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Medically Necessary: Stimulus Bill Has Billions For Vaccine Distribution, Executive Orders Signal Supply Chain Focus And Merck Helps J&J Produce Vaccine

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This is an excerpt from the March 2, 2021 edition of Medically Necessary, a health care supply chain newsletterSubscribe here.

Good afternoon. Medically Necessary is a newsletter by Matt Blois about the health care supply chain — how we get drugs, devices and medical supplies to health care providers and patients.


Stimulus bill has billions to boost vaccine distribution

The COVID-19 stimulus bill recently passed by the U.S. House of Representatives includes billions of dollars for the vaccine supply chain. Democrats have enough votes in the Senate to pass the bill without Republican support

The Senate will still need to debate the bill, which could lead to changes. As it currently stands, the bill includes somewhere between $14 billion and $25 billion for vaccine manufacturing, administration and distribution, depending on how you slice it.The bill includes billions more for testing supplies, personal protective equipment and the public health labor force. 

  • The vast majority of the $1.9 trillion bill goes toward economic relief, but between $100 billion and $160 billion is set aside for pandemic response, according to this useful explainer from Politifact

The breakdown: Here's how the bill would fund the health care supply chain.

The Department of Health and Human Services would receive more than $62 billion to support COVID-19 testing, community health centers, the public health care workforce and other pandemic response efforts. Some of that would go toward the supply chain, but it's not clear how much.

  • Some of the $46 billion destined for COVID-19 testing would support manufacturing, procurement and distribution of tests and testing supplies. 
  • The department could grant $7.6 billionto community health centers. Some of the grants would support equipment and supplies for mobile vaccinations or other vaccine distribution efforts. Recipients could also be reimbursed for activities they've already carried out.
  • See also: How to Invest Your $1,400 Stimulus Check
  • Another $7.6 billionwould be used to hire 100,000 full-time public health workers at state and local governments, or nonprofits implementing public health programs. 
  • A portion of $1.8 billion would help buy supplies and personal protective equipment for testing and vaccine administration specifically for congregate living settings, like prisons or nursing homes.
  • The bill allocates $100 million to the Medical Reserve Corps, a network of volunteer public health workers.

Centers for Disease Control and Prevention would receive $8.5 billion to promote, distribute, administer and track COVID-19 vaccines. That money could be used in several ways.

  • Grants to tribal, state and local governments to help with vaccine distribution and administration.
  • Establishing or expanding community vaccination centers and mobile vaccination units, particularly in underserved areas.
  • Improving information technology systems used to distribute and track vaccines.
  • The bill dedicates $1 billion for a marketing campaign to persuade Americans to get a vaccine.

Indian Health Services would receive more than $6 billion for pandemic response. 

  • $600 million would be allocated for distributing and administering COVID-19 vaccines.
  • $600 million would help the agency upgrade health facilities. 

The Biomedical Advanced Research and Development Authority, a government agency tasked with developing tools to respond to public health emergencies, would receive $5.2 billion for research and development related to vaccines or therapeutics.

  • Some of that money could also go to manufacturing and production, but the bill doesn't specify how much. 
  • The bill's text focuses on COVID-19 but would also allow the agency to use the funds for other diseases.

The Food and Drug Administration would receive $500 million. Part of that money would go toward facilitating COVID-19 vaccine manufacturing, inspecting manufacturers producing vaccines or therapeutics, and oversight of the supply chain. 

Bottom line: The final text of the stimulus bill is far from settled, butits approval by the House sets the stage for massive government investment in the health care supply chain. 


Executive orders signal long-term federal focus on health care supply chain

The White House is also taking a closer look at the health care supply chain.

Last month, President Joe Biden issued an executive order calling for an examination of supply chains across a number of critical industries, including health care.  

The order directs HHS to identify risks in the supply chain for pharmaceuticals and active pharmaceutical ingredients. 

  • That's in addition to the task, laid out in a previous executive order, of identifying the immediate supply chain concerns for the COVID-19 pandemic.

While the recent stimulus bill focuses mostly on immediate risks, this executive order signals that the pandemic is pushing the federal government to shore up the health care supply chain in the future. 

Drug disruptions: The COVID-19 pandemic caused major disruptions to the pharmaceutical supply chain on both the supply side and the demand side. 

