America's Medical Supply Crisis
Why was the United States left scrambling for critical medical equipment as the coronavirus swept the country? With the Associated Press, FRONTLINE investigates the fragmented global medical supply chain and its deadly consequences.
>> NARRATOR: Months into the
pandemic... >> This is a huge security
issue. >> NARRATOR: Unheaded warnings
about America’s medical supply chain.
>> This is what I was worried about on steroids.
>> NARRATOR: FRONTLINE, the Global Reporting Centre, and the
Associated Press investigate. >> This is one of your N95 masks
for under a dollar. This is one made in China
for 30 cents. >> China can sell masks for
cheaper than my raw material costs are.
>> The president and first lady have both tested positive for
the coronavirus. >> NARRATOR: With the president
testing positive, and cases still rising why wasn’t the
United States more prepared? >> You can't be prepared if
you're not funded to be prepared.
>> NARRATOR: Who is accountable? >> Do you think that this
Administration has done what it needs to do to protect
healthcare workers? >> I think a lot more could be
done. >> NARRATOR: And what will
happen when a vaccine is ready? >> Given the abject failure, of
the Administration we do worry. >> NARRATOR: Now on FRONTLINE
"America’s Medical Supply Crisis".
>> It hit the whole hospital hard.
Everybody knew Sandy-- every lab, X-ray, the respiratory
therapists. You know, she always had a smile
for them, or a kind word for them.
We're a family, and it was devastating.
>> My sister was a nurse. (voice breaking): She would tell
us that she was going to go to work with no fear, that she
knew that God was with her and He was going to protect her.
>> NARRATOR: It was the start of the coronavirus pandemic in
California, and nurses like Sandy Oldfield were short on
masks and gowns and gloves. >> It was hard.
Our morale was pretty low. We still weren't getting the PPE
on our floor, on our unit. It was tough.
>> She didn't feel safe. I even had made a comment to
her. I said, "Just don't go to work."
She was, like, "We have to. We've already, I mean, you
don't just not show up, you know?"
But she said everybody felt the same.
I mean, they felt that they just were not being protected.
She cared for a patient that was asymptomatic.
He showed no signs of the virus or anything.
And my sister, unfortunately, was exposed.
She called me in the morning and said that she was positive.
>> NARRATOR: After nine other nurses in the same hospital came
down with COVID-19, the nursing staff started protesting.
>> What do we want? PPE!
>> We're all saying the same thing.
Give us our PPE. >> The hospital says
safety is the highest priority. >> We are seeing a lot of our
healthcare workers come down with this illness.
>> NARRATOR: Inside the hospital, Sandy Oldfield was
getting sicker. >> She told me, "The doctors
are going to put me on a ventilator."
And I said, "We're going to be right here when you open your
eyes." I told her I loved her, and that
was the last time I spoke to her.
>> A somber night in Fresno as nurses mourn the loss of one of
their own to COVID-19. >> Sandy Oldfield died on Monday
after battling the virus for two months.
>> She was very well-liked and had many friends, many of which
gathered here... >> We welcome all of our sisters
and brothers here tonight, to honor the tragic loss of our
first nurse to the coronavirus pandemic here in Fresno County.
♪ ♪ >> It just really hurt my heart
just to know that my sister wasn't protected.
All of this could have been avoided.
>> In a plane crash situation, you put your mask on first.
You need to put your PPE on so that you could take care of
them. If you get sick, you can't help
them. You can't help anybody.
>> I feel if she would've had the proper PPE, she would be
alive today. >> What do we need?
>> PPE. >> What do we want?
>> (inaudible) >> What do we need?
>> PPE! >> We are demanding PPE so that
we can protect ourselves and our families.
>> NARRATOR: Sandy Oldfield was one of the countless Americans
left unprotected when the coronavirus hit.
Left without essentials like gloves, gowns, masks.
>> A major problem amid this crisis-- a national shortage of
personal protective equipment, or PPE.
>> NARRATOR: Forced to re-use personal protective equipment or
make their own-- even healthcare workers, around a thousand of
whom have died from the virus. >> This is deplorable.
You know, when you stop and think that we send soldiers into
battle with the equipment that they need, yet we were asking
nurses to do the exact same thing, but without the equipment
that they needed. There's a failure in the system.
I think those who are in position to ensure that the
supply chain was being maintained, they failed us, big
time. >> NARRATOR: For the past seven
months, "Frontline" and Associated Press reporters
Juliet Linderman and Martha Mendoza have been examining that
failure and the unheeded warnings, interviewing
manufacturers and government officials, analyzing records,
and tracing key medical supplies along a fragile global chain.
>> MENDOZA: I did a run of N95 masks...
>> NARRATOR: From the earliest days, they were tracking a
database of medical supply imports.
>> MENDOZA: Almost all coming from China.
>> NARRATOR: Within the numbers, one detail stood out.
>> MENDOZA: You see this graph? >> LINDERMAN: Yeah, yeah.
>> NARRATOR: Beginning in March, the usual flow of tons of PPE
from China to the U.S. had plummeted.
>> LINDERMAN: What we're seeing here is, like, pretty
consistent. 25 shipments.
