This is an excerpt from Medically Necessary, a health care supply chain newsletterSubscribe here.

The news: A trade group representing more than two dozen mask manufacturers in the U.S. says many members are weeks away from shutting down. 

The American Mask Manufacturers Association (AMMA) warns that most member companies will go out of business by the end of July without government support.

The group is calling on the federal government to buy from their members to sustain the nation’s mask production capacity.  

“You asked us for help and we helped you,” Brian Wolin, CEO of the New Jersey-based manufacturing company Protective Health Gear, told FreightWaves. “The government should be buying our respirators to keep us in business … while they figure out legislation.”

The call to action: In the spring of 2020, demand for personal protective equipment jumped precipitously in the U.S. as hospitals started treating their first COVID-19 patients.

Demand for N95 and KN95 respirators was up 14,000% in March of 2020 compared to the previous year, according to data from the group purchasing organization Premier.

As health care providers struggled to find PPE, some government leaders suggested that domestic manufacturers should start making protective equipment. 

“Increasing domestic production of PPE is both a public health and national security imperative,” Washington Gov. Jay Inslee wrote in a March 2020 letter to Vice President Mike Pence.

Also in March of 2020, New York Gov. Andrew Cuomo issued an executive order encouraging companies to make PPE and offering funding for equipment.

The response: Spurred by those requests — and the sky-high price of PPE — dozens of companies jumped into action.

Wolin and his brother-in-law, Evan Schulman, spent $2 million to secure equipment and materials to make PPE. 

“We had a ribbon cutting right after Labor Day and then we went at it full force,” Wolin said.

Khwaja Ali, founder of Washington-based Rainier American Mask Co., used his retirement savings to start his company. By July of 2020, his machines were up and running.

The correction: But the demand for PPE started to dissipate quickly when the vaccination campaign started gaining steam.

“We all understood when we started these businesses that as the pandemic started to subside the demand for masks would be considerably smaller,” Brent Dillie, managing partner at Premium-PPE Amerishield and a co-founder of AMMA, told FreightWaves.

Over the course of 2020, hospitals had built up their stockpiles of protective equipment and no longer needed to place additional orders.

Hospitals had 200 days of inventory for N95 and KN95 masks by March of 2021, compared to 23 days of inventory during COVID-19 spikes in 2020, according to Premier’s data

In late June, the Food and Drug Administration revoked emergency use authorization for masks that don’t have government approval because the supply of approved masks had stabilized.

By July, Get Us PPE, a website dedicated to connecting health care providers with PPE suppliers, mostly shut down because it was receiving few requests for help.  

Wolin said he’s also having trouble selling N95 masks to consumers because he can’t advertise on Google, Facebook or other tech platforms. Google currently prohibits sales or ads for N95 masks because of global supply shortages.

“We blocked over 99 million Covid-related ads from serving throughout the year, including those for miracle cures, N95 masks due to supply shortages, and most recently, fake vaccine doses,” Scott Spencer, Google’s vice president of ads, privacy and safety, wrote in a March 2021 blog.

In addition, Dillie said that Chinese manufacturers are currently selling masks for a few cents each, far less than American manufacturers can offer. 

AMMA has threatened to file a complaint with the World Trade Organization over those low prices, which it considers unfair.

AMMA claims that those factors have already pushed six member companies to stop production and forced one company to close down.

“We have breathing space of three months. If we are unable to sell, then I can’t continue to spend my 401(k) money on this,” Ali said. 

The risk: Dillie argues that allowing American mask manufacturers to go out of business will reduce the nation’s ability to produce protective equipment and weaken public health response capabilities. 

“If these mask manufacturers close, it won’t be possible to restart production the next time our government encounters a crisis requiring PPE,” Dillie said, according to a press release. 

Dillie also said the industry would lose employees trained to produce masks — AMMA reports that members have already laid off nearly 5,000 people — and suppliers that provide critical materials.

“Those producers are running businesses as well,” Dillie said. “They’re going to switch back over to carpets or furniture or car liners, and those are mechanical changes to those machines. Those machines can’t just be switched back on to mask mode.” 

A solution? Dillie believes that a domestic mask industry will need long-term support from the federal government to survive. In the short term, American mask makers simply need to see new orders.  

Dillie suggested that the Strategic National Stockpile could contract with American manufacturers to replenish its inventory. 

According to the SNS, that has already happened. The agency has met its inventory goal for N95 respirators. Multiple contracts went to domestic manufacturers to replenish supplies, according to an SNS spokesperson. 

A website tracking government spending shows the agency overseeing the stockpile has signed 12 contracts for N95 masks, worth more than $380 million, since the spring of 2020.

All but one of those contracts went to American companies. Large manufacturers like 3M, Honeywell and Hanes received the biggest contracts.

Alternatively, Dillie said the U.S. Agency for International Development (USAID) could buy American masks for donations to other countries.

For most of 2020, a Federal Emergency Management Agency rule that was supposed to conserve domestic supplies prohibited USAID partners, in many instances, from buying PPE produced in the U.S. or destined for the U.S.

Agency partners could use PPE necessary to protect staff and continue operating programs, but otherwise would need permission to buy American products. 

That rule expired in April. Now, USAID partners have more freedom to buy PPE from American manufacturers.

Next steps: There is bipartisan support for aiding the U.S. mask manufacturing industry. A bill directing several government agencies to buy PPE from American manufacturers passed the Senate with 68 votes in May.

“The issue we’re facing is that legislation is going to take time. We’re confident it’s going to get done. It’s bipartisan,” Dillie said. “But with legislation, you’re talking about six to 12 months. As an industry, we don’t have that time. We’ve got six to 12 weeks if we’re lucky.”