Manufacturing PPE in N.J. has huge upside, but comes with challenges

It’s a great thought — and a seemingly easy solution to a huge problem.

When the Northeast consortium of states goes to buy personal protection equipment for now — and for stockpiling in the future — wouldn’t it be great if the needed products could be made by and purchased from New Jersey companies?

That was the view of Gov. Phil Murphy, when the consortium made its announcement Sunday. (Read story here.)

“That’s something that I think we all want to strive for,” he said. “We have to figure out a way to make this stuff here.”

John Kennedy, the CEO of the New Jersey Manufacturing Extension Program, would like nothing more.

It not only would solve the supply-chain issue, it would keep dollars in the state — and show just how important the state’s more than 11,000 manufacturers are to the economy while bringing more of the middle-class jobs Murphy covets.

“There’s no reason to buy them from anywhere but New Jersey,” he told ROI-NJ on Sunday afternoon.

But, while Kennedy knows bringing this type of large-scale manufacturing back to New Jersey is possible — a few dozen companies already are participating —he knows there are challenges to the idea. Challenges that can be overcome, but challenges, nonetheless. Consider:

  1. A commitment to faster FDA approvals.

Let’s start with N95 masks.

“We’ve got a bunch of companies that can make them, they just can’t make the approved N95 masks because they are not (Food & Drug Administration)-approved,” he said. “That’s something that we have to solve. You have to be an approved source, and we’re not.”

How long this will take is unclear. Kennedy said he’s tried to get an answer, but can’t. He figures it would take months. In normal times. But consider this: How many manufacturers in New Jersey — let alone the country — could be asking for approval at the same time.

“There are hundreds of companies that have retooled or are looking to get retooled to make this stuff,” he said. “The problem is, eventually, you’re going to have to get FDA clearance.”

  1. A commitment to a pipeline in the U.S.

“There is a tremendous gap right now,” Kennedy said. “Why is the U.S. FDA approving Chinese companies, and other Asian countries, but we’re not approved here? That’s why we can’t provide N95 masks directly to first responders right now.”

Kennedy isn’t being an isolationist. As a former business owner, he knows having more than one pipeline is a good business practice. As is this: Doing business with your friends.

“China is not our friend,” he said. “Nor do they have to be our friend. They are a sovereign nation that acts in its best interest.

“If we really had an issue with China, what would make them say, ‘You’re not going to get our blood pressure medication’ or something else they produce? That’s not a good situation.”

  1. A commitment to paying a higher price.

This is one of the reasons so much manufacturing has left the country. Labor costs are much lower in other countries. Kennedy — who notes studies routinely show U.S. manufacturing is the highest quality in the world — wonders when price no longer will be the most important variable in purchasing.

He said hospitals, pharmaceuticals and medical device companies need to rethink pricing.

“Is it so important that we make another quarter on something?” he said. “It’s not like pharma companies are poor to begin with. I think there are ways to work this out. And, plus, if it’s a viable business in the United States, companies are going to innovate, so there will be less of a price issue.”

Instead, states and hospitals are getting price-gouged because of the limited supply right now, paying far more than they would have for U.S. manufactured goods.

Kennedy offer this, too:

“What is going to be the true price this time: 50,000 lives … 100,000 lives?” he said. “What’s the cost of having this many people in hospitals because we weren’t prepared?”

Kennedy sees hope. His interactions with federal officials — the state’s senators and congresspeople — has never been better.

“They see now why we have to fix the supply chain,” he said.

He speaks highly of Murphy and his administration, as well as the leaders of the state’s Manufacturing Caucus, rattling off Sens. Linda Greenstein (D-Cranbury), Steve Oroho (R-Sparta) and Vin Gopal (D-Ocean Twp.), Assemblyman Eric Houghtaling (D-Ocean Twp.) and former state Sen. Bob Gordon, who is now the commissioner of the Board of Public Utilities.

There’s nothing Kennedy would like more than to see more manufacturing come back to the state.

He sees how it could work. A number of companies could produce masks, gowns, gloves and whatever other products are needed. More could be approved to do so — and, thus, be ready to go should a crisis necessitate the need for more, he said.

“Why wouldn’t you want to have a series of companies that not only are able to produce these items, but also be connected — potentially through the MEP national network — so, if something happens, you’d be able to fill the gap instead of panicking?”

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