[Senate Hearing 117-479]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 117-479

                             COVID-19--2021

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                                and the

                 COMMITTEE ON RULES AND ADMINISTRATION

                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS


                             FIRST SESSION

                               ----------                              

 PREPAREDNESS FOR COVID-19: THE INITIAL PANDEMIC RESPONSE AND LESSONS 
                      LEARNED, APRIL 14, 2021 AND
  COVID-19 PART II: EVALUATING THE MEDICAL SUPPLY CHAIN AND PANDEMIC 
                      RESPONSE GAPS, MAY 19, 2021

                               ----------                              

        Available via the World Wide Web: http://www.govinfo.gov

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs



                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]












                                                        S. Hrg. 117-479

                             COVID-19--2021

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                                and the

                 COMMITTEE ON RULES AND ADMINISTRATION

                    ONE HUNDRED SEVENTEENTH CONGRESS


                             FIRST SESSION

                               __________

 PREPAREDNESS FOR COVID-19: THE INITIAL PANDEMIC RESPONSE AND LESSONS 
                      LEARNED, APRIL 14, 2021 AND
  COVID-19 PART II: EVALUATING THE MEDICAL SUPPLY CHAIN AND PANDEMIC 
                      RESPONSE GAPS, MAY 19, 2021

                               __________

        Available via the World Wide Web: http://www.govinfo.gov

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs




                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]






                                 ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

45-981 PDF                WASHINGTON : 2022













        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman

THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
         Christopher J. Mulkins, Director of Homeland Security
               Alan S. Kahn, Chief Investigative Counsel
                   Yelena Tsilker, Professional Staf
                 Megan L. Petry, Investigative Counsel
                Pamela Thiessen, Minority Staff Director
    Andrew Dockham, Minority Chief Counsel and Deputy Staff Director
              Loren Terry, Minority Investigative Counsel
           William H.,W. McKenna, Minority Chief Investigator
                     Laura W. Kilbride, Chief Clerk
                     Thomas J. Spino, Hearing Clerk







                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Peters................................................1, 87 
    Senator Portman...............................................3, 89 
    Senator Hassan............................................. 19, 103 
    Senator Hawley..............................................21, 108 
    Senator Rosen...............................................24, 111 
    Senator Johnson.............................................26, 106
    Senator Ossoff..............................................29, 113 
    Senator Padilla..............................................    33
Prepared statements:
    Senator Peters..............................................37, 119 
    Senator Portman.............................................40, 121 


                       Wednesday, April 14, 2021

                               WITNESSES

Hon. Nicole Lurie, M.D., Former Assistant Secretary for 
  Preparedness and Response, U.S. Department of Health and Human 
  Services.......................................................     6
Julie L. Gerberding, M.D., Former Director of the Centers for 
  Disease Control and Prevention, U.S. Department of Health and 
  Human Services.................................................     8
Hon. Joseph L. Nimmich, Former Deputy Administrator, Federal 
  Emergency Management, U.S. Department of Homeland Security.....    11
Elizabeth A. Zimmermnan, Former Associate Administrator, Office 
  of Response and Recovery, Federal Emergency Management, U.S. 
  Department of Homeland Security................................    13

                     Alphabetical List of Witnesses

Gerberding, Julie L. M.D.:
    Testimony....................................................     8
    Prepared statement...........................................    54
Lurie, Hon., Nicole, M.D.:
    Testimony....................................................     6
    Prepared statement...........................................    43
Nimmich, Hon. Joseph L.:
    Testimony....................................................    11
    Prepared statement...........................................    60
Zimmerman, Elizabeth A.:
    Testimony....................................................    13
    Prepared statement...........................................    65

                                APPENDIX

Response to post-hearing questions submitted for the Record
    Ms. Lurie....................................................    74
    Ms. Gerberding...............................................    77
    Mr. Nimmich..................................................    84
    Ms. Zimmerman................................................    85

                        Wednesday, May 19, 2021
                               WITNESSES

Shereef Elnahal, M.D., President and Chief Executive Officer, 
  University Hospital, Newark, New Jersey........................    91
Robert Handfield, Ph.D., Professor, Poole College of Management, 
  North Carolina State University................................    93
Stephen Schondelmeyer, Pharm.D., Ph.D., Professor, College of 
  Pharmacy, Co-Principal Investigator, Resilient Drug Supply 
  Project, University of Minnesota...............................    95
Kimberly Glas, President and Chief Executive Officer, National 
  Council of Textile Organizations...............................    97

                     Alphabetical List of Witnesses

Elnahal, Shereef, M.D.:
    Testimony....................................................    91
    Prepared statement...........................................   123
Glas, Kimberly:
    Testimony....................................................    97
    Prepared statement...........................................   217
Handfield, Robert Ph.D.:
    Testimony....................................................    93
    Prepared statement...........................................   130
Schondelmeyer, Stephen Pharm.D., Ph.D.:
    Testimony....................................................    95
    Prepared statement...........................................   152

                                APPENDIX

Statements submitted for the Record:
    American Hospital Association................................   231
    Ravi M. Anupindi, Ph.D.......................................   235
    American Society of Health-System Pharmacists................   243
    BioOhio......................................................   245
    MN Deptartment of Administration.............................   247
    Henry Ford Health System.....................................   249
    Health Industry Distributors Association.....................   252
    Michigan Health and Hospital Association.....................   265
    Munson Healthcare............................................   268
    Jared Polis..................................................   269
    Premier Healthcare...........................................   270
    Robert J Wiehe UC Health.....................................   278
    Sparrow Health...............................................   282
    Trinity Health...............................................   284
    United States Pharmacopeia...................................   286
Response to post-hearing questions submitted for the Record
    Mr. Elnahal..................................................   292
    Mr. Handfield................................................   300
    Mr. Schondelmeyer............................................   323
    Ms. Glas.....................................................   372




 
                 PREPAREDNESS FOR COVID-19: THE INITIAL
                 PANDEMIC RESPONSE AND LESSONS LEARNED

                              ----------                              


                       WEDNESDAY, APRIL 14, 2021

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
             and the Committee on Rules and Administration,
                                                    Washington, DC.
    The Committee met, pursuant to other business, at 10 a.m., 
via Webex, Hon. Gary C. Peters, Chairman of the Committee, 
presiding.
    Present: Senators Peters, Carper, Hassan, Sinema, Rosen, 
Padilla, Ossoff, Portman, Johnson, Paul, Lankford, Romney, 
Scott, and Hawley.

            OPENING STATEMENT OF CHAIRMAN PETERS\1\

    Chairman Peters. This Committee will come to order.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Peters appear in the Appendix 
on page 37.
---------------------------------------------------------------------------
    First, I want to thank each of our witnesses for joining 
today's discussion, which will be the first in a series of 
hearings focusing on the Federal Government's preparation for, 
and response to, the coronavirus (COVID) pandemic.
    We have to examine and confront our failures, identify and 
build on what went right, and propose reforms to ensure our 
Nation can combat this pandemic and be better prepared to 
prevent and respond to future pandemics, which we know will 
occur at some point, and other public health threats.
    I appreciate Ranking Member Portman for joining me to 
conduct this bipartisan oversight of the Federal pandemic 
preparedness and response efforts. This approach is another 
clear example of how this Committee is stronger when we work 
together.
    And no challenge requires a bipartisan approach more than 
tackling this once-in-a-lifetime pandemic. Since the first 
cases were diagnosed in the United States, more than 562,000 
Americans have now lost their lives.
    While Congress has provided critical relief over the course 
of this pandemic, millions of Americans lost their jobs, 
families continue struggling to make ends meet, and countless 
small businesses are being forced to close their doors 
permanently.
    More than 4 million Americans are getting immunized every 
day and the number of deaths from coronavirus are declining, so 
there indeed is a light at the end of the tunnel.
    But we are not out of the darkness yet, and I am concerned 
that cases continue to rise, particularly in my home State of 
Michigan right now.
    Vaccines are certainly an important step to prevent the 
spread of COVID-19, but we still need to practice social 
distancing, wear masks, and follow the advice of public health 
experts to get the resurgence of this virus under control, 
especially as variants continue to spread all across the 
country.
    Tragically, it did not have to be this way. The lives lost, 
the permanent changes to people's personal health, the economic 
devastation, and the long months of personal sacrifice and 
suffering were not inevitable.
    Adherence to years of pandemic planning by prior 
administrations, decisive action, and clear leadership from the 
Trump administration could have helped mitigate this pandemic.
    In fact, since the first whole-of-government pandemic 
response plan was published in 2005, the United States has had 
ample opportunity to prepare for this type of public health 
crisis.
    Professionals across our government spent years working to 
improve our pandemic preparedness, from a pandemic response 
playbook drafted by the National Security Council (NSC) in 
2016, to a 2019 Department of Health and Human Services (HHS) 
series of exercises called ``Crimson Contagion'' that simulated 
a highly contagious airborne influenza pandemic.
    In 2019, I conducted an investigation and released a report 
that identified the serious national security risks posed by 
our overreliance on foreign manufacturers for critical drugs 
and medical supplies.
    My report found the United States was unprepared to deliver 
vaccinations on the scale needed during a pandemic and made 
critical recommendations that could help onshore manufacturing 
for essential supplies.
    Unfortunately, despite preemptive actions and warnings, the 
previous administration failed to take necessary steps that 
would have limited the impact of this coronavirus pandemic.
    Instead of acting swiftly and decisively, the previous 
administration chose to sideline our Nation's foremost medical 
experts and failed to implement a comprehensive national 
strategy that left individual States to combat the virus all on 
their own.
    In fact, we know President Trump was aware the virus was 
both deadly and contagious as early as February 2020. However, 
he continued to tell the American people it would 
``miraculously disappear'' and initially even compared its 
effects to the common flu, when scientific evidence clearly 
showed that coronavirus was much more lethal.
    At a time when the administration could have provided clear 
and consistent communication, supported scientific guidance on 
needed public health measures, and ramped up production of 
personal protective equipment (PPE) and other critical medical 
supplies through emergency contracts and fully invoking the 
Defense Production Act (DPA), among other critical actions, the 
previous administration sought to rather downplay the virus' 
severity to the public.
    On top of those failures, there have been numerous reports 
of widespread political interference in Federal agencies' 
COVID-19 response, including reports that Health and Human 
Services political appointees reviewed and may have altered or 
delayed weekly scientific reports issued by the Centers for 
Disease Control and Prevention (CDC) about the pandemic.
    The Trump administration's inaction and efforts to minimize 
the threat posed by COVID-19 contributed to the carnage our 
communities have seen over the past year.
    Despite representing only four percent of the world's 
population, by January 2021, the United States accounted for 
nearly a quarter of the global COVID-19 cases.
    There is no question that the Federal Government must learn 
from these missteps and urgently work to strengthen our 
pandemic response, to ensure that we can both combat the 
ongoing pandemic, and prevent the next crisis, whatever it may 
be, from reaching the magnitude we have seen with this one.
    Today we will hear from former officials from key agencies 
in the Federal Government, all of whom are widely credited 
experts in their respective public health and emergency 
preparedness fields.
    I look forward to a very frank and open discussion and 
clear and candid recommendations about what we must do to 
prevent past mistakes from moving forward. It is our duty to 
ensure that our Nation is better able to meet whatever the next 
crisis may be.
    With that, I turn it over to Ranking Member Portman.

            OPENING STATEMENT OF SENATOR PORTMAN\1\

    Senator Portman. Thank you, Mr. Chairman. I appreciate the 
fact that our oversight so far--and we have sent a lot of 
letters and done a lot of interviews--that that oversight has 
been not just bipartisan but nonpartisan, and that we have been 
able to set aside politics and focus on the facts and past 
events, but also on the road ahead of us and how we can learn 
from what happened during this unprecedented, tragic 
coronavirus situation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Portman appears in the 
Appendix on page 40.
---------------------------------------------------------------------------
    First, though, I want to take a moment to acknowledge the 
extraordinary loss that our Nation has experienced. As of this 
morning, 559,741 Americans have died because of COVID-19. And 
like just about all Americans, I have lost friends, I have also 
lost former staff members, and we all join with the families in 
grieving those we have lost during this pandemic.
    I also want to express my gratitude for the work and the 
sacrifice of those who have been on the front lines, 
particularly those health care professionals who have been out 
there on the front lines for all of us, 1,541 of whom died 
fighting this pandemic.
    COVID-19 has been catastrophic; there is no mistake about 
that. It also presented an unprecedented challenge to, in many 
ways, an unprepared U.S. public health system. Why were we 
unprepared? That is one of the questions we will get into 
today.
    Unlike emergencies more localized in nature, a pandemic is 
not a singular event. COVID-19 has stretched across our entire 
country, in fact, the entire globe, with no regard for borders 
or beliefs. The scope is unprecedented. It has stressed our 
supply and health care systems--including our critical front-
line personnel as we said--and it has stressed it often to a 
breaking point. We have seen the economic damage. Millions have 
lost their jobs as a result of pandemic restrictions.
    We are here today to understand some important issues: the 
United States' preparedness and initial efforts leading into 
the COVID-19 pandemic; the initial Federal response; and to 
identify recommendations to improve Federal preparedness for 
future pandemics and other public health threats.
    We owe it to those Americans who did die as a result of 
COVID-19, to their families and countless others who are 
struggling to make ends meet, to make this a serious, 
nonpartisan oversight effort. Looking at the steps the Federal 
Government took in the initial days of the pandemic, we have to 
learn from the experience for the future.
    To that end, I think there are three issues that are 
important to address. First, CDC surveillance systems and the 
lack of testing limited our early response. We know that China 
irresponsibly downplayed the initial severity of COVID-19. In 
my view, there is no question about that. That presents 
questions about our ability to work with global partners, 
particularly China, to identify and combat pandemics in their 
nascent stages.
    But how did we do in the United States at recognizing and 
communicating COVID-19 cases, symptoms, and deaths, once the 
pandemic reached our shores? The CDC can only communicate and 
address the issues it knows about and understands. In many 
instances, what we found out is that COVID-19 cases manifested 
in patient symptoms and were ultimately the cause of death, but 
that information was slow to reach the CDC. Why was that? 
Instead of seeing real-time data, the CDC was only seeing 
fragmented, historical data. Adding to surveillance challenges, 
diagnostic testing was slow to develop and then slow to scale 
up to the level required by the pandemic. Why was that? It is 
critical that we enable State and local public health officials 
to communicate effectively and directly to the CDC. We also 
must have the capability to scale up testing when needed. We 
know those things. We have to talk about how we can do that 
better. In a future pandemic, this could mean the difference 
between quick, life-saving decisions, or confusion, and the 
needless loss of life.
    Second, who was in charge? Where was the accountability? 
This is something I look forward to asking some of our 
distinguished panel about today because they have a lot of 
experience in how these things are managed. The reoccurring 
narrative in interviews with former government officials, like 
the ones we have today, and public health professionals is 
that, in the initial stages of the pandemic, leadership roles 
were not well defined, and they still are not well defined, in 
my view, in some respects. This resulted in confusion at the 
Federal, State, and the local level and likely slowed our 
initial response considerably.
    But we knew this was going to be an issue. In 2019, HHS ran 
an influenza pandemic tabletop exercise called ``Crimson 
Contagion.'' That exercise identified the lack of defined 
leadership as a major challenge. The exercise found that 
insufficient and conflicting statutory authorities defining 
leadership roles hampered the Federal Government's ability to 
effectively respond to a pandemic. Confusion about leadership 
was also an issue identified following the 2009-10 H1N1 
pandemic. This should be a cautionary tale for us as we 
continue our review. It is not enough to identify issues; we 
have to be forward-thinking and actually implement solutions to 
the issues we discover.
    Third, this unprecedented pandemic crippled the U.S. 
medical supply chain in the initial weeks of the pandemic. Why 
was that? It was due, in large part, to a longstanding 
overreliance on China for pharmaceuticals and other medical 
supplies, including PPE. Reports indicate that China, as early 
as December 2019, increased imports and decreased exports of 
medical supplies as their own needs increased, dramatically 
shrinking U.S. purchasing ability. Compounding this issue was 
the lack of an organic medical supply stockpile here in our 
country.
    The Strategic National Stockpile (SNS), which we will talk 
a lot about today--the largest Federal repository of 
pharmaceuticals and critical medical supplies, available for 
rapid delivery to support the response to a public health 
emergency--was not adequate when those State and local supplies 
are depleted. It was, frankly, understocked. We need to talk 
about why and, again, how to prepare for the future. The SNS 
was never replenished, despite urgent requests, after the 2009 
H1N1 pandemic, and, further, it was never meant for a 
nationwide response. This, too, was an issue we knew about. 
Past pandemic exercises and lessons learned from prior 
pandemics--such as H1N1--told us that the supply chain 
resiliency was an issue.
    Now, let us consider this: A critical supply chain with a 
single point of failure. A Strategic National Stockpile that 
was never meant for a national response. I understand the 
supply chain has mostly recovered, and the stockpile is 
restocking, but we cannot allow these issues to impede a future 
pandemic response.
    The tragic loss of life, the devastating impacts on the 
economy and American workers, and also the destabilizing effect 
on global stability and security has taken a toll on all of us 
and all nations. Given the extent of existing issues within the 
public health system I just discussed, it is little surprise 
that the initial pandemic response was chaotic and unorganized.
    Again, Mr. Chairman, I appreciate the nonpartisan nature of 
this review so far, and I stress the importance of identifying 
a bipartisan way forward. We have to figure out how to come 
together, learn from these lessons, and be better prepared next 
time. I thank our witnesses for being here today. I look 
forward to hearing from them, and I look forward to hearing 
their thoughts on the way forward.
    Thank you.
    Chairman Peters. Thank you, Ranking Member Portman, for 
your opening comments, and I, too, look forward to working 
closely with you and every Member of this Committee to find 
answers to the questions that we have and then put forward 
meaningful solutions and action plans. I look forward to that 
work.
    It is the practice of the Homeland Security and 
Governmental Affairs Committee (HSGAC) to swear in witnesses, 
so if each of you who will be testifying--I know you are on 
video, but if you would not mind standing and raising your 
right hand, we would appreciate it at this time. Do you swear 
that the testimony you will give before this Committee will be 
the truth, the whole truth, and nothing but the truth, so help 
you, God? If you would respond ``I do,'' please.
    Dr. Lurie. I do.
    Dr. Gerberding. I do.
    Mr. Nimmich. I do.
    Ms. Zimmerman. I do.
    Chairman Peters. Thank you so much. You may be seated.
    Our first witness today is Dr. Nicole Lurie, former 
Assistant Secretary for Preparedness and Response (ASPR) at the 
U.S. Department of Health and Human Services from 2009 until 
2017. Dr. Lurie is currently the strategic advisor to the Chief 
Executive Officer (CEO) and response lead at the Coalition for 
Epidemic Preparedness Innovations, and during her 8-year term 
as Assistant Secretary for Preparedness and Response, she led 
the HHS response to a number of public health emergencies from 
infectious disease to natural and manmade disasters, and is 
responsible for many innovations in emergency preparedness and 
response.
    Dr. Lurie, welcome to the Committee, and you are now 
recognized for your five-minute opening statement.

   TESTIMONY OF THE HONORABLE NICOLE LURIE, M.D.,\1\ FORMER 
 ASSISTANT SECRETARY FOR PREPAREDNESS AND RESPONSE (2009-17), 
          U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Dr. Lurie. Thank you, and good morning, Chairman Peters, 
Ranking Member Portman, and others. As you heard, I am Dr. 
Nicole Lurie. Let me just stress that today I represent only 
myself.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Lurie appears in the Appendix on 
page 43.
---------------------------------------------------------------------------
    The role of government is to protect its people from harms 
and to build resilience to those that cannot be prevented, and 
that means preparing for the worst and scaling back when it is 
appropriate to do so. As we know, the U.S. Government has been 
preparing for a pandemic for decades, and as a country, we have 
developed, exercised, and refined plans, created robust 
authorities that have enabled nimble response systems and 
infrastructure, and as we know, these have been put to the text 
during many events which were successfully managed within 
existing authorities.
    After the West Africa Ebola epidemic, the pandemic office 
at NSC was reconstituted and developed a comprehensive 
playbook. Countermeasure development was guided through a 
formal coordination process known as the Public Health 
Emergency Medical Countermeasure Enterprise (PHEMCE), and that 
process was significantly degraded. But even these actions 
cannot fully explain the failure to act when we were first 
alerted to a potential pandemic, and I want to peg that at the 
end of December 2019.
    We lost a month of valuable time between then and when a 
public health emergency was declared. In part, I believe that a 
climate of fear and retribution had developed over the years 
leading up to the pandemic, and that this inhibited seasoned 
career employees in key agencies from stepping up and speaking 
out.
    You have asked whether or not the authorities for a 
successful response were sufficient, and I believe the answer 
is generally yes. But all the authorities in the world cannot 
make up for the failure of leadership and its devastating 
outcomes.
    Here are 10 things I think should have happened early on. 
As soon as hearing about the outbreak in China, the 
administration should have played out the likely scenarios, 
making a plan for each.
    Communicating from the top in a clear, forthright, and 
consistent way about the severity of the threat and what to do 
about it.
    Developing and executing a real-time research agenda.
    Strengthening surveillance and testing. The failure of test 
development at CDC and the inability of State and local health 
departments to deal with testing and tracing is well-known, but 
the authorities to develop and scale testing were not 
leveraged, and public health and health care data remained 
largely unlinked, with signals of the staggering racial and 
ethnic inequalities going unaddressed for way too long.
    Examining what was in the SNS. It was always clear there 
was not enough PPE, but emergency contracts to ramp up 
production in early January and to gain visibility into the 
supply chain should have been executed.
    Recognizing and addressing the other health-related supply 
chain vulnerabilities predicted from the get-go.
    Putting the health care system on alert so it could prepare 
the staff, supplies, policies, and for community-wide 
coordination.
    Starting countermeasure development early, as soon as the 
threat was detected, to include diagnostics, therapeutics, and 
vaccines. The National Institute of Allergy and Infectious 
Disease (NIAID) jumpstarted work on an mRNA vaccine, but 
Biomedical Advanced Research and Development Authority (BARDA) 
was hamstrung in taking early action. While Operation Warp 
Speed (OWS) came together and did a phenomenal job with vaccine 
development, it could not make up for lost time, especially 
with regard to diagnostics and therapeutics.
    As a point of reference, Coalition for Epidemic 
Preparedness Innovations (CEPI), where I work, was worried 
enough about an impending pandemic that its staff activated 
vaccine developers in early January, even before the sequence 
was posted. It could always take an off ramp, but not make up 
for lost time.
    Coordinating across all levels of government and providing 
guidance for health care settings so people were not left to 
fend for themselves and compete with one another.
    And mobilizing private sector partners.
    I appreciate the opportunity to look forward, and here are 
a few things that I think we need to do.
    First, I think we need to make it safer for career 
employees to do their jobs, including maintaining the integrity 
of our science agencies.
    Second, reconceptualize the organization and role for 
public health. America needs a modern public health system, not 
just at CDC but across the country.
    Third, maintain a standing emerging infectious disease fund 
at BARDA.
    Four, reexamine the SNS, what it is for, ensure it can be 
activated for surge production on demand, and has 
responsibility for monitoring and addressing critical supply 
chains going forward.
    Five, strengthen and clarify selected authorities at the 
Food and Drug Administration (FDA).
    I will say, six, protect against cyber threats to our 
research, our manufacturing, our supply chains, and our public.
    It is important to remember that preparedness requires 
continuous, proactive financial investment. It is all too easy 
to lose sight of the fact that preparedness is forever. We 
cannot afford to let our guard down. Almost 600,000 dead and 
still counting. We cannot make up for lost time or lost lives, 
but we can act on the hard lessons learned. Preparedness and 
response have always been bipartisan or nonpartisan, and I 
appreciate the spirit in which this hearing is being held.
    Thank you.
    Chairman Peters. Thank you, Dr. Lurie, for your opening 
comments.
    Our second witness is Dr. Julie Gerberding, a former 
Director of the Centers for Disease Control and Prevention at 
HHS from 2002 to 2009. Dr. Gerberding is currently the 
executive vice president and chief patient officer at Merck & 
Company. She also co-chairs the Center for Strategic and 
International Studies (CSIS) Commission on Strengthening 
America's Health Security. While at CDC, Dr. Gerberding led the 
agency through more than 40 emergency responses to public 
health crises. She has been recognized for her leadership in 
responses to anthrax, bioterrorism, and the September 11, 2001, 
attacks.
    Welcome, Dr. Gerberding, and you may proceed now with your 
five-minute opening statement.

