In Md., medical manufacturing grants a short-term boost but not a long-term gain

A woman models a decorated face shield, aimed at pediatricians and pediatric dentists, sold by Hatch Exhibits. (Courtesy Hatch Exhibits)

Grants to Maryland companies manufacturing medical supplies early in the COVID-19 pandemic were successful in the short-term, Department of Commerce data shows, but have made little impact on the state’s manufacturing capability since then.

The state invested over $3.1 million in grants of as much as $100,000 to companies that pivoted to manufacture items like masks, gowns and gloves in the spring and summer of 2020. According to self-reported data, the grants allowed companies, which ranged from live events companies to bridal boutiques, to hire a total of 563 workers and produce hundreds of thousands of units of PPE and other COVID-19 supplies.

But the program was never intended to be long term, Heather Gramm, assistant secretary of business and industry sector development for the Department of Commerce, said in an interview with The Daily Record. Rather, it is aimed at helping companies stay afloat while easing immediate supply chain issues.

“It was a, ‘how can we partner with our existing manufacturing base and our existing companies to help them meet this immediate emergency need?’” she said. “And I think we were successful with that.”

These products served a range of purposes, with many being donated to hospitals and other facilities that were struggling to find PPE, Gramm said. Two manufacturers who received Maryland COVID-19 Emergency Relief Manufacturing Fund grants even ended up with contracts with the state: Hardwire, a manufacturer of bulletproof armor located in Pocomoke City, and Hatch Exhibits, a company in Elkridge that builds trade show booths, produced 100,000 face masks and 100,000 isolation gowns for the state, respectively.

But some manufacturers struggled to figure out what to do with the PPE they created.

Integrated Pharma Systems, a small biotechnology firm based in Rockville, began manufacturing masks after receiving money from the state through the second round of Maryland COVID-19 Emergency Relief Manufacturing Fund grants.

Pivoting to manufacturing masks wasn’t difficult for the firm, according to President and Chief Science Officer Mina Izadjoo. Integrated Pharma Services already focuses on developing therapeutic and diagnostic products for pathogens, and Izadjoo herself has a Ph.D. in microbiology and immunology, so the firm had the scientific background necessary to make effective masks.

Plus, they even have laboratories in the same location where they make masks, allowing staff to easily test their product’s effectiveness.

“That’s a very unique setup that I haven’t seen (elsewhere),” Izadjoo told The Daily Record. “Often mask manufacturers, the gap that they have (is) they do not understand the science of it.”

Hatch Exhibits face shields, which are decorated to appeal to children. (Courtesy of Hatch Exhibits)

But despite offering high-quality masks, the firm still faced significant challenges selling its product. Officials were unable to get contracts with any governments or hospitals, and only found any success selling their disposable masks direct-to-consumer through the company’s website and Amazon.

Other companies that receive grants had better luck. On top of providing isolation gowns to the state, Hatch Exhibits also found a niche market providing face shields decorated with colorful stickers to pediatricians and pediatric dentists. The firm, which figured out how to make the PPE with its existing manufacturing equipment mere days after it was shuttered by COVID-19, still sells its shields to this day, even with trade shows and events having returned.

“It became a worldwide brand. It still just does its thing. People buy it every day. We don’t really do anything with it that much anymore, in terms of promotion, but every day we have units that go out the door,” said Chris McCormick, finding partner of Hatch Exhibits. “But it was key to getting us through the two years.”

Despite early success, COVID-19 manufacturing grants seem to have done little to improve Maryland’s domestic medical manufacturing capabilities in the long run. In a review of the websites of all 45 companies that received these funds, only nine, or 20%, still prominently advertising the products they were given funds to produce.

This is consistent with the experience of manufacturers across the United States who received PPE grants, according to an Associated Press report. Some firms have said that they were unable to sell any of their products, while others were forced to close after putting too much weight behind pivots to producing PPE that ultimately proved unsuccessful.

In total, AP identified COVID-19 manufacturing grants in 10 states — Alabama, Hawaii, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Missouri, New York and Ohio — that distributed over $125 million to more than 300 businesses.

Domestic manufacturing has proven important throughout the pandemic, as supply chain slowdowns made it difficult to import urgently needed medical supplies and forced hospitals, governments, schools and consumers across the country to compete for a relatively small pool of supplies.

According to Ravi Srinivasan, an associate professor of operations management at Loyola University Maryland’s Sellinger School of Business, logistical issues, like whether ports in different countries are open or closed, can make it more challenging to procure products from abroad.

“When you want to have a little bit more control over your supply, it’s best to keep it near to where it is being consumed,” he said.

The state of Maryland did source a significant portion of its PPE, which it distributed to hospitals, nursing homes, schools, election facilities, local governments and state agencies, from local companies; 33% of the money spent by the Department of General Services on PPE — or nearly $218 million — went to Maryland-based companies, although few of them actually manufactured their products in the state.

The program was never intended to permanently solve medical supply chain issues in the state. Even in the first press release announcing the fund’s awardees, Kelly Schulz, then-Maryland commerce secretary and current a candidate for governor, referred to the program as aiming to “address an immediate critical need,” while Gov. Larry Hogan called it a way to “save lives and flatten the curve.”

Still, Maryland officials are now looking into long-term ways to bring medical manufacturing into the state. According to Gramm, the assistant secretary of business and industry sector development for the Department of Commerce, companies beginning to take a greater interest in working with the government to solve supply chain issues and avoid a situation where necessary medical supplies are challenging to get.

In fact, one medical supply company, an N95 mask and medical-grade nitrile exam glove manufacturer called United Safety Technology, has recently announced it’s moving its operations to Tradepoint Atlantic in Baltimore County, to the celebration of local and state leaders

“We’re seeing the private sector have a lot of good interest and understanding in where their supply chain pinches were, where their gaps are,” Gramm said.


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