and deceptive social media posts, removed 
7,000 fraudulent e-commerce offerings, and removed more than 
140 deceptive Internet addresses.
    Despite these efforts, these practices persist. ISEA 
supports in general the National Association of Manufacturers 
anti-counterfeiting efforts, which we have detailed in our 
comments. It is not just about the products; it is also about 
the platforms they are sold on.
    On the e-commerce front, platforms have been working 
cooperatively to crack down on illicit products during the 
pandemic, but that begs the question of why these solutions 
were ignored for so long. We support legislation requiring that 
online sellers remove these products and hold the sellers 
responsible for any injuries arising from their sale.
    The second major challenge we have faced is getting the 
equipment into the hands of those who need it. Our industry has 
experience with abnormal demand surges, and we are capable of 
and we have ramped up production. The hard truth is that no 
planning with existing capacity will address the fact that 
industries are scaled to meet the regular forecasted demand of 
their markets, and not to plan for emergencies on this scale.
    For these issues, public policy interventions are required, 
such as the strategic national stockpile. We were an original 
partner with the Federal Government when the SNS was 
implemented. Since 2009, we have asked that PPE stocks be 
properly maintained in the SNS. We support Senator Alexander's 
Preparing for the Next Pandemic Act, which would provide long-
term funding for State and Federal stockpiles, and we recommend 
that comprehensive, quantitative approaches be included for 
demand planning.
    Some of those approaches could be used now. FEMA needs the 
authority during a public health emergency to gather data from 
State and local governments on the supply, use, and demand of 
PPE.
    Regarding the support for domestic PPE production and use, 
our industry has had a positive experience with the Defense 
Production Act, used as a tool to help signal demand up the 
supply chain. Recent results are that funding for both 3M's 
personal safety division and Honeywell's safety products has 
more than doubled production of respirators in the U.S.
    Broadly, ISEA supports legislation which focuses on direct 
and sustained support for domestic PPE production. We applaud 
recent actions to address liability for companies stepping 
forward to help during a crisis, and we ask that clear 
reference to gloves and garments be included in the future. And 
we support tax credits for end users as the American workforce 
gets back to work, so that they can afford and provide the PPE 
needed to protect the workforce.
    Thank you very much for this opportunity to testify.
    [The prepared statement of Mr. Johnson appears in the 
appendix.]
    Senator Roberts. Thank you, Mr. Johnson. Thank you for 
mentioning Senator Alexander's bill. A great number of us, on a 
bipartisan basis, are supporting that.
    Dr. Grant, 30 years of nursing experience. Thank you so 
much for being here in person. You are next, sir.

   STATEMENT OF ERNEST GRANT, Ph.D., R.N., FAAN, PRESIDENT, 
         AMERICAN NURSES ASSOCIATION, SILVER SPRING, MD

    Dr. Grant. Thank you, sir. Good morning. My name is Dr. 
Ernest Grant. I am president of the American Nurses 
Association, which represents the interests of the Nation's 4.3 
million registered nurses. I would like to thank Senator 
Grassley, Ranking Member Wyden, and other members of the 
Finance Committee for this opportunity to be with you here 
today. I would also like to pay homage to the front-line 
workers who are still working hard and so diligently.
    At the beginning of this crisis, nurses, doctors, and other 
members of the health-care team recognized that there was a 
shortage of PPE and began to improvise, using PPE that they 
made themselves, or using garbage bags for gowns.
    Some left the profession due to unsafe working conditions 
or for protection of their family members or themselves. Some 
still report suffering emotional, psychological, and mental 
health stress. Some have also given the ultimate sacrifice. 
Over 230 registered nurses have died providing care in your 
communities.
    This is unacceptable. Currently, PPE is not being provided 
in the quantity or quality that is required for nurses to 
safely provide care for patients. In May, the American Nurses 
Association conducted a survey, and 45 percent of the 
respondents stated that their facilities are still experiencing 
a shortage; 79 percent, or 4 out of 5, of the nurses reported 
that they are encouraged or required by their employer to re-
use single-use PPE, as health-care facilities are stretching 
their supply of PPE resources. Fifty-nine percent say that re-
use of PPE makes them feel unsafe. Nurses should not be exposed 
to any unnecessary risk in the course of their work. They share 
human and workers' rights, including the right to be safe at 
work.
    That was 2 months ago. Currently, the ANA is fielding yet 
another survey, and the preliminary data is showing that 
nothing has changed. I hear from nurses across the country that 
the PPE supply continues to be strained.
    Colleagues in Oregon report that a large hospital system 
purchased and reported ample supply of masks. Unfortunately, 
the hospital switched brands, likely due to supply issues, and 
the current stock of masks they did receive were all large in 
size and do not fit or provide adequate protection for most of 
the staff. Nurses report that the quality of the masks was so 
poor that the wire that forms around the nose does not fit 
properly. This causes extreme safety concerns that the facial 
seal is not tight.
    Other concerns that I have heard: nurses being asked to re-
use PPE when re-use is not in alignment with manufacturer's 
guidelines; face masks that fog up, resulting in various 
incidents; nurses being asked to re-use PPE that has been 
decontaminated; under-served and rural hospitals being out-bid 
by larger health systems, as well as both the State and Federal 
Government, exacerbating their difficulty in obtaining 
supplies. The list goes on and on.
    A major concern from the ANA surveys regards the re-use of 
decontaminated N95 respirators. There is limited scientific 
data to determine how many times respirators can be 
decontaminated without reducing their effectiveness.
    As I stated earlier, 59 percent of the nurses say that this 
makes them feel unsafe. ANA does not support the use of 
decontaminated masks as a standard practice and urges Congress 
and the administration to ensure that the country goes back to 
best practices for infection control as soon as they are able 
to do so.
    Understanding that the PPE crisis is the result of multiple 
factors such as the shortage of raw material, the global need 
for equipment, and the growing PPE needs as the country and 
schools reopen, we believe that more must be done by both the 
State and Federal Governments to better deploy the protective 
equipment.
    While States certainly have a role in ensuring access to 
care, more needs to be done to enhance the Federal and the 
State partnership to ensure transparency and equitable access 
to safe and quality protective equipment for health-care 
providers.
    Nurses want to, and are willing to work. They just need the 
protective equipment that will allow them to do their jobs, and 
do them effectively. To achieve this goal, the ANA recently 
submitted detailed recommendations to Senator Alexander and the 
HELP Committee in response to the chairman's white paper.
    Our recommendations are outlined in our testimony. I thank 
you for the opportunity to speak with you, and I look forward 
to answering any questions that you may have.
    [The prepared statement of Dr. Grant appears in the 
appendix.]
    Senator Roberts. Thank you, Dr. Grant. You are obviously a 
champion for the American Nurses Association, and all of the 
committee thanks you and every nurse in America who has been 
working overtime with regards to this pandemic and saving 
lives.
    I think I will recognize Senator Wyden at this point for 
any comments, or any additional questions.
    Senator Wyden. Thank you very much, Mr. Chairman. And, Mr. 
Chairman, let me begin this way. I believe in the halls of 
Congress we are always talking about the heroes. And of course 
we are hearing from health-care heroes, because the 
extraordinary work they do every day is of such value to 
America.
    But the fact is, we do not send heroes into battle without 
proper equipment. And yet that is what we have heard from all 
of these witnesses today. And I know in my home State--and it 
is just really hard to get your arms around it--we heard from a 
home health-care worker who says that they are so short of 
disinfectant wipes that, in Oregon they are having to cut them 
into quarters in order to actually make it through the week.
    So my first question to you, and maybe we will start with 
you, Dr. Grant, is do you believe that forcing State health 
departments, hospital systems, and doctors' offices to compete 
against each other for medical supplies is a sound national 
strategy in a global pandemic? Because that is essentially what 
we are dealing with. The Trump administration has walked away 
from a strong national leadership role, and so you have these 
States and hospitals and offices competing against each other.
    I would like to have your assessment first, Dr. Grant. Do 
you think that is a sound national strategy for a global 
pandemic?
    Dr. Grant. Thank you, Senator Wyden. My answer to that is, 
no, I do not think that having hospitals, the States, and the 
Federal Government competing against each other for access to 
PPE is a sound strategy.
    Senator Wyden. Now the second question I would like to get 
into is that communities of color have just been hit by the 
coronavirus like a wrecking ball. And blacks, indigenous, and a 
whole host of communities where folks have modest resources 
just really have nowhere to turn.
    In my opening statement, I referred to a rural Alabama 
hospital where PPE is in critically short supply. The CEO there 
is Loretta Wilson. She runs Hill Hospital in Sumter County, 
where 70 percent of the population is black and 35 percent of 
residents live in poverty. There are fewer than 13,000 people 
living in the county, and 350 have been infected--and 15 have 
died of the coronavirus.
    In my home State of Oregon, the Warm Springs Tribe has a 
higher rate of coronavirus cases than any other county in 
Oregon. The situation is compounded by a water crisis, making 
it harder for members to wash their hands and forcing them to 
use bottled water. A lot of members of the Finance Committee 
have constituents in rural communities, and under-served and 
rural hospitals like Ms. Wilson's are having a very difficult 
time competing with big buyers seeking out PPE.
    I would like to know how this strategy of trying to compete 
with the big guys seeking out PPE is not just going to compound 
the racial disparities that we are already seeing? Because 
those big buyers usually are not anywhere near those 
communities of color. They are usually out in the affluent 
white suburbs.
    So I would be interested in having our witnesses comment on 
that, because that is going to be a special focus of the 
Finance Committee going forward, including in the coronavirus 
package: the racial disparities that are so profound in 
American health care. The committee has jurisdiction over 
health care. You see it in maternal mortality. You see it of 
course in COVID-19. You see it in out-of-pocket expenses.
    But I would like to hear our guests tell us how this is not 
just going to compound the racial disparity problem, because 
these big buyers are the ones that are trying to corner the PPE 
market and are likely to be off in the white affluent suburbs.
    Can I have a reaction from our panel on this? Dr. Grant, 
perhaps you and others could comment on it.
    Dr. Grant. Thank you, Senator Wyden. My initial response to 
that would be that I would agree with you that the lack of 
supply directly affects the ability to provide care, and 
therefore it also makes it more difficult for smaller hospitals 
such as you described to be able to compete to get the 
equipment that they need. And as a result of that, then people 
who are utilizing that particular hospital for access to health 
care, obviously they are going to suffer disproportionately 
because of the fact that they are not getting the quality of 
care that they should.
    So it just starts a snowball effect. But that would be my 
initial response to you, sir, and I can provide some other 
information to you after this meeting is over, perhaps, and as 
we look up some additional data to support that.
    Senator Wyden. I think I am at my time limit, but Chairman 
Roberts is being gracious. Would any of our other guests like 
to comment on that--Mr. Wiehe or others?
    Mr. Wiehe. Certainly I am happy to comment. I do agree with 
your comments. UC Health does serve many of the communities 
that you mentioned. But what we are trying to do, furthermore, 
is we are reaching out and we are partnering with some of our 
rural hospitals in the area, trying to help them. They 
certainly do not have the resources to bring to bear--and you 
mentioned that--to this crisis. They do not have the sourcing 
abilities and some of the other things that we can do.
    So what we try to do is help them wherever possible to 
provide supplies, where we are a bit heavy on stock. We are 
trying to provide them with trusted suppliers that we found 
through our sourcing activities. But certainly I think your 
statement is valid.
    Senator Wyden. Thank you. Thank you, Mr. Chairman.
    Mr. Johnson. ISEA would also comment on the question, if 
the chair would allow the time?
    Senator Wyden. Yes, I think Chairman Roberts probably 
will----
    Senator Roberts. Certainly; certainly. Please proceed.
    Senator Wyden. Thank you.
    Mr. Johnson. Equipment manufacturers have been very 
concerned with the design and provision of safety equipment for 
a diversifying American workforce. And certainly the stresses 
we have seen on the supply chain during the COVID crisis could 
have adverse effects on underserved communities.
    We do believe that some of the suggestions that have been 
put forward for better data collection from affected 
communities of all types across the board can help us alleviate 
some of these issues going forward.
    Senator Wyden. My time is up, Mr. Chairman. I think that 
last point by Mr. Johnson is a very good one. The tragedy is, 
after 150,000 deaths, now we are still talking about trying to 
collect data. So I thank you for the extra time, Mr. Chairman.
    Senator Roberts. Senator Wyden, we do not want to leave 
Cathy Denning out, if she would like to comment.
    Senator Wyden. Oh, yes.
    Ms. Denning. Thank you so much. We serve members from two-
bed hospitals all the way up to the largest academic medical 
centers in the country. And so our efforts have been centered 
around making sure that, to the greatest degree possible, all 
sizes of hospital providers were served.
    There is just not enough product, as we have talked about. 
In addition to that, we have realized through COVID-19--we have 
always recognized that the social indicators of health have 
been an issue. But it absolutely has shined a light on the 
disparity in the people of color area. And so we actually have 
education sessions that we do for member hospitals around this.
    It is absolutely something that we need to address. Thank 
you.
    Senator Wyden. Thank you, Mr. Chairman.
    Senator Roberts. In making my comments, I would note for 
the record I remember sometime back when we were considering 
this kind of a problem, during the Bush administration and at 
the very last of the Bush administration--this is Bush 2--the 
President indicated he wanted $8 billion from the Congress. He 
made an impassioned plea to start the work to address a 
possible pandemic.
    He said it was not a matter of ``if'' but ``when.'' He was 
pressing on that issue. Unfortunately, the Congress did not 
respond to his request, although working with the Nunn-Lugar 
program back in that day on the Emerging Threat Subcommittee of 
the Senate Armed Services Committee, I was able to go to secret 
cities in Russia at that particular time--obviously that is not 
possible today. I will comment on that later.
    But my first question is this. As we have heard from the 
testimony, the increasing demand for personal protective 
equipment, PPE, caused by the pandemic was unprecedented. And 
the strategic national stockpile, which I guess the acronym for 
that is SNS, was not intended to fill the need for every 
community across the country all at once, even though it was 
happening in every community all at once.
    So I would like to start with a high-level question. Going 
forward, should we expect and plan for this kind of spike in 
demand to happen again--I think that is probably obvious--
perhaps during the next pandemic? And then how much of that 
demand should SNS plan to cover? Could stockpiling be too much 
so as to be counterproductive?
    Cathy, why don't you start it off?
    Ms. Denning. Yes, we do believe that the strategic national 
stockpile needs to be more functional in the future. And so, 
one of the things that we have recommended is that there be a 
90-day supply of critical products--that does not mean all 
products, which you would typically use in a hospital, but 
those that certainly you need to get through a pandemic, like 
personal protective equipment, ventilators, critical drugs that 
you would need.
    In addition to that, we believe that it should be limited 
to times of disaster and, in those times of disaster, that 
there is a way for us to get those products quickly to the 
places most in need.
    Senator Roberts. I appreciate that. Robert?
    Mr. Wiehe. Thank you, Senator. I agree with Cathy's 
statement. I do believe that the national stockpile needs to be 
increased. I think 90 days is a good start.
    I would also say, I think we need the ability of a complete 
supply chain from the government. So I think major suppliers, 
similar to the pharmaceutical industry, should report out 
capabilities, whether that is capacity, whether that is stock 
or critical raw materials, so that there is a complete 
understanding when there are critical shortages even in times 
of non-pandemic--that the government has a full view of that.
    I would also roll that down the supply chain, right? There 
are possibilities to mandate--potentially to help systems, 
maybe as part of the CMS mandate--to have a certain amount of 
stock on hand. I do not think that would be completely onerous 
on the health system to have that, but I think having this 
national stockpile spread out from top to bottom in the supply 
chain would be a logical approach, as we look at this.
    Senator Roberts. Let's see, we have Charles. Why don't you 
proceed?
    Mr. Johnson. Thank you, Senator Roberts.
    The obvious answer of course is, yes. And I would go 
further to say this planning needs to be more comprehensive and 
systematic. Building on the previous panel of witnesses, this 
90-day concept is gray. I would say, ``of what?'' and ``for 
what?''
    So previously we have seen provision of the strategic 
national stockpile as a sort of one-and-done event. And that 
has led to expired product in the inventory and other systemic 
problems.
    Going forward, we need a planning process that does a 
better job of forecasting demand at a much more granular level, 
that collects information from many more stakeholders, and that 
addresses those issues with a systemic approach that prices 
preparedness in to the personal protective equipment industry.
    Senator Roberts. I appreciate that, Mister--pardon me, 
President Johnson.
    Dr. Grant?
    Dr. Grant. Yes, sir. I would also agree with the other 
members of the panel. And from our perspective, we support that 
a report that includes when items are expiring, or when they 
need to be replaced, should be included in that stockpile so 
that they are on a rotational basis.
    As you remember, some of the reports that have come out 
earlier when we were accessing the stockpile show that some of 
the materials had already expired. But as we keep a rotation of 
supplies going in, we can be assured that supplies are within 
dates. And as they are approaching their expiration date, then 
obviously those that still could serve their clinical use can 
be donated to other health-care facilities or under-served 
areas, but we want to make sure that the supplies that are in 
those stockpiles are within their use dates.
    Senator Roberts. I appreciate that. Dr. Grant--pardon me, I 
think we have already recognized you. Let me go to the next 
question really quickly.
    Several manufacturers in Kansas--and I am going to include 
South Dakota here, given that good Senator Thune is present and 
accounted for--and around the country have altered their 
manufacturing lines to help produce PPE. And several more wish 
to do so, I am sure, all around the country.
    Mr. Johnson, to what extent does getting more domestic 
manufacturers to produce PPE solve the supply chain 
difficulties? What gaps could these companies fill if lines 
were permanent? And do we see any problems along this line? 
Please?
    Mr. Johnson. Thank you, Senator Roberts. ISEA and our 
members produce in the U.S. We source internationally, some of 
us, and some of us are international conglomerates.
    Our first answer to that question is that increased support 
for domestic production can be ``an'' answer to future 
preparedness, but it is not ``the'' answer to future 
preparedness.
    Nothing takes the place of proper preparedness planning and 
provisioning in the future. Now with that said, domestic 
support and diversification of the supply chain are an obvious 
plus for the future. And I would once again highlight that a 
systemic approach to domestic support for the industry will be 
needed in order to make sure that those producers can stay in 
business over the long term.
    We have seen in previous pandemics that the incredible 
increase during the emergency leads to huge overhangs of 
inventory. And those types of strategies that lead to those 
large overhangs are a perfect way to put that capacity out of 
business so that it is not available in subsequent emergencies.
    Senator Roberts. With apologies to Senator Carper, who is 
anxiously waiting virtually, I want to finish up what I 
mentioned at the first. Back in the day under Nunn-Lugar, I had 
the privilege of visiting a secret city in Russia. Those are 
closed now, of course. But this was a community, or a 
``center,'' if you will, in Obelinsk, where they were--in terms 
of going in, we were really trying to help those folks keep 
security and keep these scientists onboard back when the Soviet 
Union fractured. And there were warehouses full of all sorts of 
pathogens designed to attack a nation's food supply.
    Now this is an attack, and I guess you could say that, if 
you really want to stretch this, you could involve China and 
the United States with this, or the rest of the world. But what 
worries me is that we had DHS, HHS, and the Department of 
Agriculture all involved. We had an exercise in that regard, 
and it was with the livestock community with hoof and mouth 
disease.
    We lost almost every head of cattle in the country. All of 
our exports stopped. The shelves of our grocery stores were 
empty. Would any of you like to comment? Obviously we would 
have a serious problem there, given the fact you would have to 
use the military. But have you thought about that kind of a 
circumstance which would be sort of an Armageddon with regards 
to the situation with a pandemic? And since you answered last, 
I think I will ask Charles to respond to that.
    Mr. Johnson. Yes, our industry does contemplate abnormal 
surge demand in the future and the inventories that are needed 
to address it.
    I would return to the concept that no matter where 
production is located, it will scale itself to the regular 
demand of the market that it serves. And so to deal with these 
issues of large inventory management that is meant to service 
the surge demand of a large-scale emergency, we have to first 
have the imagination to contemplate those future emergencies. 
And then we have to have a rigorous planning program in place 
that quantifies the needs, and then signals those needs to the 
manufacturing industry and supports the production of the 
materials that are needed to respond, or to serve that 
stockpile. And certainly overshoots are possible and 
deleterious.
    Senator Roberts. I appreciate that very much.
    Let's see, we have Senator Carper. Senator, I apologize for 
going over time.
    Senator Carper. That is quite all right. You are a 
chairman. You can go as long as you want.
    To our witnesses, especially the ones from the Queen City 
of Cincinnati, we welcome you. I am an Ohio State boy, and I am 
just glad to have a Buckeye in the house. Thank you all for 
joining us from around the----
    Senator Roberts. Tom, let me interrupt you. We need to get 
sound up, if we can, on behalf of Senator Carper.
    Tom, can you speak up a little bit?
    Senator Carper. Yes, I can. I want to start by--for my 
sound check, I want to quote Einstein. Einstein used to say 
that the definition of insanity is to do the same thing over 
and over again and expect a different--what?--result. Einstein 
also said, ``In adversity lies opportunity.''
    We are facing one heck of a lot of adversity here, but 
there is also some opportunity as well. And I want us to focus 
a little bit on that opportunity.
    Now was that--in terms of my sound, was that any better, 
Mr. Chairman?
    Senator Roberts. I'm sorry, Senator, not at least as far as 
I am concerned. We are having some problems.
    [Pause.]
    Senator Carper. I am going to try--I have a Lavalier mic 
on. I am just using that. Is that any better?
    Senator Roberts. Senator, pardon me. I asked them to turn 
the sound up, so now we have an echo. But at any rate, what is 
your specific question? If you want additional time, you can 
have it, or if you want to reserve your time, you can have it.
    Senator Carper. I want to make sure you can hear me. Can 
you hear me?
    Senator Roberts. Yes. Yes, we are in good shape right now.
    Senator Carper. Thanks so much.
    Senator Roberts. Thank you.
    Senator Carper. This Lavalier mic has helped. I was quoting 
Einstein for part of my sound check, and a couple of Einstein 
quotes: the definition of insanity is to do the same thing over 
and over again and expect different results. The other Einstein 
quote: in adversity lies opportunity.
    Given all the adversity we have, there has to be some 
opportunity as well. And one of the great things about this 
panel is, you can help us to identify some of that opportunity.
    We continue to hear from the administration about how good 
the response has been to the coronavirus pandemic, yet the U.S. 
continues to be the country with less than 5 percent of the 
world's population and over 25 percent of the deaths around the 
world. And since March, my colleagues and I have been calling 
on our President to invoke something called the Defense 
Production Act to expedite production of much-needed medical 
supplies. And almost 5 months later, the country is still faced 
with PPE shortages, and you have shared responses about results 
today. And we certainly see that in Delaware as well. But we 
thank you for joining us, and I want to thank our chair and 
ranking member for bringing us together.
    Sometimes when we have a panel like this with really smart 
people and a big problem to solve, I will ask, where do you 
agree? For each of you, give me one example where you agree. 
You heard one another's testimony, things we ought to do more 
of, less of. Where do you find there is a consensus in maybe 
one area, Ms. Denning, that you would really especially 
recommend we take action on, really follow up on? Ms. Denning?
    [Pause.]
    Dr. Grant. If I may be at liberty to answer the question 
first, I believe that more transparency in reporting is needed 
to help fix the supply strain that is going on. You know, 
obviously the reduction of competition between the State and 
Federal Governments, which is also causing problems with 
health-care facilities having to bid against larger entities. 
That is obviously driving up the cost of the mask, and 
sometimes driving it out to where they are not able to make 
those purchases.
    So I would think that more transparency and being able to 
work together so that everyone can get a piece of that.
    Senator Carper. Thank you, Dr. Grant. I think that--Cathy 
Denning, you are next--I think that was like maybe the first 
point that you made. Is that correct?
    Ms. Denning. That is correct. We believe that not just 
transparency for certain agencies, but for everybody really 
around where the product is manufactured, where those raw 
materials come from, how you get it through the supply chain. 
And really, we ask suppliers to provide us with the time that 
it leaves the manufacturer to the dock of that hospital. We 
have had a very hard time getting that information.
    I think the other things that I would add--transparency is 
one part of resilience. But also we need a global supply chain 
that is redundant, with an increased domestic footprint.
    We do not believe that even if we wanted to, tomorrow we 
could add all of our manufacturing back onshore, but we do 
believe that there is an opportunity to significantly increase 
that. Vizient actually has gone at risk with several domestic 
manufacturers guaranteeing the purchase of their product if 
they would bring up lines in North America.
    We can do more of that. It certainly is a gap filler, but 
we have made long-term commitments to those companies, and I 
think that is something, echoing Dr. Grant, that we would need 
to make sure of, that there is an opportunity for hospitals to 
continue to buy products as we are----
    Senator Carper. I am going to ask you to hold it right 
there, please. We need to have time for these other folks. They 
will not be very happy. They will go home sad.
    Robert Wiehe from--where are you from? Where are you today, 
Mr. Wiehe?
    Mr. Wiehe. I am in Cincinnati, OH, Senator.
    Senator Carper. Okay, good; a buckeye.
    Mr. Wiehe. Thank you for your thought for the Queen City.
    Senator Carper. You bet. You bet.
    Mr. Wiehe. I think my response would be very similar. Thank 
you.
    Senator Carper. All right. We are hearing greater 
transparency. We are hearing redundancy from two of our 
witnesses. Would you agree with that?
    Mr. Wiehe. I agree completely. I think, as was stated 
previously, there is no wrong answer here, right? I think 
transparency is critical. And that transparency is not just 
from the supplier base, but from the demand side as well.
    We need to be consistent in what we are telling folks is 
needed.
    Senator Carper. Charles Johnson?
    Mr. Johnson. I would echo that last thought. I think that 
we are all in violent agreement on this transparency and data 
issue. I think that we all----
    Senator Carper. I love that term, ``violent agreement.'' 
That is wonderful.
    Mr. Johnson. We see it all from different facets of the 
same issue. From the manufacturing side, what we have really 
learned through the COVID crisis is that we need a lot more 
transparency about the demand signals coming from users. 
Because without that, industry is flying blind, and 
distributors are flying blind.
    And so from our point of view, that transparency applies to 
communication up the supply chain from the users, from the 
States, and from the various actors that are at the other end 
of the supply chain.
    Senator Carper. All right. I would ask one more question, 
if I could. I think I have some time.
    Coordination of the Federal Government--this would be for 
you, Mr. Johnson. My staff and I have spent a fair amount of 
time--and I am sure other staffs and the members have too--
since this pandemic began, working with the FDA, working with 
CBP, and even the State Department, to try to retrieve 
shipments of medical supplies and test kits that have been 
blocked by Federal Government officials.
    During any global pandemic, we ought to expect new 
technologies and supply chain backlogs that challenge our 
regulatory systems and overload our border checkpoints.
    Having said that, I know we can do better. In your view, 
what sort of coordination is needed to ensure that delays are 
minimized, appropriate treatments and tests are approved, and 
regulations are clearly communicated for those attempting to 
provide our front-line workers with needed supplies?
    Mr. Johnson?
    Mr. Johnson. That is a great question, and thank you for 
asking the question, Senator.
    The ISEA and our members have had a long and productive 
partnership with various Federal agencies that manage the 
certification of, the approval of, and the regulation of safety 
equipment.
    Greater coordination between those agencies during the 
COVID crisis could help other entities that are policing the 
U.S. border--or are surveilling the U.S. market--to carry out 
those activities. We have seen unintended consequences during 
the COVID outbreak.
    We have seen shipments of legitimate product held at the 
U.S. border. In some cases, this was because they were 
erroneously thought to be classified as medical products by the 
FDA and thus would need FDA approval for movement across the 
border, when that was not in fact the case.
    ISEA has been able to help in those situations, but clearly 
the fact that it occurred to begin with points to the fact that 
we need better communication about the legitimacy of safety 
equipment products and the proper processes for policing those 
issues when they do occur.
    Senator Carper. Mr. Johnson, I am going to ask you to wrap 
it up right there. My time has expired.
    Mr. Chairman, thanks so much for your generosity with the 
time. My thanks to the witnesses. Great to see you all. Hope to 
be able to thank you in person for the great work you are doing 
around the country. God bless.
    Senator Roberts. Thank you, Senator. And we are going now 
to Senator Cassidy, who is going to assume the role of acting 
chairman. Senator Cassidy, as I understand it, will be with us 
virtually. Senator Cassidy?
    Senator Cassidy [presiding]. Senator Roberts, thank you. 
And now it is Senator Cardin's turn to ask the questions.
    Senator Cardin. Thank you very much, Mr. Chairman. And let 
me thank all of our witnesses. This is a very, very important 
issue, for us to get the supply chain right.
    I am just going to start off by giving one example from one 
of our hospital groups in Maryland, and they gave me their 
dollar numbers in regards to what is happening with PPE.
    Face masks have gone up 20 times. Face shields have gone up 
5 times. Respirators have gone up 10 times in cost. Isolation 
gowns, 10 times in cost. And gloves, 4 times in cost.
    So where their 2019 total expenses for PPE were about 
$800,000, so far, in the first 5 months, their costs are $11 
million. Now part of that is volume, and part of that is the 
extraordinary increase in costs because of the inadequacy of 
the supply chain.
    I want to concentrate on an issue that some of you have 
already touched upon. Senator Wyden brought this up. And that 
is, the disparate impact it has on minority communities and 
under-served communities.
    Senator Menendez and I have introduced legislation to deal 
with the COVID response to minority communities, recognizing 
that they have suffered more on a population basis from COVID-
19, but also the distribution of PPE and many other issues, the 
testing supplies--all that has put these communities at greater 
risk.
    You all have acknowledged that, but you have not given us a 
plan to try to counter that, other than the general issues of 
dealing with the supply chain, which I strongly support. But I 
can tell you that if we just deal with the supply chain, we 
will not be dealing with the unique problems we have in under-
served communities. They still will not get the same quality 
and quantity of PPE, and they certainly will not get the same 
access to testing and health care.
    So can you give me some concrete suggestions on how we 
should target our response to deal with the under-served 
communities and the minority communities?
    I think I will start first with Dr. Grant, if I might. If 
you could help me on this, I would appreciate it, because we 
are looking for specific ways we can target the help to those 
communities that have suffered the most.
    Dr. Grant. Thank you, Senator. I would be happy to give you 
some suggestions that we feel would be most helpful.
    The first is, obviously there needs to be a stronger 
investment within the public health sector. I believe that 
public health funding has been cut dramatically since, probably 
about 2008. So an investment in that would allow for more 
nurses to be in the community to promote the help in health 
care that is needed.
    Obviously investing more in testing, and test follow-up, or 
contact tracing follow-up is extremely important as well. And 
again, having enough funding for nurses to be able to do that.
    And I think the third thing would be--I cannot emphasize 
enough--for nurses to be at the table when these decisions are 
being made. When you have local committees, or even at the 
State level, as they are identifying these communities of high 
risk, the nurses know the communities very well and can 
identify either potential hot spots or how to access those 
communities. So it is extremely important, I believe, that we 
take those two things into consideration as we are looking at 
ways to invest in the disparate communities.
    Senator Cardin. That is very helpful. Let me just point out 
another serious challenge we have. We find that minorities have 
much higher representation in industries in which they have 
essential workers who have worked--we had significant problems 
in some of those plants in Maryland. And we found that those 
employers either were not in the position, or did not pay 
attention to having adequate protective equipment for those 
workers.
    So let me just drill down as to what role the Federal 
Government has, either in requiring or help with financing to 
make sure that those vulnerable workers have the protective 
equipment they need.
    We know we have the health-care workers, and they are not 
receiving the adequate supplies. We know we have the nursing 
homes, included under the health-care workers, that have been 
made vulnerable. But we also have businesses that have been 
there providing essential employment, but they have not had the 
ready supply of quality equipment for their workers.
    And is there a role for the Federal Government to play, 
either in regulation or in financing, or both, in order to 
provide better protection for these essential workers who may 
not quite have the same voice for protection as other workers 
have?
    Dr. Grant. I would agree with you, Senator, that there is a 
role, such as perhaps congressional oversight, as well as 
adequate funding to ensure that relevant agencies are able to 
stay focused and follow through at the local level to ensure 
that the services that need to be offered at the local or 
regional level are done to the fullest of their capacities. So 
yes, I would wholeheartedly agree with your comments, sir.
    Senator Cardin. Thank you. And let me again thank all the 
witnesses. And, Mr. Chairman, I will yield back my time. Thank 
you.
    Senator Cassidy. I have to be here, so I am going to allow 
my colleagues to go before me. So, Senator Brown, I will call 
upon you now.
    Senator Brown. Thank you, Mr. Chairman, and thanks for----
    Senator Cassidy. Excuse me, Senator Brown. Can we reset the 
clock, please? There you go. Okay, Senator Brown; I am sorry. 
Go ahead.
    Senator Brown. Thank you. And thanks for your generosity, 
Mr. Chairman.
    Mr. Wiehe, thank you for the work you do in Cincinnati. We 
know the failures, and I hear far too many times people--
whether they are working in hospitals or working in grocery 
stores, whether they are bus drivers or custodians or security 
workers or food preparers--simply have not gotten the masks and 
the other kinds of protective equipment they need due to a 
failure of the President when, back in March, we asked the 
President to begin to use the Defense Production Act and to 
scale up both testing and things like producing cotton swabs 
and protective equipment. And the fact that we are still 
struggling as this outbreak continues speaks to that.
    I wanted to ask you, Mr. Wiehe, as the Federal Government 
works to strengthen the strategic national stockpile or 
domestic supply chain, what should we prioritize?
    Mr. Wiehe. Thank you, Senator Brown. Again, I am going to 
sound a bit redundant with my response. I think transparency 
and communication have got to be strengthened. And I am going 
to elaborate on that a bit more than I have.
    While we have received some goods from the strategic 
national stockpile, they have been sporadic; they have been 
unannounced. For a supply chain leader, when you are not able 
to plan because you do not know what is coming, you have to 
assume it is not coming, right? So it leads to us procuring all 
of our needs versus maybe relying on something else.
    I think that leads to competition. So I think the 
transparency and good communication about the strategic 
national stockpile has to be improved. We have to understand it 
a little bit better. We have to understand what is forthcoming, 
or how we can rely upon it. I do think, as we have talked about 
earlier, that resiliency in bringing some or all of the 
production regionally into North America, or into the United 
States, is critical because that allows a supply chain a much 
faster response time when there is a period of demand that we 
have not seen in the past.
    I think, lastly, just having the right quantities in the 
stockpile, having goods that are not expired--and again, so 
that we are not competing with the government and the private 
sector for those same goods when a pandemic or another crisis 
hits. That is crucial.
    Senator Brown. Thank you, Mr. Wiehe. Thank you for that. I 
introduced yesterday the Protecting American Heroes Act, which 
would increase U.S. production of PPE and other critical items 
in the strategic national stockpile. And the legislation would 
strengthen the supply chain resiliency and make sure we are 
better prepared for a pandemic. So I look forward to working 
with you, and UC, and others. So thank you for that.
    Dr. Grant, in testimony you submitted to the House Energy 
and Commerce Committee hearing earlier this year on health-care 
inequality, you urged Congress to identify and address racial 
disparities in its Federal response to COVID-19. Thanks for 
your dedication to addressing that.
    How does Congress ensure future policy decisions--from 
those specific to COVID-19 to those designed to eliminate 
racial disparities--how do we ensure those decisions are 
informed by diverse scholars and experts, including our 
Nation's nurses?
    Dr. Grant?
    Dr. Grant. Thank you for that question, Senator.
    I would say that one of the best ways that Congress can 
ensure that is, obviously, funding that would ensure that 
health disparities are addressed and become a top priority and 
not just a sub-tier priority. But particularly illnesses that 
affect minority communities, and the disparate communities, 
that those issues are addressed, and that we see a change in 
the focus of health care--mainly, a focus towards prevention 
and education in those particular areas so that better health 
and better care can be provided for everyone.
    Senator Brown. Thank you, Dr. Grant.
    In closing, Senator Cassidy, I would like to briefly 
comment on something the President said in a news conference 
yesterday afternoon.
    He said, and I quote, ``We've replenished the long-
neglected national stockpile. In January, the stockpile had 
17,000,095 masks. Today the stockpile has over 50 million 
masks. We will be doubling that in a very short period of time. 
And then doubling that number again,'' is the President's 
quote.
    If that is true, the question is--to no one in particular--
but the question is, why on earth are we still forcing our 
nurses to use poor quality PPE or to re-use their equipment? I 
mean, it again sends the message to workers in this country 
that we may call them essential but they really seem 
expendable. And Congress needs to do something about that.
    Thank you, Mr. Chairman. Thank you, Mr. Wiehe and Dr. 
Grant.
    Senator Cassidy. Thank you, Senator Brown. The time has 
expired. Senator Brown, did you want an answer to that, or can 
we go to Senator Cortez Masto?
    Senator Brown. No, I was really just putting the question 
out there of, what are we doing? So thank you, Mr. Chairman.
    Senator Cassidy. Okay, your time has expired. Thank you, 
sir. Senator Cortez Masto?
    Senator Cortez Masto. Thank you, Mr. Chairman.
    Thank you all for participating today. I can tell you, the 
conversation we are having today is the same conversation we 
are having in the States. And I think every State and every 
local government, everybody is competing with one another----
    Senator Cassidy. Excuse me, Senator Cortez Masto. Can 
somebody start the clock, please? Got it. Okay, I am sorry.
    Senator Cortez Masto. You bet. Thank you.
    So I am a firm believer that we should have fully invoked 
the Defense Production Act, and that would have addressed all 
of the concerns we are hearing about right now. So I appreciate 
the conversations we are having.
    And let me just say for the record as well, in the State of 
Nevada, what you are talking about with the lack of 
communication from Federal agencies, we are seeing it. We had 
to compete to get PPE in the private sector, which was held up 
at the border.
    And then we, thank goodness, had a good working 
relationship with our FEMA regional director who helped us move 
it from the border to get it to Nevada. I mean, everything that 
you are all saying is absolutely happening in all of our 
communities. I cannot thank you enough for using your voices to 
really stress this, and why we need to fully invoke the Defense 
Production Act, and why we need one single command and control 
over all of the supply chain, from the PPE to the tests to 
everything else.
    We as a country have done it in the past, and that is why 
we should be doing it now. So my question to all of you on the 
panel is, is it too late? Is it too late for us to fully invoke 
the Defense Production Act and address all of the concerns that 
we are hearing now?
    Let me just open it up. Let me start with Ms. Denning.
    Ms. Denning. Thank you, Senator. What I would say is, I am 
not familiar with all of the nuances of the Defense Production 
Act, but any time that we can increase production and make 
available products that are critically needed by the front-line 
health-care workers, and the public in general, I would support 
that.
    I will give you a statistic. I heard you talk about the 
N95s. Here at Vizient, we have been tracking what the use is of 
N95 masks. So to give you an example, normally our hospitals, 
which represent 50 percent of those acute-care centers in the 
country, would need 50 million N95 masks in a year.
    Most recently, our count for this year alone is up to half 
a billion--so, 500 million masks. So when you think about how 
staggering that is, that need of the hospital, anything we can 
do to meet that need in any way, I would support.
    Senator Cortez Masto. Thank you. Let me go to the rest. Mr. 
Johnson?
    Mr. Johnson. Yes, thank you for that.
    I want to stress that our members and our Association have 
been active and positive participants in the DPA process that 
has been in use, and we stand ready to partner with the Federal 
Government if it is invoked further in the future.
    And we can say unequivocally that it has helped. And there 
is new capacity that is coming online through the use of the 
DPA. We would also say, as an industry, that the DPA is not 
magic. It cannot stretch back into the past and make production 
lines appear out of thin air.
    And so I would say that, given what it can do and is doing, 
and if there are future solutions that are proposed for the use 
of the DPA, we would absolutely want to partner there. But 
command and control for capacity that does not exist is not a 
solution.
    So again, we are positive and active participants in this 
process. We want to partner more in the future, and we 
absolutely will. But we want to stress that it cannot make 
production appear out of thin air.
    Senator Cortez Masto. Right. And that is the problem, 
right? I mean, that is what we knew going into this from the 
very beginning. It was about production. Yes, command and 
control is important, but it starts with that production and 
that capacity, and controlling it.
    I mean, again, we have done it before as a country. We did 
it with the Jeep, right? And so what we know is, it is doable, 
and that is the whole reason we have this act. But let me move 
on here, because I only have so much time.
    And let me ask, Dr. Grant, I think we all are so deeply 
concerned about the impact that this pandemic is placing on our 
health-care workers, our nurses, everybody on the front lines 
who are the true heroes.
    But let us talk a little bit about the psychological toll 
on nurses who are caring for patients through the pandemic. 
What can we do to address the mental health needs of nurses and 
other health providers that we should be aware of? And what 
more can we do? Because we know that, besides being on those 
front lines, they are also dealing with emotional issues when 
it comes to individuals who are positive for COVID-19.
    Dr. Grant. Thank you, Senator. I would like to emphasize 
the need for more spending on mental health services for front-
line workers. This pandemic, as you have stated, has placed a 
tremendous strain on providers, including the registered nurses 
who provide the individual care.
    Our foundation has actually recently just completed a 
survey, and over 75 percent of the people who responded to that 
survey are showing high stress, post-traumatic stress: not 
being able to sleep, not being able to eat, or sleeping too 
long, short tempers, et cetera.
    And what this does is, it leads into the fact that when 
they do go to work, they are not able to work as effectively as 
they can as a result of this. So definitely more funding is 
warranted to address the mental health needs of the people who 
are on the front line.
    The downside to that, unfortunately, may be that more 
people may choose to leave the profession, and Lord knows we 
need all the nurses that we have at this particular point in 
time. So I am extremely concerned about the mental health needs 
of our front-line providers.
    Senator Cortez Masto. Thank you. I know my time is up. 
Thank you so much.
    Senator Cassidy. Thank you. Senator Casey?
    [Pause.]
    Senator Cassidy. Senator Casey, you are muted.
    Senator Casey. Oh. Okay now?
    Senator Cassidy. You've got it.
    Senator Casey. Thank you, Mr. Chairman. I want to thank the 
witnesses for their testimony and their ongoing work on this 
issue. And we can recite chapter and verse about the failures 
of the last several months, and they are many on PPE.
    But we also have to acknowledge that we have not had the 
manufacturing capacity in place to meet the demand. So we hear 
from, as every Senator does, hospitals and nursing homes and 
all kinds of settings. And frankly, we need a whole new 
industrial policy when it comes to PPE. We have to stop 
thinking about this in terms of months or years. We need to be 
building up for decades of PPE.
    That is my view of it. But we are hearing a lot about 
strengthening the supply chain. We are hearing about stopping 
counterfeit products, both of which are critical debates to 
have. But we are also hearing a little bit, and frankly not 
enough, about investing in the next generation of PPE.
    So I am going to start with Mr. Johnson. We have been 
considering today the challenges with supply and quality 
control as it relates to PPE, and the critical role it plays. 
But I want to ask you a question about innovation.
    What is the status of PPE innovation right now? If you 
could, kind of outline that for us.
    Mr. Johnson. That is a wonderful question, and thank you 
for that. The PPE industry is always innovating. And even 
during the COVID crisis, new solutions and alternatives have 
been brought to market. And solutions that were used in other 
sectors have been redirected into the COVID crisis response.
    And so that innovation is always occurring. And I would 
say, proudly, that ISEA members, and U.S.-based personal 
protective equipment manufacturers, are world leaders in 
innovation in this space. And that is the strength of the U.S. 
PPE industry.
    So we are already making those investments, and we are 
already looking forward into what the next generation of PPE 
may look like. We are also working especially for respirators, 
which have been so much in discussion during this pandemic. We 
are working closely with the regulatory bodies that also carry 
out research in that area. And we fully support funding for 
those agencies. And I am speaking specifically for the National 
Institute for Occupational Safety and Health, and NPPTL, where 
respirator certification and research takes place.
    Senator Casey. Mr. Johnson, what, if any--and I hope the 
answer is there are not--but what, if any, barriers exist to 
PPE innovation?
    Mr. Johnson. That is also a great question. Barriers do 
exist. The certification process for respirators is a process 
that we have worked closely with the Federal Government on in 
the past. It is a process that has in the past suffered from 
long lead times.
    I would note that proper funding for the agencies that 
carry out that work, so that they can carry out their mission, 
so that new and innovative products can be brought to market 
faster, would be a great intervention to help innovation in 
this space.
    Senator Casey. Thanks very much. I want to move in the 
remaining time I have to Dr. Grant.
    We know from some of the background materials you have 
provided that health-care workers are concerned about both 
quality and durability of some foreign-made equipment. We have 
also been hearing from front-line workers that, as they wear 
the PPE over many hours or days, their masks become 
uncomfortable and cause long-lasting skin irritations.
    What have you heard from nurses about improving the design 
of PPE for health-care workers?
    Dr. Grant. Thank you, Senator. We have had a couple of 
comments from nurses, you know, asking for ways to try to be in 
on such a design change, if you will. Obviously, wearing a mask 
for up to 12 to 16 hours a day, you are correct in that it does 
leave an imprint in the face. It also causes hypersensitivity 
reaction to the skin.
    And again, you are looking at masks that are just designed 
to be used once and thrown away. So the fact that we are re-
using them and, depending on what they may be decontaminated 
with, as well as what may be remaining in the material, could 
be causing that irritation.
    So we would welcome the opportunity to get with the 
manufacturers and see if there is something that we could do 
that would help to minimize such reactions from occurring.
    Senator Casey. Thank you, Doctor. Thank you, Mr. Chairman.
    Senator Cassidy. Senator Whitehouse?
    Senator Whitehouse. Thank you, Chairman Cassidy, and thank 
you to the witnesses who are here.
    We had some pretty compelling testimony yesterday about the 
state of the PPE market. It was described as being rife with 
counterfeiting, with crime, with price gouging. Several 
investigative efforts have been stood up to try to deal with 
the criminal activity that runs throughout this market.
    And I wanted to ask the witnesses--so I will start with Dr. 
Grant, if I may--for their view of what this PPE marketplace 
looks like. And I will say, by way of introduction, that from 
Rhode Island, which has actually handled the COVID crisis 
better than most States, we are seeing descriptions of this 
marketplace that are chilling.
    People refer to it as ``the dark side,'' as ``dog-eat-
dog,'' as ``Lord of the Flies competition.'' And if you would 
take a second and think about it, if the market is that toxic, 
it does not just affect the demand side--the hospitals that are 
thrown into this mess trying to fend for themselves and find 
their own equipment--it also affects the supply side. We have a 
powerful textile industry in Rhode Island. They are trying to 
find their way in. But it is very hard to not know whether you 
are qualified, to not know what the standards are, to not be 
able to get in touch with somebody who can assure you that your 
product will sell, to not know that there will be a market for 
it.
    My thesis here, from what I have been seeing in Rhode 
Island, is that when a market goes toxic--and my belief is that 
this one has gone toxic--it not only discourages the demand 
side of the market, it discourages the supply side of the 
market.
    All of this could have been resolved by a more potent, 
forceful, and sensible executive branch response, but let us 
not get into that. Let us just focus on--to your people, what 
does this market look like? And does this ``dark side,'' ``dog-
eat-dog,'' ``Lord of the Flies'' terminology pertain from your 
perspective?
    Dr. Grant. Thank you for the question, Senator. From the 
perspective of the nurses and other front-line workers, this 
creates a lot of concern because, obviously if you are getting 
equipment that is not in good quality, that does not fit very 
well, then of course you are concerned about the possibility 
that while you are actively taking care of someone who has a 
known case of COVID-19, what is the potential if there is a 
break in that seal, if you will, that now you are at increased 
risk for that?
    Obviously, as there is also more of increased demand or 
more people getting in on the black market, then that means 
that perhaps less quality equipment is getting there. I also 
have been told from staff that a public affairs firm is working 
to try to get PPE into the giant box store corporations, and 
that is causing a great deal of concern, because I am worried 
about the fact that now large box chains will be able to outbid 
hospital systems and take more masks away from them or continue 
to drive the price up.
    So your comments are very well-founded, sir, and it does 
cause an extreme concern for me and for those who are on the 
front line that not having, not only quality but quantities of 
PPE that they need to do their job and do it effectively, is 
going to create more psychological impact. And as I stated 
earlier, the possibility is that some nurses may choose to 
leave the profession, which is of grave concern to me.
    Senator Whitehouse. Mr. Chairman, if I could, I would like 
to ask the remaining witnesses to take this as a question for 
the record and offer a written response, if they would care to, 
because my time is running out. But I would point out, in my 
last 40 seconds, that in Rhode Island--again, less hard hit 
than many places; more successful in dealing with it than many 
places--we had PPE trucks from FEMA show up empty.
    We had deliveries to our providers of counterfeit and 
defective goods. We had people who had to offer payment for 
products in order to get in line, and the products never showed 
up. The thing was a scam. And then they have had to fight to 
get their payments back.
    The market, I believe, is toxic. And it is toxic because of 
an absence of Federal leadership to oversee a legitimate market 
with proper supply and demand.
    And with that, I will leave it to the witnesses to provide 
the written responses, and I thank the chairman.
    [The responses appear in the appendix.]
    Senator Cassidy. Thank you very much, Senator Whitehouse.
    Senator Hassan?
    Senator Hassan. Well, thank you very much, Chairman 
Cassidy, and to the ranking member, and to all of the 
witnesses. Thank you for participating today.
    The challenges we have heard about from our witnesses today 
clearly convey the shortcomings of our current supply chain. 
And I will add to what my colleagues have already said. It 
reinforces the need for this administration to take strong 
action to support the acquisition and distribution of medical 
supplies, including personal protective equipment.
    At any point over the past 5 months, this administration 
could have invoked the Defense Production Act. And I will 
continue to call on them to take that step, which would provide 
support to health-care workers, hospitals, and suppliers and 
would address many of the issues that we are hearing about 
today.
    And I also just want to add that, while we are focused on 
the health-care sector today, I spent time this week talking 
with my education leaders in New Hampshire, and they are going 
to need PPE if we are in fact reopening our schools for 
physical attendance this year.
    And that again adds a whole other source of demand in an 
already highly stressed system. So my first question is to Ms. 
Denning.
    Given the increase in demand for personal protective 
equipment and the challenges facing our supply chain, group 
purchasing organizations have had to adjust their allocations 
to health-care facilities, which means their customers are 
almost universally receiving less than what they order. How are 
you prioritizing these allocations to ensure that PPE and other 
essential supplies are getting to facilities that are 
experiencing shortages or are in the midst of a COVID-19 surge 
in their community?
    Ms. Denning. Thank you, Senator Hassan. We do not actually 
set allocations; the manufacturers and the distributors work 
together to do that. What we identified is that, regardless of 
historical usage--so your allocation is based on your 3 prior 
months of usage--there just is not enough allocation to a 
particular health-care facility to meet the demand.
    So when we find that a member--we call them members--a 
member provider is short on product, they will reach out to us. 
We work with the suppliers and those distributors to identify 
product that is potentially available and help get that to them 
in the most efficient and effective and quickest manner.
    Just this week, we had a large hospital system down in 
southern Florida that had 3 days' worth of exam gloves left, 
and so we worked with a new supplier that we had done a 
contract with to get them supply. I will tell you, there just 
is not enough supply right now.
    Senator Hassan. But let me ask you, then--this is a follow-
up. I am sure it is incredibly difficult to balance all of this 
as a purchaser, but is the Federal Government helping you 
identify and prioritize facilities that are facing the most 
urgent need for supplies? And how has uncertainty impacted your 
acquisition costs?
    Ms. Denning. Yes. The Federal Government has not stepped in 
to help us, but they have stepped in to help different 
hospitals. We have heard about FEMA helping them. We have 
worked with FDA and Customs and Border Patrol, OSHA, in order 
to ensure that information was available and if we had products 
that were not getting across the border.
    It has impacted us from a cost perspective. I will echo 
what everybody has said. The underbelly of the supply area has 
come out through this. And so we see people trying to 
profiteer. Vizient, though, does not do contracts with those 
gray market suppliers.
    We work with bona fide, known suppliers and attempt to find 
a middle ground to make sure that we continue to have supply 
for the increasing and ongoing demand at a fair price for 
everybody, given the current market.
    Senator Hassan. Understood. And has that lack of 
centralized Federal planning to sourcing and allocating 
personal protective equipment impacted your ability to source 
products from your traditional suppliers or identify new 
suppliers of safe products?
    And just quickly, please, because I need to move on to one 
other question.
    Ms. Denning. Yes. I think we could have done better there.
    Senator Hassan. Dr. Grant, I just wanted to add my thanks 
to you and the nurses all across the country who are putting 
their own health on the line in order to respond on the front 
lines to the COVID-19 pandemic. We are very, very grateful for 
the work you are doing.
    We have certainly been hearing from health-care workers 
about how this virus will impact their own health and that of 
their families, and how these challenges have been more 
difficult in an environment where access to PPE has become less 
certain.
    We know that there is enormous stress and strain and mental 
health challenges as a result on the front-line nursing 
workforce, but could you address, sir, just how the uncertainty 
about how much personal protective equipment, what kind and 
quality of personal protective equipment you are getting, and 
the need to re-use it when it is not traditional practice to 
re-use it has affected the mental health and the trauma that 
your members are experiencing?
    Dr. Grant. Thank you, Senator. As I pointed out in my 
opening statement, about 59 percent of nurses who responded to 
a survey that we did stated that their use, or re-use, of a 
mask that has been sterilized makes them feel unsafe.
    When they are feeling unsafe, then that is in the back of 
their mind, which also may interfere with their ability to 
perform their job effectively. There is always that potential 
question of, is this the time that perhaps I may catch the 
virus, as opposed to knowing that I am using a brand-new mask 
to reduce that chance?
    So it is very, very stressful for them. And this is why we 
are advocating that we increase the supply chain so that nurses 
are able to get a new mask every time that they can, as opposed 
to sometimes being forced to keep the same mask for up to 10 
days to 2 weeks. It is just really unconscionable that it is 
being asked of a health-care provider to do that.
    We do not send firefighters into fight a fire without the 
proper gear. The same thing with nurses: they want to be able 
to do their job. They just need the proper equipment to be able 
to do that.
    Senator Hassan. Thank you. And thank you, Mr. Chairman; I 
went over. I appreciate it.
    Senator Cassidy. Senator Portman?
    Senator Portman. Thank you, Mr. Chairman.
    First of all, Rob Wiehe, thank you for coming to testify. 
It has been great working with you and Dr. Lofgren and other 
folks at the University of Cincinnati over the past few months 
to address this unprecedented pandemic.
    And I was pleased that we were able to get the great 
testing equipment, way back in March. You all contacted me and 
said that you had ordered a test, and that you were told by the 
folks, at Roche in this case, that they had to take the test 
somewhere else at a time when we were desperately needing it in 
the southwest Ohio region.
    So I am glad we were able to get that test by getting HHS 
involved. And I am glad we have great testing in Ohio. We have 
now gone from about 8,000 tests a day to about 22,000 tests a 
day. I think that was the average the last week, in the space 
of about 6 weeks, and that was needed.
    The problem is, the people are not getting the results 
quickly enough. And I want to talk to you about that. That is 
certainly the information I have. Some of it is anecdotal, I 
will acknowledge, but it is basically people who say, ``Look, I 
can now get a test. I went to the pop-up testing center.'' I am 
glad we have those now, and we have used some Federal money for 
that, some of the money that came out of the CARES Act, but we 
have to know the results more quickly than 6 to 8 days in order 
for it to be effective.
    Someone told me about their kid who had to take a test in 
order to go back to a sports team, but the results came so late 
that they had to be re-tested again. And I do not get that. I 
mean, we are finally getting the testing up to where we all 
want it in our States. I would still like to see even more 
testing, because I think that is essential to getting us back 
to work safely, and back to school, and back to using health-
care facilities, and in general leading a more normal life. But 
I think that not having the ability to get the results quickly 
enough really undermines those efforts.
    And again, in some cases people have had to test and re-
test, including some of the companies that have asked for 
testing, and I am just talking about the diagnostic test here. 
I am not even talking about the immunity test, which has other 
issues we can talk about in terms of its accuracy.
    But one, Rob, if you could just tell me, do you agree with 
the information that I am getting with regard to the timing on 
tests, how quickly people get results of their tests? Is that 
accurate, from your experience and the data that you have?
    And then second, if I am right, I want to then dig a little 
deeper into why. It is the re-agents; it is having the 
technical expertise, having the technicians available. It is 
just the machines like the one you have being overwhelmed with 
the number of tests, I am told.
    But I want to get your perspective on both of those things. 
So, Rob, could you give us a little help there?
    Mr. Wiehe. Yes. First of all, I would like to say ``thank 
you'' again, Senator Portman, for helping us with the Roche 
diagnostic equipment. It was much-needed in the region here.
    So I do agree, there is a lot of variability with the 
timing of getting test results. And what we are seeing--we have 
the Roche machine, as well as some other machines, in house. We 
are on allocation on most of our testing supplies. And it 
presents some difficulties with planning for our lab.
    The Roche machine, for example--we have folks on all three 
shifts who can run that. It is, as I understand it, a little 
easier machine to run than some of our other equipment. But if 
we do not know that we can get supplies on that piece of 
equipment regularly, planning for that is difficult. So that is 
one outlier.
    I think you mentioned the pop-up testing sites. We are a 
regional site, so we are getting tests sent in from lots of 
other facilities. But that unknown demand can trigger on any 
day much more than we can handle, or it could be much less, or 
a very appropriate amount.
    So I think having the correct supplies and the proper 
personnel inside the line, aligning that with the demand that 
we may see on any given day, does affect the timing of getting 
these tests back. And I think that lack of coordination, if you 
will, from end to end contributes to the frustration you are 
hearing, and the public perception about testing capabilities 
and confidence.
    Senator Portman. Rob, can you dig a little deeper in terms 
of the supplies? Again, I am not trying to make this about your 
Roche test. I am asking you more broadly about what you are 
experiencing, in your case in southwest Ohio. But I think many 
members have the same question. Is it the re-agent that is not 
available? And I know that depends on the test and where the 
re-agent comes from. I know some comes from foreign places, 
Germany or Asia in some cases, but what are you talking about 
specifically that is a bottleneck in the system in terms of 
supplies? And what could we do to solve that problem?
    Mr. Wiehe. We have experienced shortages a little bit early 
on, especially on the swabs that are needed. Many of those came 
from one region in Europe, and that was one of the hardest hit. 
So that certainly created a barrier early, and it continues to 
be somewhat of a barrier.
    But then the testing----
    Senator Portman. Rob, just--we have limited time here, but 
on the swabs, I am told that we are now making swabs in this 
country. Specifically we are using 3D technology and other 
things to try to produce them more rapidly.
    Is that accurate? So do you see that problem being solved? 
Or is that still an issue?
    Mr. Wiehe. So there has been a lot of innovation, and it is 
certainly not my area of expertise, per se. However, what I can 
tell you is, we have had 3D swabs. We have talked to 
laboratories. We have brought them in. As we have tested some 
of those innovative solutions internally, we did not feel that 
the results were adequate. We could not validate the results in 
our labs. So we have chosen not to use some of the solutions 
like that.
    Some of the other labs, some of the other things that are 
being produced for other industries as well--so our lab is 
looking at everything. I think again, we are doing better than 
we did early in the crisis. Some of those innovative solutions 
just have not proven to be something that we at UC Health have 
chosen to utilize.
    Again, to the solution, we are on allocation from pretty 
much everybody. Some of the testing products have had issues in 
production. And it was because of plastics or some other 
materials they could not get, which has severely limited what 
we could get.
    As I mentioned earlier, hot spots. Certainly supplies are 
being diverted appropriately to those areas as well. So I think 
it is a combination of all of those factors, Senator. It is 
still making it a little bit of an unknown from day to day, or 
week to week.
    Senator Portman. So what I am hearing from you is that 
supply continues to be an issue. I will give you some homework 
here, if you do not mind. If you could get back to us 
specifically, maybe talk to some of your colleagues as well 
about what are the specific supplies. What could be done? The 
3D technology--as we know, the FDA has gone back and forth with 
that, and we have to make sure these swabs are safe and that 
they work well. But we also have to restore whatever we can. 
And if you could help us on this, the fluctuating demand issue, 
how could that be addressed--you know, having a bunch of pop-
ups is a great idea, but if you do not have the lab capacity to 
get the test results quickly, maybe the pop-ups ought to be 
more consistent and not in need of personnel, and I am also 
hearing concerns there.
    I have more questions for Ms. Denning--and I will get those 
to her--about long-term contracts. We have legislation, Ms. 
Denning, we are working on to try to get the Department of HHS, 
but also DLA--that's the Defense Logistics Agency--to consider 
longer-term contracts to provide the incentive for American 
companies to make the investments to bring back this PPE. And 
we would love to hear your views on that.
    Thank you, Mr. Chairman.
    Senator Cassidy. Thank you, Rob. My turn now.
    Ms. Denning, first, and, Dr. Grant, I am a physician, and I 
just want to thank all the nurses in your organization. Believe 
me, I just know from first-hand experience what a great service 
they provide. So, just thank you. I did all my practice in a 
public hospital for the uninsured, inner city hospitals, so 
just a real acknowledgment of that.
    When you were asked, though, what could be done to improve 
the racial disparity, which is an issue we are all concerned 
about, you suggested--I think your reply was along the lines of 
further funding, research, et cetera, to address those issues.
    I guess my question is, NIH has a National Institute of 
Minority Health and regularly puts out data and the CDC's and 
other Federal agencies' specific RFPs regarding addressing 
racial disparity. Was your reply a critique upon that? Or were 
you just in general endorsing it? Are you still here, Dr. 
Grant? I am not seeing you on the panel.
    Dr. Grant. Yes, Senator, I am still here. Yes, my reply was 
a little bit of both--you know, endorsing it, but also I guess 
you could say that it is time for action, as opposed to giving 
reports and having plans or recommendations that are in these 
reports; that we actually begin to move forward now and put our 
money where our mouth is, so to speak.
    Senator Cassidy. So if the research shows a specific 
intervention would be effective to actually attempt to 
implement the intervention----
    Dr. Grant. Correct.
    Senator Cassidy. So not much criticizing the amount of 
money or effort on the research, but just the need to implement 
that research. Got it.
    Dr. Grant. Yes, sir.
    Senator Cassidy. Ms. Denning, Senator Wyden suggested that 
most hospitals are not located where patients are who are of 
color, and that is a serious issue if it is true. I noticed in 
your self-
description that of one-half of all acute-care hospitals in 
your system, 95 percent are academic health centers, et cetera. 
And it is my impression that academic health centers are often 
in urban areas, because that is where the patients are. And 
similarly, when you think of those big hospitals in New York, 
they are where the patients are.
    Is there that mal-distribution of hospital beds relative to 
people who are vulnerable, in poverty, et cetera, as Senator 
Wyden seemed to suggest?
    Ms. Denning. There are certainly those large academic 
medical centers in public hospitals that are in urban areas. If 
I remember what his statement was, Senator Cassidy, it was 
about the fact that, even though there are racial disparities 
in the urban areas, access to care as well as access to 
products is easier there than it is in the very rural areas.
    Senator Cassidy. Then let me ask you, because that goes 
back to your role as a GPO. Obviously GPOs, for those not 
familiar with them, are responsible for distributing fairly 
across all their members. And so I presume--I am begging the 
answer--but is there any preferential treatment that your GPO 
gives among your members as to which receive supplies?
    Ms. Denning. There is not. And in fact what we have done 
is, where there is a surge, because the surges are moving 
around the country--first we had----
    Senator Cassidy. I have limited time, so I am going to move 
on because I just wanted to have that point.
    Mr. Wiehe, I have been told that one of the problems with 
hospitals being an expanded capacity for testing is that if the 
patient is not in your system, there is not a mechanism for the 
hospital to bill.
    So, yes, if someone has been seen at a University of 
Cincinnati-affiliated hospital, or a practice affiliated, you 
can do it. But if you were to get a shipment from Covington, 
where my brother was born, and that is not part of your system, 
there is no billing mechanism for you to perform that service. 
And that somewhat limits the ability of hospitals to fill in 
the gap for capacity, aside from the reagent supply, et cetera. 
Can you comment on that? Is that a true assessment?
    Mr. Wiehe. Senator, I am--that is not my area of expertise, 
and I would not be able to comment on that today.
    Senator Cassidy. Could I ask you to research that?
    Mr. Wiehe. Yes.
    Senator Cassidy. I would appreciate that.
    Mr. Johnson. Mr. Chairman? Thank you, Mr. Chairman; I was 
hoping I would be called on. Excuse me.
    Senator Cassidy. Yes, Mr. Johnson. I really liked your 
comments that the supply chain sizes to the size of the market, 
because there have been multiple recommendations to build up 
manufacturing capacity, but your point is, if there is no 
market for the good once produced, sooner or later it becomes a 
stranded, useless asset. And I just want to acknowledge that.
    Now with that said, you were about to make a comment 
otherwise. What was the comment you were going to make?
    Mr. Johnson. Yes, I would like your indulgence to address 
this issue of allocation to minority and rural communities. 
ISEA----
    Senator Cassidy. Again, make it a quick point, because I am 
over time.
    Mr. Johnson. Very quick. ISEA has bill language that would 
address the issue brought up by you and Senators Casey and 
Hassan. It would address the issue of minority and rural 
communities and the need for coordinated allocation and 
distribution by a coordinated response through FEMA and 
industry, and we would like to follow up with that post-
hearing. Thank you.
    Senator Cassidy. That sounds great. I think Senator Wyden 
has an additional question he wished to ask. Is he back online? 
He is not. Okay, then----
    Senator Wyden. I am, Mr. Chairman----
    Senator Cassidy. Ah, Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I just want to make 
one point, because you asked the question about how in rural 
areas folks might acquire PPE. And as you know, I like to work 
with you on health-care issues whenever we can in a bipartisan 
way. I do not think there is any question that the example you 
used is of some value. I am just saying that in rural America, 
particularly in communities of color, there are scores and 
scores of hospitals and providers falling between the cracks. 
And that is why I gave a very real-world example I heard about 
from Senator Jones in Alabama.
    So let us continue this dialogue, and we can work on it in 
a bipartisan way.
    Senator Cassidy. Sounds great. By the way, I thought you 
were also referencing urban, and that just was not consistent 
with my experience. Not to say there are not problems of 
access, but it is an important issue to kind of drill down on.
    And let me ask one more question to you, Ms. Denning, since 
I am the last person. There have been calls for the Federal 
Government to take over the distribution of products, as if the 
Federal Government would be more efficient in that 
distribution.
    You are obviously a very large GPO which distributes. Do 
you feel as if the supply chain currently run by the private 
sector would be able to manage the distribution, presuming that 
there was an adequate supply of that which requires 
distribution?
    Ms. Denning. Thank you, Senator, for the question.
    We do not distribute. We have contracts for distribution. 
But we do have expertise in distribution, as well as 
contracting, for all types of products that a health-care 
facility would use.
    That being said, I do believe that we could come together, 
private sector, public, the Federal Government, and work better 
to make sure that that strategic national stockpile is where it 
needs to be. And we believe that it should be utilized in times 
of disaster.
    We do not believe that going to a totally federalized 
system is the answer, but we do believe working together and 
being able to know when we should assist the hospitals and the 
citizens of the United States with the products that they need 
to protect themselves and to protect their patients, is 
critically important.
    Senator Cassidy. Sounds great. Me asking you that question 
allowed me to find out if I am supposed to have a script to 
close this.
    First, thank you all for participating. If members wish to 
submit questions for the record, there will be a period of time 
in which they may do so. With that, I close the hearing. Thank 
you very much.
    [Whereupon, at 11:34 a.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


