Fraud and Shortage in Global Medical Supply Chain Revealed at Senate Hearing
Around the world, fraud and short supply cause serious worries about chain’s ‘integrity’

by Avery Martinez

The U.S. Senate Finance Committee held a public hearing July 28 covering the global medical supply chain of products and equipment and the shortages, illicit operations and government action in response. This was the first meeting to address the “integrity” of the country’s medical supply chain, Chairman Chuck Grassley said.

“We cannot allow our medical supply chain to be so heavily dependent on other countries,” Grassley said, adding that he would like to work with both Republicans and Democrats to diversify the nation’s supply chain by increasing manufacturing within the U.S.

The hearing raised the question of why the U.S. and the world are experiencing a breakdown in the medical supply chain and how the government would go after fraudsters.

Grassley expressed concern over the medical supply chain in the opening phases of the pandemic in a letter sent to Vice President Mike Pence. One example was how the shortage of PPE in the U.S. allowed bad actors to take advantage of hospitals looking for supplies.

Prior to COVID-19, health care providers could avoid “counterfeit” medical equipment by using traditional means of obtaining supplies, Grassley explained. But with the onset of the pandemic, hospitals and health care providers were forced to try to obtain PPE supplies from wherever they could — unaccredited dealers, ecommerce and others outside the supply chain. In some cases, these providers have inadvertently purchased “fake, faulty or even illicit medical supplies,” Grassley said.

Grassley said China is the number one producer of Personal Protective Equipment in the world, and to date nearly 40% of all PPE is manufactured there. Grassley expressed the view that China has many quality-control issues.

At the beginning of the pandemic, China did the “unthinkable,” Grassley said, by turning off the “taps” of PPE manufacturing, and the Chinese government heavily restricted the export of PPE products.

This article appears in the Aug. 3 issue of Law Week Colorado. To read this complete article, and others from that issue, order a copy online.