Biden’s Executive Orders and the PPE Market

During Biden’s first week in office, he signed a flurry of executive orders. While this is normal for Presidents at the start of their term, the scale of these orders is unusual. Yet, this is most likely a product of the pandemic and because Biden is reversing many of Trump’s orders. Hence, many of Biden’s orders impact the PPE market.

A direct result of these executive orders will be an increase in demand. This will stretch an already overextended market to its limits. At HoPPE Alliance, we believe that easy access to test kits and other personal protective equipment will get us back to normal faster. That’s why our immediate aim is to get the necessary materials to every industry that needs it.

What is an executive order?

Executive orders are not new laws. They are directions to one of the executive departments of the government. Biden’s recent executive orders are largely organizational. They create task forces and start regulatory processes or explore policy changes. "A lot of what these orders consist of are plans to make plans, in a sense," said Andy Rudalevige, professor of government at Bowdoin College [1].

Biden’s first act as President was to sign an executive order to mandate masks. But, the mask mandate has its limitations.

Can the Government Mandate Masks?

Many politicians have advocated for a universal mask mandate, starting in early March 2020 with Nancy Pelosi and Joe Biden. Yet, there are constitutional restraints on both the Executive and Legislative branches. The constitution upholds state sovereignty. The Federal Government only has the right to control certain realms. Thus, healthcare is the state’s responsibility. Still, the Federal Government can control spending. This covers things like providing funds, supplies, technical expertise and medical research [2].

The Federal Government consists of both the executive and the legislative branch. These branches have different powers. The powers of the executive branch center around foreign affairs, the military, and granting pardons or nominating officers. It is the legislative branch, Congress, that controls domestic affairs. Yet, this power is also constrained. Under the Commerce Clause, Congress may “regulate Commerce...among the several States.” So, Congress might be able to make certain people wear masks at certain times. If they are crossing state lines or if they are within interstate commerce, then they could. But, this would not affect public spaces within the states.

In the 1930's. the Supreme Court expanded the powers of Congress. Congress can now regulate intrastate activity that impacts the economy. Yet, according to Prof. John Yoo, the director of the Korea Law Center, the California Constitution Center, and the Law School’s Program in Public Law and Policy at Berkley, it is likely that a universal mask mandate would not pass the courts. Yoo cites the Supreme Court’s recent dismissal of gun control. He also cites the dismissal of gender violence and the Affordable Care Act’s individual mandate [2].

Regardless of whether Congress would or would not be able to do it, they have not tried. So, masking laws remain in the hands of individual states during the pandemic. Most states already have mask requirements in place. Florida, Georgia, Oklahoma, and Tennessee have chosen not to issue a statewide order [3]. Recently, Texas governor, Greg Abbott, has decided to completely eliminate mask requirements in the state.

On day 1, President Biden signed an executive order requiring mask-wearing. But this only covered federal property. The mandate applies to all federal courthouses, state capitals, national parks, and monuments. As you can see, it leaves all private property to the states themselves.

On day 2, Biden signed an executive order promoting Covid-19 safety in travel. This encompassed various modes of domestic and international transportation. Airports, planes, trains, buses, and intercity buses were all included[3]. In contrast in April 2020, the Trump administration refused a request from the flight attendants union (AFA) to mask on planes [3].

Also on day 2, Biden signed another executive order on workplace safety amid the pandemic. Biden’s order directs the Department of Labor to revise and issue new guidance for employers promoting the health and safety of workers, such as mask-wearing in the workplace [4]. The impact of more stringent mask wearing in workplaces could be dramatic.

Strengthening the Supply Chain

Another order of Biden’s day 2 was to improve the public health supply chain. That same day he released a COVID-19 plan called the National Strategy for the COVID-19 Response and Pandemic Preparedness [5]. The National Strategy explains the order. It states, “The A Sustainable Public Health Supply Chain executive order.. directs federal agencies to fill supply shortfalls using all available legal authorities.” The National Strategy calls for a“stable, secure, and resilient supply chain.” Biden will begin by increasing domestic manufacturing in four critical sectors:

Critical Sectors of the Public Health Supply Chain According to Biden’s Strategy

  • Antigen and molecular-based testing
  • PPE and durable medical equipment
  • Vaccine development and manufacturing
  • Therapeutics and key drugs

The National Strategy also promises to prepare for the next pandemic. This means reducing our reliance on foreign nations during a global crisis. In times of crisis, every nation’s focuses on themselves. He calls for a “resilient, domestic public health industrial base..a flexible supply chain..and to expand an American manufacturing capability where the United States is not dependent on other countries in a crisis” [5]. Biden plans to use the Defense Production Act (DPA) to do this.