   Prepared Statement of Cathy Denning, R.N., MSN, Group Senior Vice 
 President, Sourcing Operations, Analytics, and Center of Excellence, 
                                Vizient
    Good morning, Chairman Grassley, Ranking Member Wyden, and members 
of the committee. Thank you for holding this critically important 
hearing and for giving me the opportunity to testify today. My name is 
Cathy Denning, and I am the group senior vice president of Sourcing 
Operations, Analytics, and the Center of Excellence at Vizient and a 
registered nurse. Prior to joining Vizient 20 years ago, I practiced in 
the clinical arena working in both the acute care and home care 
settings.

    Before we get started today, I'd like to tell you a little bit more 
about Vizient. Headquartered in Irving, TX--so if I may, I'd like to 
say a special ``hello'' to you, Senator Cornyn--Vizient is the Nation's 
largest member-owned, member-driven, health-care performance 
improvement company.

    You'll hear me use the word ``member'' a lot today. When we say 
member, we mean the health-care providers that participate in our 
organization's services and choose to work with us every day. Vizient 
members include more than half of all the acute-care health-care 
systems, including pediatric facilities, community hospitals, 
integrated health delivery networks and approximately 95 percent of the 
Nation's academic medical centers. We also serve approximately 20 
percent of the non-acute care market as well.

    Most people know us for our supply chain expertise, also known as 
group purchasing or ``GPO'' expertise, which is what I will focus on 
today. Our group purchasing business is predicated on the idea of 
negotiating prices and terms and conditions for drugs, devices, and 
other medical products and services on behalf of our member health-care 
providers. In other words, we help providers realize savings and 
efficiencies by aggregating their purchasing volume and using that to 
negotiate discounts and other value, such as clinical and utilization 
support, with suppliers, resulting in larger savings and greater value 
than individual hospitals can typically negotiate on their own. Our 
members purchase approximately $100 billion of goods and services off 
of our contracts annually.

    Beyond this supply chain support, we also offer an array of 
consulting services, collaboration services, analytic tools, and 
clinical expertise--all designed to ultimately improve patient outcomes 
and lower the cost of health care. We see ourselves as extensions of, 
and advocates for, the health-care members we serve. We strive every 
day to be their indispensable partner--to help them achieve 
efficiencies, lower costs, and improve patient outcomes--with the goal 
of improving the health-care system for all.

    Important for today's discussion, Vizient holds a unique position 
in that we work closely with both health-care providers and suppliers. 
We act as a liaison, advocating on behalf of the member providers we 
serve and sometimes acting as their lifeline in times of disaster.

    That brings us to why we are here today--focusing on the critical 
issue of counterfeit PPE, the so-called ``gray market'' of brokers and 
supplies, and how at a time of grave need there were, and are, 
individuals and organizations looking to exploit health-care providers, 
the patients they serve, and the government with their false and often 
harmful claims of having appropriate medical supplies to offer.

    But before I go into more detail regarding our experience, and our 
members' experiences, with counterfeit product, I think it's important 
that I provide some context regarding the perfect storm that led to the 
current situation.

    First--it is my strong belief, having spent my entire career either 
working in a health-care setting or for a GPO, that the supply chain is 
not ``broken'' as some have claimed. We've certainly seen that there 
are ways that the private sector, including Vizient, can work better 
with other private and public sector stakeholders to make 
improvements--and I'll get to those later--but generally speaking, even 
in times of previous disasters like hurricanes, floods, and others--the 
health-care supply chain represents a great example of different 
stakeholders working together for a common purpose. Previously, 
manufacturers, distributors, GPOs, hospitals and others have been able 
to quickly put protocols and processes in place to help guide critical 
supplies and services to areas most in need. We are proud of the work 
we do on a daily basis--but surely in times of crisis.

    That said--yes--when COVID-19 hit the United States, everything 
seemed to change overnight. And it is important to understand how the 
unprecedented nature of this pandemic impacted the supply chain and 
made it nearly impossible for anyone to fully prepare.

    I realize that word--unprecedented--has been used often in 
describing the last several months here in the United States and across 
the world. But truly, this pandemic was. As you all know, the health-
care industry has been looking for ways to reduce costs for more than 
20 years. Lean practices to streamline clinical processes, just-in-time 
inventory, and tightly managing inventories of medical supplies have 
become more commonplace in hospitals across the country. Additionally, 
more manufacturing has been moved off-shore as suppliers sought to 
lower prices and looked for ways to achieve cost savings.

    Then COVID-19 hit. No one knew how it was transmitted, where it 
came from, or how to treat it--only that it presented with a 
complicated mix of symptoms and appeared to be respiratory in nature. 
This meant that providers were facing an unknown, highly contagious 
infection and the public was panicked here and simultaneously across 
the globe. It was the perfect storm.

    At the same time, other challenges exacerbated the problem. For 
example, here in the U.S. we were coming off of two spikes of influenza 
Type A and Type B. We were already facing critical shortages of 
surgical gowns due to manufacturing issues in China. Then, when COVID-
19 spread across the globe, suppliers that manufacture in Asia could 
not get their PPE out of the country due to the sequester of those 
products for in-country use. In addition, although we've known for 
quite some time that a lack of a diverse and redundant manufacturing 
locations is problematic, it became acutely problematic during this 
crisis. To give you a specific example, the EU epicenter for COVID-19 
was the Lombardy region in Italy--but that's also exactly where the 
overwhelming majority of the nasal swabs needed to test for COVID-19 
are manufactured. While manufacturing was increased and deemed an 
essential business by the Italian government, it exposed a 
vulnerability in the supply of these critical products.

    To add to the challenges, virtually overnight, hospitals were using 
roughly 10 times their usual amount of PPE products and those in the 
hardest hit areas were using 10 to 15 times their usual amount of N95 
respirators at the peak of their surge. To provide context, these 
products are normally used only for known highly infectious respiratory 
illnesses during surgery and procedures that produce aerosol. Now many 
members are using these as universal precautions for all patients.

    Bottom line--in the pre-COVID-19 environment, there was simply no 
way for anyone to have adequately planned for this unprecedented and 
ongoing spike in worldwide demand for PPE.

    Which brings us to why we are here today--to expose the predatory 
practices of those looking to exploit this vulnerability by making 
false promises and offering unsafe, exorbitantly priced medical 
supplies to healthcare providers throughout the country, and to work 
together to collectively find ways to prevent these practices in the 
future.

    One of the first things we did to help our members respond to the 
COVID-19 outbreak was establish a dedicated ``war room'' to ensure 
rapid responses to member needs. These dedicated staff began fielding 
more than 1,000 member inquiries each week. Some of these inquiries 
included requests to vet products that members were considering 
purchasing from non-traditional manufacturers or brokers--and to 
provide an opinion on whether an offered product was what someone 
claimed it was.

    The war room staff, along with our sourcing and clinical staff, and 
our Quality Assurance and Regulatory Affairs (QARA) professionals, 
quickly determined that the best way to assist our members, and have 
the biggest impact, would be to focus on the actual manufacturers of 
the products. Our QARA team has the expertise to help members 
understand the regulatory environment and the registration and approval 
requirements for manufacturers--so that is where we focused our 
efforts. We did not actually examine or ``touch'' the products 
themselves. We emphasized to members that our process was simply a 
necessary first step; if they wanted to move forward with purchasing 
any of these items, they would need to feel comfortable with the 
seller, and review samples of the products themselves to ensure the 
products met their internal infection control or other protocols.

    Starting in mid-March, as the number of requests to vet products 
became more numerous, we realized that many of the requests were 
duplicates--either because the same broker had reached out to multiple 
end-points, or because multiple brokers were claiming to have product 
from the same original manufacturers. For example--we received 38 
separate submissions purporting to be from brokers who represented a 
product from a single manufacturing site in China. The site is a 
legitimate manufacturer of respirators, but brokers were claiming this 
manufacturer could supply members with additional products including 
surgical masks, gloves and surgical gowns--yet we could not find any 
such device listings with the FDA. At least 26 brokers claimed to have 
access to this single manufacturer's products. Submissions like these 
started in mid-March and continue to be submitted by new brokers as 
recently as last week.

    Given these complexities, we quickly stood up a workflow management 
tool and database to help manage the influx of requests and to help us 
track where the duplications were occurring. To give you a better sense 
of the sheer volume--from March 29th through July 13th, we received 
2,385 total requests to review products with 1,320 of these being 
unique requests for a unique manufacturer and product. Ultimately, we 
found that only 788 of these products could be validated as potentially 
appropriate based on the applicable FDA or NIOSH standards.

    It's important to note that this ``vetted'' list has morphed week 
after week as guidance from the Federal agencies continues to be 
refined. For example--the FDA issued an emergency use authorization (or 
EUA) for certain filtering face piece respirators on April 3rd but 
then, as part of their continuous quality assessment and working with 
the CDC and NIOSH, revised this EUA just over a month later. More than 
65 filtering face piece respirators that had previously been authorized 
by the original EUA, many of which had appeared on our validated list, 
were no longer authorized. This just goes to show how complex and 
evolving this situation has been over the last few months--and it 
continues to evolve even today.

    This vetting and validation process was only one piece of our 
overall response efforts to the pandemic. It continues to be 
laborious--but critical--and between these bad actors, unsafe products, 
demand needs of our provider members and consistent with our dedication 
to leaving no stone unturned to get our members what they needed, we 
also explored other ways to help bring more supplies to market.

    Vizient has partnered with multiple suppliers to expand capacity of 
PPE and other vital supplies, including putting our own capital at risk 
with some North American suppliers to start or expand PPE manufacturing 
lines, thus increasing overall production capacity. Our relationship 
with Standard Textile, where we guaranteed purchases if they converted 
manufacturing lines, has helped to create more than 2 million reusable 
isolation gowns and more than 700,000 reusable surgical masks and face 
shields. With the company, Encompass, we helped to reopen their North 
American production line to produce 19 million level 3 disposable 
isolation gowns. These are just a few specific examples of how we have 
helped to source new product. Working with nearly a dozen more 
manufacturers we have helped to source Level 2 disposable gowns, nasal 
swabs, nitrile gloves, medical masks, and N95 sterilization processors 
for our healthcare provider members.

    Despite our efforts, as I mentioned, counterfeit product 
continued--and continues--to be a problem that our provider members 
face. The overwhelming demand that I highlighted earlier has continued 
as hospitals are still facing actual or possible surges in COVID-19 
cases. Although suppliers, GPOs, and the government have all taken 
innovative and big steps forward to meet this demand, we don't expect 
that the overall supply will begin to even out until 2021. Bad actors 
continue to reach out to providers in need, and our members continue to 
try and find whatever safe supplies they can. Unfortunately, it often 
times does not end well. I'd like to highlight a few specific examples 
of the types of situations our members have found themselves in--and, 
as such, bring attention to just one of the many challenges they are 
facing throughout this crisis.

    First, our member, Yale New Haven Health in Connecticut, 
experienced an ongoing issue with N95 respirators. In late March they 
became aware that there may be counterfeit Dasheng KN95 respirators. 
Combing through donations they had received, they found a significant 
number of these counterfeit respirators. Of course, they also had open 
orders at the time for these Dasheng KN95s so they immediately canceled 
those. Yale later learned that most of the PPE vendors with whom they 
had been engaging were not actually dealing directly with factories in 
China but, rather, third party distributors or grey market brokers. 
Their concern around these counterfeit products led them to cancel 
orders they had placed directly with the Dasheng factory. Throughout 
this crisis, Yale discovered that many vendors had sent false test 
results, prompting Yale to send some of their KN95s out to a third 
party testing lab--turns out they were barely 85 percent efficient--
leading Yale to become even more skeptical of these vendors and their 
product.

    Second, a regional acute-care facility in Florida engaged with a 
broker to obtain N95 respirators supposedly manufactured by 3M. The 
hospital's internal review process caught that the broker was not 
actually licensed to sell those 3M masks so they did not contract for 
or end up paying for the products. They did, however, have additional 
purchase pending for masks but the shipments were continually delayed. 
Their bank got concerned that the activity was fraudulent so although 
they did receive some product, they canceled the remaining order and, 
thankfully, got their money back. But this hospital ended up losing out 
on two different shipments of critically needed product due to 
counterfeiting concerns.

    Finally, one last example I'll highlight for you--but I'll note 
that these three examples are representative of stories we've heard 
from many more of our provider members. A large acute-care provider in 
the Pacific Northwest is currently in the middle of sorting out a 
questionable situation in which they were sent small-sized Halyard-
manufactured N95s from a company that claimed to have sourced them in 
South Carolina. However, when they arrived they were in plastic bags 
and sealed with a sticker--not the original Halyard boxes, as would 
normally be expected. When this provider pressed the third-party 
company on this, they were told that they had a process for 
``reallocation'' of the respirators--but would not share what this 
actually meant with the provider. The company in question is a 
sterilizer solutions firm in its normal course of business--so you can 
draw your own conclusions on that one--but they have been very 
unresponsive since our member began to question them about this 
incident.

    As I mentioned previously--these are just three stories--there are 
countless other stories, and many of our members were reluctant to come 
forward with their stories due to reputational concerns, liability 
risks, or other issues. At a bare minimum, these counterfeit products 
and grey market brokers have taken vital resources away from our 
provider members and wasted hundreds of hours of time--time they could 
have been spending elsewhere.

    In fact, some of the biggest issues our members faced throughout 
the country are not necessarily with respect to counterfeit product, 
but with gray market third parties seeking to exploit our members' 
needs by offering these critical products at excessive prices. Brokers, 
and sometimes suppliers, sought to charge hospitals $8.50 for AAMI 
Level 2 and 3 non-sterile isolation gowns, when those same gowns 
typically go for as low as $0.84 per gown. Similarly, brokers were 
trying to sell masks for as much as $11 (with the median price being 
$4.50) when they normally sell for approximately $0.80.

    Despite the contemptible actions of these bad actors and the 
overall challenges presented by COVID-19, I think it's important that I 
end my remarks today with a hopeful outlook to the future.

    We are learning from our experience going through COVID-19 that 
vulnerabilities do exist--and therefore there are opportunities for 
improvement. Specifically--our supply chain needs to be more resilient, 
through enhanced transparency, redundancy, and diversification. We also 
need to take the lessons we learned regarding the strategic national 
stockpile and do better to ensure that it truly is a resource to States 
and providers.

    In order to further build a resilient supply chain, more 
transparency is needed. Transparency into the location of 
manufacturing, including raw materials, as well as storage locations. 
And I don't just mean transparency with the FDA and other government 
officials--this information should be shared with private-sector 
partners as well so that we can aid in the diversification efforts I'm 
going to speak to.

    Redundancy, whether it be in the PPE space or in the pharmaceutical 
space, where Vizient is also extremely active in helping to source 
product for members--we have long advocated that the best way to 
achieve availability and cost savings is to encourage competition. But 
competition is also necessary to mitigate disruption. It is critical 
that we have multiple manufacturers who produce the same products so 
that a shutdown or negative impact on one company doesn't ripple 
throughout the supply chain broadly.

    Regarding diversification of the supply chain--I've touched on this 
already--but the fact that so many of our medical supplies are 
manufactured overseas is not the singular reason for the problems we 
are facing now. Similarly, onshoring all manufacturing would not solve 
these problems either. We need a diversified supply chain--one that is 
global in nature. By having multiple manufacturing locations spread 
across the globe, we mitigate the risk of having all manufacturing of 
an essential product in one location wiped out by a single event. That 
said, I think we can all agree that more needs to be done to create a 
much stronger domestic footprint.

    Finally, there has been a lot of discussion regarding the Federal 
stockpile--we strongly believe that the stockpile does need to be 
bolstered and be accessible to health-care providers in need. We 
believe the stockpile should have at least 90 days of supplies for key 
items (including the essential medications list that my Vizient 
colleagues in pharmacy have put together--drugs without which you would 
be unable to provide life-sustaining care). These items, however, need 
to be rotated and managed as appropriate. This means that the 
government should continue to engage private-sector stakeholders, like 
Vizient, manufacturers, health-care systems and others to help provide 
feedback on which products should be included, how much, and how they 
should be stored and managed. And, again I'll emphasize the importance 
of transparency--which is much needed in the stockpile as well. Health-
care systems and States need to be able to quickly access these 
products during a disaster and all participants in the supply chain 
need to understand the consumption of these products and overall need. 
That said--whether it be the Federal or State stockpiles--usage should 
be limited to times of emergencies, not as a regular course of 
business. Stockpiles are meant to supplement needs and serve a very 
specific, and critical purpose.

    I would like to close by saying that Vizient has enjoyed a 
collaborative working relationship with the Federal Government and 
Capitol Hill for many years--but especially over these last few months. 
I have been pleased with how officials from FEMA, FDA, CDC, DOD, and 
others have been proactive in their outreach to me, our leadership 
team, and others throughout Vizient--and especially the outreach and 
support to our provider members.

    With that, I want to thank you again for the opportunity to testify 
today. I appreciate being able to be here to share my, and Vizient's, 
experiences regarding counterfeit PPE products and other supply chain 
challenges over the last few months. As you can tell, I am passionate 
about these issues and strongly believe that we can all do better, 
working together, to help health-care providers and the patients they 
serve get through this crisis. I would also like to offer my sincere 
appreciation for all of the front line health-care workers who have 
given of themselves tirelessly throughout the pandemic.

    I look forward to your questions.

                                 ______
                                 
                  U.S. Department of Homeland Security

                          Washington, DC 20472

                                  FEMA

                          Voluntary Agreement

MANUFACTURE AND DISTRIBUTION OF CRITICAL HEALTHCARE RESOURCES NECESSARY 
                        TO RESPOND TO A PANDEMIC

                                Preface

    Pursuant to section 708 of the Defense Production Act of 1950 
(DPA), as amended (50 U.S.C. Sec. 4558), the Federal Emergency 
Management Agency (FEMA) Administrator (Administrator), after 
consultation with the Secretary of the Department of Health and Human 
Services (HHS), the Attorney General of the United States (Attorney 
General), and the Chairman of the Federal Trade Commission (FTC), has 
developed this Voluntary Agreement (Agreement). This Agreement is 
intended to maximize the effectiveness of the manufacture and 
distribution of Critical Healthcare Resources nationwide to respond to 
a pandemic by establishing unity of effort between the Participants and 
the Federal Government for integrated coordination, planning, 
information sharing with FEMA, allocation and distribution of Critical 
Healthcare Resources. The activities contemplated by this Agreement are 
limited to those necessary to respond to a Pandemic, at the sole 
determination of FEMA. This Agreement affords Participants defenses to 
civil and criminal actions brought for violations of antitrust laws 
when carrying out this Agreement and an appropriate Plan of Action. 
This Agreement is intended to foster a close working relationship among 
FEMA, HHS, and the Participants to address national defense needs 
through cooperative action under the direction and supervision of FEMA. 
This Agreement, when implemented through a Plan of Action, affords 
Participants a safe harbor to exchange information, collaborate and 
adjust commercial operations as to particular products and services, 
when FEMA determines it necessary for the national defense, and only to 
the extent necessary for the national defense.

                               I. Purpose

    A pandemic may present conditions that pose a direct threat to the 
national defense of the United States or its preparedness programs such 
that, pursuant to DPA section 708(c)(1), an agreement to collectively 
coordinate, plan and collaborate for the manufacture and distribution 
of personal protective equipment (PPE), Pharmaceuticals and other 
Critical Healthcare Resources is necessary for the national defense. 
This Agreement will maximize the effectiveness of the manufacture and 
distribution of Critical Healthcare Resources nationwide to respond to 
a pandemic by establishing unity of effort between the Participants and 
the Federal Government for integrated coordination, planning, 
information sharing with FEMA, allocation and distribution of Critical 
Healthcare Resources. The activities included in this Agreement are 
limited to those necessary to respond to a Pandemic, at the sole 
determination, direction, and supervision of FEMA and implemented 
through Plans of Action.

                            II. Authorities

    Section 708, Defense Production Act (50 U.S.C. 4558); sections 
402(2) and 501(b), Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5121-5207); sections 503(b)(2)(B) and 
504(a)(10) and (16) of the Homeland Security Act of 2002 (6 U.S.C. 
313(b)(2)(B), 314(a)(10) and (16)); sections 201, 301, National 
Emergencies Act (50 U.S.C. 1601 et seq); section 319, Public Health 
Service Act (42 U.S.C. 247d); Executive Order (E.O.) 13911, 85 FR 18403 
(March 27, 2020); Prioritization and Allocation of Certain Scarce or 
Threatened Health and Medical Resources for Domestic Use, 85 FR 20195 
(April 10, 2020). Pursuant to DPA section 708(f)(1)(A), the 
Administrator certifies that this Agreement is necessary for the 
national defense.

                        III. General Provisions

A. Definitions

Administrator

    The FEMA Administrator who, as a Presidentially appointed and 
Senate confirmed official, is the Sponsor of this Agreement. Pursuant 
to a delegation or redelegation of the functions given to the President 
by DPA section 708, the Administrator proposes and provides for the 
development and carrying out of this Agreement. The Administrator is 
responsible for carrying out all duties and responsibilities required 
by 50 U.S.C. 4558 and 44 CFR part 332 and for appointing one or more 
Chairpersons to manage and administer the Committee and any Sub-
Committee formed to carry out this Agreement.

Agreement

    The Voluntary Agreement. Participants who have been invited to join 
and agreed to the terms of this Agreement as described in Section VII 
below may join the ``Committee for the Distribution of Healthcare 
Resources Necessary to Respond to a Pandemic.''

Attendees

    Subject matter experts, invited by the Chairperson to attend 
meetings authorized under this Agreement, to provide technical advice 
or to represent other government agencies or interested parties. 
Attendees are not Members of the Committee.

Chairperson

    FEMA senior executive, appointed by the Administrator, to chair the 
``Committee for the Distribution of Healthcare Resources Necessary to 
Respond to a Pandemic.'' The Chairperson shall be responsible for the 
overall management and administration of the Committee, this Agreement, 
and Plans of Action developed under this Agreement while remaining 
under the supervision of the Administrator; may create one or more 
Subcommittees, as approved by the Administrator; shall initiate, or 
approve in advance, each meeting held to discuss problems, determine 
policies, recommend actions, and make decisions necessary to carry out 
this Agreement; and otherwise shall carry out all duties and 
responsibilities assigned to him. The Administrator may appoint one or 
more co-Chairpersons to chair the Committee and Sub-Committees, as 
appropriate.

Committee

    Committee for the Distribution of Healthcare Resources Necessary to 
Respond to a Pandemic established under this Agreement. Provides 
Committee Members a forum to maximize the effectiveness of the 
manufacture and distribution of Critical Healthcare Resources 
nationwide to respond to a Pandemic through integrated coordination, 
planning, and identification and development of Plans of Action needed 
to respond to a pandemic, including making recommendations on the 
creation of a Plan of Action.

Critical Healthcare Resources

    All categories of health and medical resources for which production 
and distribution capacity is necessary to respond to a pandemic, 
including, but not limited to, PPE, Pharmaceuticals, respiratory 
devices, vaccines, raw materials, supplies, and medical devices.

Documents

    Any information, on paper or in electronic format, including 
written, recorded, and graphic materials of every kind, in the 
possession, custody, or control of the Participant.

Members

    Collectively the Chairperson, Representatives, and Participants of 
the Committee. Jointly responsible for developing all decisions 
necessary to carry out this Agreement and to develop and execute Plans 
of Action under this Agreement.

Pandemic

    A Pandemic is defined as an epidemic that has spread to human 
populations across a large geographic area that is subject to one or 
more declarations under the National Emergencies Act, the Public Health 
Service Act, or the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, or if the Administrator determines that one or more 
declarations is likely to occur and the epidemic poses a direct threat 
to the national defense or its preparedness programs. For example, 
Coronavirus Disease 2019 (COVID-19).

Participant

    An individual, partnership, corporation, association, or private 
organization, other than a federal agency, that has substantive 
capabilities, resources or expertise to carry out the purpose of this 
Agreement, that has been specifically invited to participate in this 
Agreement by the Chairperson, and that has applied and agreed to the 
terms of this Agreement in Section VII below. ``Participant'' includes 
a corporate or non-corporate entity entering into this Agreement and 
all subsidiaries and affiliates of that entity in which that entity has 
50 percent or more control either by stock ownership, board majority, 
or otherwise. The Administrator may invite Participants to join this 
Agreement at any time during its effective period.

Personal Protective Equipment

    Objects that provide measures of safety protection for healthcare 
workers, first responders, critical infrastructure personnel and/or the 
general public for the response to the Pandemic. These PPE items may 
include, but are not limited to, face coverings, filtering facepiece 
respirators, face shields, isolation and surgical gowns, examination 
and surgical gloves, suits, and foot coverings.

Pharmaceuticals

    All drugs defined under the Food, Drug, and Cosmetic Act. 21 U.S.C. 
Sec. 321(g), including biological products defined under the Public 
Health Service Act. 42 U.S.C. Sec. 262(i).

Plan of Action

    A documented method, pursuant to 50 U.S.C. 4558(b)(2), proposed by 
FEMA and adopted by invited Participants, to implement this Agreement, 
through a Sub-
Committee focused on a particular Critical Healthcare Resource, or 
pandemic response workstream or functional area necessary for the 
national defense.

Plan of Action Agreement

    A separate commitment made by Participants upon invitation and 
agreement to participate in a Plan of Action. Completing the Plan of 
Action Agreement confers responsibilities on the Participant consistent 
with those articulated in the Plan of Action and affords Participants 
antitrust protections for actions taken consistent with that Plan of 
Action as described in Section IV below.

Point of Care

    All categories of medical service providers necessary to respond to 
a pandemic, as determined by the Chairperson after consultation with 
the Members of the Committee. This may include, but is not limited to, 
Acute Care, First Responders, Nursing Homes, Private Hospitals, Public 
Hospitals, Veterans Administration Hospitals, Physician Offices, Dental 
Offices, Ambulatory Clinics, Pharmacies, Community Health Clinics, 
Laboratories, and other acute and non-acute care facilities responsible 
for healthcare.

Representatives

    The representatives the Administrator identifies and invites to the 
Committee from FEMA, HHS, and other federal agencies with equities in 
this Agreement, and empowered to speak on behalf of their agencies' 
interests. The Attorney General and the Chairman of the FTC, or their 
delegates, may also attend any meeting as a Representative.

Sub-Committee

    A body formed by the Administrator from select Participants to 
implement a Plan of Action.

B. Committee Participation

    The Committee established under this Agreement will consist of the 
(1) Chairperson, (2) Representatives from FEMA, HHS, DOJ, and other 
federal agencies with equities in this Agreement, and (3) Participants 
that have substantive capabilities, resources or expertise to carry out 
the purpose of this Agreement. Other Attendees--invited by the 
Chairperson as subject matter experts to provide technical advice or to 
represent the interests of other government agencies or interested 
parties--may also participate in Committee meetings. Collectively, the 
Chairperson, Representatives and Participants will serve as the Members 
of the Committee. Public notice will be provided as each Participant 
joins or withdraws from this Agreement. The list of Participants will 
be published annually in the Federal Register.

C. Effective Date and Duration of Participation

    This Agreement is effective immediately upon the signature of the 
Participant or their authorized designees. This Agreement shall remain 
in effect until terminated in accordance with 44 CFR 332.4, or in any 
case, it shall be effective no more than five (5) years from the date 
the requirements of DPA section 708(f)(1) are satisfied as to the 
initial Voluntary Agreement regarding the manufacture and distribution 
of critical healthcare resources necessary to respond to a Pandemic, 
unless otherwise terminated pursuant to DPA section 708(h)(9) and 44 
CFR 332.4 or extended as set forth in DPA section 708(f)(2). No action 
may take place under this Agreement until it is activated, as described 
in Section III(E.), below.

D. Withdrawal

    Participants may withdraw from this Agreement at any point, subject 
to the fulfillment of obligations incurred under this Agreement prior 
to the date this agreement is terminated with regard to such 
Participant, by giving written notice to the Administrator at least 
fifteen (15) calendar days prior to the effective date of that 
Participant's withdrawal. Following receipt of such notice, the 
Administrator will inform the other Participants of the date of the 
withdrawal. Upon the effective date of the withdrawal, the Participant 
must cease all activities under this Agreement.

