- Healthcare workers say personal protective equipment (PPE) is still in short supply, endangering the safety of employees and patients.
- Experts say corruption, greed, and mismanagement are part of the reason why PPE supply isn’t meeting demand.
- Several companies are trying to fill the gap by mass-producing PPE and having it delivered at minimal cost worldwide.
Arnold Thorstad is a global entrepreneur who’s cofounded several successful brands and developed major supply chains in the coconut, tea, acai, and salmon industries.
Working with farmers and factories on several continents, Thorstad and his partners at Invico Worldwide employ thousands in seven countries.
His work has taken him to locales such as the Amazon rainforest, India, Indonesia, and Thailand.
But for all his travels and success, Thorstad couldn’t ignore the opportunity to help healthcare workers affected by the COVID-19 pandemic in Chicago, the city where he was born and raised.
In March, soon after the coronavirus hit the United States, Thorstad delved into the personal protective equipment (PPE) arena headfirst.
To protect the doctors, nurses, and other personnel at the suburban Chicago hospital where his mother works as a surgical technician by providing them with quality PPE.
“She told me the hospital was in shortage of protective respirators and that she and fellow healthcare workers were needing to reuse masks at the hospital,” Thorstad told Healthline.
Thorstad knew that to enter the industry, he’d have to develop a brand that delivered quality, consistency, and credibility.
The brand, which he named MediViCo, was born in early March with immediate donations of respirators and masks to the state of Illinois, St. Jude Children’s Research Hospital in Tennessee, and Advocate Health Care.
That marked the beginning of a journey through the PPE landscape that for Thorstad has been both rewarding and at times frustrating.
“With limited supply and huge demand worldwide, in an industry that only accepts the highest quality, and with a race to deliver goods yesterday, we are in a constant state of stress to execute,” he said.
Healthline interviewed more than a dozen people who work or have worked in the PPE industry.
The unanimous conclusion?
The sale and purchase of masks, gloves, and gowns for healthcare workers, teachers, and other essential workers worldwide has become entangled in complexity, red tape, and at times greed.
Thorstad said there are few factories around the world that actually have medical-quality certifications, and most of them have minimal capacities and only accept cash.
“International and domestic logistics are constrained, and hospitals and government institutions are weary of suppliers because of poor quality and scams,” he said.
Achieving credibility in times identified by desperation and greed can be difficult, Thorstad said.
But he’s managed to do just that.
Thorstad’s experience in qualifying products and factories, along with his vast network, have enabled his company to put feet on the ground to monitor orders.
“It’s allowed me to confidently supply PPE in a business environment with tremendous risk,” he said.
Two weeks ago, two Houston-area men were charged for attempting to fraudulently sell 50 million nonexistent N95 face masks to a foreign government, according to the U.S. Attorney’s Office for the Southern District of Texas.
Paschal Ngozi Eleanya, 46, and Arael Doolittle, 55, are accused in a scheme to sell 50 million 3M model 1860 N95 respirator masks they didn’t possess to a foreign government.
The indictment alleges the pair defrauded a foreign government out of more than $317 million, the total purchase price of the masks.
It’s an industry that, especially since this global pandemic began, has attracted many humanitarians as well as some unethical players.
“I have seen both,” said Thorstad, who’s used to working in countries where there’s entrenched bureaucracy and corruption in the day-to-day commerce.
In places like Brazil, for example, where he has many friends and family, Thorstad said normal trade rules don’t always apply, and the competition can be fierce and even ruthless.
But Thorstad has found ways to navigate the terrain.
“I’ve been burned before, but I’ve learned how to minimize risk by learning who to avoid and who to count on,” he said.
The search for PPE involves the navigation of a complicated and sometimes wayward chain of supply and demand.
And sometimes the product that was purchased never shows up at all.
A suburban Chicago business owner was charged last month with fraud for reportedly swindling more than $2.6 million from two prominent Midwest hospitals seeking PPE, according to the U.S. Attorney’s Office for the Northern District of Illinois.
Dennis Haggerty, president of the Illinois-based At Diagnostics Inc., was charged with one count of wire fraud.
