Ali McBride interviewed Tony Paquin, iRemedy CEO and SAMS Director, to learn more about the technology company’s experience work to change the U.S. medical supply chain.
What are some aspects of iRemedy that set you apart as a medical products distributor from other similarly situated companies?
At the core, iRemedy is a technology company. We were founded by lifelong technologists who have extensive experience in healthcare. Our emphasis on technology allows us to focus on (and fix) various problems and inefficiencies along the medical supply chain. Through technology, we can bring true price transparency to a market that has endured complex, manipulated pricing processes for decades. With growing costs in every area of healthcare, high-cost provider care eventually trickles down to the patient. The industry has operated the same way for decades, without ever evolving to the 21st century. This has caused fundamentally simple problems that has weakened our allocation-based supply chain. Product availability isn’t based on current demand, there is no economic reason for a company to vertically integrate, and the scope of the problem remains undefined. These are the cores reasons the industry fell apart during COVID and this is what iRemedy is working to change. We are creating, through our technology, a truly price transparent marketplace with every medical supply and pharmaceutical available in the US. This would; drive costs down – ultimately saving patients money, increase competition in the industry – driving costs down and improving availability, and incentivize domestic manufacturing of critical healthcare related items.
How did iRemedy step up during the pandemic through Operation Warp Speed and other programs that helped with the COVID supply chain shortages?
iRemedy was able to successfully manufacture and import over 540,000,000 needles and syringes (over 1 billion items) to the United States in the effort to vaccinate the country. This was a project within Operation Warp Speed and was a constant battle for nearly 12 months. We had to endure the high cost of raw material, ruthless competition and high-cost dynamic transport costs – all while interfacing with five Chinese factories. Dealing with this level of manufacturing volume during a pandemic (not to mention the geo-politics of Chinese commerce) was a monumental challenge that consumed our entire team for its duration, but thankfully we were able to pull it off and help America get back to normal.
As seen during the COVID pandemic, the U.S. has long relied on foreign manufacturers for essential medical products, making us vulnerable to hold ups in the supply chain. How does iRemedy respond to such supply chain bottlenecks?
The unfortunate answer is that iRemedy has no choice but to accept the reality that most of our inventory originates in China or Asia. Whether we buy from a prominent distributor in the US or a manufacturer overseas, the grim reality is that there is essentially zero medical manufacturing in the US – and this was especially true prior to the pandemic. This began to change in March of 2020 and we are seeing more medical manufacturers come online in the US than ever, but is primarily for COVID related supplies and built on faulty COVID economics. I am concerned that many of these newly formed factories won’t be able to sustain long-term in the “bottom-line focused” hospital/healthcare industry in the US. There are a few companies who have obsessed over becoming highly efficient, automated manufacturers in the US and I believe those guys will sustain. But for the time being, iRemedy (like everyone else) is forced to accept the fact that these supply chain bottlenecks cannot be fixed overnight.
Why is this a national security issue?
Simply put, what if COVID was a much more deadly virus? What if China decided that instead of seizing 40% of our needles and syringes, they were going to take 100%? What if China decides to take Taiwan and suddenly, we can’t access the computer chips used in most ventilators and CPAP machines? The list of these critical, Asian-produced, items go on and on. If any one of these items becomes blocked for export out of Asia, it is weeks before Americans begin dying. We cannot ramp up domestic production quick enough when so many items are vulnerable to this risk and there is no basic infrastructure. The US military follows the DIME principle of war – Diplomacy, Information, Military and Economic. iRemedy would argue that the medical supply chain can be another tool of war, like the recent use of energy extortion in Eastern Europe. The globalization of healthcare matters – the globalization of the automotive industry does not.
What are some government policies that have helped iRemedy in the past, and what policies would you like to see moving forward to better promote American made supplies?
In the past, the government’s policy to waive the requirement for the contracted goods to be made in America has helped iRemedy. When the government originally requested the needles and syringes for Operation Warp Speed, they wanted everything produced in the US. They ultimately gave us a waiver and allowed us to produce in China, because we had no other choice. If they didn’t approve this waiver, the entire western hemisphere couldn’t have produced what we did, in the time we did, and rapidly get Americans vaccinated. The government needs to stop being so liberal with waiving this requirement, and by doing so would promote more domestic manufacturing to occur. Ultimately, the only way to create long-term, sustainable domestic manufacturing is to support those who are trying to make it happen. The government must incentivize this, without that it won’t happen.
iRemedy is focused on the following policies/legislation becoming a reality:
- FY23 Inpatient Prospective Payment System (IPPS) Proposed Rule
- THE AMERICAN MADE MEDICINE ACT
- H.R. 3635 Strengthening America’s Strategic National Stockpile
- PREVENT Pandemics Act
- Medical Supplies for Pandemics Act
What’s the next shortage in medical supply chain verticals?
We are already seeing multiple, critical items going into shortage in the US. Iodine contrast used in CT scans, crutches and wheelchairs, and pre-filled saline syringes are currently in a nationwide shortage – preventing proper patient care. At the core, this is due to the lack of domestic production. But this is also a side effect of COVID related supply chain bottlenecks (raw material, transport costs, COVID shutdowns, etc.) and the allocation based medical supply industry that does not produce more inventory than expected to use the following year.