E. Plan of Action Activation and Deactivation

    Upon occurrence of a Pandemic, the Administrator may authorize a 
Plan of Action and Sub-Committee for one or more specific Pandemic 
response workstreams, functional areas, or Critical Healthcare Resource 
national defense needs, e.g., a pharmaceuticals plan of action, or a 
PPE distribution plan of action, or a vaccine plan of action. The 
Administrator will invite a select group of Participants who are 
representative of the segment of the industry for which the Plan of 
Action is intended to participate on the Sub-Committee. The Plan of 
Action will be activated for each invited Participant when the 
Participant executes a Plan of Action Agreement. Actions taken by 
Participants to develop a Plan of Action and actions taken after 
executing a Plan of Action Agreement to collectively coordinate, plan 
and collaborate, pursuant to that Plan of Action and as directed and 
supervised by FEMA, will constitute action taken to develop and carry 
out this Agreement pursuant to 50 U.S.C. 4558(j).

    Sub-Committees will meet only for the purposes specified in this 
Agreement and as provided for in writing by the Chairperson. They will 
report directly to the Committee regarding all actions taken by them, 
and any Plan of Action adopted by a Sub-Committee must be approved 
first by the Chairperson. A Plan of Action may not become effective 
unless and until the Attorney General (after consultation with the 
Chairman of the Federal Trade Commission) finds, in writing, that such 
purpose(s) of the Plan of Action may not reasonably be achieved through 
a Plan of Action having less anticompetitive effects or without any 
Plan of Action and publishes such finding in the Federal Register. The 
Chairperson may appoint a Sub-Committee Chairperson to preside over 
each Sub-Committee as a delegate of the Chairperson; however, the 
Chairperson retains responsibility for all Sub-Committees and for 
administerial and record keeping requirements of any meetings held by 
such Sub-Committees, including providing public notice as required of 
any meetings.

    When recommended by the Sub-Committee Chairperson, the 
Administrator will provide notice of a Plan of Action Deactivation. Any 
actions taken by Participants after the Deactivation date are outside 
the scope of Plan of Action Agreement and the Section IV antitrust 
defense is not available.

F. Rules and Regulations

    Participants acknowledge and agree to comply with all provisions of 
DPA section 708, as amended, and regulations related thereto which are 
promulgated by FEMA, the Department of Homeland Security, HHS, the 
Attorney General, and the FTC. FEMA has promulgated standards and 
procedures pertaining to voluntary agreements in 44 CFR part 332. The 
Administrator shall inform Participants of new rules and regulations as 
they are issued.

G. Modification and Amendment

    The Administrator, after consultation with the Attorney General and 
the Chairman of the FTC, may terminate or modify, in writing, this 
Agreement or a Plan of Action at any time, and may remove Participants 
from this Agreement or a Plan of Action at any time. Participants may 
propose modifications or amendments to this Agreement at any time. The 
Administrator shall inform Participants of modifications or amendments 
to this Agreement as they are issued. If a Participant indicates an 
intent to withdraw from the Agreement due to a modification or 
amendment of the Agreement, the Participant will not be required to 
perform actions directed by that modification or amendment.

    The Attorney General, after consultation with the Chairman of the 
FTC and the Administrator, may terminate or modify, in writing, this 
Agreement or a Plan of Action at any time, and may remove Participants 
from this Agreement or a Plan of Action at any time. If the Attorney 
General decides to use this authority, the Attorney General will notify 
the Chairperson as soon as possible, who will in turn notify 
Participants.

H. Expenses

    Participation in this Agreement does not confer funds to 
Participants, nor does it limit or prohibit any pre-existing source of 
funds. Unless otherwise specified, all expenses, administrative or 
otherwise, incurred by Participants associated with participation in 
this Agreement shall be borne exclusively by the Participants.

I. Record Keeping

    The Chairperson shall have primary responsibility for maintaining 
records in accordance with 44 CFR part 332, and shall be the official 
custodian of records related to carrying out this Agreement. Each 
Participant shall maintain for five years all minutes of meetings, 
transcripts, records, documents, and other data, including any 
communications with other Participants or with any other member of the 
Committee, including drafts, related to the carrying out of this 
Agreement or any Plan of Action or incorporating data or information 
received in the course of carrying out this Agreement or any Plan of 
Action. Each Participant agrees to produce to the Administrator, the 
Attorney General, and the Chairman of the FTC upon request any item 
that this section requires the Participant to maintain. Any record 
maintained in accordance with 44 CFR part 332 shall be available for 
public inspection and copying, unless exempted on the grounds specified 
in 5 U.S.C. 552(b)(1), (3) or (4) or identified as privileged and 
confidential information in accordance with DPA section 705(d), and 44 
CFR 332.5.

                         IV. Antitrust Defense

    Under the provisions of DPA subsection 708(j), each Participant in 
this Agreement shall have available as a defense to any civil or 
criminal action brought for violation of the antitrust laws (or any 
similar law of any State) with respect to any action to develop or 
carry out this Agreement or a Plan of Action, that such action was 
taken by the Participant in the course of developing or carrying out 
this Agreement or a Plan of Action, that the Participant complied with 
the provisions of DPA section 708 and the rules promulgated thereunder, 
and that the Participant acted in accordance with the terms of this 
Agreement and any relevant Plan of Action. Except in the case of 
actions taken to develop this Agreement or a Plan of Action, this 
defense shall be available only to the extent the Participant asserting 
the defense demonstrates that the action was specified in, or was 
within the scope of, this Agreement or a Plan of Action.

    This defense shall not apply to any action occurring after the 
termination of this Agreement or a Plan of Action. Immediately upon 
modification of this Agreement or a Plan of Action, no antitrust 
immunity shall apply to any subsequent action that is beyond the scope 
of the modified Agreement or Plan of Action. The Participant asserting 
the defense bears the burden of proof to establish the elements of the 
defense. The defense shall not be available if the person against whom 
the defense is asserted shows that the action was taken for the purpose 
of violating the antitrust laws.

                        V. Terms and Conditions

    Each Participant agrees to voluntarily collaborate with all 
Committee Members to recommend Plans of Action and Sub-Committees that 
will, at the direction of and under the supervision of FEMA, maximize 
the effectiveness of the manufacture and distribution of Critical 
Healthcare Resources nationwide to respond to a pandemic by 
establishing unity of effort between the Participants and the Federal 
Government for integrated coordination, planning, information sharing 
with FEMA, and allocation and distribution of Critical Healthcare 
Resources. These efforts aim to promote efficiency and timeliness to 
mitigate shortages of Critical Healthcare Resources to respond to a 
Pandemic and to meet the overall demands of the healthcare and other 
selected critical infrastructure sectors, along with those demands 
necessary to continue all-level-of-government mission-essential 
functions.

    As the sponsoring agency, FEMA will maintain oversight over 
Committee and Sub-Committee activities and direct and supervise actions 
taken to carry out this Agreement and subsequent Plans of Action, 
including by retaining decision-making authority over actions taken 
pursuant to this Agreement and subsequent Plans of Action to ensure 
such actions are necessary to address a direct threat to the national 
defense. The Department of Justice (DOJ) and the Chairman of the FTC 
will monitor activities of the Committee and Subcommittees to ensure 
they execute their responsibilities in a manner consistent with this 
Agreement having the least anticompetitive effects possible.

A. Plan of Action Execution

    Specific Member obligations and actions to be undertaken will only 
be provided for in individual Plans of Action, not in the Agreement. 
Activities taken to develop a Plan of Action or to implement a Plan of 
Action that has been activated pursuant to section III.E. above will 
provide Participants the antitrust defense described in section IV. 
Each Plan of Action will endeavor to clearly identify the conduct that 
Participants will undertake in carrying out the Plan of Action and that 
would be subject to the defense described in Section IV.

    Each Plan of Action will describe what information Members will 
share, as directed by FEMA and under FEMA's supervision. Information 
will be used to create a common operating picture in furtherance of the 
Plan of Action's purpose and/or to promote overall situational 
awareness of Critical Healthcare Resource manufacturing and 
distribution activities.

    Each Plan of Action, and information gathered pursuant to that 
plan, will be used to support one or more of the following objectives:

     (1)  Facilitate maximum availability of Critical Healthcare 
Resources to end-users by deconflicting overlapping requirements for 
the collective Participant customer base;
     (2)  Facilitate maximum availability of Critical Healthcare 
Resources to Members by deconflicting overlapping supply chain demands 
of Members;
     (3)  Facilitate efficient distribution of Critical Healthcare 
Resources by deconflicting overlapping distribution chain activities of 
Members;
     (4)  Inform where expansion of the manufacture of Critical 
Healthcare resources is necessary;
     (5)  Identify and prioritize Critical Healthcare Resource 
requirements;
     (6)  Validate Critical Healthcare Resource requirements;
     (7)  Project future demand for Critical Healthcare Resource 
requirements.
     (8)  Execute a collaborative manufacturing strategy to more 
efficiently make use of limited resources for key manufacturing lines 
of effort for Critical Healthcare Resources;
     (9)  Collaborate in the voluntary Participant allocation of 
Critical Healthcare Resources nationwide;
    (10)  Cooperate to the fullest extent possible to distribute 
Critical Healthcare Resources to locations most in need, as identified 
by FEMA;
    (11)  Explore strategies for increased manufacturing of Critical 
Health Resources in or near the United States;
    (12)  Carry out any other activities as determined and directed by 
FEMA necessary to address the Pandemic's direct threat to the national 
defense.

B. Information Management and Responsibilities

    FEMA will request only that data and information from Participants 
that is necessary to meet the objectives of a Plan of Action. Upon 
signing a Plan of Action Agreement, participants should endeavor to 
cooperate to the greatest extent possible to share data and information 
necessary to meet the objectives of the Plan of Action.

    The specific data requested, procedures for sharing that data, and 
data management and disposition will be tailored for each specific Plan 
of Action. Where feasible and to the greatest extent possible, FEMA 
will incorporate the following principles regarding data sharing into 
each Plan of Action:

        In general, Participants will not be asked to share 
competitively sensitive information directly with other Participants. 
Direct sharing of information among Participants will be requested only 
when necessary and will be closely supervised by FEMA, including 
requiring appropriate safeguards regarding participant use and 
dissemination of other participants' data.
        If FEMA needs to share information with parties outside the 
Sub-Committee, FEMA will limit the amount and type of information 
shared to the greatest extent feasible and permitted by law, while 
still furthering the objectives of the Plan of Action.
        Prior to distribution within or outside the Sub-Committee, 
FEMA will aggregate and anonymize data in such a way that will maximize 
the effectiveness of the Plan of Action without compromising 
competitively sensitive information.
        Pursuant to 5 U.S.C. 552(b)(4) and 44 CFR 332.5, FEMA will 
withhold from disclosure under the Freedom of Information Act 
Participant trade secrets and commercial or financial information and 
will restrict Sub-Committee meeting attendance where necessary to 
protect trade secrets and commercial or financial information.
        Any party receiving competitively sensitive information 
through a Plan of Action shall use such information solely for the 
purposes outlined in the Plan of Action and take steps, such as 
imposing firewalls or tracking usage, to ensure such information is not 
used for any other purpose. Disclosure and use of competitively 
sensitive information will be limited to the greatest extent possible.
        At the conclusion of a Participant's involvement in a Plan of 
Action--due to the deactivation of the Plan of Action or due to the 
Participant's withdrawal or removal--each Participant will be requested 
to sequester any and all competitively sensitive information received 
through participation in the Plan of Action. This sequestration will 
include the deletion of all competitively sensitive information unless 
required to be kept pursuant to the Record Keeping requirements as 
described supra, Section I, 44 CFR part 332, or any other provision of 
law.

C. Oversight

    The Chairperson is responsible for ensuring the Attorney General, 
or suitable delegate(s) from the DOJ, and the FTC Chairman, or suitable 
delegate(s) from the FTC, have awareness of activities under this 
Agreement, including Plan of Action activation, deactivation, and 
scheduling of meetings. The Attorney General, the FTC Chairman, or 
their delegates may attend Committee and Sub-Committee meetings and 
request to be apprised of any activities taken in accordance with 
activities under this Agreement or a Plan of Action. DOJ or FTC 
Representatives may request and review any proposed action by the 
Committee, Sub-Committee or Participants undertaken pursuant to this 
Agreement or Plan of Action, including the provision of data. If any 
DOJ or FTC Representative believes any actions proposed or taken are 
not consistent with relevant antitrust protections provided by the DPA, 
he or she shall provide warning and guidance to the Committee as soon 
as the potential issue is identified. If questions arise about the 
antitrust protections applicable to any particular action, FEMA may 
request DOJ, in consultation with the FTC, provide an opinion on the 
legality of the action under relevant DPA antitrust protections.

                   VI. Establishment of the Committee

    There is established a Committee for the Manufacture and 
Distribution of Healthcare Resources Necessary to Respond to a Pandemic 
(Committee) to provide the Federal Government and the Participants a 
forum to maximize the effectiveness of the manufacture and distribution 
of Critical Healthcare Resources nationwide to respond to a Pandemic 
through integrated coordination, planning, and information sharing with 
FEMA. A Chairperson designated by the FEMA Administrator will convene 
and preside over the Committee. The Committee will not be used for 
widespread or collective exchange of information among members. These 
activities, if required, shall be done within individual Sub-
Committees, and in accordance with an established Plan of Action. The 
Committee will not be used for contract negotiations or contract 
discussions between the Participants and the Federal Government; such 
negotiations or discussions will be in accordance with applicable 
federal contracting policies and procedures. However, this shall not 
limit any discussion within a Sub-Committee about the operational 
utilization of existing and potential contracts between the 
Participants and Representatives when seeking to align their use with 
overall manufacturing and distribution efforts consistent with this 
Agreement and a Plan of Action.

    The Committee will consist of designated Representatives from FEMA, 
HHS, other federal agencies with equities in this Agreement, and each 
Participant. The Attorney General and Chairman of the FTC, or their 
delegates, may also join the Committee and attend meetings at their 
discretion. Attendees may also be invited at the discretion of the 
Chairperson as subject matter experts, to provide technical advice, or 
to represent other government agencies, but will not be considered part 
of the Committee.

    To the extent necessary to respond to the Pandemic and at the 
explicit direction of the Chairperson, the Committee Members will 
provide technical advice to each other as needed, share information 
collectively, identify and validate places and resources of the 
greatest need, project future manufacturing and distribution demands, 
collectively identify and resolve the allocation of scarce resources 
amongst all necessary public and private sector domestic needs, and as 
necessary, share vendor, manufacturer and distribution information, and 
take any other necessary actions to maximize the timely manufacture and 
distribution of Critical Healthcare Resources as determined necessary 
by FEMA to respond to the Pandemic. The Chairperson or his or her 
designee, at the Chairperson's sole discretion, will make decisions on 
these issues in order to ensure the maximum coordination, efficiency, 
and effectiveness in the use of Member's resources and will create and 
execute Plans of Action as needed. All Participants will be invited to 
open Committee meetings. For selected Committee meetings, attendance 
may be limited to designated Participants to meet specific operational 
requirements.

    The Committee Chairperson shall notify the Attorney General, the 
Chairman of the FTC, Representatives, and Participants of the time, 
place, and nature of each meeting and of the proposed agenda of each 
meeting to be held to carry out this Agreement. Additionally, the 
Chairperson shall provide for publication in the Federal Register of a 
notice of the time, place, and nature of each meeting. If a meeting is 
open, a Federal Register notice will be published reasonably in advance 
of the meeting. The Chairman may restrict attendance at meetings only 
on the grounds outlined by 44 CFR 332.5(c)(1)-(3). If a meeting is 
closed, a Federal Register notice will be published within 10 days of 
the meeting and will include the reasons why the meeting is closed 
pursuant to 44 CFR 332.3(c)(2).

    The Chairperson shall establish the agenda for each meeting, be 
responsible for adherence to the agenda, and provide for a written 
summary or other record of each meeting and provide copies of 
transcripts or other records to FEMA, the Attorney General, the 
Chairman of the FTC, and all Participants. The Chair shall take 
necessary actions to protect from public disclosure any data discussed 
with or obtained from Participants which a Participant has identified 
as a trade secret or as privileged and confidential in accordance with 
DPA sections 708(h)(3) and 705(d), or which qualifies for withholding 
under 44 CFR 332.5.

    The Administrator, in his or her sole discretion and after 
consultation with the Committee Members, will create Plans of Action 
and Sub-Committees for specific workstreams or functional areas 
requiring collective coordination, planning, and collaboration. These 
Sub-Committees shall be subject to the same rules, regulations and 
requirements of the Committee and any other rules or requirements 
deemed necessary by the Chairperson, the Administrator, or the Attorney 
General, after consultation with the Chairman of the FTC.

                     VII. Application and Agreement

    The Participant identified below hereby agrees to join in the 
Federal Emergency Management Agency sponsored Voluntary Agreement 
entitled Committee for the Manufacture and Distribution of Healthcare 
Resources Necessary to Respond to a Pandemic (Agreement) and to become 
a Participant in this Committee. This Agreement will be published in 
the Federal Register. This Agreement is authorized under section 708 of 
the Defense Production Act of 1950, as amended. Regulations governing 
this Agreement appear at 44 CFR part 332. The applicant, as 
Participant, agrees to comply with the provisions of section 708 of the 
Defense Production Act of 1950, as amended, the regulations at 44 CFR 
part 332, and the terms of this Agreement.

                            VIII. Assignment

    No Participant may assign or transfer this Agreement, in whole or 
in part, or any protections, rights or obligations hereunder without 
the prior written consent of the Chairperson. When requested, the 
Chairperson will respond to written requests for consent within 10 
business days of receipt.

Vizient, Inc.

Primary Contact: Steve Downey ([email protected])
Secondary Contact: Shohana Krilow ([email protected])

10/8/2020

                                 ______
                                 
     Questions Submitted for the Record to Cathy Denning, R.N., MSN
                 Questions Submitted by Hon. Ron Wyden
    Question. You noted during your testimony that during a normal 
year, 15 million N95 masks are used, and that so far this year, 500 
million N95 masks have been used. Please provide data on other 
categories of PPE, including but not limited to, surgical masks, face 
shields, gloves, isolation gowns, hand sanitizer? Which supply 
categories are currently experiencing shortages (please quantify or 
provide specific examples), and which categories cause you the most 
concern about shortages moving forward?

    Answer. First--to clarify a critical point--the 500 million N95 
number I provided references the number of masks we estimate our 
members ordered, but not necessarily the number that were received or 
shipped. This number reflects a significant demand increase but it's 
important to clarify that hospitals did not likely receive all of the 
items they attempted to purchase. Regarding your question about data on 
other categories of PPE, please find a table at the end of the document 
that shows the increase in volume of orders received between 2019 and 
2020.

    With respect to PPE, the market does seem to have softened around 
hand sanitizer, surgical masks, face shields and isolation gowns. For 
the time being our members seem to be able to obtain adequate products 
through their current suppliers for their daily needs. In addition, 
many providers have invested in building reserves of these products 
where feasible. For some products, like N95s, members report that they 
have continued with extended use and reprocessing for these products 
and when the supply is completely healthy, they will return to 
supplying these daily as needed. This level of having adequate supply 
could shift if there is a repeat of supply constraints like earlier in 
the year with the two waves of influenza and the emergence of COVID-19.

    The exam glove market, however, is experiencing unprecedented 
demand increases in both health-care and non-health-care settings. This 
increased demand is being driven by stockpile buying (in some cases to 
meet State and local government standards), as well as increased buying 
from the non-health-care sector and buying from outside of the US. This 
increase in demand is exacerbated by a lack of excess capacity or 
ability to quickly expand within glove manufacturers, the significant 
cost and technological barriers to entry into the glove manufacturing 
market, as well as the barring of some large glove manufacturers from 
shipping to the U.S.

    This, in turn, has led to astronomical pricing increases. Prior to 
the pandemic, hospitals were able to purchase gloves at an average cost 
of $.03-$.04 per glove; we are now seeing hospitals pay more than $.105 
with some manufacturers and distributors predicting $.15 average 
pricing in the 4th quarter with further price increases expected in 
early 2021.

    These price increases have been driven, up until now, primarily by 
increased worldwide demand and profit-taking by manufacturers. However, 
manufacturers are now reporting a 25-percent increase in raw materials 
which will further drive pricing on gloves delivered in November and 
December.

    As with glove manufacturing, the raw materials companies exist 
almost exclusively within China and Southeast Asia. As glove 
manufacturers are investing in expansion of production, a significant 
question will be whether or not the raw materials makers have the 
capacity to supply new manufacturing capabilities.

    For hand sanitizers, the market share leaders (GOJO, Ecolab) are 
still on distribution allocation (average is 150 percent) but there are 
not any issues hitting the allocation.

    Question. In a statement for the record, Premier, Inc., which 
operates similar businesses to Vizient, called for ``real-time 
syndromic surveillance to provide an upstream alternative to 
identifying cases before tests can detect them or patients are 
hospitalized.'' From your company's point of view how could such a 
system augment existing disease surveillance efforts? Similarly, can 
PPE demand data be used to inform understanding of where COVID-19 
outbreaks are occurring?

    Answer. Vizient's approach is upstream to real-time syndromic 
surveillance. The challenge with surveillance is that by the time a 
person is presenting with symptoms, the infection has likely already 
spread. We believe that surveillance can be limited as leading factor. 
Based on what we know about the disease, coupled with modeling social 
distancing patterns, population density and vulnerable patient 
populations, we actually have insights prior a patient presenting to 
the health system as symptomatic. Vizient harnesses these factors, 
along with previous infection rate patterns, to gain insight into 
future COVID-19 burdens prior to any ``real-time'' syndromic 
surveillance indications. Vizient has developed statistical forecasts 
of COVID infection rates that provide future demand not only at the 
individual hospital level, but also at the city, State and national 
levels. This can help us and our members assess future 
hospitalizations, including ICU utilization, as well as future PPE 
demand. Vizient is actively leveraging these insights to proactively 
work with our membership to assess and plan for future resource needs.

    Question. What, if any, data is or has Vizient been sharing with 
the Supply Chain Task Force and/or FEMA?

    Answer. Vizient holds regular calls with FEMA and others in the 
administration to share information related to demand data, fill rates, 
member concerns, and other issues related to the supply chain. This 
also includes item lists such as reference information from our product 
data including what specific items are within a category (e.g., part 
numbers of gowns). We have also shared master reference data such as 
catalog data listing--a given item number and what each of the 
distributors use as item numbers for those items and their different 
units of measure. On the pharmaceutical side, we have shared the 
following information, some of which was sent to an organization called 
Healthcare Ready for them to share directly with FEMA or other 
government officials:

        April 4, 2020--Listing of top generic drug manufacturers 
contact information sent to Healthcare Ready.
        April 7, 2020--FEMA ICU patient drugs--added missing drugs, 
amended dosing recommendations and supply size needed for COVID 
treatment sent to Healthcare Ready.
        April 7, 2020--COVID drug list for FDA--COVID drugs and 
corresponding fill rates sent to Healthcare Ready.
        April 8, 2020--COVID drug list for FDA--updated with 
additional tab providing crosswalk information for each drug being 
monitored to assist FEMA sent to Healthcare Ready.
        April 22, 2020--Vizient report to FDA and COVID-19 impact upon 
ventilator drugs--demand and fill rate for 48 drugs being tracked for 
FDA along with a weekly analysis presented in PPT on ventilator drugs 
sent to Healthcare Ready.
        April 27, 2020--Common COVID ventilator medications--Vizient 
fulfilled request for information on common drugs expected to be used 
in management of ventilated patients sent to Healthcare Ready.
        April 28, 2020--Supply Chain Task Force primary and secondary 
medications priorities--Vizient reviewed and provided feedback on a 
draft list of priority medications the FEMA Supply Chain Task Force 
plans to track sent to Healthcare Ready.
        May 1, 2020--Fill rate tracker FEMA--Vizient responded to FEMA 
request for fill rates across 15 specific vent meds sent to Healthcare 
Ready.
        May 2, 2020--Fill rate tracker FEMA--Vizient provided an 
update and responded to methodology question supporting detail on how 
fill rates are calculated sent to Healthcare Ready.
        May 7, 2020--GPO site usage for 15 ventilator medications--
responded to request to expand fill rate to include total utilization 
(demand) by month across GPO membership sent to Healthcare Ready.
        May 7, 2020--Remdesivir requests--shared additional feedback 
with FEMA in response to distribution limitations of Remdesivir across 
many of our member hospitals sent to Healthcare Ready--this was done 
every business day until a more formal process for Remdesivir 
distribution was laid out by HHS.

    Question. Please provide copies of any agreements that Vizient has 
signed with the task force or FEMA.

    Answer. As of October 8, 2020, Vizient has signed a Voluntary 
Agreement with FEMA pursuant to the Defense Production Act. A copy of 
that agreement is included as a separate attachment (see p. 44).

    Question. My State of Oregon relied upon an Emergency Use 
Authorization issued by the Food and Drug Administration as a stamp of 
quality when it acquired N95 respirators, only to have that decision 
reversed after the State imported them from China. The U.S. agency that 
actually tests and certifies these respirators--NIOSH--now says that 
Chinese manufacturers are telling them some of the respirators they de-
certified were counterfeit. In a recent article, The Wall Street 
Journal attempted to quantify the problem that States across the 
country faced (``FDA's Shifting Standards for Chinese Face Masks Fuel 
Confusion,'' August 3, 2020), reporting that State agencies submitted 
orders for more than 180 million KN95 masks that ``are now sitting 
unwanted in warehouses due to quality concerns,'' and that ``more than 
60 percent of foreign-made masks, nearly all Chinese made, have failed 
basic U.S. government quality tests that looked at 220 such brands.'' 
Please answer the following:

    Were counterfeit, fraudulent or otherwise substandard PPE a 
significant problem for the U.S. prior to this pandemic?

    Answer. No.

    Question. Is this primarily driven by the massive surge in demand 
for PPE?

    Answer. Yes.

    Question. Has the FDA's decision to list and delist KN95 masks 
complicated efforts to obtain sufficient supplies of respirators?

    Answer. Yes. While the various EUAs have been appreciated, the 
addition of multiple products labeled as KN95, coupled with these 
products being easily counterfeited, created a problem for providers. 
Providers subsequently purchased these products before the EUAs were 
rescinded which then led to them being ultimately unusable. All of this 
complicated the overall efforts to obtain sufficient supply of usable 
N95s.

    Question. Would your members have benefited from more Federal 
leadership throughout this pandemic procuring quality safety equipment?

    Answer. We have appreciated working with individuals throughout the 
administration on this critical issue. All stakeholders, including the 
government, could have improved in their overall response to COVID-19, 
and we look forward to continuing to engage as we all work towards the 
same goals.

    Question. The Trump administration testified in July that it has 
used the Defense Production Act ``more than 10 times'' to combat COVID-
19, an extraordinarily narrow use of existing authority that stands in 
stark contrast to Federal agencies historical use of DPA. Historically, 
the statute's authority has been used to acquire supplies and services 
in times of emergency and in day-to-day business. For example, the 
Department of Defense places approximately 300,000 rated orders 
annually, while the Department of Homeland Security, including FEMA, 
placed more than 1,000 rated orders and contracts in 2018. Specific 
examples include using priority orders to acquire the Adenovirus 
vaccine, expediting construction of floodwater controls in New Orleans, 
speeding up the purchase of railroad equipment following Hurricane 
Katrina, and obtaining resources needed to house and feed disaster 
survivors and first responders, communications equipment and 
information technology needs, and other logistical needs supporting 
disaster response and recovery efforts. Given the shortages of PPE you 
have experienced, shouldn't the administration use the Defense 
Production Act to increase the availability of personal protective 
equipment and better allocate supplies?

    Answer. We have previously stated our support for--and continue to 
support--the use of the DPA and other means to increase the supply of 
PPE and other critical products.

    Question. The Trump administration has relied on the practice of 
reusing PPE to make it look like there are adequate supplies at 
hospitals and other medical settings, which has been a big safety 
concern for workers. The American Nurses Association surveyed 14,000 
nurses in May and found that 45 percent worked at facilities with 
shortages of PPE, and 79 percent reported having to reuse PPE. In July, 
the National Nurses Union released a survey of 21,000 nurses, of which 
87 percent reported re-using PPE. My staff heard similar stories from 
around the country. One nurse in Houston, where the virus is surging, 
told Minority staff that her hospital is cleaning and reusing N95 masks 
up to 10 times. Ms. Denning, if your members were not reusing PPE 
intended for single use, would there be more severe shortages of 
supplies?

    Answer. Yes.

                                 ______
                                 
               Question Submitted by Hon. Debbie Stabenow
    Question. As we continue to respond to this pandemic, we also know 
that influenza season will soon start. You mention in your written 
testimony that a spike in influenza cases just prior to the pandemic 
had hindered our PPE supply. Do you have similar concerns about the 
upcoming flu season?

    Answer. Yes.

                                 ______
                                 
             Question Submitted by Hon. Sheldon Whitehouse
    Question. Like many States, Rhode Island has had chilling 
experiences procuring PPE, including unfulfilled orders, fraudulent 
sales, and a competitive race for supplies. This toxic atmosphere 
discourages not only buyers, but also suppliers, from entering the PPE 
market, as manufacturers face challenges understanding the market, 
product standards, and the allocation process. In your experience as 
buyers of PPE on behalf of hospitals and health-care providers, what 
does the current PPE market look like and how has it been tainted by 
the disorganized, toxic procurement process?

    Answer. First--to clarify the role of a GPO--we do not take title 
to products (or buy products). Our primary role is to leverage the 
scale of our membership to negotiate prices on their behalf for goods 
and services. That said, as I mentioned in my testimony, there have 
been many bad actors who have looked to exploit health-care providers, 
patients, and the government by preying on the critical need for PPE 
and other products.

    Additionally, in recent years, hospitals have been driven to the 
lowest cost item and a just-in-time inventory system to keep supply 
costs as low as possible. However, because of this approach to managing 
a challenging financial environment, many health-care systems found 
themselves unprepared for the unprecedented volume of COVID-19 
patients.

    We believe the PPE market has been adversely impacted in that 
traditional, quality suppliers looking to grow their capacity to help 
meet the increased needs were, in turn, met with factories in other 
countries that saw an opportunity to significantly increase prices and 
sell dedicated manufacturing lines to the highest bidder. We also 
experienced an emergence of third-party brokers (many questionable) 
that were securing product in other countries and didn't have the 
expertise to validate the manufacturer, evaluate the product quality or 
appreciate the required certifications needed for U.S.-based health-
care providers.

    That being said, there have been some positive outcomes that 
include increased demand for transparency around origin of 
manufacturing and raw materials, PPE innovation and overall 
competition. We experienced innovative approaches to a number of PPE 
categories including gowns, masks and face shields. We have also seen 
new market entrants into the healthcare market.

    This experience underscored the importance of the terms and 
conditions of GPO contracts that include failure to supply, warranty, 
competitive pricing, validated quality as well as governmental 
regulations.

                                 ______
                                 
                Question Submitted by Hon. Sherrod Brown
    Question. In your testimony, you acknowledged that supply chain 
vulnerabilities exist, and in order to improve our supply chain and 
make it more resilient we must increase transparency, redundancy, and 
diversification. Can you provide specific suggestions for how the U.S. 
government, particularly through the strategic national stockpile and 
other Federal programs focused on preparedness and response, can 
increase transparency, redundancy, and diversification within our PPE 
supply chain?

    Answer. Location of manufacturing. Require the physical address of 
the most significant manufacturing steps to be available to the public, 
as well as other manufacturing steps or contract manufacturing.

    Location of raw materials. Require the physical address of each raw 
material supplier be supplied and available to the public.

    Supply capacity. Require manufacturers to disclose capacity of each 
manufacturing location, by product sku, with current capacity and 
potential expansion capacity.

    Share information on demand, stock, and supply. As the government 
builds databases about the health of supply chains, through demand, on-
hand inventory and supply information, make that information available 
to industry participants, including GPOs.

    SNS. As health systems consume product within State/Federal 
stockpiles, provide a report to industry stakeholders, including the 
GPOs that serve those hospitals, for enhanced visibility. Also inform 
GPOs of the products and stock levels within the SNS so we can assess 
the risks to supply.

    Local supply. Help drive a more resilient supply chain by investing 
in domestic supply of manufacturing.

                                 ______
                                 
               Question Submitted by Hon. Chuck Grassley
    Question. We've heard from some manufacturers and suppliers that 
increased transparency within the supply chain could harm competition 
and expose confidential business information. Can you respond to these 
concerns? How can the Federal Government increase transparency while 
balancing these concerns?

    Answer. Yes, we have also heard the argument that increased 
transparency of manufacturing information is not possible due to the 
risk of disclosing confidential details and/or creating a less 
competitive marketplace. In response, we must note that the existing 
environment of limited or non-existent information regarding the 
manufacturing quality or the origination of source of active 
pharmaceutical ingredients and other medication components has failed 
to deliver the resilient and safe supply channel that is required to 
sustain patient care. For example, in addition to the recent pandemic, 
drug shortages cost the U.S. health-care system at least $360 million 
annually. The concept of increased disclosure and transparency 
regarding manufacturing and quality has been articulated in the Food 
and Drug Administration's task force on drug shortages and championed 
by numerous other organizations including the American Hospital 
Association, the American Medical Association, the United States 
Pharmacopeia, the American Society of Health-System Pharmacists, and 
Vizient.

    The expectation for increased transparency is no longer a 
negotiable situation. Too many stakeholders now expect this level of 
clarity and are taking steps to gather information to make more 
informed sourcing decisions. We would strongly encourage the 
pharmaceutical and medical device industries to support this endeavor 
and ensure end users have accurate information on which to make their 
decisions. Furthermore, we fully anticipate that those companies who 
volunteer information and demonstrate a visible and documented 
commitment to quality will be even more competitive as compared to 
those who resist this transformation. We similarly urge the government, 
through congressional or other action, to hold manufacturers 
accountable for this level of needed transparency.

FOLLOW-UP FROM QUESTION 1:

                                     2019 vs. 2020 Submitted Invoice Volume
----------------------------------------------------------------------------------------------------------------
                                  2019 Est. U.S.      2020 Est. U.S.
                                Acute Care Invoice  Acute Care Invoice
                                 Volume  (Based on   Volume  (Based on    Invoiced
        PPE Categories          Jan-Jul annualized  Jan-Jul annualized     Volume       Order Volume  Increase
                                  Vizient Member      Vizient Member      Increase
                                      Spend)              Spend)
----------------------------------------------------------------------------------------------------------------
Face Shields                               331,760           1,191,431         259%  690% at peak
----------------------------------------------------------------------------------------------------------------
Exam Gloves                         22,480,253,366      27,338,294,843          22%  260% at peak
----------------------------------------------------------------------------------------------------------------
Isolation Gowns                        539,918,064         847,360,528          57%  380% at peak
----------------------------------------------------------------------------------------------------------------
N95 Respirators                         29,761,566         121,847,624         309%  4,000% at peak
----------------------------------------------------------------------------------------------------------------
Surgical Masks (tie behind)            145,291,499         239,105,409          65%  650% at peak
----------------------------------------------------------------------------------------------------------------
Procedure Masks (ear loop/             529,432,461       1,452,702,635         174%  650% at peak
 elastic)
----------------------------------------------------------------------------------------------------------------
Shoe Covers                            193,979,281         231,508,380          19%
----------------------------------------------------------------------------------------------------------------

                                          Invoiced Volume in Eaches
Assumptions:
      Estimated U.S. Acute Care volumes are built on invoice data 
shared with Vizient from member hospitals and based on the following:
The data provided represent 80 percent of the total Vizient member 
volume
Vizient members represent 50 percent of the U.S. Acute Care market 
volume
      Invoice volume reflects the actual quantities that were shipped 
in comparison to order volumes which can be overstated due to hospital 
and distributor ordering practices
      Order quantity perspective provided by Owens and Minor to 
Vizient
      Includes all safety levels

                                 ______
                                 
        Prepared Statement of Ernest Grant, Ph.D., R.N., FAAN, 
                 President, American Nurses Association
    Chairman Grassley, Ranking Member Wyden, and members of the 
committee, thank you for giving me the opportunity to appear before 
you, on behalf of the American Nurses Association (ANA), to discuss the 
need to protect the reliability of the United States medical supply 
chain during the COVID-19 pandemic. Nurses and other health-care 
providers in communities across the country have been on the front 
lines of the coronavirus pandemic and have been negatively impacted by 
the shortages of Personal Protective Equipment (PPE) caused by the 
global impact of COVID-19.

    ANA is the premier organization representing the interests of the 
Nation's over 4 million registered nurses (RNs), through its State and 
constituent member associations, organizational affiliates, and 
individual members. ANA members also include the four advanced practice 
registered nurse roles (APRNs): nurse practitioners (NPs), clinical 
nurse specialists (CNSs), certified nurse-midwives (CNMs) and certified 
registered nurse anesthetists (CRNAs). ANA is dedicated to partnering 
with health-care consumers to improve practices, policies, delivery 
models, outcomes, and access across the health-care continuum.

    This is one of the most difficult times nurses have ever faced. At 
the beginning of this crisis the United States saw nurses and other 
front-line health-care professionals confronting a shortage of personal 
protective equipment by making their own masks or using trash bags for 
make-shift gowns. Because of the unsafe working conditions, some made 
the difficult choice to leave their jobs to protect their families and 
themselves. Others developed emotional and psychological issues, 
suffered severe physical ailments from the coronavirus and tragically, 
all too many, more than 230 nurses died providing care to their 
communities. This is unacceptable.

    Nurses must be protected and supported so they can continue to care 
for patients and educate the public. We must safeguard nurses' and 
other front-line providers' well-being and heed their invaluable 
insights so that the Nation can recover faster and stronger. It is both 
a moral and strategic imperative for our Nation's leaders to do 
everything possible to arm and protect nurses and other critical 
responders as we work to combat the pandemic and prepare for future 
public health crises.
                           ana surveys on ppe
    Despite hopes that strong mitigation and containment actions in our 
communities would reduce the severity of the coronavirus outbreak, the 
Nation is currently seeing an uptick in COVID-19 cases, causing the 
demand for, and pressure on nurses to only grow. At the time of this 
testimony, PPE is not being provided in the quantity or quality that is 
required for nurses to safely care for patients. To closely and 
consistently monitor nurses' access to PPE, ANA has deployed several 
PPE-specific surveys, including two that were conducted in March and 
May, as well as one that is currently in the field. The findings of 
these surveys are outlined below, but the topline takeaway is that 
there has been little to no change in our members' access to sufficient 
quantities of safe and effective PPE since the beginning of the 
pandemic in the United States

    ANA's May survey on access to PPE received 14,000 responses. 45 
percent of respondents reported PPE shortages in their facility, and 79 
percent said they are required, or encouraged, to reuse single-use PPE, 
such as N95 masks. More than half of these respondents said they feel 
unsafe using decontaminated respirators. ANA does not support the use 
of decontamination methods as a standard practice; however, we have 
acknowledged this is a crisis capacity strategy. The Association 
recommends that Congress engage with the U.S. Food and Drug 
Administration regarding the need to expeditiously research the 
effectiveness of various decontamination methods for the reuse of PPE 
by nurses and other health-care professionals. We also urge additional 
oversight to ensure a return to best practices as soon as possible.
                         stories from the field
    ANA has requested nurses from across the country share their 
personal stories related to PPE. It is evident from these stories that 
the PPE supply chain continues to be strained. While facilities 
struggle to supply adequate quantities of PPE, ANA is hearing that the 
quality of the PPE is getting worse. Nurses in Oregon reported that a 
large hospital system purchased and reported an ample supply of masks. 
Unfortunately, likely due to supply issues, the hospital switched 
brands, and the current stock of masks are all too large to properly 
fit most staff. This can cause safety issues because if the masks are 
too large, there is the potential to create an opening in which the 
virus may enter, putting healthcare workers at an even greater risk, as 
there is not a reliable seal around their face, which is mandated by 
the wearing of isolation gear.

    Nurses also reported that the quality of the masks was so poor that 
the wire that forms around the nose did not fit properly, causing 
safety concerns over the tightness of the facial seal. These are not 
isolated examples. Congress and the administration, in coordination 
with the States, must ensure not only that health-care providers are 
stocked with adequate quantities of PPE, but also that it meets 
medical, safety, and quality criteria.

    The top-line concerns that ANA has received in its surveys are as 
follows:

        Nurses are being asked to reuse PPE when reuse is out of 
alignment with manufacturers' guidelines.
        Facemasks fog up resulting in various incidents (needle stick, 
inability to accurately take blood pressure, etc.).
        Nurses being asked to reuse PPE that cannot be disinfected.
        That some personal protective equipment is unsafe. A soft, 
pliable face shield may be non-medical grade, warping and fogging 
material. The straps cannot be disinfected.
        In some locations there is an insufficient supply of PPE. 
Nurses are getting small allotments of gloves, disinfectant, surgical 
masks and N95s. These do not meet the need of the procedures the nurses 
are being ordered to perform.
        Underserved and rural hospitals are being outbid by larger 
health systems as well as both the State and Federal Government, 
exacerbating their difficulty in obtaining supplies.

    ANA has also received over 200 personal stories as part of a PPE 
survey that is currently out in the field.
              strategic national stockpile recommendations
    While ANA understands the PPE crisis is the result of multiple 
factors, including shortages of raw materials, a global need for 
equipment, and growing PPE needs as the country and schools reopen, we 
believe that more must be done by both the Federal and State 
Governments to better deploy this protective equipment. While States 
certainly have a role in ensuring access to care, more needs to be done 
to enhance the Federal/State partnership to ensure transparency and 
equitable access to safe and quality protective equipment for health-
care providers.

    To achieve this goal, ANA recently submitted detailed 
recommendations to Chairman Lamar Alexander and the Health, Education, 
Labor, and Pensions (HELP) Committee in response to the chairman's 
white paper request, which is attached and summarized below.

        To make sure health-care providers are never again left with a 
PPE shortage, Congress should request an annual report on the state of 
the strategic national stockpile (SNS) with respect to PPE, vaccines, 
medicines, and other supplies. The report must include when items are 
expiring and what items need to be replaced. When items are approaching 
expiration, they should be donated to underserved medical facilities 
such as federally qualified health centers, rural hospitals, and 
clinics based on need.

        Health-care facilities should be required to report monthly on 
their levels of these items so the agency in charge has up to date 
information on where shortages may be most acute in the early stages of 
an emergency. A formulary should be developed by National Academy of 
Sciences, Engineering, and Medicine on what levels of PPE, vaccines, 
and other supplies health-care facilities should have in their own 
stockpiles. Manufacturers of these items should also be reporting on 
production and capabilities.

        The Federal Government must take appropriate steps to plan 
coordination efforts. Many States will not have the resources or 
expertise to carry out preparations or coordination without Federal 
assistance. Hospitals and facilities with more capital will most likely 
benefit while rural and underserved areas will suffer. There have been 
instances of States and health-care systems in competition with one 
another to procure PPE and essential supplies. The Federal Government 
needs to help States prepare by taking steps to ensure they are not 
pitted against each other when it comes to resources.

        The Federal Government needs to do more to incentivize and 
prioritize the manufacturing of PPE, medications, and other supplies in 
the United States, even if that means carrying out production itself. 
We cannot allow our citizens to be put at a health risk because 
businesses view manufacturing elsewhere better for their bottom line. 
More production in the United States will also help the U.S. economic 
recovery.
        ana engagement with the federal government regarding ppe
    Since the beginning of this pandemic, ANA has called on Federal 
officials to increase the supply of PPE. The Association will continue 
to do so because nurses, other health-care professionals, and essential 
workers must have the proper equipment to protect themselves and take 
care of our communities. We have specifically urged the administration 
to use the Defense Production Act more aggressively to increase the 
domestic production of medical supplies and equipment desperately 
needed by front-line health-care personnel. With the rise in cases as 
States reopen, the administration and Congress must continue to 
increase and incentivize the domestic production of medical supplies 
and equipment that meets medical, safety, and quality criteria 
desperately needed by front line health-care personnel.
                               conclusion
    ANA stands ready to work with the Finance Committee, the entire 
Congress, and the administration to find sustainable solutions to this 
PPE crisis in order to protect our Nation's front-line nurses and 
ensure that front-line providers will never experience this level of 
shortage and unsafe practices again. On behalf of our patients and 
their families, the 4 million RNs who care for them, and the hundreds 
who have selflessly given their lives to safeguard the health of their 
communities, we must do better. Thank you and I look forward to 
answering any questions that you may have.

                                 ______
                                 

Attachments:

ANA response to the Senate HELP Committee white paper titled, 
``Preparing for the Next Pandemic,'' https://www.nursingworld.org/
practice-policy/work-environment/health-safety/disaster-preparedness/
coronavirus/june-3-2020-prac-grant/june-26-ana-letter-to-chairman-
alexander/.
ANA May 2020 PPE Survey, https://www.nursingworld.org/practice-policy/
work-environment/health-safety/disaster-preparedness/coronavirus/what-
you-need-to-know/survey-series-results/
#::text=ANA%20Personal%20Protective%20Equipment%
20Survey%20-%20May%202020,situation%20on%20the%20frontlines%20of%20the%
20COVID-19%20pandemic.
ANA May 2020 PPE survey infographic, https://www.nursingworld.org/
49cd40/globalassets/covid19/ppe-infographic-june-5-2020.pdf.

                                 ______
                                 
                              Attachment 1

           ANA Responds to Questions From Chairman Alexander 
                   Re: Planning for the Next Pandemic

ANA responded to questions from a white paper entitled, ``Preparing for 
the Next Pandemic.'' It looks to address future pandemics based on 
lessons learned from COVID-19 and the past 20 years of pandemic 
planning.

June 26, 2020

The Honorable Lamar Alexander
Committee on Health, Education, Labor, and Pensions
428 Dirksen Office Building
Washington, DC 20510

Re: Pandemic Preparedness White Paper

Dear Chairman Alexander:

In the Pandemic Preparedness White Paper that was issued on June 9, 
2020, the Committee requested input on what the United States has 
learned from the past twenty years of public health preparedness and 
response and how it can better prepare for future pandemics. On behalf 
of the American Nurses Association (ANA), I have provided 
recommendations for the Committee to consider as its work on COVID-19 
and preparedness continues over the next several months.

 Stockpiles, Distribution, and Surges--Rebuild and Maintain State and 
                    Federal Stockpiles and Improve Medical Supply Surge 
                    Capacity and Distribution

How can the Strategic National Stockpile be better managed and how can 
Congress increase oversight and accountability?

Congress should receive an annual report on the state of the Strategic 
National Stockpile (SNS) with respect to personal protective equipment 
(PPE), vaccines, medicines, and other supplies. The report must include 
when items are expiring and what items need to be replaced. When items 
are approaching expiration, they should be donated to underserved 
medical facilities such as federally qualified health centers, rural 
hospitals, and clinics based on need.

Health care facilities should be required to report monthly on their 
levels of these items so the agency in charge has up to date 
information on where shortages may be most acute in the early stages of 
an emergency. A formulary should be developed by National Academy of 
Sciences, Engineering, and Medicine on what levels of PPE, vaccines, 
and other supplies health-care facilities should have in their own 
stockpiles. Manufacturers of these items should also be reporting on 
production and capabilities.

In addition, the federal government needs to do more to incentivize and 
prioritize the manufacturing of PPE, medications, and other supplies in 
the United States, even if that means carrying out production itself. 
We cannot allow our citizens to be put at a health risk because 
businesses view manufacturing elsewhere better for their bottom line. 
More production in the United States will also help the U.S. economic 
recovery.

How can states and hospitals improve their ability to maintain a 
reserve of supplies in the future to ensure the Strategic National 
Stockpile is the backup and not the first source of supplies during 
emergencies?

They should be required to follow and report on the above-referenced 
formulary of how much of each item they must always have on hand. 
Without an incentive or penalty--financial or otherwise--there is 
little incentive to maintain larger reserves.