  TESTIMONY OF JULIE L. GERBERDING, M.D.,\1\ FORMER DIRECTOR 
  (2002-09), CENTERS FOR DISEASE CONTROL AND PREVENTION, U.S. 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Dr. Gerberding. Thank you so much. Chairman Peters, Ranking 
Member Portman, and all the Members of the Committee, it is an 
opportunity to appear today and do whatever I can do to 
contribute to improving upon the lessons that we have learned.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Gerberding appears in the 
Appendix on page 54.
---------------------------------------------------------------------------
    Unfortunately, we cannot expect this pandemic to be an 
isolated event, and what we can do now will help improve our 
overall preparedness and response for this crisis, but also for 
whatever is in store for us in the future.
    We are in the middle of a war right now, and it is too soon 
to declare victory, but I am sure we will eventually prevail. 
We are dealing with on one side the virus, which continues to 
spread and cause severe disease in new populations and 
certainly new countries and new regions. We are dealing with 
variants, 15 so far that are of some degree of concern, and one 
of which, the B117 variant, which is now the dominant 
transmitted virus in the United States. But we are also dealing 
with vulnerability, a population of people that is increasingly 
vulnerable not just to the impacts of this virus but also the 
disruption in our social system, our care system, and the 
experiences that they have with the difficulties in sustaining 
care and treatment for their other underlying medical 
conditions.
    On the good side, we have the vaccines, which I think have 
exceeded everyone's expectations. We have a lot more to learn 
about them, the safety, the long-term durability of their 
protection, and I will not be surprised if down the road we 
will need a 2.0 or a 3.0 vaccine armamentarium. But at the very 
least, this is an incredibly powerful tool, and we need to make 
sure that we can deploy it to all the people who need 
vaccination.
    We also have vigilance, and I know this is a controversial 
topic, but we have seen around the world that vigilance really 
can contain this pandemic without vaccine. We need to ask our 
citizens to continue to contribute that part of the equation 
until such time that we really do have vaccine-induced 
immunoprotection.
    In my written testimony, I try to summarize the critical 
requirements for success, the lessons that we have learned so 
far, and some of the action items that I think we could be 
taking right now that would strengthen our position. I will not 
review all of those, of course, but I do think that, in 
addition to the sort of interim lessons learned analysis, we 
need to strongly encourage a commission, a review of all of the 
complexities that this pandemic has created for us, something 
along the lines of the 9/11 Commission that Dr. Phil Zelikow 
chaired in the past. Some of us are actually involved in 
supporting the planning for such a commission. I think down the 
road that is going to really be helpful not just to this 
Committee but to our Nation as we harden our biosecurity front 
lines and really get serious about what we need to do to 
protect America. So let me just talk about four critical areas 
that I see as the most important right now.
    First and foremost is still case detection, and while we 
have made incredible progress with the support of the private 
sector and getting all kinds of tests available, we are still 
missing cases, and that becomes extremely important in the 
construct of vaccine breakthroughs or recurrent infections in 
people who have been infected more than once, as we need to 
understand how the variants are playing into that and what 
really is the long-term outlook for protection. So we must 
continue that ability to test and look for the genomic 
variability.
    In order to do that, we need to think about how to support 
the front line of that effort, and that takes more than 
emergency funding. We really have to transition to sustainable 
funding models that allow our public health system to invest 
and develop the workforce necessary to provide these services, 
but also a more proactive stance going forward, and that 
includes funding our immunization infrastructure, the data 
system modernization that you have already referred to, and the 
ability to use more modern techniques and tools in the digital 
space to improve the speed and accuracy of this overall case 
detection phenomenon.
    We must also improve our care to sick people. I think we 
have made progress there, but we are not deploying the 
guidance, and the front-line workers are not necessarily using 
the tools that we have made available. As I said, we still need 
to slow transmission in communities, and we have new tools 
there, too. Merck, for example, is hoping that we will be able 
to assess one of our antiviral medicines as a post-exposure 
prophylaxis tool, and there are others that might add to our 
ability to keep people out of the hospital and slow down 
transmission in our communities.
    The last piece of this, of course, is countermeasure 
development. I have already said the biggest lesson learned is 
how important our biopharmaceutical and related ecosystem has 
been, surprising everyone with the speed, the collaboration, 
and the overall volume of countermeasures that have been coming 
forward. But we need to focus on the deployment of those 
countermeasures not just in the United States but globally, 
because, there is no wall tall enough to keep this virus out; 
and if it is being spread anywhere in the world, it presents a 
threat to us.
    We also need to think ahead, and I hate to be a harbinger 
of negative information, but I think we are learning our lesson 
at a much faster pace now about how frequently these emergences 
will occur. So we have to change our doctrine of response to 
being much more involved in predicting where spillovers will 
occur, preempting those spillovers, and expanding, at least an 
order of magnitude, our armamentarium of countermeasures 
through mechanisms like CEPI, National Institute of Health 
(NIH), and most certainly the private sector, which I believe 
we have learned is absolutely critical to both the development 
as well as the manufacturing of these countermeasures in real 
time going forward.
    I will stop there and just thank you again for including me 
in this hearing.
    [Pause.]
    Senator Portman. Mr. Chair, I think you are on mute.
    Chairman Peters. Oh, sorry about that. Thank you, Dr. 
Gerberding. You missed my ``thank you.'' Now that I am off 
mute, thank you for your testimony and for being here today.
    Our third witness is Mr. Joseph Nimmich, former Deputy 
Administrator of the Federal Emergency Management Agency (FEMA) 
at the U.S. Department of Homeland Security (DHS) from 2014 to 
2017. Mr. Nimmich is currently a partner at Potomac Ridge 
Consulting. He served in the United States Coast Guard (USCG) 
for over 33 years and retired in 2010 as a Rear Admiral. Mr. 
Nimmich has four decades of experience in disaster management 
and response and recovery operations.
    Mr. Nimmich, it is great to have you here today to testify. 
You may proceed with your five-minute opening statement.

  TESTIMONY OF THE HONORABLE JOSEPH NIMMICH,\1\ FORMER DEPUTY 
 ADMINISTRATOR (2014-17), FEDERAL EMERGENCY MANAGEMENT AGENCY, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Nimmich. Good morning, Chairman Peters, Ranking Member 
Portman, and members of the Committee. Thank you for this 
opportunity to appear before you. I am proud to have served as 
the Deputy Administrator at FEMA and in the U.S. Coast Guard. I 
hope my experiences provide insights useful to your program of 
learning lessons from the COVID-19 response and the future 
preparedness of our Nation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Nimmich appears in the Appendix 
on page 60.
---------------------------------------------------------------------------
    The work of the Commission on the National Response 
Enterprise convened by Business Executives for National 
Security (BENS) has strongly influenced my thinking about the 
pandemic response. I was honored to serve as a Commissioner in 
this effort, along with a very august team of leaders from 
business, civil society, and government at all levels, 
including Senator Hassan and Senator Cassidy.
    The whole-of-society approach to this challenge made the 
work of the Commission second to none, in my opinion, and 
resulted in 11 actionable recommendations for redesigning our 
response capabilities that I offer to the Committee to look at 
closely.
    I want to start with some good news. The Commission found 
that the components of our integrated national response 
capability are largely in place, but COVID-19 response exposed 
critical execution challenges, particularly when a crisis 
impacts numerous States simultaneously.
    I would like to focus on two of the areas of weakness 
identified today--that is, the exercising of our response plans 
and the surging of the human capital, the ability to respond to 
the crisis.
    For exercising, the lack of planning really causes a 
performance shortfall. It is usually the fact that a plan is 
never as good as when it is first created. Time passes. New 
crises deflect decisionmakers' attention. People in positions 
change dissipating the trust between stakeholders, and the plan 
loses its effectiveness.
    The U.S. had multiple plans for the response, and, 
Chairman, you have already indicated the exercise in 2019 
called ``Crimson Contagion.'' It encountered and predicted 
virtually every problem experienced less than several months 
later during the COVID-19 response. Why were we not more ready? 
The BENS Commission identified weaknesses in the national 
exercise program and contributed the performance challenges we 
saw in responding, including the low frequency of national-
level exercises, the limited participant knowledge of our 
plans, the National Response Framework (NRF), and the crisis-
specific action plans, the lack of clear understanding of 
authorities that are dictated in multiple authorizations and 
Homeland Security Presidential Directives (HSPDs), and the 
delegation of the responsibility for participating in those 
exercises from the decisionmakers to their subordinates. Only 
frequent and continual exercising keeps plans alive, enabling 
updating and improvements. When we think of Crimson Contagion, 
there was no time to be able to improve the response from the 
time the exercise occurred because it occurred so late in the 
process.
    Elevating the priority placed on exercising drives more 
effective coordination of the plans, and it allows the entire 
emergency response enterprise to be aware of the plans.
    When we talk about surge, right now 80 percent of FEMA's 
workforce is deployed in support of national COVID-19 
vaccination efforts as well as existing disasters. The problem 
is that these FEMA employees have day jobs. They run the 
National Flood Insurance Program (NFIP). They oversee the 
billions of dollars in grant programs. They hire the FEMA 
workforce. They provide the information technology (IT) that 
FEMA relies on. Continual deployment caused by escalating 
frequency and significance of disaster declarations has put 
unsustainable pressure on the FEMA personnel and the agency 
itself.
    I am passionate about one of the Commission's 
recommendations to alleviate the pressure: the creation of a 
true civilian expertise reserve (CER) program for disasters. 
Modeled after the National Guard, these CERs could activate for 
service in both State and Federal crises and would provide 
emergency managers with a highly trained rapid response force 
of professionals, just as the National Guard does today. They 
would possess the skills and experience contemporary 
emergencies require: data analytics, cybersecurity, information 
technology, along with what we would expect, medical, 
engineering, and construction capabilities. They would have the 
same protections provided by USARA as the National Guard does.
    The Guard's command and control structure could present a 
model for the CER management with State-based operations, a 
leadership hierarchy in each State, and a national leadership 
based in Washington, DC, to assume command of these forces when 
Federalized. As envisioned, the Civilian Expertise Reserve 
workforce gives the Nation a trained workforce to address 
disasters large and smile, while delivering the essential 
capacity only when it is needed.
    In closing, FEMA now has activated for nearly 400 days. 
That is five times more than the 70-day record of 2017. The 
dedication of every one of our Nation's first responders and 
FEMA employees is incomparable. They answer the call every 
single time America needs them. Congress needs to understand 
the pressures on FEMA, provide the necessary authorities and 
adequate resources for the agency's success. The Nation 
deserves it.
    Thank you again for your time today, and I will be happy to 
answer any of the Committee's questions.
    Chairman Peters. Thank you, Mr. Nimmich. We appreciate you 
being here today and for your testimony.
    Our final witness today is Ms. Elizabeth Zimmerman, former 
Associate Administrator for the Office of Response and Recovery 
(ORR) within FEMA from 2014 to 2017. Ms. Zimmerman is an 
internationally recognized emergency manager with over 35 years 
of experience, and during her tenure at FEMA, Ms. Zimmerman 
held dual titles of Associate Administrator and Director of 
Disaster Operations where she directed and coordinated programs 
and day-to-day operations within FEMA's Response, Recovery, 
Logistics, and Field Operations Directorates, including during 
major disaster and emergency activations.
    Welcome, Ms. Zimmerman. Good to have you here with us. You 
may proceed with your 5-minute opening Statement.

   TESTIMONY OF ELIZABETH A. ZIMMERMAN,\1\ FORMER ASSOCIATE 
ADMINISTRATOR (2014-17), OFFICE OF RESPONSE AND RECOVERY OF THE 
    FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF 
                       HOMELAND SECURITY

