IV fluid shortages in the U.S.--perhaps we should allow international imports?

There's a hurricane-induced shortage of intravenous (IV) fluid.  Maybe we should import some? (But...international borders...)

An obstacle is that FDA approval of the factories is usually needed, but can be (and in the past has been) suspended, to allow imports from places that do their own high quality inspection (like Australia and Ireland in 2017--I guess it's good that the labels are in English) .  

More generally, after the Covid pandemic we learned of the fragility of supply chains that have concentrated overseas sources (like surgical masks from Wuhan).  The reaction has been to onshore more production. But concentrated domestic production also makes for fragile supply chains, and being able to diversify to overseas producers could strengthen them.

Statnews has the story:

White House should declare national emergency over IV fluid shortages caused by Helene, says hospital group. Hurricane Helene shuttered a Baxter plant that manufactures 60% of IV solutions for the U.S.  By Brittany Trang 

"Amid Hurricane Helene shuttering a major IV solution manufacturing plant and Hurricane Milton now barreling toward other IV manufacturing facilities in central Florida, the American Hospital Association on Monday asked the Biden administration to declare a shortage of IV solutions and invoke national emergency powers to ease the crisis. 

'In late September, Hurricane Helene shut down a Baxter plant in Marion, N. C., which manufactures approximately 60% of the IV solutions for the U.S. Both Baxter and “all other suppliers” of IV solutions have restricted how much their customers can order and have stopped taking new customers, AHA president Rick Pollack wrote in the organization’s letter to Biden. As a result, hospitals have declared internal shortages and restricted IV use. 

...

"In addition, the letter asked for the government to declare a national emergency and public health emergency so that Medicare and Medicaid rules around IV infusions can become more flexible, and to invoke the Defense Production Act to expand the production of IV solutions and bags. The AHA also suggested the government put the Federal Trade Commission and Department of Justice on alert for price gouging during the shortage.

Another step the FDA could take is to allow the importation of IV bags from other countries,* as it did when Hurricane Maria shut down Baxter’s Puerto Rico-based IV saline plants in 2017. That shortage mostly affected small IV bags. According to Vizient, a health care performance improvement company, the North Carolina Baxter plant is largely a producer of large IV bags, including saline, dextrose, and Ringer’s lactate solutions.

#####

*In 2017: "To address a shortage of intravenous solution bags exacerbated by Hurricane Maria, the Food and Drug Administration has granted permission for a health supply company to import certain products to the United States from Australia and Ireland."

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Related:

Wednesday, August 28, 2024

WHO Says Countries Should Be Self-Sufficient In (Unremunerated) Organs And Blood, by Krawiec and Roth

More on the looming shortage of new antibiotics

 From Medpage Today:

Superbugs Are Getting Stronger— Our defenses are getting weaker  by David Thomas, MS, and Emily Wheeler 

"There are only 64 antibacterial therapeutics currently in clinical development. That's compared to 1,300 treatments in development for various cancers. Over one-third of antibacterial drug candidates target just two bacteria: Clostridioides difficile and Mycobacterium tuberculosis. That leaves only 44 drugs to target all other pathogenic bacteria.

"In other words, the antibacterial pipeline is grievously small. And it's shrinking compared to previous decades. In the last 35 years, just one antibacterial with a novel way to target bacteria has been approved. Comparatively, 18 new antibacterials with novel targets were approved by the FDA between 1940 and 1990.

"Meanwhile, superbugs continue to grow stronger. New research estimates they claimed 1.27 million lives in 2019 -- more than twice the estimated number of annual deaths just 5 years prior.

...

"Every time we use an antimicrobial, the target microbes have a chance to survive and become resistant. So, clinicians prescribe them only when needed. But this sound medical practice makes for poor economic incentives for private companies in a market system.

"Take the experience of the biotech firm Achaogen, which secured FDA approval in 2018 for its novel antibiotic plazomicin (Zemdri), after 15 years of development. The medication treats infections caused by one of the most challenging superbugs, carbapenem-resistant Enterobacteriaceae.

"While important for the overall armamentarium, such novel antimicrobials are used particularly sparingly to prevent dangerous pathogens from developing resistance to our strongest medications. As a result, clinicians hold novel antibiotics like plazomicin in reserve, using them judiciously to preserve effectiveness. That means companies like Achaogen don't sell large quantities of the drugs they develop -- or earn back the capital they invested in the research and development process.

"Achaogen filed for bankruptcy in 2019. In the 3 years since, several other small biotech companies that successfully cleared the clinical pipeline with FDA-approved antibacterials have seen a similar fate.

"The market conditions for antimicrobials are so discouraging that most large biopharmaceutical companies have pulled out of the sector entirely. Small companies discovered over 80% of the antibacterial therapeutics currently in clinical trials.

"These dynamics are causing investors to vacate the antimicrobial sector, too. Venture capital funding for biotech firms focusing on antibacterial research declined over the last decade, while other areas such as oncology rose 700%.

... 

"One solution is the bipartisan, bicameral Pioneering Antimicrobial Subscriptions To End Upsurging Resistance (PASTEUR) Act, which would change the current dose-based payment model for certain antimicrobials. Under PASTEUR, the government would offer developers of the most critically needed antimicrobials between $750 million and $3 billion up front in exchange for access to their medications once they hit the market.

...

