Kushner-backed program chartering flights to address hospital shortages raises questions in Congress

With hospitals still facing shortages, Dems say feds should take more control.

April 23, 2020, 4:00 AM

A flight from China chartered by the U.S. government touched down at Chicago O’Hare International Airport on Wednesday last week. Inside were nearly 6 million surgical masks and some respiratory equipment.

But the supplies on board weren’t tucked into the national stockpile or distributed by the federal government among cities hardest hit by novel coronavirus despite the average taxpayer bill of $750,000 to $800,000 per flight.

Instead, the masks and other life-saving equipment were owned by Medline, one of the nation’s largest privately held manufacturers and distributors of medical supplies. They were loaded onto cargo trucks and driven to the company’s warehouse in suburban Chicago.

It was up to Medline to decide who gets the protective gear and what price they would pay.

The sole federal requirement imposed on Medline was that it would promise to sell half its cargo to designated "hot spots" facing outbreaks of the coronavirus. Medline says it is currently selling protective gear at a loss and isn't charging extra for the expedited processing.

"All the product is ours, until it goes to our customers," a Medline spokesperson told ABC News.

The April 15 flight from Shanghai was part of a new unprecedented public-private partnership called "Project Airbridge," which is raising questions about whether the Trump administration is doing enough to address dangerous hospital supply shortages and ensure health care workers get what they need to fight a fast-moving and deadly virus.

The program, championed by White House adviser Jared Kushner and run by Rear Adm. John Polowczyk, is being hailed by the Trump administration as an innovative way to help the industry overcome logistical hurdles to supply the nation’s 4,700 hospitals and other front-line responders.

Kushner told reporters this month that his mandate was to break down barriers for the Federal Emergency Management Agency, which is coordinating the federal response to novel coronavirus.

"This is an effort where the government is doing things that the government doesn’t normally do, where we are stretching. We’re acting very quickly," Kushner said.

PHOTO: White House senior adviser Jared Kushner looks on as President Donald Trump leads the daily coronavirus response briefing at the White House in Washington, April 2, 2020.
White House senior adviser Jared Kushner looks on as President Donald Trump leads the daily coronavirus response briefing at the White House in Washington, April 2, 2020.
Tom Brenner/Reuters, FILE

But Project Airbridge also has become a new focus for Democrats who question whether the federal government has gone too far in deferring to the industry amid a nationwide pandemic and given contractors an outsized role in controlling the nation’s supply chain.

"The supply chain was broken to begin with, and they’re putting these (materials) back into the supply chain with no idea where it’s going" even as health care workers recycle face masks, said Rep. Ted Deutch, a Florida Democrat.

Rep. Angie Craig, a Minnesota Democrat who previously worked in health care manufacturing before joining Congress, said she thinks the program is probably well-intentioned but also "chaotic."

"We have literally wasted six weeks getting ourselves ramped up because we stood on the sidelines and allowed the private sector to manage itself instead of coming up with a centralized strategy," Craig told ABC News.

FEMA insists it has enough visibility into the supply chain because it tracks final deliveries at hospitals. The agency also says it doesn’t want to interfere with existing relationships between suppliers and medical customers.

"I’m not here to disrupt a supply chain," Polowczyk told reporters earlier this month.

Tune into ABC at 1 p.m. ET and ABC News Live at 4 p.m. ET every weekday for special coverage of the novel coronavirus with the full ABC News team, including the latest news, context and analysis.

‘The Big 6’

Project Airbridge grew out of a White House March 29 meeting between President Donald Trump and the country’s biggest medical supply distributors and delivery companies.

By that point, it had been two months after the diagnosis of a Washington state patient with novel coronavirus, and health care workers already were facing shortages in protective masks and gowns. Compounding the problem was that many of the supplies originated in China, the first country crippled by the virus.

Trump seemed reluctant to use to the full force of his executive powers under the Defense Production Act, preferring to invoke that power only when contractors were seen as difficult or needed federal money to boost production lines.

PHOTO: President Donald Trump arrives with Vice President Mike Pence for the daily coronavirus task force briefing at the White House in Washington, April 22, 2020.
President Donald Trump arrives with Vice President Mike Pence for the daily coronavirus task force briefing at the White House in Washington, April 22, 2020.
Jonathan Ernst/Reuters

In attendance at the White House meeting were shipping giants UPS and FedEx, along with five medical supply companies: Medline, Cardinal Health, McKesson, Henry Schein and Owens & Minor. Concordance Healthcare was later added to the group, now referred to as the "Big 6," because it represents more than 90% of the medical supply chain.

The White House and the companies struck a deal: Distributors would pay 100% for supplies originating from overseas, while the federal government would pick up the tab per flight -- averaging $750,000 to $800,000 -- to bring supplies to the U.S. faster than by cargo ship. This federal "airbridge" would shave off days or weeks in delivery time.

In exchange, the distributor agreed to sell half of their supplies to certain hard-hit counties, designated by the government as "hot spots," and leaving the destination of the other half to the company's discretion.

Smaller companies were not invited to participate because they "don’t command significant upstream inventory and leverage in commercial markets," FEMA told ABC News.

Companies like McKesson said it opted to participate so it could help address the crisis.

"Our ongoing work with government officials and agencies at the federal, state and local level reflects our commitment to helping meet the extraordinary challenge of the COVID-19 pandemic," McKesson, a Texas-based delivery company said in a statement.

The commercial invoices for each flight though remain secret. That irks Rep. Deutch, who has called on FEMA to release more data to help Congress discern whether the administration is favoring certain contractors and where the supplies are going.

"That’s an enormous benefit to these companies," Deutch said of the agreement. "There’s no reason why we don’t know the rest."

Five dozen flights, 52 million surgical masks and 600 million gloves

Project Airbridge has run some 70 federally chartered flights originating from places like China, Honduras, Thailand and Malaysia and landing at airports in Chicago, Los Angeles, Miami and Columbus, Ohio, as of Wednesday.

According to a FEMA document obtained by ABC News, these "prioritized distributor supply chains" have helped to rapidly move some 50 million surgical masks, 760,000 N95 respirators, 608 million gloves, 7 million gowns, 2 million thermometers and more than 562,000 face shields.

The agency, as of Tuesday, has spent some $5.7 billion in the federal response to coronavirus. In a statement provided to ABC News, it says shortages of protective gear for medical workers continues and will likely take "months" to fill.

"The shortages are massive and the supply chain effects are going to be pervasive for months to come," the agency said.

What to know about coronavirus:

Related Topics