What steps should be taken to ensure that health-care providers and 
first responders have the supplies they need, such as personal 
protective equipment?

By following the recommendations above regarding better managing the 
SNS and improving how states and hospitals improve their ability to 
maintain reserves.

As states and hospitals establish or build their own stockpiles, how 
will they know what supplies to stockpile? What guidance should the 
federal government provide on what medical supplies are appropriate?

There should be a formulary developed by the Department of Health and 
Human Services, Centers for Disease Control and Prevention, National 
Academies of Sciences, Engineering, and Medicine, and other appropriate 
government agencies, departments, and other stakeholders, to determine 
what items are needed for their own stockpiles and what are appropriate 
levels of stock for each item.

Could states and hospital systems establish their own vendor managed 
inventory programs with manufacturers and distributors? Should the 
federal government or states contribute to such hospital stockpiles?

In theory they could, but quality conditions and maintenance will 
result in drastically varying consistency. Furthermore, neglect could 
occur in some areas due to budget cuts.

 Public Health Capabilities--Improve State and Local Capacity to 
                    Respond

What specific changes to our public health infrastructure (hospitals, 
health departments, laboratories, etc.) are needed at the federal, 
state, and local levels?

A robust public health infrastructure better equips the nation with 
preparedness and response measures during times of crisis. This 
pandemic is the latest in a long string of emergencies that put a 
spotlight on what damage underinvesting in public health can do to a 
society. Federal reinvestment in public health infrastructure back to 
at least 2008 levels will be important as the nation moves forward.

Additionally, expansion of the public health workforce is a key element 
of this needed investment. Our public health workforce, of which public 
health nurses are the largest segment, touch every aspect of health 
care and community well-being. They play an integral role in narrowing 
disparities, improving health outcomes, and reducing disproportionately 
high morbidity and mortality rates due to preventable illness.

How can the federal government ensure all states are adequately 
prepared without infringing on states' rights and recognizing states 
have primary responsibility for response?

It is important for the federal government to take appropriate steps to 
plan coordination efforts. Many states will not have the resources or 
expertise to carryout preparations or coordination without federal 
assistance. Hospitals and facilities with more capital will most likely 
benefit while rural and underserved areas will suffer. We have seen 
instances of states competing with each other to procure PPE and 
essential supplies, and federal government coordination efforts, where 
appropriate, wouldn't seem to infringe on state responsibility. The 
federal government needs to help states prepare by taking steps to 
ensure they aren't pitted against each other when it comes to 
resources.

How should the federal government ensure agencies like CDC maintain an 
appropriate mission focus on infectious diseases in the periods between 
emergencies to strengthen readiness to respond when a new threat 
arises?

Congressional oversight as well as adequate funding are vital to ensure 
that the CDC and other relevant agencies stay focused and dedicate 
resources to improved readiness for future pandemics and public health 
emergencies.

ANA is the premier organization representing the interests of the 
nation's 4.1 million RNs, through its state and constituent member 
associations, organizational affiliates, and individual members. ANA 
members also include the four advanced practice registered nurse roles 
(APRNs); Nurse practitioners (NPs), clinical nurse specialists (CNSs), 
certified nurse-midwives (CNMs) and certified registered nurse 
anesthetists (CRNAs). ANA is dedicated to partnering with health-care 
consumers to improve practices, policies, delivery models, outcomes, 
and access across the health-care continuum.

Thank you for giving nurses this opportunity to provide the federal 
government with input on pandemic preparedness and public health. If 
you have questions, please contact Ingrida Lusis, Vice President of 
Policy and Government Affairs, at (301) 628-5081 or 
[email protected].

Sincerely,

Debbie D. Hatmaker, Ph.D., R.N., FAAN
Acting Chief Executive Officer/Chief Nursing Officer
cc: Ernest Grant, Ph.D., R.N., FAAN, ANA President

                                 ______
                                 
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                              Attachment 3
[GRAPHIC] [TIFF OMITTED] T3020.001


                                 ______
                                 
 Questions Submitted for the Record to Ernest Grant, Ph.D., R.N., FAAN
                 Questions Submitted by Hon. Ron Wyden
    Question. During the July 30th hearing, you testified that the 
difficulties rural and underserved medical settings have had obtaining 
personal protective equipment is leading to a ``snowball effect'' that 
exacerbates health disparities experienced by black, indigenous, Latinx 
and other communities of color. You noted during your testimony that 
you had additional thoughts and data that you could provide to expand 
on that point--please use this question to expand your views on the 
issue.

    Answer. As the COVID-19 pandemic continues to evolve, it is clear 
that communities of color are disproportionately impacted. The Kaiser 
Family Foundation found that multiple analyses of available data 
demonstrate that people of color are not only more likely to contract 
the virus but have higher rates of mortality.\1\ This is especially 
true in rural and underserved areas of our health care delivery system.
---------------------------------------------------------------------------
    \1\ https://www.kff.org/coronavirus-covid-19/issue-brief/covid-19-
racial-disparities-testing-infection-hospitalization-death-analysis-
epic-patient-data/.

    Health-care providers need PPE to successfully respond to and 
provide care for patients who have contracted COVID-19. Challenges 
faced by providers to obtain the necessary PPE hinders their ability to 
do so. We know that a medical center in rural Wisconsin had difficulty 
in gaining access to needed PPE. The same was true for underserved 
---------------------------------------------------------------------------
areas of Chicago--leading to widespread transmission of the virus.

    In addition, patients in rural and underserved areas face barriers 
to access and needed health-care services--which the pandemic has only 
made worse. For example, many vulnerable populations rely on public 
transportation systems to be able to get to appointments. Local and 
State COVID-19 mitigation plans resulted in the discontinuation or 
restriction of public transportation services, which continues to 
directly impact the ability of patients to access needed care. The 
pandemic also highlighted the need for a highly educated and trained 
health-care workforce representative of all residents in every 
community is essential to not only treat but prevent outbreaks through 
trusted education.

    These factors only serve to exacerbate existing health disparities 
among people of color and must be addressed. It is critical that 
Congress addresses the challenges faced by providers in acquiring 
needed, quality PPE as they continue to respond to the COVID-19 
pandemic.

    Question. Observers have noted that rural hospitals and healthcare 
providers faced difficulties obtaining PPE in the early days of the 
pandemic in part because it wasn't where the pandemic was centered. Now 
the pandemic has progressed there and we have heard anecdotally that 
those supply problems persist as smaller operators compete against 
larger buyers, States and the Federal Government. In many cases, these 
rural providers are providing care to black, indigenous and Latinx and 
other communities of color, which as you noted, and the PPE shortages 
exacerbate racial health disparities. Assuming that a viable vaccine is 
approved, what lessons can be drawn from the experiences with PPE and 
testing to ensure health disparities in these communities aren't 
further worsened? What steps can the Centers for Medicare and Medicaid 
Services take to ensure broad distribution to rural and underserved 
communities?

    Answer. It cannot be over-stated that all individuals must have 
access to the vaccine--especially in rural and underserved areas. It is 
critical that education about the need for all individuals to receive 
the COVID-19 vaccine begins now. That also means that clinical trials 
and post-marketing studies must include pregnant women and individuals 
of all ages, races, nationalities and health conditions. Public service 
announcements on television and radio can convey factual, science-based 
reasoning on the importance of the vaccine. Partnering with community 
leaders will allow for further dissemination of information, such as in 
places of worship, social service organizations, and local community 
centers. Elected officials can help by getting vaccinated themselves 
and promoting it to their constituents. As the vaccine becomes 
available and is distributed, these channels can be used to provide 
additional information on how and where to access the vaccine.

    Nurses are a critical component in vaccine education and 
distribution. Nurses remain on the front lines of the pandemic, and 
their relationships with patients can be leveraged to ensure vaccine 
adherence. Nurses can be hired to monitor and ensure patients receive 
the full course of the vaccine. They can aid in breaking down 
transportation barriers by bringing the vaccine to where patients are 
in the community. Other barriers can be simply addressed by allowing 
nurses to offer extended hours for vaccine administration and using 
school-based settings to ensure entire families are vaccinated. 
Furloughed nurses also can be hired to administer vaccines, as well as 
nursing students needing to meet clinical hour requirements. These are 
just some examples of how nurses can ensure rural and underserved 
populations have access to the COVID-19 vaccine.

    The Centers for Medicare and Medicaid Services (CMS) must work with 
other Federal agencies and community partners to ensure education about 
the vaccine is disseminated and that the vaccine is broadly distributed 
to ensure patient access--especially, for rural and underserved areas 
of the health-care delivery system. Existing community support should 
be leveraged to provide the vaccine to communities already faced with 
barriers to health-care services. CMS and Medicare Advantage plans must 
make clear to Medicare beneficiaries how to access the vaccine and work 
with State agencies to ensure the vaccine is available to Medicaid 
beneficiaries and children enrolled in the Children's Health Insurance 
Program (CHIP).

    In addition to administrative action, Congress must provide the 
resources needed to ensure broad distribution of the vaccine, 
specifically targeting rural and underserved communities. Congress can 
also address how uninsured populations can access and receive coverage 
for the vaccine, similar to how it addressed testing and treatment of 
COVID-19 for uninsured patients. As noted above, the populations in 
these communities are disproportionately impacted by the pandemic, 
which highlights the challenges stemming from racial health 
disparities. Resources to support targeted, intentional distribution of 
the vaccine is critical to ensure racial health disparities are not 
further exacerbated.

    Question. The Trump administration has relied on the practice of 
reusing PPE to make it look like there are adequate supplies at 
hospitals and other medical settings, which has been a big safety 
concern for workers. Your organization surveyed 14,000 nurses in May 
and found that 45 percent worked at facilities with shortages of PPE, 
and 79 percent reported having to reuse PPE. In July, the National 
Nurses Union released a survey of 21,000 nurses, of which 87 percent 
reported re-using PPE. My staff heard similar stories from around the 
country. One nurse in Houston, where the virus is surging, told 
Minority staff that her hospital is cleaning and reusing N95 masks up 
to 10 times. Dr. Grant, what concerns do you have regarding the reuse 
of PPE that intended for a single use?

    Answer. Nurses on the front lines of the COVID-19 response, faced 
by continued shortages, continue to have serious concerns about reusing 
PPE. In our July 2020 PPE survey of 21,000 nurses, 68 percent of nurses 
reported they are required to reuse N95 respirators. Of those who reuse 
N95 respirators, 58 percent report reuse for 5 or greater days. 62 
percent of nurses feel unsafe with current reuse practices.

    The ANA does not support the use of decontamination methods as a 
standard practice. However, as we are faced with a crisis, we 
acknowledge alternative capacity strategies must be utilized, but this 
does not eliminate the need for establishing the appropriate safeguards 
and quality control measures.

    ANA strongly recommends that Congress engage with the U.S. Food and 
Drug Administration to expeditiously research the effectiveness of 
various decontamination methods for the reuse of PPE by nurses and 
other health-care professionals. We ask that you take into 
consideration the current practice of extended use within a single 
shift and reuse over multiple days as decontamination practices are 
evaluated. A 2012 study cites degradation in form and fit of N95 
respirators following 5 don and doff cycles independent of the current 
extended use practices over an 8-12 hour or longer shift. Further, we 
encourage Congress to examine the need for additional oversight on 
supply, distribution, and facility policy and how best to expeditiously 
return to best practices.

    Question. What steps should the Federal Government take to secure 
adequate PPE supplies?

    Answer. There are many steps the Federal Government can take to 
ensure adequate supply of PPE for health-care providers across the 
country. First, the Defense Production Act (DPA) must continue to be 
enforced as well as, better management of the strategic national 
stockpile (SNS). Congress should receive an annual report on the state 
of the SNS with respect to personal protective equipment (PPE), 
vaccines, medicines, and other supplies. The report must include when 
items are expiring and what items need to be replaced. When items are 
approaching expiration, they should be distributed based on need to 
underserved medical facilities such as federally qualified health 
centers, rural hospitals, and clinics.

    Health-care facilities should be required to report monthly on the 
inventory of these items to allow for up-to-date information to 
determine where shortages may be most acute at any stage of a public 
health emergency. Such reporting should include number of staff and 
sizing needs to address appropriate fit of PPE. A formulary should be 
developed by the National Academy of Sciences, Engineering, and 
Medicine on what levels of PPE, vaccines, and other supplies health-
care facilities must have in their own stockpiles. Manufacturers of 
these items should also be reporting on production levels and 
capabilities.

    Currently, the Nation continues to face a pandemic, at the same 
time as hurricane season, fire season in the West, and the beginning of 
influenza infections. Hurricane season puts more strain on health-care 
facilities and providers due to frequent trauma related incidents and 
physical damage to facility and employee property. Widespread community 
transmission of the flu has the potential to further strain the health-
care delivery system, with infected patients overwhelming facilities 
already at capacity. As the Nation looks forward and addresses 
readiness and response to the rising incidence of pandemics, Congress 
must take steps to ensure that the SNS is the backup and not the first 
source of supplies during any public health or other emergency.

    Question. The Trump administration testified in July that it has 
used the Defense Production Act ``more than 10 times'' to combat COVID-
19, an extraordinarily narrow use of existing authority that stands in 
stark contrast to Federal agencies historical use of DPA. Historically, 
the statute's authority has been used to acquire supplies and services 
in times of emergency and in day-to-day business. For example, the 
Department of Defense places approximately 300,000 rated orders 
annually, while the Department of Homeland Security, including FEMA, 
placed more than 1,000 rated orders and contracts in 2018. Specific 
examples include using priority orders to acquire the Adenovirus 
vaccine, expediting construction of floodwater controls in New Orleans, 
speeding up the purchase of railroad equipment following Hurricane 
Katrina, and obtaining resources needed to house and feed disaster 
survivors and first responders, communications equipment and 
information technology needs, and other logistical needs supporting 
disaster response and recovery efforts. Given the shortages of PPE you 
have experienced, shouldn't the administration use the Defense 
Production Act to increase the availability of personal protective 
equipment and better allocate supplies?

    Answer. We do not know when this crisis will end or how many 
additional waves we will go through. The administration should use the 
Defense Production Act (DPA) to increase the availability of PPE. In 
March, the ANA, American Medical Association, and the American Hospital 
Association sent a letter to President Trump urging the administration 
to fully invoke the DPA and ensure that N95 respirators, isolation 
gowns, isolation masks, surgical masks, eye protection, intensive care 
unit equipment, and diagnostic testing supplies are fully stocked 
across the country.


                                 ______
                                 
               Question Submitted by Hon. Maria Cantwell
    Question. In my State, health-care workers are reporting a 
noticeable decline in the quality of PPE available to them.

    I spoke with a cancer care nurse from Swedish Hospital in Seattle 
who said that she and her colleagues are forced to reuse the PAPR hoods 
in the hospital to the point that they are being held together by duct 
tape.

    What are your members across the country reporting to you in terms 
of the quality and availability of PPE that they are receiving?

    Answer. ANA has requested nurses from across the country to share 
their personal stories related to PPE. It is evident from these stories 
that the PPE supply chain continues to be strained. While facilities 
struggle to supply adequate quantities of PPE, ANA is hearing that the 
quality of PPE is getting worse.

    Nurses in Oregon reported that a large hospital system purchased 
and reported an ample supply of masks. Unfortunately, the hospital 
switched brands and the current stock of masks are all too large to 
properly fit most staff. Nurses also reported that the quality of the 
masks was so poor that the wire that forms around the nose did not fit 
properly, causing safety concerns over the tightness of the facial 
seal. Further, some PPE produced overseas may not meet NIOSH standards, 
raising serious concern about the efficacy of the PPE.

    In addition to the safety concerns, ill-fitting or low-quality PPE 
wastes the limited resources of health-care facilities. The continued 
decline of supply and/or quality PPE is especially critical as we begin 
influenza season amid the ongoing COVID-19 pandemic. Nurses must be 
able to rely on PPE that will protect them and other patients as they 
remain on the frontlines of the ongoing public health emergency.

                                 ______
                                 
              Questions Submitted by Hon. Debbie Stabenow
    Question. My colleagues raised questions about the impact of the 
pandemic on the mental health of nurses and front-line workers, which 
we must address with urgency. We also know that the pandemic has 
negatively affected the mental health of Americans not serving on the 
front lines.

    You spoke in your testimony to the mental health effects on nurses. 
What resources do you anticipate frontline workers like nurses needing 
to respond to increasing mental health emergencies that may result from 
the pandemic's effects? Have nurses observed an increase in patients 
with mental health challenges that they encounter in their work while 
they respond to this pandemic?

    Answer. It is imperative that nurses are aware of and have access 
to mental health services as they continue to respond to the COVID-19 
pandemic. The pandemic has escalated burnout, anxiety, depression, and 
fear of stigma among frontline health-care professionals. In a report 
by the International Council of Nurses (ICN), 60 percent (20 out of 33) 
of responders sometimes or regularly received reports of mental health 
distress among nurses during the COVID-19 public health emergency.

    In recognition of the need to support nurses during this 
unprecedented time, the American Nurses Foundation launched The Well-
Being Initiative. In partnership with the American Nurses Association, 
American Association of Critical Care Nurses, American Psychiatric 
Nurses Association and the Emergency Nurses Association, this 
initiative offers responsive and preventative resources to support all 
nurses' mental health and resilience as they continue to serve on the 
front lines of this public health emergency. The Initiative includes 
virtual support systems, a curated digital toolkit, and expressions of 
gratitude.

    In addition, it is critical that nurses who are serving on the 
front lines are adequately compensated and given time off. While this 
does not directly address the mental health effects of the pandemic, 
these factors are important to ensure nurses are recognized and 
supported. The need for nurses to receive hazard pay cannot be 
overstated. Nurses on the front lines not only put their lives at risk, 
but are critical in successful response to and mitigation of COVID-19 
outbreaks.

    Further, the pandemic continues to disrupt the lives of all 
Americans. The economic downturn due to the pandemic has led to great 
uncertainty--fear of losing one's house or job is a source of great 
stress and anxiety. Others have been directly touched by the pandemic, 
losing loved ones to the virus without the ability to be by their 
bedside or attend funeral services because of COVID-19 mitigation 
efforts. For those with existing mental health or substance use 
disorder needs, including veterans struggling with post-traumatic 
stress disorder, response to the pandemic has exacerbated their 
challenges. Patients that relied on in person support meetings now must 
rely on virtual support, which poses new challenges as not all patients 
have access to stable, adequate Internet. This has resulted in an 
increase in patient mental health needs. Nurses are increasingly seeing 
patients faced with a mental health or substance use challenges, which 
can potentially complicate patient recovery from COVID-19. Just as it 
is critical that nurses have knowledge of and access to mental health 
services, patients must as well.

    Question. Senator Casey mentioned the need to innovate on PPE for 
health-care workers as we respond to this pandemic and prepare for the 
future, an effort I am proud to work with him on. What are the most 
pressing PPE issues facing front-line workers to address in future 
innovation?

    Answer. Congress needs to do more to incentivize and prioritize the 
manufacturing of PPE, medications, and other supplies in the United 
States--even if that means carrying out production itself. We cannot 
allow our citizens to be put at a health risk because businesses are 
profit-motivated to manufacture elsewhere. As this pandemic has clearly 
illustrated, it is imperative the United States have stable supply 
chains so that the health-care delivery system can respond to any 
public health emergency. In addition, increasing domestic production 
can also help the Nation recover from the economic downturn resulting 
from the COVID-19 pandemic. Domestic production is critical so that our 
Nation's health-care providers have access to adequate amounts of 
quality PPE to ensure they are safe serving on the front lines.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. What do you believe is the most important action that 
this Congress or administration can take to ensure the safety and 
vitality of our Nation's health-care workforce through the remainder of 
the COVID-19 pandemic and in anticipation of future public health 
threats?

    Answer. The COVID-19 pandemic has highlighted the need for Congress 
and the administration to examine and address workforce shortages. With 
an aging population, a robust health-care workforce is crucial to 
ensure patient access to needed services. In addition, we need to 
reinvest in our public health workforce and infrastructure. Multiple 
years of funding cuts contributed to more than 55,000 lost jobs at 
local health departments from 2008-2017.\2\ This could help identify 
illness earlier within communities and stop the spread of COVID-19, 
reduce other health-related issues, and put our health-care system on a 
stronger foundation.
---------------------------------------------------------------------------
    \2\ https://www.tfah.org/article/new-tfah-report-persistent-
underfunding-of-americas-public-health-system-makes-the-nation-
vulnerable-and-puts-lives-at-risk/.

    In response to the COVID-19 pandemic, the administration was quick 
to remove barriers to workforce and licensure requirements that allowed 
for full deployment of health-care providers to respond to the public 
health emergency. Congress and/or the administration should examine 
which barriers should be permanently removed to bolster the vitality of 
the Nation's health-care workforce now and for the future. This 
includes, but not limited to, full practice authority for nurses, 
payment parity for telehealth services, and scholarships and loan 
forgiveness programs for clinicians working in areas with workforce or 
---------------------------------------------------------------------------
appointment shortages.

    Last, as detailed above, health-care providers must have access to 
adequate supply of quality PPE for their safety. This has been 
especially true for the COVID-19 pandemic. Congress and the 
administration must take steps to ensure that providers have the 
supplies they need to prepare for and respond to any future public 
health threat.

    Question. What more should Congress be doing to prepare for the 
upcoming flu season and its impact on the ongoing COVID-19 pandemic?

    Answer. Congress can ensure that Federal agencies, States, and the 
health-care delivery system have the resources and support needed to 
prepare for the upcoming influenza season. Congress and Federal 
agencies can take similar steps that we detail above for the COVID-19 
vaccine to educate about the importance of and ensure access to the 
influenza vaccine. Efforts to educate in tandem can reinforce the 
importance of both vaccines--which is critical in ensuring the health 
care delivery system is not potentially overwhelmed by concurrent 
public health emergencies.

                                 ______
                                 
              Prepared Statement of Hon. Chuck Grassley, 
                        a U.S. Senator From Iowa
    Good morning. I'd like to welcome everyone to Part 2 of the 
committee's hearing on ``Protecting the Reliability of the U.S. Medical 
Supply Chain During the COVID-19 Pandemic.'' This is the second hearing 
to discuss COVID-19's effect on our Nation's medical supply chain.

    Two days ago, we heard from the Department of Homeland Security's 
Office of Procurement, U.S. Customs and Border Protection, and U.S. 
Immigration and Customs Enforcement's Homeland Security Investigations, 
on their efforts to shore up the integrity of our Nation's supply 
chain.

    Today, we will hear from a panel of industry experts who represent 
all corners of the supply chain. These witnesses have an insider's 
perspective and will be able to tell us about the challenges our 
Nation's health-care industry is facing right now. We will also hear 
how the Federal Government is collaborating and communicating with its 
industry partners during the pandemic.

    Indeed, during our first hearing we heard that DHS is engaged in a 
whole-of-
government response to combat the virus and is working with its 
Federal, State, local, tribal, and international partners in a unified 
effort to ensure the integrity of our Nation's supply chain. For 
example, we heard from Homeland Security Investigations on their 
efforts to prevent and investigate criminal activity surrounding the 
pandemic, and how they seized hundreds of items of fake and faulty 
personal protective equipment and returned over $17 million dollars to 
victims of COVID-19 fraud. We also heard from DHS's Chief Procurement 
Office on their efforts to cut bureaucratic red tape so that FEMA could 
easily procure larger volumes of emergency services and supplies.

    These are things that front-line workers desperately need, and DHS 
answered the call by working with industry to review and vet companies 
offering COVID-19 solutions to the Federal Government. I want to 
highlight that this continues to be an incredible challenge, as 
thousands of unscrupulous sellers claim to be able to produce safe and 
legitimate supplies when what they are actually selling is fake and 
faulty.

    Lastly, we heard from Customs and Border Protection on their 
efforts to speed up the delivery of high-demand personal protective 
equipment from manufacturers overseas. As a result of CBP's efforts, 
over 1.3 billion pieces of personal protective equipment entered 
swiftly into the United States.

    The list goes on and on, with many of these efforts being initiated 
at the beginning of the virus's foothold in the United States. However, 
my colleagues on the left aren't telling the public these success 
stories. They would rather spread their doom-and-gloom narrative for 
the purposes of winning the election.

    It's a fact that the Federal Government's approach to emergency 
preparedness has always been fraught with challenges. This goes back to 
prior administrations and beyond. However, my Democratic colleagues 
would make you believe that these problems are specific to this 
administration. This is simply not true, and we have several witnesses 
before us today who can testify to this very fact, which I will state 
simply here and now: the Federal Government has never been prepared to 
address a national emergency of this type, or of this scale--period.

    In closing, I want to thank the witnesses present today, and all 
the medical professionals and first responders who work day after day 
to keep Americans safe and healthy. Your dedication to your community 
is essential in the days and weeks ahead.

                                 ______
                                 
           Prepared Statement of Charles Johnson, President, 
               International Safety Equipment Association
    Chairman Grassley, Ranking Member Wyden, and members of the 
committee, thank you for the opportunity to appear before you today to 
discuss the major challenges and potential solutions in protecting the 
reliability of the U.S. medical supply chain during the COVID-19 
pandemic and beyond.

    The International Safety Equipment Association (ISEA) is the 
association for safety equipment and technologies--equipment and 
systems that enable people to work in hazardous environments. ISEA 
member companies are leaders in safety equipment design, manufacturing, 
testing, and application. For more than 85 years, ISEA has set the 
standard for personal protective equipment (PPE) and technologies, 
supporting the interests of its member companies who are united in the 
goal of protecting the health and safety of people worldwide.

    ISEA is a recognized leader in the development of ANSI-accredited 
safety equipment standards, in the U.S. and around the world. The 
association and its members work with Congress and government agencies 
to consult with policymakers whose decisions affect the industry. Over 
the course of ISEA's 85-year history, the industry has stepped forward 
to aid the Unites States in the face of various emergencies, from 
natural disasters to terrorist attacks, and certainly for public health 
emergencies. When these events occur, ISEA members provide the 
equipment that protects responders, medical professionals, and the 
public.

    ISEA's member companies have been challenged on two fronts 
throughout the COVID-19 pandemic:

     1.  First, the safety and efficacy of the PPE used to combat the 
COVID-19 pandemic has been compromised by opportunistic market 
behavior. The incredible increase our member companies have seen in 
counterfeit, fraudulent, and non-performing equipment is of great 
concern to the manufacturers of, and more importantly, the users of, 
PPE.

     2.  Second, the overall capability of the US to provide protection 
during this pandemic has been sorely tested. We must improve our 
overall preparedness to handle the remainder of the COVID-19 pandemic, 
but more importantly, there are improvements to preparedness that must 
be undertaken so that we can better respond to the next inevitable 
emergency.
          maintaining the safety and efficacy of ppe supplied 
                     for public emergency response
Standards and Conformity
    The safety equipment industry is built on a foundation of 
standardization, certification, regulatory compliance, and conformity. 
Most PPE products are as much items of intellectual property as they 
are physical barriers to injury or sickness. The standardized 
performance, the conformity of the product to that standard, and the 
accurate communication of that standard and conformity, are central to 
the value that PPE provides to the wearer. In many cases, the user 
hopes to never see a true test of a PPE product's performance in the 
field, yet they rely on that performance to keep them safe. They must 
trust the safety performance that has been communicated to them for a 
particular type of protection will occur.

    Nowhere is this more evident than during the response to a national 
emergency, and most especially for new and novel threats such as a 
novel virus. When the medical community faces an unknown new pathogen, 
the state of the science must evolve quickly, and recommendations for 
protective equipment may do so as well. In these cases, the performance 
of the safety equipment must be a known, quantified parameter. If the 
CDC says a respirator that filters 95 percent of contaminants is 
adequate protection, then the respirators sourced by responders must 
reliably provide that level of standardized protection.

    Opportunistic market behavior in the PPE sector leverages value of 
the standardization and conformity of branded, standardized, or 
certified safety equipment, and falls into three large categories:

      1.  Counterfeit products are marked or labeled with a known brand 
name and trade on the trust that the brand owner has built in the 
market--that their product is standardized and that it conforms to that 
standard, and that the user can trust that it provides the level of 
protection to which it attests.

      2.  Fraudulent products make false claims about their 
certifications, or the bodies that have provided testing.

      3.   Non-performing products either intentionally or 
unintentionally, do not meet the standards or certifications to which 
they attest.
   ansi/isea 125-2014: national consensus standard to assure product 
                               legitimacy
    ISEA has published a national consensus standard designed to help 
end-users and PPE purchasers confirm the products they are purchasing 
are legitimate. ANSI/ISEA 125-2014--American National Standard for 
Conformity Assessment of Safety and Personal Protective Equipment is an 
approved method to encourage manufacturers or importers to attest to 
the veracity of their products. The ANSI/ISEA 125-2014 standard creates 
three levels of conformity assessment, by which the manufacturer or 
importer communicates to others the certainty of conformance to the PPE 
manufacturing standard. Level 1 is a self-declaration of conformity. 
Level 2 requires identification of accredited test labs that have 
tested the product to its relevant standard(s). Level 3 is a full 
third-party certification. This is used when product failure will 
result in death or severe harm to the wearer.

    When ANSI/ISEA 125 is incorporated into another manufacturing 
standard, an end-user, procurement officer, or government official can 
ask the manufacturer for the product's conformity assessment 
declaration. While it is possible for an unscrupulous entity to provide 
a fraudulent test report, this standard is to help promote product 
legitimacy.

    Voluntary product standards are a hallmark of the United States 
system of PPE standardization, and have been incorporated into the U.S. 
system for PPE use in occupational safety. Some PPE, for instance, 
respirators, are separately certified by government entities. In recent 
years, increased imports and entry of more and newer actors in the 
marketplace have led to both intentional, and possibly unintentional, 
abuse of these systems.

    ISEA has previously brought these issues to the attention of 
various US agencies, including Department of Commerce, Customs and 
Border Control, and OSHA, and we will continue to explore solutions. As 
discussed below, the industry has seen an increase in false claims tied 
to standards during the COVID-19 pandemic. ISEA and its members 
continue to explore policy solutions for the issue of nonperforming 
PPE, and we recommend that this issue be addressed by future 
counterfeiting initiatives recommended below
Counterfeits, Fakes, and Frauds
    ISEA welcomes the committee's focus on Protecting the Reliability 
of the U.S. Medical Supply Chain During the COVID-19 pandemic. ISEA is 
proud to be a member of the National Association of Manufacturers (NAM) 
and we would like to associate ourselves its recent call to action, 
``Countering Counterfeits: The Real Threat of Fake Products,'' to 
battle against counterfeit goods, across the board.\1\
---------------------------------------------------------------------------
    \1\ https://www.nam.org/wp-content/uploads/2020/07/
CounteringCounterfeits.vF_.pdf.
---------------------------------------------------------------------------
               role of dhs in preventing harmful imports
    First, ISEA applauds Customs and Border Patrol (CBP) and Homeland 
Security Investigations (HSI) for the agencies' dedication to stopping 
fraudulently marked and counterfeit COVID-19-related products from 
entering the U.S. Fakes, frauds, and counterfeits have always plagued 
the PPE sector, and these illegal products don't just harm the 
financial interest and the brand trust of our members, they put users 
at risk of injury, sickness, and death.

    The Association understands that while most seizures during the 
COVID-19 pandemic are of illicit respirators and surgical masks, 
additional types of PPE interdicted by Federal authorities include 
clear face shields, safety goggles, protective suits, gloves, medical 
gowns, and protective shoe coverings. A wide range of other fraudulent 
COVID-19-related items have also been identified and seized. This 
process works, but it can work better, as we note below with a few 
suggestions.
          isea member efforts to prevent illegitimate imports
    Supplementing the work of DHS, ISEA members view the import of 
fraudulently marked and counterfeited PPE seriously. For example, 3M 
Company has: (1) taken down 10,000 false and deceptive social media 
posts; (2) removed 7,000 fraudulent e-commerce offerings; (3) removed 
more than 140 deceptive Internet addresses; and (4) more.\2\ The 
company is also investing in ways to identify fraudulently marked and 
counterfeited products. It is not just large companies that are the 
victims of this nefarious activity--but the largest companies are able 
to devote significant resources to protecting their brands, and the 
safety of their products.
---------------------------------------------------------------------------
    \2\ https://www.3m.com/3M/en_US/worker-health-safety-us/covid19/
covid-fraud/?utm_medi
um=redirect&utm_source=vanity-url&utm_campaign=3m.com/covidfraud.

    Small and medium-sized manufacturers are likely to be harmed the 
most by the counterfeit market. These companies have fewer resources to 
invest in the personnel and technology to monitor illicit activity and 
protect their brands. Government enforcement efforts often rely on 
information provided by brand owners, and smaller manufacturers are 
less able to engage with government entities responsible for enforcing 
their IP right and fighting against fraudulently marked products. 
Smaller firms are also more at risk to be driven out of business by 
counterfeiters. They often offer fewer products than larger 
counterparts, which means harm from counterfeits cannot be easily 
offset. Smaller firms are less able to absorb the losses that come when 
---------------------------------------------------------------------------
counterfeiters siphon off their business.

national institute of occupational safety and health, ppe manufacturers 
           inform end-users of fake or fraudulent respirators
    In addition to CBP and HSI, the National Institute for Occupational 
Safety and Health (NIOSH) National Personal Protective Technologies Lab 
(NPPTL), based in the Pittsburgh area, has identified a large number of 
respirators fraudulently marked with the NIOSH moniker and falsely 
claiming to be a NIOSH-certified product.\3\ The vast majority of these 
are from China. However, there are also several manufacturers based in 
China with NIOSH-approved N95 respirators.
---------------------------------------------------------------------------
    \3\ https://www.cdc.gov/niosh/npptl/usernotices/
counterfeitResp.html.

    NIOSH/NPPTL also performed filtration efficiency tests of several 
non-NIOSH certified respirators from China. Most exporters claim 
conformance to China's GB2626 standard. The results of the filtration 
efficiency tests show these devices removed 95-100 percent of the test 
particles. However, a few models had filtration performances below 50 
percent, and some as low as 30 percent. Those with such low performance 
rates could be fraudulently marked as meeting the GB2626 standard. It 
was NIOSH's testing of respirators that led the Food and Drug 
Administration to cull its list of non-NIOSH respirators from China 
---------------------------------------------------------------------------
allowed for use in medical workplaces for protection from COVID-19.

    Finally, we note that ISEA member companies have stepped in to 
combat the issue of nonperforming, or fake, PPE. Free testing provided 
by ISEA member companies is available to PPE users when they suspect 
the PPE they have sourced is nonperforming or substandard. In one case, 
an ISEA member found non-NIOSH certified respirator (KN95) masks to 
range from 45 percent-30 percent in efficiency. This catastrophically 
inadequate product was marked as FDA approved, making it fake and 
illegal. When ISEA member Magid Glove and Safety tested 10 foreign 
respirators, eight failed and two passed. The PPE manufacturer and 
distributor based out of Romeoville, IL, cited one example in which the 
fake respirator was no different that wearing a bandana on the face.
             need for strong government-wide coordination 
                      on import protection efforts
    With NIOSH's contribution to this area in mind, ISEA would like to 
underscore NAM's call for a range of import security reforms.\4\ One 
that is applicable here is for creation and funding of a White House 
agency that holds primary responsibility for U.S. anti-counterfeiting 
efforts, including strategy, policy and enforcement. The new White 
House agency should serve as a central point of contact for the private 
sector and other stakeholders. This type of coordination center might 
allow for NIOSH to train and inform the Nation's import security 
professionals. NIOSH does not have enforcement authority. When it finds 
a company illegally using the NIOSH logo, the agency's only mechanism 
is to send a letter requesting the counterfeiter cease and desist.
---------------------------------------------------------------------------
    \4\ https://www.nam.org/wp-content/uploads/2020/07/
CounteringCounterfeits.vF_.pdf.
---------------------------------------------------------------------------
                 online retailer responsibility needed
    ISEA's largest companies have found Amazon and other online 
retailers to be responsive in removing counterfeit products. ISEA 
applauds the ecommerce platforms that worked cooperatively with PPE 
manufactures and the government to crack down on the sale of these 
illicit products. The Association believes all parties can build on 
this success and momentum.

    ISEA asks Congress for legislation mandating that online sellers 
audit their sites for fake, fraudulent and counterfeit PPE and other 
products, and remove them. ISEA joins with NAM in calling for 
legislation to hold online retailers partially responsible 
(contributory liability) for any injuries arising from the use of fake, 
fraudulently marked or counterfeited products sold on their platforms.

    COVID-19 has led to increased cybercrime and misinformation, 
preying upon consumers looking to keep themselves and their families 
safe. These criminals require domain names, which can also include 
phishing and malware campaigns, selling dangerous counterfeits and 
setting up scam sites.\5\ The value of WHOIS data (domain name 
registrations) is widely known throughout the cybersecurity community. 
But law enforcement and IP holders have effectively been blocked from 
accessing this critical data. But access to this data serves the public 
interest and contributes to the security of the Internet by providing 
contact information to support efforts related to consumer protection, 
cybercrime investigation, domain name system (DNS) abuse mitigation, 
intellectual property protection, and for appropriate law enforcement 
needs. ISEA believes legislation is also needed to allow Federal law 
enforcement authorities and IP holders to identify the individuals 
behind the websites and electronic front companies offering non-
legitimate products.
---------------------------------------------------------------------------
    \5\ https://www.sec.gov/news/press-release/2020-97.
---------------------------------------------------------------------------
             china's efforts to prevent fraudulent exports
    China's Ministry of Commerce (MofCom) has helped to some degree in 
preventing fraudulently marked protective equipment from leaving the 
country. In one case, MofCom officials prevented the export of 
protective garments because they did not claim to meet a specific 
standard. In China, these products must meet the local performance 
standard. But products were destined for the U.S. market, where there 
is no government standard. ISEA intervened by explaining that in the 
U.S. there is no government standard for these products, and their 
arrival at Customs would not cause an issue.
 Ensuring the Adequate Supply of PPE During Surge Demand Due to Public 
        Emergencies
    ISEA was an original partner with the Federal Government when the 
strategic national stockpile (SNS) was implemented. Our member 
companies have participated in successive rounds of preparedness 
planning, all of which identified the need for a public policy solution 
for the issue of surge demand during large scale public emergencies.

    Like all other manufacturers, the safety equipment industry has 
adopted just-in-time supply chain and inventory management. 
Manufacturers do not have the option to maintain excess production 
capacity or product inventories. Competitiveness is directly linked to 
logistics efficiencies. Manufacturers are not emergency planners or 
emergency response agencies.

    These market forces also affect the ability of end user entities 
such as large hospital locations from carrying extensive inventories of 
the various equipment that would be needed for all public emergency 
scenarios.

    Public policy solutions will be needed to address future surge 
capacity comparable to what we have seen in the first half of 2020, and 
ISEA will partner with the agencies tasked with that challenge.

    ISEA asks Congress to provide FEMA with authority during a public 
health emergency to gather data from State and local governments and 
health-care providers regarding the supply, use, and demand for PPE (as 
well as similar supply data from raw material suppliers, manufacturers 
and distributors). This will ensure optimal distribution decisions can 
be made based on real-time data.
Direct and Sustained Support for Domestic Production
    The use of the Defense Production Act (DPA) is new for the PPE 
industry, as for others. ISEA members have found the use of the DPA to 
have positive and negative consequences.

    The Federal Emergency Management Agency's (FEMA) quick action to 
prevent exports of filtering facemasks respirators, reusable 
respirators, and the replacement filters for them will have a long-term 
negative impact on U.S. manufacturers of these devices. Foreign 
customers will find other sources to supply respirators and the 
requisite replacement filters. Once the new products are part of an 
end-user's health and safety operation, on which employees are trained, 
end-users are not likely to switch back.

    In relation to PPE supply for the pandemic, any short-term increase 
in supply in the U.S. domestic market would be more than offset by 
retaliatory bans from trade partners, not just on PPE products, but 
potentially on the supply of materials and components for U.S. 
manufacturers.

    On the other hand, DoD's use of title III of the DPA resembled the 
type of public-private partnership that aids both U.S. manufacturers' 
and the Federal Government's ability to provide necessary equipment and 
products. As the medical industry stepped up its sourcing of PPE at the 
beginning of the outbreak to unprecedented levels, established market 
signals that regularly allocate product broke down.

    ISEA is aware that large orders for PPE were fulfilled in regions 
that were not yet heavily impacted by the outbreak while early heavily 
affected areas scrambled for equipment. At the same time, responding 
agencies approached the industry with supply data inquiries, but 
without data or forecasting for the demand side of the equation. Use of 
the DPA model allowed the Federal Government to provide a clear and 
concise demand signal to the industry for efficient and accelerated 
response.

    Recent and well-publicized actions include capital funding for both 
3M's personal safety division and Honeywell Safety Products to expand 
production of filtering facepiece respirators. Other respiratory 
protection manufacturers have also received DPA funding through the 
Defense Department for expansion of filtering facepiece respirator 
production.

    ISEA would like to highlight these successful examples of 
government and industry working cooperatively to solve a national 
issue.

    As Congress and the executive branch continue to focus on public 
health emergency response, ISEA asks that legislators focus on direct 
and sustained support of domestic PPE production. All too often this 
industry has been flooded with orders only to see them disappear after 
the public health emergency is fully mitigated.

    ISEA asks Congress to recognize medium sized employers do not have 
the ability to reshore operations and supply chains. In addition, 
medium-sized companies seek steady growth. For these companies, the 
effort required to respond to a one-time request for proposal from the 
government takes away from managing day-to-day issues, which include 
executing on strategic growth plans. ISEA asks that Congress not cut 
these companies out of SNS supply opportunities because they have not 
fully reshored all operations.
SNS Funding and Mandate
    ISEA supports Senator Alexander's recently introduced Preparing for 
the Next Pandemic Act, which supports long-term funding for both State 
and Federal stockpiles. This type of long-term commitment is needed to 
encourage more U.S. companies to enter the U.S. supply market.

    In past public health emergencies, PPE manufacturers found that 
end-users submitted duplicate orders to multiple providers, which 
inflated demand. As soon as the emergency abated, the orders were 
canceled. This left many distributors and manufacturers wary about 
fully responding to future pandemics. In fact, for COVID-19, many 
manufacturers told customers that orders were un-cancelable. In 
addition, many medium-sized manufacturers cannot risk reshoring their 
operations, which would both be a costly enterprise and increase the 
costs of manufacturing, only to find that U.S. public health 
stockpiling funding has fallen short for various reasons. A long-term 
commitment to maintaining SNS will stimulate an equally long-term 
commitment to invest in U.S. by U.S. manufacturers.

    ISEA applauds the groundwork laid for future SNS planning that 
would include a more comprehensive quantitative planning approach. The 
SNS needs a centralized planning process that develops demand 
scenarios, prioritizes needs, and then establishes institutionalized 
supply solutions to meet those demands.
Tax Credits for PPE
    As Americans return to work, they are finding that the occupational 
safety landscape has fundamentally shifted. Many job categories that 
previously wore some type of respiratory protection, such as dentists, 
are returning to a workplace that now requires N95 respirators, and a 
large volume of them. Many more broad job types and categories that 
were never required to wear any type of protection are now being asked 
to wear a new category of protection, cloth face masks, that have not 
been widely used in the United States. Employers are installing a vast 
array of equipment to isolate workers safely. All of these solutions 
add up, and ISEA supports tax credits for employers to provide these 
solutions to their workers so that COVID-19 can be stopped in the 
workplace.

    Non-medical fabric face-coverings are essential in every-day life 
during COVID-19. However, these items are not traditional PPE, and they 
are not sanitary products. Therefore, ISEA asks that any legislation 
allowing for the deductibility of PPE and sanitary products 
specifically include non-medical machine-washable fabric face coverings 
as an item that would qualify for procurement tax deductions.

    As members of the Senate Finance Committee are likely aware, OSHA 
has published guidance stating cloth face coverings ``[a]re not 
considered personal protective equipment (PPE).''\6\ But, OSHA also 
states in a related guidance that ``. . . [e]mployers may choose to use 
cloth face coverings as a means of source control. . . .\7\
---------------------------------------------------------------------------
    \6\ https://www.osha.gov/SLTC/COVID-19-19/COVID-19-19-
faq.html#cloth-face-coverings (accessed July 10, 2020); see third 
bullet point. PPE is defined in the OSHA regulations at 29 CFR 
1910.132.
    \7\ https://www.osha.gov/SLTC/COVID-19-19/COVID-19-19-
faq.html#cloth-face-coverings (accessed July 10, 2020); see second 
bullet point.

    A specific mention of cloth face masks will make certain employers 
can expense the costs of these devices, which limit the spread of SARS-
CoV-2 and COVID-19. At the same time, maintaining that mention of cloth 
face masks as a separate item in the legislation, will allow the 
regulatory and safety community the time it needs to fully define this 
equipment and develop the practices around it that are needed to keep 
workers safe.
     costs associated with occupational safety and health training
    In addition, ISEA asks that the Healthy Workplaces Tax Credit Act 
allow tax credits for costs of occupational health and safety training. 
As Americans continue to work through COVID-19 and come back to work 
during COVID-19, keeping them safe is a national priority. Many 
employers are seeking to provide workplace health and safety training 
on topics such as: restructuring air flow for optimal safety; how to 
properly sanitize a workplace; how to conduct a user seal check on a 
respirator; how to take off (doff) gloves and other protective 
equipment in a safe manner that does not spread contamination; and 
more.
International Trade Agreements
    ISEA asks that Congress urge U.S. Trade Representative Lighthizer 
to include in his trade discussions with the UK and the EU cooperative 
efforts to combat fake, fraudulently marked, and counterfeited 
products.

    ISEA and members of this committee are no doubt aware the ``China 
Export'' mark is substantially similar to the official ``CE'' marking, 
which demonstrates a product has met the relevant and strict EU 
standards. This marking brings benefit to all in the supply chain and 
most notably, the consumer.

    The ``China Export'' mark and only means that the product was 
manufactured in China. Here are the two markings:

[GRAPHIC] [TIFF OMITTED] T3020.006


          add protective gloves and garments into the prep act
    The Public Readiness and Emergency Preparedness (PREP \8\) Act 
provides liability protection for items identified by the CDC as being 
essential to the response and mitigation of a public health emergency. 
Even though CDC recommends general-use gloves and garments to keep 
workers safe from harmful biological agents, these items are not 
included in the PREP Act.
---------------------------------------------------------------------------
    \8\ The PREP Act is Division C of the Department of Defense, 
Emergency Supplemental Appropriations to Address the Hurricanes in the 
Gulf of Mexico and Pandemic Influenza Act, 2006 (Pub. L. 109-148).

    In an outbreak of a novel infectious agent, such as COVID-19 or 
West African Ebola, the route of exposure and dose/response 
relationship is usually unknown. Also, in these instances, the Centers 
for Disease Control and Prevention (CDC) recommend, and end-users 
demand, general-industry personal protective equipment. This puts 
manufacturers and distributors at risk: provide the equipment and be 
exposed to opportunistic lawsuits or hold off from supplying equipment, 
which they wouldn't do because of ethics and commitment to national 
---------------------------------------------------------------------------
security.

    ISEA asks Congress to meet PPE manufacturers and distributors half-
way.

    The current definitions in the PREP Act apply only to FDA-related 
devices, not the general industry types of gloves and garments often 
recommended by the CDC for worker protection during a public health 
emergency, including COVID-19. Public emergencies like outbreaks and 
pandemics frequently necessitate health care on an industrial scale 
that overwhelms the supply chains for normal medical (FDA approved) 
products. Most recently, in the COVID-19 pandemic, general industry 
gloves and garments are being used by hospital and medical personnel 
when ``approved'' supplies and stockpiles were depleted.

    Addressing the PREP Act is vital. During the West Africa Ebola 
outbreak, CDC and other HHS officials recommended hospital workers use 
PPE not usually found in the health-care workplace, namely nitrile 
gloves and chemical protective garments. This created a great risk, 
because the government recognized these products, such as the types 
used in chemical plants, would be both effective and the best way to 
keep health-care workers safe. However, because these garments are 
designed for and used in environments that do not call for FDA 
registration or certifications, Federal authorities were unable to 
provide such devices with PREP Act protections due to the current 
definitions of what's covered.

