More medical gloves are coming from China, as U.S. makers of protective gear struggle
A 85-foot-tall, dark-gray building stands in southern Virginia, surrounded by grassy fields and rolling blue mountains. This brand-new chemical plant was set up during the pandemic to produce a special type of synthetic rubber that's needed to make medical exam gloves, the kind used everyday by doctors and nurses.
But so far, this factory has produced nothing.
About 340 miles northeast, in Maryland, another brand-new factory sits idle and unfinished. This one was designed to take that kind of synthetic rubber and transform it into medical gloves. It's a 735,000-square-foot building full of equipment, but the machines inside of it have not been fully set up.
Zero gloves have been made.
Farther north, a glove factory in New Hampshire acquired four high-speed production lines, so it could start churning out medical gloves quickly. But those lines have not been completely assembled.
That company recently laid off over 100 workers.
Together, these glove-manufacturing projects got about $290 million in public funding, part of a roughly $1.5-billion investment made by the federal government since the start of the pandemic to boost American production of medical masks, gowns, and gloves, plus the raw materials needed to make them.
The goal was to reduce the reliance on imports from Asia and to help prevent dangerous shortages of these essentials from happening again during future health crises.
But a group of manufacturers says that the effort has stalled — and that some American companies trying to make personal protective equipment (also known as PPE) are facing financial circumstances that threaten them with ruin.
"The commitment the U.S. Government made just three years ago appears to have been abandoned," executives recently wrote to lawmakers in Congress.
Greg Burel, who directed the federal Strategic National Stockpile for a dozen years, told NPR that having some PPE manufacturing in the United States is "vital" for preparing for any kind of event that would break the normal supply chains and leave countries around the world vying for these critical items.
Asked if the nation was better off now, versus a few years ago, in terms of having reliable access to PPE in a global emergency, Burel said, "No. I don't think so."
"What the government has done is invested in this industrial base expansion," says Burel. "But there are no other particular incentives for the U. S. healthcare marketplace, on a day-to-day basis, to buy product coming out of those expanded manufacturing capabilities."
A spokesperson for the Department of Health and Human Services (HHS), which worked with the Department of Defense to give out grants during the pandemic, says that the efforts by the HHS have "strengthened our preparedness for future public health threats but sustaining the gains that our country has made over the last few years is difficult, important, and requires continued investment in domestic manufacturing."
The only facility in the U.S.
A close examination of one key medical item — medical exam gloves — illustrates why manufacturing this protective gear has proven so difficult.
Over 100 billion basic exam gloves get used each year in the United States, and business executive Scott Maier says that all but a tiny fraction of them come from Asia.
Even before the pandemic, Maier dreamed of manufacturing medical gloves on U.S. soil. He figured that with automation, he could get prices low enough to compete with makers in Malaysia, which had been the world's main glove supplier for years.
"That's what we were trying to do," says Maier, the CEO of a company called Blue Star NBR. "But trying to raise hundreds of millions of dollars to make a commodity, before the pandemic, was not an easy feat."
As a novel coronavirus began to race around the world in 2020, however, hospitals found themselves desperately short of PPE, with doctors and nurses forced to ration masks and gloves.
With the pandemic underscoring an urgent need to increase the on-shore production of these items, government officials scrambled to figure out what kinds of funding could be found and mobilized across various agencies.
Maier originally had a two-part plan to build a glove factory, plus a chemical plant that could churn out the raw material needed to make the gloves.
The Department of Defense announced in 2021 that "on behalf of and in coordination with" HHS, it would provide over $123 million for the chemical plant that would produce rubber.
Technically the rubber is called nitrile butadiene rubber, or NBR, and it's the preferred material for gloves these days because so many people have allergies to latex.
"This is the only facility in the U.S. that can make a medical-grade NBR," Maier said during a recent tour of the facility, as he pointed out reactors and mixing tanks — all of which stand empty and unused.
When it's first made, the NBR is a white liquid that looks like viscous milk, and Blue Star NBR has been making test batches in a trailer near the plant, on the other side of some train tracks. One suitcase-sized container of it bore a sticker with an American flag that said "PROUDLY MADE IN USA."
"The easiest way to think about making NBR is to think of making a salad dressing," Maier says — a key difference being that some of these ingredients could go boom if they're handled in the wrong way.
If this chemical plant was operational, it could make 90,000 metric tons of the rubber each year, which Maier says is enough for 12 billion regular exam gloves or 6 billion thicker, "chemo-rated" gloves.
A big reason it's not online, Maier says, is because his company wasn't able to secure funding for its planned glove manufacturing factory, which was going to share certain set-up costs with the chemical plant.
At one point he'd been hoping to get money made available as part of the Defense Production Act program, which used experts on facilitating government loans at the U.S. International Development Finance Corporation (DFC).
Blue Star NBR and the DFC dispute the details of what happened — the agency says the company withdrew its application to seek other funding that aligned with its construction schedule, while Maier says he didn't withdraw it and that the agency ran out of time in their funding authorization.
Today, where the glove factory was going to be, there's just a vacant lot.
Looking for customers
When Maier went back to the government seeking more help, he says officials told him the contract he'd gotten only required him to create the capacity to make rubber, not to actually produce it.
"We thought that was odd," says Maier.
Asked if Maier's account of that was true, a spokesperson for HHS responded that the agency "engages with all potential vendors and contract awardees interested in domestic manufacturing to fulfill deliverables and ensure a more resilient public health supply chain."
Maier estimates that Blue Star NBR would need $60-70 million to finish up the chemical plant and hook it to utilities. He's eager to have it start producing rubber, in part because the expectation of new manufacturing jobs moved state and local officials to contribute millions of dollars in land and infrastructure upgrades.
