Key Medical Supplies Were Shipped From US Manufacturers to Foreign Buyers, Records Show

By Lee Fang, The Intercept

05 April 20

 

hile much of the world moved swiftly to lock down crucial medical supplies used to treat the coronavirus, the U.S. dithered, maintaining business as normal and allowing large shipments of American-made respirators and ventilators to be sold to foreign buyers.

The foreign shipments, detailed in dozens of government records, show exports to other hot spots where the pandemic has spread, including East Asia and Europe.

American hospitals around the country are now running low on all forms of personal protective gear, such as N95 masks or purified air personal respirators, for medical staff, as well as life-saving ventilators, which pump oxygenated air into the lungs, for patients. Experts say the U.S. could face a drastic shortage of intensive care units equipped with ventilators and breathing aids to meet the expected wave of seriously ill patients. New York City Mayor Bill de Blasio has pleaded for more ventilators and said that the city may run short as soon as April 5.

The persistent lack of medical supplies is the result of a combination of factors, including poor planning by the U.S. government. In the absence of early detection and purchasing agreements, crucial medical supplies have been ferried out from American manufacturers for foreign markets.

Vessel manifests maintained by U.S. Customs and Border Protection and reviewed by The Intercept show a steady flow of the medical equipment needed to treat the coronavirus being shipped abroad as recently as March 17.

Drive DeVilbiss Healthcare, a Pennsylvania-based health product firm that produces supplemental oxygen machines, sent at least three different shipments of respiratory equipment to Belgium in mid-February and early March. The total cargo included 14 containers weighing more than 55 tons. DeVilbiss and its owner, Clayton Dubilier & Rice, a New York-based private equity firm, did not respond to a request for comment.

Pennsylvania Gov. Tom Wolf reportedly reached out to DeVilbiss later in March to support the company’s increased production of respiratory medical devices. “Our demand is unprecedented,” Tim Walsh, the company’s vice president, told WJAC, a local news station.

Vapotherm, a New Hampshire firm that produces respiratory equipment, has faced surging demand from international customers. The company has added 50 employees and a second shift to meet growing demand for its products. WMUR, a local news station, profiled Vapotherm’s role in producing lifesaving respiratory equipment used to treat the coronavirus.

During the segment, Joseph Army, the chief executive of Vapotherm, told the station that he first heard from customers in Europe and Asia in response to the coronavirus. A camera shot of Vapotherm’s factory showed a box labeled “Japan.” The demand, he added, has shifted in recent weeks to domestic contracts for clients in Seattle, New York City, Georgia, and Florida.

Invoice records confirm the international shipments. On March 8, two tons of Vapotherm’s high-flow disposable patient circuit units, used for operating its respiratory aids, were loaded onto a container ship in the Port of Los Angeles. The shipment was sent to Kobe, Japan, for Japan Medicalnext Co., a health care distributor.

The records show dozens of other shipments of respirator equipment, medical garments, medical masks, oxygen concentrators, and ventilators sent abroad over the last two months.

On February 28, a ship left New York for Hamburg, Germany, with about 1.5 tons of ventilator masks manufactured by Allied Healthcare Products, a health product business based in St. Louis. The masks are used for the company’s portable ventilator unit.

Global demand for health care products used for the treatment of the coronavirus, including thermometers and pulse oximeters, surged starting in early January when the pandemic became clear in China.

Many countries moved swiftly to shore up supplies for a potential pandemic. Global Trade Alert reported that from January 1 through March 11, 24 countries, including South Korea and Germany, moved to ban exports of vital health care products in a bid to shore up domestic supply.

Taiwan, which also banned exports of medical equipment, has been able to maintain low rates of infection and death in large part because of its early detection of the outbreak and swift deployment of medical and sanitation supplies.

The U.S. government has placed no restrictions on exports of medical supplies while continuing to impose financial penalties on the import of personal protective gear, protective goggles, pulse oximeters, hand sanitizer, and other medical products from China. On March 10 and 12, President Donald Trump temporarily lifted tariffs, in place since 2017, on some of these medical products.

“The lack of domestic personal protective equipment also relates to our government’s unwillingness to read the cards and begin seriously stockpiling in January and February,” said Olivia Webb, policy analyst with the American Economic Liberties Project.

Blanket bans on exports could disrupt production of health care products by breaking supply chains in the midst of a crisis, and could limit the ability of the U.S. to assist poorer countries facing the pandemic.

“An ideal policy,” Webb said, “would demand corporations give the U.S. government and U.S. health care entities the right of first refusal for PPE and related equipment during a national emergency.”

The current supply crisis has been precipitated by a variety of administration failures, from cuts to international programs for disease detection and preparation to a refusal to swiftly mobilize supplies. Trump did not declare a national emergency until March 13 and the federal government did not start issuing major federal contracts for the purchase of personal protective equipment, as The Intercept previously reported, until early and mid-March.

Despite demands by public health officials and lawmakers, Trump moved sluggishly to deploy the Defense Production Act, a law that allows the federal government to compel private firms to produce vital supplies.

Lobbyists with the U.S. Chamber of Commerce, an influential business trade group, reportedly pressed the administration against using the act. It was not until March 27 that Trump finally utilized it to narrowly compel General Motors to build ventilators.

The failure of the U.S. to recognize Covid-19 as a serious problem follows years of efforts to dismantle federal programs designed to maintain international disease surveillance. The Trump administration cut 14 employees from the Beijing office of the U.S. Centers for Disease Control and Prevention, and closed U.S. Agency for International Development programs in China working to monitor disease outbreaks over the last two years. In 2018, Trump disbanded the National Security Council office devoted to pandemic preparation.

The disorganized response has led to confusion over whether the U.S. government can meet surging demand across the country. Governors have reported receiving lackluster support when requesting supplies from the federal government.

The Federal Emergency Management Agency, meanwhile, has asked USAID to bring reserves of protective medical equipment from warehouses in Dubai and Miami for use across the country.

Other supply issues reflect a deference to industry that has come to define many elements of the Trump administration.

A recent ProPublica story spotlighted a promising effort to stockpile ventilators in preparation for a respiratory pandemic — that failed to deliver in time for the current crisis.

The U.S. Department of Health and Human Services provided a contract to develop 10,000 low-cost ventilators from Philips Respironics, an American subsidiary of Royal Philips N.V that produces medical respiratory equipment. But the device, the Trilogy Evo Universal, was never delivered to the national stockpile. The terms of the contract do not require delivery until November 2022, and sources for ProPublica suggest that the administration granted a preferential window to Philips that has allowed the company to first sell the product to a variety of buyers at higher prices.

The subsidiary, CBP records show, has instead exported at least six shipments of respiratory equipment abroad, largely to Europe, over the last two months. Last November, the company also shipped products associated with the Trilogy Evo Universal to the Netherlands.

Asked whether the company would focus on meeting the acute demand in the U.S., the Philips parent company demurred in a statement.

“Philips believes that critical medical equipment, such as hospital ventilators and patient monitors, should be made available across the world, prioritizing those communities and countries that need it the most, using a fair and ethical approach to allocate supply to acute patient demands based on data such as the COVID-19 risk-classification of a country/region,” said Steve Klink, a spokesperson for Philips.

“Orders may be divided into batches and delivered in phases so that we can serve multiple priority countries/regions in parallel,” Klink added.