22 shipments. 23 shipments.
And then, just, whoosh. Drops to three shipments in all
of March. Complete drop-off.
>> NARRATOR: China was dealing with its own outbreak...
>> China has identified a previously unknown coronavirus.
>> NARRATOR: ...and the U.S. was left desperately short.
>> It's thought to have originated in the city of Wuhan.
>> NARRATOR: U.S. officials began urging the public to
conserve supplies. >> Right now in the United
States, people should not be walking around with masks.
>> It can lead to a shortage of masks?
>> Exactly, that's the point. It could lead to a shortage of
masks for the people who really need it.
>> NARRATOR: But then, in late March, there was a sign of
relief. Import records showed PPE
shipments were slowly starting up again.
One of the first was a planeload of N95 masks destined for this
warehouse in Santa Barbara, California.
>> This is the first shipment that we've got in from China in
the past two months. These are the N95 masks that are
in such high demand right now. >> NARRATOR: The charity Direct
Relief, which normally helps with disasters around the world,
had turned its focus on the U.S. to help fill the gap in the mask
supply. >> It's just such a scramble
because of the huge demand and the scary time we're in.
So what you're seeing now is a global demand spike.
Because of the outbreak in China itself, I think the demand was
all gobbled up. That is now just starting to
loosen up. >> NARRATOR: Direct Relief
planned to distribute these Chinese-made masks to healthcare
workers across the country. Looking at the footage we'd
shot, the Associated Press reporters made a surprising
discovery. >> LINDERMAN: Looks like he's
inspecting them, right? >> MENDOZA: Those, those are ear
loops, not a head strap. >> NARRATOR: The straps on the
masks looked different than normal.
>> MENDOZA: I don't think they're supposed to have an ear
loop. >> LINDERMAN: No, they're
definitely not. >> NARRATOR: We sent some of the
masks to be tested at an environmental medicine lab at
the University of North Carolina.
>> All of these products that arrived, even though they're
labeled clearly N95, and they show the lady in the picture is
wearing a mask with head straps, it has ear loops, so that's a
dead giveaway that it's a counterfeit product.
These were all counterfeit that we tested.
>> NARRATOR: His tests showed that the counterfeit masks did
not meet requirements to filter at least 95 percent of harmful
particles. Direct Relief never sent out
the masks, but around the country
as more shipments began to arrive from China, more
counterfeits began turning up... >> And now federal agents say
that they are seeing criminals preying on people during the
coronavirus pandemic. >> NARRATOR: ...just as health
officials were reversing course and urging everyone to wear
masks. >> ...counterfeit masks, hand
sanitizers, fake COVID-19 testing kits.
>> Customs inspectors have been seizing fake medical supplies as
scammers try to take advantage of the crisis.
>> NARRATOR: We wanted to talk to the FBI about the rash of
counterfeits. They were part of a task force
investigating the problem. >> LINDERMAN: My colleagues and
I were working on a story about a nonprofit organization.
They were getting one of the first shipments of medical-grade
N95 masks. They opened it up and it turned
out that they were all counterfeit masks.
How does something like this happen?
>> Under the COVID circumstances, supply and
demand changed rapidly, and the demand became so great that it
overtook what we really had in our stock.
So that didn't change that, the fact that the medical
professionals and first responders really needed that.
There's a lot of money out there and, you know, working for the
FBI, it becomes clear on your first day here that when there
is an opportunity for a criminal to make money, they will explore
that. >> LINDERMAN: What is the risk
of having counterfeit or substandard masks actually make
it to frontline medical workers?
>> If, when you put on a set of PPE, you assume that it's going
to protect you. That's what it's for.
And if it's not doing that job, it really is putting the most
vulnerable people at risk. So that is something that should
scare every one of us. >> NARRATOR: As we continued
investigating medical supply shortages, we followed a trail
leading back more than a decade, to the story of a mask-maker in
Texas. >> The mask capital of the world
was Fort Worth, Texas. I was with some amazing
companies that did some incredible things.
Great products, great company, very innovative, very efficient.
We ruled the world on face masks.
>> NARRATOR: Dan Reese is one of the last domestic mask
manufacturers. He told us a turning point for
the industry came in 2001... >> China was voted into the
World Trade Organization today >> NARRATOR: ...when the World
Trade Organization welcomed its newest member.
>> ...the People's Republic of China.
>> That was the beginning of the end.
There's nothing to stop them, so we're left competing against
China. >> NARRATOR: By the late 2000s,
most of the masks used in the United States were produced
outside the country. >> This is a huge security
issue for this country. They can stop it, saying, "We're
not going to ship to you because we need it."
>> NARRATOR: Reese had officials from the Department of Health
and Human Services visit his factory in 2007, and warned them
the U.S. risked losing control of its mask supply.
>> The PPE, the things that we have to have in an emergency,
we, as a country, cannot hand this control over to a foreign
government, say, "Okay, if you're okay with it, send it to
us." And that's what we did.
That's the security issue. >> NARRATOR: It wasn't long
before his fears were playing out.
>> The world is now at the start of the 2009 influenza pandemic.
