Optimism is growing about an end to the coronavirus pandemic. As of March 15, more than 38 million Americans have already been fully vaccinated (more than 71 million have received their first dose) and supplies of vaccine are increasing quickly. But there’s a problem.
The kind of syringes most health care providers use can draw only five of the six doses that come in each of the vials shipped by vaccine makers. As the Washington Post, Bloomberg, Quartz, The New York Times, and others have reported, that means nearly one-fifth of our entire vaccine supply goes to waste. As a result, thousands of Americans are dying, or will die, who otherwise wouldn’t.
It didn’t have to be this way. More than 20 years ago, an engineer named Thomas Shaw invented an innovative, retractable syringe that, were it widely available today, would fix the problem while also offering other safety benefits as well. But Shaw’s product has gained only miniscule market penetration because the market for syringes, as for most other hospital supplies, remains cornered.
It’s a story that goes back to the 1970s, when a few small hospitals set up entities known as Group Purchasing Organizations. As Mariah Blake first reported in the Washington Monthly back in 2010, GPOs were originally intended help smaller hospitals by allowing them to concentrate their purchasing power when procuring basic medical supplies like gloves and gauze tape. The arrangement was supposed to help them compete with larger, richer hospitals, but it didn’t take long until those larger hospitals did the same and corrupted a good idea.
Large hospital chains created their own for-profit GPO subsidiaries, allowing other hospitals to join in so long as they paid membership dues. As Blake noted, it’s kind of like a membership to Costco: You pay monthly dues so you can buy in bulk products you use every day. The concept caught on. By the 1980s, virtually every hospital in the nation belonged to a GPO, and most thought they got better prices as a result.
Then, in 1986, Congress passed a law that allowed GPOs to switch from charging hospitals membership dues to charging suppliers “fees” for carrying their products. It was the kind of set-up that, in any other industry sector, prosecutors would recognize as an illegal kickback scheme.
The intention behind this loophole may have been admirable: the sponsors said they wanted to help hospitals by shifting the burden of supporting GPOs onto the venders. But it’s fair to say the self-described reformers turned GPOs into colluding cartels. GPOs were supposed to act as purchasing agents for hospitals. But once their profits no longer came from hospitals, and instead from suppliers, GPOs began looking at the interest of the suppliers first and the hospitals second (if at all).
That new balance of power, in turn, allowed big suppliers to use the GPO system to impose stiffer and stiffer terms, like demanding that hospitals give them exclusive contracts. If a hospital wanted to avoid paying a big medical supply manufacturer more for bandages, for example, they would have to agree to buy all their other medical supplies, including syringes, from the same manufacturer.
Normally, this kind of “bundling” would be a violation of antitrust law—it is clearly designed to shut out competition—but in 1996, the Department of Justice and Federal Trade Commission ruled that GPOs were protected from antitrust actions except under “extraordinary circumstances.” That led to even deeper consolidation.
It is this system that explains why the nation doesn’t have the syringes it needs to get more people vaccinated against Covid-19 quickly. When Shaw invented the retractable syringe, health care providers who tried it instantly recognized it as better than the other needles on the market. The big sales point at the time was that his retractable needles minimized the chances of nurses and other health care workers accidentally pricking themselves—a surprisingly common, and potentially lethal, occurrence. Moreover, unlike conventional needles, Shaw’s syringes also could prevent wastage by removing the last drop from every vial. “It’s simply a superior product and way more efficient in terms of being able to administer more doses to more people,” says Russell Telzel, who works at a small family-owned pharmacy in Pilot Point, Texas.
Today, the company Shaw founded, Retractable Technologies, is able to sell to a few independent pharmacists like Telzel’s, but hospitals have long refused to do buy its products. That’s because, under the GPO system, either a hospital buys its syringes from the dominant supplier, in this case Becton Dickinson, or else it has to pay more for everything else it purchases through the GPO. And since Becton Dickinson does not have the patents it needs to make retractable syringes and, as a near monopoly, has no need to innovate on its own, America came into the Covid crisis without the capacity to make enough of the kind of needles we now so desperately need.
Where does that leave us today? At the end of January, Biden invoked the Defense Production Act to boost the production of vaccines, testing equipment, and syringes. That included a $275 million contract to Retractable Technologies, as well as an even bigger contract to Becton Dickinson to manufacture so called “low-dead-space” syringes, which, while not as safe as Shaw’s invention, at least doesn’t leave valuable vaccine behind in each vial.
But even with all the federal dollars going toward this massive effort, it’s going to take months for both companies to build the manufacturing and distribution infrastructure to disseminate these syringes on a mass scale. All the while, medical providers will continue to throw away precious vaccine that could be going into the arms of Americans. Part of the blame falls on the Trump administration, which last year could and should have taken the aggressive actions Biden did in January. The real source of the problem, though, is the legislation that elected officials enacted in the ‘80s and 90s that radically reshaped the GPO system. Until those are fixed, many more Americans will likely die unnecessarily the next time a pandemic strikes.