As of March 30, there were 1,404 search results for GoFundMe campaigns featuring the word “N95,” and that number is growing. These campaigns, ranging from asks of a few thousand dollars to millions, have mostly proliferated in the United States in the past week and a half. With them a constellation of WhatsApp groups, Slacks, and Discord channels have emerged, coordinating a rapidly moving self-organized network that’s trying to do what federal agencies, state governments, and traditional medical companies apparently cannot do fast enough: import N95 respirators — the National Institute of Safety and Health (NIOSH)-standardized and increasingly coveted protective mask that filters 95 percent of particulates — into the United States and donate them to hospitals.
As more and more reports from American hospital workers on the dire lack of personal protective equipment (PPE) pour in, people outside of the medical equipment supply chain are looking for ways to help. Art students are scouring metal shop supply closets, companies are donating private stockpiles, and people are even fabricating DIY masks. Mask importers, who are primarily working on imports from China, where the majority of N95 masks are manufactured and where there’s currently more supply, are of a slightly different character and scale — some individuals, yes, but some partnering with major players in venture capital and startups.
Whether individual small fundraisers, ever-growing volunteer organizations, or VCs, all of these players are jumping headfirst into the complex world of supply chain vetting and logistics management. Some have related prior experience but not necessarily a background in health care. They’re navigating a newly formed unofficial gray market, wary of fraud and price gouging by going through these nonstandard channels but also desperate to provide anything that might give doctors and nurses even a slight advantage.
It’s possible this ad hoc market will dissipate as quickly as it formed when supply for N95s evens out; it’s also possible that the vacuum of government action to make mass purchases or jump-start domestic manufacturing by using the Defense Production Act will mean these informal efforts will be filling a void for weeks or even months to come. While the wherewithal, generosity, and determination of many of these efforts is incredibly inspiring, the fact that such a massive grassroots effort has to exist at all speaks to how weak medical supply chains already were before this crisis — and, unless they’re radically changed, how likely they are to break again in the future.
How mask importing is supposed to work
The typical supply chain for getting N95 masks to American hospitals should look something like this: Based on projections of future demand and existing contracts with hospitals, a medical supplies company places an order for a certain number of masks either directly with a (typically overseas) partner factory or through an intermediary supplier. Those hundreds of thousands of masks are sent to the medical supplies company via container ship, and the medical supplier then arranges distribution to buyers. The turnaround time from initial projection to actual product in hand can be 65 to 80 days.
Through this entire 65- to 80-day process, there are lots of layers of bureaucratic quality assurance. The factory is responsible for acquiring key materials (like the non-woven polypropylene crucial to N95’s superior filter, and ultrasonic welding equipment sometimes used for attaching rubber bands) to meet the standards of the Centers for Disease Control and Prevention and the Food and Drug Administration (manufacturers of N95 masks need to receive certification from both). The medical supplies company is responsible for vetting the quality of its factory’s output, and hospital procurement officers are responsible for making sure they’re getting their product at a fair price.
In theory, it’s not that different from the supply chain for any mass-manufactured consumer product. In practice, however, “the health care industry is one of the most fragile in terms of its supply chain,” says Michael Einhorn, CEO of the medical supplies company Dealmed, “and [prior to Covid-19] the health care supply chain was fundamentally unhealthy.”
While much of the reporting on the N95 mask shortage has emphasized consumer hoarding and demand in China before the outbreak of Covid-19 in the United States, Einhorn points out that this isn’t the first time in recent years that easily anticipated shortages in key medical supplies have left US hospitals flat-footed. Centralization of manufacturing by a small number of health care companies has long been understood to be a problem in pharmaceuticals (recall the Epipen scandal or ask any diabetic), but it’s as much of a problem with PPE and basic medical supplies. Remember the 2018 shortage of IV bags as a result of Hurricane Maria knocking out a central Puerto Rico manufacturing hub? And just months before the coronavirus outbreak, Cardinal Health issued a massive recall of medical gowns, creating shortages across hospitals.
Combined with companies making conservative inventory purchases in the past year to avoid the tariffs of the US-China trade war and a major N95 mask manufacturing hub (Wuhan) being the first region hard-hit by Covid-19, conditions before the pandemic were already unfortunate.
How ad hoc imports happen
For many who now find themselves contributing to the independent, volunteer-led efforts to source, import, and donate N95 masks to the United States, getting into the PPE supply chain was the last thing they expected to be doing.
“Last week I never thought I would be working pro-bono to import masks,” wrote Melanie DiSalvo by email. DiSalvo is the founder of Virtue and Vice, a consultancy focused on ethical sourcing in the fashion industry. “But, as I continued to see my friends and friends of friends that were working in hospitals take to social media to plead for masks and other PPE, I thought, I know so many people in China, someone should be able to help me.” DiSalvo is raising money via GoFundMe to import masks sourced through suppliers she’s previously worked with and trusts.
Adjacency to import-export and Chinese manufacturing seemed to be a common trait among the smaller efforts. “I’ve worked with suppliers, but for very different worlds,” said Iain Nash, a tech worker and artist based in Manhattan. Nash is running livestreamed fundraisers to buy and import KN95 masks, a Chinese standard for respirators that’s almost identical to N95 masks (and is on the CDC’s list of acceptable respirators to use “when supplies are short”).
Nash’s entry into PPE imports was through past projects working with a supplier of LED stage lighting for art installations. The Chinese manufacturer he worked with, like many manufacturers in China, was converted to manufacture PPE in the wake of Covid-19. Now that Chinese demand has started to level off, companies have begun turning to past clients in the United States to see if they were interested in buying masks and other equipment.