    Ms. Zimmerman. Great. Good morning, Chairman Peters, 
Ranking Member Portman, and Members of the Committee. I thank 
you for the opportunity to speak with you today regarding the 
preparedness for COVID-19.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Zimmerman appears in the Appendix 
on page 65.
---------------------------------------------------------------------------
    The COVID-19 pandemic is a maximum of maximum event that 
has stressed and challenged the United States' health, social, 
and economic systems. This was a national emergency, not just a 
public health emergency, and for the first time in our Nation's 
history, all 50 States, the District of Columbia, and the U.S. 
territories were under a State of emergency due to the 
consequences of COVID-19 being so severe, and they overwhelmed 
the State, local, tribal, and territorial (SLTT) governments.
    COVID-19 differs from other State and regional emergencies 
in that every level of government was responding and focused on 
saving the lives of their residents, while attempting to 
prevent the collapse of their economy and medical systems. All 
levels of government and the private sector were competing for 
the same scarce resources such as medical personnel, PPE, and 
ventilators, while simultaneously attempting to prepare for the 
unknowns of the COVID-19 global pandemic.
    Several issues arose in the early days of COVID-19 that in 
hindsight could have been handled more effectively and 
efficiently. Our Nation's emergency response and public health 
systems must learn from our recent experiences and mistakes by 
taking action now to update the plans, procedures, and better 
define the authorities to be ready for the next pandemic or any 
national emergency.
    In my written Statement, I outline six areas that I believe 
require further exploration for lessons learned, including the 
issues and recommendations for these changes. The six areas 
included the plans, lead Federal agency, data management models 
and forecasting, commodities and logistics, the funding, and, 
last, the workforce. I am going to highlight a few of the 
issues and recommendations now.
    The plans: The National Response Framework is the 
overarching foundational framework for how we as a country 
respond to and coordinate disasters. The NRF is used by all 
levels of government to develop their plans. At the onset of 
the pandemic, the NRF, the incident command and coordination 
system were not acknowledged as being used. COVID-19 was being 
managed by siloed health system operations, not coordinated 
across the whole of government or with the private sector. In 
mid-March 2020, when FEMA was named as the lead Federal agency 
and brought the response under the NRF and organized the 
National Response Coordination Center (NRCC), which is a system 
that everyone is trained, exercised, and accustomed to use.
    Recommendations going forward is that the NRF should be 
used for all events and incidents as the foundation for 
response operations in the U.S. Any agency can lead the 
coordination under the NRF.
    The second issue was designating a lead Federal agency. 
Many times during national crises, FEMA becomes the Federal 
Government's 911. COVID-19 was not the first time FEMA has been 
called upon to organize and/or lead events on behalf of another 
Federal agency that is outside of FEMA's Stafford Act 
authority. H1N1, Ebola, Zika, Flint water crisis, the surge and 
sheltering of unaccompanied minor children all fall within HHS' 
mission and responsibility.
    FEMA was also involved in the U.S. Environmental Protection 
Agency (EPA) and U.S. Coast Guard's Deepwater Horizon response, 
the Department of Agriculture's (USDA) avian flu response, and 
the U.S. Department of Housing and Urban Development (HUD's) 
long-term recovery and housing missions. While FEMA 
successfully took on these responses, if FEMA is going to be 
the 911 for the Federal Government, they must be given 
authority, staffing, and resources to ensure successful 
outcomes.
    Which leads to my third and final issue and recommendation 
that I will mention this morning. Typically, this time of year 
FEMA's workforce has down time amid responding to tornados, 
severe storms, and river flooding; however, this is not so in 
2021. They have been working nonstop for over 15 months, with a 
record number of staff deployed, second only to the 2017 
hurricane season, and they are expected to top that number of 
deployed staff by early May. They are stretched very thin, and 
we know hurricane season is right around the corner.
    The recommendation is that if FEMA is going to be the go-to 
agency, their Reservist Program needs to be increased and 
professionalized, similar to the military reserve corps, as Joe 
Nimmich also mentioned earlier, where individuals can take a 
leave of absence from their jobs to serve their country and 
have the guarantee of returning to their job.
    I thank you for the opportunity to participate in today's 
hearing. As a lifetime emergency manager, it is important for 
us as a Nation to make sure we include the whole community--
government and nongovernment, private sector--in preparing for, 
mitigating against, responding to, and recovering from 
disasters. We need to be prepared now for the next pandemic. As 
COVID-19 demonstrated, it is not if but when it will happen. I 
look forward to our discussion this morning, and I thank you 
for this opportunity.
    [The prepared Statement of Ms. Zimmerman follows:]
    Chairman Peters. Thank you, Ms. Zimmerman, for your 
testimony. You are absolutely right. The men and women of FEMA 
do not have any down time, and they certainly --we all 
appreciate their work. They are outstanding professionals, and 
we appreciate all that they do each and every day.
    Last month, former White House coronavirus response 
coordinator Dr. Deborah Birx said, and I am going to quote Dr. 
Birx here: ``There were about 100,000 deaths that came from the 
original surge. All of the rest of them, in my mind, could have 
been mitigated or decreased substantially.''
    That is certainly a pretty damning assessment in the wake 
of over half a million deaths in the United States and 
increasing cases in Michigan right now and in States across the 
country.
    So my first question for you, Dr. Lurie--I am not going to 
ask you to put any kind of number on it, but, generally, would 
you agree with Dr. Birx's assessment?
    Dr. Lurie. Oh, absolutely I would agree, and I think there 
have been a number of, you know, modeling exercises that have 
suggested that 40-plus percent of the deaths were avoidable. I 
want to remind us that it is not only the deaths, but it is 
people who have suffered long-term health consequences from 
COVID; it is people who have suffered long-term mental health 
consequences from COVID; it is their families, and obviously 
the consequences of social and economic disruption.
    I would also just say, going forward, there is still a lot 
of opportunity to avoid deaths, not only with vaccination but, 
as you and Dr. Gerberding point out, by taking seriously now 
the surge we are seeing in cases and having people take the 
appropriate public health measures. We are still all in this.
    Chairman Peters. Absolutely, we definitely are.
    Dr. Gerberding, would you agree with Dr. Lurie and Dr. 
Birx, again, without giving any numbers but the general 
assessment of their Statements?
    Dr. Gerberding. Of course, I do not have the actual data or 
the modeling raw material, but I think it is common sense that 
if we had been able to identify cases and isolate them and 
their contacts sooner, we would have seen a much slower startup 
to this problem, and we would have bought a lot more time than 
we were left to deal with once we recognized how widespread it 
had already become. So that clearly is a major issue. The 
reasons for it are complex. I have tried to understand them 
from the outside looking in, but I think, as I mentioned in my 
written testimony, there are some things we can do now to 
harden ourselves against a future that brings that particular 
problem to bear, again, on the inability to respond initially.
    I will also say that this is a shared responsibility. CDC 
certainly made its share of missteps at the beginning. We also 
needed some regulatory support for expanding access to tests 
when they became available, and then a faster mechanism to 
bring the private sector that can really scale testing into the 
situation. So the solution is broad but, nevertheless, it was a 
very early and unfortunate problem.
    Chairman Peters. No question about that, and I want to 
focus now with you, Dr. Gerberding, on the three week period in 
late February to early March 2020, at the very beginning of 
what we saw with this pandemic. The number of COVID-19 cases in 
the U.S. increased by more than 1,000-fold, according to the 
CDC--a critical period, clearly, at the beginning of this 
pandemic.
    My question to you is: In your view, what factors led to 
that rapid rise in COVID-19 cases? And you have alluded to many 
of the different types of stuff, but if you could just focus in 
on that initial stage, which was just so critical, what steps 
could the Federal Government have taken to mitigate that spread 
right at the very outset during that three week period, late 
February to early March?
    Dr. Gerberding. Yes, I think it is tough. What we now know 
in retrospect is this is one of the most transmissible viruses 
we have ever had to deal with from a respiratory perspective. 
The fact that we had ongoing coronavirus transmission but 
essentially no flu transmission tells you what the differential 
is in terms of their probability of spread. So it was a really 
tough challenge, and it was made a lot tougher by not being 
able to get in there early and really not just look at people 
with a travel history or those that we suspected were at high 
risk, but to understand very early in the course of things that 
asymptomatic transmission was happening at a rate, again, 
somewhat unprecedented in disease transmission. And we also, I 
think, really would have been much more assertive about doing 
sampling studies, population-level sampling studies where we 
really look for the hot spots based on what we know about 
previous settings where viruses are easily transmitted by the 
respiratory route, and accelerated the science of the 
transmission coefficient so that we would be able to better 
predict where to go to look for cases even when testing was not 
widely available.
    So in a sense, this was a failure of imagination, a failure 
to appreciate that this was not going to be like severe acute 
respiratory syndrome (SARS) or Middle East respiratory syndrome 
(MERS) where the efficiency of transmission from person to 
person was low. This was a disease that spread like wildfire, 
and we responded as if it were sort of business as usual.
    Chairman Peters. Dr. Lurie, I want to ask you a question 
related to those very initial stages as well where we saw this 
acceleration of the spread of the virus. In your testimony, you 
identify multiple missteps in that initial response, and you 
specifically highlight--and I want to quote what you 
specifically highlight. You say,``. . . all the authorities in 
the world cannot make up for the failure of leadership.''
    My question to you is: What avoidable harm, in your view, 
flowed most directly from this failure of leadership as the 
initial pandemic response unfolded in January, February, and 
March of last year?
    Dr. Lurie. I think the avoidable harm started with the 
ability of the virus to spread like wildfire because we did not 
acknowledge that it was going on and we did not take the steps 
to contain it, either the public health kinds of measures that 
Dr. Gerberding talked about, the steps to ramp up things like 
the production of masks and PPE to protect health care workers 
and to protect the supply chain and others, and everything that 
has unfolded from there.
    If you think that the first 100,000 cases were maybe 
unavoidable, or less, certainly we could have changed the 
trajectory of this and saved countless lives.
    So the failure to take all of the early actions, those that 
I mentioned and more, were really all avoidable and would have 
been much more avoidable had there been open and public 
acknowledgment of these risks. Even if we did not know how bad 
it was, it was our responsibility to prepare for the worst and 
to alert the public.
    The other really avoidable harm has been the politicization 
of this, and so the public has gotten really confused about who 
to believe, what to believe, and obviously, people are still at 
odds with each other over a lot of aspects of this.
    Chairman Peters. All right. Thank you.
    Ranking Member Portman, you are recognized for your 
questions.
    Senator Portman. Great. Thank you, Mr. Chairman. And thanks 
to all the witnesses.
    I want to start with the surveillance issue. We talked a 
lot this morning already about CDC, but what happened? Why 
didn't CDC have the ability through the surveillance systems 
that we had in place to be able to detect this sooner? It seems 
to me they were relying on incomplete and outdated public 
health information, among other things, as I said in my 
opening. Some of you have talked today about the need for 
digital monitoring and that there were early warning signals 
that were not picked up.
    Dr. Gerberding, you focused on that. What sort of 
surveillance indicators was the CDC relying on at the outset of 
the pandemic to inform the public health response?
    Dr. Gerberding. I think first and foremost was to take a 
look at what was going on globally. We had some information 
about the extent of spread in the Wuhan Province. We had 
examples of pretty well documented spread from travelers into 
work settings in other parts of the world. I think the clues 
were there that this was a very transmissible infection, unlike 
SARS was in 2003. So that was the first thing, is to lean into 
the threat that exists.
    The second thing is testing and, you know, I think it was 
unlikely, even under the most rehearsed scenario, that we would 
have been able to immediately deploy a test for a brand-new 
pathogen to 300 million people on short order. But we certainly 
could have utilized the tests that were available elsewhere in 
the world that had proven to be useful, and we could have 
worked much faster to bring the scale of testing up to speed 
with better cooperation and earlier engagement of the academic 
sector as well as the private sector. So the first thing that 
needs to happen is case detection and then the isolation of the 
cases, the quarantine of their contacts.
    Now, that is a problem in the United States because finding 
contacts is basically shoe leather right now. It means you have 
to go out and more or less door-to-door to track down the 
people who might have been exposed. And our workforce is way 
too thin to have been able to accomplish that once we had so 
many cases. It became almost impossible.
    I think a third piece of this is to use our epidemiologic 
common sense and recognize that with a respiratory pathogen 
there are going to be certain congregate settings--confinement, 
high degrees of contact--where there is likely to be 
transmission, and to get into those settings first, do the 
testing and the epidemiologic assessment so we are ahead of the 
curve rather than waiting until cases were hospitalized and 
then find the hot spots in retrospect. So a lot of things are a 
combination of testing, workforce scarcity, and I think, again, 
just the inability up front to imagine how bad it was going to 
be.
    Senator Portman. I would like to dig a little deeper on the 
testing with you and Dr. Lurie and anybody else who wants to 
jump in. But backing up on surveillance for a moment, because 
it is not just about testing, as you indicate it is also about 
the World Health Organization (WHO) telling us what was going 
on, which they did not, China being more transparent, we know 
that. But what type of fixes do you think we need to make 
beyond additional funding, which I appreciate, and I appreciate 
the fact that you said the personnel are needed. You mentioned, 
for instance, using technology better in your testimony and 
digitizing some of this. Just quickly, if you could, what could 
we do under a surveillance system, in addition to testing, to 
make it more effective?
    Dr. Gerberding. One really important point that I think is 
implied in your question is that this is a global challenge, 
and if we had really actualized the promise of the global 
health security agenda, we would have had much better insight 
into where this disease started and how fast it was spreading 
internationally. We do need to come back to that global network 
of surveillance, not just a U.S. network. In the United States, 
I agree with you on the digital tools and the application of 
our technology in new and exciting ways, but at the end of the 
day, it boils down to case detection as the first step.
    Senator Portman. Yes, let us talk about testing for a 
second. Again, anybody is free to jump in here. I tell you, my 
frustration on testing was that CDC--and some of you have been 
involved in CDC over the years, and, there is plenty of blame 
to go around here. But CDC had lousy tests. In Ohio, we were 
given a bunch of CDC tests, and that was the only place to get 
tests, as we understood it. They did not work. There were 
defects in them. It prevented our labs from being able to 
validate the tests, rendering them basically useless.
    I do not know if you know this, but in Ohio, the result of 
this was that some of the private sector jumped in, and 
particularly the Cleveland Clinic developed its own test, and I 
will give you some dates here. We got our botched tests from 
CDC on February 7th. We did not get a working test from CDC 
until March 5th, so virtually a month went by. And talk about a 
waste and an opportunity to save lives. And the Cleveland 
Clinic developed their own test and put it online on March 
13th. That test I took, by the way, early on. But why were we 
so reliant on CDC? Shouldn't we have been encouraging the 
private sector to be involved all along? Again, Dr. Lurie, if 
you could jump in here, how did the legal and regulatory 
landscape at the time help or hinder institutions like the 
clinic, to use them as an example, but there were groups all 
over the country doing this, developing their own tests? Could 
you respond to that, Dr. Lurie?
    Dr. Lurie. Yes, sure. What I would say is, when it was 
clear very early on that we were going to need an awful lot of 
tests, and tests were developed around the world. As Dr. 
Gerberding said, some of them worked quite well, and we could 
have used them. When CDC was struggling with its tests, or even 
before, BARDA should have exercised its authorities and gotten 
in early on to stimulate the development of diagnostic tests 
across the private sector and in the academic sector so that 
you would have had a variety of tests earlier.
    No one--there was no entity that took responsibility for 
pulling samples together to validate diagnostic tests, and so 
all the test developers really struggled. And so FDA gave an 
awful lot of them a pass and said, well, you are not going to 
need an Emergency Use Authorization (EUA); we are going to go 
ahead and assume a number of things. Then it turned out that we 
had diagnostic tests that did not perform well at all and had 
to come back off the market.
    So the failure to get in early, ask the private sector to 
develop tests, agree to work with them, provide the sept that 
they would need for validation, and then be able to scale I 
think were really significant failures stemming from the 
failure to want to recognize that this was happening.
    Senator Portman. Thank you. We have to learn from that, 
clearly, and, it amazes me that we were so ill prepared in 
terms of our diagnostics.
    My time is coming to an end. Admiral Nimmich, I had planned 
to ask you some questions about the BENS Commission. I 
appreciate the work on that. Senator Hassan was involved, who 
is on the panel today, and Senator Cassidy. But we really have 
appreciated that, and we are using some of your work. I guess 
the planning and the exercises, were not adequate in this case, 
and one question I want to leave with you as I end my time is: 
Is FEMA the right organization to head up something like this? 
There is a difference of opinion as to whether it should have 
been HHS or FEMA. And was FEMA the right entity? I will sort of 
leave that question out there hoping that somebody else follows 
up on it who has more time available.
    Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Ranking Member Portman.
    Senator Hassan, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR HASSAN

    Senator Hassan. Thank you, Chairman Peters. And to Ranking 
Member Portman, thank you as well for the nonpartisan approach 
that you have taken to convening this hearing.
    To our witnesses, thank you for being here today, but also 
thank you for your service.
    I do want to start with a question to Mr. Nimmich, and I 
will ask you the question, and then if you want to fold into 
your answer a little bit about your thoughts to Senator 
Portman's question, that is fine, too.
    It was really a pleasure, Mr. Nimmich, working with you on 
the BENS Commission on the National Response Enterprise. In 
your testimony, you discussed one of the topics addressed by 
the Commission, which is the importance of exercising emergency 
plans. A report from the 2019 Crimson Contagion exercise found 
that, with regard to the crisis in that exercise, there was 
``confusion between HHS, FEMA, and the Department of Homeland 
Security on which Federal agency would take lead in the 
crisis.'' Unfortunately, we witnessed this very same confusion 
between the role of HHS and FEMA during the COVID-19 pandemic, 
and this confusion certainly contributed to an overall lack of 
coordinated national response.
    First, Mr. Nimmich, do you support updating the Stafford 
Act to clarify FEMA's response role to include pandemics?
    Mr. Nimmich. I think the two questions are highly related, 
and the question really comes, support and supporting. I use an 
awful lot of Department of Defense (DOD) concepts because 
response to whether it is a Department of Defense issue or a 
domestic issue, responding is pretty standard. I do not think 
it is--it is a requirement that we identify early on who is the 
lead agency and who is supporting them. You can add into the 
Stafford Act for pandemic, for cybersecurity, cyber events, and 
that would allow FEMA to be funded to do the work that is 
necessary. But it does not have to put FEMA in the leadership 
role. FEMA coordinates, and they take the rest of the whole of 
government and bring it to the event.
    I do think that FEMA has a role to play in a pandemic. It 
has a role to play in almost any type of a national crisis. But 
it does not necessarily have to be in the lead, but it has to 
be defined early. The pandemic playbook that the NSC had in 
their hands had triggers of when certain things should happen, 
and those triggers rely on the data, whether it comes from CDC 
or someone else. You have to validate those. You have to 
exercise that and make sure each administration is comfortable 
that the data they are receiving, when the trigger is set, that 
they know who they are going to put in charge.
    Senator Hassan. Thank you. I want to follow up on that a 
little bit just in terms of the exercise issue as well, because 
regarding the 2019 exercise that identified this potential 
problem, how do we ensure that the Federal Government is 
actually implementing improvements on what is learned from 
these emergency exercises?
    Mr. Nimmich. I think that is a great question, and the 
challenge always is where do the resources and the policy 
changes being made in order to address the problems you found 
in the exercise. All too often we say that was a great 
exercise; we planned for what we can do and not necessarily 
what will be done. I ran the Spill of National Significance 
(SONS) exercise in January and February 2010. We did a great 
job. We identified certain problems. But we planned on what we 
could do, a ship running aground with 600 million gallons of 
oil. We learned in April of that year that you can have an 
uncontained spill, with the new Horizon. I do believe it is 
planning for, as Dr. Lurie said, sometimes the unimaginable and 
then exercising those plans.
    Senator Hassan. And then making sure there is communication 
about what you learned.
    Mr. Nimmich. That is right, the policy and the funding.
    Senator Hassan. Thank you.
    To Dr. Gerberding, as former CDC Director, you understand 
the importance of communicating effectively with the American 
public. As you know, there was some who are concerned that 
vaccine hesitancy may begin to impact our vaccine 
administration efforts in the coming weeks. What steps can we 
take now to improve public confidence in existing COVID-19 
vaccines so that we can vaccinate at a rate that mitigates the 
threat of emerging variants? How do we communicate the 
importance of vaccination as critical steps toward reaching 
herd immunity?
    Dr. Gerberding. Thank you so much for bringing this up, 
because as I am sure you know, at baseline we deal with a 
severe crisis in vaccine confidence in the United States and 
elsewhere, so this pandemic has brought that to the forefront 
in every way.
    The good news is the efforts so far, which particularly 
emphasized reaching into the communities and constituencies 
that have the greatest degree of concern and bringing not just 
scientific information facts and figures, but the messages and 
the engagement of people they trust. Sometimes at the community 
level that is a pastor or a barber, or it may be the front-line 
primary care provider. But we have to build out a network of 
people who have the facts, but also have the trust of the 
community.
    In many communities the government is not the most trusted 
part of the equation, nor are the manufacturers of vaccines. 
This is a matter of all of us affecting--in my company, at 
Merck, we are working hard to build confidence among our own 
employees. We are working with the World Economic Forum (WEF) 
to help employers understand how they can inform their 
employees and help them make the right choice about 
vaccination. I think it is an uphill battle, and we are pleased 
with the support and the supplement to help the CDC lead that 
communication effort. At the same time, we have a long way to 
go before we really achieve herd immunity on the basis of 
vaccination because of the reluctance of so many people. 
Whenever there is a safety concern, people really struggle to 
put the very high risk of COVID into the context of low but 
real potential risk from immunization. It seems like the risk 
of the vaccine looms so large in your mind, and yet the risk of 
COVID is deadly to far too many people, and we have to help 
folks recognize that this is a really important tool, 
especially if we use it right now.
    I would love to talk with you offline more about this 
because I think there is much more we can and should do.
    Senator Hassan. I thank you because you really answered my 
next question, too, about how do we get to communities where 
the skepticism is the greatest and that have traditionally and 
historically faced the biggest challenges in access, too. I 
will look forward to that. I thank you so much, too, for 
pointing out not only the risk of death from COVID but also the 
long-term risks for long-haul COVID patients compared with the 
low risks of vaccine.
    Thank you, Mr. Chairman, and, last, I will just say to Mr. 
Nimmich, you can expect a follow-up question from us on how do 
we make sure that we have the kind of surge capacity we need as 
we move forward with FEMA having more and more responsibility 
as that kind of lead emergency agency.
    Thanks again for the hearing.
    Chairman Peters. Thank you, Senator Hassan.
    Senator Hawley, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR HAWLEY

    Senator Hawley. Thank you, Mr. Chairman. Thanks to the 
witnesses for being here.
    Ms. Zimmerman, I would like to start with you, if we could, 
and discuss the supply chain issue. I noticed in your written 
testimony your recommendations about logistics and just-in-time 
manufacturing, saying that they do not really work in your 
experience and observation when we are in the midst of a global 
event like the one we have just gone through. I certainly agree 
with that, and I am wondering if you can just elaborate about 
your experiences at FEMA. What demonstrated to you that the 
just-in-time model is insufficient for a major crisis like the 
one that we have just gone through?
    Ms. Zimmerman. Right. Thank you, Senator. The just-in-time, 
when we are working especially in the medical supply chain, 
medical supply to hospitals, what we have noticed is that they 
do not have supply on hand for much more than a few days. They 
require the just-in-time to replenish. They have their 
contracts so that they can get the supplies they need for their 
day-to-day operations come in, and they do not have to also 
have a huge warehouse to store them in. They rely on the 
private sector for doing that.
    So being able to get those commodities when you need them 
in the extreme amounts that we did during COVID in early days 
before manufacturing can get pulled up, it made it very 
critical, and that is when we saw that, there were not supplies 
within the United States. We needed to go elsewhere. We needed 
to go to other countries and when it was set up to bring in the 
commodities from other places.
    So the just-in-time can work fine in smaller events, just 
like the FEMA distribution centers that they have across the 
country, that stockpile of the water and the blankets and the 
things that we need to protect lives and get things stabilized 
during normal natural disasters that FEMA works in. But when it 
really comes to a global event like this, just-in-time does not 
work when we do not have manufacturing ready to go to bring in 
those commodities in the numbers that were needed.
    Senator Hawley. I have been an advocate of reshoring our 
critical supply chains and introduced legislation to do that, 
and I think it is absolutely something that we have to pursue 
and make a top priority. But you and I both know that that 
process of onshoring will take time. It is vital we do it, but 
that is a medium-to long-term project that we need to start 
now. In the short term, do you have any recommendations about 
how we can reduce our reliance on the just-in-time model and 
improve our resiliency in the midst of a major crisis? What can 
we do immediately that will have short-term implications or 
effects?
    Ms. Zimmerman. I think immediately we need to look at what 
supplies are on hand. We look at the Strategic National 
Stockpile when it comes to COVID or any other pandemic and 
medical issue, looking at those types of things. We try to plan 
for those maximum of maximum events so that we have things when 
they use the Defense Production Act to change over 
manufacturing from cars to ventilators and that. How do we 
really do that? But what are those key critical things that we 
need? I think after the last year, we saw the PPE and the 
supplies that were needed by the medical first responders. We 
need to make sure that we have a way of getting those within 
those country and how we stand up those abilities immediately 
when we see something happening.
    I think this is an opportunity right now. We are still in 
the midst of the COVID-19, and where are we now with getting 
commodities in and how we have resourced and been able to get 
things even for the American people, the masks that people are 
wearing, the other supplies and things that we need, so looking 
at where we are today, and we need to accept where we are 
today, but what are those other things that we might need going 
forward? We need to be prepared to supply those.
    Senator Hawley. Very good. Thank you.
    Mr. Nimmich, let me just give you a chance to weigh in here 
given your experience at FEMA. Do you have a view on the supply 
chain question, whether that is stockpiling, as Ms. Zimmerman 
just said, stockpiling commodities or ramping up production on 
a temporary basis or something different?
    Mr. Nimmich. Not dramatically different, Senator, but you 
could tell from my body language, yes, I have some pretty 
strong opinions on the ability to move from just-in-time, and 
the National Stockpile is a good thing, but it is not the only 
thing we can do. While we are bringing ashore the capacity and 
being able to understand the Defense Production Act and how we 
would utilize that in a future capability, we can incentivize 
hospitals and local medical capability to go over their 
efficient level, to be able to bring in and actually rotate the 
stock of medical equipment so that if it is in the National 
Stockpile, it does not go stale on the shelf and then have to 
be replaced at a larger cost.
    I think we could look at ways of incentivizing hospitals 
and medical facilities to keep 110 percent of what their daily 
requirements are, and that 10 percent, if we incentivize it, 
the Federal Government or the States could reallocate to other 
areas. You have now distributed your stockpile across the 
Nation, and it is closer to where you are going to need it 
whenever you need it.
    Senator Hawley. That is good. That is very interesting. Let 
me ask you about the Supply Chain Stabilization Task Force led 
jointly by DOD and FEMA, which the last administration helped 
set up--or did set up to help coordinate and maximize the 
procurement of things like PPE. How well do you think that 
worked? What should we learn from that experience?
    Mr. Nimmich. Like any task force, it took time to establish 
itself understand each other's roles. When you again look at 
the Department of Defense, they understand the National defense 
industrial base. They know where the capabilities are. We do 
not try to create a comparable industrial base that we 
understand and we maintain, and it goes to your bringing back 
to shore the infrastructure to be able to do this.
    I think the task force performed admirably once it had been 
established and they understood each other's roles, but you 
have to have, like DOD does, the infrastructure in place to 
understand how you are going to do this before an event. 
Creating it during the event reduces that time to perform.
    Senator Hawley. Very good.
    Dr. Lurie. Let me just try to jump in here for a minute, if 
I could, with one additional suggestion, and we experienced 
both shortages in H1N1 and Ebola and found that in different 
places in the private sector and in government there were 
actually large supplies that were double and triple ordered, 
but the government did not necessarily have the mechanism to go 
to all the manufacturers and distributors and ask where it was 
in the system. So clarifying authorities for it to be able to 
do that in an emergency, you can see where it is and 
redistribute it quickly, I think would be very helpful.
    Senator Hawley. That is helpful. Thank you.
    I see my time has expired. I will have a few more 
questions, Dr. Gerberding, for you and, Dr. Lurie, for you as 
well for the record.\1\
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    \1\ The questions of Senator Hawley appears in the Appendix on page 
83.
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    Senator Hawley. Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Senator Hawley.
    Senator Rosen, you are recognized for your questions.