    ISEA asks Congress to add a clear reference to gloves and garments 
directly to the PREP Act to mitigate this risk and make the PREP Act 
fair to all. Moving this issue through FDA only adds more regulatory 
uncertainty. ISEA would be grateful for your assistance in correcting 
this issue.
                               conclusion
    ISEA and its members are honored to be part of the solution that 
will see our workforce through the COVID-19 pandemic and better prepare 
the country for the next public emergency. We believe that a focus on 
the fundamentals of safety and health is the appropriate and necessary 
path forward.

        We must, as a Nation, plan better and on a larger scale for 
future emergencies.

        We must ensure that American responders have continued support 
from the world's premier emergency response agencies for the selection 
and use of PPE.

        We must ensure the reliability and quality of the equipment 
provided.

        We must implement the public policy instruments that will 
ensure the supply of future equipment needs.

    ISEA thanks the committee for this opportunity to testify.

                                 ______
                                 
           International Safety Equipment Association (ISEA)

                        1901 North Moore Street

                        Arlington, VA 22209-1762

                              703-525-1695

                            fax 703-528-2148

                      https://safetyequipment.org/

                        [email protected]

October 19, 2020

The Hon. Charles Grassley           The Hon. Ron Wyden
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
Washington, DC 20510                Washington, DC 20510

     Re: Response to questions for the record from ``Part 2: Protecting 
the Reliability of the U.S. Medical Supply Chain During the COVID-19 
Pandemic''

Dear Senators Grassley and Wyden,

Thank you for inviting ISEA to testify at the Committee's hearing: 
``Protecting the Reliability of the U.S. Medical Supply Chain During 
the COVID-19 Pandemic'' held on Thursday, July 30th.

Attached please find ISEA's answers to the questions for the record. 
Many questions asked for follow-up on ISEA's comments about what can be 
done to improve data collection.

There are two answers here:

        First, support the Office of the Strategic National Stockpile's 
        proposed ``Next Gen SNS,'' as described in a June 29, 2020 
        request for information.\1\
---------------------------------------------------------------------------
    \1\ https://beta.sam.gov/opp/d262bb77bb014a2cb422c8dc3ed0e636/
view?keywords=75a50120
nextgensns&sort=-relevance&index=opp&is_active=true&page=1.

        Second, a near-term solution is to require the federal 
        government (FEMA is the likely option given its current role in 
        the COVID-19 response effort) to collect both PPE needs 
        assessments of ``emergency response providers'' (as defined in 
        6 U.S.C. 101) and the amount of PPE such providers have on 
---------------------------------------------------------------------------
        hand. This data must be collected in transparent manner.

        When the needs and supplies-on-hand data are shared with 
        manufacturers and distributors of PPE they can (1) structure 
        plans to meet the demand and (2) assess level of federal 
        assistance needed.

Below is proposed language to allow for this type of data collection 
and sharing to aid in the on-going COVID-19 response and mitigation 
effort. PPE will likely be needed by a number of those who did not need 
or use it before the pandemic.

Again, thank you. I can be reached at 703-525-1695 ext. 15 or at 
[email protected] if any Committee members or their staff 
members have additional questions.

Sincerely,

Charles D. ``Chuck'' Johnson, Jr.
President

                                 ______
                                 

ISEA AMENDMENT on DATA-GATHERING

New text in italic

Miscellaneous Statutory Provision that Relates to the Stafford Act

6 U.S.C. Sec. 724. Logistics

(a) The Administrator shall develop an efficient, transparent, and 
flexible logistics system for procurement and delivery of goods and 
services necessary for an effective and timely response to natural 
disasters, acts of terrorism, and other man-made disasters and for 
realtime visibility of items at each point throughout the logistics 
system.

(b) Reporting Requirements for an Emergency Involving Federal Primary 
Responsibility--Whenever the President issues a declaration for an 
Emergency Involving Federal Primary Responsibility (as defined in 42 
U.S.C. 5191(b)) for a pandemic or public health emergency, the 
Administrator shall have the authority to collect information from 
emergency response providers (as defined in 6 U.S.C. Sec. 101) on the 
amount of drugs, biological products (including vaccines), devices 
(including respiratory protective devices), and other medical supplies 
that are, or may become, critical supplies. To ensure the efficient and 
coordinated procurement, delivery, and distribution of such supplies by 
Federal agencies, private organizations, and state and local 
governments (as provided for in 42 U.S.C. 5192(a)(2)), such information 
shall be regularly updated to ensure realtime visibility on the amount 
and availability of these critical supplies at the state, local, and 
hospital levels.

CROSS-REFERENCED INFORMATION

Highlights below are referenced in the red text above.

6 U.S.C. Sec. 101--Definitions

(6) The term ``emergency response providers'' includes Federal, State, 
and local governmental and nongovernmental emergency public safety, 
fire, law enforcement, emergency response, emergency medical (including 
hospital emergency facilities), and related personnel, agencies, and 
authorities.

STAFFORD ACT: TITLE V--Emergency Assistance Programs

Sec. 501. Procedure for Declaration (42 U.S.C. 5191)

(a) Request and Declaration--All requests for a declaration by the 
President that an emergency exists shall be made by the Governor of the 
affected State. Such a request shall be based on a finding that the 
situation is of such severity and magnitude that effective response is 
beyond the capabilities of the State and the affected local governments 
and that Federal assistance is necessary. As a part of such request, 
and as a prerequisite to emergency assistance under this Act, the 
Governor shall take appropriate action under State law and direct 
execution of the State's emergency plan. The Governor shall furnish 
information describing the State and local efforts and resources which 
have been or will be used to alleviate the emergency, and will define 
the type and extent of Federal aid required. Based upon such Governor's 
request, the President may declare that an emergency exists.

(b) Certain Emergencies Involving Federal Primary Responsibility--The 
President may exercise any authority vested in him by section 5192 of 
this title or section 5193 of this title [Sections 502 or 503] with 
respect to an emergency when he determines that an emergency exists for 
which the primary responsibility for response rests with the United 
States because the emergency involves a subject area for which, under 
the Constitution or laws of the United States, the United States 
exercises exclusive or preeminent responsibility and authority. In 
determining whether or not such an emergency exists, the President 
shall consult the Governor of any affected State, if practicable. The 
President's determination may be made without regard to subsection (a) 
of this section.

(c) Indian Tribal Government Requests--

     (1)  In General--The Chief Executive of an affected Indian tribal 
government may submit a request for a declaration by the President that 
an emergency exists consistent with the requirements of subsection (a).

     (2)  References--In implementing assistance authorized by the 
President under this subchapter in response to a request of the Chief 
Executive of an affected Indian tribal government for an emergency 
declaration, any reference in this subchapter or subchapter III (except 
sections 5153 and 5165d of this title [Sections 310 and 326]) to a 
State or the Governor of a State is deemed to refer to an affected 
Indian tribal government or the Chief Executive of an affected Indian 
tribal government, as appropriate.

     (3)  Savings Provision--Nothing in this subsection shall prohibit 
an Indian tribal government from receiving assistance under this 
subchapter through a declaration made by the President at the request 
of a State under subsection (a) if the President does not make a 
declaration under this subsection for the same incident.

Sec. 502. Federal Emergency Assistance (42 U.S.C. 5192)

(a) Specified--In any emergency, the President may

      (1) direct any Federal agency, with or without reimbursement, to 
utilize its authorities and the resources granted to it under Federal 
law (including personnel, equipment, supplies, facilities, and 
managerial, technical and advisory services) in support of State and 
local emergency assistance efforts to save lives, protect property and 
public health and safety, and lessen or avert the threat of a 
catastrophe, including precautionary evacuations;

      (2) coordinate all disaster relief assistance (including 
voluntary assistance) provided by Federal agencies, private 
organizations, and State and local governments;

      (3) provide technical and advisory assistance to affected State 
and local governments for--

            (A) the performance of essential community services;

            (B) issuance of warnings of risks or hazards;

            (C) public health and safety information, including 
        dissemination of such information;

            (D) provision of health and safety measures; and

            (E) management, control, and reduction of immediate threats 
        to public health and safety;

      (4) provide emergency assistance through Federal agencies;

      (5) remove debris in accordance with the terms and conditions of 
section 5173 of this title [Section 407];

      (6) provide assistance in accordance with section 5174 of this 
title [Section 408];

      (7) assist State and local governments in the distribution of 
medicine, food, and other consumable supplies, and emergency 
assistance; and

      (8) provide accelerated Federal assistance and Federal support 
where necessary to save lives, prevent human suffering, or mitigate 
severe damage, which may be provided in the absence of a specific 
request and in which case the President--

            (A) shall, to the fullest extent practicable, promptly 
        notify and coordinate with a State in which such assistance or 
        support is provided; and

            (B) shall not, in notifying and coordinating with a State 
        under subparagraph (A), delay or impede the rapid deployment, 
        use, and distribution of critical resources to victims of an 
        emergency.

(b) General--Whenever the Federal assistance provided under subsection 
(a) of this section with respect to an emergency is inadequate, the 
President may also provide assistance with respect to efforts to save 
lives, protect property and public health and safety, and lessen or 
avert the threat of a catastrophe, including precautionary evacuations.

(c) Guidelines--The President shall promulgate and maintain guidelines 
to assist Governors in requesting the declaration of an emergency in 
advance of a natural or man-made disaster (including for the purpose of 
seeking assistance with special needs and other evacuation efforts) 
under this section by defining the types of assistance available to 
affected States and the circumstances under which such requests are 
likely to be approved.

                                 ______
                                 
         Questions Submitted for the Record to Charles Johnson
                 Questions Submitted by Hon. John Thune
    Question. In your written testimony you mention how sellers of 
counterfeit products have leveraged online platforms like Amazon to 
gain access to unsuspecting consumers. I recently introduced the 
bipartisan Platform Accountability and Consumer Transparency Act, or 
PACT Act, which would help ensure that online platforms are liable if 
they do not remove content or stop activity that a court order found to 
be unlawful. Do you believe this could help incentivize action by tech 
companies to stop the sale of illegal PPE on their sites?

    Answer. The PACT Act's provisions to: (1) require technology 
platforms to have an individual, who can be reached to hear complaints 
about fake and fraudulent products being offered on the particular 
technology platform and (2) remove from the 1934 Communications Act's 
liability protections if quick action is not taken would seem to 
incentivize online platforms to take quick action on legitimate 
complaints and could provide incentive for platforms to take preemptive 
actions and consider the legitimacy of products before they are 
accepted on to the platform.

    Question. You and other witnesses testified regarding the ``just-
in-time'' approach to supply procurement. As I understand it, health 
systems have optimized inventory management to keep costs low. I expect 
the same is true for the manufacturers you represent in terms of the 
need to find efficiencies. As we are looking for ways to improve 
preparedness for future emergencies, how do we ensure we are investing 
in domestic manufacturing capabilities prudently given the need to also 
be cost-
competitive?

    Answer. There are multiple ways to ensure we are investing in 
domestic manufacturing capabilities prudently which take into account 
the need to also be cost-
competitive. One is for HHS to have its own grant making authority, 
similar to title III of the DPA that could be used to prepare when the 
Nation is not under a declared emergency order. Recent reports show 
that DoD has contracted with companies that have not been able to 
deliver needed products. HHS is familiar with the products used by 
healthcare professionals and the known and trusted suppliers of these 
products. A second option is a revolving stockpile model. This would 
allow manufacturers and their distributors to work cooperatively with 
end-users. In this situation, the distributor is authorized to sell a 
certain percentage of the product that manufacturer will then 
replenish. This type of vendor-managed inventory has been discussed, 
but we have not seen this type of contractual arrangement yet for 
personal protective equipment (PPE) for a public health emergency.

    Both options, and other possible inventory and stockpile solutions, 
should be implemented in a manner to fully price in emergency 
preparedness to the existing PPE supply chain. Just-in-time supply 
provision guarantees that the size and capability of manufacturing and 
distribution will adjust to the existing market. Emergency preparedness 
must, in the future, be a known, quantified and resourced part of that 
market.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
    Question. During your testimony, you stated that additional data 
collection is needed to improve the distribution of personal protective 
equipment to medical facilities in rural and underserved communities, 
including black, indigenous, Latinx, and communities of color. Please 
be as specific as possible about the types of data the Federal 
government should be collecting and disseminating to facilitate the 
distribution of PPE? How would the industry use this data to improve 
distribution of PPE to these communities?

    Answer. The types of data the Federal Government should be 
collecting from emergency response providers, as defined in 6 U.S.C. 
Sec. 101 (see citation below), and in turn disseminating to 
manufacturers and suppliers of general use and medical PPE includes: 
(1) the amount on-hand of drugs, biological products (including 
vaccines), devices (including respiratory protective devices), and 
other medical supplies that are, or may become, critical supplies; and 
(2) 30-, 60-, and 90-day demand projections these critical materials.

    ISEA believes that WITH such information, for which the association 
has been calling on the Federal Government, manufacturers and 
distributors can provide needed PPE where and when it is needed, 
including to underserved communities.

    6 U.S.C. Sec. 101
    (6) The term ``emergency response providers'' includes Federal, 
State, and local governmental and nongovernmental emergency public 
safety, fire, law enforcement, emergency response, emergency medical 
(including hospital emergency facilities), and related personnel, 
agencies, and authorities.

    Question. The Trump administration has relied on the practice of 
reusing PPE to make it look like there are adequate supplies at 
hospitals and other medical settings, which has been a big safety 
concern for workers. The American Nurses Association surveyed 14,000 
nurses in May and found that 45 percent worked at facilities with 
shortages of PPE, and 79 percent reported having to reuse PPE. In July, 
the National Nurses Union released a survey of 21,000 nurses, of which 
87 percent reported re-using PPE. My staff heard similar stories from 
around the country. One nurse in Houston, where the virus is surging, 
told minority staff that her hospital is cleaning and reusing N95 masks 
up to 10 times. When PPE like N95 respirators or surgical masks are 
manufactured, are they intended to be used a single time?

    Answer. Filtering facepiece respirators, including N95s, are 
designed, certified, and manufactured as disposable products. However, 
it does not mean that during an emergency they cannot be re-used. But 
still, it is not considered a best practice. Even before the Severe 
Acute Respiratory Syndrome (SARS), the National Institute for 
Occupational Safety and Health (NIOSH) had in place recommendations for 
re-use of disposable respirators in emergency situations. These 
recommendations can be found here.\1\
---------------------------------------------------------------------------
    \1\ https://www.cdc.gov/niosh/topics/hcwcontrols/
recommendedguidanceextuse.html.

    Question. What steps should the Federal Government take to secure 
---------------------------------------------------------------------------
adequate PPE supplies?

    Answer. There are multiple ways to secure adequate PPE supplies. 
One is for HHS to have its own grant making authority. (Recent news 
stories show DOD has contracted with companies that have not been able 
to deliver needed products.) HHS is familiar with the products used by 
healthcare professionals and the known and trusted suppliers of these 
products. A second option could be a combined program with 
manufacturers and their distributors whereby a long-term Federal 
contract allows a distributor maintain PPE supplies for the Federal 
Government but still able to sell a certain percentage of the product 
(first in, first out) that a manufacturer will then replenish. This 
type of vendor-managed inventory has been discussed, but we have not 
seen this type of contractual arrangement yet for personal protective 
equipment (PPE) for a public health emergency.

    These and other programs must continue to be a focus of Federal 
policy and allocation even after the COVID-19 pandemic has passed. The 
best emergency response can be hampered by a lack of preparedness, and 
history has shown the best preparedness programs are only as effective 
as their funding levels allow.

    Question. The Trump administration testified in July that it has 
used the Defense Production Act ``more than 10 times'' to combat COVID-
19, an extraordinarily narrow use of existing authority that stands in 
stark contrast to Federal agencies historical use of DPA. Historically, 
the statute has been used to acquire supplies and services in times of 
emergency and in day-to-day business. For example, the Department of 
Defense places approximately 300,000 rated orders annually, while the 
Department of Homeland Security, including FEMA, placed more than 1,000 
rated orders and contracts in 2018. Specific examples include using 
priority orders to acquire the Adenovirus vaccine, expediting 
construction of floodwater controls in New Orleans, speeding up the 
purchase of railroad equipment following Hurricane Katrina, and 
obtaining resources needed to house and feed disaster survivors and 
first responders, communications equipment and information technology 
needs, and other logistical needs supporting disaster response and 
recovery efforts. Given the shortages of PPE you have experienced, 
shouldn't the administration use the Defense Production Act to increase 
the availability of personal protective equipment and better allocate 
supplies?

    Answer. ISEA is pleased to see attention to allocating supplies. As 
noted in our answer to your first question, a structured, uniformly 
implemented data gathering program will allow for optimal allocation of 
PPE and other critical supplies for public health emergency response. 
Regarding the first part of the question, the government did use the 
Defense Production Act with industry in 35 instances.\2\ The DPA is 
most effective when used cooperatively with industry. ISEA stresses the 
cooperative aspect of this because in one case, the DPA was used to 
help an automotive company build powered air purifying respirators 
(PAPRs), but that action flowed down, which meant an existing PAPR 
manufacturer was no longer able to get a critical component for its 
PAPR. ISEA understands the issue was resolved, but not without delay in 
production of this important COVID-19 product.
---------------------------------------------------------------------------
    \2\ https://www.whitehouse.gov/wp-content/uploads/2020/08/OTMP-DPA-
Report-FINAL-8.13.20.pdf.

    In addition, FEMA, which in April was given authority to use powers 
under DPA, is now using title VII of the Act to structure voluntary 
agreements to allow a wide array of Federal agencies, companies and 
associations to share detailed data to optimize public health emergency 
---------------------------------------------------------------------------
response

    Question. The CARES Act included funding for title III of the 
Defense Production Act. How much of that funding has been allocated to 
members of your industry? What projects has it been used for? How many 
applications do your members have pending? Would your members have an 
appetite for additional title III funds in future legislation?

    Answer. Certainly, ISEA members would welcome additional DPA funds 
for pandemic response PPE. The DPA agreements are one tool the 
government can employ to price preparedness into the supply chain. By 
entering onto long term contracts for PPE supplies, the government can 
work cooperatively with the private sector to prepare for future 
events. These agreements would be maximally efficient when used to help 
existing PPE manufacturers increase capacity. Finally, the association 
believes that an HHS-funded grant-making program that can continue the 
DPA's mission once the public health emergency declaration is lifted 
can serve to help fill Federal, State, and local emergency pandemic 
stockpiles.

    As noted above, ISEA members welcome a cooperative approach to use 
of the DPA. In addition, as noted in the answer to Question 3, ISEA 
understands other legislation may be introduced to provide HHS with 
similar grantmaking authority. Because HHS has greater familiarly with 
the end-users and manufacturers of PPE used by healthcare workers, this 
agency may be in a better position to make grants for acquisitions of 
PPE.

                                 ______
                                 
               Question Submitted by Hon. Maria Cantwell
    Question. In my State, health-care workers are reporting a 
noticeable decline in the quality of PPE available to them.

    I spoke with a cancer care nurse from Swedish Hospital in Seattle 
who said that she and her colleagues are forced to reuse the PAPR hoods 
in the hospital to the point that they are being held together by duct 
tape.

    Is it safe for our nurses and doctors who are on the front lines 
responding to a global pandemic to be reusing PAPR hoods until they are 
falling apart?

    Answer. Powered Air Purifying Respirators (PAPRs) are key aspect of 
public health emergency response, and should be part of the strategic 
national stockpile. This way, health-care providers that use these 
could be supported the by SNS.

    Like other types of personal protective equipment (PPE), safety 
managers should follow manufacturers instruction on use. Generally, 
these calls for inspection of the product before and after each use.

    More generally, one of ISEA's core mission objectives is to ensure 
the safety and function of PPE that is marketed in the United States. 
This includes support for the proper use of PPE. In that regard, we 
support PPE standardization and conformity, use in accordance with 
manufacturers' guidance and labeling, and adherence to the 
recommendations of public health and safety agencies.

                                 ______
                                 
               Question Submitted by Hon. Debbie Stabenow
    Question. Senator Casey mentioned the need to innovate on PPE for 
health-care workers as we respond to this pandemic and prepare for the 
future, an effort I am proud to work with him on.

    What innovations do you see as the most critical to be able to 
better respond to pandemics in the future, and how can Congress and the 
administration encourage and support such innovation?

    Answer. Safety equipment manufacturers are constantly working to 
design new, improved safety products that are easy to use and 
comfortable to wear. NIOSH's certification level of 95-percent 
filtration efficiency is a backstop for worker safety and not a 
regulatory barrier.

    Most innovation in respiratory protection is in reusable 
respirators. Congress might consider a program, where healthcare 
providers are incentivized to use reusable respirators in addition to 
disposable respirators. In these respirator classes, there are many new 
designs, technologies and features. A grant program to help speed up 
these technological advances could be considered.

    Congress should consider a mandate to NIOSH to update its standard 
test protocols (STPs), which act as unofficial regulations. NIOSH has 
voluntarily begun working with manufacturers to update the STPs, 
removing unneeded and redundant tests and requirements. The STPs are 
equal to NIOSH regulations in the certification process. A benefit to 
the structure of the STPs is that if a new test technology becomes 
available, it is easier to add that to the STPs than it would be to add 
such a new testing technology to a regulation if the STPs were 
codified.

    Congress should provide funding for NIOSH. This agency has served a 
critical role for the Nation during the pandemic. The National Personal 
Protective Technologies Lab, which certifies respirators, is based in 
Bruceton, PA, at an old Bureau of Mines facility. Funding is needed for 
both buildings and to modernize the facility's test labs (some test 
labs on the NPPTL site are located in corrugated steel structures), and 
to increase in the Lab's personnel count. Both would help speed-up the 
certification process and boost the Nation's ability to respond to and 
mitigate future public health emergencies.

                                 ______
                                 
             Question Submitted by Hon. Sheldon Whitehouse
    Question. Like many states, Rhode Island has had chilling 
experiences procuring PPE, including unfulfilled orders, fraudulent 
sales, and a competitive race for supplies. This toxic atmosphere 
discourages not only buyers, but also suppliers, from entering the PPE 
market, as manufacturers face challenges understanding the market, 
product standards, and the allocation process. In your experience as 
buyers of PPE on behalf of hospitals and health-care providers, what 
does the current PPE market look like and how has it been tainted by 
the disorganized, toxic procurement process?

    Answer. While ISEA does not buy PPE for hospitals, the 
disorganized, toxic procurement process has two impacts on legitimate 
PPE manufacturers: (1) respirator, protective garment, and glove 
manufacturers have had to increase their awareness of their brands and 
company identity being ripped off; and (2) these PPE manufacturers have 
had to inform and educate end-users about how to be aware of fake 
websites.

    NIOSH has provided a useful service of testing the filtration 
efficiency of non-NIOSH foreign made respiratory protective devices. 
This allowed some large, institutional buyers to know that (1) a 
foreign company was legitimate if it was willing to send samples for 
testing in the U.S. by a Federal agency and (2) the results helped 
purchasers make informed decisions.

    As we have noted in responses to other questions from members of 
the Senate Finance Committee, use of the Defense Production Act, or in 
the future, of grant making program at HHS or other Federal agencies, 
would aid in availability of product.

    The current leadership and staff members of the office of the 
strategic national stockpile proposed in June, their ``Next Gen SNS.'' 
ISEA believes this proposal will bring rationality, complete data 
awareness and optimization for future public health emergency response 
activities. ISEA also offers suggestions to bring rational, data-driven 
decision making to public health emergency response in our answer to 
Senator Wyden's first question.

    One complicating factor has been rated orders. Given the Federal 
contracting process, a number of small firms presented significant 
orders to manufacturers. Understanding which orders were legitimate and 
which were not took time to figure out.

                                 ______
                                 
           Questions Submitted by Hon. Catherine Cortez Masto
    Question. In your testimony, you noted that investments made under 
title III of the Defense Production Act are helpful to increasing 
supply. What kind of investment would Congress need to make in title 
III DPA authorities in order to ensure that there is sufficient supply 
of PPE to meet demand?

    Answer. ISEA believes the data gathering discussed above, where by 
the Federal Government assesses what emergency response providers 
(again, as defined at 6 U.S.C. Sec. 101: Federal, State, and local 
governmental and nongovernmental emergency public safety, fire, law 
enforcement, emergency response, emergency medical (including hospital 
emergency facilities), and related personnel, agencies, and 
authorities) have on hand and will need in the foreseeable future, 
combined with data from DoD's use of the DPA for PPE, will provide the 
answer.

    Question. Several of the witnesses on the panel discussed the 
importance of greater transparency in the supply chain to make sure 
that manufacturers have an accurate picture of need, and providers know 
what they're getting and when they're getting it. What should Congress 
be doing at the Federal level to facilitate that? What entity should be 
charged with producing and making available the information that you 
need?

    Answer. Congress can provide FEMA with the immediate authority and 
congressional mandate to collect in a transparent manner data from 
``emergency response providers'' as defined in 6 U.S.C. 101. This data 
should be shared with manufacturers of products needed to mitigate and 
respond to the pandemic, who can use that to help plan on-going 
production. ISEA asks this because there is immediate need for this 
data, which will likely continue over the next few years.

                                 ______
                                 
   Prepared Statement of Robert J. Wiehe, Senior Vice President and 
          Chief Supply Chain and Logistics Officer, UC Health
    Chairman Grassley, Ranking Member Wyden, and distinguished members 
of the committee, thank you for the opportunity to speak with you today 
on a matter of utmost importance to the country: protecting the 
reliability of the U.S. medical supply chain.

    As the senior vice president and chief supply chain and logistics 
officer for UC Health, my responsibilities include strategy and 
oversight for sourcing, acquiring, and distributing all supplies and 
capital equipment within our health system. UC Health is an integrated 
health-care system serving the southwest Ohio and northern Kentucky 
region, and one of 125 academic medical systems in the country. In 
partnership with the University of Cincinnati, UC Health combines 
clinical expertise and compassion with research and teaching--a 
combination that provides patients with options for even the most 
complex situations.

    The challenges that have emerged from the COVID-19 pandemic are 
unlike anything we have encountered in our lifetimes. The health-care 
sector has been one of the hardest hit by this pandemic. Coronavirus-
related disruptions to supply chains, combined with dramatic increases 
in global demand, are among one of the many challenges that hospitals 
and systems are facing in today's environment.

    Our president and CEO, Dr. Rick Lofgren, is one of three health 
executives in Ohio serving in an advisory capacity to Governor DeWine 
on Ohio's response to the COVID-19 pandemic. With leadership from State 
executives and the Ohio Hospital Association, the State created 
geographic regions in order to have a coordinated, regional approach to 
the pandemic. This geographic coordination, that includes active 
participation and engagement from regional and local leaders and public 
health experts, has created an environment of partnership and 
cooperation oftentimes not seen between hospitals or between hospitals 
sand public health. Through these communication pathways, we have been 
able to quickly identify and resolve barriers and challenges--
oftentimes using unique and innovative solutions.

    One such innovative solution is the ``Virtual Stockpile,'' created 
by the Ohio Hospital Association in partnership with Governor DeWine, 
to guarantee that the hospital industry would contribute supplies to 
congregate living facilities, rural hospitals, health clinics, etc. so 
that Ohio's economy could open, and remain open. The Ohio Hospital 
Association coordinates this effort on behalf of their membership and, 
while it is in its infancy, shows the promise of what true 
collaboration could look like during any disruption to the medical 
supply chain.

    In my role, I have participated in State-level conversations about 
the reliability of the supply chain, partnered with other academic and 
community hospitals to leverage the supply chain on State, regional and 
local levels, and coordinated an aggressive internal strategy to access 
supplies directly for our care teams and patients.

    Today, I will provide a brief overview and background on health-
care supply chains. I will also highlight challenges, lessons learned 
and potential resulting strategies for moving forward post COVID-19. 
For each of these areas, I will segment my comments by focusing on 
perspectives from both the Demand side and Supply side. Lastly, I will 
provide a summary of the impact that COVID-19 has had on out health-
care system and provide potential areas of improvement to the committee 
based on my insights and experiences in over 30 years in Operations and 
Supply Chain Management.
            health-care supply chain background and overview
    Traditional health-care supply chains were typically transactional-
based departments which were focused on purchasing and distributing 
materials within the hospital or system. In recent years, as 
reimbursement models have shifted towards value based, patient centered 
care the hospital supply chain has shifted its focus and become more 
strategic and integrated with its clinical partners. Supplies are often 
the second largest expense within a health-care system, accounting for 
anywhere from 25 percent to 35 percent of total expenses--labor is the 
only category that is larger than supply expense. Value based 
reimbursement systems reward providers who decrease costs while 
improving quality and outcomes, creating an improved and more cost-
effective system.

    This change has shifted the focus of supply chain executives from 
transactional to an integrated model with a laser focus on Cost, 
Quality and Outcomes (CQO). This focus has forced better alignment with 
internal customers and led to improvements in cost, quality and 
outcomes through efforts such as product standardization. These efforts 
required improvements in infrastructure and systems that integrate pure 
purchasing data such as quantities and price with quality, outcomes and 
utilization patterns. Improved data capabilities have enabled 
physicians, clinicians and supply chain to start align purchasing 
decisions thereby driving improvements in CQO. Not all health-care 
systems are fully integrated, but the vast majority are moving in this 
direction in order to more deeply understand demand, reduce waste, 
improve outcomes, and lower the overall cost of health care.

    Hospital supply chains differ from their industry counterparts in 
that they are much more reliant on Group Purchasing Organizations 
(GPOs) and Prime Distributors to assist with day-to-day activities. 
Even with the most rigorous standardization efforts, many systems still 
have thousands of parts they are trying to contract, purchase, 
inventory and distribute. The sheer magnitude of this number of 
products often necessitate the use of these strategic third party 
partners to assist with contracting, purchasing and distributing of 
materials for health systems. In fact, many systems are looking towards 
these strategic partners to help drive costs out of the internal health 
care supply chain. Examples of this include the utilization of GPO 
price contracts to eliminate the need for local contracting and 
utilizing prime distributors and converting to a just-in-time (JIT) 
delivery model which eliminates the need for bulk warehousing and 
storage onsite.

    While health-care supply chains have become increasingly efficient 
in helping to drive out cost and inefficiencies, they have also become 
heavily inward focused. The use of strategic vendors to perform 
critical functions can be a very cost-effective approach, however, it 
adds another layer or touchpoint within the overall supply chain and 
can lead to neglect and a lack of understanding into where there may be 
supply risks upstream. The lack of integrated systems or tools to help 
track utilization and forecast demand also impacts the overall supply 
chain and its ability to quickly react to changes.
                  health-care supply chain challenges
Demand
      1.  The increased demand spike for COVID-19-related medical 
supplies was unprecedented. Demand for supplies such as PPE, testing 
equipment, testing supplies, ventilators, physical plant resources 
(monitors, beds), and ventilator-related drugs started to climb in 
March.

      2.  Low-volume products, such as PPE, became high-volume 
overnight. Allocations from prime distributors were based on 
historically low usage of these supplies, thus allocated supply was 
inadequate to meet health-care system needs.

      3.  Unknown usage and shifting usage patterns caused anxiety and 
stockpiling of supplies as they were available.

      4.  The increase in demand spike for certain essential drugs with 
increased off label use stressed areas within the pharmaceutical supply 
chain.

      5.  An increase in demand from non-traditional customers such as 
first responders, nursing homes and others contributed to the rapid 
increase in demand for PPE products worldwide.
Supply
      1.  A large percentage of manufacturing capabilities for both raw 
materials and manufacturing are located in the Asia-Pacific region. 
This includes both PPE and a large number of Active Pharmaceutical 
Ingredients (API's) required for many medicines and drugs.

      2.  Existing manufacturing facilities around the world were 
disrupted due to closures and lockdowns to prevent the spread of COVID-
19.

      3.  Export restrictions were imposed by many countries to protect 
domestic supplies during the height of the crisis.

      4.  Distribution and logistics capacity constraints were affected 
by workforce issues. Sickness and travel bans have had an effect on 
commercial air and ocean freight carriers. Many suppliers were 
chartering private planes to help expedite shipments.

      5.  There was a significant increase in counterfeit PPE products 
and gray market suppliers.

      6.  A lack of transparency and communication across the medical 
supply chain network slowed and confused responses from health systems.

      7.  The global impact of COVID-19 was unparalleled. In a more 
typical disaster, such as a hurricane, supply chains can redirect 
resources from one geography to another. The global impact of this 
pandemic did not allow for shifting of resources--all areas were hit 
equally throughout the world.
   health-care supply chain lessons learned and responding strategies
Demand
      1.  Implementing preservation and reuse policies, to protect and 
preserve limited supply resources, were a necessity. A great deal of 
effort went into preservation policies with strong collaboration 
between health-care providers, infection control and supply chain 
leaders. All efforts were coordinated to ensure health-care workers 
were protected while trying to preserve supplies in the face of 
scarcity.

      2.  New businesses were created to assist with the shortage of 
supplies. Decontamination efforts for N95 masks were fast tracked. 
Battelle in Columbus, OH was granted the approval by the FDA and 
awarded a contract by HHS and FEMA and funded up to $400 million to 
assist health-care facilities with decontamination of masks.

      3.  Innovation labs were mobilized quickly at universities like 
the University of Cincinnati to research and look for alternative 
solutions to supply issues. 3D printing of masks, swabs, and 
respirators were among the first innovations that were presented to 
health-care systems. Additionally, innovative solutions to re-tool and 
re-use non-standard equipment was also at the forefront of innovation.

      4.  Data collection and reporting on daily PPE usage (by 
department and site) was critical to monitor demand spikes and to 
ensure that preservation efforts were being followed.

      5.  Local and State organizations (e.g., Ohio Hospital 
Association) mobilized and helped to facilitate dialogue and solution 
sharing among members.

      6.  Strong collaboration and communication networks between 
health systems has become commonplace. Sharing of ideas and supplies 
has become standard practice as everyone is learning and adapting to 
this pandemic.
Supply
      1.  Production expansion with existing traditional manufacturers 
quickly increased but was also insufficient to meet increased demand. 
Companies such as 3M and Medline quickly ramped up production worldwide 
at existing manufacturing facilities.

      2.  Modification of existing production lines to run additional 
or new product was also enabled as quickly as possible to increase 
output of much needed supplies.

      3.  Extended hours of operation and overtime was used wherever 
possible to increase output in existing manufacturing facilities.

      4.  Nontraditional manufacturers entered the space quickly to 
assist the country with the need for PPE. Athletic and apparel 
companies were among many who quickly pivoted operations to assist with 
products like protective eyewear and simple masks. Procter and Gamble 
is an example of a Cincinnati company who quickly pivoted operations to 
manufacture critical supplies and donate to local and regional health 
systems.

      5.  In addition to the university 3D printing efforts, industry 
3D printing leaders also quickly looked for ways to partner with 
universities to find expedited solutions that worked for the medical 
community.

      6.  Many companies also pivoted to make ventilators, however, 
retooling manufacturing lines in addition to longer lead times for this 
type of manufactured equipment did not provide immediate relief.

      7.  Sourcing expansion of both raw materials and finished 
products happened quickly from both the supplier and customer side of 
the equation. Suppliers were looking for alternative solutions to meet 
the increased need while end users were looking to source product from 
non-standard suppliers in order to secure product as quickly as 
possible.

      8.  Supply Chain transparency platforms have been created to 
assist with communication across entire supply chains. Vizient and One 
Network Enterprises are a great example of this much needed improvement 
in the U.S. medical supply chain.

      9.  Logistics providers partnered with both the private sector 
and the government to expedite shipments and increase logistics service 
capacity.

      10.  Supply allocation was quickly put in place by domestic 
manufacturers and distributors alike, thus ensuring that products were 
available for ``hotspots'' that were hit the hardest.

      11.  From a global perspective, export restrictions were put in 
place to keep scarce medical resources in the United States.
                        uc health--fiscal impact
    The unanticipated health-care supply chain costs due to COVID-19 
have been staggering; the long-term impact to the U.S. health-care 
system remains to be seen. With the prohibition on elective procedures, 
the impact of COVID-19 from a fiscal perspective was a loss of 
approximately $110 million in April/May. This represents a 5-6 percent 
loss of total annual revenue over this 2-month period. Expenses during 
this same period increased by approximately $10 million largely due to 
buildup of inventories for PPE.

    While hospitals are no longer prohibited from providing elective 
procedures for patients, FY21-22 will continue to see an increase in 
expenses and overall reduced revenue for the system. Expenses will 
continue to be larger than historical levels due to many new 
developments as a result of COVID-19. A few examples include increased 
utilization of supplies, new expenses such as screening stations at 
hospital entrances, increased lab testing, and investment in additional 
infrastructure such as telehealth. This increased utilization of 
supplies is coupled with higher than normal pricing. The chart below 
provides data on a small sample of UC Health PPE utilization and 
pricing (Pre-COVID and current):

----------------------------------------------------------------------------------------------------------------
                                         Pre-COVID-19              COVID-19                 Average Price
                                   -----------------------------------------------------------------------------
                                    Avg. Daily  Avg. Price  Avg. Daily  Max. Price
                                       Usage       (ea.)       Usage       (ea.)      April      May      June
----------------------------------------------------------------------------------------------------------------
Exam Glove                              9,405       $0.06      47,876       $0.06     $0.06     $0.06     $0.06
----------------------------------------------------------------------------------------------------------------
Impervious Plastic Gown                 2,886       $0.27       5,996       $2.34     $1.20     $2.30     $0.32
----------------------------------------------------------------------------------------------------------------
Level 1 Mask                            2,280       $0.11       8,343       $1.95     $1.12     $0.06     $0.07
----------------------------------------------------------------------------------------------------------------
N95 Mask                                  159       $0.64         382       $6.50     $3.21     $1.69     $1.50
----------------------------------------------------------------------------------------------------------------
Face Shield                                52       $0.96         128       $6.00     $3.65     $0.96     $0.96
----------------------------------------------------------------------------------------------------------------

             uc health--supply chain impact and experiences
Demand
    While southwest Ohio was not an initial hotspot, and that allowed 
us the benefit of learning from others, it also meant that the region 
was not prioritized in terms of obtaining limited resources. As 
resources were distributed to national hotspot areas, we often needed 
to engage our elected leaders to intervene on our behalf with Federal 
leaders and/or the manufacturer in order to obtain the items we needed 
to provide a stable and ongoing COVID-19 response in southwest Ohio.

    We view the current medical supply chain (from PPE to testing 
supplies to machinery) as ``comfortable, not confident,'' and we 
continue to advocate for a national and State distribution strategy 
(public and private) that allows resources to be distributed to all 
geographic areas.

    As a standing member of our Incident Command Center, collaboration 
between clinical leaders, infection control and supply chain was vital 
to developing a plan and understanding what future demand for critical 
supplies would look like. Broad communication of appropriate PPE use, 
re-use and storage was a critical component that helped supply chain to 
better understand and develop a strategy for sourcing these scarce 
resources. Collaborative planning helped to provide appropriate 
protection to UC Health employees while ensuring that usage data was 
collected and monitored on a daily basis. Daily reports from Supply 
Chain helped to alleviate clinical concerns about the supply of PPE for 
the system. All sourcing decisions and activities were centralized and 
supplies were strategically placed in work areas with nursing leaders 
playing a vital role in monitoring and dispensing as appropriate. These 
interventions did not happen overnight, but constant communication 
between all parties helped facilitate a better understanding and less 
fear among all stakeholders.
Supply
    With critical supply on allocation from our prime distributor due 
to their inability to meet demand, UC Health had to quickly pivot and 
source PPE from non-standard suppliers. This change in activity was 
dramatic and shifted from a supply that was on automatic replenishment 
with one vendor to reaching out and making over 500 new sourcing 
inquiries in a 30-45 day period to vendors we had no prior experience 
with. This presented a unique challenge with respect to balancing the 
urgent need for product and the inherent risk in dealing with unknown 
third parties. UC Health relied on a strong network of contacts and 
collaboration with peer academic medical centers across the country to 
work with credible vendors and weed out bad actors.

    UC Health's strategy was to focus on known or existing vendors and, 
if at all possible, to steer clear of new vendors entering the market. 
We mitigated risk by spreading multiple smaller orders through various 
vendors versus trying to rely on singular large purchases to cover all 
of our needs. The vendors we utilized were already in the business of 
supplying either the health-care industry in another capacity or a 
different industry in a similar capacity. For example, we used a vendor 
who had previously focused on supplying material handling bins to the 
health-care industry, but was able to utilize their network of 
logistics and suppliers to quickly enter the PPE space. Another vendor 
we found supplied PPE into a different industry than health care but 
was able to pivot and start selling industrial respirators into health 
care as the CDC and NIOSH released expanded lists of approved N95 
masks. As UC Health and others started to have success with non-
standard vendors, we quickly shared successes with our counterparts to 
build an alternative supply network.

    In southwest Ohio, there was tremendous cooperation among health 
systems and even some attempts to combine our purchasing power and look 
for large scale opportunities to purchase simple masks and N95 masks. 
While I believe there eventually was some limited success with this 
approach, we learned that there were many scams and promises of large 
quantities of supplies coming in from outside the United States. These 
scams involved large sums of money being placed in escrow or cash in 
advance purchases for goods that did not materialize. UC Health relied 
on our internal legal team to vet potential sellers and was fortunate 
that we did not lose any money despite our involvement, albeit limited, 
with some of these transactions. UC Health quickly moved away from this 
approach and continued to place smaller orders with more reliable 
vendors.
Product Vetting
    A majority of the product we successfully sourced came from China 
or other Asian-Pacific countries. A great deal of time and resources 
were spent vetting these products before we moved forward with 
purchasing. Our standard approach required a potential vendor to submit 
material specification sheets, FDA Certificates of Approval, Third 
Party Testing Certification and samples that were reviewed by our 
infection control team. A significant percentage of the information we 
reviewed did not prove to be authentic. FDA certificates were submitted 
that did not match what we could find online at the FDA website and 
third-party testing certificates were submitted that could not be 
verified. If a product made it past these initial checkpoints, our team 
then tested the product to ensure that all materials received matched 
specification sheets. Using the methodology described above, UC Health 
was fortunate that we did not purchase or receive any non-standard or 
counterfeit products.
Supplier Communications
    During the initial months of the pandemic, UC Health had several 
shipments delayed and our suppliers communicated to us that this was 
due to the supplies being either purchased or seized by the Federal 
Government. Shipments were often delayed for 2-4 weeks until another 
shipment arrived from overseas. In order to circumvent product being 
held or seized at the port of entry, our suppliers communicated that 
they were labeling packages as ``not for medical use.'' We received 
product labeled as such and they met all specifications and testing 
criteria. We were not direct recipients of this communication from the 
manufacturer and can only attest to what we were told by our suppliers.

    Another frequent communication from our suppliers in the first 4-6 
weeks of the pandemic was the inability to get shipments into the 
country due to the lack of available capacity with commercial air 
freight companies. Suppliers used multiple methods of transport to 
overcome this constraint including private charters, smaller and more 
numerous shipments on Fed Ex or UPS, and ocean freight, which delayed 
availability by 2-4 weeks.
Regional and Strategic National Stockpile Assistance
    Starting in February, the Ohio Department of Health (ODH) surveyed 
hospitals in order to ascertain our PPE levels and to prepare for 
statewide stockpile resource allocation. In partnership with the ODH, 
the Ohio Hospital Association and the Regional Healthcare Coordinators, 
we monitored ongoing PPE needs and inventories in order to inform 
distribution allocations. Additionally, this network of communication 
allowed for sharing of guidelines and recommendations for PPE 
conservation, and regional and State cache limitations due to expired 
or destroyed supplies. Hospitals were asked to utilize the limited 
regional and State cache prior to the strategic national stockpile 
(SNS) as they continued to distribute PPE from our regional cache to 
health-care providers, EMS, law enforcement and hospitals through EMA 
request processes.

    In early March, UC Health received our first supplies from our 
regional cache and in late March we received our first shipment of PPE 
from SNS. We continued to receive shipments of supplies in the months 
of April and May.
                     opportunities for improvement
    I would like to go on record that the cooperation I have witnessed 
both internally and externally to UC Health has been in a word--
remarkable. This includes but is not limited to government officials, 
health-care leaders, and industry leaders from the non-health-care 
sector, physicians, nursing, and supply chain. Supply chain disruptions 
continue to be more frequent as geopolitical events, weather events, 
and other outside forces continue to impact all industries. If we can 
continue to have an open dialogue and learn from our collective 
experiences and other industries, we will be in a much better position 
when the next supply disruption happens.

    Specific to the health-care industry, I would offer the following 
specific examples of areas that can continue to be strengthened and 
improved:

      1.  Communication and transparency along the entire supply chain 
must be improved. Genuine transparency from demand forecasting to 
supply and raw material availability is crucial and builds trust along 
the supply network. Improved data capabilities and infrastructure 
should be adopted across the health-care supply chain to help 
facilitate these efforts.

      2.  Create a more diverse and possibly regionalized approach for 
critical supplies. Supply chain resiliency should be favored over low 
cost for critical supply items.

      3.  Require manufacturers of critical supplies to report raw 
materials and manufacturing capacities to the government to provide 
insight into the most important supply chains. This would be similar to 
how pharmaceutical manufacturers are required to report to the 
government.

      4.  Require health systems or hospitals to carry a minimum days 
on hand supply of critical supplies. This would be similar to the CMS 
requirement for facilities to maintain enough fuel, potable water, etc. 
to operate for a minimum of 96 hrs. My suggestion would be to mandate a 
minimum of 30 days inventory on critical PPE for all health systems.

      5.  Improve transparency and communication on the national 
stockpile. This would include details on the supplies and quantities 
that are being stockpiled and how these will be allocated during a time 
of need.

      6.  Build a larger national stockpile of critical supplies. This 
would eliminate the competition for supplies when and if a crisis 
strikes again. We should avoid scenarios where government and industry 
are trying to secure the same resources and competing against one 
another.

      7.  Improve domestic capabilities and capacities for the 
manufacturing of critical raw materials and supplies. On February 26th, 
U.S. Health and Human Services (HHS) Secretary Alex Azar told the House 
Appropriations Committee that the country had a stockpile of 12 million 
N95 masks, but according to HHS estimates, it needs 300 million to 
cover an emergency. The estimated annual production capacity in the 
U.S. and Mexico is 65 million masks.
                               conclusion
    Thank you for the opportunity to share my insights on this very 
important subject. COVID-19 has provided yet another example of the 
vulnerability of critical health-care supply networks and the need to 
look for new creative solutions to overcome these disruptions. I 
believe we have already learned many valuable lessons that can be used 
to improve our health-care supply chain resiliency and ultimately 
improve outcomes during future supply disruptions. I look forward to 
working with the committee and others to offer my thoughts and help to 
strengthen our health-care supply chain from end to end and create 
greater transparency and resiliency in the process.

    I am happy to answer any questions from the committee.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    The Finance Committee is focusing this week on issues dealing with 
the lack of high-quality PPE and other equipment during the pandemic.

    I know that the other side would like this to be all about China, 
China, China, and I agree that counterfeiting is a problem. But if 
you're focused entirely on that aspect of the issue, you're skipping 
right past the bigger story, which is the Trump administration's casual 
disinterest in leadership when it comes to getting PPE and making sure 
our health-care heroes are equipped. It goes back even before the 
pandemic began.

    In 2019, the Federal Government conducted a pandemic war game 
called ``Crimson Contagion.'' In it, a hypothetical airborne virus 
originated in China and made its way to the U.S., infecting 110 million 
people and killing nearly 600,000. The exercise concluded the U.S. 
would need 3.5 billion N95 masks to fight a large-scale pandemic. The 
Trump administration took no action to acquire them. The coronavirus 
arrived just a few months later.