>> H1N1 has spread to 46 states. More than 1,000 Americans have
died, and more than 20,000 have been hospitalized.
>> NARRATOR: Amid the H1N1 pandemic, officials believed the
U.S. might need as many as five billion N95 masks-- nearly 50
times what the country had on hand.
>> Public health experts are expressing concern about whether
hospitals could handle the onslaught.
>> We received a call from the government that says, "Prestige,
we have a situation." So they ask us to ramp up, ramp
up hard, do everything we could do.
Save the country. And our response was, "We're
small. We're not that big, you know?
We don't have huge market share."
But what we did, with our own money, our own investment, we
went round the clock. We built machines as fast as we
could possibly build them. We went from having probably 60
employees to having 260. And we respond as much as we
possibly can for the country. >> NARRATOR: With much fanfare,
Reese cut the ribbon on a new facility that they called the
Global Pandemic Preparedness and Response Center.
>> It's kind of a dream to be this pandemic response center.
>> 15 years ago, nine out of ten masks were made right
here in the United States of America.
In less than a decade, that flipped, where one out of ten
masks is now made in this country.
But this company, this company made the commitment to turn that
around. >> NARRATOR: Texas congressman
Michael Burgess, who's also a physician, understood the
importance of what was happening.
>> It is important that those masks function as required, and
the only way to ensure that is to have those masks made by you
in the United States of America...
Are we willing to spend a few pennies more for a mask, but
have a reliable mask available, and the supply of masks that we
need? I think that's the question that
has to be answered. >> LINDERMAN: So what happened
to that response center? >> (sighs)
The amount of product that was purchased diminished.
The pandemic was over, everyone's attention got
diverted to something else, then the monies dried up.
>> One day, America realizes, "We're not going to die from
H1N1." >> It looks like swine flu
is history. >> The World Health
Organization just declared an end to the H1N1 pandemic
alert. >> NARRATOR: With the outbreak
under control, Prestige Ameritech's orders weren't
renewed. Hospitals went back to buying
cheaper masks from their overseas suppliers.
Reese's business nearly went bankrupt.
>> The people that we'd hired, these people that stepped in to
save America, they were rewarded by getting in an unemployment
line. >> MENDOZA: When they asked you
to ramp up, didn't the government guarantee anything to
help support you? >> No.
>> MENDOZA: Nothing. >> No.
>> NARRATOR: Reese showed us letters he and his colleagues
wrote to the Obama administration insisting that
"America must re-secure its mask supply chain."
They said H1N1 was a wake-up call, and warned that in a major
pandemic, China could stop shipping masks to the U.S.
But in Washington, officials had moved on.
Their fallback would be an emergency stockpile meant
to cover medical needs in such a crisis.
>> The stockpile fills a gap. If the Strategic National
Stockpile did not exist, we would have very limited or no
capability to respond to these types of events.
>> NARRATOR: Greg Burel ran the Strategic National Stockpile,
the SNS, a series of government-run warehouses
filled with medical supplies like ventilators and masks,
which were critically important during the H1N1 pandemic.
>> LINDERMAN: The SNS response to H1N1 was the largest
deployment of the stockpile. What was your focus during
that time? >> During H1N1, we sent out
personal protective equipment that we had stocked for
a pandemic influenza event ahead of a great deal of disease
spread, so it was already in place.
We showed we could get that material out rapidly, and it
could be made available. >> NARRATOR: The problem was,
H1N1 ended up depleting the stockpile.
And in the ensuing years, neither Congress nor the White
House moved to substantially refill it.
One government report found that many of the N95 masks
in the stockpile were past their expiration date-- some broken,
gathering dust and mold. >> We bought the N95 masks that
are in the stockpile with funds that were appropriated in the
early 2000s. They've passed their expiry
date, but we didn't have additional funds to buy more, so
we made the difficult decision to hold on to those.
You can't be prepared if you're not funded to be prepared.
>> LINDERMAN: Why do you think you didn't receive those
appropriations? >> You'd really have to ask
the Congress. >> Well, yeah, Congress does
bear a significant amount of responsibility.
There are always going to be competing budgetary priorities.
It's difficult when you talk to the people in the budget
committee to say, "These are the dollars we're going to need
to purchase N95 masks." I think if we'd had that
discussion a year and a half ago, you'd have got a lot
of blank stares. >> NARRATOR: But, in fact, in
those pre-COVID years, we found repeated warnings from inside
and outside the government that the country was being left
without a safety net. That the government needed
to strengthen the supply of PPE. And it wasn't just masks.
It was ventilators, too. >> At that time, the ventilators
in the stockpile were pretty old.
And we really wanted to set out to modernize the stockpile.
>> NARRATOR: Nicole Lurie was in charge of preparedness and
response at the Department of Health and Human Services.
In the wake of H1N1, she tried to do something about the dire
situation. >> How can we make a better
ventilator? How can we make it cheaper?
And how, then how can we have enough?
And so we contracted with a couple of different companies
to make those ventilators. >> NARRATOR: The final contract
in 2014 went to a company called Philips Respironics.
The plan at the time was that they could deliver 10,000
machines to the stockpile by mid 2019.
