HHS Outlines Plans to Make Medical Devices and Diagnostics Supply Chains Pandemic-Proof

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Diving brief:

  • The US Department of Health and Human Services plans to investing in areas such as artificial intelligence, robotics and test kit research with the aim of making the public health supply chain more resilient.
  • The HHS update lays out the situation a year after President Biden tasked the department with finding ways to strengthen the supply chain in light of pressures placed on it by the COVID-19 pandemic.
  • The department wants to reduce the cost of diagnostic starter components and make them more interchangeable to increase test availability. HHS plans for medical devices focus on production technologies, identifying untapped domestic capacity and ways to sustain demand.

Overview of the dive:

The first phase of the coronavirus pandemic was marked by shortages of personal protective equipment (PPE) and durable medical equipment (DME), as well as limited access to COVID-19 diagnostics. These supply issues have hampered efforts to control the spread of the virus. HHS wants to make sure the United States is better prepared for the next pandemic.

“These challenges have exposed pre-existing issues in the public health supply chain and industrial base, such as the lack of manufacturing and sourcing onshore or near raw materials and finished medical products. Unless the U.S. government takes steps to create a larger, resilient public health supply chain, we could experience similar disruptions during a future public health emergency,” the department wrote in its report.

The HHS report lists its current and planned supply chain initiatives in areas such as PPE, EMR and testing. To improve the availability of PPE and EMR, the department encourages the domestic production of raw materials of nitrile butadiene rubber, and other key chemicals for surgical gloves, gowns and masks. The objective is to have onshore or nearshore production capacities.

Specific aspects of the strategy include investing in “artificial intelligence, robotics and automated assembly practices and technologies (e.g. shelf life extension) for existing manufacturers.” The goals of the investment include “extruders to scale up synthetic fiber production and computer numerical control/robotic automation assets for sewing and finishing of gowns, and advanced human headforms to speed up turnaround times.” development of respirators”.

HHS also plans to work with industry to find untapped domestic manufacturing potential or strategies to allocate end-to-end risk among manufacturers, and to explore ways to drive and sustain demand for domestic products, such as example by increasing inventory and creating a revolving fund. for strategic national stock with “Buy American” provisions.

The department approaches the diagnostic offer from different angles. HHS wants to reduce the cost of test kits by lowering the price of starting components and improving the shelf life of reagents to ensure materials remain usable longer. Other goals include increasing the interchangeability of non-patented test components to increase the volume of common parts and reduce one-time shortages.

HHS said the government will continue to invest in testing capacity for COVID-19. The plan is to “prioritize hot-base production capacity that will allow suppliers of tests, components and reagents to quickly ramp up production during peak demand.” The term “hot base” refers to sites capable of rapidly manufacturing products in response to a pandemic or other public health crisis.

The actions outlined by HHS are part of a larger effort to identify and remediate supply chain vulnerabilities. Cowen analysts said “there will likely be further legislative and administrative action,” in a Friday note to investors.

“We continue to believe that a strict requirement that drugs must be made in the United States is unlikely. Instead, a much more limited list of drugs – largely generics, as well as PPE more easily manufactured like face masks and ventilators – could be prioritized over those manufactured in foreign countries for purchase by the VA and DoD as well as strategic national stockpile,” the analysts wrote.

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