               OPENING STATEMENT OF SENATOR ROSEN

    Senator Rosen. Thank you, Chair Peters and Ranking Member 
Portman. This is a really important hearing, and I appreciate 
all the witnesses for everything you have done and for being 
here today.
    I want to talk a little bit about data tracking and early 
pandemic response. As we know, the pandemic dominated American 
life last year and, of course, into this year. Our focus has 
rightly remained on tackling the immediate challenges before 
us. We have to work to save lives and livelihoods.
    However, I do think there were missed opportunities to get 
a better picture of the pandemic, which is critical to 
understanding how to protect people dealing with the long-term 
effects of COVID, making sure we are not leaving anybody 
behind.
    So moving forward, I believe we need to be sure we have a 
comprehensive understanding of priorities while still doing 
research efficiently so that data collection does not delay us 
getting help to those who need it, it is not so cumbersome, 
because a novel virus like COVID-19, it is critical we have a 
full understanding of the impacts. Only through data collection 
is it going to tell you that.
    Last year, I introduced the bipartisan Ensuring 
Understanding of COVID-19 to Protect Public Health Act. I want 
to make sure we get started on those comprehensive long-term 
studies with regular reporting right away so that researchers 
and clinicians can have the latest information. Some of the 
studies have started, but, of course, there are significant 
gaps. I hope all my colleagues will join me.
    But, Dr. Gerberding, can you please discuss some of the 
remaining gaps in research we have, especially now that we are 
seeing the long haulers, people who are in it for the long 
term, they seem fine and things are popping back up? How does 
the virus seem to be impacting patients differently, especially 
so we need to do research on this?
    Dr. Gerberding. We have a lot to learn, to start with the 
medical dimensions of the infection. You are absolutely right. 
We do not really understand the actual pathogenesis or the 
mechanism by which this virus causes such a myriad 
constellation of diseases, everything from no symptoms all the 
way to devastating multi-organ system failure. Some of that is 
perhaps related to viral load; some of it is genetic. But there 
is much to be learned there, just at a very basic medical 
level.
    But, in addition, the syndrome of the post-infectious phase 
of COVID, which is increasingly recognized as the broad 
constellation of findings with a pretty durable impact on 
people, not just their physical health but their mental health 
and their ability to function, we have to understand this post-
infectious phase of illness. But I think there are also many 
things that we need to learn about the basic epidemiology, and, 
again, that is where data systems can be our best friend 
because we may be able to probe things from existing data or 
more rapidly get our hands on data that are evolving through 
our health systems and our public health systems to be able to 
draw connections and see patterns that we cannot currently 
recognize without the use of artificial intelligence (AI) or 
machine learning-type tools.
    The list of what we need to know is long. I think right now 
everyone is kind of focused on the most critical things in the 
context of care of patients and vaccination, but we are going 
to be with this coronavirus for a long time.
    Senator Rosen. I agree with you. The list is long, so we 
need a vast amount of information, but we need it quickly. I 
have heard from some caregivers up and down my State, 
especially in smaller, more rural areas. They are hesitating on 
some things because they do not know if they have the capacity 
to comply with the various reporting systems.
    How do you think we need to simplify the process so that 
everybody getting vaccinations and treatments in our community 
health centers, in our smaller hospitals, that we have the 
interoperability and the ease of reporting so we can get vast 
amount of data to us quickly? Dr. Lurie and Ms. Zimmerman, 
maybe you might respond to the collecting of data and the 
interoperability to give the doctors the tools they need going 
forward, give us all of us really.
    Dr. Lurie. Sure. I would say a couple of things. First of 
all, it got going late, but there are now mechanisms through 
something called ``Project Echo'' to pull doctors together 
every week for sort of peer-to-peer learning about best 
practices and how to treat one another. I would encourage all 
kinds of health care providers to take advantage of that.
    But make no mistake. Our data systems are really siloed. 
You are right; they are not interoperable. In fact, there are 
vast amounts of data out there that go unanalyzed because we do 
not have the tools to do it and we do not have the workforce to 
do it.
    Going forward, I think we could ask ourselves very fairly 
now, what needs to be done by humans? Or could you have sort of 
early aberrant signals picked up now by machine learning, by 
artificial intelligence, and others, so we could put the highly 
trained human capacity where it needs to go and not miss 
signals and be able to aggregate data much more quickly? On the 
data end, we have made such great progress from the perspective 
of integrating it or health care and public health data 
together into the way we understand the disease and the way we 
make decisions. We have a really long way to go and a huge 
opportunity there to do better.
    Senator Rosen. Thank you.
    Ms. Zimmerman, what do you think we might be able to do to 
help improve this interoperability between, I guess, I want to 
say ``partners,'' whether they are health care, FEMA, community 
partners, mobile clinics, you name it, hospitals, all of our 
system? Do you have suggestions for us?
    Ms. Zimmerman. Yes, thank you, Senator, exactly, because 
when you start chasing the data--and in the beginning of COVID-
19 everybody was chasing all sorts of data. There was no set 
parameters of what was needed to make decisions. In the 
beginning you are making it with limited data, and that is what 
emergency managers do. They go forth and push.
    But I think we have a great opportunity right now to look 
at what data provided us the best information in order to make 
those decisions. What are those immediate decisions you need to 
make at the onset of a pandemic or any type of major medical 
thing that is impacting the Nation? I think it is looking at 
what were the things that gave us the outcomes. To me, you need 
to look at the outcomes and what is the data needed to get that 
and to be able to put the smart people in the room to determine 
what is needed in that regard I think is very key right now, 
because, otherwise, with all of the technology and everything 
that is out there, we go chasing a lot of data points that do 
not give us an outcome that matters, and we need to look at 
what are those outcomes that are going to matter to shortening 
the time period for all of this that we have been through.
    Senator Rosen. Thank you. As a former analyst, I could not 
agree more that the data tells a story if you figure out how 
you need to listen to it, and we really need to understand the 
lessons we have learned that we can use, not just for going 
forward in this pandemic, but God forbid we have another or the 
next public health emergency. So this should be able to guide 
us.
    Thank you. I will submit the rest of the questions for the 
record.
    Senator Rosen. Thank you.
    Chairman Peters. Thank you, Senator Rosen.
    Senator Johnson, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman.
    Dr. Gerberding, first of all, welcome back to the 
Committee. I remember you testifying before our Committee on 
February 12th on many of these same issues. I am sure we talked 
about testing. I want to talk a little bit about that. But I 
know it was in that hearing that I found out, because FDA 
Commissioner Gottlieb also testified, about our lack of active 
pharmaceutical ingredient (API).
    As I further investigated that, I found out there is 
something even before API, which is what they call 
``intermediate.'' It is an odd name because it is really the 
precursor chemicals. It sounds like most of those precursor 
chemicals, because it is a dirty manufacturing process, occurs 
in China. Is that accurate?
    Dr. Gerberding. I think it depends on what product you are 
talking about, but the global supply chain that is the raw 
materials, the intermediates, and the API, certainly includes 
China, India, and many other locations around the world.
    Senator Johnson. But if we really want security in terms of 
our pharmaceutical industry, we really need to get not only API 
back in the United States, but we are going to have to do that, 
the intermediate, the precursor chemicals as well, and we are 
going to have to figure out how to do that environmentally 
safely. Correct?
    Dr. Gerberding. I think the safety and the fidelity and the 
consistency of the supply are really critical issues. All of us 
in the context of COVID have been examining our supply chains, 
not just for vaccines and the most critical countermeasures, 
but for our entire supply chain, many companies have a system 
of having kind of a bubble, sort of what we were talking about 
with the Strategic National Stockpile, so that we have a 
contingency planning around those intermediates. But our 
vulnerabilities are clear now, and we are going to need to do 
more to make sure we can sustain the most critical essential 
medicines and vaccines in times of international stress.
    Senator Johnson. Let us talk about testing. February 4th, 
we were still pretty early into this pandemic. I think 
everybody recognized we would like to get tests so that we can 
identify cases so we can quarantine people. It took many weeks, 
a number of stumbles. I guess maybe it is my manufacturing 
background where I am a little more sympathetic that these 
things just are not that easy. It takes time to ramp up 
manufacturing. You need basic supplies. We found out--just 
glass vials, we needed the reagents, we needed the chemicals, 
that type of thing.
    So the question I have is: Assuming we could have 
immediately get a test that worked, and even that, I mean, it 
is nice to be a Monday morning quarterback, but we did not even 
have the pathogen, we did not even have the virus. I do not 
know how much better we could have done, maybe a few weeks. But 
what do we need to put in place today, what supplies do we need 
to keep in the National Stockpile or through a private sector 
distribution system where we maybe pay people to carry excess 
inventories? Do we need glass vials? Do we need certain 
chemicals? What do we need so we can prepare and be testing 
earlier next time?
    Again, I am not sure we could have done that much better. 
Maybe by a few weeks. I think the horse was out of the barn at 
that point in time. I think we maybe overstate the case in 
terms of how the pandemic played out. But what do we need in 
terms of testing supplies?
    Dr. Gerberding. First of all, this is a perfect storm, much 
asymptomatic disease, so who do you test? You cannot test 300 
million people all at once, so that really challenged everyone, 
even, as you said, with the perfect test available to us.
    Second, scaling a test quickly depends not only on the 
ability to make the test kits and deploy them; it also depends 
on having the samples of known cases so that you can determine 
if the test is actually reliable or not. And that was a gap 
that I think Dr. Lurie has already mentioned.
    The third thing I would say about testing per se is that I 
worked at the CDC for a long time, and I have watched them 
before and after, and CDC is actually extremely good at making 
tests for new pathogens. So this problem in this situation was 
tragic, but an isolated situation, and I know there are going 
to need to be specific remediation steps. But going beyond 
that, I think to solve this problem in the future, we have to 
plan ahead for how we bring in the private sector right at the 
beginning and have the consortium of people available to work 
collaboratively.
    I do not think the testing issue is so much a supply issue 
per se as it was simply the ability to validate and prove the 
reliability. Of course, we have had a lot of bad tests come 
out, and we have had some counterfeit tests come out. That is a 
whole other set of issues that we kind of had to contend with.
    Senator Johnson. Again, it is fine to be a Monday morning 
quarterback, but I think we need to be a little careful. Back 
in 2009, with H1N1, CDC in the end estimated somewhere between 
43 and 89 million people got infected with H1N1. Right now we 
are about 31 million. To a certain extent, we have flattened 
the curve by what we have done. I think we need to actually 
take a look at the numbers. I have been tracking the numbers 
very carefully. Deaths per million, Italy, about 2,700; U.K., 
about 1,870--these are as of April 1st. The United States, we 
are at a little under 1,700. Everybody criticized Sweden for--
not everybody. I did not--for a different approach, isolate the 
sick, quarantine the sick, protect the vulnerable, and then 
have the rest of us go about our lives as carefully as 
possible. They are below us at about a little over 1,500. But, 
I want to see if anybody can explain why is India at 120 deaths 
per million when all these U.S. and European countries are well 
over 1,500 deaths per million? What is the difference?
    Dr. Gerberding. Many differences, but one of them is that 
testing is even less available in India. The infrastructure of 
public health there is even more impaired, many billions of 
people that are not necessarily accounted for are included in 
those numerators and denominators, and India----
    Senator Johnson. So you question the numbers on that one?
    Dr. Gerberding. I am sorry?
    Senator Johnson. You are questioning the numbers they are 
reporting.
    Dr. Gerberding. I think----
    Senator Johnson. I have no idea.
    Dr. Gerberding [continuing]. But India also right now is 
the leading edge of surge on a global basis, so they are coming 
into----
    Senator Johnson. A stark difference, 120 deaths per million 
versus--I will try to get an explanation on that.
    The final question I have is: I think we have to factor in 
the human toll, the cost, the economic devastation of these 
shutdowns, and really ask ourselves what was worse. We had Dr. 
Bhattacharya testify before our Committee talking about a WHO 
study that said there were 130 million people at risk of 
starvation. I think we have to within our pandemic planning, 
next time we jump to shutting down our economy, I think we have 
to also understand the human toll of these shutdowns. Would you 
agree or disagree with that?
    Dr. Gerberding. I think when you are looking at now 563,000 
deaths in America, it is hard to feel good about that----
    Senator Johnson. I am not saying we should.
    Dr. Gerberding [continuing]. Under these circumstances, so, 
we need to understand the full ripple effects. But, clearly, 
the social distancing and the isolation, the devastating 
economic circumstances have their own toll. There is no doubt 
about it. One of the most important dimensions of that is that 
people are not getting their ordinary care. We are not 
vaccinating our kids, we are not taking care of our diabetes, 
we are not screening for cancers. These are things whose toll 
with accumulate over a much longer period of time.
    So, yes, this is a very wicked problem we are trying to 
solve here. The most important thing is to contain the virus as 
quickly as we can.
    Senator Johnson. OK. Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Senator Johnson.
    Senator Ossoff, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR OSSOFF

    Senator Ossoff. Thank you, Mr. Chairman. Thank you to our 
distinguished panelists.
    Dr. Gerberding, I want to thank you as well for your 
service and leadership of the Centers for Disease Control and 
Prevention, which, of course, as you well know, are located in 
my home State of Georgia. We have such an outstanding team of 
public health professionals, medical doctors, and civil 
servants who lead our Nation's epidemiological efforts and 
disease control efforts.
    Dr. Gerberding, based on your experience and your 
assessment of what has gone wrong and what has gone right over 
the last year and a half, I would like to ask you to take this 
opportunity to make recommendations to this Committee and to 
the Congress with respect to how we can empower and resource 
the CDC to augment its capacity, empower its nonpartisan public 
health professionals, and make more robust our national 
capacity to adapt and respond to a pandemic.
    Dr. Gerberding. Thank you, and I will follow up with you 
because we are exploring this issue with the CSIS Commission on 
Global Health Security as well. But there are some big buckets 
here.
    First is structural. I think we have seen that it is very 
possible for the CDC science to not have the role it needs to 
have in planning and responding to a serious health threat, and 
that just cannot happen again. Scientists need to be able to 
bring the science to the policymakers unfettered.
    Secondly, there are structural issues related to the way 
the CDC is funded. The budget is inconsistent from year to 
year. The crisis-to-complacency cycle--``boom or bust'' some 
people call it--results in unstable funding. It is very 
difficult for State and locals to hire the people they need. It 
is very difficult for the CDC to sustain progressive 
preparedness over time.
    Then I think the third issue really is certain parts of the 
CDC science need to be modernized. We are kind of in a stable 
level of support, but science is bursting ahead, and we need to 
bring the more modern tools, the data sciences, the data 
information modernization. There are a whole number of areas of 
scientific inquiry relevant to public health. We need the same 
kind of funding support that we give to NIH and biomedical 
research, but that is, a long-term investment, and we are 
really going to need congressional support for that. So thank 
you for the question.
    Senator Ossoff. Thank you, Dr. Gerberding. Let us talk a 
little bit about effective public health communication and how 
we can improve public health experts' capacity to deliver 
evidence-based information to the public, to families, to 
organizations, when you have an emerging situation such as we 
did where there is uncertainty and fear, particularly in the 
early months of this pandemic, and where you have political 
actors with no relevant public health expertise, such as in 
this case the President of the United States speculating about 
the efficacy of bleach treatments in response to COVID-19 from 
the White House Press Briefing Room. How can we enhance the 
capacity of public health experts and medical doctors who are 
qualified to assess the available data and make evidence-based 
recommendations to the public, acknowledging that there will 
always be uncertainty, particularly when we are facing a new 
pathogen whose means of transmission and lethality and 
mechanism of action is not yet fully established? How can we 
enhance our ability to deliver evidence-based information from 
public health experts to the public in an emergency such as 
this one?
    Dr. Gerberding. There is no question to that 
misinformation, in many cases disinformation is easy to 
propagate now, and it has tremendous impact on people through 
the expansion in the social networks that perpetuate it. This 
has to happen at every level. Trust is the foundational 
dimension of this.
    When people see scientists arguing with each other about 
data, that in and of itself creates mistrust. In the context of 
the rapid learning curve we are in, sometimes that is 
inevitable. But I think the CDC Director today, Dr. Wollensky, 
is doing a fantastic job of persistently saying the same thing, 
standing strong, speaking regularly and often, doing the best 
she can to translate evolving information to the public. But 
that has to be cascaded throughout our whole system.
    We learned during some of the outbreaks that I managed that 
the most trusted person for most people is not their Federal 
official or their politician or even someone who is 
pontificating on boxes on the network news. It is their local 
doctor. And so bringing the clinician community into the 
knowledge base to share that evidence and giving them the tools 
and the training they need to help translate it is also 
critically important.
    I think we have seen that done well in other countries like 
New Zealand, but we need to go back to basics and restart our 
process of getting the whole ecosystem of trusted health 
officials to sing from the same sheet of music and translate 
that information into messages that matter to people.
    Senator Ossoff. Thank you so much, Doctor. Thank you all 
for your testimony today, for your service, and for the 
expertise and experience you have shared with us.
    Mr. Chairman, I yield.
    Chairman Peters. Thank you, Senator Ossoff.
    We may have another Senator or two. We are about ready to 
start votes, and, folks, we have multiple committees so we may 
have another Senator or two arrive. In the meantime, I am going 
to take the liberty as Chair to ask another couple questions 
while we wait.
    My first question, I am going to put it out to the panel to 
give me a sense. One thing that is clear as we have gone 
through this critically difficult time is that there are many 
conflicting authorities, and we have talked about that 
throughout this hearing. So although it is clear there are 
conflicting authorities, there is no clear path as to who 
should actually be in charge. You think about the multiple laws 
right now that we have on the books that determine disaster and 
public health emergency response authorities. We have the 
Public Health Services Act, the Stafford Act, the National 
Emergencies Act, various Homeland Security Presidential 
Directives, Presidential policy directives, and that list, 
unfortunately, can just go on.
    I will ask this to you first, Dr. Lurie, but I would 
certainly love to have the input of all of you. Dr. Lurie, I 
ask it first because you already testified about the need for a 
clear Federal agency to lead in pandemic response. Yet from 
this initial COVID-19 response, there was continued confusion. 
There were changes in authorities as we went along.
    So it is a very direct question. Who at the Federal level 
should have led the response, in your mind, for this public 
health crisis? I would love to hear from the other panelists as 
well.
    Dr. Lurie. Sure. I think the White House should have 
designated a lead at NSC supported by FEMA to lead this and 
pull together a whole-of-government response as they have for 
so many other crises. As Mr. Nimmich testified and Ms. 
Zimmerman testified, FEMA can help coordinate and support. At 
the beginning you do not even know how bad it is going to be, 
and it evolves over time. And so it may be that the lead in 
coordination needs to evolve over time. But there is no reason 
not to mobilize a whole-of-government response, and there are 
many mechanisms to do that. You just have to choose one.
    Chairman Peters. Great. Anyone else? Just jump in, please.
    Dr. Gerberding. I will say I think the whole-of-government 
is the concept, although it is more than government, as we have 
seen; the private sector is critically important, and the whole 
health system matters in a situation like this. But the concept 
of planning for the whole-of-government, the strategic 
framework for the operation being something that really has to 
be done by the administration because all the Cabinets are 
involved, and then executing the components of that plan in the 
agency that is best suited to carry out the specific tasks or 
objectives at hand. It is kind of plan horizontally, execute 
vertically, and then maintain that coordinating function.
    From an operational and logistical perspective, I think the 
FEMA conversation can also come into play here, especially when 
there are issues about deployment of material goods or getting 
things moved around from one place to another. So there are 
many different dimensions of the operation, but the strategic 
framework, the intent of the response really needs to be 
centralized, in my opinion, in the White House.
    Chairman Peters. Right.
    Mr. Nimmich. Chairman, I have to respond that the National 
Response Framework gives you the ability to do this, and as Dr. 
Lurie will attest, FEMA supported HHS in Flint, Michigan; we 
supported HHS in the Ebola outbreak; we supported HHS in the 
Zika outbreak. The ability to use the infrastructure and the 
response, training, and professionalism inside FEMA--it does 
not have to be in charge, but you have to make that clear. I do 
think there was a stumble when we said HHS was not in charge 
and now FEMA is in charge. It should have been HHS is in charge 
and FEMA is the supporting entity that is implementing HHS' 
knowledge base of the pandemic.
    Dr. Lurie. I would agree.
    Chairman Peters. Ms. Zimmerman.
    Ms. Zimmerman. Yes, and I agree with what Mr. Nimmich has 
just said. This is something FEMA does. They do it for all 
disasters all the time. The system that is in place within the 
NRF and within the National Response Coordination Center, all 
the Federal agencies, voluntary agencies, even the private 
sector is very familiar with how that works. And to be able to 
employ that very quickly during disasters is key. It does not 
matter how big or small. It is practiced all the time. State 
level, States have set up their emergency operation centers 
much the same way. So it is really something that gives people 
that opportunity to jump right into events, and I think doing 
that but I think being led by the agency that has the known 
mission set such as any pandemic, with HHS being the lead for 
that, and then how, in this event they established the Unified 
Coordination Group (UCG), which was the first time ever at a 
national--at the Federal level, to establish that I think was 
key. I think just to keep that in the forefront is very 
important going forward.
    Mr. Nimmich. Mr. Chairman, if I could have another 
opportunity?
    Chairman Peters. Yes.
    Mr. Nimmich. I do think that the challenge is deciding if 
you are going to activate the National Response Coordination 
Center at FEMA. I think that there should be a much more robust 
interface of all the departments, particularly ASPR and FEMA, 
on a day-to-day basis. It should not be when we make a decision 
that we have crossed the threshold that we now activate the 
NRCC. There needs to be--each of the emergency support 
functions needs a day-to-day connectivity in the environment we 
are in because things happen so quickly.
    Chairman Peters. Very good. Mr. Nimmich, I am going to ask 
you a question. In your testimony you discuss the need to 
create additional surge capacity for supplies in an emergency, 
and you recommended this responsibility be given to a new FEMA 
surge center. So my question to you is: What additional 
authorities and funding, if any, do you believe that this 
center would need if we were to set it up?
    Mr. Nimmich. I think, Chairman, this goes back to the 
ability to access all those silos of data Dr. Lurie talked 
about, and it is not just in the medical side, but it is in the 
supply side and the demand side of these. We often protect our 
data or do not want to trust our data, so that surge center 
would create an environment where we can have data that is 
protected, not utilized in a way that the provider of that data 
would not want it. So the public sector can bring in and tell 
me there is excess capacity of PPE at this location and know 
that that is being trusted and will only be used when there is 
a need nationally, or we can inform another State or another 
county that that capacity exists somewhere and they can access 
it.
    But that does not exist. It will require additional 
authorities to allow FEMA to integrate that data. It can be 
done with medical data, as well as Dr. Lurie pointed out, and 
it will require improvement in technology. The technology 
exists today. Whether it is in how we protect our information 
but also access our information, we have the technology now to 
be able to access all of that. The artificial intelligence will 
start us to be able to be smarter of where we put our human 
capability. But it is really a center where you can bring that 
data in on a day-to-day basis and add to it. I was not 
monitoring how much of the precursor elements were needed for 
our pharmaceuticals. Now I want to access that information and 
understand where those precursor chemicals come in.
    Chairman Peters. Great. Thank you.
    Senator Padilla, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR PADILLA