>> Ultimately, that ventilator got approved for use by the FDA.
It was small. It was nimble.
It was not expensive. And there was a contract to
procure those for the Strategic National Stockpile.
>> LINDERMAN: So Philips delivered on their contract?
>> No. >> NARRATOR: HHS didn't actually
order the ventilators until September 2019, and then gave
Philips more time to deliver. The delays have sparked
questions in light of the coronavirus pandemic.
When we spoke to Congressman Raja Krishnamoorthi this past
summer, he was leading an investigation into the Philips
deal. >> Although Philips had been
contracted to deliver them by this time, they're nowhere to be
seen. >> LINDERMAN: Is that
surprising? >> It is surprising, given how
much money that the federal government and the taxpayers
have put into this project of developing these ventilators.
The fact that I don't believe we have even one of these is not
only surprising, it's shocking. That's all the more
an indication of failure on the part of the government.
>> NARRATOR: Philips would not agree to an interview, but in
answers to our written questions, said it had recently
delivered 1,700 ventilators. The company said the delays were
due to "software development issues" discovered during
testing, and "FDA clearance... which took longer than
anticipated." As a result of the delays,
at the end of the Obama administration, there were only
about 18,000 ventilators in the national stockpile, a fraction
of what health officials said would be needed in a full-blown
pandemic. And when it came to N95 masks,
the reserves were thin, too. >> So in all of this, you say,
well, what's likely to happen? People are going to get sick.
Healthcare workers are going to need to take care of them.
You need to protect healthcare workers almost as a first-
priority population, because you need to keep the healthcare
system running, right, to take care of people who are sick.
>> NARRATOR: With these shortages in mind, Nicole Lurie
and other outgoing health officials tried to warn the
incoming Trump administration about the dangers that might lie
ahead. >> There was a brief afternoon
with the incoming team that played through a pandemic
scenario and walked through with the incoming cabinet what roles
and responsibilities were, and the things that they needed to
have on their radar screen. >> LINDERMAN: Did they mention
specifically, like, shortages? >> We always talked about
shortages. >> LINDERMAN: Do you remember
the, kind of the big takeaways from that?
>> The big takeaways from that were that there was not a lot
of traction on the part of most people who were participating.
One didn't have the sense coming in that this was going to be
high on the priority list. >> The World Health Organization
declaring the outbreak of COVID-19 a global pandemic.
>> New developments in the coronavirus emergency.
>> Much of America shutting down.
>> Every day, you hear about a new shortage.
>> NARRATOR: In the spring of 2020, it was impossible to
ignore the warnings any longer. >> All kinds of companies
producing things they don't normally produce.
>> NARRATOR: Furniture makers switched to making masks.
>> We're seeing a lot of hands-on-deck approach.
>> NARRATOR: Factories retooled to make face shields.
Distilleries were producing hand sanitizer.
We went to one hospital group on Long Island...
>> Hello! >> LINDERMAN: Hi!
>> NARRATOR: That was trying to make its own swabs for
coronavirus tests. >> By no means are we going
into the swab business forever. This is a way to keep us
operating at 100% as more and more people came into the
hospital. >> NARRATOR: They were using 3D-
printing technology. >> This is the final swab here.
We need these swabs from everyone.
Like, producing it by manufacturing capacity is not
there, so we need everyone firing on all cylinders in order
to combat this, so we can get ourselves back to normal, and
we wanted to ensure that the testing supplies were not
limited by something as simple as a nasal swab.
>> NARRATOR: With such widespread shortages, the Trump
administration had to look abroad for help.
>> We did not make any significant volume of supplies
in the United States. I realized that I was going
to have to fly material here, accelerating volume from
overseas to the U.S. >> NARRATOR: Rear Admiral John
Polowczyk was put in charge of a program called Project Airbridge
that attempted to procure supplies from China and
elsewhere and distribute them in the U.S.
But from the start, it didn't go well.
States continued to struggle to get supplies.
Some governors took matters into their own hands, cutting
their own foreign deals. >> In New Hampshire today, an
airplane carrying over 91,000 pounds of personal protective
equipment landed in the Granite State.
>> Maryland's governor brokered a deal to buy half a million
coronavirus tests. >> Governors were forced to find
private business people who had connections around the world
to try to somehow get ahold of just basic things like masks.
>> This is the first of several flights to the frontlines in
Illinois, an effort the governor's office, frankly,
calls comparable to the wild, wild west.
>> There's 50 states, and so it was everybody against
everybody else. It was just a free-for-all.
>> The single largest shipment the state's received of personal
protective equipment, or PPE, is being delivered today.
>> LINDERMAN: Do you have a sense of where and how supplies
are distributed? >> Well, that's one of the
questions we've asked them in our many letters, is, what
are the standards and what are the protocols?
Project Airbridge is, like many of these projects with
the federal government, it's a little unclear how much that's
actually worked to bring equipment here.
And, I mean, the original idea, I think, was to get equipment
here, but I haven't seen much of a response.
>> LINDERMAN: Why hasn't there been better coordination?
>> I think there's been, there's been a lot of coordination.
I've had several series of sit- downs with every state emergency
manager, every state health officer, what they're buying,
how they're trying to buy, where they're going.