Those shortages were due in part to the unexpected increase in demand caused by a surge of COVID-19 patients, but also to critical factories in other parts of the world temporarily shutting down, according to a report on the pharmaceutical supply chain from Johns Hopkins University. 

What to expect: Both the Feb. 24 and Jan. 21 executive orders call for a bigger focus on risk monitoring and management in the health care supply chain. 

  • The most recent executive order calls out a lack of domestic manufacturing, relying on imports from unfriendly countries and single sources of supplies as major risks to the supply chain. 

The executive orders call for research, rather than specific policies, but they signal that changes are on the horizon.


Johnson & Johnson vaccine starts shipping

Three vaccines: Over the weekend, the FDA approved Johnson & Johnson's (NYSE: JNJ) one-shot COVID-19 vaccine for emergency use, and shipments started on Monday.   

The company currently has about 3.9 million doses ready for shipment, and the first doses should arrive at vaccine sites as early as Tuesday, White House COVID-19 Task Force coordinator Jeff Zients said during a press conference on Monday

The federal government was aiming to distribute all of those initial doses this week. On Tuesday, the White House announced it would ship 2.8 million doses this week.

  • "We're getting these doses out the door right away to ensure vaccines get into arms as quickly as possible," Zients said during the press conference.

Limited supply: Johnson & Johnson has indicated that supply will be limited for the next few weeks. The company is aiming to deliver 20 million vaccines this month, but the bulk of those will be shipped toward the end of the month. 

A little help from my friends: The drugmaker Merck & Co. (NYSE: MRK), which abandoned its attempt to create a COVID-19 vaccine, will help produce Johnson & Johnson's vaccine, according to a scoop from The Washington Post.

In a press conference Tuesday, White House Press Secretary Jen Psaki said Merck will devote two plants to producing the vaccines. 

  • "The U.S. government will facilitate this partnership in several key ways, including invoking the Defense Production Act to equip two Merck facilities to the standards necessary to safely manufacture the vaccine," Psaki said at the press conference.

It's not clear how much that partnership would speed up the production process, according to an Associated Press report.


Wishful thinking: One wish to improve COVID-19 vaccine rollout

Wishful thinking is a section of the newsletter where I give experts one wish to improve the health care supply chain. Send your wishes to mblois@freightwaves.com.  

"My Dream – An HHS software application that with just a couple clicks will let people know where and when they can be vaccinated and will let caregivers know exactly who to vaccinate." 

— Peter Guinto, member, United States Air Force COVID Task Force and Air Force chief of contracts

VaccineFinder: Last week, the U.S. government launched a web application called VaccineFinder that allows people to search for a nearby location dispensing COVID-19 vaccines. 

Users type their ZIP code into a search bar, and a map pops up showing where to find the vaccine and how to sign up for an appointment. Locations with vaccines in stock are highlighted in green, while locations without any doses are grayed out. 

  • "We're trying to create a trusted site and bring some order to all this chaos and confusion around availability," VaccineFinder founder and Boston Children's Hospital Chief Innovation Officer John Brownstein told The New York Times.

Building on the past: Boston Children's Hospital, along with support from the CDC, developed VaccineFinder during the H1N1 flu pandemic in 2009, and has previously used it to help patients find other vaccines, according to a report from STAT. This year, it reconfigured the platform to work for COVID-19 vaccines. 

IT improvement: For weeks, mediocre IT systems slowed the vaccine rollout and made it hard for patients to find appointments. VaccineFinder is a step forward, but it doesn't solve all the problems.

  • In a Twitter thread, Brownstein warned that the application isn't a replacement for local systems and patients can't book appointments directly through the site.

VaccineFinder is working with Google to feature the information on Google Maps.


Reading list: The best stories about the health care supply chain

  • "The Trump administration quietly spent billions in hospital funds on Operation Warp Speed" STAT
  • "After Billions of Dollars and Dozens of Wartime Declarations, Why Are Vaccines Still in Short Supply?" Kaiser Health News
  • "Vaccine Shipments Present a Security Challenge Worthy of a James Bond Film" Bloomberg
  • "Biden orders review of US supply chains after a year of shortages, delays" Supply Chain Dive

Thanks for reading. Please send an email to mblois@freightwaves.com if you have questions, praise or grievances. If this email was forwarded to you, sign up here.

Matt Blois

P.S. I made an error in logic in a story about delaying second doses in the previous newsletter. I updated the web version to make it more accurate. 

 

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