Paul Mango, former Deputy Chief of Staff for Policy HHS, discusses the success of the public-private collaboration to deliver COVID-19 vaccines.
June 2022 – The Journal of Healthcare Contracting
Paul Mango, the deputy chief of staff for policy for the U.S. Department of Health and Human Services (HHS) from 2019 to 2021, joined Share Moving Media’s Scott Adams for a Q&A on Operation Warp Speed (OWS), a public-private partnership to facilitate and accelerate the development, manufacturing and distribution of COVID-19 vaccines, therapeutics and diagnostics. Mango served as the formal liaison for OWS and has written a new book called Warp Speed: Inside the Operation That Beat COVID, the Critics, and the Odds.
They also discussed the Strategic National Stockpile (SNS) and Project Airbridge, a program created to shorten the amount of time it took for U.S. medical supply distributors to bring PPE and other critical medical supplies into the U.S. during the initial COVID-19 pandemic response.
Scott Adams: It was really unique to watch our industry come together, even competitors working side by side (during the initial COVID-19 pandemic response). Your team had a ton to do with that. Talking about the Strategic National Stockpile, in those early days of the pandemic when you were developing strategy on how to collaborate, you worked specifically with medical and supply chain distributors. What were the potential shortages during that time?
Paul Mango: All hell was breaking loose. But exceedingly early in the pandemic, in February 2020, when we started experiencing hospital admissions and then some of the initial fatalities here in the U.S., I called six or seven large health systems that were treating these patients because we wanted to know what the supply consumption was associated with a COVID patient in the early days. It was a 10-day length of stay on average.
Providence in Seattle had some of the first cases, and the clinical medical director said they were going through 350 N95 masks per patient over a 10-day length of stay. We started doing the math. Our Strategic National Stockpile had 12 million N95 masks. You can start to figure out that after about 40,000 patients the cupboards were going to be bare, and we were expecting a lot more.
We had to develop a strategy quickly on how we were going to get supplies to those hospitals and health systems that needed them most. We put a team together to understand where the PPE was manufactured. You had masks, gowns, booties and Nitrile gloves.
What we learned was the vast majority of these were manufactured outside of the U.S. Nitrile gloves were 98% outside of the U.S. N95 masks – we actually made quite a few. But when it came to gowns, they were sewn in Mexico or in South America. We developed a strategy with four major components:
Acceleration (Project Airbridge) was a function of us working with these great medical supply company distributors. It was McKesson, Henry Schein, Quidel, Abbott and Owens & Minor. Cardinal was very instrumental. Great, iconic American companies that had rights to much of the PPE in China.
Wuhan, China, ironically, was where a lot of PPE was manufactured and they had to shut down their factories for six weeks during the early days of COVID. When they resumed production, they had been filling up their warehouses with stuff these medical supply companies owned. If they put them on the normal transportation route on large container ships coming back to the U.S., it would’ve taken 45 days to get here, unloaded and put on trains or trucks from the West Coast. It could be 55 or 60 days – two months.
We decided to send 747 cargo jets over to the warehouses in China and this was the fundamental nature of the Airbridge. The medical distributors would still own 100% of the product we picked up, but in return for us financing the transportation, the companies permitted us to direct the allocation of 50% of whatever we picked up. Our ability to take a constrained supply base and redirect it to the hotspots was crucial to the long-term success. These medical suppliers and distributors were patriots. They exhibited no self-interest and were all
We used the Defense Production Act (DPA) Title VII, which permitted normal competitors to collaborate during this time of a public health emergency. One of the ways they collaborated was, along with Palantir Technologies, which is a great information technology company, creating an information technology system giving us line of sight into each N95 mask, gown and booty from factory to warehouse to where it was being shipped in the country.
This decision support system was phenomenal. Distributors had never had that on their own, and now we have one. It’s really a national asset and that permitted us to reallocate.
Again, the first principle was Acceleration. That was getting things here overnight that would normally take two months. Once we did that, it shifted around using this IT system to send more gowns to Mount Sinai in New York, for example, because New York was blowing up with cases. That meant these suppliers would have to short some of their other customers, but those would be customers that didn’t have the same need at that time.
The third part of our strategy was Preservation. We decided to get hospitals and health systems on the phone and the American Hospital Association helped us. We had 2,000 participants from hospitals around the U.S. listening to those leaders in the hospitals that were treating COVID patients. This is where COVID wings came about. Hospitals created COVID wings to put the COVID patients together.
The last part of our strategy was called Repatriation to bring production back to the U.S. Close to $500 million worth of grants were issued to expand domestic manufacturing capacity of masks, gloves and other things. A lot of this was offshored 20 years ago when labor arbitrage opportunities were significant.
