In Md., medical manufacturing grants a short-term boost but no long-term gain

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A woman models an ornate face shield aimed at pediatricians and children’s dentists and sold by Hatch Exhibits. (Courtesy of Hatch Exhibits)

Grants to Maryland companies that manufactured medical supplies early in the COVID-19 pandemic had short-term success, Department of Commerce data shows, but have had little impact on the state’s manufacturing capacity since.

The state invested over $3.1 million in grants of up to $100,000 to companies focused on manufacturing items like masks, gowns and gloves during the spring and summer of 2020. According to the company, the grants awarded companies ranging from living events companies to bridal boutiques to hire a total of 563 employees and manufacture hundreds of thousands of units of PPE and other COVID-19 items.

But the program was never intended to be a long-term program, Heather Gramm, deputy secretary for business and industrial sector development at the Department of Commerce, said in an interview with The Daily Record. Rather, it aimed to help companies stay afloat while solving immediate supply chain problems.

“It was like, ‘How can we work with our existing manufacturing base and businesses to help them meet these immediate emergency needs?'” she said. “And I think we were successful with that.”

Those products served a variety of purposes, with many being donated to hospitals and other facilities that were having trouble finding PPE, Gramm said. Two manufacturers who received grants from the Maryland COVID-19 Emergency Relief Manufacturing Fund ended up receiving one State Contracts: Hardwire, a Pocomoke City-based bulletproof armor manufacturer, and Hatch Exhibits, an Elkridge company that builds exhibition stands, produced 100,000 face masks and 100,000 isolation gowns, respectively, for the state.

However, some manufacturers had difficulty figuring out what to do with the PPE they were developing.

Integrated Pharma Systems, a small biotechnology company based in Rockville, began manufacturing masks after receiving money from the state under the second round of grants from the Maryland COVID-19 Emergency Relief Manufacturing Fund.

According to President and Chief Science Officer Mina Izadjoo, it wasn’t difficult for the company to switch to making masks. Integrated Pharma Services is already focused on developing therapeutic and diagnostic products for pathogens, and Izadjoo himself has a Ph.D. in microbiology and immunology, giving the company the scientific background needed to produce effective masks.

Plus, they even have labs in the same location where they make masks, so employees can easily test the effectiveness of their product.

“It’s a very unique setup that I haven’t seen (anywhere else) before,” Izadjoo told The Daily Record. “Often mask manufacturers don’t understand the gap they have, the science behind it.”

Hatch exhibits face shields decorated to appeal to children. (Courtesy of Hatch Exhibits)

But despite offering high-quality masks, the company still faced major challenges in selling its product. Officials have been unable to strike deals with governments or hospitals and have only had success selling their disposable masks directly to consumers through the company’s website and Amazon.

Other companies that receive grants have had better luck. In addition to supplying isolation gowns to the state, Hatch Exhibits found a niche market offering colorfully stickered face shields for pediatricians and pediatric dentists. The company, which figured out how to make the PPE using its existing manufacturing facilities just days after being shut down by COVID-19, is still selling its shields to this day, even as trade shows and events have returned.

“It became a global brand. It just keeps doing its thing. People buy it every day. We don’t do that much with it anymore as far as promotion goes, but every day we have units that go out the door,” said Chris McCormick, founding partner of Hatch Exhibits. “But it was key to getting us through the two years.”

Despite early successes, COVID-19 manufacturing grants appear to have done little to improve Maryland’s domestic medical manufacturing capabilities over the long term. In a review of the websites of all 45 companies that received these funds, only nine, or 20%, prominently advertise the products they received funds to make.

This is consistent with the experience of manufacturers in the United States who have received PSA grants, according to the Associated Press report. Some companies have said they could not sell any of their products, while others were forced to close after placing too much emphasis on manufacturing PPE, which ultimately proved unsuccessful.

Overall, AP identified COVID-19 manufacturing grants in 10 states — Alabama, Hawaii, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Missouri, New York and Ohio — distributing over $125 million to more than 300 companies.

Domestic manufacturing has proved important during the pandemic as supply chain slowdowns made importing much-needed medical supplies more difficult, forcing hospitals, governments, schools and consumers across the country to compete for a relatively small inventory of supplies.

According to Ravi Srinivasan, associate professor of operations management at Loyola University Maryland’s Sellinger School of Business, logistical issues, such as whether ports in different countries are open or closed, can make sourcing products from abroad more difficult.

“If you want a little more control over your stash, it’s best to keep it close to where you use it,” he said.

The State of Maryland sourced a significant portion of its PPE, which it distributed to hospitals, nursing homes, schools, voting facilities, local governments, and state agencies from local businesses; 33% of the money the Department of General Services spends on PPE — or nearly $218 million — went to Maryland-based companies, though few of them actually manufactured their products in the state.

The program was never intended to permanently solve medical supply chain problems in the state. Even in the first press release announcing the fund’s award recipients, Kelly Schulz, then Maryland Secretary of Commerce and current nominee for governor, described the program as aiming to “address an immediate critical need,” while Governor Larry Hogan called it a way to “save lives and flatten the curve.”

Still, Maryland officials are now looking at long-term ways to bring medical manufacturing into the state. According to Gramm, the Commerce Department’s deputy secretary for business and industrial sector development, companies are beginning to show greater interest in working with the government to resolve supply chain issues and avoid a situation where obtaining necessary medical supplies is difficult is.

In fact, a medical supply company, a maker of N95 masks and medical nitrile exam gloves called United Safety Technology, recently announced it was moving its operations to Tradepoint Atlantic in Baltimore County to celebrate local and state leaders

“We’re seeing the private sector have a lot of interest and understanding of where their supply chain issues have been and where their gaps are,” Gramm said.

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