Outbid and left hanging, U.S. states scramble for ventilators

(Reuters) – On the final Thursday in March the Arkansas team in charge of procuring ventilators thought they had scored a coup: a vendor had agreed to sell them 500 of the breathing machines critical to keeping COVID-19 patients alive at $19,000 each.

The next day they were told the deal had vanished because a buyer representing New York was offering to purchase 10,000 units, pay cash upfront and double the price, a deal the vendor could not turn down. Reuters could not independently verify that New York bought the ventilators.

Either way, for Arkansas, the search for the machines goes on.

“We still want to purchase the 500,” said Dr. Steppe Mette, chief executive of UAMS Medical Center in Little Rock, who is helping oversee procurement of supplies for the state. “There are profiteers all over the place.”

Arkansas may never need those ventilators. It has 785 across the state, most of which are not currently in use, and data from New York and other hot spots in recent days suggest hospitalizations might be peaking.

In the past week Louisiana and Arizona scaled back their requests for ventilators from the federal government, while Oregon, Washington and California offered up spare units for use by other states.

But the episode illustrates how some states have been muscled aside in the scramble for equipment to combat a virus that has killed nearly 18,000 people in the United States, potentially leaving them vulnerable should the worst-case scenarios materialize or the virus return in subsequent waves.

The stakes are especially high when it comes to ventilators, which can be the difference between life or death for patients suffering from COVID-19, the respiratory illness caused by the novel coronavirus.

Reuters surveyed all 50 states about their ventilator needs. The 31 that either responded or have disclosed figures showed a collective intent to procure 70,000 units, including outstanding requests to the federal government and private sector.

((For an interactive graphic on ventilator inventories by state: reut.rs/3b35Xp6))

The Federal Emergency Management Agency (FEMA) has acknowledged there aren’t enough ventilators in the Strategic National Stockpile to meet demand, and is distributing units to states most in need. According a FEMA spokesperson, the federal government has 8,644 ventilators available, including 8,044 in the stockpile and 600 from the Department of Defense.

Some states have criticized the federal government for crowding them out of the market. Rhode Island, which has 300 ventilators, one of the lower inventories among the states, said it is struggling to source the machines.

“Right now it’s almost impossible to procure ventilators,” Rhode Island Governor Gina Raimondo told reporters this week. “It’s really a very poorly organized system.”

SHANGRILA

Arkansas’ Mette said his procurement team had tried to buy the Shangrila 510S, a compact ventilator advertised on the website of the manufacturer, Beijing Aeonmed Co. Ltd. as “Ready to Confront COVID-19”, from a reseller of the machines.

The incident was significant enough that a report was given to Governor Asa Hutchinson, portions of which were read to Reuters. It says the order vanished in a matter of hours after buyers for New York secured a deal for 10,000 units, the maximum that could be produced in two months.

The office of New York Governor Andrew Cuomo did not respond to a request for comment. Cuomo has himself complained about receiving only 2,500 out of an order for 17,000 ventilators from China, with per-unit prices doubling since the outbreak.

Beijing Aeonmed said it had not applied for approval from the U.S. Food & Drug Administration (FDA) for the Shangrila 510S and that producing 10,000 units in such a short time was “unrealistic”.

Roger Biles, the head of a medical supplies company, InterMed Resources TN, helping Arkansas source ventilators from China, said the reseller told them it was New York that had bought the machines but there was no way to know for sure.

“If you snooze you lose in this environment. Product is going left and right,” Biles said. “We couldn’t get the money to them fast enough. They said they are all gone.”

Biles said the reseller provided certification that the Shangrila 510S could be sold in the United States because it had similar specifications to an approved machine, a common process to gain market access. The FDA did not respond to a request for comment.

The administration of President Donald Trump is working with Ford Motor Co and other manufacturers to produce 100,000 ventilators by the end of June, and FEMA has told states it will provide units 72 hours before any surge hits them.

Arkansas still wants a buffer, even with current projections showing it may now only need 300 ventilators at the apex of hospitalizations in the coming weeks, whereas a previous model indicated it may require 2,000 at peak.

“Prepare for the worst, hope for the best. We are still going on that philosophy,” Mette said.