What are the business risks associated with using an unfamiliar PPE source?
The most critical risk is receiving unapproved, unsafe products. Providers report having received incorrect product, poor quality items, or counterfeit items that fail to protect staff from disease risks. Other risks include losing money and wasting staff time.
What can I do to minimize the risk of sourcing from unknown vendors?
Many healthcare providers trust their distributor partner to vet new sources. Those who choose to do their own sourcing should keep in mind that offers that sound too good to be true often are. If considering an unfamiliar source, do basic due diligence such as checking references and securing a sample. Watch for red flags including:
Are there resources to help me figure out if a new source is legitimate?
- Unrealistic promises such as too‐good‐to‐be‐true prices or volumes
- Advance‐payment requirements
- Last‐minute changes in payment instructions
- Claims that the goods are not yet produced
- Sellers who refuse to state which company they represent until it is time to make an agreement
- Lack of a website, business address, and evidence of doing business with such products in the past
Many manufacturers of PPE post helpful end‐user purchasing information on their web sites, such as lists (or hotlines) to confirm authorized sellers, the models and list prices at which their products may be sold, and descriptions of the intended use, labeling, packaging and certification of various PPE supplies. Other resources that can help determine if a vendor is authentic:
What credentials should a legitimate seller be able to provide?
- Office of Inspector General Exclusions Program identifies federally excluded organizations and individuals
- System for Award Management tracks whether an organization can do business with the federal government
- FDA Establishment Registration & Device Listing identifies companies and the US Agent registered with the FDA
- FDA 510(k) Database identifies whether a company provided proof to the FDA that its products are as safe
- FDA Table of PPE EUAs lists manufacturers and model numbers that fall under current emergency use authorizations
- Counterfeit Respirators/Misrepresentation of NIOSH Approval resource page describes how to spot counterfeit product
- Company’s W‐9 and/or business license
- Financial snapshot, including recent income statement
- Product cut sheets
- Origin of offered product, lot number, date of manufacture
- Proof of 510(k) clearance or EUA
- Current inventory levels and locations
Be aware that some fraudulent sellers provide “manufactured” fake versions of the documents listed above.
What is the difference between credible commercial distributors and opportunistic brokers?
What risks are associated with a brokered transaction?
- Distributors typically serve as a single source through which providers can buy PPE and other medical products critical to everyday operations. Distributors vet the suppliers they represent. They generally take ownership of and stock the products they sell, offer a range of logistics services, and usually have long‐term business relationships with their provider customers.
- Brokers facilitate deals between sellers and buyers and often solicit bids from potential purchasers. Brokers do not take ownership of products, are focused on individual transactions, and usually do not have long‐term relationships with healthcare product sellers or buyers.
This transaction type is ripe for price gouging, especially in times of high demand. Brokered deals force buyers to bid against buyers, pushing prices up and driving goods to the highest bidder without consideration to where product is most needed. Additionally, because a broker does not accepts title to products, industry acceptable transportation controls are not guaranteed. This creates an increased risk for shipments being lost or damaged in transit. Some brokers produce counterfeit versions of branded‐product with fraudulent product registrations, certificates and/or test reports that do not meet federal quality standards. Some use official looking but misleading logos and brands in their communications.
What is my distributor doing to vet new sources of PPE?
Distributors are working diligently on behalf of their provider customers to vet and identify new PPE sources by leveraging the sourcing techniques described in this FAQ. Additionally, some distributors have international employees or agents who can evaluate inventory at overseas sites.
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