"Another bill under consideration is the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act. The legislation would increase Medicare reimbursements for certain antimicrobials"

************

I don't know how I should feel about the fact that proposed legislation is named with clever acronyms (and I'm not sure that DISARM sends the right message...)

Economics in a war zone: Tymofiy Mylovanov interviewed by Scott Kominers

 What's the first thing an economist has to think about when his country is invaded?  Supply chains.

Scott Kominers interviews Tymofiy Mylovanov, via Twitter, at Bloomberg.

How a Ukrainian Economist Is Fighting the Russians. Since the bombs started to drop, Kyiv School of Economics President Tymofiy Mylovanov has been working on the nightmare logistics of humanitarian aid in a war zone. By Scott Duke Kominers

"For the past three weeks Tymofiy Mylovanov, president of the Kyiv School of Economics in Ukraine, has been witnessing the effects of Russia’s invasion of Ukraine firsthand -- working from within a war zone to bring desperately needed medical supplies to the country. Mylovanov, an economics professor and former minister of Economic Development, Trade and Agriculture for the Ukrainian government, is directing fundraising and other aid efforts from his base in Lviv in western Ukraine. 

...

"Mylovanov: If you want to get something done during war, it must be project-based. A lot of people are just completely lost. People have all kinds of ideas that the government has to do something, or someone else has to do something, and so they don’t do anything. You really have to focus on a specific project and the entire logistical supply project chain. We rely a lot on trust. And this trust was developed over the last eight years. I started working with Ukraine in 2014. I was at [the University of Pittsburgh] when the invasion of Crimea happened and I felt I had to get engaged with Ukraine. And I developed some expertise on how things work in extreme circumstances. So that helps me a little bit now. For example, we knew what to do with finances. In 2014, I raised $50,000, and a lot of academics were giving me checks of $1,000, $2,000 just to help Ukrainians in 2014. And none of it was wasted.

"We don’t need food or paper towels. What the army needs is munitions and people need medical supplies, specific medical supplies. Most people die from blood loss after a cluster bomb or after some kind of ballistic missile falls.  There may be 20 or 200 people wounded. It’s a little bit like when an airplane cabin loses pressure, the masks fall down — and what you need to do is to put the mask on yourself and then help others. So in this case, the mask analogy is a medical kit, which allows you to stop bleeding. So you really have to ensure that you are not bleeding, and then that people next to you are not bleeding.

"So you have to have a lot of these medical kits, and they usually cost 10 or 20 bucks. But now of course they cost 100 bucks because it’s surge pricing and no one can deliver. So we are trying to focus on this specifically. Civilian authorities need them and even railroads are asking for these medical kits because evacuation trains get shelled and people die without this specific kit. We will deliver them. We have connections, there’ll be no [extra overhead charges]. It doesn’t get stolen on the way. And [your donation] is also tax deductible in the U.S. So for $100, you’ll save a life and get your taxes back.

"So that’s what we are doing. But the first thing is to make sure we can pay [for supplies]. Because it’s wartime, there are capital controls and no one can make payments [in the usual way]. So you have to figure out how we’re going to pay. Then you need to figure out how you’re going to collect [fundraising] money. You need to figure out how to do crypto. So I am [talking to] European currency exchanges and charitable foundations and [universities] in the U.S. and Ukraine and the central bank of Ukraine and other banks and CEOs to ensure that the financial monitoring [for sanctions] doesn’t stop me because it’s all automatically blocking everything.

"And you need to get suppliers. In war, there are so many intermediaries and fees. So you have to establish a procurement department to figure out who is serious. Once you have suppliers, you have to figure out all the [wartime] export licenses,  all these government regulations. And of course things get stolen on the way. For example, one large, well-known American charity sends 95 pallets of medical supplies to Ukraine. When it arrives, it’s only two pallets because 93 of them got stolen somewhere. Not in Ukraine — either in Poland or even in New Jersey. So you have to watch for this. You actually have to put your own people in Warsaw or in New Jersey, in Israel, in Sweden, to check what has been loaded at every point so that it doesn’t get stolen. It’s a logistical nightmare. And when you finally get it to Ukraine, people are shooting at you at checkpoints.

...

"All the fundraising goes directly to logistics. I have a website at the university of the charitable foundation [Kyiv School of Economics Humanitarian Relief Fund], and there is a Twitter post at my account. If I get a hundred dollars on that charitable foundation, it goes towards medical kits and it’s likely going to save a life."

Black market supply chains, Persian gulf stories

 Supply chains around the world are reacting to disruptions caused by Covid and other things. And those are mostly uncontroversial, uncontested legal supply chains.  For black markets things are even tougher. Here are two stories, about oil and arms, from the Persian gulf. Both are from the WSJ:

Smuggled Iranian fuel and secret nighttime transfers: Seafarers recount how it’s done  By Katie McQue

"The secret transfers usually take place at night to evade detection by regional coast guards. The ships anchor in the Persian Gulf just outside the territorial limits of the United Arab Emirates, and then, individually, small boats carrying smuggled Iranian diesel shift their loads to the waiting vessels, according to seafarers who have witnessed the trade.

“It is a big chain, with fishing boats sailing up to give diesel to a waiting tanker. It takes four to five days because boats come one by one,” said a 27-year-old Indian seafarer, who spoke on the condition of anonymity for fear of reprisals. He said he had been employed by a Dubai-based shipping company that smuggled Iranian fuel to Somalia.