"We believe firmly that this is a good project for southwest Virginia. It was lauded as transformative when it was announced, and I firmly believe that it will be, once it's realized," says David Manley, executive director of the Joint Industrial Development Authority of Wythe County in Virginia, who hopes to see both the plant completed and the glove factory built.
As far as he can tell, Manley says, Blue Star NBR has acted in good faith. "They have built a very impressive facility on that piece of property," says Manley. "I feel like right now, the biggest barrier is finance, frankly."
Even if Blue Star NBR's rubber factory somehow got finished, they'd need to find customers for this raw material.
A spokesperson for HHS says that it invested approximately $574 million to increase the domestic manufacturing capacity for medical gloves by 7.2 billion gloves a year.
But Maier told NPR that he wasn't aware of any glove-makers that had gotten funds that were actually producing additional gloves at this time.
Asked about that, a HHS spokesperson said the investments "are resulting in expanded domestic production, with the capacity to produce 2.3 billion nitrile gloves annually by March 2024, and an additional 133 million annually by September 2024."
Maier knows of only a few glove manufacturers currently operating in the U.S. and he doesn't think they'd buy enough rubber for his chemical plant to financially make it.
"For this facility to just break even," he says, "we need to sell about 40,000 to 45,000 metric tons."
HHS says this isn't the only government-funded project for the production of the raw material needed for gloves, and that it expects "the capacity to produce up to 90,000 metric tons by September of 2025."
An artificially low price
One would-be glove manufacturer who might want to buy American-made rubber in the future is United Safety Technology.
"What's the point of making gloves here if we are relying on imported raw material?" asks Dan Izhaky, the company's CEO.
His company also received government money — over $96 million that again came from the Department of Defense on behalf of HHS — to create a glove production factory that he says could potentially churn out 10 billion gloves a year.
The company has set up shop in a vast building outside of Baltimore that used to belong to Bethlehem Steel. It's filled with truck-sized metal boxes that Izhaky says are like a giant Lego set — modules of machinery that together will make up the production pipeline.
"These blue things are ovens that cure and bake gloves," he explains as he gives a tour.
This factory isn't finished. "Trying to stand up a facility like this in the middle of a pandemic was challenging," he says, explaining that they got hit with unexpected expenses and inflation.
Plus, the entire global glove market shifted. At the start of the pandemic, the U.S. bought most of its gloves from Malaysia, which had the lowest prices.
But China started selling even cheaper gloves and is rapidly taking over the U.S. market.
"Basically, they're selling at what we believe to be an artificially low price," says Izhaky. "It's really hurting the whole global industry, other than the Chinese."
During the pandemic, China was accused of covering up the extent of the outbreak in order to hoard medical gear.
If masks, gowns, and gloves continue to come overwhelmingly from overseas, says Izhaky, it'll be déjà vu in the next crisis, with American nurses and doctors having to make do — or do without.
"It could be a pandemic, it could be a geopolitical event, we don't know what it would be," he says. "But once global supply chains shut down, if we don't have some domestic capability to produce this, then it's shame on us, all of us."
A penny versus a nickel
The government does stockpile some emergency supplies. But Greg Burel, the former stockpile director, says there would never be enough money to buy everything needed for a pandemic and just keep it on the shelf indefinitely.
"That means we have to rely on going to the market during an event at some point," says Burel.
And in that market, he says, American PPE manufacturers are in a tough spot: "No matter what these people do, they are never going to outcompete many of the foreign-made products."
The usual customers for these products are large hospital consortiums and healthcare distributors, which just want something that works and is cheap, says Eric Toner, with the Johns Hopkins Center for Health Security.
"If they can get a glove for a penny versus a nickel, they are going to go for the penny," says Toner.
While the government could set up subsidies and incentives to make American-made PPE more attractive to customers, says Toner, that would mean spending money for something that, most of the time, isn't needed.
"I think in the current political environment, it would be a really hard sell," says Toner.
But PPE manufacturers say their products would be needed in a pandemic, and they desperately need help, in the form of long-term direct-from-the-factory purchase contracts, or reimbursements for health care organizations that spend extra money to buy American-made products.
"The government has not yet given the indication that they're going to believe in these factories that they invested in. And they should. They need to," says Richard Renehan, CEO of Renco Corporation based in Manchester, Massachusetts, which produces specialty gloves for use in clean rooms and certain medical applications.
When demand for basic exam gloves surged during the pandemic, Renco received $70 million in federal funding to acquire four new high-speed production lines for a glove-making site in Colebrook, New Hampshire.
Renehan says the cost of everything spiked during the pandemic, so those production lines aren't fully assembled. He's spent two years appealing to the government for more money to finish the job.
And with China now selling gloves for the low price of around $0.02 each, he says, his company recently had to lay off workers.
If a government agency or other customer wanted to order from Renco, he says they'd jump at the chance to produce basic exam gloves, especially if it was a long-term contract.
But for now, Renehan says, "We're on hold. We do not have the funding or orders to make them."
Asked what could be done to help companies like these that had gotten grants but now found themselves in a bind, a spokesperson for the HHS said that agency officials had recently conducted "a thorough set of reviews, including deploying personnel on-site where needed, to determine how to most efficiently utilize remaining contract resources and, if needed, adjust the scope" of projects that were behind schedule or over budget.
The spokesperson says HHS is continuing to work closely with companies and the rest of the government to try to "increase the sustainability of the domestic manufacturing gains made during the COVID-19 response."
Meanwhile, experts on the medical supply chain continue to worry about shortages of essentials during the next health emergency.
"We're not in a better position," says Burel. "If we have no domestic manufacturing capability — particularly some domestic manufacturing capability that can ramp up quickly at the time of need — we'll see the problem recur again if there is another pandemic." [Copyright 2023 NPR]
