BACKGROUND PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON THE PRESIDENT’S STRATEGIC NATIONAL STOCKPILE ANNOUNCEMENT
Via Teleconference
11:03 A.M. EDT
MR. GIDLEY: Thank you, Nick. Good morning, everyone. Thanks so much for taking the time to join this background briefing regarding the National Stockpile. The ground rules are as follows: The information on this call is on background and can be attributable to a “senior administration official.” And the content will be embargoed until 12:30.
As a reminder, by participating in the call, you are agreeing to the ground rules that I have set forth. We have several administration officials on the call. [Senior administration official] is here. [Senior administration official] is here. The [senior administration official] for HHS and [senior administration official].
And with that, I’ll turn the call over to [senior administration official], and then we’ll take some questions.
SENIOR ADMINISTRATION OFFICIAL: Great. Thank you very much, Hogan. And thank you all for joining us. I’ll give a quick overview, and then I’ll pass it over to [senior administration official] and then to [senior administration official].
Basically, we’re in a time now where we’re crossing a great threshold where we’re starting to have a lot of supply in the country and we’re focusing on the reopening. We’re focusing on getting more supply into the country. We’re focusing on building capacity. And we’re focusing on redoing the Stockpile, based on everything that we’ve learned over the last couple of months, to make sure that the country has increased preparedness and increased ability to move forward.
Starting with where we were after the 2009 pandemic, they did not restock the Stockpile. They depleted a lot of the masks. So we had a combination of a low stockpile, a lot of the materials are not made in America, and then also the Stockpile didn’t have enough of the SKUs that are needed to deal with a pandemic. The number that we have is, only 28 percent of what was needed for a COVID patient was actually in the Stockpile. And on the shelf, which was not replaced, you only had one to three weeks of supply for different supplies.
So what we’re doing today is we’re going to be touring Owens & Minor in Pennsylvania. That’s one of the distribution facilities that helped do a lot of great work that we had. It helped us identify a lot of the needs throughout the country and then also distribute it.
[Senior administration official] will talk about the new model we’re going to be putting in place, what our ambitions are, and then obviously talk about Project Airbridge, which was a great success at bringing over badly needed medical supplies in record time, in record volume, in order to meet the needs during the pandemic, and then talk about what we’re going to be stocking on the shelf, how we’re going to have more range and more depth to the different supplies that we’re going to have, and then how we’re going to basically have, you know, surge capacity and the ability, as Admiral Polowczyk says, “to reload the chamber” to continue to be prepared for whatever comes.
And so we’re also going to focus on ways that we saw certain flaws in how the Stockpile was run that we’re going to be changing in this go-around.
So this is about making sure that America is prepared for whatever comes in the future. This is about bringing jobs and manufacturing back to America. And this is about a much more efficient manufacturing and stockpile process, so that going forward, America is able to respond in record -- even faster than we did this time.
SENIOR ADMINISTRATION OFFICIAL: Thanks. [Senior administration official] here. So let me just run through a few items, and then I’ll -- then I’ll end with -- I’ll end with Airbridge.
So the Supply Chain Task Force has spent some time aggregating demand across the commercial, across the healthcare/medical supply chain. So we -- we think we have a well-defined understanding of 30, 60, 90 days’ worth of demand. And so we’ll be working to put that on the shelves in a manner where the Stockpile isn’t just a singular purchase.
I brought forward some ways that DOD manages strategic stockpiles of items. One way is shelf life management. To allow -- to have a large 90-day supply of something to sit on the shelf, that has a shelf life, one must be able to rotate it. And one of the ways that -- the National Stockpile is, if we have this in our commercial marketplace, a commercial marketplace can -- you know, if we put 100 boxes of something on the shelf, as long as there are 100 boxes there when we call upon them, that will be the end state. But the commercial marketplace can issue restock -- issue restock to maintain shelf life. It’s a commonly used inventory management practice that DOD does for commercial-like items.
The second thing is access to surge capacity. Another vignette that I’ll use here is from the DOD. In my previous job as [redacted] I managed the [redacted]. Well, the Navy has lots of Tomahawk cruise missiles in its magazines, but we still buy Tomahawk cruise missiles every year and keep those production lines warm to be able to surge when needed.