...

"In addition to the nighttime transfers at sea, Iranian diesel bound for international markets is exported on tankers setting sail from Iran with the origin of the shipment forged to make it look as though it came from Iraq or the UAE, according to a third seafarer and three experts in security and energy affairs.

"Because of the profit margins, this trade was highly lucrative even before the United States pulled out of the nuclear deal. Iran has some of the world’s cheapest fuel prices thanks to very low production costs, heavy government subsidies and a weak currency. But the reimposed economic sanctions have given this business a further boost as smugglers seek to evade restrictions on Iranian oil exports. 

***********

Iran Navy Port Emerges as Key to Alleged Weapons Smuggling to Yemen, U.N. Report Says  By Benoit Faucon  and Dion Nissenbaum

"Thousands of rocket launchers, machine guns, sniper rifles and other weapons seized in the Arabian Sea by the U.S. Navy in recent months likely originated from a single port in Iran, according to a confidential United Nations report that provides some of the most detailed evidence that Tehran is exporting arms to Yemen and elsewhere.

"The draft report prepared by a U.N. Security Council panel of experts on Yemen said small wooden boats and overland transport were used in attempts to smuggle weapons made in Russia, China and Iran along routes to Yemen that the U.S. has tried for years to shut down. The boats left from the Iranian port of Jask on the Sea of Oman, the U.N. report said, citing interviews with the boat’s Yemeni crews and data from navigational instruments found on board."

The demise of bourbon-scented hand sanitizer

The Covid pandemic isn't over, but the emergency shortage of hand sanitizer is.

Some Companies Will Stop Making Alcohol-Based Hand Sanitizer, by Rebecca Voelker, JAMA. 2021;326(19):1899. doi:10.1001/jama.2021.19919

"Nearly 2 years after the COVID-19 pandemic struck the US, the FDA will withdraw its guidance on manufacturing hand sanitizer. The withdrawal applies to nonpharmaceutical companies that followed temporary policies to produce both alcohol-based hand sanitizer and the alcohol used in them during the public health emergency.

"“In recent months, the supply of alcohol-based hand sanitizer from traditional suppliers has increased, and now, most consumers and healthcare personnel are no longer having difficulty obtaining these products,” Patrizia Cavazzoni, MD, director of the FDA’s Center for Drug Evaluation and Research, explained in a statement.

"The agency’s announcement stated that companies making alcohol-based hand sanitizer under the temporary policies must stop production by December 31. Those that plan to continue making the product will have to comply with requirements for over-the-counter topical antiseptics as well as the FDA’s Current Good Manufacturing Practice regulations."

***********

Earlier:

Thursday, June 11, 2020

The pandemic market for disinfectants (including Bourbon scented hand sanitizer)

Marketplace for supplies to produce vaccines: COVAX

 Scott Kominers sends me the following link, of a marketplace intended to notify vaccine makers of supplies that may be available:

The COVAX Marketplace

"The COVAX Marketplace aims to accelerate the global production of COVID-19 vaccine doses for COVAX by matching existing suppliers of critical inputs with vaccine manufacturers who urgently need them to produce vaccines for fair and equitable distribution through COVAX

...

"The COVAX Marketplace is a key deliverable of the COVAX Manufacturing Task Force. It aims to respond quickly to immediate market needs and bottlenecks and improve the free flow of critical COVID-19 vaccine supplies by:

– Providing suppliers with a platform to allocate and reallocate unused materials.

– Mobilising idle stock from vaccines and candidates that fail prior to gaining regulatory approval – as well as from those that might scale down their production in the future.

– Mobilising potential surplus stock from manufacturers with non-vaccine activities.

...

"The initial version of the Marketplace will include COVAX vaccine manufacturers and suppliers of the key materials that have been identified as being most urgently needed.

"Participants in the COVAX Marketplace will be able to offer and request any materials required for vaccine production through the Marketplace, but it will initially focus on six categories of supplies that have been identified as critical: bioreactor bags, single use assemblies, cell culture media, filters, lipids, vials, and stoppers.

...

"Matches negotiate and conclude the transaction between themselves, independently of the Marketplace. Pairs notify CEPI on successful closure."

**************

Other posts on supply chains.

Congestion in transit in supply chains: pipeline inventory

 The recovery from the pandemic is revealing as many supply issues as the pandemic itself did. Here's an article in Forbes about congestion in transportation

How Traffic Congestion In Chicago Is Backing Things Up In Los Angeles: Pipeline Inventory Is Now A Big Logistics Problem  by Willy Shih 

"As retailers try to bring a surge of imports into their distribution centers, they are exceeding the capacity of logistics providers to move them through choked hubs like the Union Pacific Global 4 intermodal terminal in Joliet, Illinois outside of Chicago. A shortage of truck chassis means its difficult to get containers out of the terminal to warehouses, that in turn leads to congestion that makes it is difficult to unload trains. According to a recent discussion hosted by the Journal of Commerce on top importers, that means the traffic has backed up to the marine terminals in Los Angeles and Long Beach, and to a lesser extent Seattle/Tacoma. That’s why now would be a good time to understand what we mean by pipeline inventory.

...

