The Trump administration will use the Defense Production Act to secure about 60,000 coronavirus test kits — and will insert DPA language into a contract for 500 million protective masks, according to media reports.
FEMA chief Peter Gaynor broke the news on CNN today. He stressed that the administration still wants to be careful not to disrupt markets with use of the DPA — a Korean War–era law that gives the federal government extraordinary powers to mobilize resources during a war or national emergency. “We want to be thoughtful about not upsetting the balance, making sure we get it on the market.”
Democratic leaders and governors of states especially hard hit by the COVID-19 have been asking Trump to do more amid shortages of needed supplies, equipment and virus tests. Trump over the weekend sounded hesitant to use the DPA, saying that invoking the act and threatening to use it was leverage enough with corporations.
“Call a person over in Venezuela. Ask them how nationalization of their businesses worked out. Not too well,” Trump said on March 22.
He later said: “We have the threat of doing it if we need it. We may have to use it along the supply chain in a minor way.”
Trump said the business community is already stepping up and responding. He mentioned 3M (NYSE:MMM) — which makes 1.1 billion N95 respirator masks annually, 400 million of them in the U.S. The Maplewood, Minn.–based manufacturing conglomerate said March 20 that it would increase investments, mostly in the U.S., to boost production by nearly a third.
Trade group AdvaMed today sent Gaynor an open letter that called for centralization of procurement and allocation decision-making for medical ventilators.
“For ventilator systems in particular — which are essential for many of the sickest COVID-19 patients to help them breathe — manufacturers are producing as many systems as possible through significant production increases. However, given unprecedented global demand for these products, we believe the most effective way to ensure appropriate sourcing and allocation, based on patient needs, is for the administration to designate a lead agency, such as FEMA, to oversee these decisions with the active input of clinical experts, the CDC, and the medical technology industry,” AdvaMed CEO Scott Whitaker said in a news release.