So that’ll be another element of the National Stockpile going forward, which will be access to domestic production. And so that should be viewed not as a light switch, but as a rheostat. That as we send those rather large demand signals to industry as manufacturing is brought back to America, a element of the National Stockpile will be accessed to surge manufacturing capability to meet those needs. As if you issue those supplies out of the National Stockpile, then you can surge manufacturing as you go forward.
I think I'll end there.
And then for Project Airbridge, if you remember, I was moved from the Department of Defense in mid-March and quickly understood that, unfortunately, we don’t make a lot of these products in America. And so the quickest way to get it here was to fly it. And so through FEMA and Health and Human Services, we identified the items that were in critical short supply and flew those for -- either for direct purchase from FEMA or assisted the commercial marketplace to get their products here faster, to do everything we could to get needed supplies to healthcare workers on the frontlines.
I look forward to your questions today. Thank you very much.
SENIOR ADMINISTRATION OFFICIAL: Hey, this is [senior administration official.] As, Hogan mentioned, I'm the [redacted] over at HHS. And several weeks ago, Jared and the President asked us to collaborate along with FEMA and with Admiral Polowczyk and actually with the Department of Defense to take a look at our Strategic National Stockpile. And if I had one sentence for you: What we're doing is creating a much more robust, a much more capable, and much less vulnerable Strategic National Stockpile.
And you've heard the others talk about it, but it's been over a decade since we've had our last major kind of outbreak of H1N1, and the world has changed from a technology standpoint, from a clinical care standpoint, and from where domestic versus foreign manufacturing is.
So, we are restructuring a whole series of relationships internally with DOD, FEMA, and HHS to respond more effectively, as well as externally, with external stakeholders -- the states, hospitals, distributors, manufacturers.
So I think if you want to take away just two things, it is, again: We're going to have a much more robust, more capable, and less vulnerable Strategic National Stockpile. And this is going to require the permanent restructuring of a whole series of relationships using information technology and contracting capabilities very differently than anyone has in the past.
And I'll pause.
MR. GIDLEY: Great. Thank you very much. We're going to open up for questions. But just as a reminder for everyone, the information on this call is on background and can be attributable to "senior administration officials," and the embargo is until 12:30.
With that, we'll open up for some questions.
Q Hi, thanks for taking the call. You said that after 2009, that the National Stockpile was not replenished. But as of 2010, an article in the CDC's Emerging Infectious Disease journal said that there were 9,000 ventilators in the stockpile. Is that not true?
SENIOR ADMINISTRATION OFFICIAL: I was basing my comment based on a Wall Street Journal article that basically said that in 2009 -- we're talking about masks. But do you want to go through it, [senior administration official]?
SENIOR ADMINISTRATION OFFICIAL: Yeah, just real quickly, I'll give you some facts. Before H1N1 in 2009, we had over 100 million N95 masks in the stockpile. And these are facts from our own Strategic National Stockpile leaders. During that -- I don’t want to call it a pandemic, but during that event, they handed out 90 million of those masks to the states. They were never replenished. So when we started addressing COVID in January, we had 13 million N95 masks in the stockpile. That’s precisely the number we had right after H1N1 in 2009-2010. So it was severely depleted after H1N1. Never replenished.
Q Hi, guys. This is Blake Burman over at Fox Business. Thanks for doing this. Appreciate it. I have a question for you since we've seen the bottom fall out of the labor market. Have you -- do you have any modelling or any answers or any guess as to building up this stockpile, how many jobs that might save, how many jobs that might create since some of this now is being done in the U.S.? And do you have a figure or a guess as to what that might mean, either over the last couple of months or in the upcoming months, or years even, going forward?
SENIOR ADMINISTRATION OFFICIAL: Yes. It's [senior administration official] again. Thank you for the question. Just a couple of things. We're trying to address with this initiative two separate parts of the economy. First and foremost, we are rebuilding the stockpile such that we are fortified against the resurgence of COVID -- a potential resurgence of COVID or any other upper respiratory pandemic. So that’s job one.