"All those containers stuck at UP Global 4 are pipeline inventory for somebody, and rail congestion out of West Coast ports means pipeline inventory is building up there (and remember it’s on trucks and trains as well). The Port of Los Angeles Signal report for last week projects import volumes up 54.9% this week and 71.6% next week, with big jumps in on-dock and off-dock rail containers. So that furniture or freezer you are waiting for might be sitting in a container stack in a yard somewhere.

...

"The key question is will those goods stuck in pipeline inventory make it to the consumer while the demand is still there? The recent precipitous collapse in lumber prices suggests that as Americans shift towards a more normal consumption pattern, we might end up with a lot more of some goods than retailers planned. Neglect of pipeline inventory, or increased ordering to make up for the pipeline lag, is one of the major causes of the bullwhip effect in supply chains. Sophisticated retailers like Walmart or Target are probably always on top of how much inventory they have in the pipeline, but the challenge is will the demand still be there when those goods finally arrive? For fashion retailers, this could be “Hello, TJX” as they end up looking for help to liquidate excess inventory."

Vaccinating the whole world quickly turns out to be hard

 As Covid vaccines became available, rich countries that had made early, advanced purchases at high prices had contracts that delivered available doses early, while countries and organizations that had made later purchases at lower prices had "best effort" contracts that allowed delivery dates to slip as supply chain problems developed.  The consequences were greatest for the poorest countries, despite efforts to speed vaccination worldwide.

The WSJ has the story:

Why a Grand Plan to Vaccinate the World Against Covid Unraveled. The multibillion-dollar Covax program was supposed to be a model for vaccinating humanity, but has hit problem after problem By Gabriele Steinhauser, Drew Hinshaw and Betsy McKay

"The Covax program, conceived in early 2020 as a kind of Operation Warp Speed for the globe, was supposed to be a model for how to vaccinate humanity, starting with those who needed it the most. The plan was scheduled to have the developing world’s entire healthcare workforce immunized by now.

"Instead, the idealistic undertaking to inoculate nearly a billion people collided with reality, foiled by a basic instinct for nations to put their own populations first, and a shortage of manufacturing capacity around the world.

"Dr. Berkley and a small crew of global health experts spent months trying to recruit much of the world into buying their vaccines from one common pool, rich and poor countries alike. While they were hammering out the details and raising money, nations that could afford it rushed to secure their own shots first.

...

"Most of the world’s poorest nations were left highly dependent on a single vaccine, produced by a single manufacturer in a single country. In a cruel twist, that supplier—the Serum Institute of India—ended up engulfed by the world’s worst Covid-19 outbreak.

...

"Dr. Berkley, the chief executive of Gavi, the Vaccine Alliance, a public-private partnership that secures childhood immunizations for the world’s poorest countries and is the central organization behind Covax, said the facility did its best to navigate a hypercompetitive vaccine market. “We hear a lot of criticism, and the truth is, we’ve tried to do something that we think is the right thing,” he said. “Hindsight’s 2020. Should we have not invested in India? Well, that was the fastest way to get there.”

...

"Covax started shipping Covid-19 vaccines within three months of the world’s richest countries administering their first shots—lightning speed, compared with the five to 10 years it often takes for new immunizations to reach the developing world.

"Yet now it is running out of vaccines just when Covid-19 cases are escalating across countries it was meant to protect: the low- and middle-income states of Latin America and South Asia. The program has shipped 72 million shots, far short of the 238 million it had targeted by the end of May. That’s 4% of the total 1.7 billion vaccines shipped world-wide.

"Some 20 million of Covax’s shots have come from India, which was due to ship 140 million by the end of the month but stopped exporting them as it works to inoculate the country’s 1.3 billion citizens

...

"Wealthy countries, including ones that had promised to fund Covax, were buying their own doses first. In late May, the U.K. had sealed its own agreement with AstraZeneca, for 100 million doses. The U.S., without a commitment to Covax, had signed up for 300 million from AstraZeneca, pledging up to $1.2 billion.

"In June, the European Union, worried that its own countries would start competing for limited supply, stepped in to buy shots for its 450 million citizens. As part of its deal with member states, the EU blocked governments from joining any parallel vaccine purchasing programs. That meant France and Germany were now effectively barred from buying doses from the pool they had championed.

...

"By late December, after months of haggling over prices, Covax had 2 billion doses lined up, enough to vaccinate some 20% of the population in over 100 countries. Yet most were soft agreements with no clear delivery dates or involved drugmakers whose shots hadn’t yet panned out. As Europe and the U.S. began to vaccinate, Covax’s only completed purchases were with AstraZeneca and the Serum Institute.

...

"On Feb. 15, the WHO approved the AstraZeneca shot for emergency use, six weeks after it was cleared in the U.K. That allowed Covax to make its first shipment to a developing country, Ghana, weeks after Serum began exporting shots to other countries.

"Three days later, the U.S., now under President Biden, announced a $2 billion contribution to Covax, with another $2 billion planned through 2022. The EU upped its commitment to 1 billion euro.

"By then, there were scant vaccines available to buy. This month, Covax reached a deal with Moderna for 500 million doses, of which 466 million won’t be delivered until 2022."

Vaccine shortages are more about congested supply chains than about patent protection: Alex Tabarrok at MR

 Alex Tabarrok has a nice post at Marginal Revolution about the actual problems in worldwide vaccine supply, involving congested supply chains much more than protected intellectual property.

