ARI SHAPIRO, HOST:
The Trump administration has enlisted some of the biggest corporations in America to help boost the supply of medical equipment needed to COVID-19, but many of those supplies still are not going to where they're needed most. Instead, the marketplace and long-established business ties are shaping who gets lifesaving equipment and who has to wait. North Country Public Radio's Brian Mann reports.
BRIAN MANN, BYLINE: When the COVID-19 pandemic exploded, many governors around the U.S. expected the federal government to rush medical supplies to growing hot spots like New York City. Here's Governor Andrew Cuomo of New York.
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ANDREW CUOMO: When I was in the federal government, FEMA effectively was the shipping clerk. They did the purchasing. They disseminated to the states.
MANN: FEMA is doing some of that, but the Trump administration has shifted much of this effort to five big medical supply companies including McKesson, Cardinal Health and Illinois-based Medline, where Jesse Greenberg is a spokesman.
JESSE GREENBERG: We operate about 50 distribution centers in the United States. We have about 22 manufacturing facilities. We're doing our very best to step up to this challenge.
MANN: The theory here is the medical supply shortage is vast, too big for the federal government to handle alone. The U.S. needs these corporations digging in, getting creative to ramp up shipments fast.
ELEANOR FOX: It's totally unique. I do not remember anything like it before.
MANN: Eleanor Fox studies trade regulation at New York University. She points out the Justice Department issued a formal letter last Saturday allowing medical supply companies that are typically competitors to collaborate in ways that would normally violate antitrust laws.
FOX: It would probably be an illegal cartel but for the fact that this is a crisis.
MANN: Company executives interviewed by NPR say they're already accelerating deliveries, expanding the overall supply of medical equipment. They also say safeguards are in place to prevent them from price gouging during the pandemic. But this arrangement has infuriated many state leaders. That's because the majority of supplies procured by these companies aren't being handed out on the basis of need. Instead, they're going to the companies' regular customers, even if they're not in a COVID-19 hot spot.
GREENBERG: We have existing contracts.
MANN: Jesse Greenberg with Medline says, as the pandemic escalated, his company actually stopped taking new orders from frontline health providers, even those facing dire shortages of protective equipment.
GREENBERG: The inventory isn't there for Medline to service new customers in a way that would damage or lessen the amount that another customer would get - existing customer.
MANN: One high-profile part of this public-private arrangement is the Airbridge project. The Trump administration has been chartering dozens of cargo flights of medical supplies from overseas. Speaking yesterday, President Trump described it as a success.
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PRESIDENT DONALD TRUMP: That gear and those outfits are being handed. Out as they arrive, they're going directly to point.
MANN: In fact, those masks, gowns and other gear are going first to private companies. Firms partnering with FEMA on Airbridge tell NPR roughly half the medical equipment on those planes is theirs to sell however they like. The other half is sent to COVID-19 hot spots, but not necessarily to the worst-hit hospitals. Once again, supplies go to existing customers. Admiral John Polowczyk, who's leading FEMA's Procurement Task Force, was asked about this arrangement during a White House briefing last week.
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JOHN POLOWCZYK: I'm not here to disrupt a supply chain, say, look, they have trucks to go to the hospital door every day. We're bringing product in. They're filling orders for hospitals, nursing homes like normal.
MANN: But many governors, including Andrew Cuomo, say the situation isn't normal. Nurses and doctors are still caring for patients without enough protective equipment, so desperate states are working around this supply chain, reaching out directly to suppliers overseas.
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CUOMO: I have to figure out how to do business with China, where I have no natural connection as a state. And every state has to scramble.
MANN: Governors say this has led to confusion and chaotic bidding wars. Until the bottleneck is sorted out, it will be market forces and corporations that often decide who gets scarce supplies and who doesn't. Brian Mann, NPR News, New York. Transcript provided by NPR, Copyright NPR.