Two things have happened in the interim period. One is worldwide labor costs have normalized a bit. It’s not equal, but it’s normalized a bit. Secondly, after we offshored a lot of this manufacturing, Asian countries applied automation techniques and equipment to manufacture it. We learned that the U.S. was actually a cost advantaged place to manufacture it 20 years later, particularly Nitrile gloves. The base raw material for Nitrile gloves is petroleum, and it’s much cheaper in Louisiana, Mississippi and Texas than it is in Vietnam. There was a potential cost advantage in bringing this manufacturing back, but an initial capital investment in the equipment was necessary to automate it, and that’s what we funded.
Adams: Talk about Defense Production Act Title VII that allowed national distributors to work together early on.
Mango: Early in the pandemic, HHS collaborated closely with FEMA, which is an expert at responding to disasters – floods, hurricanes or tornadoes. They had representatives distributed across 10 regions in the U.S. as logistical hubs. I was at FEMA at 7:30 a.m. every morning and we had our initial call with these distributors at 8 a.m. The CEOs were on the phone calls. They were committed.
The private sector knows best what to do. We needed to elicit their input and ideas. Our role was to coordinate, not tell them what to do. These calls were them informing us on how to get this done. We’d have morning calls and late afternoon calls every day. We had the right leadership at the table, and it was real-time problem solving. We got into a rhythm, and once there, it was fantastic. FedEx, UPS and others helped us with the Airbridge. Great, iconic American companies stepped up.
In Fall 2020, we were prioritizing for vaccinations and there was a debate about vaccinating the elderly and most vulnerable first or vaccinating the healthcare workers first. Deborah Birx said that out of 20 million healthcare workers in the U.S., only 200,000 had been infected at that time. People who are in contact with COVID patients every day weren’t infected. That’s because of the success of Airbridge and these companies. We got PPE to the right place at the right time.
Adams: Give us a couple lessons you learned and some things that we might be able to avoid if we face this again, which we probably will.
Mango: Coming back to the Strategic National Stockpile, we were fundamentally unprepared for what hit us. The mission of that stockpile had a lot to do with chemical, biological and nuclear warfare. In the early days of the Trump administration, the biggest threat to this country in 2016 through early 2018 was North Korea.
Many resources went into antidotes that would protect America against nuclear threats. We weren’t prepared for a biological threat like this. But when I left, we had close to 300 million N95 masks in the stockpile.
I hope we don’t repeat the mistakes of the past, but the government dramatically increased demand for certain supplies during the pandemic. Unfortunately, we saw this with testing too, and once that demand goes away, the supply goes away. Then it’s exceedingly difficult to respond to the next pandemic. The federal government needs to continue to fund the presence of idle capacity that is warm and can be hot very quickly.
Collaboration needs to take place between the Strategic National Stockpile, medical supply distributors and manufacturers to ensure it’s in place and pressure test it multiple times a year. The federal government is going to have to pay for that, but it’s significantly cheaper than the trillions of dollars of lost economic growth because we weren’t prepared.
Lastly, the federal government’s role in an emergency like this is to enable the private sector to be successful. It depends on the private sector to deliver success. The government enables, the private sector delivers.
Adams: I want to shift gears and move to Operation Warp Speed. Please tell us how it started.
Mango: In the early days of the pandemic, even in January 2020, the initial stages of Operation Warp Speed had begun. Moderna was working with the NIH before the pandemic broke out on using mRNA technology to develop cancer therapies. When the viral sequence – the DNA sequence of the coronavirus – was posted on Jan. 10, 2020, Moderna and the NIH collaborated on using mRNA technology to develop a vaccine very quickly.
It had never been done before. mRNA is a new vaccine technology. In about 10 days, they had a good vaccine, unbelievably. They didn’t know it. We didn’t know it. But what was developed in those first 10 days is basically what Moderna eventually distributed. At the time, there were about 95 vaccine candidates that were being developed around the world. We started funding a number of companies to accelerate that development.
Secretary Alex Azar and I sat down with the FDA and the Office of the Assistant Secretary for Preparedness and Response (ASPR). Secretary Azar mapped out the strategy for Operation Warp Speed, and everything that used to be done in series would now be done in parallel. The financial risk associated with that, like starting manufacturing even though we didn’t know whether the vaccine would be authorized by
the FDA, would be assumed by the federal government.
It had a number of principles around governance, doing things in parallel and assuming financial risk, and spreading our investment risks across three technology platforms – mRNA, viral vector and protein subunit. Another especially important principle was bringing in private sector expertise as our manufacturing lead. That’s how it started, and
the rest is history.
Adams: March 28 and March 29, 2020, is when this was outlined?
Mango: That’s correct. Now, there’d been some early work done on screening the world for vaccines and investment in Moderna, but it wasn’t a coherent initiative. It didn’t have a governance structure or strategy. Secretary Azar got it right away and said, this needs to change dramatically.