    On March 19, 2020, with coronavirus cases beginning to go skyward, 
the President said the following when asked about buying and 
distributing PPE: ``The Federal Government's not supposed to be out 
there buying vast amounts of items and then shipping . . . Governors 
are supposed to be doing it.''

    On March 29th, he accused nurses and doctors of stealing PPE: 
``Something is going on, and you ought to look into it as reporters. 
Where are the masks going? Are they going out the back door?''

    In mid-April, he called reports of PPE shortages ``fake news.''

    On May 6th, a nurse told reporters gathered in the Oval Office that 
the availability of PPE was ``sporadic.'' Trump responded, quote, 
``Sporadic for you, but not sporadic for a lot of other people. . . . I 
have heard we have a tremendous supply to almost all places.''

    Just last week, he said, ``My administration currently has zero 
unfilled requests for equipment or anything else that they need from 
the Governors . . . frankly we are stocked up and ready to go.''

    Wrong, wrong, wrong.

    Just in the last few days, Democratic Finance Committee staff have 
gathered direct accounts from health-care workers about PPE shortages 
that are devastating communities, given the recent spikes in cases. The 
committee heard from nurses in Dallas, TX, where COVID cases are 
surging, who recently began buying their own surgical masks since their 
hospital was requiring staff to reuse old ones for days at a time.

    The committee heard from an administrator of a 33-bed hospital in 
rural Alabama, serving a majority black community, who told the 
committee her hospital is so low on PPE that she keeps an emergency 
supply stashed in her office for safekeeping.

    One Oregon home health-care nurse, who didn't want to provide their 
name for fear of retribution from their employer, told the committee 
they have so few disinfectant wipes that they are cutting them in 
quarters to last through the week.

    Finance Committee Democrats want to make sure these important 
stories are still being heard. So I encourage doctors and nurses and 
first responders and nursing home staff dealing with shortages and 
defective equipment to submit personal stories for the hearing record 
at [email protected]. If we've learned one thing, it's 
that getting these stories into public view and in front of Senators 
can make a lot of difference.

    This week, the National Nurses Union released a survey of 21,000 
hospital nurses. Eighty-seven percent reported having to reuse PPE 
that's designed for a single use. According to CDC data, hundreds of 
nursing homes didn't have PPE in mid-July, and thousands more had less 
than a week's supply. States like Oregon, cities, and health-care 
providers have been forced to compete against each other and pay 
ransoms for equipment on the open market. That has opened the door to 
junk sold by scam artists and incompetent vendors.

    A group of health systems was so concerned about losing access to 
PPE that it recently bought a minority stake in a big PPE manufacturer 
to keep the pipeline open. What about the smaller hospitals and 
independent doctor's offices and nursing homes that can't afford to buy 
their own manufacturers?

    The Trump administration has touted Jared Kushner's Project Air 
Bridge as a PPE game changer, but Project Air Bridge brought in just 
4.5 million N95 masks over the course of 3 months this spring. HHS's 
own estimates said the U.S. needed 300 million N95 respirators every 
month.

    The fact is these shortages of PPE have put our doctors, nurses, 
and caregivers in grave danger. An ongoing study by Kaiser Health News 
and The Guardian has identified at least 851 deaths among front-line 
health-care workers likely due to COVID-19.

    From sea to shining sea, Americans are desperately hoping there are 
safe and successful vaccines on the market in the coming months. They 
need to be distributed in a fair, methodical, and medically sound way. 
Unfortunately, the country's experience over the past 5 months raises 
serious concerns about whether or not Americans can have any confidence 
this will be the case.

                                 ______
                                 
July 28, 2020

The Honorable Chuck Grassley
Chairman

The Honorable Ron Wyden
Ranking Member

U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Senators Wyden and Grassley,

As Administrator of Hill Hospital, located in rural Sumter County, one 
of Alabama's poorest counties, I am proud of our response to COVID-19 
despite the unprecedented challenges we faced due to the limited amount 
of personal protection equipment (PPE) at the onset of the COVID-19 
pandemic.

I recall when Sumter County got its first case in March, our staff 
began to panic. Our doctors, nurses, and office staff questioned, 
``What are we going to do?'' ``How can our patients be protected? How 
can we be protected?'' With very little PPE in-house, our small 27-bed 
and 4-emergency room facility began preparing for the worse.

We had a mere three weeks of PPE, so we immediately reached out to 
increase our stock; but we quickly ran into difficulty when we learned 
that our primary suppliers, Cardinal Health and Medline, had everything 
on back order. As our stock began to dwindle, our maintenance director 
of 40 years remembered that the hospital had a stockpile of PPE 
resulting from previous emergency preparedness efforts. That discovery 
would be our saving grace through March and April.

However grateful for this discovery, we again experienced a decline in 
PPE in May and June due to an increase in emergency room patients. 
Within two months, we had more than 300 patients presenting to the ER 
with COVID-19 symptoms, confirming 15 of them to be positive. By then, 
we were managing our PPE by keeping a small par level in each 
department, utilizing a sign-in sign-out system, and requiring nurses 
to reuse N95 masks for up to 5 days when they were not soiled or torn. 
Doctors and nurses expressed their concerns as many have comorbidities 
and are over 60. They were afraid of putting their lives at-risk. To 
ensure safety, we began screening patients outside in a tent, which 
helped prevent an influx of patients and required minimum use of PPE.

The high demand for PPE has caused small rural hospitals like ours to 
question the integrity of our suppliers. While supplies from the State 
distribution center and other businesses have allowed for our continued 
day-to-day operation, the scarcity of resources from our usual 
suppliers is worrisome. Orders that were placed with these vendors in 
March still have not been filled. As a result, I am having to store PPE 
in my office to prevent exhaustion of our current supply.

PPE continues to be a serious a concern for Hill Hospital. Without 
continuous access to these critical items, safety for both patients and 
our front-line providers is greatly jeopardized. Currently there are 
354 confirmed cases with 15 deaths in Sumter County, according the 
Alabama Department of Public Health. We are fearful of not being able 
to adequately service our community due to lack of PPE as COVID-19 
continues to spread and the cold and flu season approaches.

Funding from the CARES Act has helped address some of our PPE shortage, 
allowing us to purchase supplies, although at much higher prices, from 
suppliers outside our normal purchasing group and to purchase at levels 
above our historical volume. Additionally, we have utilized this 
funding to create a safer environment for patient care by converting 
multiple isolation rooms with negative pressure.

Every day when I enter the halls of Hill Hospital, I am met with the 
faces of employees who are depending on me to ensure we maintain during 
and after COVID-19. I want to deliver; however, I need the appropriate 
resources to do so.

To this end, I am recommending that Congress consider the following:

      Guarantee that small rural hospitals have access to affordable 
PPE through private vendors, regardless of the volume of our orders;
      Continue to ensure that the State of Alabama receives the 
resources needed to help with the supply of PPE to the rural hospitals 
in our state; and
      Continue to fund rural hospitals post COVID-19 to prevent 
closure.

Over the past 6 years, Hill Hospital has had to make drastic changes to 
remain financially viable. Among other measures, we have decreased the 
hours and salaries of our staff and eliminated non-essential services. 
Just as we were experiencing a turn-a-round, a beacon of light, COVID-
19 happened. I am fearful, that our small hospital will not be able to 
withstand the unprecedented financial pressure placed on us by COVID-19 
without assistance from the federal government.

    Again, I am very proud of the professionalism and commitment of the 
doctors, nurses, and staff of Hill Hospital, and I remain dedicated to 
ensuring the safety of these employees who put their health on the line 
every day to ensure that the residents of Sumter County receive the 
high level of care that they deserve.

Sincerely,

Loretta Webb Wilson, MBA/HCA
Administrator
Hill Hospital of Sumter County

                                 ______
                                 
From:             Irene Agostini
To:               Gartrell, Peter (Finance)
Cc:                Michael E Richards; Kate Becker; Chamiza Pacheco de 
Alas; Nathan David Bush; Jessica Kelly; Barbara I Damron; Misty P Salaz

Subject:          UNM PPE--from Irene Agostini MD
Date:             Tuesday, July 28, 2020 5:22:06 PM

_______________________________________________________________________

Peter,

This is my story. I have approval from our government relations 
officers and senior leaders to share this. Please reach out if you have 
any questions or concerns.

        PPE experience at University of New Mexico Hospitals

        I have been in health care for more than 30 years and have 
        never even given a minute of my time to PPE until this year. As 
        a physician and now a Chief Medical officer at the only level 
        one trauma center, the only safety net hospital and the only 
        academic medical center in New Mexico, I deal with a myriad of 
        issues. In my wildest nightmare, I would never have thought 
        that I and many senior leaders would spend hundreds, if not 
        thousands, of hours worrying about PPE.

        In early February we began planning; by mid-March we were in 
        full disaster mode at the University of NM Hospital. We 
        realized that despite years of creating stores of PPE, we would 
        quickly run out of PPE (especially N95s) if we did not create a 
        conservation strategy. We formed a PPE committee consisting of 
        senior physician leaders, nursing leaders, logistics, 
        infectious disease experts, front line nursing staff and other 
        staff. We still meet 5 days a week and have produced over a 
        hundred guidelines about proper PPE usage and conservation 
        methods. We began recycling PPE masks using aerosolized 
        hydrogen peroxide. Our logistics team vetted hundreds of 
        vendors--only one in ten was found to be reliable. Many asked 
        for cash up front.

        Our front-line staff needed enormous emotional support to care 
        for a new disease that we all knew very little about. This was 
        much more difficult with the need to conserve PPE in a way that 
        was unthinkable in the US until this pandemic. Our ICU nurses 
        had one N95 for a 12 hour shift--we knew that was safe but 
        certainly not preferred. Our doctors stored their N95s in 
        Tupperware so they could reuse them for up to 3 days since they 
        were not in patients' rooms as much as the nurses. Our students 
        were removed from the clinical setting because we needed to 
        conserve the PPE for our staff. Due to the enormous efforts of 
        our logistics team, with the support of NM's governor and our 
        New Mexico Congressional Delegation, we were able to continue 
        to procure PPE. We never had to suffer the nightmare of running 
        out of PPE because of the enormous time and energy spent to 
        conserve, as well as procure PPE. We have worked tirelessly to 
        create trust amongst staff by meeting with all essential 
        workers from our physicians to our environmental staff. We had 
        hundreds of meetings, some with Spanish translators, so all of 
        our staff could hear about our efforts to keep them safe 
        despite the PPE shortage.

        The emotional toll on our front-line health-care workers has 
        been tremendous and the added fear of conserving PPE, so as not 
        to run out, is egregious and seemingly unthinkable in the most 
        expensive health-care system in the world.

Irene Agostini M.D.
UNM Hospitals
Chief Medical Officer
Assistant--Deb Gallegos
[email protected]

                                 ______
                                 
From:             Krause, Erica (Brown)
To:               PPEshortages
Subject:          Toledo Ohio PPE Shortages
Date:             Thursday, August 6, 2020 3:48:11 PM

_______________________________________________________________________

Good Afternoon,

Below is an account of issues with PPE from Zepf Center in Toledo Ohio. 
They gave me permission to share their issues. Zepf is one of the 
largest mental health and addition services providers in Northwest 
Ohio.

Thanks,

Erica

Erica Krause
Northwest Ohio Regional Representative
Office of U.S. Senator Sherrod Brown
[email protected]

Date      Wed, 5 Aug 2020 16:26:01 +0000
From     Stephanie Kinsman 
To        ``[email protected]'' 

Cc         Peter Areddy , Adam Nutt 
, Andrea Powell 
Subject   RE: Request from Senator Brown's Office

Good Afternoon Erica,
I am reaching out in response to Caryn's email below. As a Behavioral 
Health non-profit, we are seeing major disruptions in the normal supply 
chain. Below are some of the issues we have encountered.

    1.  Items on back order for months and then canceled right before 
they are supposed to finally be in stock, tying up needed funds for PPE 
that could have been allocated elsewhere.

    2.  Items commandeered at Customs for several weeks, even over a 
month in some instances.

    3.  Price increases on standard cleaning supplies that are in 
stock.

    4.  Zero availability on cleaning items from our standard vendors, 
requiring us to utilize resources online from companies we are not 
familiar with, putting us at risk for buying sub-par items.

    5.  An overwhelming amount of ``KN95'' masks available for purchase 
turn out to be counterfeit upon further research. We are having to go 
through rigorous hoops to ensure the products we receive are legitimate 
KN95s and the sites we purchase from are legitimate companies.

    6.  N95 masks are still very difficult to find at a reasonable 
price.

Additionally, because demand exceeds supply, costs of essential 
products will be unsustainable for nonprofits like Zepf without any 
additional assistance.

Sincerely,

Stephanie Kinsman
Financial Operations Analyst
Zepf Center
2005 Ashland Ave.
Toledo, Ohio 43620
[email protected]
419-841-7701 ext. 6045

Erica Krause
Northwest Ohio Regional Representative
Office of U.S. Senator Sherrod Brown
[email protected]

                                 ______
                                 
From:             Sarah Delgado
To:               PPEshortages
Subject:          Responding to the call for information about PPE 
Shortages
Date:             Friday, August 28, 2020 9:03:48 AM

_______________________________________________________________________

To the Senate Finance Committee,

Thank you for putting out this call for frontline health-care workers 
to share their experiences with deficits of personal protective 
equipment (PPE). As the largest specialty nursing organization, 
representing the interests of the more than 500,000 acute and critical 
care nurses, we have followed this issue closely. Of note, because of 
ubiquitous and ongoing implementation of contingency strategies, we are 
now seeing normalized deviance in the use of PPE. Our members view 
extended use and reuse of equipment intended for single use as a normal 
practice. For instance, we have members say they have access to PPE, 
and in further discussion, note that they use the same single use N95 
mask for a week or longer. This, along with recent research 
demonstrating the effectiveness of properly used PPE in protecting 
health-care workers from SARS-CoV-2 infection, makes current and future 
deficits an urgent problem.

Attached is our most recent letter to Congressional leaders describing 
priorities that must be included in Coronavirus Relief legislation. In 
addition, I've attached a list with summaries of 5 recent research 
studies published in peer-reviewed journals that demonstrate the 
mitigating impact of PPE on SARS-CoV-2 infection rates among health-
care professionals. Thank you for your continued efforts to address 
access to PPE for front-line health-care workers and specifically, your 
support of acute and critical care nurses.

- -

Sarah A. Delgado, MSN RN ACNP

Clinical Practice Specialist, Strategic Advocacy

American Association of Critical-Care Nurses

P: 949-448-7347

                                 ______
                                 
From:             Kim Zimmerman
To:               PPEshortages
Subject:          PPE
Date:             Thursday, August 13, 2020 12:25:58 PM

_______________________________________________________________________

I'm sharing this story from one of AHCA's members.
Thank you,
Kim Zimmerman
American Health Care Association
202-294-8981

Dear Senator Wyden:

Village Health Care is 106-bed independently owned nursing facility in 
Gresham, Oregon. The community was hit with an outbreak around March 20 
with 16 staff cases and 20 cases in their resident population. My 
facility was well-prepared with a large stockpile of personal 
protective equipment (PPE) available onsite. However, given the burn 
rate associated with taking care of vulnerable populations during a 
pandemic, we ran through that stockpile within the first 10 days of 
their outbreak. We also had long-term, established relationships with 
several suppliers and had never experienced a supply chain disruption 
previously. After placing orders for more PPE, the suppliers would 
later inform us that they could not be filled.

From then on, we tried every option available to keep PPE on-hand and 
keep the residents and staff safe including:

  Immediately began following federal and state guidelines on how to 
conserve and ration PPE, in order to keep some supply on hand;
  Worked with state and local partners, but ultimately there was no 
consistent supply to be found;
  Received deliveries from the National Guard that were helpful but 
not even close to adequate in the long term; and
  Tried a variety of unconventional routes to find PPE, including 
working with an individual in our IT department who had established 
business relationships in China to source PPE directly.

While the supply chain has recovered somewhat from the early days of 
the crisis, Village Health Care, like many communities across the 
country, is still unable to rely on traditional suppliers or know if 
adequate supplies of all PPE items will continue to be available. PPE 
costs have also skyrocketed, just as care providers are requiring 
unprecedented amounts of PPE to deal with the COVID-19 pandemic. 
Village Health Care has been COVID-19 free since May 31st but still 
faces supply challenges in our efforts to keep COVID-19 out of their 
community.

Prior to COVID-19, a case of 100 gowns would cost $75. After the crisis 
began, we now pay $495 for the same 100 gowns--a 560% increase. The 
burn rate of PPE is extraordinary. Due to the 14 day-quarantine period 
necessary for new admissions and acuity of some of those residents, the 
community uses 400 gowns per day serving just 8 residents in a new 
admissions wing. That's nearly $2000 in gowns alone daily, and that's 
only one small part of the community. We still care for others with 
non-COVID-19 infectious diseases--so there is a constant burn of PPE 
there as well.

As an independent community, Village Health Care has very few staff not 
engaged in direct caregiving and is unable to rely on a corporate 
office to manage supply chains.

We would appreciate any help Congress can provide to help on the PPE 
supply issues. With massively increased costs across the board, we 
relied on a PPP loan as a critical lifeline, as well some funds from 
the Provider Relief Fund. Federal support will be crucial for the 
duration of this crisis.

Sincerely,

Gregory Madson, Administrator
[email protected]
Village Health Care
3955 SE 182nd Ave.
Gresham, OR 97030
Main: 503-665-0183
Direct: 503-676-3005
https://villagehc.com/

                                 ______
                                 
From:             Jarone Lee
To:               PPEshortages
Subject:          PPE Story
Date:             Friday, August 21, 2020 9:04:24 AM

_______________________________________________________________________

Dear Senate Finance Committee:

I am a practicing emergency medicine and critical care physician on the 
frontlines of COVID-19 in one of our hot spot areas in the United 
States. I have cared for and continue to care for many COVID-19 
patients.. As such, I have witnessed the full range of devastating 
stories related to our patients and their families. Not all stories 
were sad. Many patients made remarkable recoveries despite prolonged 
critical-illness. However, none of the survivors would have made it 
without our frontline nurses, respiratory therapists, janitorial staff 
and physicians and their required PPE. My colleagues and I regularly 
talk about the burden of not only patient care, but also worrying about 
adequate PPE--will there be enough PPE tomorrow? Many bought their own 
PPE, some self-made. Others continue to need to use old and repurposed 
N95s. A lot of us wonder if the chemical smell from repurposing PPE is 
worse than COVID-19 itself.

All of this would not be an issue if we had adequate PPE so that we can 
safely and adequately do our jobs and treat our patients. We will 
continue to show up as front-line workers, not because we are heroes, 
but because we must and no one else can. We can only do so until we get 
sick. Please remember that us front-line health-care workers are highly 
trained and specialized for what we do. As more and more of us get sick 
from lack of PPE, there will be less and less of us to take care of 
America.

Jarone Lee, MD
Emergency Medicine/Critical Care Physician

                                 ______
                                 
From:             Williams, Christa (Christa)
To:               PPEshortages
Subject:          PPE shortages
Date:             Monday, August 17, 2020 5:00:21 PM

_______________________________________________________________________

I am a family physician faculty at a large public teaching hospital. We 
are still in a place of recycling our N95 masks. As you likely know, 
these masks were not meant to be re-used, especially not repeatedly. 
When our institution did receive a shipment of N95 masks from FEMA--
they were too old to be safely used and all had to be discarded. This 
was infuriating, because we all know that whoever packaged those 
20,000+ masks up for shipping, knew they were expired. We have 1 PAPR 
for our entire labor floor (50 beds, probably 300 staff+) which is 
necessary for anyone with facial hair or who fails fit testing. We have 
managed to be OK w/ gowns. We wipe down and reuse our masks. Our 
pharmacy manufactured hand sanitizer, which was incredibly helpful. But 
Oxyvir shortage is an ongoing issue--we have to use spray and paper 
towels.

It is so frustrating that months into this situation, front-line 
workers are reusing N95s.

Thank you,

Christa Williams, MD

                                 ______
                                 
From:             Kristina Haley
To:               PPEshortages
Subject:          PPE Shortages
Date:             Monday, August 3, 2020 1:09:44 PM

_______________________________________________________________________

Good morning,

I am writing regarding PPE shortages. My name is Kristina Haley, and I 
am a pediatric hematologist/oncologist in Portland, OR. I take care of 
children with bleeding and clotting disorders, deficiency or 
dysfunction of various blood cells like red cells and platelets, 
children with cancer, and children who are undergoing or who have 
undergone bone marrow transplants. These are some of the most 
vulnerable patients in our children's hospital. During normal cold and 
flu season, we have strict guidelines regarding our interactions with 
these patients--we are required to sign in to each clinical space in 
order to declare ourselves fever and symptom free and we utilize the 
required protective equipment--changing gowns, gloves, and masks for 
every patient interaction. For my entire career, it has been explicitly 
told to me that I must change my PPE between every single patient. This 
provides them with the most protection. I have watched patients in our 
unit require ICU admission, require mechanical ventilation, and die 
from viruses that typically cause regular cold symptoms in otherwise 
healthy individuals.

In addition to caring for some of our most vulnerable patients, I too 
am on an immune modulating agent for a myeloproliferative neoplasm. I 
am unsure if my medication or my disease put me at higher risk for 
infection or at higher risk for severe infection. But, I have to assume 
they do. I live in a state that has not seen the extraordinary strain 
on resources that other states have seen. I am not trying to utilize 
garbage bags as isolation gowns as I have heard other health-care 
workers have had to utilize. I am being told to re-use my face mask as 
long as possible--to keep using it between patients in order to 
minimize the number of masks I ultimately use. This goes against 
everything I have been told prior to the COVID-19 pandemic regarding 
optimal utilization of PPE. In addition, my patients are in home-made 
masks that do not fit correctly and are not made of adequate materials. 
The Oregon Health Authority recommended that patients wear surgical 
masks but we do not have the supplies for this. I fear I am putting my 
patients and myself at risk. I go into each patient encounter with 
anxiety for myself and for them.

I am not a hero. I am a well-trained and well-educated resource. I want 
to take the best care of my patients, but I also must continue to 
protect myself so that I can continue to take the best care of my 
patients going forward. Sending healthcare workers as well as other 
people who interact with the public on a daily basis without adequate 
protection is not heroism. It is irresponsible. It is unethical. It is 
dangerous.

Please get us the supplies we need to do the jobs we are trained to do. 
Stop calling us heroes--it doesn't make us feel better. Call us well-
equipped professionals who can manage crises and get us the PPE we need 
to do the jobs we are well-trained to do.

Thank you,

Kristina
Kristina Haley, DO
Associate Professor
Oregon Health and Science University

                                 ______
                                 
From:             Petee, Barb
To:               PPEshortages
Subject:          PPE Shortages/a story from frontlines/ProMedica
Date:             Monday, August 31, 2020 5:18:24

_______________________________________________________________________

The following is sent on behalf of Nicole Justus, MSN, RN, Hospital 
Incident Management Team/Logistics Section Chief, ProMedica

ProMedica is a health system based in Toledo, Ohio. Please do not 
hesitate to let me know if you need additional information of have any 
questions.

To the Senators of the Finance Committee:

I am a nurse. Though I am not working directly with patients at this 
time, I do serve nurses and other healthcare workers who work directly 
with patients. I would like to tell you the story from my own ``front 
line.'' When the COVID-19 pandemic struck, my organization, ProMedica, 
quickly followed the Hospital Incident Command System (HICS) and 
assembled a team. I was asked to coordinate the Logistics section of 
the HICS, and our Supply Chain division immediately began trying to 
source, purchase and distribute PPE. We knew the need for it would be 
greater than anything we had experienced before.

From the start, we encountered obstacles. Our normal suppliers were 
unable to meet the new, increased demand, not just from us, but from 
their customers nationwide. We put the word out to our community--
businesses, organizations and individuals responded generously, 
donating everything they had: a paint shop sent us all the masks they 
had on hand, a local nursing school sent us their isolation gowns, hair 
salons and tattoo parlors sent us their last boxes of gloves. And 
although this generosity rescued us in the beginning, we knew it 
wouldn't--couldn't--last and we would need to get creative.

We investigated every non-traditional supplier of PPE we could think of 
(for instance, food and beverage industry suppliers). We worked with 
local engineers to use 3D printers to make some of our equipment. And 
ultimately, with CDC guidelines in place while assuring patient and 
staff safety, we had to change the way we practiced. As I'm sure you 
are aware, almost all PPE is typically only used once and then 
discarded. This includes gowns, gloves, masks, and respirators. But in 
this crisis, we needed to consider re-using our PPE. We asked 
ourselves: how can we protect our staff AND still take care of 
patients? We were determined to not have to choose between the two. 
Fortunately, we never had to make that decision, but it felt like we 
came close. Thanks to devoted infection preventionists, we established 
protocols that would allow for the safe re-use of our PPE. It wasn't 
optimal, it wasn't what we would have chosen if we had alternatives, 
but it's what we had to do in this unprecedented situation. We knew, 
though, that these unavoidable changes in practice were not ideal and 
ran counter to our employees' years of experience. Our leaders care 
deeply about the safety of patients and staff, and I witnessed members 
of our leadership team in tears because we had to make the difficult 
decision to reuse and reprocess supplies.

Let me discuss one piece of personal protective equipment in 
particular--the N95 respirator. An N95 respirator is pivotal in the 
prevention of the spread of COVID-19. Of all the PPE we attempted to 
source, this one proved, and continues to prove, the most difficult. We 
went to extraordinary lengths to obtain PPE: we paid higher than list 
price; we chartered a plane to pick up PPE out of state; we entered 
into collaborative agreements to increase our purchasing power. But 
also, we ordered, and paid for, a shipment of N95s that never made it 
to our organization; we ordered, and paid for, a shipment of N95s that 
turned out to be counterfeit. We were so hopeful that we could finally 
relieve some of the burden of reprocessing, but it was not to be. 
Despite the fact that reprocessing has been given an EUA by the FDA, 
and that we're all doing it, and it seems to have relieved some of the 
pressure, make no mistake--this is not an ideal situation for our staff 
or our patients. Until we return to normal, we are stressing an already 
precarious situation.

We continue to experience difficulties. Special gowns for staff who 
provide chemotherapy are unable to be ordered. We recently nearly 
exhausted our supply of medium gloves, the size worn by most of our 
staff. We moved to an industrial (instead of medical) supplier of 
gloves to fill in the gaps while we waited for our regular suppliers to 
continue shipments. And we are still reprocessing N95s. Our staff are 
still using them more than once. If adequate amounts of N95s exist from 
suppliers that aren't going to price-gouge us into bankruptcy, they are 
not making it to the hospitals that need them. We are not confident 
that the supply chain will remain stable and be able to fulfill our 
needs if we resume ``traditional'' use of PPE. We fear every day that 
we may run out.

Our staff are the real heroes--working under these conditions is 
stressful and scary. We will continue to do everything we can, 
everything we must, but we could really use your help. Any boost to the 
PPE supply chain, especially N95s, would be appreciated more than you 
could know.

Respectfully submitted,

Nicole Justus, MSN, RN
ProMedica
Hospital Incident Management Team--Logistics Section Chief
_______________________________________________________________________
Please direct questions or inquiries to:

Barbara J. Petee
Chief Advocacy and Government Relations Officer
ProMedica
MSC-S39000
100 Madison Avenue
Toledo, Ohio 43604
419-260-2800
(Cell) 567-585-3894
[email protected]

                                 ______
                                 
From:             Allison Edwards
To:               PPEshortages
Subject:          Lack of PPE
Date:             Thursday, August 20, 2020 3:17:23 PM

_______________________________________________________________________

Senator Wyden:

I run a small primary care clinic in Kansas City, Kansas.

We have had--and continue to have--difficulty in purchasing PPE. We've 
had to get creative with gloves, masks, gowns and have been sourcing 
our hand sanitizer from local shops (since medical suppliers are out).

We're largely re-using PPE that under normal circumstances we'd use 
once and toss.

I think the hardest part is not knowing when/if 1) the Pandemic will 
end and 2) when the PPE shortage will end.

So in the mean time, we're doing the best we can with what we've got.

(And on a bright note, we were able to contribute to a bulk buy 
faciliated by weneedppe.org and were able to get 100 gowns for the 
practice so that we could continue to provide COVID testing!)

Happy to elaborate more, but I fear my story is the same as almost 
anyone else's who is trying to run a small clinic.

- - - - - - - - - - - - - - - - - - - - - - - 

Allison Edwards, MD
[email protected]

Founder and Medical Director
Kansas City Direct Primary Care
@KansasCityDPC
[email protected]
www.kansascitydirectprimarycare.com

                                 ______
                                 
From:             Yuet Mui Kong
To:               Rodriguez, Isabel (Hirono)
Cc:               PPEshortages; Luna, Nicholas (Hirono)
Subject:           Hawaii's PPE Shortages--Share Your Experience with 
Senator Hirono
Date:             Monday, August 31, 2020 10:41:01 PM

_______________________________________________________________________

Aloha Senator Hirono,

I would like to share my experience. Hawaii's PPE shortages have 
started in February, 2020. My workplace's suppliers/vendors have not 
been able to provide us stable supplies. Most of the time, items are on 
back order. Hence, I signed up as many as PPE donation websites and PPE 
purchase groups as possible--official and unofficial (via social 
media), nationally and internationally.

Since then, many vendors have approached me. However, they either take 
bulk order only, e.g., minimum order of 10,000 masks each time, or 
cannot provide proof of quality. I have been spending a lot of time to 
verify the ``certificates'' they send me, and counter check with the 
NIOSH list and FDA/CDC list. In addition, I also need to keep up with 
the news in case the manufacturers drop out of the lists or lose 
government contracts, e.g., following the news about BYD in California.

Being on the official lists does not mean the masks are not 
counterfeit. If I am lucky to get some samples, I will need to check if 
the quality meets standards, if the design is the same as the photos on 
the manufacturer's official website, and if the address printed on the 
box is the same as address listed on their website, etc. Fortunately, I 
am able to read Chinese to verify the information. When masks are made 
in the other countries, I need to contact my friends and relatives in 
those countries to verify the information. It is very time consuming. 
Needless to say, the price for surgical/procedural masks has increased 
from $15/box of 50 to over $55 per box of 50!

In my experience, a lot of surgical/procedural masks I tested cannot 
protect our frontline staff from COVID-19. Some masks are not even 
waterproof which means they cannot block any droplets. Some masks' 
filter layer is almost see-through. The staff would be at risk if they 
used those masks.

When I thought I found a reliable, genuine N95 source to replace the 
most popular brand's N95s, the Federal contracted sterilization 
facility only sterilizes the ``common'' N95 masks that meet its 
criteria. Which means I need to start the process over again to find my 
co-workers another affordable masks with reliable quality and meet its 
sterilization requirements. In addition, most of the medical staff in 
Hawaii only passes the fit testing with N95 size small. Most of our 
staff cannot pass the test if they use size regular or universal. So, 
it is almost like mission impossible.

We don't know how much longer we need to face the shortage and at the 
same time, to keep ourselves safe to continue to serve our patients and 
community.

Thank you for your kind attention.

Aloha,

Yuet ``Mui'' Kong
Chief Operations Officer
Kokua Kalihi Valley Comprehensive Family Services
2229 N. School Street
Honolulu, HI 96819
Tel: 808-791-9413
Fax: 808-848-0979

                                 ______
                                 
From:             Krause, Erica (Brown)
To:               PPEshortages
Subject:          Elara Caring--Home Health NW OH/MI
Date:             Friday, August 7, 2020 9:10:46 AM

_______________________________________________________________________

Good Morning,

Below is an email I received from Elara Home Health regarding their 
issues obtaining necessary PPE. They have faced significant challenges 
because prior to COVID they did not routinely need medical grade N95 
masks. Trying to enter that market during the pandemic has proved 
nearly impossible. Ms. Brewer would be happy to talk further with the 
committee.

Thanks,

Erica

 Email from Rebecca Brewer, RN--Area VP Midwest-East Michigan/Ohio--
                    Elara Caring

``We have been unable to secure N95 masks from medical supply companies 
due to allocations. This is not an item as a skilled home care provider 
we used often prior to March. Never more than a dozen or so a year, if 
that. Because of this there is no allowable allocations for us to order 
them from supply companies. Companies like 3M are, from what I 
understand, directed to provide these to hospitals and maybe government 
supplies stocks instead of providers like Elara? I am not well versed 
on the situation producers are in other than being told we are not able 
to get them directly from the factory. We are especially in need of 
small size N95 masks. Dave Cook our VP of Procurement recently told me 
on his last call to 3M he was informed that 3M is on a 4 billion mask 
backlog right now and not making small sizes. The standard sizes often 
do not provide a proper fit on our primarily female work force. 95% of 
what we have secured and used since March are N95 masks that were 
donated by construction companies that are primarily larger males. This 
has left us in the situation of only having a small number of staff 
that were able to pass a fit test to see patients. In many of these 
cases the staff member is still using the same single mask they were 
fitted into 4 months ago. This is very concerning as we head in to what 
looks to be a very stressful winter for front line workers. Hospitals 
are leaning on companies like Elara Caring to keep patients home where 
the risk of nosocomial infection is marginal and saving inpatient space 
for COVID-19 patients. Without additional supplies this is going to 
become extremely difficult. Some of the other very basic items that 
continue to be available in limited supply (if at all) due to 
allocations: Fit testing kits for protective N95 and above masks (I 
have still not been able to secure a kit since March--luckily we had a 
few of these on hand); Fit testing solution; Alcohol Swabs; 
Thermometers; Basic wound care/dressing supplies; Gloves--all sizes and 
materials; Gowns; Procedure/surgical masks of all types; Surgical caps; 
Shoe covers; Catheters, drainage bags and insertion supplies. I would 
be happy to get on a call and discuss our experiences further or 
participate anyway that would be helpful. I have been a nurse for 23 
years and have never experienced anything close to what the last few 
months have brought to the table. Thank you for advocating for our 
staff. Thank you for reaching out to us for input!''

Best,

Rebecca Brewer, RN | Area Vice President Midwest--East
Michigan/Ohio
c 517-581-8896 | f 800-379-1600 | [email protected]

Erica Krause
Northwest Ohio Regional Representative
Office of U.S. Senator Sherrod Brown
[email protected]

                                 ______
                                 

                             Communications

                              ----------                              


                        Center for Fiscal Equity

                        14448 Parkvale Road, #6

                       Rockville, Maryland 20853

                      [email protected]

                    Statement of Michael G. Bindner

Chairman Grassley and the Ranking Member Wyden, thank you for the 
opportunity to submit these comments for the record. Excepts were also 
sent to the Ways and Means Trade Subcommittee from last week. The next 
three paragraphs, however, are new to this hearing.

I also omitted my comments about Hyperstagflation. I see from the 
Senate version of the draft bill that our views and those of the 
majority are the same, although $100 is a bit too low. May I suggest 
$350, which is a good halfway point and leaves worker with $800 a week 
total. Rent will get paid and food will be bought.

The irony is that I tested positive for PAN-SARS yesterday, although I 
had the severe version of the virus. We shall see if this is a false 
positive or, worse, it can be extreme twice. May I suggest a panel of 
COVID patients to relate their experiences. This is also relevant 
because it goes to the quality of testing. If the false positive rate 
for tests is too high, we may have less documented cases than we know, 
at the same time that we have a much greater number of real cases, like 
mine, where medical attention was not sought because there were no 
serious SARS symptoms. Many have had only the cold, the latent 
contagious stage and the non-
contagious fatigue stage where we manufacture immunity (which my blood 
test yesterday did not detect).

More to the point, many manufacturing workers, including those in the 
medical supply system, have likely tested positive but may not have 
actually been sick, while others are never tested but are among the 
walking wounded--although, as I say below--no one can work with extreme 
fatigue symptoms, which is a concern as to the welfare of undocumented 
workers who likely don't have the luxury of sick leave benefits. This 
worker illness and the related shutdown will impact medical suppliers 
in the United States in areas where the virus is active, which means 
the entire South and West, with the Midwest being the next on deck. 
Repeated material follows.

This testimony relies on my experience as a member of the Cost 
Management Systems project of what was then called Computer-Aided 
Manufacturing--International, now the Consortium for Advanced 
Management--International. The project produced Cost Management for 
Today's Advanced Manufacturing. I created a handbook based on the 
project, the U.S. Air Force Orientation Guide to Advanced Cost 
Management.

One of the topics addressed is the manufacturing environment known as 
Process Simplification, which features Just in Time supply chains. This 
model works for Walmart, which is massively integrated, and for defense 
production. Parts arrive with little holding time and go right out the 
door. If everyone is working in the supply chain, it works beautifully. 
Commercially, it is essentially a rationalized production line from 
resource extraction to delivery.

As long as the line is not stopped, it minimizes waste and non-value-
added cost. It doubles down on traditional manufacturing's stance of 
labor being a cog in the machine. Unionization is not compatible with 
it unless they have incentives to keep things moving (like in the 
defense sector, which requires cleared and more specialized workers).

Recent reported experience on Midwest food production has workers being 
made to work sick, or after exposure. The CDC model has been flawed, 
but they have finally added a runny nose to the list of symptoms (as I 
predicted they must, having had the virus myself). The virus has not 
been contained, not through lack of correct distancing but because the 
economy was closed in areas where it had not arrived, which meant 
reopening just as it has gone from early exposure to full-on illness. 
Because nasal symptoms were discounted, people likely transmitted in 
private settings, with transmitters not knowing their sneezes were 
potentially deadly and not hay fever.

Testing positive for exposure means someone sneezed. Not knowing that 
this is the trigger means workers were idled (or not idled) at the 
wrong time. There is no danger that workers with SARS or fatigue 
symptoms will keep working. It is impossible to do so. If they do not 
have sick leave, the results could be tragic. Undocumented workers have 
even more dire consequences in their personal supply chain, which 
includes remittances and cramped living conditions that ensure virus 
transmission. The attached table shows how states will be affected 
under current policy.

At this stage of the pandemic, the assembly line is about to crash. A 
new round of mandated closings is inevitable unless mandate quarantine 
to the period from the first sniffle to three weeks after they stop for 
everyone in the household. Unless there is significant cross training 
already in place, the supply of goods will begin to diminish.

There is simply no stock of inventory to rely on in this model. Farmers 
will again be overwhelmed with unsold food that they will not able to 
move. It will be worse in this round unless courageous action is taken 
on personal quarantine and in the CDC's understanding and guidance of 
how the virus spreads and does not spread. I doubt that the medical 
hierarchy has it in them.

Please see the attached table, which predicts that there will be at 
least 400,000 US deaths if national mortality rates are even 80% of 
those in New York.

Thank you for the opportunity to address the committee. We are, of 
course, available for direct testimony or to answer questions by 
members and staff.


------------------------------------------------------------------------
                                            Population       Projected
                  State                     (millions)     deaths @0.12%
------------------------------------------------------------------------
Alabama                                              4.9           5,880
------------------------------------------------------------------------
Alaska                                              0.73             876
------------------------------------------------------------------------
Arizona                                             7.28           8,736
------------------------------------------------------------------------
Arkansas                                            3.02           3,624
------------------------------------------------------------------------
California                                         39.51          47,412
------------------------------------------------------------------------
Colorado                                            5.76           6,912
------------------------------------------------------------------------
Connecticut                                         3.57           4,284
------------------------------------------------------------------------
Delaware                                            0.97           1,164
------------------------------------------------------------------------
District of Columbia                                0.71             852
------------------------------------------------------------------------
Florida                                            21.48          25,776
------------------------------------------------------------------------
Georgia                                            10.62          12,744
------------------------------------------------------------------------
Hawaii                                              1.42           1,704
------------------------------------------------------------------------
Idaho                                               1.79           2,148
------------------------------------------------------------------------
Illinois                                           12.67          15,204
------------------------------------------------------------------------
Indiana                                             6.73           8,076
------------------------------------------------------------------------
Iowa                                                3.16           3,792
------------------------------------------------------------------------
Kansas                                              2.91           3,492
------------------------------------------------------------------------
Kentucky                                            4.47           5,364
------------------------------------------------------------------------
Louisiana                                           4.65           5,580
------------------------------------------------------------------------
Maine                                               1.34           1,608
------------------------------------------------------------------------
Maryland                                            6.05           7,260
------------------------------------------------------------------------
Massachusetts                                       6.89           8,268
------------------------------------------------------------------------
Michigan                                            9.99          11,988
------------------------------------------------------------------------
Minnesota                                           5.64           6,768
------------------------------------------------------------------------
Mississippi                                         2.98           3,576
------------------------------------------------------------------------
Missouri                                            6.14           7,368
------------------------------------------------------------------------
Montana                                             1.07           1,284
------------------------------------------------------------------------
Nebraska                                            1.93           2,316
------------------------------------------------------------------------
Nevada                                              3.08           3,696
------------------------------------------------------------------------
New Hampshire                                       1.36           1,632
------------------------------------------------------------------------
New Jersey                                          8.88          10,656
------------------------------------------------------------------------
New Mexico                                           2.1           2,520
------------------------------------------------------------------------
New York                                           19.45          23,340
------------------------------------------------------------------------
North Carolina                                     10.49          12,588
------------------------------------------------------------------------
North Dakota                                        0.76             912
------------------------------------------------------------------------
Ohio                                               11.69          14,028
------------------------------------------------------------------------
Oklahoma                                            3.96           4,752
------------------------------------------------------------------------
Oregon                                              4.22           5,064
------------------------------------------------------------------------
Pennsylvania                                        12.8          15,360
------------------------------------------------------------------------
Rhode Island                                        1.06           1,272
------------------------------------------------------------------------
South Carolina                                      5.15           6,180
------------------------------------------------------------------------
South Dakota                                        0.88           1,056
------------------------------------------------------------------------
Tennessee                                           6.83           8,196
------------------------------------------------------------------------
Texas                                                 29          34,800
------------------------------------------------------------------------
Utah                                                3.21           3,852
------------------------------------------------------------------------
Vermont                                             0.62             744
------------------------------------------------------------------------
Virginia                                            8.54          10,248
------------------------------------------------------------------------
Washington                                          7.61           9,132
------------------------------------------------------------------------
West Virginia                                       1.79           2,148
------------------------------------------------------------------------
Wisconsin                                           5.82           6,984
------------------------------------------------------------------------
Wyoming                                             0.58             696
------------------------------------------------------------------------
                                                                 393,912
------------------------------------------------------------------------


                                 ______
                                 
                     Healthcare Leadership Council

                        750 9th Street, NW #500

                          Washington, DC 20001

                              202-452-8700

July 30, 2020

The Honorable Chuck Grassley, Chairman
The Honorable Ron Wyden, Ranking Member
U.S. Senate Committee on Finance
219 Dirksen Senate Building
Washington, DC 20510

Dear Chairman Grassley and Ranking Member Wyden:

The Healthcare Leadership Council (HLC) commends the Senate Committee 
on Finance for holding its hearing on, ``Part 2: Protecting the 
Reliability of the U.S. Medical Supply Chain During the COVID-19 
Pandemic.'' We applaud the promptness with which you and your 
colleagues in the U.S. Senate and House of Representatives have 
addressed policies and priorities related to disaster preparedness 
under these extraordinary circumstances.

The HLC is a coalition of chief executives from all disciplines within 
American healthcare. It is the exclusive forum for the nation's 
healthcare leaders to jointly develop policies, plans, and programs to 
achieve their vision of a 21st century healthcare system that makes 
affordable high-quality care accessible to all Americans. Members of 
HLC--hospitals, academic health centers, health plans, pharmaceutical 
companies, medical device manufacturers, laboratories, biotech firms, 
health product distributors, post-acute care providers, home care 
providers, and information technology companies--advocate for measures 
to increase the quality and efficiency of healthcare through a patient-
centered approach. We are uniquely positioned to address disaster 
preparedness comprehensively from all perspectives in the healthcare 
industry.

HLC members are pleased to announce that we are working with the Duke-
Margolis Center for Health Policy on an initiative aimed at 
strengthening the public-private partnership that is essential to 
disaster preparedness and response. As part of this initiative, as we 
are also working with the Deloitte consulting firm to bring its 
expertise to our endeavor.

Like you, we believe there is much to be learned from the collective 
response thus far to the COVID-19 pandemic. In the summer and fall of 
2020, we will be bringing together the expertise of the Duke-Margolis 
Center, the multisector perspectives of the HLC membership, and ideas 
from key individuals and organizations--from the public sector as well 
as the Administration and Congress--involved in the current pandemic 
response to assemble a set of innovative, integrated solutions that 
will, one, determine what is working well in the current COVID-19 
response and needs to be maintained and even strengthened and, two, 
what aspects of our disaster preparedness and response require fresh 
thinking and new approaches.

Our work will be concentrated in three primary areas:

      Supply chain readiness. Particularly in the early stages of the 
COVID-19 pandemic, we witnessed difficulties and disruptions in the 
distribution of critical goods and supplies including personal 
protective equipment and testing supplies. It is essential that we call 
upon the expertise of the private sector to build a disaster-ready 
supply chain that can work with government at all levels to ensure that 
our nation's needs are met and that future treatments and vaccines can 
be delivered safely and expeditiously.

      Care delivery. We have learned a great deal during the current 
pandemic about how to expand healthcare reach to meet extraordinary 
escalations in patient demands. It is essential to translate those 
lessons into a systemic approach that incorporates components such as 
telehealth, workforce mobility, adequacy and resiliency, and financial 
stability for healthcare providers during periods when normal revenue 
streams are disrupted.

      Data and evidence generation. Our ability to respond to a 
nationwide health crisis relies heavily on the ability to access and 
analyze data rapidly and effectively. This must involve well-
coordinated public-private cooperation to gather data and utilize it to 
improve patient care, strengthen public health surveillance, and 
accelerate biomedical innovation while protecting the privacy of 
individuals.

Through this initiative, contributions from the nation's premier 
experts in both healthcare and disaster preparedness will be coalesced 
into a set of specific recommendations and commitments that will 
strengthen our nation's preparedness and response for future health 
crises. We will be sharing ideas with your committee as this initiative 
progresses.