But as you heard [senior administration official] talk about this, a second part of it has to do with tremendous expansion of domestic capacity to manufacture these items. And we’re already in the process of expanding that capacity. Several companies have done that. And much of that, we anticipate, will go toward the labor markets and the other sectors of the economy. So we’re doing that for both purposes.
I can’t give you an estimate of how many jobs that will save or how many people will go back to work. But we do know that masks and protective equipment are essential for many workers who have interactions with their customers and coworkers every day. So we’re cognizant of that.
SENIOR ADMINISTRATION OFFICIAL: Yeah. And I’ll just add that a big part of this effort is to make sure that people can go back to the work in the fall because not only we’ll be prepared if something comes up, but also the more that we stimulate the domestic supply and bring the supply into America, the more that industry and people will have the masks and protective equipment they need to safely return to work. So getting this done is just a strategic effort.
And if you think about why, obviously, we had to go into intense mitigation early on, it was because we were fearful of not having the hospital capacity, not having the ventilator capacity, not having enough critical supplies, not having enough tests. And I think that now that we’ve caught up on all these items, we’re making sure that, as we go into the fall, we’re in a position where America never has to shut down again. And a big part of this is giving people the confidence that we’re very focused so that that will be the case.
Q Hi. Thanks, guys, for holding this call. I wondered if you guys -- you guys spoke about just changing the relationships and utilizing IT. If you can give an example of that. And then also, I mean, how you, kind of, send that market signal to domestic companies to expand capacity or, if they’re offshore, bring that capacity back home.
SENIOR ADMINISTRATION OFFICIAL: Yeah. [Senior administration official], do you want to take this one?
SENIOR ADMINISTRATION OFFICIAL: Yeah. Sure. Will do. So one of things you have to understand is you can’t manage a supply chain unless you can see it. And so one of the efforts that we did very early within the supply chain task force is we put together multiple business systems from across industry that’s providing, you know, 85, 90 percent of the supply chain capacity to the hospitals.
We (inaudible) their business systems together to understand what’s coming in through the supply chain and where it’s going. So we have visibility of the distribution.
Going forward to support Health and Human Services, we are going to also bring in hospital information -- what’s on the shelves in the hospitals and how much they’re burning through, utilizing supplies. Along with, as we expand industrial production capacity, bringing in manufacturing (inaudible) where we can.
And so as you manage the National Stockpile, you’ll have visibility across the supply chain to see areas where the hospitalization information has now led to increased utilization of supplies. You can make informed allocation decisions from the National Stockpile to those areas, and then also make informed decisions of, “Do I need to surge manufacturing capacity to add more back into the Stockpile.” Not some -- not an IT solution that we have today, but that is being built out over time.
Thank you.
SENIOR ADMINISTRATION OFFICIAL: I thought we'd just maybe offer a couple of numbers. I think [senior administration official] introduced this at the beginning. But just to put this into perspective: When COVID broke out in the U.S., we had one to three weeks’ worth of supply for most of the items in our stockpile. And that was based on a retrospective look on how much the surge demand was for certain products.
We are going to have a full 90 days’ worth. And I think what the Admiral was talking about is, the 90 days is a buffer while we stand up surge capacity in the manufacturing markets. So we feel -- we'll feel much more secure about that.
The second thing that [senior administration official] alluded to was, of all of the items that a COVID patient in a hospital consumes during a length of stay, we only carried only 28 percent of those stock-keeping units, so to speak. We didn’t carry a lot of the critical care drugs. You've heard a lot about this. We did not carry testing supplies. These were never in the Strategic National Stockpile. They will be in the Strategic National Stockpile going forward. So a much broader and much deeper kind of set of supplies to keep America safe.
MR. GIDLEY: Yeah, we'll do one more question.
Q Hey, thanks so much for doing this. I had a question for [senior administration official] as well as [senior administration official]. To [senior administration official], if you could, could you just explain a little bit more of what the surge manufacturing is? Is that like keeping the DPA ready to go to make sure these manufacturing plants keep or have the ability to produce this vital medical needed essentials, the PPEs?
