Thread by @AlecStapp

1/ @calebwatney and I wrote 4,000 words for @mercatus detailing how we can use government purchase guarantees and targeted deregulation to massively increase production of essential medical supplies.

Short thread with the highlights...

mercatus.org/publications/c…

2/ Everyone is talking about using Title I of the Defense Production Act (DPA) to effectively nationalize the supply chain of critical medical supplies.

But there’s a much faster and more effective path forward to eliminate shortages...

https://twitter.com/maddow/status/1244687678542614539

3/ To maximize production of critical medical supplies, policymakers should:

- make purchase guarantees
- issue guaranteed loans
- grant liability waivers
- offer FDA exemptions
- delegate product testing
- remove EUA quantity limits
- expand imports
- waive price gouging laws

4/ First, use Title III of the DPA to make massive purchase guarantees (i.e., commit to buying huge amounts of product over a period of time).

This would alleviate demand uncertainty, create positive spillovers from more people wearing masks, and respond with a "speed premium."

5/ One problem manufacturers face is that they are usually paid on delivery (or later).

But to massively scale up production, businesses need working capital to hire workers, buy raw materials, and invest in new machinery.

Use Title III of the DPA to provide guaranteed loans.

6/ Fear of lawsuits is currently a huge impediment to production.

Use Title VII of the DPA to waive antitrust liability for private firms that are coordinating to produce essential goods.

And Congress should waive product liability for manufacturers.

washingtonpost.com/politics/insid…

7/ It takes more than three months to certify a new N95 mask factory.

We don’t have that kind of time.

Instead, the FDA should issue temporary exemptions from the emergency use authorization (EUA) req. for domestic manufacturers (just as it did for diagnostic testing in March).

8/ One of the major barriers to bringing a new PPE factory online is receiving certification from the National Personal Protective Technology Laboratory (NPPTL) at the CDC.

Instead, the CDC should delegate product testing to university and private labs to expedite this process.

9/ In one recent case, a manufacturer said its machines could decontaminate 80,000 N95 masks per day.

Under the initial terms of its EUA, the FDA limited the company to 10,000 masks per machine per day.

This is moronic.

The FDA should remove quantity limits in EUAs.

10/ On April 3, the FDA said Chinese KN95 respirators were “eligible for authorization if certain criteria are met, including evidence demonstrating that the respirator is authentic.”

So far the FDA has authorized only one Chinese manufacturer.

That’s not enough.

11/ Every other non-NIOSH-approved Chinese manufacturer remains in legal limbo without liability protection.

The FDA should authorize Chinese manufacturers (and grant them a liability waiver) if they have been approved to market KN95s (and other PPE) in any OECD country.

12/ No one likes profiteers.

But right now the US is losing out on the global competition for PPE & ventilators because vendors are worried about running afoul of US price gouging laws.

The government should waive price gouging laws for the duration of the crisis.

13/ As @mattyglesias argued, these are chronic rather than acute shortages — higher prices signal that firms should invest in production capacity for the long run.

https://twitter.com/mattyglesias/status/1245043017087582210

Or if 10-page research briefs aren’t your thing, here is the argument in op-ed format:

politico.com/news/agenda/20…