April 27, 2020

Warren and Blumenthal to Medical Equipment Wholesalers: Explain Your Role in the Jared Kushner-Led "Project Air Bridge" that Failed to to Provide Critical Supplies for States' COVID-19 Responses

"(T)he American people need an explanation for how these supplies are obtained, priced, and distributed through Project Air Bridge."

Senators' letter cites multiple reports of seizures of supplies by federal officials and political favoritism, cronyism, and price-gouging via third-party sellers

Letters to Project Air Bridge Companies (PDFs)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) and Senator Richard Blumenthal (D-Ct.) today sent letters to the six major medical wholesalers or distribution companies involved in the Trump administration's opaque medical supply chain management project known as "Project Air Bridge," including Cardinal Health, Concordance, Henry Schein, McKesson, Medline, and Owens and Minor, urging them to share what they know about the pricing and distribution of medical supplies critical to states' COVID-19 responses. Their letters urge the companies to help bring light to the project, which Jared Kushner has described as an "unprecedented public-private partnership." The Senators asked the wholesalers for information about how the Trump administration may be using Project Air Bridge to affect the medical supply market, where there have been reports of political favoritism, cronyism, orders seized by the federal government, and price gouging. Last week, Senators Warren, Blumenthal, and colleagues also called on watchdogs at FEMA and HHS to investigate corruption and mismanagement of medical supply distribution.

"(G)iven the 'unprecedented' nature of this partnership, and the numerous reported problems with states and hospital officials being unable to obtain personal protective equipment (PPE) and other medical supplies, or having shipments of these materials seized by federal officials and spirited to unknown destinations, the American people need an explanation for how these supplies are obtained, priced, and distributed through Project Air Bridge," the senators wrote in their letters. "Unfortunately, neither the administration nor your company has explained critical details, such as the content of any existing contracts or financial agreements."

"Between reports of shortages across the country, seizures of supplies by the government, and outrageous prices, there is an extraordinary level of confusion and dismay about the current state of the medical supply chain. Given the critical need for supplies as the pandemic continues to unfold, the administration's continued stonewalling about Project Air Bridge, and the fact that your company is in a position of knowledge about the supply chain, we request that you answer the following questions by May 8, 2020," the senators requested of each of the companies. These questions include:

  • How was your company selected as a participant in Project Air Bridge?
  • What specific contracts or agreements are in place between you and federal government entities regarding Project Air Bridge? With what agencies has your company signed these agreements?
  • How do you receive medical supplies and PPE from Project Air Bridge? What costs do you pay for the federal government's transport of these items, and how does it compare to your typical costs for obtaining items from suppliers?
  • How has your company distributed medical supplies and PPE?
    • How is your company or the government determining which half of supplies will be distributed to hotspots, and which half will instead be fed into the "normal supply chain"? For example, are medical supplies being divided into halves by number of unit? Cost? Is each category of medical product being divided separately?
    • Have you been provided with instructions to distribute supplies to COVID-19 "hotspots"? Please provide any lists of hotspots that have been provided to you, as well as any relevant dates for which those lists were current.
    • How is your company distributing the supplies that are fed into its "normal supply chain"? Are these supplies going to orders that were placed before the initiation of Project Air Bridge? Are they going to existing customers under renegotiated terms? Are they auctioned to the highest bidder? Please describe your company's practices in as much detail as possible.
  • Please provide a full accounting of the distribution of all medical supplies and equipment that you have been provided via Project Air Bridge, including a list of all COVID-19-related supplies and PPE you have received, the quantity of each item, and information on where this quantity has been distributed, including a list of how much each recipient (states, localities, and tribal governments, hospitals or medical systems, or other third-parties) has received.
  • How do you determine selling prices for medical equipment and PPE that you have obtained via Project Air Bridge? What restrictions, if any, dictate your ability to set prices on medical supplies distributed via Project Air Bridge? One report says that your company is required to charge "reasonable" prices. Please describe any such requirements in detail. How is the government monitoring and enforcing compliance with such requirements?
  • Please provide a full accounting of the cost and pricing of all medical supplies and equipment that you have been provided via Project Air Bridge, including a list of (1) average cost to obtain each type of supply or equipment, (2) your average selling prices for each type of supply or equipment, and (3) your average selling price for each pieces of supply or equipment for each major recipient (states, localities, and tribal governments, hospitals or medical systems, or other third-parties).
  • Is your company entrusted with distributing pre-existing orders of supplies that are seized by FEMA? Has it been given any directives on how to distribute these supplies?

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