Legislative Priorities

In addition to the broad-based policy initiative mentioned above, HLC 
members also urge your committee and others in Congress to address a 
set of legislative actions that will help reduce barriers to disaster 
preparedness and response. These legislative priorities are outlined 
below.
Workforce
      Implement a federal waiver of state licensure and allow for 
practice at the top of the scope of license for physicians, nurses, 
pharmacists, pharmacy technicians and other healthcare professionals in 
times of disaster. This should also allow nurses to work in centralized 
locations to provide services, including remote patient monitoring 
across state lines.
      Allow license portability for non-physician providers for 
Medical Disability Exam vendors with the Veterans Administration (VA) 
in parity with what is allowed for providers who work within the VA 
health systems. Specifically, license portability is needed for Medical 
Disability Exam vendors for providers such as nurse practitioners, 
physician assistants, audiologists, psychologists, and more.
      Enable swift allowance of temporary visas for nurses, 
physicians, pharmacists, and healthcare professionals (especially those 
who have already completed clearances) to address need in times of 
disaster.
      Continue to encourage states to temporarily waive in-state nurse 
licensing and scope of practice requirements for the duration of the 
COVID-19 pandemic, allowing nurses to work in a centralized location to 
provide services, including remote patient monitoring across state 
lines.
      Direct the Department of Homeland Security to take the following 
actions to increase the supply of physicians during the national 
emergency:
          Temporarily suspend the enforcement of the 2 year 
home residency requirement for any J-1 medical resident or fellow who 
is willing to work full time in a Health Professional Shortage Area 
(HPSA) or Medically Underserved Areas and Populations (MUA/Ps) or in a 
medical field that is directly treating COVID patients or assisting in 
the battle against COVID. This should not be restricted to just the 
Conrad 30 Waiver program. There are many other Interested Government 
Agency (IGA) Waivers including Appalachian Regional Commission (ARC), 
Delta Regional Authority (DRA) VA Waivers, and Health and Human 
Services (HHS) Waivers.
          Temporarily make exempt from the annual H-1B cap 
any physician, or healthcare worker (as long as they are H-1B 
classifiable positions) involved in direct patient care who may be 
called upon to join the fight against COVID-19.
          Temporarily extend the status and work 
authorization of any H-1B physician beyond the normal 6-year limit for 
the duration of the COVID-19 crisis or at least 1 year.
          Require U.S. Citizenship and Immigration Services 
to reinstate premium processing for any H-1B filed for a physician, 
physician assistant, registered nurse, nurse practitioner, and any 
other critical healthcare professional for the purpose of fighting 
COVID-19.
          Temporarily suspend the VisaScreen Certificate or 
equivalent requirement for healthcare professionals.
          Temporarily grant current J-1 medical residents 
and fellows the ability to engage in COVID patient care even if that is 
not a part of their formal training program.
      Permanently expand waivers to permit pharmacists to diagnose and 
prescribe testing and treatment for COVID-19 and related influenza-like 
illnesses (in accordance with FDA approvals and treatment guidelines) 
in times of an emergency declaration. Additionally, recognize 
pharmacists as Medicare providers so that they may be reimbursed for 
these services.
Healthcare Coverage and Costs
      Provide federal premium subsidies for group continuation 
coverage (COBRA and state continuation that goes beyond COBRA) of at 
least 90 percent, preferably 100 percent, to people who lose health 
coverage because of COVID-19.
      Support temporary federal risk mitigation programs to support 
the financial stability of insurers and self-insured employers during 
the duration of COVID-19.
      Waive cost sharing for COVID-19, and COVID-19 mutations, 
testing, vaccine administration and treatment.
      Expand the payroll tax credit provided under the Coronavirus Aid 
Relief and Economic Security (CARES) Act for providing group health 
coverage for tax years 2020 and 2021, from 50 percent up to 100 percent 
of payroll taxes. Or, Congress should establish a direct grant program 
to fund employers that wish to continue their group health coverage 
during the pandemic.
      Establish a special enrollment period, allowing uninsured 
Americans to purchase coverage on the exchanges.
      Enhance the individual market tax credits (APTC) to reduce 
premiums for individuals, for individuals between 400 percent and 600 
percent of the federal poverty level, because premium costs for those 
individuals often far exceeds 10 percent of income.
      Implement continuous eligibility for current Medicaid 
beneficiaries during the public health emergency.
      Provide additional FMAP, in line with National Association of 
Medicaid Directors' requested percentage, for states to address 
Medicaid program growth and high-acuity beneficiaries.
      Require CMS to compare MA plans 2020 Star Ratings and 2021 Star 
Ratings and use the higher scores to hold plans harmless due to data 
collection challenges during the crisis. In addition, CMS should 
provide plans having a 3.5 or 3 Star Ratings with the opportunity to 
earn a Quality Bonus Payment (QBP) for contract years 2022 and 2023 
(2021 and 2022 Star Ratings) of at least 3.5 percent to improve program 
stability and the stability of benefit offerings for beneficiaries' 
given the COVID-19 public health emergency.
      While CMS recently provided additional guidance enabling 
Medicare Advantage organizations to submit diagnosis for risk 
adjustment payment from telehealth visits, plans need certainty that 
this policy will continue to be implemented moving forward. Therefore, 
Congress should codify that starting in 2020, CMS must adjust MA plan 
enrollee's risk scores to consider diagnosis data obtained through 
telehealth services covered by the plan.
      Bolster mental/behavioral health and social determinants of 
health support to address the COVID-19 ramifications.
Provider Support
      The CARES Act that included over $100 billion for providers is a 
welcome step, but it has proved insufficient for many providers. 
Congress must further support healthcare providers who are losing 
revenue during the COVID-19 pandemic and help them ramp back up 
efficiently when the system is ready to return to more normal business. 
While aid based on historic Medicare fee-for-
service (FFS) payments may be the easiest and quickest way to provide 
support, as noted by CMS, it fails to meet all needs, including:
          Providers who have moved to value-based care, 
such as Medicare Advantage and other Medicare-sponsored value-based 
programs;
          Providers with a large Medicaid or other non-
Medicare FFS population;
          Providers with a significant number of COVID-19 
patients; and
          Providers located in rural areas serving a 
predominantly rural population.
      Help expand the public health infrastructure to support better 
bi-directional electronic information exchange between public health 
disease registries, labs, and electronic health records.
      Allow healthcare providers a 0% interest rate as part of the 
Accelerated and Advanced Payments provision under the CARES Act.
      Allow a temporary increase in Medicare and Medicaid 
disproportionate share (DSH) allotments during public health 
emergencies.
      Enable hospitals, health systems and other providers to be 
compensated for costs associated with remote patient monitoring, which 
otherwise meets evidence-based guidelines and appropriate patient data 
security and privacy standards, through direct federal funds that 
explicitly includes Registered Nurse-
supported COVID-19 remote patient screening and monitoring solutions, 
creation of new reimbursement mechanisms, or a waiver of existing 
billing requirements.
      Provide additional financial support for in-home personal care 
attendants/
caregivers.
      Provide support for mobile phlebotomy to eliminate delays in 
cancer diagnostic testing and mitigate risks associated with clinic and 
hospital visits for immune-compromised patients.
      Provide liability protections for healthcare providers should 
they be placed in a position of making resource allocation and 
treatment decision trade-offs.
      Provide immediate relief to teaching hospitals by temporarily 
doubling Indirect Medical Education (IME) payments.
      Extend by two years the Graduate Medical Education (GME) cap 
building period for new teaching hospitals that are currently within 
the five-year period that determines GME reimbursement caps.
      Impose a two-year moratorium on finalizing the Medicaid Fiscal 
Accountability Regulation (MFAR), as states and healthcare providers 
will not be able to implement the proposal during or in the aftermath 
of the pandemic or absorb the financial impact.
      Provide leniency and/or immunity under Occupational Safety and 
Health Administration (OSHA) rules for issues related to PPE shortages 
unless gross negligence can be proven.
      Provide essential support to the fitness center industry to 
ensure the continuation of employee and senior wellness programs. These 
programs provide invaluable services to millions of Americans during 
times of economic insecurity and uncertainty. Maintaining wellness 
program access for seniors will promote health and well-being, 
preventing an escalation in long-term healthcare costs. There are 
multiple options for providing this support: inclusion of the fitness 
center industry in the SBA PPP program, providing business interruption 
insurance, offering lease relief, or creating a 9/11-style recovery 
fund.
Regulatory Relief
      Expand on CMS' allowance for Medicare Part B drugs to be 
administered in a home setting, in times of an emergency declaration if 
the patient and the patient's physician believe it is critical to help 
protect the patient's safety and health, by allowing the home 
administration supplier to be able to directly bill CMS for the items 
and services provided. However, we acknowledge that this additional 
flexibility may not be appropriate for oncology drugs unless HHS, 
working with the oncology community, deems it safe and appropriate.
      For those interventions that otherwise meet evidence-based 
guidelines and appropriate patient data security and privacy standards, 
waive strict application of remote patient monitoring coding 
requirements, such as the minimum time standards, which may limit 
providers' ability to use them and pose an undue documentation burden 
during the public health crisis.
      Grant a one-year extension of the implementation date of the CMS 
and ONC Interoperability and Information Blocking Final Rules to 
January 1, 2022 since the healthcare sector as a whole does not have 
time, personnel or funding to implement the rules during the pandemic.
      Amend Section 1135(b) of the Social Security Act by giving the 
Secretary authority to adjust benefits and administrative procedures 
for Medicare Advantage plans to match changes made in Medicare FFS.
      Amend Section 1135(b) of the Social Security Act to clarify the 
authority to waive certain HIPAA requirements for the duration of a 
public health emergency, rather than only for 72 hours.
      Enact the National Telehealth Strategy and Data Advancement Act 
(H.R. 5763) to ensure coordination of telehealth activities.
      Allow expansion of tools that can be used to determine 
disability (VASR-D) and that can be used as part of a mobile 
examination, particularly serving veterans in remote or medically 
underserved areas or in homeless communities, during this time of 
national emergency.
      Allow for partial completion of the Document-Based Questions 
(DBQs) when determining disability ratings through the Veterans 
Administration. DBQs that are only partially completed but meet the 
requirements of the VASR-D for rating of the claimed disability should 
be deemed sufficient for rating purposes and should not adversely 
affect the quality ratings of either the VA personnel utilizing the 
DBQs or the vendor completing and delivering the DBQ.
Innovation
      Enact the Developing an Innovative Strategy for Antimicrobial 
Resistant Microorganisms (DISARM) Act (H.R. 4100) to encourage 
innovation of new antibiotics to fight antimicrobial resistant (AMR) 
infections by providing additional reimbursement to hospitals that need 
to use these high-need antibiotics. These antibiotics incur significant 
cost to develop and while they are often the most appropriate therapy 
to treat AMR infections, the structure of the DRG mechanism creates a 
financial disincentive for their use. These drugs need to be made 
readily available and appropriately reimbursed for hospitals especially 
during the COVID-19 pandemic.

      Create public incentives to ensure private investment in 
improved vaccine technologies to address this and future pandemics.

As the committee moves forward on issues related to disaster 
preparedness, we stand ready to be a trusted resource that encompasses 
the perspective of all stakeholders in the private sector committed to 
working in collaboration to be better prepared should another pandemic 
occur. Thank you for your efforts to gather information to ensure our 
country remains vigilant. HLC looks forward to continuing to 
collaborate with you on our shared priorities. Should you have any 
questions, please do not hesitate to contact Debbie Witchey at 
[email protected] or Tina Olson Grande at [email protected]

Sincerely,

Mary R. Grealy
President

                                 ______
                                 
                 National Association of Manufacturers

                     733 10th Street, NW, Suite 700

                          Washington, DC 20001

                             P 202-637-3144

                             F 202-637-3182

                          https://www.nam.org/

July 30, 2020

The Honorable Charles Grassley
Chairman
U.S. Senate
Committee on Finance
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
Washington, DC 20510

Dear Chairman Grassley and Ranking Member Wyden:

On behalf of the National Association of Manufacturers, I write to 
thank you for holding today's hearing, ``Part 2: Protecting the 
Reliability of the U.S. Medical Supply Chain During the COVID-19 
Pandemic.'' The NAM is the nation's largest industrial trade 
association, representing small and large manufacturers in every 
industrial sector and in all 50 states. Manufacturers are concerned 
about the rise in fake and counterfeit products, which cost the U.S. 
economy nearly$131 billion and more than 325,000 jobs in 2019 alone.

The COVID-19 pandemic has brought new urgency to the fight against 
counterfeits. Fake goods not only reduce U.S. jobs and infringe on 
creators' intellectual property rights, but also threaten consumer 
health and safety. Counterfeit test kits and unsafe PPE peddled to 
unwitting consumers can exacerbate the public health crisis that our 
nation faces.

Manufacturers have developed several policy proposals to combat 
counterfeits, which are detailed in the attached report. In brief, we 
urge policymakers to (1) require e-commerce platforms to reduce the 
availability of counterfeits; (2) modernize enforcement laws and 
tactics to keep pace with counterfeiting technology; (3) streamline 
government coordination to tackle counterfeit items; and (4) empower 
consumers to avoid counterfeit goods. In addition, we recognize that 
any lasting solution will require stronger collaboration among all 
private sector stakeholders.

On behalf of the millions of men and women who make things in America, 
thank you for your attention to this important issue.

Sincerely,

Chris Netram
Vice President, Tax and Domestic Economic Policy

                                 ______
                                 

                       Countering Counterfeits: 
                    The Real Threat of Fake Products

How Fake Products Harm Manufacturers, Consumers, and Public Health--and 
                       How to Solve This Problem

Amid an unprecedented global health crisis, manufacturers have stepped 
up and taken the lead, working together and with national, state and 
local governments to fight the spread of COVID-19. Manufacturers 
deliver day-to-day necessities, lifesaving medical innovations and 
products that improve people's lives in countless ways. While the 
pandemic has demonstrated anew the importance of American innovation 
and ingenuity, it has also revealed a serious threat: counterfeit 
products that put lives and livelihoods at risk.

Counterfeiting is not a new problem; it has harmed manufacturers, 
American workers and consumers for years. But the problem is getting 
worse, and the COVID-19 pandemic has shown just how dangerous inaction 
can be. As part of the nation's critical response effort, manufacturers 
have been supplying health-care workers and other Americans on the 
front lines of this crisis with vital goods, including personal 
protective equipment, hospital beds, ventilators, hand sanitizers, 
cleaning supplies and other critical health-care and safety products. 
But while manufacturing men and women work long hours to ramp up 
production of desperately needed products to fight the spread of this 
deadly illness, counterfeiters have exploited the crisis to peddle fake 
tests, dangerous vaccines and ineffective protective gear. These 
counterfeits are harming American citizens and hindering manufacturers' 
efforts to protect their workers and communities.

The prevalence of counterfeits in the COVID-19 response has brought new 
urgency to this long-simmering issue. So the National Association of 
Manufacturers is leading the charge against fake and counterfeit goods, 
bringing together diverse stakeholders and driving innovative policy 
solutions to address these issues once and for all and to ensure the 
long-term success of our sector and the safety and security of the 
people who rely on our products.

Jay Timmons
President and CEO
National Association of Manufacturers

                                 ______
                                 

I. Counterfeits and the Threat to Manufacturers

Counterfeit goods are a threat to manufacturers and to the consumers 
they serve. Fake products have infiltrated everyday avenues of 
commerce, making their way into supply chains and consumers' homes. The 
problem is not limited to specific sectors: it affects a broad range of 
manufactured goods, from automotive parts and children's toys to 
medical devices and pharmaceuticals. The rise of counterfeits threatens 
manufacturers' competitiveness, undermines consumer confidence and 
poses a threat to individuals' health and safety.

By one estimate, global trade in counterfeit and pirated goods exceeded 
$500 billion in 2016, which amounts to 3.3% of all global trade.\1\ 
Even this number likely fails to capture the full scope of the problem. 
Attempts to understand the scale of counterfeit goods are tied to the 
data on counterfeit goods seized by officials at Customs and Border 
Protection. It is estimated that authorities in the United States catch 
less than 2.3% of the total volume of counterfeit goods.\2\
---------------------------------------------------------------------------
    \1\ Trade in fake goods is now 3.3% of world trade and rising, 
Organization for Cooperation and Development (March 18, 2019), https://
www.oecd.org/newsroom/trade-in-fake-goods-is-now-33-of-world-trade-and-
rising.htm.
    \2\ Commission on the Theft of American Intellectual Property, the 
Theft of American Intellectual Property: Reassessments of the Challenge 
and United States Policy, Update to the IP Commission Report 9 (2017), 
http://ipcommission.org/report/IP_Commission
_Report_Update_2017.pdf.

[GRAPHIC] [TIFF OMITTED] T3020.007


China is the top global hub for counterfeiting. In 2019, more than 8 of 
every 10 counterfeit products seized at U.S. borders came from China or 
Hong Kong, dwarfing the volume of counterfeits from any other country 
or region.\3\ Chinese counterfeits challenge U.S. manufacturers not 
only in China and in the United States, but also in markets across 
Asia, Africa and the Americas. Tackling these problems requires working 
more closely with trading partners to enhance enforcement, capacity 
building and joint advocacy.
---------------------------------------------------------------------------
    \3\ U.S. Customs and Border Protection Office of Trade, 
Intellectual Property Rights Seizure Statistics: FY 2019 14 (2020), 
https://www.cbp.gov/sites/default/files/assets/documents/2020-May/
FY%202019%20IPR%20Seizure%20Powerpoint%20FINAL%20PBRB%20AP
PROVED_0.pdf.

[GRAPHIC] [TIFF OMITTED] T3020.008

E-Commerce: Captive to Counterfeits?

Counterfeiters have gained strength due to the growth of e-commerce 
platforms, which have transformed how companies connect with customers 
and changed the marketplace for selling goods. E-commerce sales now 
make up 10% of all retail spending, up from 3% of total sales in 
2009.\4\ Pre-COVID-19 estimates predicted that global e-commerce sales 
would exceed $4 trillion in 2020,\5\ with U.S. e-commerce spending to 
exceed $1 trillion by 2025, doubling the volume from 2018.\6\ The spike 
in e-commerce during the COVID-19 pandemic has only pushed these 
numbers higher.\7\
---------------------------------------------------------------------------
    \4\ Joe Kaziukenas, U.S. E-Commerce Posts Fastest Growth in Seven 
Years, Marketplace Pulse (November 20, 2019), https://
www.marketplacepulse.com/articles/us-e-commerce-posts-fastest-growth-
in-seven-years.
    \5\ U.S. Government Accountability Office, GAO-18-216, Intellectual 
Property: Agencies Can Improve Efforts to Address Risks Posed by 
Changing Counterfeit Market 12 (2018), https://www.gao.gov/assets/690/
689713.pdf [hereinafter GAO-18-216].
    \6\ Kaziukenas, supra note 4.
    \7\ April Berthene, Shoppers Buy More Online Compared To Before the 
Pandemic, Digital Commerce 360 (June 8, 2020), https://
www.digitalcommerce360.com/article/coronavirus-impact-online-retail/.

While these platforms have created opportunities for manufacturers to 
sell their products and provided new conveniences for consumers, they 
have also created a pipeline directly to customers that bad actors can 
exploit. Millions of third-party sellers can easily access these 
platforms without providing basic information about their identity or 
location, and the platforms themselves exert little oversight over 
these sellers. Counterfeiters are therefore better able to pose as 
legitimate sellers to profit off of fake goods. Because bad actors are 
often able to hide their identities, it is difficult for the government 
and the private sector to hold them accountable even after they are 
---------------------------------------------------------------------------
discovered.

        A surge in counterfeits accompanies a growth in e-commerce. E-
        commerce sales have grown and are expected to exceed $4 
        trillion by 2020.\8\
---------------------------------------------------------------------------
    \8\ GAO-18-216, supra note 5, at 12.

Online platforms present unique challenges for manufacturers who must 
devote ever-increasing resources and time to monitoring search engine 
results, e-commerce channels, social media postings, payment providers 
and others who may all play a role in driving online traffic to 
---------------------------------------------------------------------------
counterfeit products.

        Bosch like other manufacturers faces the dilemma in effectively 
        dealing with counterfeiters present in online marketplaces. 
        There are several key challenges to dealing with online 
        counterfeits. Counterfeiters are able to market goods that 
        appear to be legitimate, often using the brand owner's own 
        online content, making it difficult to identify counterfeits 
        without a purchase. The sheer volume of listings can also pose 
        a challenge to enforcement. Finally, the counterfeiters are 
        able to effectively hide the true person or entity hidden 
        behind the digital curtain separating them from the consumers 
        in the online marketplaces. Even though some online 
        marketplaces have tools to report sellers, the brand owner is 
        unable to take measurable actions against the infringing seller 
        without more knowledge of the seller's identity. In the current 
        environment, the brand owner's ability to thoroughly defend its 
        intellectual property is hampered.

        - Clayton Lindgren, Senior Manager, Country Approval and Brand 
        Protection, Robert Bosch LLC

During the COVID-19 pandemic, counterfeiters--who have long preyed on 
vulnerable consumers to make a profit--have taken advantage of 
consumers' increased anxiety and fear, the high demand for certain 
goods and the substantial increase in e-commerce necessitated by social 
distancing measures.\9\ COVID-19 has required manufacturers to adapt to 
new demands and innovate new products at record speeds, further 
complicating the challenges of fighting counterfeits.
---------------------------------------------------------------------------
    \9\ See, e.g., Jay Kennedy, Buyer Beware: Counterfeit markets can 
flourish during a public health crisis, The Conversation (March 26, 
2020), https://theconversation.com/buyer-beware-counterfeit-markets-
can-flourish-during-a-public-health-crisis-134492;  Europol, How 
Criminals Profit From the Covid-19 Pandemic (March 27, 2020), https://
www.europol.europa.eu/newsroom/news/how-criminals-profit-covid-19-
pandemic; Daniel Bennett, Covid-19 and Counterfeiting: How the Pandemic 
Is Reshaping Brand Protection--Part 1 (April 2, 2020), https://
www.corsearch.com/covid-19-counterfeiting-how-pandemic-reshaping-brand-
protection/.
---------------------------------------------------------------------------
        Peddling Fakes During a Pandemic:
        Counterfeit products have seriously complicated COVID-19 
        response efforts, with increasing reports of untested test 
        kits, counterfeit pharmaceuticals and fake respirator masks. As 
        legitimate manufacturers worked to develop and manufacture 
        critical COVID-19 tests and test supplies, unscrupulous actors 
        used the uncertainty to sell dangerous knockoffs. In April 
        2020, the Department of Homeland Security announced it ``worked 
        alongside U.S. Customs and Border Protection to seize over 225 
        shipments of mislabeled, fraudulent, unauthorized or prohibited 
        COVID-19 test kits, treatment kits, homeopathic remedies, 
        purported anti-viral products and personal protective equipment 
        (PPE).''\10\ As CBP seized thousands of test kits entering the 
        United States through International Mail Facilities, the U.S. 
        Food and Drug Administration warned consumers about the 
        fraudulent tests being sold online.\11\ Amazon announced that 
        it blocked or removed more than 1 million products that 
        contained suspect claims about COVID-19 treatments and 
        applications.\12\
---------------------------------------------------------------------------
    \10\ ICE HSI Launches Operation Stolen Promise, U.S. Immigration 
and Customs Enforcement (April 15, 2020), https://www.ice.gov/news/
releases/ice-hsi-launches-operation-stolen-promise.
    \11\ 1,147 Prohibited Test Kits Seized by Chicago CBP in 45 Days, 
U.S. Customs and Border Protection (May 1, 2020), https://www.cbp.gov/
newsroom/local-media-release/1147-prohibited-test-kits-seized-chicago-
cbp-45-days; Beware of Fraudulent Coronavirus Tests, Vaccines and 
Treatments, U.S. Food and Drug Administration (April 29, 2020), https:/
/www.fda.gov/consumers/consumer-updates/beware-fraudulent-coronavirus-
tests-vaccines-and-treatments.
    \12\ See, e.g., Catherine Thorbecke, Amazon removes 1 million 
products for misleading claims, price gouging amid coronavirus outbreak 
(March 3, 2020), https://abcnews.go.com/Business/amazon-cracks-million-
misleading-price-gouged-products-amid/story?id=69357582.

Counterfeiters operating as third-party sellers on popular e-commerce 
platforms can undercut legitimate manufacturers' sales because they are 
not subject to the same rules and standards. They can sell products for 
a fraction of the price because they have not invested in the research 
and development to create new products. The products they are shipping 
have not gone through the same safety tests or been built to the same 
stringent standards as products made by the manufacturers who follow 
---------------------------------------------------------------------------
the rules.

E-commerce platforms unfortunately benefit from counterfeit products as 
well, making a profit from third-party sales of counterfeits just as 
they do from legitimate sales. Amazon made $53.76 billion in revenue 
from third-party sales in 2019, up from $42.75 billion in 2018.\13\
---------------------------------------------------------------------------
    \13\ J. Clement, Third-party seller share of Amazon platform 2007-
2020, Statista (May 4, 2020), https://www.statista.com/statistics/
259782/third-party-seller-share-of-amazon-platform/.

Without a level playing field, manufacturers face challenges competing 
and maintaining their technological edge. Without products subject to 
testing and standards, consumers face real threats to their health and 
safety.

Impact on Manufacturers: The Cost of Counterfeits

Counterfeits threaten manufacturers' investments in innovation and 
violate manufacturers' intellectual property rights. Manufacturers in 
the United States perform nearly two-thirds of all private-sector 
research and development, totaling $271 billion in 2018.\14\ 
Safeguarding manufacturers' intellectual property rights is critical to 
manufacturers' continued ability to grow and innovate. Counterfeiting 
can slow economic growth and lead to job loss in IP-intensive 
industries.\15\
---------------------------------------------------------------------------
    \14\ National Associating of Manufacturers, Facts About 
Manufacturing: Top 18 Facts You Need to Know, https://www.nam.org/
facts-about-manufacturing/ (last visited June 16, 2020).
    \15\ Congressional Research Service, RL34292, Intellectual Property 
Rights and International Trade (May 12, 2020), https://fas.org/sgp/crs/
row/RL34292.pdf.

        The Economic Costs:
        With counterfeits making up 3.3% of total merchandise trade, 
        the U.S. economic impacts are staggering. For 2019, 
        counterfeiting would have subtracted nearly $131 billion from 
        the U.S. economy, including direct, indirect and induced 
        economic impacts. That means $22.3 billion of lost labor 
        income, 325,542 fewer jobs,$5.6 billion of lost federal tax 
        revenues and nearly $4 trillion less in state and local tax 
        collections.\16\
---------------------------------------------------------------------------
    \16\ Data from NAM Chief Economist Chad Moutray running global 
counterfeit totals through IMPLAN (on file with author).

In addition to misappropriating manufacturers' valuable IP, 
counterfeiters undermine the brand names and business reputations that 
manufacturers invested money and time to establish. Counterfeiters 
infringe on trademarks and confuse consumers as to the quality and 
origin of products and services. They undermine the confidence and 
quality that trademark laws are intended to support.\17\
---------------------------------------------------------------------------
    \17\ J. Thomas McCarthy, McCarthy on Trademarks and Unfair 
Competition, Sec. 2:5 (4th ed. 2015).

Counterfeits force manufacturers to divert resources away from critical 
business operations and focus on policing platforms and protecting 
their brands. Companies spend huge sums to employ global networks of 
investigators, retain brand-protection experts and pursue enforcement 
against counterfeiters.\18\ Eachdollar spent to fight counterfeits is a 
dollar not spent to improve products, develop new technologies, grow 
employee wages or create new American jobs.
---------------------------------------------------------------------------
    \18\ GAO-18-216, supra note 5, at 18-19.

Small and medium-sized manufacturers are likely to be harmed the most 
by the counterfeit market. These companies have fewer resources to 
invest in the personnel and technology to monitor illicit activity and 
protect their brands. Government enforcement efforts often rely on 
information provided by brand owners, and smaller manufacturers are 
less able to engage with government entities responsible for enforcing 
their IP rights. Smaller firms are also more at risk to be driven out 
of business by counterfeiters. They often offer fewer products than 
their larger counterparts, which means that harm from counterfeits 
cannot be easily offset.Smaller firms are less able to absorb the 
losses that come when counterfeiters siphon off their business.

Impact on Consumers: The Dangers of Counterfeits

Consumers come in direct contact with some of the most common types of 
counterfeit products, including cosmetics, toys and pharmaceuticals. 
Many can pose real dangers to their health and safety. According to 
CBP, 16% of the 31,560 shipments of counterfeit goods they seized in 
2016 contained products posing threats to consumer health and 
safety.\19\
---------------------------------------------------------------------------
    \19\ Id. at 2.

The threats to individuals can be severe. Counterfeit products 
integrated into electronics such as chargers and hoverboards have 
caused fires and physical harm. Faulty components that make their way 
into critical auto safety products like airbags can undermine these 
lifesaving mechanisms. Items like helmets falsely claiming to meet 
government-approved safety standards have failed to perform their 
functions and resulted in deaths.\20\
---------------------------------------------------------------------------
    \20\ Alexandra Berzon, et al., Amazon Has Ceded Control of Its 
Site. The Result: Thousands of Banned, Unsafe or Mislabeled, The Wall 
Street Journal (August 23, 2019), https://www.wsj.com/articles/amazon-
has-ceded-control-of-its-site-the-result-thousands-of-banned-unsafe-or-
mislabeled-products-11566564990?mod=article_inline.

The COVID-19 pandemic has made the threat to consumers even more 
obvious. The appearance of fake testing kits, unsafe pharmaceuticals 
and counterfeit masks has caused confusion among anxious consumers and 
exacerbated public health risks in the current crisis.\21\ As families 
are staying home more often, they are going online to purchase toys to 
keep children entertained, desks and chairs to set up home offices, 
outdoor power equipment to tend to their homes and recreational 
equipment to stay in shape. Manufacturers of all these products have 
reported high levels of counterfeits that create serious, even fatal, 
risks to consumers.
---------------------------------------------------------------------------
    \21\ See, e.g., Jay Kennedy, Buyer Beware: Counterfeit markets can 
flourish during a public health crisis, The Conversation (March 26, 
2020); How Criminals Profit From the Covid-19 Pandemic, Europol (March 
27, 2020).

        As the current COVID-19 pandemic has unfortunately illustrated, 
        health-care products will continue to be one of the most 
        commonly targeted industries for counterfeiters. We are likely 
        to continue to see illicit medical devices, drugs and personal 
        care products entering legitimate supply chains. This is a 
        problem that impacts patients and consumers in the U.S. and 
        across the globe. At Johnson & Johnson, we invest significant 
        resources to aggressively pursue this illegal activity but we 
        believe businesses must join together and partner with 
        governments to become a greater force in fighting the growing 
        threat of counterfeits. Our ultimate goal always is to keep 
---------------------------------------------------------------------------
        patients and consumers safe but we cannot do it alone.

        - Rich Kaeser, Vice President of Global Brand Protection, 
        Johnson & Johnson

The Need for Action Now

The threats to manufacturers and consumers underscore the need for 
swift action against counterfeits. There is no silver bullet for 
tackling the diverse set of factors that have allowed counterfeits to 
proliferate. But the COVID-19 environment demonstrates the need for 
action and presents a new opportunity for the government to tackle this 
long-standing problem.

        Counterfeiting is a complex problem that requires unwavering 
        commitment from the private and public sectors to solve. UL's 
        Project Centurion, an effort to reduce counterfeit products in 
        the marketplace by leveraging a global safety network, led to 
        over 270,000 counterfeit UL Marked products seized globally in 
        2019, valued at $23 million. UL's Anti-Counterfeiting 
        Innovation Center combines expertise from law enforcement, 
        retailers, e-commerce platforms, government officials and 
        others to address complex counterfeiting challenges, reframe 
        problems and implement innovative solutions. The Center aims to 
        lead in anti-counterfeiting innovations that drive globally 
        relevant, cost-effective solutions that advance public safety 
        and build capacity within law enforcement and private sector 
        organizations to combat IP crime.

        - Brian H. Monks, Vice President and Chief Security Officer, UL

II. Policy Solutions and Call to Action

 REQUIRE E-COMMERCE PLATFORMS TO REDUCE THE AVAILABILITY OF 
                    COUNTERFEITS

THE CHALLENGE

To reduce the harm caused by counterfeits, stakeholders must work to 
eliminate the availability of counterfeit goods for purchase. Fewer 
counterfeits on the market mean fewer consumers harmed by fake goods 
and fewer financial incentives for counterfeiters to operate. The 
challenge today is identifying and advancing policies and programs that 
policymakers, retailers, e-commerce platforms and brand owners can 
collectively adopt to limit the availability of as many counterfeit 
goods as possible.

Several key market factors drive counterfeiting, including the ability 
of counterfeiters to turn a profit, their access to global markets and 
a lack of accountability for bad actors.\22\ The most important of 
these, however, is profit. Indeed, the higher potential profitability 
of counterfeiting itself--based on their ability to free-ride with 
respect to research, development and marketing costs while accessing 
cheaper production processes and materials--creates the incentive for 
entities to engage in counterfeiting over legitimate production.\23\ By 
using e-commerce platforms and selling directly to consumers, 
counterfeiters can cut out the middleman and further increase their 
profit margins.\24\
---------------------------------------------------------------------------
    \22\ Although limited, research shows that counterfeiting and 
piracy are driven by both demand- and supply-side factors embedded in 
institutional, behavioral and cultural environments. However, for 
purposes of limiting the availability of counterfeits, this paper 
focuses on the supply-side only. See Seung-Hee Lee and Boonghee Yoo, A 
Review of the Determinants of Counterfeiting and Piracy and the 
Proposition for Future Research, 24 Korean Journal of Policy Studies 1, 
6 (2009), https://pdfs.semanticscholar.org/ad71/
3f727bc224ab79ffc8b999bdede50b0e8a26.pdf.
    \23\ See id. at 19.
    \24\ See Jon Emont, Amazon's Heavy Recruitment of Chinese Sellers 
Puts Consumers at Risk, The Wall Street Journal (November 11, 2019), 
https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-
sellers-puts-consumers-at-risk-11573489075?mod=cx_picks&cx_nav
Source=cx_picks&cx_tag=collabctx&cx_artPos=1#cxrecs_s.

The Internet and e-commerce platforms have provided counterfeiters with 
access to global markets through easily accessible sales and 
distribution channels. A factory in China can quickly create an online 
account with a platform and begin selling directly to consumers around 
the world. These same channels also allow counterfeiters to avoid 
liability for the harm caused by counterfeit goods and continue to 
pursue their illicit operation. Counterfeiters can use false identities 
and addresses and then vanish at the first sign of trouble.\25\
---------------------------------------------------------------------------
    \25\ See, e.g., id. at 21 (citing Organisation for Economic Co-
operation and Development, The Economic Impact of Counterfeiting--
Counterfeiting and Piracy Overall Assessment (2006)); Daniel Chow, 
Alibaba, Amazon, and Counterfeiting in the Age of the Internet, 
Northwesten Journal of International Law and Business, Forthcoming 
(August 22, 2019); Ohio State Pub. L. Working Paper No. 497 (2019), 
https://ssrn.com/abstract=3441110.

E-commerce platforms have democratized retail sales and enabled small, 
often remote, legitimate manufacturers to compete in the global 
marketplace. Tackling the problem of counterfeiters on e-commerce 
platforms should be done in a way that does not undermine the value 
these platforms provide to legitimate manufacturers, many of whom 
operate as good-faith, third-party sellers on these online 
marketplaces. Solutions should be crafted to target the parts of the 
system that counterfeiters can exploit, and they should increase the 
cost for counterfeiters by ensuring accountability for bad actors.

THE SOLUTIONS

  Congress should enact legislation to require e-commerce 
platforms to strengthen upfront screening of potential vendors. 
Congress should require e-commerce platforms to take the following key 
steps or face contributory liability for infringement due to vendor 
activities on their platforms:

       Collect and verify key information (such as representative 
identity, address and contact information and bank account information) 
prior to vendor listing.

       Require potential vendors to attest, with appropriate proof, 
that the goods sold on the platform are authentic and authorized and 
have appropriate legal documentation required for sale in the United 
States where necessary.\26\
---------------------------------------------------------------------------
    \26\ Such information could include a chain of title or license (to 
demonstrate that their product sales are authorized), legal 
certifications such as a Children's Product Certificate (to meet 
requirements by U.S. safety certification bodies) or other 
demonstrations of conformity with appropriate U.S. standards.

       Maintain a current, verified set of the information referenced 
above for each vendor (through ongoing audits and reverification) or 
face the risk of contributory liability in the event of counterfeiting 
---------------------------------------------------------------------------
enforcement.

       Require a vendor to attest that it is only using images on its 
product listing sites that it is authorized to use and that accurately 
depict the goods being sold, and require it to conduct due diligence on 
submitted images to ensure that they appear to be accurate.

       Conduct due diligence, including use of appropriate technology, 
to screen for counterfeit products prior to offering the seller's goods 
for sale.

       Screen potential vendors and products prior to approval to 
ensure that previously terminated vendors, or previously delisted 
products, do not reappear on platforms under a different vendor or a 
different alias.

  Congress should enact legislation that requires e-commerce 
platforms to share information relevant for consumers to understand the 
risk of purchasing counterfeits and for brand owners to pursue 
effective enforcement actions against counterfeiters. Congress should 
require platforms to take the following key steps or face contributory 
liability for infringement due to vendor activities on their platforms:

       Provide to the public the full name and contact information of 
the vendor.

       Provide to the public information about whether the listed 
vendor is the manufacturer, importer, reseller and/or retailer of the 
product.

       Notify the consumer prior to purchase of any given product if 
the vendor supplying a product is different from the vendor named on 
the product listing page.

  Congress should enact legislation that requires e-commerce 
platforms to remove promptly counterfeit vendors and products from 
their platforms. Congress should require e-commerce platforms to take 
the following key steps or face contributory liability for infringement 
due to vendor activities on their platforms:

       Develop and use technology solutions to routinely screen for, 
and proactively remove, counterfeit products.

       Implement a timely, accessible takedown process for removing 
listings of counterfeit goods.

       Terminate sellers that have sold counterfeit goods on the 
platform.

  Congress should appropriate emergency funds to boost enforcement 
against fake and counterfeit versions of products urgently needed for 
COVID-19 treatment and care such as test kits, medicines, personal 
protective equipment and other health supplies:

       Those funds should be routed through the National Intellectual 
Property Rights Coordination Center to ensure interagency sharing of 
real-time intelligence and coordinated ramp-up of enforcement efforts. 
The FDA should play a key role in providing up-to-date information to 
both consumers and government agencies on products requiring FDA 
approval and the status of approvals to ensure appropriate border 
enforcement against counterfeit products.

       Congress should strengthen the ability of key government 
agencies to protect American consumers from fake medical products by 
ensuring the FDA has full and clear statutory authority to destroy 
counterfeit medical products.

 MODERNIZE ENFORCEMENT LAWS AND TACTICS TO KEEP PACE WITH 
                    COUNTERFEITING TECHNOLOGY

THE CHALLENGE

Fighting counterfeits requires a legal framework and robust enforcement 
to hold bad actors accountable. This means the government, brand owners 
and e-commerce platforms must work together to enforce IP, trade and 
consumer protection laws, which collectively protect brands from unfair 
competition and consumers from harm.\27\
---------------------------------------------------------------------------
    \27\ Esther A. Zuccaro, Gucci v. Alibaba: A Balanced Approach to 
Secondary Liability for E-
Commerce Platforms, 17 North Carolina Journal of Law and Technology On. 
144, 159 (2016) (citing J. Thomas McCarthy, McCarthy on Trademarks and 
Unfair Competition, Sec. 2:2 (4th ed. 2015)).

Despite the resources expended by these stakeholders to fight them, 
counterfeits continue to enter the U.S. marketplace at an increasing 
rate.\28\ This problem has only been exacerbated as criminals look to 
capitalize on the need for essential items to address the COVID-19 
health crisis.\29\ The ineffectiveness of enforcement efforts against 
counterfeits is not due to a lack of effort \30\ but to multiple 
factors combining to give counterfeiters a decided advantage against 
enforcement efforts.
---------------------------------------------------------------------------
    \28\ A recent report by the Organisation for Co-operation and 
Development and the European Union Intellectual Property Office, for 
example, shows that global trade in counterfeit and pirated goods has 
exploded in recent years, with the value of imported fake goods 
increasing from $461 billion in 2013 (2.5% of world trade) to $509 
billion in 2016 (3.3% of all global trade). OECD, supra note 1.
    \29\ See, e.g., Jay Kennedy, Buyer Beware: Counterfeit markets can 
flourish during a public health crisis, The Conversation (March 26, 
2020), https://theconversation.com/buyer-beware-counterfeit-markets-
can-flourish-during-a-public-health-crisis-134492; Europol, How 
Criminals Profit From the Covid-19 Pandemic (March 27, 2020), https://
www.europol.europa.eu/newsroom/news/how-criminals-profit-covid-19-
pandemic.
    \30\ As noted by the coheads of Venable's Copyright and Trademark 
Litigation Practice, ``While rights holders scour online marketplaces 
and investigate and report counterfeits to the marketplaces, and some 
marketplaces have stepped up proactive enforcement, the sheer volume of 
listings and ease with which sellers can enter the e-commerce market 
mean that counterfeiters have the advantage.'' Meaghan H. Kent and 
Nicholas W. Jordan, Congress Acknowledges Dramatic Shift Toward E-
commerce with Bipartisan Bills Aimed at Reducing Counterfeits, Venable 
(May 8, 2020), https://www.venable.com/insights/publications/2020/05/
congress-acknowledges
-dramatic-shift-toward.

Current U.S. law fails to appropriately hold e-commerce platforms 
accountable for their role in the rise of counterfeits, despite the 
evidence that fake goods have proliferated on the Internet. By allowing 
counterfeiters unparalleled access to consumers worldwide and the 
ability to vanish into cyberspace at the first sign of trouble, e-
commerce platforms offer counterfeiters the perfect avenue for selling 
fakes while avoiding liability.\31\ The immense revenue generated from 
third-party sales coupled with various gaps and safe harbors in U.S. 
laws have empowered e-commerce platforms to dispense with basic 
oversight responsibilities that would prevent counterfeits from being 
sold on them.
---------------------------------------------------------------------------
    \31\ As the Third Circuit recently recognized, the inability for 
customers to contact third-party sellers directly ``enables third-party 
vendors to conceal themselves from the customer, leaving customers 
injured by defective products with no direct recourse to the third-
party vendor.'' Oberdorf v. Amazon.com Inc., 930 F.3d 136, 145 (3d. 
Cir. 2019). See also GAO-18-216, supra note 5, at 2.

Gaps in current U.S. statutes and a lack of case law have enabled e-
commerce platforms to avoid being held liable for contributory 
trademark liability, even where they fail to take sufficient actions to 
address counterfeits. Under the legal concept of contributory trademark 
liability, an entity may be held liable for selling counterfeits even 
though they do not actually engage in the actual counterfeiting 
activity.\32\ This is a legal concept created through the courts \33\ 
and lacks the clear standards necessary for courts to adequately apply 
it to new and emerging situations or technologies--such as what legal 
obligations e-commerce platforms should have in preventing the sales of 
counterfeits on their platforms.\34\ Without a clear legal standard or 
legislation that would offer clarity in such cases, courts are left 
struggling to clearly define when an e-commerce platform may be held 
liable for its role in the sale of counterfeits.
---------------------------------------------------------------------------
    \32\ Contributory trademark liability is a means by which an entity 
may be held liable for selling counterfeits even though they do not 
actually engage in infringing activities in certain instances, such as 
where ``it knows or has reason to know'' the product was fake. Inwood 
Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 847-850 
(1982); see also 35 U.S.C. Sec. 271(c).
    \33\ Tiffany Inc. v. eBay, Inc., 600 F.3d 93, 103 (2d Cir. 2010) 
(``Contributory trademark infringement is a judicially created doctrine 
that derives from the common law of torts.'').
    \34\ See Eric Goldman, eBay Mostly Beats Tiffany in the Second 
Circuit, but False Advertising Claims Remanded, Technology and 
Marketing Law Blog (April 1, 2010), https://blog.ericgoldman.org/
archives/2010/04/ebay_mostly_bea.htm (``In a subtle opinion with 
potentially significant implications, eBay has preserved most of its 
big 2008 district court victory in the long-running Tiffany v. eBay 
case. However, as seems to be the norm with federal appellate opinions, 
the opinion intentionally sidesteps some key open doctrinal questions 
squarely raised by the case--such as if the Second Circuit recognizes 
the nominative use defense, or the Second Circuit's standards for 
contributory trademark infringement. As a result, we don't get the 
clean and decisive doctrinal standards that help make a case truly 
precedent-setting . . .'').

Because e-commerce and its role in the proliferation of counterfeits 
are relatively new, whether and to what extent contributory trademark 
liability applies in this context is unclear. As such, courts often 
sidestep the issue or parties are likely to settle out of court.\35\ In 
other cases where courts do attempt to address the issue, laws that 
were not intended to protect e-commerce platforms from selling 
dangerous products are interpreted as providing them a legal safe 
harbor.\36\ Both Congress and the administration have explicitly 
highlighted the need to assess liability for e-commerce under both 
contributory trademark infringement and product liability law to combat 
counterfeits,\37\ steps that manufacturers generally support.\38\ Such 
clarity is especially important to ensure courts can hold e-commerce 
platforms accountable when they are willfully blind and allow fake 
products to be falsely advertised as genuine.\39\
---------------------------------------------------------------------------
    \35\ See Paul Mazur, In Fight Against Fakes, Alibaba and Owner of 
Gucci Go From Adversaries to Partners, The New York Times (August 3, 
2017), https://www.nytimes.com/2017/08/03/business/alibaba-kering-
fakes-luxury.html.
    \36\ One such statute is Section 230 of the Communications Decency 
Act, which as intended to shield online platforms for communication on 
their platform, but not the sale of dangerous harmful goods. However, 
while Section 230 should not be interpreted to protect the sale of 
harmful goods, manufacturers still support its application to protect 
online social platforms from the speech of third parties. See, e.g., 47 
U.S.C. Sec. 230(c)(1); Green v. American Online, 318 F.3d 465,471 (3d 
Cir. 2003) (providing that Section 230 of the CDA ``precludes courts 
from entertaining claims that would place a computer service provider 
in a publisher's role, and therefore bars lawsuits seeking to hold a 
service provider liable for its exercise of a publisher's traditional 
editorial functions--such as deciding whether to publish, withdraw, 
postpone, or alter content.''); Beatrice Martinet and Reinhard J. 
Oertli, Liability of E-Commerce Platforms for Copyright and Trademark 
Infringement: A World Tour, American Bar Association (2015). See also 
Oberdorf, 930 F.3d at 152.
    \37\ See U.S. Department of Homeland Security, Combating 
Trafficking in Counterfeit and Pirated Goods Report to the President of 
the United States 33 (2020), https://www.dhs.gov/sites/default/files/
publications/20_0124_plcy_counterfeit-pirated-goods-report_01.pdf; see 
also Kent and Jordan, supra note 30 (noting recently introduced 
legislation that would ``amend the Trademark Act of 1946 to provide for 
contributory liability for e-commerce platforms for use of a 
counterfeit mark by a third-party seller unless the platforms satisfy 
certain statutory requirements.'').
    \38\ While manufacturers support the need for legislation to ensure 
that e-commerce platforms cannot evade liability for the sale of 
counterfeits over their platform by being willfully blind, such 
legislation must be careful not to prescribe overly rigid requirements 
that may prevent e-commerce platforms from developing and utilizing 
innovative solutions to prevent the sale of counterfeits and assist in 
locating counterfeiters.
    \39\ See Tiffany Inc., 600 F.3d at 109 (holding that, with regard 
to eBay's potential contributory liability for ``facilitating'' third 
parties' infringing sales, the relevant standard to assess eBay's 
liability was the Inwood test, which only required the court to 
determine whether eBay continued to supply its services to sellers when 
it knew or had reason to know they were engaging in trademark 
infringement, rather than whether it could have prevented it. In doing 
so, the court enabled e-commerce platforms to continue to avoid 
liability by being willfully ignorant).

Our law enforcement bodies lack modern legal authorities, resources and 
tools that are effective against counterfeiters. Policymakers have 
failed to update enforcement tools to keep pace with the increasingly 
sophisticated technologies and practices used by counterfeiters.\40\ 
The effective enforcement against counterfeiters is throttled due to 
gaps in current U.S. counterfeiting laws, which define 
``counterfeiting'' too narrowly,\41\ fail to account for the likelihood 
the counterfeit product may contribute to or cause death or physical 
injury and fail to appropriately assign liability and award remedies 
based on counterfeits' potential harm.\42\ As a result, a glaring 
disparity exists between the moral culpability and actual harm caused 
by counterfeiters and the penalties and remedies that arise from 
it.\43\
---------------------------------------------------------------------------
    \40\ See Christo Hall, The need for sophisticated anti-counterfeit 
technology is ever-growing as the practices of counterfeiters become 
increasingly advanced, Pathogens and Global Health (May 2012), https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC4001489/ (``Overt visible markers 
on a drug's packaging have been commonly used to identify the genuine 
from the fake. but the holograms and distinguishing markers applied to 
the blister foil, film or paper substrates of the packaging are 
mimicked and imitated to a high level of accuracy. To the untrained 
eye, the genuine and fake examples can look identical.'').
    \41\ Under both civil and criminal U.S. law, a ``counterfeit'' 
trademark is defined as a ``spurious mark'' that is ``identical with, 
or substantially distinguishable from a registered mark,'' and whose 
use is ``likely to cause confusion.'' 15 U.S.C. Sec. 1127. In practice, 
courts are also often reluctant to label a product a counterfeit unless 
the infringing defendant's is a clear copy of the registered trademark. 
See Sandra L. Rierson, Pharmaceutical Counterfeiting and the Puzzle of 
Remedies, 8 Wake Forest Intellectual Property Law Journal 433, 434 
(2008) (citing Colgate-Palmolive Co. v. J.M.D. All-Star Import and 
Export, Inc., 486 F. Supp. 2d 286, 291 (S.D.N.Y. 2007)).
    \42\ See Rierson, Pharmaceutical Counterfeiting, at 445-448, 454 
(noting that neither the Lanham Act nor the 1984 Trademark 
Counterfeiting Ac--the two main federal statutes that create civil and 
criminal liability for trademark infringement--``explicitly considers 
the nature of the defendant's counterfeiting--e.g., the type of goods 
being passed off [or the risk of harm posed by such good]--in 
fashioning his punishment or the extent of his liability'').
    \43\ Id.