And for, [senior administration official], I was hoping to ask you, how does this fit into, kind of, like the bigger picture of the President's America First priority?
SENIOR ADMINISTRATION OFFICIAL: Sure. [Senior administration official], do you want to go first?
SENIOR ADMINISTRATION OFFICIAL: Sure. Thank you. So I like to think of it this way: The demand for N95 masks, pre-COVID, was -- for the medical community, was somewhere around 30, 35 million masks a month. The COVID demand is well above that. And so what we’ll need -- I’d like you to think of it this way: Once we get -- you know, you get through COVID period, there’ll be a steady-state medical supply demand that the American manufacturing will satisfy.
Health and Human Services will then -- like I mentioned with Tomahawk cruise missiles -- we’ll enter into contract to maintain capacity, keep another line open, buy additional supplies to rotate stock into the (inaudible) of the National Stockpile for items that have shelf life.
So think of it as doing the strategic things to keep capacity readily available and not another use of the Defense Production Act to create another facility, which takes time. It’s easier to keep production lines warm than it is to build one from new.
SENIOR ADMINISTRATION OFFICIAL: Great. And my guess is -- this is [senior administration official] -- in terms of America First, I think that, you know, a lot of people are saying that, you know, this pandemic in some ways has really reaffirmed the things that the President was talking about on the campaign trail, which was that America needs to -- you know, we can’t be reliant on other nations. We need to make things here. We need to keep jobs here in America. We need to keep capacity here in America. We need to control our borders. And we have to be wary about offshoring our critical supplies to other countries because it creates a real vulnerability.
So, you know, America First, you know, for the President means that, in every decision he makes, he’s looking out for American citizens and saying what’s best for American citizens. This is the big step in the direction towards making critical products here in the USA, using, you know, American manufacturing might.
He wants to keep the jobs here, create more jobs, and then hopefully -- you know, ventilators is a great example, where, you know, last year, America made 30,000 ventilators. Everyone in the world was panicking for ventilators. We got the manufacturing ramped up very quickly. We used the Defense Production Act. American ingenuity and creativity is the greatest in the world. And we’re going to create about 200,000 ventilators. We took care of American citizens first. We got ventilators to New York, to New Jersey, to Louisiana, to Michigan, to Colorado, to everywhere that needed ventilators.
And then now that we have an excess and the stockpile is building up, the President has been talking to allies in other countries and he’s been sending them out to other countries now that America is taken care of.
So the same thing can happen with a lot of this critical supplies, whether it’s drug manufacturing, whether it’s masks, whether it’s swabs, whatever the product line is.
What we’re finding now is now as we’re surpassing tests; we’ve done now over 10 million tests and we’re growing rapidly. We’re the number one in the world by far. A lot of countries are asking us if we can -- if we have excess production, if we’re able to supply them with tests. And we’re almost in a position where we can start, you know, helping other countries ramp up as well.
So I think that it’s America leading in the world. We’re a leader in innovation. We have the greatest private sector. And when the government and the private sector partner to take on a challenge, America becomes unstoppable. So --
SENIOR ADMINISTRATION OFFICIAL: And this is [senior administration official], just to review a couple of numbers again. I mentioned at the start of the pandemic we had 13 million N95 masks. We have an aspiration to eventually have a billion of those. We’re not going to have all of those in the next 90 days, for the fall. But we do anticipate having 300 million. So you can do the math: 13 million to 300 million. We have 2 million gowns. We expect to have 6 to 7 million gowns.
For many of the critical-care drugs that are necessary for people on ventilators, we had zero. And we will have millions of milliliters of those and able to take out -- to take care of any type of surge we anticipate in the fall or beyond.
So just to give you a little bit of the magnitude, that is what is going to be stocked to take care of the American people.
MR. GIDLEY: Thanks, everybody. And just as a quick reminder as we wrap up, for the embargo time, it’s 12:30. The call is on background from a “senior administration official.” So you can file in about an hour.
Thanks for the time. Appreciate it.
END 11:28 A.M. EDT |
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