So from where I sit, I see lots of coordination.
>> LINDERMAN: Both houses of Congress have investigated
Project Airbridge, and among the issues they've raised is
concerns about secrecy, lack of transparency.
What's your response to those criticisms?
>> Unfounded. >> LINDERMAN: Unfounded.
>> The governors have as much visibility as I do to where
supplies are going. So the secrecy and the lack
of transparency is absolutely unfounded.
The volumes of masks, gowns, thermometers, face shields,
those supplies went to, first, frontline healthcare workers.
>> NARRATOR: In Fort Worth, Dan Reese was watching from the
sidelines, dismayed once again by the shortages, and the
continued reliance on products from China.
>> The minute I heard that this was the coronavirus in China,
we started reaching out to the government to try to get help,
because we're thinking that this could be the big one that we've
been talking about. >> NARRATOR: Reese offered to
ramp up mask production, but the company wanted a guarantee that
the government would commit to buying from them even after
the emergency was over. >> It's the same Catch-22 we had
on H1N1. When they would come back to us
and say, "Well, yeah, and we'll give you a contract for the next
nine months." From a business standpoint, we
said, "We can't do that," when we don't know that there's going
to be a tomorrow. >> NARRATOR: At the time, there
were mounting calls to tap into U.S. companies like
Reese's. Associations representing
hospitals, physicians, and nurses appealed directly to the
president to increase domestic production of PPE and other
supplies. >> LINDERMAN: You had a chance
to go to the Oval Office and actually talk to the president.
What did you tell him? >> We did have a brief
discussion about the, you know, the PPEs.
>> When you look at the job we've done on everything--
on supplies, on everything, the gowns, the gloves, the...
The masks... >> A lot of nurses they're
seeing death probably three to four times the average
than what they normally would. >> A lot of death.
>> Yes. >> There's no question about it.
And by the way, while we're at it, can you pass these pens
around, okay? >> You know, he was insisting
that anyone who needed to get the equipment, you know, it was
there. >> I've heard that they are
loaded up with, with gowns now. I've heard we have tremendous
supply to almost all places. Tremendous supply.
>> I don't believe that that's the case.
>> LINDERMAN: Do you think that this administration has done
what it needs to do to protect healthcare workers?
>> I think a lot more could be done.
>> LINDERMAN: What should have happened?
>> Well, A.N.A. advocated for the president to open up the
Defense Production Act so that, you know, companies within the
United States could begin to quickly manufacture the
equipment that we needed-- not only the masks, but even
ventilators and, etc. >> NARRATOR: Trump had been
resisting such calls to use the Defense Production Act,
the DPA, which compels private American companies to produce
needed supplies. >> Defense Production Act is
a wonderful thing, but I just haven't had to use it.
But remember, we're really a second line of attack.
The first line of attack is supposed to be the hospitals,
and the local government, and the states, the states
themselves. We're a country not based on
nationalizing our business. Call a person over in Venezuela,
ask him how did nationalization of their businesses work out.
Not too well. >> NARRATOR: Eventually, as the
pandemic worsened, he relented, tweeting at automakers: "Start
making ventilators, now!" >> This afternoon I invoked the
Defense Production Act to compel General Motors to accept,
perform, and prioritize federal contracts for ventilators.
>> NARRATOR: We spoke to the head of the ventilator company
that was working with GM about the president's order.
>> We were doing everything we could to move as fast
as possible with General Motors. I think Trump was expressing
what so many Americans were feeling: "We need ventilators
now. We need to solve this problem
now." >> MENDOZA: President Trump said
the Defense Production Act, he was invoking it in order to get
this going. Is that what got you and
your company working with GM in Kokomo to start making
ventilators, or were you already making ventilators at that
point? >> We were already in the
process of making ventilators, and the Defense Production Act
didn't get us to move faster and it didn't create the
partnership. The DPA did help in terms of
supply lines and getting parts here on time.
You can get a tweet from the president, or you can have
a phone call with a frontline hospital worker and hear their
voice shaking, talking about trying to make a decision
of who gets a ventilator and who doesn't.
It's those phone calls from, from the real heroes that...
That you, you'll never forget. >> NARRATOR: In August, we met
with President Trump's trade adviser, Peter Navarro, who
oversees the Defense Production Act.
>> LINDERMAN: A common refrain from critics has been that the
DPA hasn't been used enough and that it wasn't used soon enough.
>> So, on the soon enough, that's, that's counterfactual.
If you look at the executive orders, they begin in March
quite aggressively. So we had six executive orders
and four presidential memorandum where we were using it, so
that's when that began. And in terms of aggressive
enough, this, this again is counterfactual, and I think it
reflects a misunderstanding of what the DPA actually can and
should do. Our strategy has been basically
to go in and use it forcefully when we've had to, and then let
the rest of corporate America understand that if they don't
do what they should do, we're coming after 'em, and that's
been very effective. >> NARRATOR: Navarro was one of
the earliest officials to warn President Trump about the
pandemic and has long expressed concerns about critical
supplies, like PPE, being manufactured overseas.