Adams: Talk about some of those guiding principles that help with the effort of doing that.
Mango: The most important one was performing activities in parallel as much as possible. The typical approach for a pharmaceutical company is going through a phase one trial, examining those results, starting a phase two trial a couple of months or even a year later, examining those results, then going into phase three, large scale human trials, and finally taking it to the FDA. The FDA could take six months to evaluate data.
But Peter Marks (with the FDA) made a pledge of having an answer in 14 days on any data he received and any application he received from EUA. He had his staff working in three shifts, eight-hour shifts, 24 hours a day. Typically, after authorization from the FDA is when a pharmaceutical company starts manufacturing because they don’t want to put a lot of effort and resources into it before they know it’s going to be approved. We took as much of that as possible. Phase one, phase two and phase three clinical trials were measured in days, not months. We used a lot of the NIH’s clinical trial sites.
We helped recruit individuals for trials that weren’t necessarily patients. A lot of them were healthy. Then, we began manufacturing in the Summer 2020. Remember, the first EUA was granted on Dec. 11. We were already manufacturing, and it’s the first time in history that there were millions of doses of vaccines available and being shipped 24 hours after the FDA authorized use. That was one principle.
When it came to governance, it was fascinating. I spent 25 years at McKinsey & Co. leading transformational efforts in large corporations, and it’s a remarkably similar principle. When you have an emergency like this in any organization, you can’t let the bureaucracy bog you down. What we did was set up an Operation Warp Speed board co-chaired by Secretary Mark Esper at the Department of Defense and Secretary Alex Azar. We had a number of physicians and some White House representatives on it. We met every Friday morning to make decisions. If we needed any support beyond that board, we had a direct line to the Oval Office. That took weeks and months off of contracting issues and defense product act use issues. It was all action. That was an especially important principle.
The third one was the venture capital mindset from Moncef Slaoui. He’s the most successful vaccine developer of our generation. He brought 14 vaccines successfully to market at GlaxoSmithKline. But he’s a strategist at heart and he laid out the candidate investment portfolio.
Some people in the scientific community were saying, ‘get every horse you possibly can in the race.’ Invest in 20 of these things. However, what those scientists didn’t understand and Moncef Slaoui and General Gus Perna did was that the more you invest in, the less probability you have of getting through clinical trials. You need 30,000 people in each clinical trial. If you had 20 different trials going on, that’s 600,000 Americans. You have potentially a shortage of raw materials. You would add to the complexity of distribution.
These vaccines took different sized needles and syringes. They had to be stored and distributed under different conditions. The complexity of the supply chain issues would grow exponentially as you added vaccine candidates. We limited ourselves to six, and potentially seven, but we said no more than that across three technology platforms and two candidates in each platform.
In August 2020, we performed ‘trust but verify.’ Moncef had laid out his candidates, syndicated it with the board, and we evaluated each candidate on three dimensions – the probability they could get EUA before year’s end, their ability to scale up manufacturing and their effectiveness in those over age 65. We knew in Summer 2020 this virus disproportionately affected those with certain underlying conditions and the elderly. We used those criteria and performed a cumulative probability analysis.
The cumulative probability analysis suggested a 75% probability of having at least one safe vaccine manufactured at scale and effective in those over age 65 before year’s end. There was a 32% chance we’d have two and less than a 10% chance we’d have three. We wound up with two.
We were considering a seventh candidate, and every candidate we invested in was about $2.5 billion.
We ran the seventh company through our probability analysis, and it only took the 75% probability to 78%. It wasn’t worth the leadership dilution and the complexity in the supply chain. We used that tool successfully to help us make decisions.
The CDC had a strong preference for using the public health infrastructure to distribute and administer vaccines. But General Perna in the Army Material Command said, ‘we prefer CVS, Walgreens, Walmart, UPS and FedEx,’ and that won out because America’s public sector infrastructure is dilapidated at best. They don’t have electronic scheduling of patients and don’t know how to call patients back for their second doses. We looked into all of that, and we had an underlying belief in the private sector.
Adams: What were some lessons learned through this?
Mango: This is an uplifting story about America. Amid all this divisiveness, intolerance and political divisions, hopefully Americans are proud of how exceptional America is. It’s the only country in the world that offered vaccines to each of its citizens by April 2021. It’s an extraordinary level of innovation, industrial dexterity and nimbleness, and the talent and capability that we have.
A lot of people disparage large corporations. But in times of need, there’s no better place to be than within American industry. Without the development that had taken place decades before mRNA technology, warehouse management, distribution management, information technology, and tens of thousands of clinics, we never would’ve gotten through this. Let’s not disparage our large corporations for being profitable because they developed unprecedented capabilities.
Editor’s note: To listen to the complete conversation, visit http://repertoiremag.com/paul-mango-podcast.html