Patents are Not the Problem! by  Alex Tabarrok May 6, 2021 

Vaccine supply and delivery in Germany: I'm interviewed in Zeit

 Here's an interview in the German newspaper Zeit, in which I was asked in early February about the vaccine rollout here and there. (Google translate is pretty readable, although some of the Q&A is a bit garbled by the translation from English to German and re-translation back into English...)

"Die Welt kann es sich leisten, einiges zu bezahlen" Alvin Roth weiß, wie man begehrte Güter effizient verteilt. Er hat den Nobelpreis dafür bekommen. Ein Gespräch über knappen Impfstoff und wie er vermehrt werden kann.  Interview: Lisa Nienhaus

Google Translate: "The world can afford to pay a lot" Alvin Roth knows how to efficiently distribute desirable goods. He got the Nobel Prize for it. A conversation about scarce vaccine and how it can be propagated. Interview: Lisa Nienhaus February 15, 2021,

The interview starts off talking about congestion, and line jumping, and the tradeoffs between speed and fairness (and how it's really costly to allow some vaccine to expire unused in the name of fairness).  It then turns to shortages of vaccine in the near term:

ZEIT ONLINE: Attempts are being made to build new production facilities. But in Germany we are - to be honest - pretty late.

Roth: But now is not the time to give up. Everything we build now may help us in August. Even if Germany is running late, there is still time to expand production facilities. Especially since these systems would certainly not have to be destroyed after Covid. Being able to produce mRNA vaccines oneself is also a good thing in the future. Vaccine production is not that complicated. You can build production facilities anywhere. And you should too.

ZEIT ONLINE: It's not happening on a large scale yet. What to do?

Roth: Laws are really useful for that. Pfizer / BioNTech and Moderna could be forced to license the production technology to other German pharmaceutical companies.

ZEIT ONLINE: That sounds radical.

Roth: I only think it's logical. If you had a pharmaceutical company, you'd think, "I'm paid by the dose. I've got enough capacity to ship to the whole world in the next year and a half. Why should I hurry?" There is no need to set up production facilities just to supply the world in six months instead of 18. It doesn't make any difference from a business perspective. But for the German or American government, these two options are by no means equivalent. It is important that we vaccinate quickly. We need a lot more production capacity than the pharmaceutical companies think it makes sense.

ZEIT ONLINE: Economists rarely suggest such a strong market intervention. And that also applies to companies that we must first be grateful to because they show us a way out of lockdown.

Roth: It's a global pandemic. It is economically necessary to think about how to avert the damage to the economy. But of course you have to pay the manufacturers. Many forget that.

ZEIT ONLINE: How fair the companies think that probably depends on how much you pay them.

Roth: Yes. But the world can afford to pay a lot. Because the world economy is currently largely at a standstill. We have a multi-trillion dollar economy. Paying a billion to save a trillion is good business.

ZEIT ONLINE: Why is that not happening so far?

Roth: The pharmaceutical companies themselves don't think that way at the moment. But we need the vaccine now. And it's very expensive for the world to shut down its economy like that. If you lose a few percentage points of GDP growth in Germany, that's a huge number. And there is almost no amount to pay to license the vaccine that is not worth it.

Vaccine supply, and delivery, a call to increace production capacity, in Science

 The latest issue of Science has a call  by a very distinguished roster of economists, to invest in additional vaccine capacity, urgently, to shorten the time needed for the economy to fully reopen. The authors note that the savings from accelerating economic recovery are vastly larger than the costs of increasing vaccine production capacity.

Market design to accelerate COVID-19 vaccine supply  by Juan Camilo Castillo1, Amrita Ahuja2, Susan Athey3,4, Arthur Baker5, Eric Budish4,6, Tasneem Chipty7, Rachel Glennerster8, Scott Duke Kominers4,9,10, Michael Kremer4,5,*, Greg Larson11, Jean Lee12, Canice Prendergast6, Christopher M. Snyder4,13, Alex Tabarrok14, Brandon Joel Tan10, Witold Więcek

Abstract: "Build more capacity, and stretch what we already have"

Here's one among many thoughtful bits:

"Cross-country vaccine exchange

"As more vaccines are approved, given the scramble to secure bilateral deals, the nature of the fair allocation protocol adopted by COVAX (a global initiative to promote access to COVID-19 vaccines), and rapidly changing circumstances, some countries may end up with vaccine allocations that are not optimally matched to their needs. For example, some countries may have difficulty handling vaccines requiring ultracold storage or may be willing to trade off a small reduction in efficacy for a large increase in quantity. Countries allocated several vaccines may prefer to simplify logistics by consolidating on one or two.

"To facilitate efficient allocation across countries, a vaccine exchange mechanism is under consideration by COVAX. The mechanism will enable countries to engage in mutually beneficial trades of vaccine courses. Centralized market clearing will help aggregate the willingness of all countries to trade, thus maximizing gains from trade and minimizing waste of scarce vaccine courses.

"Similar mechanisms have been used successfully in other contexts where gains from trade are substantial, yet traditional cash markets are inappropriate and fairness concerns are paramount (10, 11). This setting, however, offers specific challenges. Allowable trades must satisfy regulatory approval, indemnification at the country level, and COVAX goals for population coverage. By incorporating such safeguards, an exchange can maximize efficiency, minimize waste, and ensure an equitable allocation."

Congestion in vaccine delivery, and shortage of overall supply: latest news, and a call for increased production

Covid vaccines in many parts of the U.S. are being distributed only slowly, while other places are experiencing shortages.