The criminal complaint alleges that Haggerty and two business partners formed At Diagnostics in March 2020 to sell PPE.
University of Iowa Hospitals and Clinics and Northwestern Memorial Healthcare ordered a total of 1 million N95 face masks from the company.
The hospitals deposited more than $3 million into a bank account that Haggerty said was an At Diagnostics account, but what authorities said was actually a personal account.
Authorities allege Haggerty spent part of the hospitals’ funds on two Maserati automobiles and a Land Rover sport utility vehicle.
The charge against Haggerty is punishable by up to 20 years in prison.
On the other end of the PPE spectrum are people like Jack Yuan, a 19-year-old student at Stanford University in California who is studying artificial intelligence and cognitive science.
In March, Yuan responded to the early days of the COVID-19 pandemic by creating an international PPE supply chain from scratch.
The company, which he named Tianchi Med, has generated more than $200 million in revenue since March.
Yuan said he built a network of factories in China while mitigating the risks of fraud and product quality.
Yuan said he reviewed legal documents, controlled quality, and negotiated with more than 200 factories and 20 freight companies to guarantee that his clients had the best price possible.
In less than a year, he’s established six new partnerships and now owns warehouses in New York, Los Angeles, Brazil, and Canada.
“When I first got into this, I had no idea how to run a supply chain. I did not know much about customs, packaging, contract reviews, or shipping,” Yuan said.
He’s provided high-quality PPE to such clients as the Canadian federal government, Brazilian federal government, New York state government, Michigan state government, Home Depot, and Amazon.
Yuan has hired 50 additional employees to help scale the company and decrease lead time for clients.
He’s worked with factories, governments, and hospitals in the United States, Canada, and Brazil to deliver more than 600 million pieces of PPE equipment since March.
He’s also dedicated a substantial part of his business to the less fortunate who may not have access to PPE.
“Our efficiency and low cost enable us to give back to nonprofits in the [San Francisco] Bay Area, Philly, New York, and other places that have been hit the hardest,” he told Healthline.
Yuan’s company has provided approximately 1 million masks for free this year to nonprofit organizations, such as the Ronald McDonald House Charities of Philadelphia, Masks2all, COVID-19 Mutual Aid Solidarity Network, and Masks4America.
Craig Carrier is a U.S. business executive who’s lived in China for more than 20 years.
He’s CEO of IMPACT BIOTEC, a division of IMPACT Technologies & Innovation Limited, a global renewable energy company.
Earlier this year, IMPACT pivoted to PPE because Carrier wanted to help medical professionals and patients.
Carrier said one of the biggest reasons for the ongoing PPE crisis in the United States is “underestimation” of PPE requirement resulting in a lack of purchases earlier this year.
“The motto of the Boy Scouts of America sums it up nicely: Be prepared, regardless of the budgetary constraints. Our children’s lives are at stake,” he told Healthline.
Throughout his career, Carrier has been involved in crisis management and has dealt with natural disasters, people at risk, and equipment and companies requiring immediate recovery.
During the pandemic, his company has provided PPE predominantly to Southeast Asia and emerging-market countries as well as the European Union and United States.
Carrier told Healthline that the PPE industry is “still rife with unethical companies and individuals. There are a significant number of knockoffs using the brand of high-quality companies.”
What other advice does Carrier have for U.S. buyers seeking PPE?
“First, analyze the price difference between companies with high-quality brands and those with lower-priced products, i.e., 35 percent to 40 percent lower for knockoffs,” Carrier said. “Second, ask for guarantees on the PPE for quality, etc. The knockoff brands refuse to guarantee their products.”
“And third, prequalify all clients for requirements, perform due diligence on the companies, and request copies of all certifications, and get references,” he added.
Carrier said bringing quality PPE to developing nations and rural, underdeveloped regions of the world is an especially challenging but worthwhile effort.
“When trying to bring product to some countries, we’ve had to deal with buyers who are not familiar with the workings of the PPE supply chains and the time frames and capacities of the market,” he said.
“There are also difficulties with shipping, high freight costs, funding constraints, corruption, and low levels of education in the masses, which adds difficulty to using such PPE as masks and sanitizers,” Carrier noted.