    Senator Padilla. Thank you, Mr. Chair. Thank you to all the 
witnesses for your participation and your testimony today.
    As several of our colleagues have raised throughout the 
course of the last year, I want to ask questions specifically 
concerning the aspects of COVID-19 and its disproportionate 
impact on communities of color and lower-income communities. 
And just using my own home State as an example, in California 
the death rate for Latinos is 22 percent higher than the 
statewide average. The case rate for Pacific Islanders is 32 
percent higher than the statewide average. The case rate for 
communities with median incomes below $40,000 a year is 37 
percent higher than the statewide average.
    COVID-19 has clearly exposed large underlying racial and 
socioeconomic disparities in our health care system, in our 
pandemic response plans, particularly at earlier stages, and 
the disproportionate risk for essential worker populations.
    So a question for Ms. Lurie and Mr. Nimmich. How can we 
ensure that our pandemic response plans and our disaster 
response plans more broadly take into account these underlying 
issues of inequity?
    Dr. Lurie. It is such a terrific and important question 
that needs to be considered really comprehensively. We talked a 
lot earlier about planning, and certainly racial and ethnic 
minorities and low-income communities and others need to be 
involved in the planning process from the get-go. They need to 
be understood. Every single time we think about doing 
surveillance, that we think about doing data collection, that 
we think about getting a complete picture of what the situation 
is, we need those sort of data elements about race, ethnicity, 
income, social vulnerability index of where someone lives. 
Frankly, that has to be a reflex part of every single bit of 
analysis so that we can identify as quickly as possible the 
populations that are the most adversely affected and address 
them as quickly as possible.
    But, also operationally, you have to have representatives 
of all of those communities with you at the table and part of 
the operational plan to get going. In a nutshell, it is just 
end to end looking at everything you do through this lens of 
equity.
    Mr. Nimmich. Senator, it is one of the toughest questions 
that we have to deal with, and it is a challenge. It is a 
community--the underserved and economically disadvantaged tend 
to have less trust in the Federal Government, tend to have less 
trust in what is being said. We need to encourage them to 
participate in the planning and the understanding. But we need 
to reach out to those community leaders that are able to 
explain.
    I can tell you from a FEMA perspective the ability for that 
community to request the assistance that they deserve is often 
limited. They do not even understand that there are 
opportunities there for them to take advantage of.
    Finally, when they do take advantage, they are often put in 
difficult situations, multiple different questions, multiple 
different programs. I am registered for a State program, a 
Federal program, and it becomes overwhelming for them to be 
able to participate and provide the details that we as a 
government require before we are willing to give out aid.
    Senator Padilla. Thank you. What leads to that question is 
a recognition of what the data is telling us. So my next 
question for a couple of you is not just underscoring the value 
of data but fundamental science. Many of you have mentioned in 
your testimony science is the foundation of our response 
measures to disasters. Science and research guide the public 
health recommendations and directives, including during COVID, 
social distancing, masks, face coverings, vaccine stations and 
distribution plans, et cetera. So without basic research done 
through NIH-funded institutes, our responses and vaccines could 
have taken much longer to develop and complete.
    Ms. Lurie and Ms. Gerberding, could you both comment on how 
we can more effectively use research from the COVID-19 response 
to improve our responses to future disasters and pandemics and 
what kind of data might have been more helpful earlier in the 
pandemic as, again, a case study to inform future emergencies?
    Dr. Lurie. Sure. One of the first things I would note is 
that in prior crises we have pulled together early and often 
with the help of the National Academies, developed a research 
agenda that prioritizes the most important questions to ask and 
answer as a country so that we can get on top of that quickly. 
Unfortunately, that really did not happen.
    A second thing I would want to note is that science 
includes social science, includes anthropology and sociology, 
and, here I think we missed for a long time, as Mr. Nimmich was 
pointing out, the way different population groups were being 
impacted by this. I think social science brought to bear early 
on would be critically important.
    Then, third, as I said, always look at the population 
subgroups that you think are going to be the most vulnerable, 
and sometimes you are surprised about who they are, but to be 
able to have that ability to do that. We have to be able to 
continue to fund science, and we have to be able, as I 
testified, to protect the integrity of our science agencies, to 
do science and to speak the truth about results. I think that 
last part, while we have not dwelt on it, deserves a lot of 
consideration.
    Senator Padilla. Thank you.
    Dr. Gerberding. Yes, I will add to what Dr. Lurie said 
because I agree with her entire statement and especially the 
component of the National Academy of Medicine contribution to 
setting the research agenda, is that we need practical science 
as well, just nuts and bolts, like: Do masks work? It took us a 
long time to really establish that this was an aerosol virus, 
and that is something that, had we set about finding that 
information early in the course of the situation, we might have 
been able to have better guidance up front about the importance 
of masks and what kinds of masks and how well they work, et 
cetera. There is a whole set of practical questions that come 
up in any outbreak, but were certainly critically important in 
this one, especially with the large degree of high-titer 
asymptomatic infections.
    I think a second aspect of this really relates to how we 
can build the science of the new tools that we need, as 
mentioned earlier, the data tools, the artificial intelligence 
machine learning that can take advantage of the information 
that we do have and create knowledge out of it.
    The third thing I would say, for a long time there has been 
a paucity of investment in what I would consider to be public 
health research. Not all of the research done at the NIH is 
germane to some of these practical translational problems that 
I am talking about, and CDC does really need a bigger research 
budget so they can get the best and the brightest people in our 
academic environment, our medical schools, our schools of 
public health, our social science schools, to get on to some of 
these issues and really build out the science base. It will 
serve us well in the short run in this context, but it is 
something that we need foundationally going into whatever the 
next new emerging infection is.
    Senator Padilla. Thank you both.
    Thank you, Mr. Chair.
    Chairman Peters. Thank you, Senator Padilla.
    We are going to be wrapping up this hearing. This has been 
fascinating. But I do have one last question for Dr. Lurie, and 
then we will wrap this up.
    Dr. Lurie, in your testimony you discuss the need to gain 
additional visibility into the medical supply chain, and you 
noted in that testimony that during the H1N1 and Ebola 
epidemics, HHS put together a system to gain visibility into 
the supply chain, which is critical. As part of our Federal 
preparedness, as we are looking forward, should the U.S. 
Government establish as part of its infrastructure a permanent 
system to track medical supply chain? And as you are thinking 
that through and with an answer, what limitations currently 
restrict ASPR's visibility into the supply chain that we need 
to be aware of?
    Dr. Lurie. Terrific question, and I think obviously, as we 
have talked about at this hearing, we have talked about 
precursor material; we have talked about API; we have talked 
about all kinds of supplies. And, yes, we absolutely do need to 
have visibility into all of the critical elements of the 
medical and health care supply chain. This goes from essential 
medications all the way, as I think in my written testimony I 
talked about the pipette tips and the little laboratory wells 
that are important for running the diagnostic tests.
    The Strategic National Stockpile has traditionally only had 
visibility on what is there, and yet we know that there is a 
lot more in the supply chain. We know we have critical drug 
shortages every year, and we do not do a good job monitoring 
those either. So, yes, I think either a system that Mr. Nimmich 
outlined or the Strategic National Stockpile needs to build the 
capability to have that visibility and monitor critical health 
and medical supplies.
    When we did it in H1N1 and Ebola, we did it using the 
threat of the Defense Production Act to ask manufacturers and 
suppliers to share the information, and we are able to keep it 
confidential so we did not disrupt their businesses. But this 
is an area where I do think new authorities and funding will be 
really important to set up this system so that you know what 
you need and can track that day to day and that you have 
enhanced ability to track and, if needed, voluntarily or 
compulsorily redistribute in an emergency situation. It is 
going to be a big lift and a big build, but the whole private 
sector of our economy does this very successfully every day, 
day in and day out. And there is a lot of expertise and tools 
to use out there to build such a system. It is critical.
    Chairman Peters. I agree with you, and it is clear from 
your statement that you do believe there are additional 
authorities that are necessary, so legislative action will be 
necessary?
    Dr. Lurie. Yes.
    Chairman Peters. Very good. We will look forward to talking 
further with you on that. We are in the process of drafting 
some of that, so we will look forward to working with the 
details.
    Again, I want to thank each of our witnesses today. This 
was just a great hearing. We have an awful lot of information. 
Clearly, there is a whole lot more information to gather in the 
months ahead as we continue to look at what happened and think 
through how we can do it better.
    As I mentioned at the beginning of the hearing, we always 
want to celebrate our successes. We should do that. But we also 
need to find out where the failures were and make sure that we 
are plugging those gaps, and that is the intent of what we want 
to do in this hearing.
    With that, the hearing record will remain open for 15 days 
until April 29th at 5 p.m. for the submission of statements and 
questions for the record. This hearing is now adjourned.
    [Whereupon, at 11:58 a.m., the Committee was adjourned.]

                            A P P E N D I X

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                           COVID-19 PART II:


     EVALUATING THE MEDICAL SUPPLY CHAIN AND PANDEMIC RESPONSE GAPS

                              ----------                              


                        WEDNESDAY, MAY 19, 2021

                                       U.S. Senate,
   Committee on Homeland Security and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m., via 
Webex and in room SD-342, Dirksen Senate Office Building, Hon. 
Gary C. Peters, Chairman of the Committee, presiding.
    Present: Senators Peters, Hassan, Sinema, Rosen, Ossoff, 
Portman, Johnson, Lankford, Scott, and Hawley.

            OPENING STATEMENT OF CHAIRMAN PETERS\1\

    Chairman Peters. The Committee will come to order.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Peters appear in the Appendix 
on page 119.
---------------------------------------------------------------------------
    Today's hearing, the second in a series examining the 
Federal Government's response to the coronavirus disease 
(COVID) pandemic, will focus on vulnerabilities in our medical 
supply chain that were fully exposed last year, as the United 
States struggled to secure desperately needed supplies to 
combat the spread of COVID-19.
    Despite years of warnings about the dangers of our Nation's 
overreliance on foreign sources and manufacturers for critical 
medical supplies, our Nation was still unprepared to acquire 
the masks, the gloves, the gowns, and ventilators necessary to 
treat the significant number of COVID patients, stop the spread 
of the virus, and save lives.
    While the Federal Government had plans in place and 
authorities available to help address these longstanding supply 
chain challenges, the Trump administration failed to use them 
at the onset of the pandemic to coordinate an effective, 
unified Federal response.
    To date, this tragic and historic public health crisis has 
taken the lives of more than 586,000 Americans, left untold 
economic destruction in its wake, and resulted in long-term 
health consequences for thousands of Americans.
    Thanks to the ingenuity of American scientists and the 
Biden administration's actions to ensure rapid distribution of 
vaccines, there is light at the end of the tunnel.
    However, as we learned in our first oversight hearing, the 
loss of life, the damage to the health and livelihoods of 
countless Americans, and the suffering caused by this pandemic 
were not inevitable.
    Swift, decisive action, and a comprehensive national 
strategy from the previous administration could have reduced 
the devastation this pandemic wrought on our communities.
    The Federal Government should have taken early action to 
ramp up production of personal protective equipment (PPE) and 
other critical medical supplies by issuing emergency contracts 
or fully invoking the Defense Production Act (DPA).
    Instead, the Trump administration left individual States to 
secure supplies and combat the virus on their own. Instead of a 
coordinated Federal effort to secure and direct supplies where 
they were needed the most, the Trump administration's inaction 
forced States, and even individual hospitals, to bid against 
each other for limited protective gear.
    This forced our front-line health care workers to resort to 
wearing trash bags, snorkel masks, and other ineffective 
alternatives when they could not get appropriate medical 
supplies.
    Access to sufficient PPE, like N95 respirators, face masks, 
gloves, and gowns, could have helped save lives, including the 
nearly 4,000 health care workers who gave their lives on the 
front lines to fight this pandemic.
    Even though we had limited information about how this virus 
spread when cases first started spiking in the United States, 
the warning signs about our supply chain were already there.
    As early as July 2019, the Federal Emergency Management 
Agency (FEMA) outlined that a ``worst-case'' pandemic scenario, 
like COVID-19, would result in a shortage of medical supplies, 
beds, and health care workers as hospitals became overwhelmed.
    In December 2019, I released a report warning of the 
serious national security risks posed by our overreliance on 
foreign nations for critical drugs.
    Last Congress, I pressed for legislation to help increase 
domestic production for critical drugs and medical supplies to 
address these threats, and I am going to continue working with 
my colleagues to find common-sense solutions to ensure that our 
Nation is better prepared in the event of a future crisis.
    I want to thank our witnesses for joining us today, and I 
look forward to hearing their perspectives on the challenges 
our country faced, the impact these shortages have had on 
health care workers and the public, and how we can strengthen 
our medical supply chain to prevent a similar disaster in the 
future.
    We have received significant interest in this hearing, and 
I now ask unanimous consent (UC) that all statements submitted 
to the Committee, including those from the American Hospital 
Association (AHA), Michigan Hospital Association, Henry Ford 
Health System, Munson Health Care, Sparrow Health System, 
Trinity Health, and Premier, be entered into the record.\1\ 
Without objection, the Statements will be entered into the 
record.
---------------------------------------------------------------------------
    \1\ The statements submitted for the Record appears in the Appendix 
on page 231.
---------------------------------------------------------------------------
    I understand my Ranking Member is being delayed on the 
floor. He will be here shortly. He can present his opening 
remarks at that time, so we will move forward with the witness 
testimony at this point.
    It is the practice of the Homeland Security and 
Governmental Affairs Committee (HSGAC) to swear in witnesses, 
so if you will stand and raise your right hand, and the witness 
online, if you could at least raise your hand, if not stand, 
that would be great. Do you swear that the testimony you will 
give before this Committee will be the truth, the whole truth, 
and nothing but the truth, so help you, God?
    Dr. Elnahal. I do.
    Mr. Handfield. I do.
    Mr. Schondelmeyer. I do.
    Ms. Glas. I do.
    Chairman Peters. You may be seated.
    Our first witness today is Dr. Shereef Elnahal, the 
president and chief executive officer (CEO) of University 
Hospital in Newark, New Jersey.
    I will give a more complete opening to you before your 
testimony, but I am pleased that we have been joined by the 
Ranking Member, who scurried from his duties on the floor of 
the Senate to be here. Thank you very much, Ranking Member, and 
you may proceed with your opening comments.

            OPENING STATEMENT OF SENATOR PORTMAN\1\

    Senator Portman. Thank you, Mr. Chairman, I look forward to 
hearing from the witnesses today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Portman appears in the 
Appendix on page 121.
---------------------------------------------------------------------------
    Last month we did hold an oversight hearing on this general 
topic to help us understand some of the early failures that 
reduced the effectiveness to the pandemic response, and this is 
a continuation of that. I was pleased that at the last hearing, 
we tried to keep politics out of it and focus on solutions.
    Today's hearing is going to focus on a really important 
aspect of the pandemic response, which was the supply chain 
vulnerability that we all experienced and continue to 
experience, and to help this Committee, in my view, to develop 
legislation to help solve these problems for the future. I 
think we owe it to those who lost their lives during this 
pandemic and all the disruption it has caused to get this 
right.
    We studied this issue because it became apparent that by 
the time the virus reached our shores, there was little we 
could do to prevent the shortages of critical supplies. The 
spike in demand for medical supplies was too high, the 
production of those supplies too far away, and too centralized 
in places hit hard by the virus. At the same time, the 
Strategic National Stockpile (SNS) was underprepared. The roots 
of these issues extend far past December 31, 2019, when a 
cluster of cases was first reported in Wuhan, China.
    So what does this mean? Preparation for the pandemic should 
have begun years in advance, obviously. The constraints 
experienced by Federal, State, and local agencies, as well as 
hospitals, responders, and front-line workers, is the result of 
a supply chain and preparedness culture that seems to have 
suffered a failure of imagination regarding those worst-case 
scenarios.
    While many factors contributed to our poor state of medical 
supply preparedness--which we will discuss here today--the 
State of the Strategic National Stockpile is chief among them, 
and that is our responsibility here in the Federal Government. 
The stockpile's mandate has been to respond to discrete 
emergencies, not a simultaneous 50-State pandemic. For more 
than a decade, the stockpile focused on local chemical, 
biological, radiological, and nuclear (CBRN) threats often at 
the expense of pandemic preparedness. It did respond more 
effectively to the H1N1 pandemic with millions of PPE items and 
antivirals, but those were confined outbreaks, and the 
stockpile was never replenished after that episode. In the 
intervening years, of course, the stockpile's mission has 
continued, but it has been less of a pandemic response and the 
question is, Why?
    Compounding these preparation failures by the stockpile, 
the past two decades have seen a consistent offshoring of 
medical supply manufacturing. We all know about that; we will 
hear about that more today, particularly the United States 
relying on China for 75 percent of sanitary and hospital bed 
articles and 50 percent of our PPE, including N95 masks.
    Today I look forward to hearing from our witnesses on three 
broad questions.
    First, what steps should the United States take to reduce 
overreliance on foreign countries for critical medical 
supplies? We need to understand how to diversify supply chains 
away from China, reshoring manufacturing to the United States, 
and incentivizing production in the Western Hemisphere.
    Second, how do we foster a strong ``Industrial Commons'' 
for medical supplies here in the United States? It is a key 
part of our competitiveness going forward, I think. It is where 
you have a manufacturer, you have suppliers, inventors, skilled 
workers, and distributors, all networked and integrated 
together. It is not just about assembling gowns or 
pharmaceuticals, but about building out a supply chain that 
brings together the producers of the components of those items 
with the innovators also. These networks offer efficiencies, 
make it more difficult to offshore in the future, and increase 
innovation.
    Third, as we develop this effort for medical supplies, how 
do we ensure that we have the right supplies, in the right 
quantities, and effective distributions for the future crisis? 
I also am concerned about the inadequacies of the SNS, as we 
talked about--the stockpile. Going forward, we need to properly 
define the role of that stockpile and be sure that it has the 
resources and capabilities we need to succeed.
    Thanks again to our witnesses for testifying today, I look 
forward to hearing your thoughts on the path forward and, of 
course, look forward to continuing our approach to this, which 
I hope can remain nonpartisan and focused on actually how do 
you come up with solutions so that we can be more prepared in 
the future.
    Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Ranking Member Portman.
    Our first witness today is Dr. Shereef Elnahal, the 
president and chief executive officer of the University 
Hospital in Newark, New Jersey. Dr. Elnahal is a physician who 
previously served in health care leadership roles in the public 
and private sectors, including as the 21st commissioner of the 
New Jersey Department of Health.
    Welcome, Doctor. You are recognized for your 5-minute 
opening comments.