 The NY Times brings us up to date:

New Pandemic Plight: Hospitals Are Running Out of Vaccines.  Health officials are frustrated that available doses are going unused while the virus is killing thousands of people each day. Many vaccine appointments have been canceled.   By Simon Romero and Giulia McDonnell Nieto del Rio

"In the midst of one of the deadliest phases of the pandemic in the United States, health officials in Texas and around the country are growing desperate, unable to get clear answers as to why the long-anticipated vaccines are suddenly in short supply. Inoculation sites are canceling thousands of appointments in one state after another as the nation’s vaccines roll out through a bewildering patchwork of distribution networks, with local officials uncertain about what supplies they will have in hand.

...

"Health officials trying to piece together why this is happening are puzzled by reports that millions of available doses are going unused. As of Friday morning, nearly 39.9 million doses of the Pfizer-BioNTech and Moderna vaccines had been distributed to state and local governments, but only about 19.1 million doses had been administered to patients, according to the Centers for Disease Control and Prevention....

...

"“Right now, in many cities and counties when an announcement of available vaccinations is made, website sign-up pages crash and phone calls go unanswered"

...

"The public health department in San Francisco and hospitals in the city were “caught by surprise” by the lack of doses, Dr. Rutherford said, and by the eligibility expansion to those 65 and older, which likely strained the system. Varying vaccine distribution channels — such as Kaiser Permanente and the University of California, San Francisco — receive the doses on their own, he said, further complicating an already convoluted distribution system.

“So it’s a little hard for the city to understand exactly what’s left over, what they need to do, where the holes are to fill,” Dr. Rutherford said. Still, new vaccination sites are opening in San Francisco, which Dr. Rutherford said would help speed the process along once more doses become available. “There’s this tension between efficiency and equity,” he said. “It’s never easy.”

*****************

Here's a paper that points out that getting people vaccinated fast would have enormous benefits in terms of saving lives and reopening the economy, and that once we get the kinks out of vaccine distribution, it makes sense to invest in production facilities much faster than the pharma companies might feel it was necessary to do on their own.

Preparing for a Pandemic: Accelerating Vaccine Availability  By AMRITA AHUJA, SUSAN ATHEY, ARTHUR BAKER, ERIC BUDISH, JUAN CAMILO CASTILLO, RACHEL GLENNERSTER, SCOTT DUKE KOMINERS, MICHAEL KREMER, JEAN LEE, CANICE PRENDERGAST, CHRISTOPHER M. SNYDER, ALEX TABARROK, BRANDON JOEL TAN, WITOLD WIECEK

Abstract: Vaccinating the world’s population quickly in a pandemic has enormous health and economic benefits. We analyze the problem faced by governments in determining the scale and structure of procurement for vaccines. We analyze alternative approaches to procurement, arguing that buyers should directly fund manufacturing capacity and shoulder most of the risk of failure, while maintaining some direct incentives for speed. We analyzed the optimal portfolio of vaccine investments for countries with different characteristics as well as the implications for international cooperation. Our analysis, considered in light of the experience of 2020, suggests lessons for future pandemics.

Vaccine supply chain woes

Supply chains are boring, until things are in short supply. And there are many steps in a supply chain that can cause supplies to be short. Below are some news stories on how the U.S. is having trouble delivering vaccines, with the limiting factors not yet being shortage of the vaccines themselves.

I notice a few things about these stories. 

• It seems to be widely recognized that it is worth spending billions (or at least hundreds of millions) to save trillions (i.e. to speed up vaccinations to hasten the reopening of the economy).
• It seems also to be widely recognized that it would be regarded as repugnant to allocate initial inoculations by charging high prices for them while they are scarce: instead we are trying to establish priority orders for recipients: e.g. first health care workers and the elderly in nursing homes, then the independent elderly and the ill, etc,
• Keeping strictly to priorities may partly be what is slowing down vaccinations: when not enough high priority people show up, the vaccines go back in the freezer to wait for the next day (at least I hope they go back in the freezer, and are not spoiled and unusable by the next day).  It might be better to try to find people ready to be vaccinated, when it's hard to find enough high priority people quickly.
• A lack of confidence that more vaccine doses will be reliably arriving on schedule is causing some stockpiling, which is the enemy of fast distribution.
• Holiday schedules make it hard to get lots of people vaccinated fast; maybe we'll do better this coming week.

Here's a story from the Financial Times:

Trump administration admits missing Covid vaccination goals--Officials say US states have used only a fifth of the doses they were given  by Kiran Stacey 

"Officials had aimed to distribute enough doses to vaccinate 20m people by the end of the year, but recently admitted they were not likely to hit that target until early January after underestimating how long it would take to perform quality control checks on manufactured doses.

"Figures released by the federal government, however, show a bigger hurdle is getting the vaccines to people once they have been manufactured and sent out. The US Centers for Disease Control and Prevention said on Wednesday just under 2.6m people in the country had been vaccinated, even though 12.4m doses had been distributed.

...

"Nancy Messonnier, the director of the National Center for Immunisation and Respiratory Diseases, blamed a range of factors. She said part of the problem was that pharmacies that were largely responsible for vaccinating people in care homes had been waiting to schedule appointments until they could be sure they had enough doses to perform booster shots."

