The fight to save lives from COVID-19 is coming down to a search for more surgical masks and ventilators. But a conversation this week with an international broker of medical supplies revealed just how difficult it might be for New York and New Jersey to purchase these supplies.
On Wednesday, I got a text from a friend who wanted to put me in touch with a friend of hers who knows a guy in Germany with 90 million surgical masks for sale. “Yes, this sounds like a crazy spam message, God help me,” my friend texted.
The guy in Germany is Darrell Sims of 56 Sage LLC. He says he’s a retired US Army colonel who grew up in New York and went into business after retiring from the military. For the past four years or so, he says he’s been working with a businessman in Jordan who sells medical equipment.
They say they have 90 million masks for sale, and ventilators too. But here’s the rub: The purchaser has to put up a portion of the price up front, and hospitals and state governments don’t work that way.
“I understand the frustration of Governor Cuomo,” Sims said. “You have to prove yourself. But these are some hard times. It's hard to prove yourself.”
Sims has tried to reach out to New York hospitals and Cuomo’s office, but in the meantime, he says he’s watching other countries scoop up masks and ventilators like toilet paper off the supermarket shelves. He and his Jordanian business partner sold 400 ventilators to Bahrain on Wednesday, he said.
American hospitals are accustomed to doing business with American companies, and getting the equipment before they lay out any money. But now masks and ventilators are only available on the rough and tumble international market.
“So right now, I can tell you that everything's gone out of Canada. We have sources that are outside of Europe, but they require upfront payment,” said Lisa Rhoads of New York. She’s an investor in a medical technology company who is trying to operate as a broker between Sims and the hospitals.
“The hospital systems aren't set up to do this,” Rhoads said. “And they're having a hard time going out of their normal business practices.”
The state of emergency declared by New York and New Jersey allows government agencies to purchase supplies quickly, without the usual procurement rules. But Rhoads says it’s been impossible to get anyone — hospitals or the state — to make a decision quickly enough.
“I know that the governments are trying to put together centralized sourcing for this, but someone has to put up some capital in order to get these products into the market,” she said. “And that's where the government really should be coming in, is to put together a co-operative fund.”
It’s understandable why hospitals would be worried about paying cash up front to a company they have never heard of. In New Jersey, Holy Name Medical Center spent more than $1,000 on 1,000 masks, but when they arrived they were not the quality that had been promised. Some hospitals are reporting that the 75-cent mask is now going for nine dollars.
“I get 15 or 20 emails a day about people who claim they have some big warehouse somewhere if only we can fork over a million dollars in cash upfront,” said New Jersey Governor Phil Murphy.
The New Jersey Hospitals Association has a team working on vetting international deals for its members, the 71 hospitals in the state.
“To try to do business with brand new vendors with which they don't have any experience with, and especially if they're in other parts of the world, that is difficult,” said Kerry McKean Kelly, a spokeswoman for the group. “And that's time consuming, so that’s why we’re trying to help.”
Missing from the equation is federal leadership.
The national stockpile has 40 million masks, according to testimony by the Secretary of Health and Human Services Alex Azar. That’s far short of what’s needed. President Trump has invoked the Defense Production Act, but so far, his Department of Health and Human Services has not put those powers into effect.
Now, New York and New Jersey hospitals are competing with nation states to purchase masks and ventilators in an increasingly shrinking international market. Twenty-four hours after I put the retired colonel with 90 million masks for sale in touch with the New Jersey Hospitals Association, he still hadn’t heard back.
On Thursday, he said he’s thinking about putting them on eBay.