>> We're dangerously dependent on the Chinese Communist Party
for all sorts of masks, equipment, and we know that
they, in terms of, times of crisis, will hoard that stuff.
>> LINDERMAN: You have been talking about the potential
dangers of U.S. manufacturing moving offshore for a very long
time. Is this the type of scenario
you were worried about? >> No, this is what I was
worried about on steroids. This pandemic has shone a bright
light on the dangers, because something like over 80 countries
during this pandemic has put some form of export restrictions
on what we need as a country to protect our public health.
>> NARRATOR: Using the Defense Production Act was supposed to
help address this problem and invigorate U.S. manufacturing.
But when we looked at the White House's report on DPA contracts
it showed that the largest ones had been earmarked not for
PPE, but for ventilators which the U.S. produces a lot
of already. And one contract stood out:
$646 million to Philips Respironics, the same company
whose earlier deal to deliver ventilators to the national
stockpile has been plagued by delays.
>> LINDERMAN: If this company didn't deliver on their first
contract, how do you get a second contract?
>> That is something we're trying to figure out.
For Philips to essentially fail on its first contract, and then
to be awarded a more lucrative contract, is puzzling, to say
the least. >> NARRATOR: The new contract
would pay Philips nearly five times as much per ventilator as
the previous contract. The company told us the original
machines had been priced "exceptionally low" and that the
new ones had "functional differences" and a higher cost
for "expedited delivery." We showed the specs for both
models to experts in respiratory care and medical device
engineering. They said the two devices
appeared to be similar and found nothing to account for the price
difference. A congressional investigation
came to the same conclusion and laid some of the blame on the
man who negotiated the contract, Peter Navarro.
>> LINDERMAN: The criticism has been that this administration
is allowing taxpayers to pay five times more for what is
functionally the same ventilator as the previous...
>> See, that's... >> LINDERMAN: No, no, and this
is coming from a congressional report.
>> Of course, it's a Democratic congressional report.
Let me tell you about ventilators.
All ventilators are not created equal.
You can't compare the price of this ventilator with that
ventilator without controlling for their functionality, okay?
>> LINDERMAN: So you're saying they're very different.
>> They're very different. You're dwelling on something
that's tiny in the scheme of things, and that's why I always
worry about these kind of interviews, because if the
American people really want to know what's happening, it's not
what may or may not be happening with a single contract with
Philips, okay? Because that's just pure
political BS, okay? That's all you're doing here.
If you want to play that game and put it on the air, fine, but
put this on the air: that's just BS.
>> NARRATOR: Shortly after we spoke to Navarro, the Department
of Health and Human Services terminated the contract with
Philips. HHS declined to comment on why
but canceled other ventilator deals, too, saying the national
stockpile had enough. Our months of reporting on the
supply chain problems led not just to China or the White House
but to the way hospitals themselves operate in the United
States. To places like this, a
procurement warehouse for Northwell Health, the New York
hospital group that had scrambled for swabs in the early
days of the pandemic. >> LINDERMAN: So, Paul, what's
going on the truck? >> These two carts are PPE
supplies for a COVID unit. >> NARRATOR: Paul Spodek
oversees medical supply distribution here.
He explained to us that the way the business works is based on
a concept known as "just in time," which is designed to keep
costs low. >> A hospital will submit an
order today, get their delivery tomorrow just for that day, and
they receive it in "just in time" instead of stockpiling
material on site and using up valuable space and also labor.
>> LINDERMAN: So it's a space issue, not wanting to order a
lot more product than you think you'll need in the immediate
short term. >> Correct.
It's a space issue, but it's also making sure you get the
right product. If you're not utilizing a
just-in-time system, you will order too much product that you
do not need and not enough product that you really do need.
>> NARRATOR: But when the pandemic first hit, most
hospitals didn't have enough on hand or a way to stockpile
because of the just-in-time system.
Even a chain as big as Northwell, with its 85,000-
square-foot warehouse, struggled.
>> LINDERMAN: How close did you get to running out?
>> Isolation gowns was very close.
This building looks large, but as we found out in this
pandemic, large wasn't enough. >> LINDERMAN: Did you
experience any shortages that were surprising to you?
>> Well, you know, we'd never thought we'd run out of mortuary
kits, also called body bags. It was something that you'd
never think of, um, that we'd always have enough.
I mean, it still gives me goose bumps thinking about it.
>> NARRATOR: Some of Northwell's supplies come by way of a
company called Premier... ♪ ♪
...a group purchasing organization, or GPO, which
works with more than 4,000 hospitals around the country to
get medical supplies. It's another way of keeping
costs low. >> We don't distribute products,
so we contract for products. There are health care systems
that, you know, said, "We're going to go do this on our own."
Well, you're going to be spending a lot of money on
holding costs, carrying costs. >> MENDOZA: If you have a lower
cost, does that mean you have less surge capacity?
>> No, well, it's interesting. Um, if you have a lower cost...
I think what we did-- and again, not we, Premier, but we, the
industry, did-- by creating this, you know, narrow supply
chain of products, I think we didn't keep sort of redundancies
along the way. I think that there are ways that
we can still create products at reasonable prices.
It may not be the lowest price, but reasonable prices.