Using the Defense Production Act to Increase Supply

On day 1, Biden signed an executive order coordinating a government-wide Covid-19 response. Biden charges the new COVID-19 Coordinator, Jeffrey Zients, with improving the Federal Government’s Supply chain. He will handle efforts to produce, supply, and distribute personal protective equipment. One salient tool in Biden and Zient's toolbox is the DPA.

The DPA allows the government to force companies to produce materials and services. The government can do this for the nation’s defense in times of war or national emergency [6]. The DPA also gives President Biden the ability to use incentives. Common incentives are loans and direct purchases [7]. Since its creation during the Cold War era, the purview of the DPA has expanded. It now comprises domestic emergency preparedness. It also covers recovery from terrorist attacks and natural disasters [7]. In contrast, Former President Trump also pledged to use the DPA during his presidency. Yet, a CRS report found that his use was “sporadic and relatively narrow” [6].

On day 2, Biden signed an executive order on the public health supply chain, which again called upon the DPA. This order directs the heads of agencies to “review the availability of..PPE [in the Strategic National Stockpile].” It goes on to say that agencies' must address any identified shortfalls using the DPA. The order emphasizes "acquiring extra stockpiles." It also talks about improving distribution systems. Finally, it mentions "building market capacity" and "expanding the industrial base.”

The government will mostly use the DPA for vaccine production and paraphernalia. On day 2 of Biden's administration, White House Press Secretary Jen Psaki made a salient statement. She told reporters that the president, “remains committed to invoking the Defense Production Act." She said this will allow, "the supply and the materials needed to get the vaccine out to Americans across the country” [7].

The administration sees national vaccination as one of the greatest challenges currently. "To ensure all Americans can be vaccinated quickly, the President has developed a plan for expanding vaccine manufacturing and purchasing COVID-19 vaccine doses for the U.S. population by fully leveraging contract authorities, including the Defense Production Act.”

Four Products Critical to Vaccine According to Biden's Strategy

  • glass vials
  • stoppers
  • syringes
  • needles

On it’s proprietary PPE platform, HoPPE Alliance provides a database of suppliers for these critical products.

While the vaccine is a priority, the President’s National Strategy also suggests that DPA usage may be more widespread. It identifies twelve categories of products, which will be critical for pandemic response.

Twelve Products Critical for Pandemic Response According to Biden's Strategy

  • N95 masks
  • Isolation gowns
  • Nitrile gloves
  • Polymerase chain reaction (PCR) sample collection swabs
  • Test reagents
  • Pipette tips
  • Laboratory analysis machines for PCR tests
  • High-absorbency foam swabs
  • Nitrocellulose material for rapid antigen tests
  • Rapid test kits
  • Low dead-space needles
  • Low dead-space syringes

*HoPPE can provide suppliers for these critical products.

‘Buy American’ Agenda

On Day 6, Biden signed an executive order promoting a 'Buy American' agenda. The order asks all government agencies to “procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries to help America’s workers thrive.” It also creates a position in the Office of Management and Budget (OMB) to enforce the order. The order promises strict standards for domestically non-available items.

“The OMB..shall review.. in consultation with the Secretary of Commerce and the Made in America Director, paying particular attention to economic analyses of relevant markets and available market research, to determine whether there is a reasonable basis to conclude that the article, material, or supply is not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality” [8].

To back up its legal claims, the order references the Jones act. The act regulates maritime shipping between U.S. ports and vessels.

The order also includes a section on supplier scouting. The order presents an exciting prospect for new players in the PPE supply market. “Supplier scouting in order to identify American companies, including small- and medium-sized companies, that are able to produce goods, products, and materials in the United States that meet Federal procurement needs” [8]. A statement made by the White House that same day explains the order. “This Executive Order fulfills President Biden’s promise to make Buy American real and close loopholes that allow companies to offshore production and jobs while still qualifying for domestic preferences” [11]. ‘Buy American’ orders were also issued by Former President Trump, yet manufacturers complained that the regulations were not enforced [9].