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From the NY Times:

Here’s Why Distribution of the Vaccine Is Taking Longer Than Expected--Health officials and hospitals are struggling with a lack of resources. Holiday staffing and saving doses for nursing homes are also contributing to delays.  By Rebecca Robbins, Frances Robles and Tim Arango

"In Florida, less than one-quarter of delivered coronavirus vaccines have been used, even as older people sat in lawn chairs all night waiting for their shots. In Puerto Rico, last week’s vaccine shipments did not arrive until the workers who would have administered them had left for the Christmas holiday. In California, doctors are worried about whether there will be enough hospital staff members to both administer vaccines and tend to the swelling number of Covid-19 patients.

"These sorts of logistical problems in clinics across the country have put the campaign to vaccinate the United States against Covid-19 far behind schedule in its third week, raising fears about how quickly the country will be able to tame the epidemic.

...

"Complicating matters, the county health department gets just a few days of notice each week of the timing of its vaccine shipments. When the latest batch arrived, Dr. Gayles’s team scrambled to contact people eligible for the vaccine and to set up clinics to give out the doses as fast as possible.

...

"In Florida, some hospital workers offered the vaccine declined it, and those doses are now designated for  other vulnerable groups like health care workers in the community and the elderly, but that rollout has not quite begun

...

"It may be more difficult, public health officials say, to vaccinate the next wave of people, which will most likely include many more older Americans as well as younger people with health problems and frontline workers. Among the fresh challenges: How will these people be scheduled for their vaccination appointments? How will they provide documentation that they have a medical condition or a job that makes them eligible to get vaccinated? And how will pharmacies ensure that people show up, and that they can do so safely?"

Grocery supply chains: TNR reviews "The Secret Life of Groceries"

 The New Republic reviews The Secret Life of Groceries: The Dark Miracle of the American Supermarket, by Benjamin Lorr,  (It tells you more than you want to know about supply chains, from farmed shrimp in Thailand to American long haul trucking...)

There’s No Such Thing as Ethical Grocery Shopping--“The Secret Life of Groceries” exposes the dark secrets of America’s food supply. by Josephine Livingstone

Having read the review but not the book, it sounds like a broad based followup on this 2015 story from the Guardian:

Shrimp sold by global supermarkets is peeled by slave labourers in Thailand

by Associated Press: Margie Mason, Robin McDowell and Esther Htusan in Samut Sakhon and Martha Mendoza in Washington Mon 14 Dec 2015

The fall and rise of food supplies in Covid-19 India, by Matt Lowe and Ben Roth

Pandemic lock downs gave food supply a shock in Indian markets, but they have recovered.

COVID Lockdown: How India's Food Supply Chain First Tightened and then Recovered
"Food supply shortages, if any, are driven by state level policy making, rather than consumers’ and suppliers’ fears of contracting COVID-19."
by Matt Lowe and Ben Roth

"In mid-April, the supply of fruits and vegetables at Azadpur, Asia’s largest fruit and vegetable market, had fallen about 50% since the start of India’s nationwide lockdown.

Two months later, updated nationwide data shows that India’s food supply chain appears to have recovered, operating at levels comparable to the same time last year. The story of the recovery is best told with four food facts, the sum of which tell its own tale of governance during the COVID-19 pandemic times.

Food fact 1: Food volumes took a huge hit post-lockdown but have steadily recovered.

...

Food fact 2: Food prices increased post-lockdown but have steadily fallen.

...

Food Fact 3: The early disruption to the food supply chain was highly correlated with the incidence of COVID-19 at the state level, but all states appear to be recovering.

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Food Fact 4: Within states, there was no relationship between the incidence of COVID-19 and the health of the food supply chain, even in phase 1.

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Earlier post: 

Thursday, April 16, 2020

Corona lockdown, and the food supply chain in India, by Matt Lowe and Ben Roth

When supply chains break down, brokers make markets

During the Arab oil embargo of the U.S. in 1973, I remember hearing an oil broker discuss his day. He would cold call companies that used oil and ask if they had any to sell. Almost always he was told they were looking to buy oil, because their usual suppliers had gone dry. He'd write that down and go on to the next call.  Sometimes he'd find someone with oil to sell--maybe the general economic slowdown had reduced their consumption, but since they were normally buyers and not sellers they hadn't sold their surplus.  That kept the broker in business, he was able to help them sell their excess.

When well-established supply chains break down (e.g. as factories close in China and hospitals in NY are short of supplies, both because of the covid-19 pandemic), brokers are becoming important. Brokers work to piece together pieces of broken supply chains by connecting buyers and sellers. Even in times of shortages there can be sellers, with stock in their warehouses, who no longer have connection to buyers...

The NY Times has the story:

Marc Benioff’s $25 Million Blitz to Buy Protective Gear From China
A call from a university chancellor set in motion a private-sector effort to procure 50 million masks, gowns and swabs for American medical facilities.
By David Gelles

"The university’s usual suppliers in the United States were short on masks and face shields, and there was no sign that the State of California or the federal government was coming to the rescue. “The supply chain had really dried up,” Mr. Hawgood said.

"So Mr. Hawgood called Marc Benioff, the hyperconnected billionaire who is a founder and the chief executive of Salesforce.
...
"that phone call set off a frenzied effort by Mr. Benioff and his team that drew in major companies like FedEx, Walmart, Uber and Alibaba. In a matter of weeks, the team spent more than $25 million to procure more than 50 million pieces of protective equipment. Fifteen million units have already been delivered to hospitals, medical facilities and states, and more are on the way.