Under both U.S. civil and criminal law, for a court to find a product 
to be a ``counterfeit'' and impose the severe penalties such a 
designation carries with it, the product must be a clear copy of a 
registered trademark.\44\ But products that are almost identical and 
contain trademarks that differ by only a couple of letters are merely 
``infringing marks,''\45\ which carries no threat of jail time or even 
monetary penalties. This means that a defendant selling unverified, 
fake COVID-19 test kits, for example, would not be considered a 
``counterfeiter'' and would face no risk to penalty under IP laws 
because no patent exists for such test kits yet. Similarly, a defendant 
found guilty of selling fake, but generically labeled, pharmaceuticals 
will face no risk of prison or fines despite thefake drugs imperiling 
human life,\46\ while a defendant guilty of counterfeiting identical 
fake handbags ``may be required to pay thousands, if not millions, of 
dollars in damages and/or fines, and may be sent to prison.''\47\
---------------------------------------------------------------------------
    \44\ While injunctive relief, rather than damages, is all that is 
available in the form of relief in trademark infringement cases, when a 
defendant crosses into counterfeiting, courts ``shall'' award treble 
damages, or at the plaintiff's election, statutory damages of up to 
$100,000 per mark and $1 million per mark if it is willful. 15 U.S.C. 
Sec. 1117. In addition to these civil remedies, the Federal Trademark 
Counterfeiting Act of 1984 established criminal penalties for anyone 
who ``traffics in'' counterfeit goods intentionally, imposing a $2 
million fine and up to 10 years in jail for deliberate trademark 
counterfeiting and authorizing fines of up to $5 million for repeat 
offenders. 18 U.S.C. Sec. Sec. 2318-2320.
    \45\ 15 U.S.C. Sec. 1114(1)(a) (defining trademark infringement as 
the unauthorized use of a trademark in connection with goods and/or 
services in a manner that is likely to cause consumer confusion about 
the source of the goods or services).
    \46\ Id.
    \47\ Rierson, supra note 41, at 454.

Finally, brand owners are left to fight counterfeiters alone since 
consumers who ingest fake drugs or buy lead-ridden toys, for example, 
are afforded no special avenue for relief under federal law,\48\ 
despite the fact that the consumer is often the primary victim of 
counterfeiting and, in some instances, suffers serious physical 
injury.\49\
---------------------------------------------------------------------------
    \48\ Congress did pass the Anti-counterfeiting Consumer Protection 
Act of 1996, but the law provided no remedies for consumers directly 
and only gave law enforcement agencies and trademark owners greater 
weapons. See Pub. L. No. 104-153, 110 Stat. 1386 (codified as amended 
in scattered sections of 18 U.S.C.).
    \49\ Counterfeiters' increasingly sophisticated manufacturing 
techniques have enabled them to use falsified markings on counterfeit 
medicines in connection with genuine medicine, which makes it almost 
impossible for the average consumer to differentiate between genuine 
and counterfeit medicine. Most alarming, these counterfeit 
pharmaceuticals and food products are not regulated, thus providing no 
certainty that the medicine contains the essential ingredients 
necessary to fight illness or even that its safe for human consumption. 
These products pose a significant threat to consumer health at both the 
individual and community levels, potentially resulting in critical 
treatment failure and community-wide increases in microbial resistance. 
See Counterfeit Pharmaceutical Inter-Agency Working Group Report to the 
Vice President of the United States and to Congress (2011), https://
www.whitehouse.gov/sites/whitehouse.gov/files/omb/IPEC/
Pharma_Report_Final.pdf.
---------------------------------------------------------------------------

THE SOLUTIONS

To address these issues and simultaneously strengthen effective 
enforcement efforts while minimizing ineffective enforcement efforts, 
manufacturers call for the following solutions:

  Congress should clarify the legal doctrine of contributory 
liability for trademark infringement by unambiguously defining the 
doctrine and its parameters by statute, including setting forth 
judicial review standards that encourage courts to develop critical 
fact-specific case law.

  Congress should update current laws to improve the definition of 
counterfeits and fill statutory gaps that prevent effective enforcement 
against counterfeiters. U.S. law must better recognize that the 
determination of whether a product is a ``counterfeit'' for purposes of 
liability should be based on more factors than simply whether the mark 
is ``substantially indistinguishable'' from a registered trademark.\50\ 
Counterfeiters, for example, should not be able to avoid liability 
simply by changing a letter in a word or slightly altering a symbol, 
given the potential harm to consumers and brand owners.\51\ Necessary 
updates include the following:
---------------------------------------------------------------------------
    \50\ 15 U.S.C. Sec. 1127.
    \51\ ``Another common scenario occurs when infringers register a 
similar mark and manufacture goods under this brand. The cost of 
registration is relatively low and such counterfeiting is rampant.'' 
How to combat counterfeiting, World Trademark Review (May 1, 2017), 
https://www.worldtrademarkreview.com/anti-counterfeiting/how-combat-
counterfeiting.

       Broadening the definition of a ``counterfeit mark'' to include 
not just those that are ``identical'' or ``substantially 
indistinguishable,'' but also those whose use is ``likely to cause 
confusion, or to cause mistake, or to deceive'' in relation to a 
registered trademark and where the infringing party ``knowingly or 
willfully engaged in the action.'' That broader definition would make 
statutory damages, not just actual damages, available to a wider range 
---------------------------------------------------------------------------
of counterfeiting victims.

       Encouraging courts handling counterfeiting cases to consider 
additional factors beyond just similarity of marks, such as a 
defendant's intent and risk of harm to consumers in determining whether 
a mark is a counterfeit and determining damages. Courts almost 
uniformly consider a defendant's intent when determining whether a 
likelihood of confusion exists in the context of broader trademark 
infringement cases. Consideration of a defendant's intent seems even 
more appropriate when determining whether to subject a defendant to the 
severe penalties associated with counterfeiting.

       Adjusting available penalties and remedies according to type of 
counterfeit and nature and degree of deception to better reflect the 
danger to the public and degree of moral culpability associated with 
such conduct.

       Providing consumers with an avenue for relief under federal law 
when, as is the case in many scenarios, the consumer is the primary 
victim of counterfeiting activity and suffers severe injury as a 
result.

  Congress and relevant federal agencies should hold e-commerce 
platforms to the same standards as brick and mortar retailers. Online 
virtual shelves should not escape regulators' scrutiny for failing to 
closely monitor for fake and untested goods, while physical shelves 
face intense scrutiny and, in some instances, steep penalties. For 
example, Congress should revise the definition of ``retailer'' under 
consumer product safety laws to ensure e-commerce platforms are 
required to fulfill the same legal obligations as brick and mortar 
retailers, including having to report known product-related injuries to 
the Consumer Product Safety Commission.\52\
---------------------------------------------------------------------------
    \52\ Congress should revise the definition of ``retailer'' under 
the CPSA (15 U.S.C. Sec. 2052(a)(13)) to explicitly include e-commerce 
platforms.

  Congress and Customs and Border Protection should ensure full 
implementation and enforcement of the STOP Act of 2018, including 
requirements for the U.S. Postal Service to collect advanced electronic 
---------------------------------------------------------------------------
data for 100% of packages to track counterfeits.

  The State Department and the U.S. Ambassador to the United 
Nations should ensure that low terminal dues for foreign countries do 
not continue to allow counterfeiters to cheaply ship goods to consumers 
through the U.S. Postal Service.\53\ They should closely monitor global 
implementation of the September 2019 agreement by parties to the 
Universal Postal Union to allow countries to self-declare postal rates 
and work with the White House on further actions to take if that 
implementation is insufficient.
---------------------------------------------------------------------------
    \53\ ``Terminal dues is the system that posts use to pay one 
another for international deliveries of letters and small packages. The 
global terminal dues system, updated every four years by the Universal 
Postal Union (UPU), does not fully reflect actual domestic processing 
and delivery costs.'' U.S. Postal Service Office of Inspector General, 
Terminal Dues in the Age of E-Commerce (December 14, 2015), https://
www.uspsoig.gov/sites/default/files/document-library-files/2015/RARC-
WP-16-003.pdf.
---------------------------------------------------------------------------

 IMPROVE GOVERNMENT COORDINATION TO TACKLE COUNTERFEITS

No single federal government agency is primarily focused on, or 
primarily responsible for, addressing counterfeiting.

More than 20 federal agencies and numerous additional state and local 
government agencies have jurisdiction over some aspect of 
counterfeiting.\54\ These agencies do not fully coordinate their 
activities, resulting in duplicative efforts, wasted resources and gaps 
that counterfeit products can slip through.
---------------------------------------------------------------------------
    \54\ See Fake Imports Entering the U.S.: List of federal government 
agencies working to prevent the entry and distribution of counterfeit 
and pirated goods in the United States, International Trade 
Administration (last visited June 17, 2020), https://www.stopfakes.gov/
Fake-Imports-Entering-the-US.

NIPRCC and the White House Intellectual Property Enforcement 
Coordinator are important players in attempts to better coordinate 
these efforts, but gaps persist. Counterfeiters have been able to probe 
weak spots in certain agencies--such as government procurement 
---------------------------------------------------------------------------
channels--to spread counterfeit goods.

Those government agencies also do not always effectively coordinate 
with industry. In a 2018 report, the U.S. Government Accountability 
Office identified coordination and information sharing between 
government enforcement agencies and private sector entities as critical 
to fighting counterfeits.\55\ Manufacturers continue to see gaps in the 
ability and willingness of government entities to share enforcement 
intelligence with private sector actors.\56\ Additionally, many 
manufacturers, particularly small and medium-sized firms, have not 
taken advantage of opportunities to train or partner with government 
agencies in order to more effectively block counterfeits. In some 
cases, they are unable to do so because of limited time and resources.
---------------------------------------------------------------------------
    \55\ See, e.g., GAO-18-216, supra note 5, at 40 (recommending that 
``CBP, in consultation with ICE, should assess what, if any, additional 
information would be beneficial to share with the private sector and, 
as appropriate, take action to enhance information sharing'').
    \56\ For example, despite language in the Trade Facilitation and 
Trade Enforcement Act of 2015 granting U.S. Customs and Border 
Protection (CBP) with explicit authority to share certain information 
with the private sector, CBP has not taken the necessary steps to 
implement that authority. See id. Similarly, CBP does not consistently 
share information with online platforms about counterfeit products 
seized at the border that are bound for the platform-run fulfillment 
centers or that may have been sold via their platforms. See Brian 
Huseman, VP, Public Policy, Amazon, Comment Letter to Department of 
Commerce re Report on the State of Counterfeit and Pirated Goods 
Trafficking and Recommendations (Docket No. DOC 2019 0003) (July 29, 
2019), https://www.regulations.gov/document?D=DOC-2019-0003-0083.
---------------------------------------------------------------------------

THE SOLUTIONS

To address these issues, manufacturers urge the U.S. government to take 
a number of key steps:

  Congress should establish and fund a new White House agency that 
holds primary responsibility for U.S. anti-counterfeiting efforts, 
including strategy, policy and enforcement. The new White House agency 
should serve as a central point of contact for the private sector and 
other stakeholders, and should:

       Have a permanent staff to support its operations and dedicated 
funding for its operations, as well as to allow grants to other U.S. 
government agencies for anti-counterfeiting activities and programs.

       Assume anti-counterfeiting responsibilities currently tackled 
by existing White House offices, including the Intellectual Property 
Enforcement Coordinator.

       Have the authority to work with the director of the Office of 
Management and Budget and the heads of departments and agencies to 
identify programs that contribute to anti-counterfeiting efforts. It 
should advise OMB as to whether agency budgets for anti-counterfeiting 
activities are sufficient to meaningfully address the issues.

       Head a newly created interagency task force consisting of 
representatives at the deputy secretary or deputy director level from 
key Cabinet agencies and independent agencies (such as the Federal 
Trade Commission and the CPSC). The task force should also include 
subgroups focused on anti-counterfeiting strategy, policy and 
enforcement.

  U.S. government agencies, at the direction and under the 
oversight of the new White House agency, should expand informational 
resources to help manufacturers battle counterfeiting, equipping 
manufacturers and other private sector actors with better information 
on bad-faith actors as well as on trusted importers. These should 
include databases and tools to facilitate the exchange of risk 
assessment information and lists of known violators between government 
agencies, private sector actors and the general public. Specific 
efforts should include the following:

       CBP development of a database and resource library on importers 
that CBP has vetted and deemed to be ``trusted.''\57\
---------------------------------------------------------------------------
    \57\ Such a database was promised under Objective 4.2 (Explore 
technology options to increase the exchange of e-commerce information) 
in CBP's 2018 strategy on e-commerce. See U.S. Customs and Border 
Protection, E-Commerce Strategy 9 (2018), https://www.cbp.gov/sites/
default/files/assets/documents/2018-Mar/CBP-E-Commerce-Strategic-
Plan_0.pdf.

       CPSC use of its National Electronic Injury Surveillance System 
to identify product injuries and deaths from counterfeit products and 
---------------------------------------------------------------------------
report those trends to enforcement agencies.

       CPSC establishment of a substantial product hazard list, as 
permitted under the Consumer Product Safety Improvement Act, that could 
provide critical tools to battle fake and counterfeit products that 
have spiked during the COVID-19 crisis.

  U.S. government agencies, at the direction and under the 
oversight of the new White House agency, should eliminate structural 
and practical barriers that limit government-industry information 
sharing:

       CBP should fully and promptly implement the authorities granted 
to CBP under the Trade Facilitation and Trade Enforcement Act of 2015 
to share information consistently with private sector actors on 
suspected counterfeit goods that have been seized or abandoned.

       CBP should take steps to expand the level of information 
consistently shared with the private sector, such as more limited 
redaction of photographs of suspected seizures to better allow 
identification of counterfeit products.

       CBP should revise internal procedures to make it easier for 
border agents to provide brand owners with samples of seized products. 
This would allow brand owners to more quickly take action and work with 
authorities to get the counterfeits out of circulation.\58\
---------------------------------------------------------------------------
    \58\ Under current law, CBP will only release seized product 
samples to brand owners after they provide CBP with a cash bond 
intended to insulate CBP from liability. The CBP port director 
determines the value of the bond on a case-by-case basis. To expedite 
the process, CBP should streamline the process and allow brand owners 
to pay through alternative means, such as by credit card. See Bruce 
Leeds, U.S. Customs and Border Protection Enforcement of Trademarks, 
BrauMiller Law Group (October 7, 2018), https://www.braumillerlaw.com/
u-s-customs-border-protection-enforcement-of-trademarks/.

       CBP and other U.S. government agencies should promote, 
facilitate and provide financial incentives for companies, particularly 
small and medium-sized companies, to share information with Customs 
---------------------------------------------------------------------------
officials on how to identify genuine manufactured products.

       CPSC should improve procedures to improve the speed and 
effectiveness of processes to quickly share reliable counterfeit-
related consumer safety incidents with CBP and other relevant agencies. 
CPSC should also prioritize hiring necessary staff in support of these 
efforts, which should improve the U.S. government's ability to 
identify, track and ultimately seize counterfeit consumer goods.\59\
---------------------------------------------------------------------------
    \59\ Section 6(b) of the Consumer Product Safety Act requires the 
Commission to ``take reasonable steps to assure, prior to its public 
disclosure thereof, that information from which the identity of such 
manufacturer or private labeler may be readily ascertained is accurate, 
and that such disclosure is fair in the circumstances and reasonably 
related to effectuating the purposes'' of the CPSA. 15 U.S.C. 
2055(b)(1). Manufacturers rely on the safeguards provided by section 
6(b) and the Commission's current information disclosure rules to 
ensure that information disclosed publicly is accurate and fair. 
Reasons for the public disclosure of information by the Commission 
include, but are not restricted to, responses to Freedom of Information 
Act and media requests. The CPSC also may seek to disclose information 
on its own.

  Congress should establish a fund, at the direction and with 
oversight of the new White House agency, to support development of new 
technologies, products and best practices to detect and block 
counterfeit versions of products needed for responding to COVID-19 and 
future pandemics.

 IMPROVE PRIVATE SECTOR COLLABORATION IN THE FIGHT AGAINST COUNTERFEITS

THE CHALLENGE

Private sector actors, including brand owners, online marketplaces, 
third-party search providers, shippers, customs brokers and payment 
providers, bear the brunt of the impact of counterfeiting activity. It 
is manufacturers' brands that are infringed, e-commerce platforms that 
are hijacked to support illicit activity and payment platforms that are 
misused to facilitate payments. While there is an important role for 
government entities to take action against counterfeiting, the private 
sector can also drive effective solutions to this growing challenge.

Despite the obvious need for robust private sector cooperation, 
multiple factors have made collective efforts to find solutions more 
challenging. Global counterfeiting has grown faster than the resources 
ofindividual private sector stakeholders, and new counterfeiting 
tactics have challenged the ability of individual stakeholders to adapt 
and develop new, common approaches to the problem.

A lack of information sharing among private sector entities, 
particularly brand owners and e-commerce platforms, has weakened the 
ability of all stakeholders to monitor and fight against fake products 
and detect bad-faith vendors that hide their real identity or move from 
platform to platform.

No single company or sector can fight counterfeiting alone. Legitimate 
manufacturers hold the information necessary to distinguish their 
products from the fakes on the market. E-commerce platforms hold 
information about the third-party sellers dealing in fake products. 
Search providers have a broad view of how actors can move across 
different platforms. Payment providers are a critical piece of tracing 
illicit gains to counterfeiters and cutting off their access. Input 
from each of these sources is necessary to allow both the government 
and private sector to have full insight into the paths of counterfeit 
goods and to track those responsible.

Manufacturers must collaborate with other legitimate companies to fight 
counterfeiting, seeking common approaches and sharing best practices. 
All private sector stakeholders must develop concrete mechanisms, 
including new standards, databases and programs, to share information 
directly and regularly about counterfeit products and bad-faith 
vendors. They must use that information to limit the supply of 
counterfeit products and to continually improve their strategies and 
mechanisms.

[GRAPHIC] [TIFF OMITTED] T3020.009

THE SOLUTIONS

    To address these issues, manufacturers urge private sector 
stakeholders to take a number of key collaborative steps to better 
fight counterfeiting:

  Private sector actors should develop new mechanisms for 
collaborative information sharing on counterfeiting activity. These 
mechanisms should include data on counterfeiting activity and specific 
actors that can be used by platforms to improve vendor vetting and by 
legitimate manufacturers to pursue enforcement action against bad 
actors. Such mechanisms could take the form of databases, exchanges or 
dialogues, and they should make it easy for all stakeholders to share 
information, based on a common set of information, and to make that 
information fully searchable and accessible.

  Private sector actors should work collectively to improve 
platform brand protection programs, expanding the scale, accessibility 
and scope of action for these programs. In particular, the following 
actions are needed:

       Improve the accessibility of existing brand protection programs 
for all manufacturers by expanding their scope and ensuring that the 
terms and conditions for participation do not effectively block out any 
group of brand owners, including small and medium-sized manufacturers.

       Create new programs or certifications, such as ``official'' or 
``verified'' product listings, and mark products and vendors that have 
fully verified that they are not counterfeit. For example, use of 
specific domain names such as the pharmacy domain, can distinguish 
legitimate e-commerce sources from fraudulent sources and provide 
consumers with access to verified online pharmacies.

       Strengthen and streamline direct communication channels between 
platform providers and manufacturers, including by establishing 
consistent, easy-to-
access contacts engaged with and knowledgeable of key industries.

       Expand the scope of activity for these programs to include 
joint enforcement activities between platforms and brand owners.

EMPOWER CONSUMERS TO AVOID COUNTERFEITS

THE CHALLENGE

In addition to new enforcement tools and brand protection programs, 
addressing the fundamental challenge of counterfeits requires all 
parties to equip consumers with the tools to avoid purchasing them in 
the first place.

Consumers are not sufficiently aware or concerned about the direct 
danger that counterfeit products can pose-not just to businesses, but 
directly to themselves. Even when customers are aware of the negative 
impacts of counterfeiting, they may not associate them with a direct 
personal risk to themselves and those around them.

[GRAPHIC] [TIFF OMITTED] T3020.010


Even consumers aware of the risk of counterfeit products can fall 
victim to counterfeiting by unwittingly purchasing fake products 
online. Surveys indicate that consumers are more aware of, and 
concerned with, counterfeit products being sold online but are 
nonetheless worried about their ability to spot counterfeit products.
---------------------------------------------------------------------------
    \60\ Danielle Commisso, Men and High-Earners Are More Likely to Buy 
Counterfeit Goods, CivicScience (August 13, 2019), https://
civicscience.com/men-and-high-earners-are-more-likely-to-buy-
counterfeit-goods/.
    \61\ CPC Strategy, The 2019 Amazon Consumer Shopping Study: How 
Shoppers Browse and Buy on Amazon 14 (2019), https://
learn.cpcstrategy.com/rs/006-GWW-889/images/2019-Amazon-Shopper-
Srvuey.pdf.

That task is only getting harder as counterfeiters get smarter. Not 
only are counterfeiters continuing to produce fake products that are 
closer matches to the original version, but they are also increasingly 
savvy in utilizing the online environment to make consumers believe 
they are buying genuine products. For example, a counterfeiter may 
advertise with pictures of the genuine product while shipping customers 
the fakes. Counterfeiters have also gotten smarter at removing ``red 
flags'' that consumers may use to tell a real from a fake product, 
including pricing discrepancies, online reviews or suspect language 
---------------------------------------------------------------------------
used to describe the product.

With a crowded media environment, increasing sophistication among 
counterfeiters and the rapid growth in e-commerce, the traditional 
playbook is not enough. Consumers expect everyone, including 
manufacturers, online marketplaces and social media platforms, to do 
more to protect them against the danger of fake products.\62\
---------------------------------------------------------------------------
    \62\ For example, 63% of respondents in a private-sector survey of 
more than 2,600 global online shoppers indicated that they ``didn't 
think enough was being done by brands, social media platforms and 
online marketplaces to protect them from counterfeiters, fraud and 
cybercrime.'' See MarkMonitor, Social Media: Insights Into Consumer 
Shopping Behavior 12 (2019), https://markmonitor.com/wp-content/
uploads/dlm_uploads/2019/09/Global-Online-Protection
-Business-Survey-Q3-2019.pdf.

Legitimate manufacturers and platforms alike must invest in new 
campaigns, technologies and tools to inform consumers about the direct 
harm that counterfeit products can have. They must not only educate 
consumers about the real and direct harm that counterfeits can cause 
but also provide practical tools to help consumers differentiate 
between real and fake products. They must increase and improve 
communication with consumers if they have purchased known or possible 
counterfeit products and warn potential buyers away from sellers or 
websites with a track record of selling or facilitating counterfeits.

THE SOLUTIONS

To lower demand for counterfeits, Congress should take action to help 
manufacturers and other stakeholders address these needs:

  Congress should pass legislation requiring platforms to notify 
online shoppers about actual or potential purchases of counterfeit 
goods. If they do not take such steps, they could face contributory 
liability for infringement due to vendor activities on their platforms. 
To avoid such liability, platforms should develop specific protocols 
based on consultation with private sector stakeholders. They should 
communicate directly with customers that have purchased known or 
suspected counterfeit products and develop specific warning signals to 
flag when directing customers to sellers or websites previously engaged 
in, or reasonably suspected to be engaging in, counterfeit activity.

  Congress should appropriate emergency funds to the Department of 
Health and Human Services to oversee a public campaign to educate 
consumers of the dangers of fake and counterfeit versions of products 
used for the treatment or prevention of COVID-19:

       The campaign, run either directly by government agencies or 
through grants to private sector groups, should develop and disseminate 
content that is clear, focused, easily digestible and tailored to the 
online environment to reach those most likely to purchase fake COVID-19 
products through online platforms and social media websites.

       The campaign should include a dedicated, continually updated 
COVID-19 anti-counterfeiting resource developed in consultation with e-
commerce platforms, brand owners and law enforcement agencies. This 
resource would rapidly inform consumers about the dangers of 
counterfeit products and how to identify, report and protect against 
fake products during the health crisis, and inform U.S. government 
responses to future health crises.

III. Conclusion

The current COVID-19 pandemic and the countless headlines about fake 
test kits, counterfeit face masks and fake drugs underscore the 
counterfeiting challenge. But this problem extends beyond health 
products. It also affects manufactured products that American 
households use every day, from auto parts to clothing to toys. 
Counterfeit versions of many products are widely available to American 
consumers, particularly through e-commerce platforms. These counterfeit 
goods pose a triple threat: harming the safety and well-being of 
consumers, limiting the competitiveness of manufacturers of all sizes 
and undermining American innovation.

Manufacturers need real, actionable, innovative policy solutions that 
reverse the rising tide of counterfeit products. This report provides a 
series of clear, decisive actions that all stakeholders can take, in 
government and in the private sector, to stop counterfeiters in their 
tracks.

The time is now. The solutions are clear. We must act.

                                 ______
                                 
                              Premier Inc.

                444 North Capitol Street, NW, Suite 625

                          Washington, DC 20001

                             T 202-393-0860

                             F 202-393-6499

                      https://www.premierinc.com/

The Premier healthcare alliance appreciates the opportunity to submit a 
statement for the record on the Senate Finance Committee's hearing 
titled ``Part 2: Protecting the Reliability of the U.S. Medical Supply 
Chain During the COVID-19 Pandemic'' scheduled for July 30, 2020. We 
applaud the leadership of Chairman Grassley, Ranking Member Wyden and 
members of the Committee for holding this hearing to examine the 
integrity of our nation's medical supply chain.

Background on Premier

Premier Inc. is a leading healthcare improvement company, uniting an 
alliance of more than 4,000 U.S. hospitals and health systems and 
approximately 175,000 non-acute providers to transform healthcare. With 
integrated data and analytics, collaboratives, supply chain solutions, 
and consulting and other services, Premier enables better care and 
outcomes at a lower cost.

Premier works around the clock with the nation's hospitals and other 
healthcare providers, suppliers, distributors and federal and state 
agencies to ensure products get into the right hands so every patient 
gets the care they need. Given Premier's unique position in the supply 
chain as an extension of America's healthcare providers, we understand 
firsthand the impact to patient care when hospitals and health systems 
do not have access to the drugs and medical supplies needed to treat 
patients. The coronavirus outbreak underscores what Premier has been 
advocating for the better part of a decade--that the U.S. must be more 
forward-looking and strategic about our supply chain. When the system 
works, no one thinks about it, but in an outbreak, vulnerabilities are 
on display.

Premier has been a longstanding advocate for supply chain diversity and 
resiliency, taking lessons learned from disasters and past outbreaks 
such as Ebola and H1N1. Creating permanent solutions to ensure a 
reliable supply of critical medical supplies and drugs has been the 
mission of Premier since day one. We need, however, policy changes for 
us to continue to succeed in our work. It is critical that Congress act 
now to proactively address known supply chain vulnerabilities.

Premier's Leadership in COVID-19 Response Efforts

From the beginning of the COVID-19 pandemic, Premier has been at the 
forefront of response efforts working around the clock to identify and 
implement innovative solutions that ensure hospitals, health systems, 
and alternate site providers across the country had access to the 
necessary PPE, medical supplies and pharmaceuticals to treat COVID-19 
patients. To meet the unprecedented demand, Premier

      Used our global sourcing arm, S2S Global, to identify new 
sourcing of manufacturing capacity, ultimately contracting with seven 
different PPE factories across the globe to secure 36 million masks and 
respirators and 16 million gowns.
      Arranged cargo carriers and major airlines to expedite 
transportation of products so they could be onshore in hours, rather 
than months.
      Coordinated and allocated 2 million donated masks.
      Added 40 new manufacturers of COVID-19 related supplies to our 
national contracts using an expedited review process to rapidly 
increase options.
      Worked with non-traditional and adjacent industries such as 
distilleries, textile manufacturers, and automobile manufacturers to 
fill supply gaps for essentials such as hand sanitizer, isolation gowns 
and surgical caps.
      Created an online exchange for health systems, Resilinc, to 
trade PPE supplies among one another, dynamically moving specific 
supplies to the neediest hot spots.
      Partnered with 15 health systems to acquire a minority stake the 
nation's largest domestic supplier of PPE, Prestige Ameritech, such as 
masks and N95s.
      Leveraged our existing drug shortage program, ProvideGx, to 
secure additional safety stock and dedicated supplies, thereby avoiding 
shortages for many critical products.

In addition, Premier also worked closely with the Administration to 
provide data on surge demand, clinical utilization, and barriers to 
providing care and improving healthcare delivery during the pandemic. 
This work resulted in numerous waivers, regulatory flexibilities, and 
guidance documents that were critical during the public health 
emergency to prevent infection, avoid unnecessary hospitalizations for 
ambulatory conditions, increase availability of PPE and medical 
supplies, and more.

Finally, Premier played the leading role in the creation of the COVID-
19 Private Sector Supply Chain Coalition, which was established to 
coordinate an integrated, public/private supply chain response to the 
challenges created by the COVID-19 pandemic. The Coalition serves as a 
single coordination point to share non-competitive, non-pricing 
information, best practices and strategies among key parties in the 
healthcare supply chain to promote the efficient management of supply 
and distribution during the COVID-19 pandemic. The Coalition's primary 
goals are to promote public and private sector cooperation, strengthen 
the healthcare supply chain, and speed answers to urgent supply 
challenges across hospitals and other U.S. healthcare providers.

Premier's Reflections and Learnings From COVID-19 Response Efforts

Premier has spent significant time reflecting on the experience of the 
healthcare industry during COVID-19 response efforts to determine 
elements that worked well as well as areas for improvement for the 
future. Premier's reflections have found that:
      Elements that Have Worked Well:
          Nimbleness and ingenuity of the private sector to 
anticipate and identify needs as well as respond quickly to fill gaps.
          Formation of the Private Sector Supply Chain 
Coalition to provide a coordinated and collaborative response to the 
government and in the market.
          Sharing of supply chain data that accounted for 
both supply and demand from neutral, vendor agnostic, and value 
orientated entities.
          Regulatory flexibilities and waivers from FDA, 
CMS, HRSA, and CDC that were delivered rapidly.
          Timely and regular access to government leaders 
and openness to input.

      Elements that Led to the Current Situation:
          In spite of efforts by Premier and others to 
counter the trend, a focus for the past 20+ years to move manufacturing 
offshore as a means to reduce costs to offset decreasing healthcare 
reimbursement. This is because emerging economies:
              Are more willing to take greater environmental 
regulatory risks.
              Have large populations of low-cost labor.
              Have incentives to move manufacturing to their 
markets.
          Lack of centralized upstream visibility into 
supply chain to determine source of raw materials and finished goods. 
This resulted in a lack of understanding of vulnerabilities, foreign 
reliance on manufacturing, and impact as export bans and manufacturing 
shutdowns were announced.
          Unprecedented demand both globally and nationally 
that led to an imbalance in the supply vs demand, e.g., 17X increase in 
surge demand for N95 masks.
          Export bans and manufacturing shutdowns globally.
          Insufficient supplies in the SNS and cumbersome 
process for accessing supplies in the stockpile.
          More reactive approach vs a proactive approach by 
the government at the outset. Product was not allocated to the ``hot 
spots'' because there was not clear identification of them until late.
          Fragmented approach to securing supply (private 
sector vs federal vs states) led to increase in prices as multiple 
entities competed for the same inventory and out-bid one another.
          Lack of clear visibility of distributor 
fulfillment lead to uncertainty on where products where delivered. This 
continued uncertainty left providers with dwindling confidence in the 
normal supply chain and proliferated more maverick and forward buying, 
as well as hoarding. This also led to a rampant gray market and many 
entities purchasing counterfeit products.
          Insufficient national strategy and plan for 
addressing global pandemics, including confusion regarding which 
federal agency was responsible.
          Existence of patent restrictions that impeded 
access to ancillary products needed for care such as viral swabs.

 Strengthening the Healthcare Supply Chain to Address Future Pandemics

To strengthen the supply chain to address future global pandemics, 
Premier has robust recommendations on how the existing private sector 
supply chain can be further enabled and augmented. Premier's guiding 
principles include:

      Augment the existing private sector supply chain to better 
respond to global pandemics through diversification and transparency. 
The private sector supply chain is highly functioning and should be 
further enabled, not disrupted.
      Develop a cohesive and holistic national strategy for addressing 
global pandemics and stabilizing the U.S. supply chain to respond to 
surge demand for critical medical supplies and drugs.
      Identify critical medical supplies and drugs needed to treat a 
global pandemic and associated comorbidities. This identification 
should occur via a public-
private advisory council that includes representatives from 
manufacturers, GPOs, distributors, physicians, pharmacists, 
laboratorians, nursing homes, and others.
      Create upstream visibility into the supply chain to understand 
sources of raw materials and manufacturing facilities. This information 
is critical to assess vulnerabilities and prioritize what critical 
medical supplies and drugs should be focused on initially.
      Design stockpiles to create coordination rather than competition 
between state, local and national stockpiles. Stockpiles should be 
customized to meet the unique needs of various healthcare sectors, such 
as nursing homes.
      Leverage supply and demand data from GPOs, who serve as neutral, 
vendor agnostic, and value orientated entities to drive transparency in 
the supply chain and forecast demand needs.
      Develop a real-time national syndromic surveillance system that 
also includes real-time supply chain demand data so that there is a 
means to identify a disease threat as early as possible as well as its 
implications on healthcare resources.
      Advance payment and delivery system reforms that hold providers 
accountable for the health of a population, budgets and transparent 
outcomes. This will incent improving the health of a population, which 
will both improve patients' comorbidities and attention to care 
management to sick patients. Acting within a budget helps reduce long-
term financial pressure from rising healthcare costs.

Maintaining Supply Chain Integrity

During the pandemic, unfortunately a lack of clear visibility of 
distributor fulfillment lead to uncertainty on where products where 
delivered. This continued uncertainty left providers with dwindling 
confidence in the normal supply chain and proliferated more maverick 
and forward buying, as well as hoarding. This also led to a rampant 
gray market and many entities purchasing counterfeit products thereby 
challenging the integrity of the medical supply chain.

Premier divides the gray market into two categories:

      Alternative suppliers  Legitimate product but not 
acquired through traditional entity in the supply chain at an elevated 
price. For example, N95 masks being sold at $3-$5 per piece whereas 
they normally cost $0.30-$0.40 per piece.
      Black market  Fraudulent, adulterated or counterfeit 
products at an elevated price. For example, quantities of product being 
offered that are physically unable to be legitimate such as an offer 
for 2 billion medical grade N95 masks that would normally require 10+ 
years to manufacture.

The emergence and continued presence of the gray market is directly 
related to supply chain stresses adding complexity and confusion for 
supply chain experts and clinicians questioning if their PPE is 
adequate to protect them, their patients, and their families. In the 
past month, Premier has noted in increase in gray market actors with 
increasingly sophisticated plans rendering themselves nearly 
undetectable.

Throughout the pandemic response, Premier has been diligent in warning 
health-
care providers of the risks associated with gray market purchases and 
has been prudent in our response which includes vetting over 2000 gray 
market solicitations through (1) review of submitted documentation to 
evaluate business and clinical certifications; (2) clinical evaluation 
of the product including raw materials, production facilities, and 
documented integrity of their supply chain; and (3) evaluation of the 
business itself. To date, less than 15% of gray market solicitations 
have passed Premier's stringent vetting process and were considered 
legitimate alternate suppliers.

To help strengthen and maintain the integrity of the supply chain 
during this and future pandemics, Premier recommends the creation of a 
centralized clearing house to vet gray market offers and test products 
to ensure integrity. The clearing house should:

      Hold all payments in escrow until testing is validated;
      Test lot samples through a certification process;
      If the product is validated, it should be permitted for sale;
      If the product is not validated; it should be confiscated, and 
appropriate action be taken against the gray market actor.

Revamping the Strategic National Stockpile (SNS)

Premier strongly supports the vision of the Administration to augment 
the SNS to better respond to global pandemics by enabling public-
private partnerships. However, to develop a truly cohesive and holistic 
national strategy for addressing future global pandemics and 
stabilizing the U.S. supply chain to respond to surge demand for 
essential medical supplies and drugs, Premier believes that it is 
critical to take a slightly broader approach to creating a true end-to-
end supply chain solution that is transparent, diverse, and reliable. 
In addition, it is critical to not only focus on the quantity on hand 
for critical supplies, but also focus on the time to inventory and 
ensuring the U.S. has contractual relationships established, including 
contingency and redundancy plans, to ramp up production expeditiously 
and efficiently upon identification of need.

The SNS is the supply chain of last resort for health systems, 
alternate site providers, and first responders. Therefore, the SNS must 
be built by providers for providers. The SNS must also leverage 
analytics and insights to assist providers in the delivery of care 
during global pandemics that is in the best interest of patients and 
ensure access to the right supplies at the right time.

Premier's vision for the next generation SNS includes the following 
elements that can be accomplished via a public-private partnership:

      The SNS should maintain a minimum of a 90-day supply of critical 
medical supplies and drugs based upon surge demand from hot spots such 
as New York, Washington, Detroit, etc.
      The current process for accessing the SNS is cumbersome and 
state specific. Working alongside private sector partners, the 
Administration should create a streamlined and efficient process for 
accessing drugs from the SNS.
      The SNS should work proactively with GPOs to forecast demand and 
increase capacity/supply to avoid shortages.
      The SNS should work with GPOs to rotate soon-to-expire stock out 
of the SNS and into health systems at a discounted rate. This rotation 
is supposed to occur, but GPOs can make this happen and will ensure the 
SNS is continuously stocked with in-date products and allow the SNS to 
recoup some of their expenses associated with purchase of these 
products.
      The SNS should be transparent regarding distribution of supplies 
and drugs from the SNS. The SNS should provide, at minimum, a detailed 
monthly report of what supplies were distributed to where and in what 
quantities. During a public health emergency, reporting should occur 
weekly.
      The SNS, as well as state and local stockpiles, should be 
encouraged to purchase off GPO contracts to help aggregate purchasing 
volume and keep prices competitive.
      The SNS should work to ensure that critical medical supplies and 
drugs are located as close to the delivery of care as possible. This 
includes exploring opportunities to leverage health system warehouses 
in major metropolitan areas or in rural areas.
      Create a customized stockpile for nursing homes with appropriate 
supplies, drugs and other needs.
      Include health systems or regional buying groups as potential 
stockpile operators. These organizations would be responsible for 
managing the stockpile for the providers in a region. This would allow 
an efficient means to rotate inventory and assure accountability for 
the stockpile.

Incentivizing Domestic Manufacturing

To increase domestic manufacturing of critical medical supplies and 
drugs, there are five major barriers that policy proposals must 
address. These barriers include: (1) capacity; (2) environmental 
regulations; (3) labor costs; (4) availability of raw materials, and 
(5) historical policy decisions that advantaged offshoring. To 
incentivize domestic manufacturing, Premier recommends Congress 
consider the following policy proposals:

      Section 3101 of the CARES Act requires a report by the National 
Academies of Medicine (NAM) on the foreign reliance on manufacturing 
for critical healthcare supplies, the risk to national security, and 
recommendations for improving the resiliency of the supply chain. 
However, these recommendations are not expected to be available in the 
near future and, therefore, Congress should accelerate the development 
of this report to strengthen domestic manufacturing in the long-term.
      Offer 0% interest loans to manufacturers of critical medical 
supplies and drugs to incentivize increasing domestic manufacturing 
capacity. (for example--investing in automation to offset labor costs).
      Offer tax incentives to manufacturers of critical medical 
supplies and drugs to incentivize increasing domestic manufacturing 
capacity, similar to incentives provided during the 1980s and 1990s to 
incentivize manufacturing in Puerto Rico.
      Ensure there is at least:
          One domestic supplier of the final form, 
ancillary products and raw materials for critical medical supplies and 
drugs.
          Three global suppliers of the final form, 
ancillary products and raw materials for critical medical supplies and 
drugs. Global suppliers should be from geographically diverse regions.
      Incentivize the domestic farming/cultivation of raw materials 
needed for critical medical supplies and drugs.
          For example: cotton for PPE and swabs, pigs for 
Heparin, poppy for sedatives, etc.

 Expanding Disease Surveillance to Detect, Identify, Model, and Track 
                    Emerging Infectious Diseases

COVID-19 has exposed one of healthcare's fundamental weaknesses: the 
fragmented and siloed nature of care delivery and the lack of 
centralized coordination when it comes to managing and preventing 
disease spread. The public health system continues to rely on flawed 
data and obsolete technology that consistently fails to accurately 
identify and track current cases, monitor disease progression, or 
predict future surges. Not only do these blind spots create 
opportunities for the disease to spread, they also undermine the 
ability to safely plan for economic recovery and re-opening of the 
country. Unfortunately, issues related to underfunding of and 
improvements to the public health infrastructure are not 
new.\1\, \2\, \3\
---------------------------------------------------------------------------
    \1\ Institute of Medicine 2012. For the Public's Health: Investing 
in a Healthier Future. Washington, DC: The National Academies Press. 
https://doi.org/10.17226/13268.
    \2\ DeSalvo KB, Wang YC, Harris A, Auerbach J, Koo D, O'Carroll P. 
Public Health 3.0: A Call to Action for Public Health to Meet the 
Challenges of the 21st Century. Preventing Chronic Disease 
2017;14:170017. DOI: http://dx.doi.org/10.5888/pcd14.170017.
    \3\ https://www.astho.org/Programs/Preparedness/Public-Health-
Emergency-Law/Public-Health-and-Information-Sharing-Toolkit/Collection-
Use-Sharing-and-Protection-Issue-Brief/.

There is a limited ability to nationally track symptoms of the 
pandemic, which would provide lifesaving insights as many as seven days 
before a patient is hospitalized with COVID-19. This inability to 
detect and respond is a critical missing ``gating step'' called for in 
the ``Opening of America'' to re-starting the economy and keeping it 
open. Instead, the preference has been to rely on testing, which has 
significant limitations. Americans need confidence that there is a 
means to identify a new COVID-19 surge as early as possible to allow 
effective containment and mitigation without adding billions in costs 
to national, state, and local budgets. The COVID-19 emergency 
underscores the need for real-time syndromic surveillance, providing an 
upstream alternative to identifying cases before tests can detect them 
or patients are hospitalized.

Conclusion

In closing, the Premier healthcare alliance appreciates the opportunity 
to submit a statement for the record on the Senate Finance Committee 
hearing on the integrity of the medical supply chain. As an established 
leader in the healthcare supply chain, Premier is available as a 
resource and looks forward to working with Congress as it considers 
policy options to continue to address this very important issue.

If you have any questions regarding our comments or need more 
information, please contact Soumi Saha, Senior Director of Advocacy, at 
[email protected] or 732-266-5472.

                                 ______
                                 
                   City of York Healthcare Authority

                Operating Hill Hospital of Sumter County

   751 Derby Drive, York, Alabama * 205-392-5263 * 205-490-2300 (fax)

_______________________________________________________________________

Loretta W. Wilson, Administrator/
CEO                                 Shirley Byrd, Chairman
Hill Hospital of Sumter County      Healthcare Authority Board
[email protected]             Tommie Armistead
205-376-6400                        Renee Pringle

July 28, 2020

Honorable Chuck Grassley
Chairman

The Honorable Ron Wyden
Ranking Member

Committee on Finance United States Senate
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Senators Wyden and Grassley,

As Administrator of Hill Hospital, located in rural Sumter County, one 
of Alabama's poorest counties, I am proud of our response to COVID-19 
despite the unprecedented challenges we faced due to the limited amount 
of personal protection equipment (PPE) at the onset of the COVID 19 
pandemic.

I recall when Sumter County got its first case in March, our staff 
began to panic. Our doctors, nurses, and office staff questioned, 
``What are we going to do?'' ``How can our patients be protected? How 
can we be protected?'' With very little PPE in-house, our small 27-bed 
and 4-emergency room facility began preparing for the worse.

We had a mere three weeks of PPE, so we immediately reached out to 
increase our stock; but we quickly ran into difficulty when we learned 
that our primary suppliers, Cardinal Health and Medline, had everything 
on back order. As our stock began to dwindle, our maintenance director 
of 40 years remembered that the hospital had a stockpile of PPE 
resulting from previous emergency preparedness efforts. That discovery 
would be our saving grace through March and April.

However grateful for this discovery, we again experienced a decline in 
PPE in May and June due to an increase in emergency room patients. 
Within two months, we had more than 300 patients presenting to the ER 
with COVID-19 symptoms, confirming 15 of them to be positive.

By then, we were managing our PPE by keeping a small par level in each 
department, utilizing a sign-in-sign out system, and requiring nurses 
to reuse N95 masks for up to 5 days when they were not soiled or torn. 
Doctors and nurses expressed their concerns as many have comorbidities 
and are over 60. They were afraid of putting their lives at risk. To 
ensure safety, we began screening patients outside in a tent, which 
helped prevent an influx of patients and required minimum use of PPE.

The high demand for PPE has caused small rural hospitals like ours to 
question the integrity of our suppliers. While supplies from the State 
distribution center and other businesses have allowed for our continued 
day-to-day operation, the scarcity of resources from our usual 
suppliers is worrisome. Orders that were placed with these vendors in 
March still have not been filled. As a result, I am having to store PPE 
in my office to prevent exhaustion of our current supply.

PPE continues to be a serious a concern for Hill Hospital. Without 
continuous access to these critical items, safety for both patients and 
our front-line providers is greatly jeopardized. Currently there are 
354 confirmed cases with 15 deaths in Sumter County, according the 
Alabama Department of Public Health. We are fearful of not being able 
to adequately service our community due to lack of PPE as COVID 19 
continues to spread and the cold and flu season approaches.

Funding from the CARES Act has helped address some of our PPE shortage, 
allowing us to purchase supplies, although at much higher prices, from 
suppliers outside our normal purchasing group and to purchase at levels 
above our historical volume. Additionally, we have utilized this 
funding to create a safer environment for patient care by converting 
multiple isolation rooms with negative pressure.

Every day when I enter the halls of Hill Hospital, I am met with the 
faces of employees who are depending on me to ensure we maintain during 
and after COVID-19. I want to deliver; however, I need the appropriate 
resources to do so.

To this end, I am recommending that Congress consider the following:

      Guarantee that small rural hospitals have access to affordable 
PPE through private vendors, regardless of the volume of our orders;
      Continue to ensure that the State of Alabama receives the 
resources needed to help with the supply of PPE to the rural hospitals 
in our state; and
      Continue to fund rural hospitals post COVID-19 to prevent 
closure.

Over the past 6 years, Hill Hospital has had to make drastic changes to 
remain financially viable. Among other measures, we have decreased the 
hours and salaries of our staff and eliminated non-essential services. 
Just as we were experiencing a turnaround, a beacon of light, COVID-19 
happened. I am fearful, that our small hospital will not be able to 
withstand the unprecedented financial pressure placed on us by COVID-19 
without assistance from the federal government.

Again, I am very proud of the professionalism and commitment of the 
doctors, nurses, and staff of Hill Hospital, and I remain dedicated to 
ensuring the safety of these employees who put their health on the line 
every day to ensure that the residents of Sumter County receive the 
high level of care that they deserve.

If you have questions or need additional information, please feel free 
to contact me at 205-376-6400 or by email at [email protected].

Sincerely,

Loretta Wilson, MBA/HCA
Administrator/CEO
Hill Hospital of Sumter County

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