  TESTIMONY OF SHEREEF ELNAHAL, M.D.,\1\ PRESIDENT AND CHIEF 
   EXECUTIVE OFFICER, UNIVERSITY HOSPITAL, NEWARK, NEW JERSEY

    Dr. Elnahal. Thank you, Chairman Peters, Ranking Member 
Portman, Members of the Committee on Homeland Security and 
Governmental Affairs, and my fellow panelists.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Elnahal appears in the Appendix 
on page 217.
---------------------------------------------------------------------------
    My name is Dr. Shereef Elnahal. I am president and CEO of 
University Hospital in Newark, New Jersey.
    I thank the Committee for the opportunity to offer insights 
into my institution's experiences during COVID-19. I will also 
say that the Pharmaceutical Accountability, Responsibility, and 
Transparency (PART) Act and Help Onshore Manufacturing 
Efficiencies for Drugs and Devices (HOME) Acts would have 
helped my hospital better meet the care needs of our community 
during a difficult time, and I thank the Committee for a 
bipartisan effort to take action on this issue.
    University Hospital is New Jersey's only State hospital and 
one of only 962 State and local government-run community 
hospitals in the United States. We are the Level 1 trauma 
center for the densely populated northern New Jersey region. We 
are an academic medical center and the principal teaching 
hospital for all Newark-based medical education, including 
Rutgers New Jersey Medical School--a robust, preeminent 
training ground for the next generation of health care heroes.
    Last year, we had more than 83,000 emergency room visits, 
admitted some 15,000 patients, and had 200,000 outpatient 
visits. As one of New Jersey's safety net hospitals, we serve 
as a critical health care provider for a large population of 
low-income and Black and brown residents.
    COVID-19 brought us circumstances that we had never seen 
before in health care--and things we hopefully will never see 
again.
    As the number of COVID cases in our emergency rooms and 
intensive care units (ICU) multiplied, we found ourselves at 
risk of running out of supplies that we had never seen depleted 
before. This includes protective equipment for our staff and 
ventilators for patients who needed it.
    These vital supply shortages affected the entire health 
care system, not just us, but the things that we needed the 
most were the exact same resources that every hospital needed. 
And so all hospitals were working their contacts in the global 
supply chain at the same time. Suppliers, therefore, serviced 
the highest and largest bidders, and safety net hospitals and 
stand-alone hospitals like ours were frequently the last to be 
called back.
    Key medications, especially those which are used to sedate 
patients on ventilators were also dangerously low. Failing to 
sedate someone on a ventilator is agonizing for the patient. As 
professionals dedicated to healing, this was an outcome that we 
refused to accept, and so we worked around the clock on these 
issues to help patients survive COVID.
    No patient, thankfully, went without such medications, but 
we were days away from this out in the most critical of times. 
In many cases, we needed to find suppliers with whom we had no 
track record and who we had no history of serving the U.S. 
medical community. At the same time, we were keenly aware that 
fraud was happening at many angles across the country. 
Occasionally, we needed to return or discard deliveries when 
items purchased were discovered to be ineffective.
    For decades, this country has struggled to appropriately 
focus on the Strategic National Stockpile which must also be an 
important focus. I should also mention that the Coronavirus 
Aid, Relief, and Economic Security (CARES) Act did save our 
hospital, and I thank the Committee and every Member of 
Congress who helped enact that. Without the funds that kept our 
hospital afloat during the worst of this, we could not only not 
afford the supply chain materials we needed, but also we could 
not keep our doors open by August 2020. And so hospitals simply 
cannot fail during a pandemic, and the quick action of the 
Federal Government helped tremendously.
    Aside from Federal assistance, New Jersey's State 
government--including strong support from Governor Phil 
Murphy--helped University Hospital get our fair share of the 
national stockpile. Our important work did not stop with 
patient care. In fact, we were one of the few sites nationwide 
that conducted the Moderna vaccine trial in a majority-minority 
community. We were the first hospital to administer a vaccine 
in New Jersey outside of a clinical trial, and we continue to 
provide all three approved vaccines to our community.
    We did many virtual town halls to reassure our community 
that they can trust the vaccine, helping to quell the justified 
mistrust in the health care establishment dating back to 
slavery and the horrors of the Tuskegee experiment, but also 
acknowledging the implicit bias that people of color continue 
to experience to this day. More and more people in the 
community we serve accepted the vaccine over time, and now the 
challenge is access. We have re-routed our vaccination strategy 
in recent days to be where people are with mobile vaccination 
efforts in collaboration with our city, county, and State 
governments, and we hope that more organizations will join us 
in this line of effort. Without efforts to shore up the vaccine 
components and the supply chain, none of this would be 
possible.
    Today we are in the final miles of the pandemic, but our 
public health crisis is not completely over. The reality is I 
am still not convinced that we are prepared for the next 
pandemic--whether from a vaccine-resistant variant of COVID-19 
or a different pathogen altogether. While we are better off now 
as a result of many of the initiatives from the Biden 
administration on supply chain resiliency, there is still much 
work to do.
    Still, there remains the matter of financial solvency for 
institutions like University Hospital. We need meaningful, 
value-based payment reform sooner rather than later.
    When the pandemic struck, there was never a higher demand 
for health care in American hospitals, and yet the financial 
risk for hospitals and health systems was never higher. This 
fundamental disconnect between payment and value has existed 
for decades and forced hospitals with thin margins to use just-
in-time inventory practices for these very critical items that 
we were short on.
    Thank you for the opportunity to provide our perspective, 
and I look forward to your questions.
    Chairman Peters. Thank you, Dr. Elnahal. We appreciate your 
opening comments.
    Our second witness is Dr. Robert Handfield, professor of 
supply chain management in the Poole College of Management at 
North Carolina State University, and the executive director of 
the Supply Chain Resource Cooperative. In March 2020, Dr. 
Handfield began consulting various national supply chain task 
forces responding to COVID-19, including the Department of 
Defense's Joint Acquisition Task Force. Dr. Handfield has also 
served as a supply chain consultant to Fortune 100 companies in 
health care, pharmaceutical, and industrial manufacturing.
    Dr. Handfield, welcome to the Committee. You may proceed 
with your 5-minute opening statement.

 TESTIMONY OF ROBERT B. HANDFIELD, PH.D.,\1\ PROFESSOR, POOLE 
     COLLEGE OF MANAGEMENT, NORTH CAROLINA STATE UNIVERSITY

    Mr. Handfield. Thank you, Senator Peters, and thank you to 
the Committee. Good afternoon. My name is Rob Handfield, and I 
currently serve as a professor at NC State. I have studied 
supply chains for more than 30 years. I have published about 
them in a number of journals, and I have been a consultant, as 
you say, to many companies in health care, but also in 
government, including the Veterans Affairs' (VA), the General 
Services Administration (GSA), and the Department of Defense 
(DOD). I am familiar with government acquisition.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Handfield appears in the Appendix 
on page 130.
---------------------------------------------------------------------------
    As a pro bono consultant with the DOD Joint Acquisition 
Task Force (JATF), I provided advice, market intelligence, and 
analysis for the supply of PPE, ventilators, and 
pharmaceuticals. I also interviewed chief procurement officers 
(CPO) in every State in the country to understand their 
challenges in obtaining PPE. Our team presented our 
recommendations for the SNS 2.0 to the Principal Deputy 
Assistant Secretary of Defense for Logistics at Office of the 
Secretary of Defense (OSD) in May 2020.
    In my testimony today, I will describe the State of the 
Strategic National Stockpile prior to COVID and the events that 
occurred early in 2020, as well as some of the suggested 
reforms that I believe are necessary for future public health 
emergencies.
    I would first like to state that my testimony is in no way 
intended to be acrimonious when it comes to the hardworking men 
and women who worked in the SNS during COVID. My critiques here 
are limited to the design of the SNS and government agencies as 
opposed to a direct criticism of the people working in it.
    Prior to COVID, the SNS was somewhat of a ``secret'' 
organization. They did not publicize what they did. They were 
largely founded as a response to bioterrorism, and they were 
never intended to be able to respond to pandemics such as 
COVID. Most of the people who worked there worked as inventory 
analysts, not supply chain experts. The decisions as to what 
inventory to stockpile for potential threats was determined by 
scientists within the Department of Health and Human Services 
(HHS) who often have a clinical view of public health risks, 
but do not often understand how supply chains get these 
materials to hospitals.
    So there are a number of problems which I observed during 
the first half of 2020 in my work, and I have summarized some 
recommendations for each of these.
    First of all, a lack of supply market intelligence and 
expired inventory left the government ill prepared for the 
pandemic. The SNS was running blind in managing the supply 
chain. The response was too little too late.
    For the SNS to be better prepared, a multi-agency inventory 
portfolio based on in-depth supply market analysis is needed. 
This requires a supply management team that tracks the 
condition of critical supply markets for medical supplies, the 
supply risks within those markets, and acquisition strategies 
to manage those risks.
    Second, a lack of material visibility technology across the 
SNS, FEMA, and State procurement offices led to a poor 
estimation of demand forecasts and the inability to detect 
shortages in health care networks. You cannot manage what you 
cannot see. The SNS needs an inventory visibility system tied 
to a control tower that tracks what is happening in real time.
    During the COVID response, no one knew where products were 
coming from, where they were being sent, and who was receiving 
them. Material can be tracked through bar codes across a 
trusted network of hospitals, distributors, and manufacturers. 
This is not expensive technology and is relatively easy to 
deploy.
    Third, the U.S. health care system relies on suppliers that 
are primarily overseas and leaves us at the mercy of export 
policies and priorities of other nations, which led to 
shortages. So this is a problem which we cannot fix easily 
overnight. It requires a more nuanced set of policies. 
Reshoring all health care products is not practical or cost-
efficient, and it is not clear who invest in this.
    While I agree that critical pharmaceutical products can be 
manufactured efficiently in the United States, we need more of 
a customized strategy for different categories of health care 
products, which I have outlined in my written testimony.
    Fourth, disparate communication, lack of governance, or 
decision rights and ownership of issues among public agencies 
resulted in poor decisionmaking during pandemic. We observed a 
systemic failure at response across multiple agencies and 
firms. What we need is a playbook for how supply chain experts 
will work alongside public health experts in a disciplined 
manner using a structured response.
    Fifth, States were competing with one another for material. 
This is because there is no existing policy on how to 
distribute material in an emergency. We need an equitable and 
fair means of deploying material in the stockpile that is based 
on need and avoids random allocations. Today no such policy 
exists.
    Finally, contracting with distributors to hold inventory 
warehouses and holding them accountable for distribution in an 
emergency was clearly not a reasonable solution. We need 
alternative contracting approaches for the SNS 2.0, contractual 
incentives with vetted suppliers and government agencies like 
the VA that can create an effective way to turn around 
inventory without it becoming expired.
    To conclude, the idea behind the SNS is not so much to 
focus on resiliency but immunity to shocks that might occur. 
American exceptionalism became American hubris, and a system 
failure to respond was the result of poor events planning on 
the part of multiple agencies. The model I proposed is a 
significant departure from previous versions of this agency, 
but what we need is a bold and innovative strategy for 
supporting our national response to public health emergencies. 
I have outlined a set of solutions and would be willing to 
support these efforts in any way moving forward.
    Thank you very much.
    Chairman Peters. Thank you, Dr. Handfield, for your 
testimony.
    Our third witness, Dr. Stephen Schondelmeyer, is a 
professor of pharmaceutical economics in the College of 
Pharmacy and co-principal investigator of the Resilient Drug 
Supply Project at the University of Minnesota. Dr. 
Schondelmeyer also has more than 45 years of research and 
experience studying the pharmaceutical marketplace.
    Welcome, Doctor. You may proceed with your five-minute 
opening remarks.

  TESTIMONY OF STEPHEN W. SCHONDELMEYER, PHARM.D., PH.D.,\1\ 
  PROFESSOR, COLLEGE OF PHARMACY, CO-PRINCIPAL INVESTIGATOR, 
     RESILIENT DRUG SUPPLY PROJECT, UNIVERSITY OF MINNESOTA

    Mr. Schondelmeyer. Great. Thank you, Chairman Peters, 
Ranking Member Portman, and Members of the Committee, for this 
opportunity to provide input on the resilience of the U.S. drug 
supply.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Schondelmeyer appears in the 
Appendix on page 152.
---------------------------------------------------------------------------
    First, I would ask, What was the state of the U.S. drug 
supply prior to the pandemic? Let me remind us that virtually 
everyone needs prescription drugs at some point in their life. 
Americans have come to count on critical and essential 
medicines for serious and life-threatening diseases such as 
diabetes, epilepsy, or cancer, and we expect that these 
essential medications will be available at a nearby community 
pharmacy or the local hospital when they are needed.
    Even before the pandemic, though, drug shortages were a 
serious problem and recurring problem with a web of factors in 
an opaque drug production and supply system.
    We have tracked and reported on drug shortages for more 
than two decades, and these reports show that we have had more 
than 170 drugs in shortage at every point in time since 2014 or 
before. That is 170 drugs in shortage at every point in time.
    This current and ongoing rate of drug shortages in the 
United States is unacceptable, yet for some reason, the market 
has failed to support the sustainable presence and availability 
of these drugs in the market.
    What was the impact of the pandemic on the drug supply 
chain? The medical and drug supply chains have not escaped the 
monumental impact, and they experienced a triple threat during 
the first year of the pandemic with extreme increases in 
demand, unexpected disruptions leading to decreased supply, and 
exposure of systemic vulnerabilities.
    COVID dramatically impacted the demand side for drugs in 
the United States and worldwide, with the most severe shortages 
for critical drugs such as propofol, midazolam, azithromycin, 
and other drugs. In fact, 40 critical COVID-19 drugs that were 
identified by the Resilient Drug Supply Project had 70 percent, 
or 28 out of 40, that were in short supply as recently as 
January 2021. That is, 70 percent of the critical drugs are 
still in short supply.
    The rate of drug shortages is simply unacceptable, whether 
in times of pandemic or not. COVID-19 jolted the global 
pharmaceutical market at all levels and at many production 
points. The supply side disruptions from factory closures, 
shipping delays or shutdowns, and trade limitations or export 
bans and barriers.
    Vulnerabilities of the U.S. drug supply chain have become 
more noticeable during the pandemic, including, but not limited 
to, heavy dependence upon foreign sources of drug production; 
old factories, equipment, and outdated manufacturing processes; 
below-margin prices for older, well-established generics due to 
overcompetition; lack of upstream visibility by purchasers, 
policymakers, and key stakeholders; and lack of a nationally 
coordinated policy approach to the pharmaceutical market. I 
would remind you the pharmaceutical market represents four 
percent of the U.S. economy, yet we do not have a policy 
approach as to how to manage and move that market forward.
    In October 2018, the University of Minnesota initiated its 
Resilient Drug Supply Project. First, we examined the drug 
supply chain based upon country of origin for active 
pharmaceutical ingredients (API) and for finished drug 
products. When we looked at the top brand, generic, and 
critical access drugs, we found that nearly all drug products 
have the name of a U.S.-based company on the label or a U.S. 
subsidiary of a foreign company. From the downstream 
perspective, nearly drug products in the U.S. market appear to 
be U.S. products. But when we looked at the opaque upstream 
supply chain, we found that as much as 80 percent of the 
finished drug products were made outside of the United States, 
and as much as 90 percent of the active pharmaceutical 
ingredients were foreign-made. Most of the brand products were 
made in Europe. Most of the generic products were made in 
India, with up to 70 percent of their key starting materials 
being provided by China. Most of the critical access drugs were 
made in either China or India, and about 20 percent had totally 
undisclosed sources in the market.
    While production of pharmaceuticals in foreign countries is 
not necessarily a bad thing, the current level of dependence on 
foreign sources in the U.S. supply is concerning. There is a 
long-term vulnerability of U.S. dependence on foreign sources 
for these critical medications. It places undue opportunities 
for political and economic leverage in the hands of other 
countries over the United States. We could find ourselves held 
hostage by other countries that dominate the production of 
certain categories.
    I have listed in my report four or five actions. One is we 
should have a defined process and infrastructure for analyzing, 
predicting, managing, and preventing shortages of critical 
medications.
    Second, we should have an ongoing, in-depth map of the U.S. 
drug supply.
    Third, we should authorize and fund a national entity that 
builds this map and analyzes the drug supply to coordinate the 
development of national policy.
    Finally, the U.S. needs to establish an ongoing research 
program on the resilience of the U.S. drug supply, including a 
sentinel system and a predict-and-prevent process rather than 
waiting for fail-and-fix.
    Thank you.
    Chairman Peters. Thank you, Dr. Schondelmeyer, for your 
opening statement.
    Our final witness today is Ms. Kimberly Glas, president and 
chief executive officer of the National Council of Textile 
Organizations (NCTO). Ms. Glas also serves as the appointed 
Commissioner to the U.S.-China Economic Security Review 
Commission. Ms. Glas also previously served as the Deputy 
Assistant Secretary for Textiles, Consumer Goods, and Materials 
at the U.S. Department of Commerce and spent a decade on 
Capitol Hill working on manufacturing, trade, and economic 
policy issues.
    Ms. Glas, welcome to the Committee. You may proceed with 
your five-minute opening statement.