"The relative ease with which Salesforce acquired so much protective gear stands in sharp contrast to the often chaotic government efforts. While states have had to compete against one another for scarce supplies and the strategic national stockpile of protective gear is depleted, Mr. Benioff and his team simply called up their business partners in China and started writing checks.
...
"After Mr. Benioff got off the call with Mr. Hawgood on that Thursday, he called Daniel Zhang, chief executive of Alibaba, the enormous e-commerce marketplace. Last year, Salesforce and Alibaba announced a partnership meant to give Salesforce customers better access to the Chinese market, and teams from the two companies had been working closely.
...
"In San Francisco, Mr. Aytay and his team decided to buy only from companies that someone they knew well could personally vouch for. “Setting up a trust network was very important,” Mr. Aytay said.

"By March 22, the Salesforce team identified the first promising tip. The Jointown Pharmaceutical Group, a large Chinese company, had 500,000 surgical masks in a warehouse in Los Angeles."
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Of course there are perils in dealing with unusual suppliers, so the broker has to be reliable and have reliable connections.  After all, what could go wrong?

Buzzfeed news has the story:

After One Tweet To President Trump, This Man Got $69 Million From New York For Ventilators
The Silicon Valley engineer, who had no background in medical supplies but was recommended by the White House, never delivered the ventilators.

Corona lockdown, and the food supply chain in India, by Matt Lowe and Ben Roth

Matt Lowe and Ben Roth look at the effect of India's corona virus lockdown on the food arriving at the big wholesale produce market in Delhi.  They describe breakdowns in the supply chains.

Arrivals Dropped 50% Post Lockdown. When Will Azadpur Mandi’s Supply Return to Normal?
Since the lockdown has been extended till May 3, it has become all the more crucial for the government to intervene and ensure that the broader food supply chain operates smoothly. 

"The disruption can already be seen in Delhi’s (and Asia’s) largest wholesale fruit and vegetable market – the Azadpur mandi – which has seen a precipitous decline in the volume of fruits and vegetables flowing through the market.

"Relative to the three prior years, the volume of produce arriving at Azadpur fell by about half on March 24, and has hovered at around that level since (Figure 1).

Modern slavery, in supply chains and around the world

The Global Slavery Index recently issued its report for 2018.
They say: "In the context of this report, modern slavery covers a set of specific legal concepts including forced labour, debt bondage, forced marriage, slavery and slavery-like practices, and human trafficking."

While we're apparently all lucky not to live in N. Korea, the report doesn't stop there. For one thing, it suggests that a lot of supply chains may involve involuntary labor of various sorts.  The NY Times headline summarizes the aspects of the report that might be of most concern to readers of this blog:

Report Finds Surprisingly High Rate of Slavery in Developed Countries

"The 2018 edition of the index estimates that more than 40 million people around the world are trapped in modern slavery — including what Walk Free called a surprisingly high number in developed nations like the United States, France, Germany and others.

“Given these are also the countries taking the most action to respond to modern slavery, this does not mean these initiatives are in vain,” the survey said. “It does, however, underscore that even in countries with seemingly strong laws and systems, there are critical gaps in protections for groups such as irregular migrants, the homeless, workers in the shadow or gig economy, and certain minorities.”

"In the United States, more than 400,000 people, or one in 800, are living in modern slavery, the report said. The United States is also the largest importer of what the report called “at-risk” products, or those at least partly manufactured by workers engaged in forced labor.

"These products, estimated to be worth at least $354 billion, include mobile phones, computers, clothing and food like fish and cocoa, the report said. The United States imports more than 40 percent of the total."

Kidney exchange in People Magazine

In the Nov 30 issue, with Johnny Depp on the cover.

"The chain's home base is the University of Toledo Medical Center, where transplant surgeon Mike Rees performs operations and coordinates the program through his nonprofit, the Alliance for Paired Donation. People enter the chain because they need a kidney and have a friend or family member who is willing to donate, but who isn't a match. Once they enter the chain, Rees's staff inputs their names, blood types and other information into a database of other patient-and-donor pairs; the computer then matches would-be donors and recipients."

The article is referring to a recent reunion of the 20 people involved in Rees' first pioneering non-simultaneous extended altruistic donor (NEAD) chain.

Another organization that has been successfully pursuing NEAD chains among other options is the National Kidney Registry founded by Garet Hil. Here's an article about a recent exchange of theirs: Two couples from Bronx, Jersey exchange kidneys through computer organ donation program.

See here for some more technical material on kidney exchange.

The market for bulk commodity shipments

The transport of bulk commodities by sea is a business that depends on matching loads to ships. When times are good, ships may be fully booked, and costly, and when times are bad ships may be available and cheap.

"The Baltic Exchange is an association of ship owners, and has a long and colorful history. Because shipping prices are an indicator of the general economy, the Baltic Exchange Dry Index, which measures the cost of hiring a big ship, is a leading indicator of commodities trading in particular and of economic activity in general.

As recently adjusted, the components of the index are indices for different kinds of shipping, in order of cargo capacity: Capesize (too big to transit the Suez canal, so have to go around), Panamax (the maximum size ship that can go through the Panama canal), Supramax, and Handysize.