>> NARRATOR: But we found studies and reports going back
years raising concerns that GPOs could be anticompetitive and
disrupt the supply chain. >> MENDOZA: Is there some risk
that GPOs slowed down that procurement?
>> Slowed down the procurement? You know, it's interesting, I
don't think so. I would actually argue it's the
exact other way, we're sort of this independent arbiter that
helps sort of grease the skids and tries to always try to
create healthier markets. >> Their role is to obviously
be able to buy more in bulk at a cheaper, cheaper rate.
And as a result of that, you know, you're saving money down,
down the line. But in this case, when there's
the increased demand, the system seemed to have failed somewhere
along the way. >> NARRATOR: That is exactly
what happened to Premier when the pandemic hit and one of its
overseas factories shut off supplies.
>> The factory in Taiwan said, "We're no longer going to be
able to ship to the U.S., we're going to ship all this product
to mainland China." The lesson learned on behalf
of the industry is we've got to create more resiliency, and we
don't ever want to find ourselves in this situation
again. >> NARRATOR: So, in May, Premier
bought a minority stake in one of the only domestic mask
makers, Dan Reese's company, Prestige Ameritech.
>> So, it's a huge thing for our company, it was very good.
The key thing, it's not so much just the dollar infusion in
cash, it's the commitment of these members.
The members are stepping in, saying, "Hey, we're going to buy
500,000 respirators a month for the next three years."
See, that's what we need. >> NARRATOR: While Reese's masks
cost more than ones from China, Premier was willing to pay the
extra-- at least for now. >> MENDOZA: This is one of
your Prestige Ameritech N95 masks for under a dollar.
Here's a N95 mask made in China for 30 cents.
How do you compete with that? >> Well, that's-that's really
the issue. The bottom line is China can
sell masks into the U.S. market in my territory for cheaper than
my raw material costs are. And so you're not gonna be able
to successfully compete there. >> NARRATOR: That's the same
thing we heard talking to people who do business in China.
(speaking Chinese dialect) Cameron Johnson helps U.S.
hospitals buy PPE from China and has been based in Shanghai for
20 years. >> MENDOZA: One thing that I
keep hearing here in the United States is, we are gonna have to
shift manufacturing here. We're gonna have to be producing
a domestic supply of N95s and gowns and gloves and test kits.
Is that realistic? >> The challenge really is that
China has 50% of the world's production capacity,
particularly for masks. So are we gonna move an entire
supply chain over? It's just not gonna happen.
Manufacturing, as we know it, is never gonna return.
(speaking Chinese dialect) >> NARRATOR: Thousands of
companies in China are dedicated to making PPE.
And many others, like this plastics manufacturer Johnson
took our camera crew to see, quickly pivoted during the
pandemic under government orders.
>> The factory we visited, historically, that company
produced plastics and then had to shift to producing PPEs.
Part of this change for them was required by the local
government at the time in March. So this is why they shifted so
quickly into producing these products.
In China, you have an ecosystem of various companies, whether
they provide ingredients, raw materials, production capacity.
And that currently doesn't exist in the U.S.
>> NARRATOR: To the Trump administration, this all speaks
to what they say is an unfair playing field that China
continues to exploit. >> The N95 face masks.
Um, China put export restrictions on those masks and
then nationalized... >> NARRATOR: For Peter Navarro,
a case in point is what happened in late February at the Shanghai
subsidiary of American mask maker 3M.
>> Next thing they did was nationalize, effectively, 3M,
our company, uh, in China to prevent them from sending us any
stuff. >> The masks that we produce in
China are sold in China, for the most part.
Um, that is a large industrial country now.
>> MENDOZA: The White House trade advisor, Peter Navarro, at
one point, said China had nationalized 3M's manufacturing
there. Did that-- Is that accurate?
>> When the demand increased in China-- we produce respirators
in Shanghai area-- um, and what did happen is the Shanghai
municipal government came to 3M and requested preference and,
uh, a higher degree of engagement in, uh, addressing
the orders that we were... for everything that we were shipping
out of the Shanghai facility. They were prioritizing the-the
shipping locations, because they understood even better than we
did or even our own distributors where the needs were greatest in
China. >> MENDOZA: So that doesn't
really sound like the government nationalized it.
>> Right. We continue to run the plant,
the operations, our workers, um, but they-they were there with
us, uh, you know, every day, um, as we produced respirators, and
they were very closely involved in-in deciding where those
shipments were going. >> LINDERMAN: We spoke to 3M and
they completely disagree that it was nationalization.
They said that the Chinese government requested preference
and a higher degree of engagement in addressing the
orders for everything we were shipping out of the Shanghai
facility... >> Memo to "Frontline" here.
This is why we had to do the DPA order on them.
They-they are the slipperiest people that I-- that I dealt
with in this White House, in terms of getting to yes on
things. So if they're spinning it that
way, they can go ahead and spin it, but I'm telling you flat-out
that the Chinese Communist Party, both at the federal level
and at the local level-- I think it was in Shanghai-- was
prohibiting those masks from leaving China.
>> LINDERMAN: But... >> And we had-- no.