 TESTIMONY OF KIMBERLY GLAS,\1\ PRESIDENT AND CHIEF EXECUTIVE 
       OFFICER, NATIONAL COUNCIL OF TEXTILE ORGANIZATIONS

    Ms. Glas. Thank you so much for the opportunity to testify 
before you today. As you noted, I am the president and CEO of 
the National Council of Textile Organizations, and I represent 
the domestic textile industry, which employs approximately 
530,000 workers.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Glas appears in the Appendix on 
page 217.
---------------------------------------------------------------------------
    Last spring, when the PPE crisis was on the national news 
nightly, showing workers wearing garbage bags as gowns and 
reusing N95 masks, it was profound imagery. Our strong 
overreliance on Chinese raw material components and finished 
PPE production chains exposed a profound fragility in our 
supply chains and exposed a significant national security 
threat.
    Years of offshoring this industry had severe ramifications 
that played out on the national stage for all of us to see. As 
the supply chains broken down and export controls from China 
and elsewhere were placed on certain items, it left us 
vulnerable in ways that we could have never imagined and I hope 
we will never forget.
    To frame it in a military context, it was like being on the 
front lines and learning your supply chain had been cutoff. The 
U.S. textile industry stepped in to fill an enormous void, 
reconstructing supply chains literally overnight, producing 
over 1 billion critical PPE items such as face masks, isolation 
gowns, and testing kit swabs for front-line health care 
workers. They welcome the calls from the highest levels of our 
government and across the Nation and felt an enormous 
responsibility and pride to retool their production lines.
    As one of my members put it: ``The supply chains broke 
down. I understood this is our calling. This is why we exist, 
and this is why we must make these products in the United 
States of America.''
    I come before you today with an urgent plea. We must get 
critical policies over the finish line immediately, or the very 
supply chains that were retooled and reconstructed will remain 
fragile and largely offshore. Several companies who retooled 
their production and have significant PPE capacity are now 
staring down bankruptcy. China has exponentially expanded its 
global dominance, and key segments of PPE production are going 
offshore once again.
    I want to commend the Committee for your unanimous support 
last week in advancing the Portman-Peters Make PPE in America 
Act. This is critical legislation to address two significant 
issues: long-term Federal Government contracts and domestic 
Federal procurement of 100 percent made in America PPE. I have 
outlined several key policy recommendations in my testimony and 
will briefly touch on some here. This is how Congress could 
help moving forward.
    We need to create strong domestic procurement rules for 
Federal PPE purchases and other essential products 
substantially similar to the Berry amendment and the Kissell 
amendment, which require 100 percent U.S. content from fiber 
production forward. The Berry amendment is an essential 
Department of Defense policy to ensure we have vertically 
integrated supply chains for our warfighters so we are not held 
hostage on overseas supply chains to protect our men and women 
in the military. We need similar rules to strengthen the supply 
chain for our health care workers for PPE.
    We also need to expand the Berry amendment rules for other 
essential products and purchasing by the Federal Government to 
include Department of Homeland Security, Department of Justice 
(DOJ), and beyond. A strong industrial base for the textile 
industry means a strong industrial base for the PPE industry.
    We must important forward-looking policies to shore up the 
Strategic National Stockpile and issue long-term contracts to 
incentivize investment in the domestic production of PPE 
manufacturing.
    We must create Federal incentives for private sector 
hospitals and large provider networks to purchase domestically 
produced PPE. These are the predominant critical purchasers of 
PPE in non-pandemic times.
    We must centralize U.S. Government contracting processes 
and standardize vetting procedures.
    We need to continue to deploy the Defense Production Act to 
shore up the textile industrial base from raw materials to end 
products for all essential items, including PPE, and work 
closely with the U.S. industry on advancing those key 
investments.
    We have to ensure we have strong trade policies that 
address dumping of imports and counterfeit illegal products and 
addressing the substandard products that we are importing to 
our shores.
    We must support tariffs on PPE imports to help bolster U.S. 
businesses and workers as well as our FTA partners, and we also 
must expedite and prioritize regulatory approvals for U.S. PPE 
manufacturers to strengthen this U.S. industry. With the right 
policy framework, the domestic PPE supply chains built 
overnight can endure and grow, creating a level of self-
sufficiency domestically that we have learned the hard way is 
essential to our national health and economic security. Our 
industry stands ready to help this Committee, Congress, and the 
Nation's public health.
    Thank you for the opportunity to testify today.
    Chairman Peters. Thank you, Ms. Glas, for your testimony.
    As the COVID-19 pandemic spread in April and May of last 
year, we know the first responders and health care workers were 
facing really dire shortages of critical drugs and personal 
protective equipment, and as Ms. Glas talked about, doctors and 
other health professionals were sometimes forced to reuse 
masks, were wearing ponchos, using trash bags. Those images 
were pretty startling for us to see. Hospitals across my State 
as well as around the country were scrambling to find critical 
drugs, including those needed to assist patients on ventilators 
in particular.
    Dr. Elnahal, this question is for you. You were on the 
front lines there. You saw it firsthand. I think it is 
important for the Committee's record for you to talk a little 
bit about the impact of the lack of available drugs and PPE on 
your hospital and hospitals like you. Please go a little bit 
more in-depth as to the dire circumstances you found yourself 
in so we know what we are dealing with here.
    Dr. Elnahal. Thank you, Chairman, for the opportunity to 
provide that perspective. So imagine having the sickest 
patients that folks have ever had to treat come in at first 
and, fives, tens, and then 20 to 30 admissions a night into my 
hospital, having to retrofit parts of my hospital that do not 
normally care for such patients because we simply did not have 
the room, including expanding into our mother-baby unit, 
pediatrics unit, and asking those staff, who really never care 
for adults in respiratory distress, to do so not only in a 
manageable number, but sometimes nine, ten patients at a time. 
Then to add to that the lack of availability of PPE or 
medications that will keep someone asleep while they have a 
breathing tube down their throat, this was just a tremendous 
amount of stress that piled on what otherwise would have been 
already a very difficult situation.
    And so not only were our leadership hand in hand with our 
front-line heroes, carrying boxes of PPE, isolation gowns, and 
everything in between to units themselves, we were on the phone 
ourselves with suppliers basically begging them to pay 
attention to our needs at a time when you had Goliath systems 
doing the same and sometimes cooperating with each other to 
make sure that they combine their purchasing power to acquire 
that PPE.
    We depended asymmetrically on the Strategic National 
Stockpile materials, which makes that area of policy especially 
germane to safety net hospitals like ours which serve the most 
vulnerable; but also we really had to contend with the shortage 
of many critical medications and increases in prices on 
medications that were specifically helpful for COVID-19. To 
have all those stresses on your as a clinician but then on top 
of that not feeling like you have what you need to adequately 
treat your patient and also broker conversations with family 
members and patients who are dying, sometimes our health care 
heroes were the only folks by the side of our patients as they 
were deteriorating and doing FaceTime and virtual conversations 
with family and loved ones. Just a tremendous amount of stress 
that just hopefully drives home the importance of this issue.
    Chairman Peters. Thank you for that, Doctor, and certainly 
your testimony clearly confirms what we all know. The men and 
women on the front lines are truly heroes, ones that we owe an 
incredible debt of gratitude as they put their own lives and 
families' lives in danger to help those who are suffering. So 
our thanks from the entire Committee, and thanks to all the men 
and women who are heroes in our country.
    Dr. Handfield, you had contact with administration 
officials responsible for providing medical supplies, and when 
it was clear that the Federal Government was not prepared to 
address drug and PPE shortages, what actions should have been 
taken to adequately support State and local hospitals? If we 
had a do-over, what should we be doing?
    Mr. Handfield. Thank you for the opportunity to address 
that, Senator Peters, and, by the way, I was on the faculty at 
Michigan State for 10 years, so go, Spartans.
    So, early on the SNS did have early indicators of a 
pandemic. On January 29th, they issued an analysis logistics 
summary, a new reporting mechanism that was piloting for the 
first time, and that early warning on January 29th asked for a 
response from key distributors who also were on allocation with 
China. So by February 3rd, all the distributors were being 
slammed with requests for PPE, and, I think a lot of the people 
in the SNS did not understand how that supply chain was 
designed and how much of it was located overseas.
    What should have happened is--I think this is where we need 
to have acquisition supply management professionals--to have 
those early warning indicators and also to be able to work with 
other agencies on predicting what potential problems might be 
on the horizon. I should note in 2017 there was something 
called the PHEMCE, Public Health Emergency Medical Counter 
Measures Enterprise (PHEMCE), and they issued a strategic plan 
which outlined the key areas for inventory investment for the 
SNS. Number one on that list was $5.7 billion for pandemic 
influenza, as well as development of vaccines with Biomedical 
Advanced Research and Development Authority (BARDA).
    So this was an excellent plan to be better prepared. 
Unfortunately, this excellent plan was allowed to languish in 
2018 and was never restarted. This was tragic, because I 
believe that if we had executed on this plan, we would have 
been in a much better place if it had been carried out.
    For instance, the supply of N95 masks in the SNS inventory 
was acquired during the 2009 severe acute respiratory syndrome 
(SARS) epidemic. Those masks were acquired with one-time 
supplemental influenza funding, therefore, were never 
replenished; and when COVID hit, most of them were expired and 
useless.
    In addition, $2.3 billion had been allocated on anthrax 
vaccines that were never shown to be effective for a threat 
that was never validated, which dated back to 2004. So wasting 
budgets on things like anthrax vaccines instead of real 
credible threats like pandemics is facilitated by having better 
market intelligence, better advance planning, and allocation of 
inventory to a portfolio that is based on risks in conjunction 
with public health experts that we can find across multiple 
agencies.
    Thank you.
    Chairman Peters. Thank you.
    Ranking Member Portman, you are recognized for your 
questions.
    Senator Portman. Thanks, Mr. Chairman. I appreciate all the 
experts who are here today.
    Let me just start with something simple. We know from data 
that we have been able to uncover that 70 percent of the 
medical protective gear that we needed in the United States was 
based on China, and in February 2020, China nationalized 
medical supply production and imposed export controls, of 
course, on many of those critical supplies because they wanted 
them for their own citizens.
    So the first question is just for all four of you, a quick 
yes or no. Do you think we were too dependent on China? Yes or 
no.
    Ms. Glas. Yes.
    Mr. Schondelmeyer. Yes.
    Dr. Elnahal. Yes.
    Mr. Handfield. Yes.
    Senator Portman. OK. That is a good start. It was 70 
percent, but also it was not a reliable supply, obviously, 
given the fact they put the export controls in place, making it 
even worse, despite a lot of competition from around the world. 
So that dependence impeded our COVID-19 response, right? No 
question about it. And the question is, what do we do about it?
    One of the things that we have talked about today and we 
are trying to figure out is how to make more PPE here, but use 
market forces to do it, so make it make sense. We have 
manufacturers here in this country who are willing to make 
stuff, but they need to know that they have a market. If they 
do not, they cannot make the significant investments, millions 
of dollars, to be able to convert their plants. This has 
particularly been tough on the textile industry, and, Ms. Glas, 
I want to thank you for being here, but also for your hard work 
in support of this Make PPE in America Act, which you mentioned 
we introduced and was passed in the Committee just last week.
    In 1991, 56 percent of all clothes purchased in the United 
States were made in the United States. By 2012, it was 2.6 
percent. So we have a big reduction in our textile 
manufacturing here. Has the general trend toward offshoring of 
apparel and textile products that we have seen over the last 
generation contributed to the specific lack of manufacturing of 
PPE during the pandemic?
    Ms. Glas. Undoubtedly, Senator Portman, absolutely 100 
percent.
    Senator Portman. This goal, as you know, of the Make PPE in 
America Act is to require agencies to actually issue longer-
term contracts. Why are long-term contracts an effective way to 
use those market forces to incentivize production here in the 
United States?
    Ms. Glas. Because, Senator, it provides a critical demand 
signal for our industry that there will be a purchaser and that 
they can invest in the new equipment necessary. We have Ohio 
manufacturers like Standard Textile who have looked at trying 
to invest more here in the United States, but they will not 
without a strong demand signal. A strong demand signal are 
long-term contracts. Other countries like Canada are issuing 
long-term contracts to their manufacturers to bolster 
production. Some of their contracts are as big and as large as 
10 years because they know these are essential production 
changes.
    Senator Portman. As you know, I have had a great 
frustration with our Department of Defense in this area, in 
particular their refusal to issue those long-term contracts, 
which I never understood. At the height of the pandemic, they 
still were not willing to do it. But can you talk a little 
about the Department of Defense role here and what they could 
do better?
    Ms. Glas. So throughout the pandemic, there were several 
different purchasers across the Federal Government, including 
FEMA, Department of Defense, HHS, and a lot of these contracts 
were structured for 90 days, 120 days. While our industry 
responded overwhelmingly to those solicitations, that is not 
enough production time to invest in new equipment here in the 
United States and make a long-term commitment that you are 
going to make something here. We found so many fits and starts 
with the Department of Defense purchasing, not just in terms of 
the contract period but the vetting process associated with 
this and the kinds of products that there were conflicting 
demand signals that went to our industry.
    In fact, I am just going to leave you this one anecdote. 
Our industry ran for a very short-term contract--I think it was 
120 days--millions of yards of fabric for reusable gowns, that 
are sitting in warehouses that was never used because the 
government decided at the last minute that they wanted to 
purchase disposable gowns. That was because there was a lack of 
coordination across the government. DOD was purchasing for HHS, 
and the specifications and requirements were not----
    Senator Portman. Those are all things that can be fixed, 
and as you know, I am also not sure that disposable gowns make 
sense. I mean, why not have a gown that is reusable? It is so 
much a better deal for taxpayers, particularly that they tend 
to be better gowns and safer in terms of the use by hospitals 
in particular.
    With regard to drugs, I just learned from you, Dr. 
Schondelmeyer, that 80 percent of finished drugs are made 
elsewhere; 90 percent of the components you said are made 
elsewhere, which was actually a higher figure than I had 
thought. I understand that labor costs are cheaper in places 
like China, and that China also intervenes in its economy in a 
non-market way to help their businesses. Are these the primary 
reasons that China is so dominant in the manufacturing of 
active pharmaceutical ingredients, APIs?
    Mr. Schondelmeyer. Sir, I think those are among the primary 
reasons, but it is a large and multiple factorial. I think 
China as a government has set the intention in certain 
therapeutic categories to become the dominant producer and 
influence those markets in ways that affect trade policy, in 
ways that allow them to dominate economically.
    I would point out that just during this pandemic, of the 
active pharmaceutical ingredients made in China that are 
shipped to India to make products for the U.S. market, we have 
seen price increases of 100 percent, 200 percent, or more. 
China threatened to limit shipment of some products to India 
and the U.S. market. Although they have not acted on the 
threat, India itself did limit some exports of certain drugs 
for a period of time to the United States. So there are a 
number of factors, and those certainly are part of the process.
    Senator Portman. Any reason the United States cannot figure 
out a way to produce API here?
    Mr. Schondelmeyer. We can. We have some. Actually, there is 
a new wave of what we call ``green'' manufacturing, people that 
use more efficient processes, cleaner processes that actually 
can reduce the cost compared to what it is costing in China 
given the old technology and the old processes. We could turn 
this around, but we have to have a concerted, developed 
national policy within the United States. To my knowledge, 
there is no agency that sets broad, industry-wide policy for 
the pharmaceutical market. The Food and Drug Administration 
(FDA) approves drugs' safety and effectiveness, but they have 
no authority to look at economic and market-based factors. In 
fact, they are told not to.
    Senator Portman. That should be a priority, I would think, 
to learn from this. I have a lot of questions on the Strategic 
National Stockpile, and we do not have time to get all the 
answers. I do not want to go over my time because we have a lot 
of colleagues who want to talk. But, Dr. Elnahal and Dr. 
Handfield, if you could supply us with some more information on 
what the Strategic National Stockpile ought to be--clearly the 
50-State pandemic was not something they prepared for, right? 
You have made that clear today. So that should be one criteria, 
to be prepared for this possibility. But we are going to submit 
some additional questions to the record for you all, and I 
would appreciate your getting back to us so that we can, again, 
try to put together some legislation that actually helps to 
move us forward and be better prepared next time.
    Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Senator Portman.
    Senator Hassan, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR HASSAN

    Senator Hassan. Thank you, Chair Peters and Ranking Member 
Portman. To all of our witnesses, thank you for being here 
today.
    Dr. Handfield, I am going to start with a question to you, 
and I am going to follow up a little bit on what Senator 
Portman was just talking about. At the beginning of this public 
health emergency, it became quite apparent that the Strategic 
National Stockpile, a key resource for responding to biological 
threats, did not have the necessary equipment or distribution 
capacities to adequately respond to the scale of this disaster. 
Despite the important role that the stockpile had played in 
responding to, for instance, the H1N1 virus, key supplies such 
as N95 respirators, surgical masks, and gowns were not 
replenished ahead of the COVID-19 pandemic.
    Dr. Handfield, moving forward, how can we ensure that the 
stockpile has an adequate and up-to-date supply of unexpired 
personal protective equipment at all times so that it can 
adequately respond to public health emergencies across the 
country?
    Mr. Handfield. I think, one of the challenges with managing 
a stockpile of inventory is just that, it is sitting there and 
it is getting old. So in order to maintain an inventory of 
material that is up to date, that is current, that is fresh, if 
you will, you need to turn that inventory.
    In my written testimony and in several other papers we have 
written, what we are recommending is that there be what is 
called a ``living stockpile.'' What I mean by that is that the 
inventory for the stockpile can be kept in different places 
throughout the government. We have VA hospitals around the 
country. We have DOD depots. But what is also needed is what I 
would call an ``inventory visibility system,'' which would be 
able to keep track of where all this inventory is.
    As I indicated, this is not expensive technology. It 
requires just bar codes, a large data lake, and we can monitor 
when these things are going to be expiring, and as they expire 
or are getting close to their expiration date, they can be used 
by VA hospitals, they can be used by regular hospitals, they 
can be used by distributors. They can be replenished on a real-
time basis.
    So this requires some investment in visibility systems to 
track what is going on. It would also require a workforce 
within the SNS that is much more focused on what I would call a 
supply and acquisition mentality that is monitoring what I 
would call the ``market intelligence,'' that is creating the 
intelligence of what is going on in that market and keeping 
apprised of that and continually updating their acquisition 
strategies.
    Senator Hassan. Thank you.
    I also want to follow up a little bit on comments and 
questions that you have heard from both the Chair and the 
Ranking Member here. To both Dr. Handfield and Dr. 
Schondelmeyer, in the early stages of the COVID-19 pandemic, 
many patients struggled to access essential medications as we 
saw disruptions in supply chains that interrupted the 
manufacturing and shipment of some drugs and active 
pharmaceutical ingredients. One way to avoid this problem in 
the future is to add resiliency and redundancy to our medical 
supply chains by expanding domestic manufacturing of essential 
medications.
    Drs. Handfield and Schondelmeyer, how can the Federal 
Government incentivize domestic production of essential 
medications--you began to get at this in your answer to Senator 
Portman--particularly generic drugs that are widely relied upon 
by seniors and individuals with chronic conditions? We will 
start with Dr. Handfield and then go to Dr. Schondelmeyer.
    Mr. Handfield. So that is an excellent question, and as you 
point out, a lot of the active pharmaceutical ingredients for 
generic drugs are produced in India and a lot of those raw 
materials are produced in China. The reason they are produced 
there is obviously low cost, and generics are inherently 
reimbursed by insurance companies, by CMS, and others, and 
there is a minimum cost that they will be reimbursed for. 
Clearly, somebody has to pay, and if we do bring some of those 
manufacturing sites back to the United States, we are going to 
have to take a look at what the reimbursements are going to be 
on some of those drugs.
    It is great to have generics, but, if we are saving 5 cents 
or 10 cents on a prescription and we are forgoing the 
resiliency of our supply chain, we really have to question 
that. I think there will need to be multiple agencies involved 
in reviewing this recommendation. I do think it is very 
possible to bring it back here.
    Senator Hassan. OK. Thank you.
    Dr. Schondelmeyer.
    Mr. Schondelmeyer. Yes, I do think there are things we can 
do to encourage particularly generic production in the United 
States. The U.S. Government has already acted to engage a 
company called Phlow Pharmaceuticals to make active 
pharmaceutical ingredients in the United States using new 
techniques and processes that, as I said earlier, are less 
wasteful and lower cost. They have engaged with a company 
called Civica, which is a nonprofit generic company whose goal 
is to make drugs that are in short supply or overpriced in the 
marketplace and available to all players.
    But I would point out we need more than just one example of 
each of those. We need to encourage other Phlow companies to 
develop and other either nonprofit or companies dedicated to 
low-cost generics in the marketplace at a profitable level. I 
think we can learn from the lessons of the textile industry and 
things they have done over time to encourage textile producers 
in the United States. But one thing I would point out is, in 
general, the pharmaceutical industry cannot turn around and 
beef up or start new production quite as fast as they can in 
the textile industry. They may be able to do it in two or three 
weeks. In pharmaceuticals, it may take months to years to have 
substantial increased new production facilities.
    Senator Hassan. Thank you. I appreciate that.
    Another question for you, Dr. Schondelmeyer. Over the past 
year, we have seen the results of billions of dollars in 
taxpayer investment into the development of life-saving COVID-
19 vaccines and therapeutics. While not all companies that 
produce these technologies accepted funds specifically for 
development of these projects, they all significantly benefited 
from government-funded research that informed their approach as 
well as in some cases the guaranteed sale of their product.
    So how can we ensure that the pricing of COVID-19 vaccines 
and therapeutics reflects the significant taxpayer investment 
after the end of the public health emergency?
    Mr. Schondelmeyer. I think we need to apply basic 
principles we do for all things that are purchased by the 
government. We need to assure accessibility to those who need 
it. We need to assure affordability, that we can afford it 
either on the Federal fisc or as individuals or as part of the 
health system. We need to assure accountability. Are the costs 
they are telling us that they have really bona fide costs, or 
are they simply lining the pockets of the top executives or 
shareholders beyond what is needed to induce production in the 
market? So affordability, accessibility, and accountability all 
need to be accounted for.
    Senator Hassan. Thank you very much, and thank you, Mr. 
Chair and Ranking Member. I have additional questions I will 
submit for the record.
    Chairman Peters. Thank you, Senator Hassan.
    Senator Johnson, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman.
    Let me start out by pointing out the 800-pound gorilla in 
the room here. I come from a very competitive manufacturing 
background, and I can pretty well guarantee if there is demand 
for a product, it will be supplied as long as there is a price 
that is high enough to justify the investment and the 
manufacture of it. Unfortunately, in medicine, with CMS, with 
Medicare, with Medicaid, with so much government intervention 
in that marketplace, the Medicaid formularies--which I have 
tried to understand, and they are impossible to understand--
that is the reason, I would argue, we have shortages.
    So from my standpoint in trying to solve this problem, we 
need to as much as possible rely on the pricing mechanism and 
the pricing signals of the private sector. Obviously, during 
COVID, we had a breakdown of government. It started with not 
replenishing our national stockpile after 2009. I am not really 
looking to government to solve this problem very effectively, 
but we need government help in terms of working with the 
private sector.
    The private sector obviously was not prepared for this 
because everything is on just-in-time, so we are going to have 
to be incentivized in certain areas to carry inventory.
    Mr. Handfield, real quick, rather than have government 
agencies stockpile amounts and then have to come up with a 
whole new inventory system, computer system to keep track of 
expiration dates, why not spend money and contract with the 
private distribution system to boost their levels of inventory 
to the level we need for the national stockpile and 
automatically be integrated into their current systems? 
Wouldn't that make a whole lot more sense than trying to set up 
a whole new system?
    Mr. Handfield. To answer your question, Senator Johnson, 
that is definitely something that we can do, and drugs are 
primarily distributed by distributors, like the McKessons, the 
Cardinals of the world. I think alternative contracting 
approaches can be done to do that. I think, again, I would go 
back to my earlier point of visibility. We also need to ensure 
that they are actually holding that inventory----
    Senator Johnson. Again, the private sector can do that, and 
I would much rather rely on the private sector providing that 
information than government agencies, which are rather opaque.
    Dr. Schondelmeyer, I want to really talk about the supply 
chain on pharmaceuticals. We held a roundtable here in February 
right when COVID hit, and we had Dr. Scott Gottlieb here, and I 
think that was where my eyes were really opened in terms of our 
vulnerability as it relates to our pharmaceutical supply. 
Everybody at that point was talking about the API. As I dug 
into this more, it really first starts with what they call 
``intermediate,'' which is kind of an odd name because it is 
really precursor chemicals that primarily come from China. 
There are environmental issues with that, correct, in terms 
of--when is the last time we build a refinery, a chemical 
refinery here in the United States?
    Mr. Schondelmeyer. There are some; they can be dealt with. 
But they are easier to deal with in China where they have 
higher levels of pollution.
    Senator Johnson. Right, so, again, that is a constraint. We 
are going to have to overcome that if we want to bring--again, 
make sure that I have the supply chain right. First comes the 
intermediate, which is really the precursor basic chemicals, 
the refinery process, have environmental issues. It goes from 
those basic chemicals then into the active pharmaceutical 
ingredients, primarily India. India is a big part. We have to 
bring both of those back to a certain extent, correct?
    Mr. Schondelmeyer. Either back to the United States or find 
diverse sources that are outside of China and India.
    Senator Johnson. That is the other point I wanted to make 
in terms of looking to the supply chain. I do not think it 
makes sense to do 100 percent buy America. I think the more 
suppliers we have globally, it actually increases security as 
long as we are not totally dependent on any one country or any 
group of countries, and we obviously have some manufacturing 
capability here. I think the balance is how do you get the 
percent should we manufacture here in America in terms of 
getting that accomplished. I think it is pretty simple in terms 
of drugs. You just have the FDA say if you want to supply a 
drug, an FDA-approved drug in America, it has to be 
manufactured here in America to this extent, recognizing, 
though, that that is going to increase costs, and I get back to 
the 800-pound gorilla in the room here, is we limit the 
reimbursement to private sector companies, which is why we have 
170 drugs that are in shortage perennially. Isn't that 
basically correct? Because if people could make money off these 
drugs, we would not have a supply shortage.
    Mr. Schondelmeyer. In part, yes, but in part, no.
    Senator Johnson. Tell me where I am wrong.
    Mr. Schondelmeyer. I believe in the market, sir, very much 
and in westernized economic systems. But when it comes to drugs 
and when a drug is needed in the marketplace and is not 
available, the system will respond in the long run. Most 
economists will tell you that in the long run the system will 
clear out that process. But for the patient who needs that drug 
today or in the next few hours or they will die, they will die 
in the short run, and the market will not solve that problem.
    Senator Johnson. If you have a steady demand for drugs, the 
market, I think, will respond. I know you were talking about 70 
percent of the COVID-related drugs were in short supply. That 
makes sense. Nobody was prepared for this, and you could not 
really expect them to be prepared. But how many other drugs 
outside COVID really have big supply and demand spikes as 
opposed to like heparin or things that just--you basically know 
what the demand is going to be year in and year out. You can 
plan on that.
    Mr. Schondelmeyer. Even year in and year out, there are 
wide fluctuations in certain drugs. There can be variations. It 
is not all totally predictable, and that is partly why we got 
caught with short supplies and our just-in-time inventories 
that we had not planned for the amount of variation, even for 
our flu season, let alone a pandemic event.
    Senator Johnson. OK. Again, I really do believe 
government's intervention in the marketplace, the payment, the 
limitations on pricing, really distorts the marketplace. I am 
not denying there are not other issues, but I think we really 
do need to go to the root cause of why we had, 170 drugs in 
perennial shortage. I think a big part of that is there is just 
simply not the profit motive for companies to maintain them.
    But I think I am pretty much out of time. Thank you, Mr. 
Chairman.
    Chairman Peters. Thank you, Senator Johnson.
    Senator Hawley, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR HAWLEY

