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May 20, 2020

Strategic National Stockpile 2.0: The Department of Health and Human Services Issues Request for Information Relating to the Strategic National Stockpile

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On Friday, May 15, 2020, the Department of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response (HHS/ASPR) issued a Request for Information (RFI) to solicit input from private sector manufacturers, distributors, trade associations, and other organizations that potentially might partner with the US government relating to the Strategic National Stockpile (SNS). As background, oversight of the SNS was transferred to HHS/ASPR in FY 2019 pursuant to the Pandemic and All-Hazards Preparedness and Advancing Innovation Act. The supplies, medicines, and devices for life-saving care contained in the SNS can be used as a stopgap supply when adequate amounts of these materials may not be immediately available.

In March and April 2020, as the number of coronavirus cases in the United States was on the rise, state and local government officials and medical personnel encountered widespread shortages in critical medical supplies, including personal protective equipment, ventilators, pharmaceuticals and testing supplies. On May 15, President Trump announced plans for a "Strategic National Stockpile 2.0" initiative to restock and revamp the SNS and to improve SNS inventory management and distribution. The initiative envisions drawing upon private industry partners to store and manage inventory, to enter contracts for reserved capacity, and to provide logistics services to allow for rapid identification and distribution of supplies to hotspots. The "NEXTGen SNS" RFI issued by HHS/ASPR is a critical element of the Administration's SNS initiative.

The NEXTGen SNS RFI has two identified purposes:

(1) To solicit input on the proposed structure and strategy of the Strategic National Stockpile and the role of public-private partnerships in achieving that vision, and

(2) To understand the constraints associated with meeting pandemic demand and determine how the US government can contribute to improving supply availability.

With respect to the first objective, the US government's vision for the SNS, going forward, seeks to build upon the "best-in-class capabilities" across the US government and the partnership among HHS/ASPR, the Department of Defense, and the Federal Emergency Management Agency to support, manage and oversee SNS procurement and activities. The RFI outlines US government plans to establish a "Supply Chain IT Control Tower" to create visibility of supplies across the end-to-end supply chain. Engaging private industry and expanding opportunities for public-private partnerships is considered critical. The RFI seeks white papers from private industry addressing a range of questions related to SNS objectives, inventory management, manufacturing capacity, distribution, and related logistics.

For the second objective, HHS/ASPR seeks specific industry insights on constraints encountered in meeting pandemic demand and potential strategies to ensure sufficient supply for future demand surges. The RFI seeks supply security information and strategies for six categories of products:

  1. Personal Protective Equipment (PPE);
  2. Ventilators;
  3. Airway management consumables;
  4. Pharmaceuticals;
  5. Testing supplies; and
  6. Other supplies and equipment.

HHS/ASPR explained that the product categories listed in the RFI are a starting point, and noted that the agency "is open to considering potential alternatives or additional items necessary to respond to COVID-19 and other similar crises." The RFI includes an "Input Template" for respondents to provide answers to general questions directed to all respondents, as well as manufacturer-specific and distributor-specific questions.

Politically, the Administration has touted Strategic National Stockpile 2.0 as part of its effort to reduce America's dependence on foreign sources of supply, particularly in critical industries. Indeed, one explicit goal of the RFI is enhancing domestic manufacturing capability; to that end, the RFI contains multiple questions regarding companies' ability to ramp up and sustain domestic production.

Based on the following seven factors that HHS/ASPR has identified, Attachment 1 to the RFI outlines considerations for managing demand surges in different product categories:

  1. Pandemic demand surge relative to normal demand;
  2. Shelf life;
  3. Manufacturing ramp-up time;
  4. Cost to procure material;
  5. Cost to store material;
  6. Cost to reserve manufacturing capacity; and
  7. Ability to reuse.

By its terms, the RFI is not a solicitation for proposals, proposal abstracts, or quotations, and no contracts will be awarded in response to the RFI. Respondents should ensure that their submissions and information are clearly marked with appropriate legends to protect any confidential and proprietary information. The RFI states that all such information will be handled accordingly. As noted above, while the listed categories/products in the RFI are COVID-19 related, the RFI indicates that HHS/ASPR also is open to considering potential alternatives or additional items necessary to respond to other similar crises.  Responses are due May 29, 2020, to be submitted electronically.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.