We had to deal with that diplomatically and we had to
deal with it with the DPA. And I'm telling you, I don't
care what 3M says-- that's what happened.
>> LINDERMAN: But is that different than the functions of
the DPA that say that we can block exports of masks from our
country? >> What that does is it
underscores, with an exclamation point, why we have to have this
production here, why we have to have it here.
>> NARRATOR: In recent weeks, President Trump and former Vice
President Joe Biden have both made returning medical supply
manufacturing to the U.S. part of their campaigns.
>> We're taking our business out of China.
We are bringing it home. >> We'll make the medical
supplies that our country needs. >> Bring home our medical supply
chains. >> It's easy to, as a
politician, to stand at the podium and say, "America is the
most competitive country in the world.
We have the best workers." The truth is, we are not that
competitive. >> We'll never again be at the
mercy of China or other foreign countries in order...
>> Oftentimes we hear "Anywhere but China"-- ABC.
Anywhere but China." Okay, but what's your plan?
Manufacturing is not gonna come back to the U.S. either,
because the ecosystems don't exist or the technology basis
doesn't exist or government support doesn't ex-- I mean,
take your pick. >> Here we are again.
It's harder to get anything. >> Nurses worry there won't be
enough personal protective equipment to go around.
>> NARRATOR: Seven months into the pandemic, the medical supply
chain remains fragile. >> LINDERMAN: We're months into
this pandemic and we are looking around the country and nurses
and doctors still don't have enough personal protective
equipment. So, I want to ask you, I mean,
why do you think that is? >> I, uh... Gonna have to
disagree with you. Um, uh, as I, uh, look across
the nation and the data that I have from, uh, supply chain,
from the commercial supply chain, from hospital reporting,
nursing home reporting, there's a lot of supplies in the nation.
Uh, I can't, uh-- I can't answer your question why, uh-- why
nurses are still saying that, um, they don't have supplies,
because that's not the picture I have.
>> NARRATOR: But a recent survey of nurses around the country
found that two-thirds of them were still reusing N95 masks,
more than half of them for five days or more.
>> It didn't need to be this way.
This is an administration that had policies, procedures, tools,
plans, checklists, advance warning, all of those things.
And it appears to have used almost none of it.
Former HHS official Nicole Lurie, who recently began
advising the Biden campaign, has watched with alarm.
>> I'm sure that there are people working very, very hard.
And I know there are, and I know there are a lot of people who
are really frustrated. Um, but for... this is such a
historical failure on so many levels.
>> There's new vaccine hope this morning...
>> NARRATOR: And now there are new concerns about the supply
chain. >> This morning, a major
milestone in the battle against COVID-19.
>> NARRATOR: As the country races for a vaccine...
>> ...COVID-19 vaccine contenders are now producing
their vaccines. >> NARRATOR: ...will there be
enough syringes? >> ...has asked states to
prepare for COVID-19... >> Given the abject failure,
frankly, of the administration to provide materials for testing
and PPE, we do worry if we'll have enough of the vials and
enough of the syringes and so on.
>> NARRATOR: The Trump administration says it's been
ramping up and has given contracts to several U.S.
companies to boost the supply of syringes.
>> LINDERMAN: In June, you mentioned that-that we were on
the path to have 400 million needles and syringes.
Can you just tell me if you think we're gonna meet it?
>> We've used the Defense Production Act with, um, a few
U.S. producers. I believe they're on track.
I think some of these vaccines might be a, um... a double
dose, so we'll need, you know, twice the number of
300-some-odd million, uh, Americans, and I-I believe the--
I believe they have, uh, syringes on that-that order of
magnitude-- uh, vials, syringes on-on order.
>> NARRATOR: HHS would not discuss its syringe deals or
tell us how many have been delivered to date.
But we found some troubling signs: the largest contract is
with a company that says it doesn't yet have FDA clearance.
Another company has experienced supply chain delays.
And the CEO of one supplier told us he has doubts about the
country's ability to ramp up. Back in Fresno, California,
nurses like Rachel Spray, still reeling from the death of her
colleague Sandy Oldfield, are worried.
>> We're still reusing masks, shields.
We've been short on gloves, short on gowns.
We feel disposable. If they're saying that there's
enough, why can't we get it? It costs money.
It costs money to bring it here and make it here.
It's cheaper to just import it. You know?
All that capitalism and corporate greed.
>> MENDOZA: At what cost? >> The cost of human life.
Health care workers. Sandy.
>> Go to pbs.org/frontline
for more reporting from our partners the Global Reporting
Centre and the AP on medical supply shortages.
>> That could be a life and death situation right?
>> Here's a N95 mask made in China for 30 cents.
>> And read the extended interview with Peter Navarro.
>> You want to play that game and put it on the air
fine, but put this on the air. That's just BS.
>> Connect with FRONTLINE on Facebook and Twitter,
and watch anytime on the PBS Video App or
Captioned by Media Access Group at WGBH
access.wgbh.org >> For more on this and other
"Frontline" programs, visit our website at pbs.org/frontline.
♪ ♪ FRONTLINE's,
"America's Medical Supply Crisis" is available on Amazon
Prime Video. ♪ ♪