    Senator Hawley. Thank you very much, Mr. Chairman, and 
thanks to all the witnesses for being here.
    Ms. Glas, if I could just start with you, you noted in your 
testimony--and this caught my eye--that U.S. textile 
manufacturers compete in one of the most unbalanced economic 
playing fields of any industrial sector. Can you give us a 
sense why that is the case? What role specifically has trade 
policy played in this?
    Ms. Glas. Thank you, Senator, for that question. Since the 
mid-1990s, we have seen a significant offshoring of this 
industry. There are a variety of reasons for that. The World 
Trade Organization (WTO) had quota phase-outs for textile and 
apparel products, the accession of the Chinese to the WTO, 
permanent normal trade relations with Vietnam, and the 
insatiable appetite for the lowest-cost producer, right? This 
played out on a national stage when COVID hit. How many U.S. 
textile manufacturers did I represent making PPE? Probably two 
or three. What happened during the pandemic? About 140 
companies of mine retooled their production chains to help 
fight the crisis. Now a lot of those companies simply have no 
orders. They are starting to see Chinese imports come in for 
these products, obviously exponentially. Obviously, we are 
thrilled about the vaccine being deployed; however, we are 
starting to see products come in that are below cost, the 
dumping of products coming into the U.S. market, and we have a 
U.S. industry who has invested, who want to make these products 
here, but with no demand signal, no long-term demand signal by 
the Federal Government. We have not solved the equation of how 
to get hospitals and nursing homes to purchase products that 
are made here in the United States. A lot of them have relied 
on foreign supply chains and distributor networks, and we need 
to change that equation if we want to make sure we onshore this 
long term.
    Senator Hawley. Some of the hardship of this industry, you 
put at least some of it, maybe a lot of it, down to WTO-related 
policies, agreements, changes that happened in the 1990s and 
the first decade of this century following China's admission to 
the WTO and its permanent most-favored-nation status, permanent 
trade status. Is that right? Have I got that correct?
    Ms. Glas. Yes.
    Senator Hawley. Remind me of the employment impact again. 
What was the immediate employment impact of these----
    Ms. Glas. Over time.
    Senator Hawley. Yes, I should not say ``immediate,'' I 
suppose.
    Ms. Glas. The industry used to employ, I would say, 3 
million workers in the 1990s, and now we are about 600,000 
workers.
    Senator Hawley. Wow, 3 million to 600,000, that is an 
incredible impact. Tell us why you think the deck is still 
stacked against domestic textile producers. You were started to 
allude to this with the folks who retooled to produce PPE. Now 
they do not have orders because they are seeing the imports 
from abroad that are much cheaper. But give us a sense of why 
you think the deck is stacked against domestic producers.
    Ms. Glas. Because we are not playing on the same level 
playing field, and, ironically, through this crisis, there was 
a New York Times report this summer that 50 factories sprung up 
in Xinjiang, and a number of those factories were making PPE 
for our domestic marketplace. It is hard to compete globally 
with a subsidized industry all over the world, including China. 
So we have domestic manufacturers who can be globally 
competitive. We just need to send them a strong demand signal, 
and we need to get policies over the finish line here in 
Congress to make sure that, yes, we can be more globally 
competitive, but people are not going to invest. But I am going 
to tell you the price points for some of the products, 
importation of some of the key products are below market value.
    Senator Hawley. And so people realize, when you refer to 
Xinjiang, we are referring to the province where the Uyghurs, 
among others, are imprisoned. And so there is a possibility 
that this is exploited labor.
    Ms. Glas. Exploited forced labor.
    Senator Hawley. Yes, it is hard for free labor to compete 
with exploited forced labor. Is that fair to say?
    Ms. Glas. That is correct.
    Senator Hawley. Give us a sense of what you think some of 
the ways are that we can address these imbalances in our trade 
policy when it comes to PPE and textiles.
    Ms. Glas. I think we have to have a whole-of-government 
approach to trade enforcement. First off, we need PPE tariffs, 
and we also need to take a look at punitive tariffs associated 
with PPE now that we are through the crisis of the pandemic.
    The other thing is we need to enforce our trade laws on 
environmental and labor standards and on forced labor. Customs 
came out with the withhold release order (WRO) to say that, we 
should not be importing products from Xinjiang or certain 
factories or cotton products. We need to hold them to their 
word, and we need to ensure that we are stopping importation of 
products that are suspected to be used with forced labor, and 
that requires Congress also providing a signal to the 
administration that, this needs to be enforced with the full 
throat of the U.S. Government.
    Senator Hawley. Absolutely. Just to stay on China for a 
second, why do you think that China is well placed to expand 
its global dominance in this industry? Is it due to the 
exploited labor? Is that the biggest single factor?
    Ms. Glas. That, and the subsidization within this industry. 
You will see over a period of time the Chinese have invested 
significantly in raw material production, man-made fiber 
production in the country. Man-made fiber is the essential raw 
material that is used in PPE. So during the tight time in the 
crisis, we could not just get N95 masks. There were export 
controls on this. There were export controls on the raw 
materials, so we could not even get those out of the--they have 
continued to invest in this production chain, and it has been 
at our peril. We saw this play out on the national stage. In 
fact, I just pulled up the numbers. Since the beginning of the 
pandemic, Chinese imports into the United States have grown 756 
percent. Two-thirds of our imports for PPE are continuing to 
come from China. While we have bolstered domestic production, I 
am going to tell you a lot of my members who retooled simply 
have no orders. So there is a sense of urgency to get something 
over the finish line here.
    Senator Hawley. Thank you very much for that.
    Just in my few remaining moments here, Dr. Handfield, could 
I ask you about your testimony? You write that in the 1970s 
companies producing medical supplies began to move their 
manufacturing abroad, and I wonder, in your assessment, what 
caused the shift? Is it related to the trade policies that Ms. 
Glas was just testifying about?
    Mr. Handfield. A lot of the offshoring of medical supplies 
to China occurred because of cost pressure, and at the time, 
hospitals and health care in general were under a lot of 
pressure to continually reduce costs. The channels through 
which they purchased PPE are health care distributors and what 
they also call ``group purchasing organizations.'' Their basic 
mode of operating is, well, if you buy in huge quantities, we 
will give you a big discount. So that incented them to go to 
the lowest cost.
    What it has also done, however, as you pointed out, we have 
really hollowed out our ability to be self-sufficient when it 
comes to medical supplies. I think there are a lot of reasons 
why we can develop those products domestically, and another 
reason for it is we can produce it just in time. ``Just in 
time'' means you produce close to your customer, and so you do 
not have to carry as much inventory. It does not have to sit on 
a ship. It does not have to sit in a port. There are a lot of 
benefits to doing it domestically.
    Senator Hawley. Very good. Thank you for that testimony. 
Thanks to all the witnesses.
    Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Senator Hawley.
    Senator Rosen, you are recognized for your questions.

               OPENING STATEMENT OF SENATOR ROSEN

    Senator Rosen. Thank you, Chair Peters, Ranking Member 
Portman. Really, thank you for holding this hearing. It is 
extremely timely and important, the pandemic, of course, 
highlighting so many vulnerabilities in our global supply 
chain. This is the time to learn and make improvement.
    But I would like to talk a little bit about the nonprofit 
drug and device manufacturing, because before the pandemic 
there had been growing concern about, of course, both high drug 
costs and shortages of critical drugs and, of course, medical 
devices, the clear warnings about capacity in the event of a 
pandemic, and then COVID-19 hit. We saw health providers, first 
responders, most everyone has been testifying to the scrambling 
for gloves, masks, other kinds of PPE. What we have to do, of 
course, as everyone has been testifying, is strengthen our 
global supply chains and our domestic capacity moving forward.
    One of the things I think we can do is to boost the 
nonprofit drug and device manufacturing sector in America. I am 
working on some legislation that would lower prescription drug 
costs, reduce drug shortages, boost domestic production, and 
create American jobs by providing Federal support for the 
nonprofit drug and medical device organizations.
    Dr. Elnahal, as the leader of a major hospital, I have kind 
of a multi-part question here. What impacts do unpredictable 
drugs, medical devices, supply shortages, due to, of course, 
disruption in the supply chain, have on your ability to treat 
patients, No. 1? What is the impact when there is only one 
source, No. 2? How do you think the increased availability of a 
low-cost-option critical medications produced in the United 
States, how would that improve patient outcomes in your 
hospital?
    Dr. Elnahal. Thank you, Senator, for the question. The 
first thing I will say is the obvious point, that it impacts 
patient care. So when you are days away from running out of a 
medication that allows you to ventilate a patient or to 
adequately treat them for a disease. You are forced to consider 
alternatives that may be inferior, or you may not be able to 
deliver care at all, and so this has real human costs and 
consequences, as my co-panelists have mentioned.
    But, also, it is not just potentially running out of a 
medication. It is resorting to plans of care and treatment that 
are simply not optimal. From a medical, legal, and ethical 
standpoint, that is just unacceptable. I think we have a 
responsibility as a country to ensure that hospitals like mine 
can acquire and purchase what is needed to adequately deliver 
patient care, especially something as basic as intensive care 
that you provide to somebody who just simply cannot breathe.
    Secondarily, as you mentioned, the costs can be 
prohibitive, and we have seen just serially increasing costs as 
a hospital and so many critical medications that we just cannot 
do without. When you have to do these on a sole-source basis, 
of course, the prices tend to be higher in contrast with the 
value necessarily received from them. The availability of 
generics and the availability of alternatives that are proven 
through medical evidence to be just as effective is really 
important, especially for the health care safety net in this 
country. The fact is we are a public hospital, but the vast 
majority of our revenue is earned, despite the aid that we do 
receive from the States and Medicare and Medicaid 
Disproportionate Share Hospital (DSH). All of that really 
matters for us to be able to shore up our supplies and make 
sure we do not see a repeat of what happened last year.
    Senator Rosen. Hopefully my legislation and the nonprofit 
sector can help you there. But I would like to talk to another 
thing that really impacts our supply chain disruption, and that 
is, of course, cyber attacks. Last week, the Colonial Pipeline, 
of course, that is not health care, but it does affect lives 
and livelihoods if our fire departments or first responders, 
ambulances do not have gas, there could be electrical outages, 
any of those things. Cyber attacks against hospitals, local 
governments, businesses, other organizations, of course, are 
happening every day. They pose significant threats. And 
considering the challenges in our medical supply chain, any 
disruption could be deadly.
    Dr. Schondelmeyer, through your work with the Resilient 
Drug Supply Project, as you map out supply chains, how do you 
account for expected and unexpected disruptions? You know, 
expected, you might have a hurricane or tornado. Unexpected, of 
course, are the cyber attacks that might paralyze one of your 
systems. How could we better support you in those efforts?
    Mr. Schondelmeyer. We are still in the process of 
identifying the threats that could affect the drug supply 
system, but certainly cyber attacks are on our list of things 
that could happen. There we really need to work with the 
private market. The suppliers, the wholesalers, the group 
purchasing organizations, and others have fairly efficient and 
sophisticated information technology (IT) systems and cyber 
operations, but we need to work with them to make sure that 
they are secure and that we do not have an attack on the drug 
supply systems, supply chains, like we saw with the oil 
industry recently. That could be devastating to the country. If 
we cannot get the needed drugs out to the hospitals or to the 
community pharmacies, patients with diabetes and with heart 
attacks and with other critical conditions are literally going 
to die or suffer severe consequences from the absence of those 
drugs. Things that we once thought unthinkable are not anymore.
    Senator Rosen. Would you think it would be helpful to 
designate some of our drug manufacturers, some things in these 
global supply chains and maybe inpatient care settings as 
critical infrastructure? Because not just livelihoods but lives 
are on the line if there is disruption or attack.
    Mr. Schondelmeyer. Yes, Senator, I certainly think that 
would be helpful, and we need to keep in mind that the critical 
infrastructure--they certainly are the large tertiary care 
hospitals, and they are critical. But there are also critical 
rural hospitals that are the only place for health care within, 
tens to hundreds of miles for some patients. We need to keep in 
mind health care institutions of all types and sizes, not just 
a certain type of health care institution, as being critical.
    Senator Rosen. I agree with you there. In rural Nevada, we 
have hundreds of miles sometimes to drive. Of course, those 
qualified Federal health centers, all of those community-based 
care, are particularly important.
    I appreciate you all for being here. I see that my time is 
about to expire. Thank you, Mr. Chairman.
    Chairman Peters. Thank you, Senator Rosen.
    Senator Ossoff, you are recognized for your questions.

              OPENING STATEMENT OF SENATOR OSSOFF

    Senator Ossoff. Thank you, Mr. Chairman.
    Ms. Glas, thank you for your testimony today. Thank you to 
the entire panel. You noted in your testimony and have noted 
throughout this hearing that, particularly in the early months 
of the COVID-19 pandemic, severe PPE shortages impaired the 
medical response and also put front-line health care workers at 
unnecessary risk of infection. In the early days of the 
pandemic, health care workers were forced to use ad hoc, 
homemade solutions to protect themselves--trash bags, rain 
ponchos
    The experience of Phoebe Putney Memorial Hospital in 
Albany, Georgia, is emblematic of how poorly prepared we were 
and what a failure to manage the medical supply chain and 
manage a surge in demand we saw in the execution of the Federal 
Government's response. As these PPE shortages swept across the 
country in the early months of the pandemic, nurses and doctors 
at Phoebe Putney Memorial Hospital in Albany were literally 
sewing their own face masks and producing their own protective 
equipment. I will never forget the images of nurses assembled 
in a room sewing homemade PPE so that they and their colleagues 
could continue to treat patients as we saw a huge surge in 
infections and a huge taxing demand on respiratory critical 
care and intensive care services at Phoebe Putney in Albany.
    My question for you, Ms. Glas is: Have we taken the 
necessary steps since those early months of this crisis to 
ensure that our nurses and doctors and front-line medical 
providers such as those at Phoebe Putney in Albany are never 
again forced to sew their own face masks or don trash bags or 
ponchos to protect themselves in the midst of a deadly pandemic 
while they do their jobs treating patients and saving lives?
    Ms. Glas. Senator, thank you for that question, and that 
description of that hospital is a description of so many 
hospitals and institutions across our country. I had family 
members calling me who were desperately seeking PPE, and they 
were using substandard--whatever they could find to try to 
protect themselves.
    I think this is a complicated question, Senator. Has our 
industry been able to retool and invest in some of this 
critical PPE? Absolutely. But where we are today and where we 
were in the spring of last year are two different scenarios. 
But what I am concerned about, Senator, is a few months from 
now those supply chains that we just constructed to help ensure 
that those hospitals did not have to sew their own masks will 
go offshore again. We are starting to see that. In addition, 
prior to COVID-19, there was one testing swab producer in the 
United States, and that producer has been invested in 
significantly by the U.S. Government. But there is no dramatic 
second producer here in the United States. When we are looking 
at Defense Production Act funding, we have a manufacturer in 
Ohio who can make testing kit swabs, but they are not sure if 
they are going to be in the business long term without the 
Defense Production Act.
    We are going to need to diversify supply chains moving 
forward. We need to show a demand signal to the industry. There 
needs to be incentives for hospitals like the one that you have 
that want to purchase USA-made product that is going to cost a 
little bit more, and there are a lot of Georgia textile 
manufacturers that want to respond to your local hospital 
systems and make these products long term.
    Senator Ossoff. Thank you very much for that answer, Ms. 
Glas.
    A question for you, please, Dr. Elnahal. As you consider 
potential future public health crises, whether a pandemic or 
otherwise, what are key medical products, types of medical 
equipment, for which there was perhaps not an extraordinary 
surge in demand during this COVID-19 pandemic, but for which 
there might be in other plausible public health crises so that 
we can begin now to prepare ensuring that the supply chains for 
other critical medical supplies that will be in high demand in 
a future crisis are robust and able to withstand a sudden surge 
in demand if and when such a crisis arises?
    Dr. Elnahal. Thank you for the question, Senator. The first 
thing I will mention is that respiratory viruses and 
respiratory diseases are not the only things that can cause 
epidemics and pandemics. You have, for example, Ebola, which 
keeps resurfacing in Africa. Newark Airport, for which we cover 
emergency medical services (EMS) in New Jersey, was the site of 
one patient who was suspected for Ebola, which caused a 
national incident where essentially a nurse was forced into 
quarantine. And so something that we focus on is the 
possibility of Ebola coming, but also other pathogens that can 
cause gastrointestinal diseases and other types of disease. For 
each of those disease categories, you are going to have your 
characteristic needs. But I can tell you that personal 
protective equipment for every type of pathogen will be 
important.
    The types of equipment will be different, depending on the 
specific disease. So, for example, pathogens that tend to cause 
diarrhea and are transmitted through the fecal-oral route, you 
really need to make sure that both disposable and reusable 
gowns are replenished and available. Isolation gowns for 
respiratory diseases and, contact-based diseases were an issue 
in this pandemic, but there are also different types of 
equipment specific to that.
    I think the idea is to take a look at the possibility of 
epidemics and pandemics in multiple different disease 
categories and go down the list of everything that is needed. 
But we really should not be having shortages for commonly used 
medications of any type, and Dr. Schondelmeyer talked about 
that really eloquently, to reduce that volatility through 
effective policies, making sure that the stockpile is there and 
exists. There were no real medication stockpiles we saw for 
some of the sedating medications for folks on ventilators. All 
of that will be important in addition to policies that shore up 
manufacturing.
    Senator Ossoff. Thank you, Dr. Elnahal, Dr. Schondelmeyer, 
and Dr. Handfield, my time is running out. What I would like to 
request of each witness is that you please submit for the 
record an itemized list of the medical equipment products,\1\ 
the precursors for production of key medical supplies and 
products, the pharmaceutical products that may swiftly be in 
high demand and of which we may have shortages across a range 
of plausible public health crises that you might anticipate so 
that this Committee can refer to such lists as we consider 
other supply chains that may require reinforcement.
---------------------------------------------------------------------------
    \1\ The information requested by Senator Ossoff appears in the 
Appendix on page 296.
---------------------------------------------------------------------------
    Thank you so much, and I yield.
    Chairman Peters. Thank you, Senator Ossoff.
    Last Congress, I introduced two bills. One was called the 
``HOME Act,'' the other was the ``PART Act.'' They were based 
on the findings of our 2019 investigative report that I 
mentioned in my opening comments where we saw the 
vulnerabilities that existed because of offshore production of 
critical supplies and drugs.
    One thing that became quite apparent in the investigation 
is we do not have a good handle on exactly what is made in the 
United States, what is made overseas, what are the supplies, 
what are the manufacturing capabilities. Dr. Schondelmeyer, the 
PART Act is the act that deals with that. It would basically 
expand manufacturer reporting requirements to include increased 
demand, export restrictions, quarterly reporting on the amount 
of drugs and active ingredients that are here, what is 
overseas. It is difficult to put forward policies if you do not 
have a real clear picture of what is out there. Do you see a 
need for this type of legislation to increase supply chain 
visibility as we work on this problem?
    Mr. Schondelmeyer. Absolutely. I think we know so little 
about our drug supply system, and many of the prescription 
drugs sold in the U.S. market, as I said, have on the label the 
name of a U.S. company or a U.S. subsidiary of a foreign 
company. But that almost always says ``manufactured for'' or 
``distributed by'' or ``marketed by.'' Less often does it say 
``made by'' or ``origin'' or ``product of,'' which tells you 
the country where it was really made.
    We have a health care system and a pharmaceutical system 
that masks the origin and provides kind of a stealth, and we do 
not know where they come from. In testimony last fall, I 
remember the FDA admitted that they do not know and they do not 
have authority to collect volume and market production levels. 
I think your act specifies that, spells it out, and would give 
us some of the information we need to have this ongoing supply 
map so we know what we are doing when we need to find drugs in 
the marketplace.
    I really watched the National Football League (NFL) draft, 
and it is amazing how much those NFL teams know about the 
football players they can select. We know so much less about 
the drugs that we rely on every day that it is dangerous.
    Chairman Peters. Yes, absolutely. Visibility and 
understanding the scope of the problem is the first step in 
order to try to solve this. That is the intent of that 
legislation, and we are going to be working on reintroducing it 
and certainly would welcome all the panelists' input into that 
legislation.
    The other act is the HOME Act, which then builds--after we 
have that understanding of potential supply shortages that 
could exist and where the manufacturing, once we understand 
those dynamics, we have to bring it onshore, and onshore will 
take a variety of strategies. The HOME Act talks about 
authorizing HHS to actually make investments in domestic 
advanced manufacturing of critical drugs and supplies through 
loans, perhaps forgivable grants, but also focused in a very 
strategic way as to those that we need to make those 
investments, and that requires obviously visibility as to what 
is out there, where it is manufactured, and the demand side as 
to what we need and make sure that we have to have that in our 
country, but understanding that we may have to take a proactive 
approach of investment in those industries.
    Dr. Handfield, with that brief introduction, in your view, 
would something like that help us deal with some of the 
critical shortcomings in our current supply chains? Is that 
something that we should be exploring further?
    [Pause.]
    Mr. Handfield. Yes, I am sorry. That was directed to me. I 
apologize. I really do believe that that approach would--as I 
said before, using alternative contracting approaches would 
make a lot of sense. First of all, I think you could target 
those drugs that are immediately in short supply which we know 
could be manufactured here. I have had some discussions with 
FDA, and I believe that there is greater discretion on their 
part of working with manufacturers to ensure that they meet the 
Good Manufacturing Practices (GMP) requirements to be able to 
do those quickly.
    There are other parts of the supply chain that may take 
longer to move domestically. There may be complications in 
terms of regulatory issues. But we want to be able to identify 
those areas that are really critical bottlenecks in the supply 
chain, if you will, and it is those bottlenecks that are 
sometimes two or three tiers down the supply chain that are 
going to be the restrictive component that will halt and create 
those shortages.
    I think it makes sense to start with the Prevent Auto 
Recycling Thefts (PART) Act, and manufacturers are going to be 
reluctant, to be able to share that information. I would 
venture to say that some of them may not even know what that 
information is or who is in their supply chain. And then the 
second part of that would be to say, well, what parts of that 
do we want to bring back to the United States? I think there 
are really, the right incentives, the right contractual 
incentives that can lead them to do that would make a lot of 
sense, and I would be happy to work further with you on 
determining what kinds of drugs would best fit those types of 
criteria.
    Chairman Peters. Thank you, Dr. Handfield, for that offer, 
and it certainly is interesting, the testimony that even the 
manufacturers' companies are not sure what is in that supply 
chain as well. So having greater visibility is going to be 
important for us to deal with this issue.
    I want to thank all of our witnesses for engaging in this 
important discussion as part of this Committee's bipartisan 
oversight of the Federal coronavirus pandemic response. I think 
there is no question certainly from the testimony we heard here 
today that our longstanding overreliance on foreign sources for 
critical medical products, coupled with the Trump 
administration's failure to take early action, led to mass 
shortages of needed PPE and critical drugs throughout the 
United States. As today's hearing demonstrated, the shortages 
we experienced and continue to experience, as we have heard, 
were and are foreseeable. Unfortunately, instead of acting 
quickly and understanding the severity of the virus, the past 
administration failed to effectively coordinate a unified 
response and procure the medical supplies that we needed.
    As our Committee continues its investigation into the 
Federal response and identifies needed reforms, we look forward 
to building on the testimony that we have received here today. 
As we have seen from the dearth and destruction wrought by this 
virus, the cost of inaction is simply far too great to bear.
    So, with that, the hearing record will remain open for 15 
days, until May 28th at 5 p.m., for the submission of 
statements and questions for the record. With that, this 
hearing is now adjourned.
    [Whereupon, at 4:03 p.m., the Committee was adjourned.]

                            A P P E N D I X

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