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

The request: Federal health agencies are asking Congress for more money to bolster their surveillance of the health care supply chain and make it more resilient. 

Budget requests are agency wish lists rather than actual policy. Congress will decide which programs to fund.

But the requests indicate the federal government hopes to make supply chain resiliency a priority going forward.

The Strategic National Stockpile is hoping for a 28% budget increase, after supply shortages during the COVID-19 pandemic pushed the organization to its limits.

The Strategic National Stockpile is a federal repository of drugs, medical supplies and devices that can be deployed in an emergency.

That request pales in comparison to the $16 billion, for use through 2024, that Congress allocated for the stockpile through the CARES Act last year. The HHS budget request shows the stockpile received $13 billion of supplemental funding in fiscal years 2020 and 2021.

The agency says it plans to use that supplemental funding to support COVID-19 response efforts and make “incremental progress on modernization efforts.” That includes restocking supplies, expanding warehousing capabilities and upgrading tech tools. 

Restocking: The stockpile nearly exhausted its supply of personal protective equipment within the first few weeks of the pandemic. Since then, the agency has managed to restock many critical items, such as N95 respirators, face shields and ventilators. However, the stockpile still hasn’t met its inventory goals for surgical masks, gowns and gloves.  

The Strategic National Stockpile is replenishing supplies following the COVID-19 pandemic but still hasn’t met its goals for some categories of products. (Chart: HHS)

Most of the new money in the budget request would go toward replenishing supplies. The agency is asking Congress to nearly triple its budget for replenishing supplies, from $153 million to $428 million.

SNS is also asking for a 28% increase in its budget for managing its inventory, which includes things like transportation, maintenance and disposal. 

Upgrading: In addition to buying more stuff, SNS is already making changes to the way it operates.

According to budget documents, SNS is shifting to a distributor model. This means supplies will go directly from distributors to areas of need, rather than storing products at an SNS warehouse first.  

The agency is also building what it calls a “supply chain control tower,” a data initiative that will provide great visibility into the inventory of medical supplies held by manufacturers, hospitals and government agencies. In March, the stockpile signed a $3.5 million contract with the Boston Consulting Group to provide support for this initiative. 

The Strategic National Stockpile is also looking for ways to boost domestic manufacturing of drugs and medical supplies. 

The rest: Other offices within HHS are also requesting funding for programs that would increase supply chain resiliency.

The Biomedical Advanced Research and Development Authority (BARDA) is asking for nearly $47 million, a 160% increase, for its Division of Research, Innovation and Ventures. Part of that funding would support BARDA’s Beyond the Needle Program, which aims to eliminate the need for needles and syringes and make mass vaccination campaigns simpler.

The Pandemic Influenza program is asking for a 16% budget increase, which has several ongoing initiatives to prepare the supply chain for a future pandemic. The office has initiatives aiming to speed up the development of new vaccines and expand manufacturing capacity.  

US details plans for vaccine donations

President Joe Biden tours a vaccination site at the Immanuel Chapel at the Virginia Theological Seminary in Virginia. (Photo: White House/Adam Schultz)

The news: The Biden administration will share most of the United States’ donated COVID-19 vaccines through COVAX, a global partnership aiming to vaccinate low-income countries.

“We are sharing these vaccines to save lives and to lead the world in bringing an end to the pandemic,” President Joe Biden said in a statement.

COVAX will receive 75% of donated doses. The remaining 25% will go directly to countries that have requested vaccines.

Background: The White House had already committed to sharing 80 million doses of COVID-19 vaccines by the end of June but didn’t specify how it would distribute them.

The administration pledged 60 million doses of the AstraZeneca vaccine, which isn’t approved in the U.S., in April. The White House added 20 million doses of Pfizer, Modern and Johnson & Johnson vaccines, which have received emergency approvals, to that pledge in May.

The plan: For doses donated through COVAX, the U.S. plans to prioritize Latin America, the Caribbean, South and Southeast Asia, and Africa.

The U.S. argues that giving most of its donated doses to an established program like COVAX will maximize the impact.

For the remaining doses, countries experiencing surges and countries bordering the U.S. will receive priority. The U.S. will also prioritize direct donations for countries that are prepared to receive the vaccine.

The Biden administration wants to see existing plans prioritizing vaccines for people at the highest risk, such as front-line workers. Latin America and Caribbean countries would receive vaccines based on the size of their population.

White House COVID-19 response coordinator Jeff Zients said the U.S. would also help vaccine manufacturers in the U.S. and abroad scale up production.

The recipients: The first 19 million vaccines donated to COVAX will be distributed to more than 30 countries in South and Central America, Asia, and Africa.

An additional 6 million vaccines will go directly to Mexico, Canada, South Korea, Ukraine, Kosovo, Haiti, Georgia, Egypt, Jordan, India, Iraq, Yemen, the West Bank and Gaza.

The doses going to Korea will be shipped out Thursday, according to Zients. Other shipments will go out over the next several weeks. The first shipment of vaccines will be from Johnson & Johnson, Pfizer or Moderna.

What’s next? The Food and Drug Administration still needs to inspect AstraZeneca doses produced in the U.S. to ensure they’re safe. Those doses are the biggest portion of planned donations.

A Maryland plant producing vaccines for AstraZeneca and Johnson & Johnson accidentally ruined millions of doses, which has delayed FDA approval for the manufacturing site.

According to a recent report from Politico, FDA is asking Johnson & Johnson and AstraZeneca to assess the health risks from minor cross contamination at the Maryland plant. A decision about the safety of those doses could come in the next few days, according to Politico. 

One last thing: During Thursday morning’s COVID-19 briefing, Zients also said the U.S. would stop using the Defense Production Act to speed up manufacturing of COVID-19 vaccines made by AstraZeneca, Novavax and Sanofi.

The Defense Production Act requires companies to fulfill orders from the federal government and its partners before other customers. 

“While the manufacturers will continue to make these vaccines, this action will allow U.S.-based companies that supply these vaccine manufacturers to make their own decisions of which orders to fulfill first,” Zients said at the White House’s COVID-19 briefing on Thursday morning.  

Zients didn’t specify plans for Defense Production Act decisions associated with other vaccine manufacturers.

Adar Poonawalla, CEO of the large vaccine manufacturer Serum Institute of India, has argued that the Defense Production Act has made it harder for companies outside the U.S. to access raw materials needed to produce vaccines.