HoPPE Alliance is on the cutting edge of the PPE industry and is poised to adhere to the administration's Buy American plan. Now more than ever, a stronger PPE supply chain is a patriotic imperative. Our mission at HoPPE is to ethically evolve the fractured, global healthcare industry with a technology platform designed to help B2B marketplace buyers and sellers connect & transact with increased speed, clarity, and trust. By enabling the flow of millions of items of PPE from supply to individuals, we do our part to save lives and get us back to normal.

We are working on our made in USA consortium, HoPPE Alliance America, with 7 other members. Focusing first on the U.S., HoPPE Alliance America will serve buyers who need access to top-grade products made locally.

Funding for PPE

There are several mentions of direct funding into the PPE market. Biden’s day 2 executive order on the public health supply chain gives one example. It mentions “General Services Administration (GSA) Schedules.” A GSA Schedule is a government contract with companies to sell products and services to government buyers [10].

Biden released a Memorandum that supports the use of the National Guard for Covid-19. This memorandum included a section on the use of FEMA funding for PPE for a variety of public places. These include:

“FEMA shall.. make available ..such assistance as may be required by States, local governments, and Tribal governments to provide for the safe opening and operation of eligible schools, child-care facilities, healthcare facilities, non-congregate shelters, domestic violence shelters, transit systems, and other eligible applicants. Such assistance may include funding for the provision of personal protective equipment and disinfecting services and supplies.”

Biden’s National Strategy promises to begin putting money into the PPE supply chain. “The federal government will immediately focus on procuring supplies that will be critical to control the spread of COVID-19 by initiating contracts, entering into purchase commitments, making investments to produce supplies and expanding manufacturing capacity” [5].

Ramping Up Testing

Finally, on day 2, Biden signed an executive order to establish a Covid-19 pandemic testing board. The board will lead the effort to “promote COVID-19 diagnostic, screening and surveillance testing”. It is also in charge of distributing free COVID-19 tests to people without health insurance.

The National Strategy says, America must have wide-spread testing. "The federal government will expand the rapid testing supply and double test supplies and increase testing capacity. The Administration will also increase onshore test manufacturing, fill testing supply shortfalls, enhance laboratory capacity to conduct testing over the short- and long-term, and expand surveillance for hotspots and variants” [5].

HoPPE aims to evolve the fractured healthcare supply industry with an AI-driven, unified deal demand, management & discovery platform: we’re building Alibaba meets Salesforce using AI/ML to evolve B2B healthcare supply procurement. Visit HoPPEalliance.com to learn more.

 

Bibliography

 

[1] https://www.npr.org/2021/02/03/963380189/with-28-executive-orders-signed-president-biden-is-off-to-a-record-start

[2] https://www.ocregister.com/2020/07/26/the-constitutionality-of-federal-mask-mandates/

[3] https://www.health.com/condition/infectious-diseases/coronavirus/federal-property-interstate-travel-mask-mandates

[4] https://www.nbcnews.com/politics/white-house/here-s-full-list-biden-s-executive-actions-so-far-n1255564

[5] https://www.whitehouse.gov/wp-content/uploads/2021/01/National-Strategy-for-the-COVID-19-Response-and-Pandemic-Preparedness.pdf

[6] https://www.marketplace.org/2021/01/21/how-president-joe-biden-could-use-the-defense-production-act-to-increase-vaccine-production/

[7] https://apnews.com/article/joe-biden-government-contracts-archive-contracts-and-orders-coronavirus-pandemic-bbb0f14dd5032760657c563565ecfe06

[8] https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/25/executive-order-on-ensuring-the-future-is-made-in-all-of-america-by-all-of-americas-workers/

[9] https://www.npr.org/sections/president-biden-takes-office/2021/01/25/960201852/biden-aims-to-close-loopholes-in-federal-buy-american-provisions?utm_source=morning_brew&t=1611661985553

[10] https://www.gsa.gov/buying-selling/purchasing-programs/gsa-schedules/about-gsa-schedules

[11] https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/25/president-biden-to-sign-executive-order-strengthening-buy-american-provisions-ensuring-future-of-america-is-made-in-america-by-all-of-americas-workers/