Fraud and counterfeit products are, of course, a major concern when it comes to these ad hoc supply chains. Unlike the traditional 65- to 80-day process, there are far fewer layers of vetting and certification happening in these individual imports.
For some, this means holding their efforts to a higher standard. “If people are going to import masks and they haven’t done their due diligence or done this before, it’s a dangerous hobby,” said Rafael De La Cruz, a member of one group of organizers coordinating a number of N95 import efforts that recently partnered with the PPE data clearinghouse initiative Project N95. De La Cruz technically hasn’t done this before either — his day job is managing partner at venture capital firms Universal Brand Ventures and the Happy Capital Fund (THCF) — but he is an adept facilitator, and the ad hoc network he’s part of includes experts in import-export and experience vetting medical suppliers. “People should realize they don’t need to reinvent the wheel. There are established professionals that volunteers should utilize who have been doing this for a long time.”
DiSalvo similarly cautioned, “For people looking to donate, [they should] be careful with who they donate to. If a person does not have previous experience with imports or working in China, stay away.”
For Nash, due diligence looks like ordering a smaller quantity of masks as a start and working with a contact at NYU to coordinate testing to verify they’re actually KN95. His supplier’s FDA registration as a medical device manufacturer does check out, which is a good sign. He’s also relying on the fact his supplier has “their reputation on the line — they’re not someone I reached out to out of the blue,” nor are they a random vendor cold-contacting him with no prior interaction. (While I was reporting this story, my editor was cold-contacted by a vendor offering masks and other PPE whose sole online presence appears to be this Alibaba store; they did not respond to a request for an interview.)
The decision to donate masks to hospitals isn’t only a matter of altruism. It’s also a matter of efficiency and liability. Hospitals can only purchase N95 masks from a list of CDC-approved suppliers (most of which are scrambling to acquire more masks right now) and KN95s don’t make the cut. However, hospitals and individual workers can accept donations with little bureaucracy, and demand is high. When asked whether there was concern among frontline hospital workers about using KN95 instead of N95, one doctor who’s been involved in PPE distribution to hospitals in New York City wrote via WhatsApp that it was “totally irrelevant. For me, it’s about the science. If the science behind the masks is equivalent, that’s good enough for me.”
What’s needed for the future
Of course, medical suppliers aren’t huge fans of these well-intentioned efforts. “I think that these people who don’t know the business aren’t doing anyone a service,” Michael Einhorn of Dealmed said. Speculation and stockpiling begets price gouging, more speculation, and more stockpiling. Einhorn cited a nearly 400 percent price increase on masks in the past week, and the proliferation of fraud and counterfeit in the market. Extensive experience with supply chain management and trusted suppliers isn’t a replacement for the equipment required to verify a mask is actually made with nonwoven polypropylene.
For one source working directly in the N95 supply chain involved in both state-level purchasing and informally advising ad hoc groups, the biggest issue isn’t GoFundMe importers or suppliers, but the middlemen profiting off both and the absence of government intervention to undermine the gray market.
“No one [in the ad hoc space] is really equipped to understand the commercial imperative and commercial psychology of suppliers,” they explained. Even the most decent, thoughtful owner of an N95 mask factory in China is beholden to capitalism. Given the choice between selling masks to someone who’s offering a high price but going to flip masks to ad hoc importers, a less competitive bid from a traditional supplier like Dealmed, or waiting on a massive government purchase order that never comes, it’s not much of a choice when the margins of their company are on the line.
“These self-organized groups are enabling [the middlemen] on our side because they’re trying to quickly respond to a crisis, and factories are enabling it on their side because they need to make money,” they said. “You can’t really blame either side, but who’s arbitrating that middle part?” Until supplies of N95 masks level out worldwide, that middle part is probably going to persist — as will the need for these self-organizing importers.
In a sense, the N95 gray market represents a metastasized version of crises that have come to define American health care. People shouldn’t have to set up GoFundMes to import N95 masks for hospitals any more than they should have to set up GoFundMes to pay for cancer treatments. Gray markets emerge not out of mere huckster opportunism (although opportunists tend to emerge and benefit from them) but out of a void of resources and options. The bottom-up organizing flourishing right now to support front-line health care workers is deeply inspirational and necessary, but as the coronavirus pandemic spans weeks and months, this approach cannot become a permanent stopgap for a broken supply chain.
Fixing that supply chain so shortages like this don’t happen again isn’t a simple equation. It partially involves more domestic manufacturing of masks, but that also requires a domestic manufacturing ecosystem for all of the mask’s components — for example, the electrostatic melt-blown material used to make the active filtration layer of the masks is primarily manufactured in Turkey and China.
It also requires radically different incentives for the medical supplies industry — namely, that it not be beholden to capitalist profit expectations. Some of the things that can make a supply chain fragile (concentrating production in one area, an industry dominated by a few huge players) are also things that tend to be rewarded by states and markets (in the form of things like governments giving tax breaks for manufacturing in special economic zones or increased stock price and executive bonuses for trouncing competitors).
These aren’t changes that can or should be implemented by the ad hoc groups racing against the clock right now to get N95 masks into hospitals. They’ve got more than enough to deal with right now, and for the foreseeable future crisis response is likely going to take priority over economic overhaul of health care as we know it. But if ordinary people rising to the challenge of extraordinary times is only understood as a triumph of altruism and not a tragedy of capitalism, if companies have to put profit ahead of diversified sourcing or maintaining inventory, if governments refuse to treat health care as a basic human right, what we’re seeing right now will happen again.
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