US Remains Vulnerable to COVID-19 Scams

Here are the loopholes the FDA should close

Photo Credit: Matthew Horwood/Getty Images

As states and hospitals scour the world for urgently needed COVID-19 supplies, Food and Drug Administration (FDA) efforts to increase the importation of face masks, protective shields, and other products have come into conflict with the agency’s mandate to ensure that all medical devices entering the US meet the appropriate standards.

The United States entered the pandemic with one of the world’s most stringent regulatory regimes for importing medical devices, overseen by the FDA’s Center for Devices and Radiological Health. To deal with the supply crunch, the FDA relaxed some rules—a policy followed by mostly every country hit by the virus. This policy, though well-intentioned, has opened a range of loopholes that scammers have already exploited. Luckily, scams are avoidable, even during a pandemic. The FDA must balance the need to ensure widespread availability of devices that meet basic standards with the need to protect patients against future scams.

The FDA’s regulatory relaxation has taken two main forms since the secretary of the Department of Health and Human Services declared a public health emergency on Jan. 31. That initial declaration became the grounds for the FDA to issue a range of Emergency Use Authorizations (EUAs), allowing manufacturers and laboratories to sell products or devices that would have otherwise failed to meet FDA standards. These authorizations are given on the presumption that whatever risks the devices may entail, the FDA’s assessment of their benefits outweighs those risks.

In addition to EUAs, the FDA has also issued guidance documents, which outline the agency’s likely course of action regarding specific devices or uses of them. Unlike EUAs, guidance documents aren’t legally binding and are written to simply advise industry, labs, and hospitals on what the FDA does not intend to object to about a device, in the absence of an EUA. Guidance documents might be used, for instance, by a laboratory commercializing a given test while waiting for a specific EUA to be issued.

To be sure, not all medical devices are made the same, and some are more likely than others to fall short of FDA standards. The disposable, low-cost nature of personal protective equipment (PPE) helps explain why ill-intentioned manufacturers have seized on states’ and hospitals’ need for large amounts of it as an opportunity for profitable scams. Ventilators, meanwhile, are harder to forge, by the sheer complexity of their design.

Faced with shortages of PPE like face masks and shields in healthcare facilities, the FDA’s guidance document from April 2 allows frontline staff to improvise in the absence of approved alternatives. In most cases, homespun masks will make for better protection than no protection at all, but in the few cases where masks are made with substandard fabrics, the opposite may be the case. Policy guidance requires healthcare facilities to disclose all bodily contacting materials of improvised PPE that frontline staff use, but to prevent the use of dangerous homespun masks, the FDA should consider explicitly banning those made out of cheap fabrics known to be easy carriers of SARS-CoV-2.

Another way the FDA has sought to boost the availability of PPE is by issuing EUAs for decontaminants and sterilizers, thus allowing frontline staff to potentially give used masks and shields a much longer wearable life. However, the accompanying requirement to verify that no traces of SARS-CoV-2 remain on a sterilized mask applies only to a special kind of filtering facepiece respirators. The FDA should extend this requirement to all masks and shields.

The last avenue the FDA has used to make these devices more widely available has been through EUAs authorizing respirators that comply with standards in a number of approved foreign jurisdictions, even though they do not meet Centers for Disease Control and Prevention (CDC) standards. The initial approved jurisdictions include the EU, South Korea, Brazil, and Canada. An additional EUA followed over a week later, authorizing respirators from Chinese manufacturers that had CDC approvals for other items in their product lineup or those with authorization from China’s National Medical Products Administration.

Regulatory recognition is a welcome improvement in the abstract. But China’s record of producing safe and effective medical equipment is dismal—all scam cases to date originated in China, as recounted by the Gatestone Institute’s Soeren Kern—and its regulations don’t forbid the export of devices that it wouldn’t allow its own population to use. Therefore, the rationale for singling out China with a targeted EUA was dubious at best. At worst, it encouraged ill-intentioned manufacturers to seek US approval for their filtering facepiece respirators under the EUA.

This loophole was only remedially corrected by adding a further qualifying criterion to the EUA on May 7, requiring manufacturers to have positive CDC test results and efficiency assessments within 45 days of the EUA’s issuing to qualify for coverage. This amounted to retroactively banning 65 previously EUA-authorized Chinese manufacturers of N-95 masks. The move led to a lot of criticism of FDA reviewers. The course-correction had indeed come about too late—the 65 manufacturers were allowed to sell faulty masks for three weeks. In light of this, the FDA should consider rescinding the authorization from April 3 altogether.

Ultimately, a comprehensive strategy against scams will need to combine all the aforementioned tweaks with a larger focus on prevention and remediation. Such a strategy starts with a more deliberate approach to blacklisting all known scammers, such as issuing federal registries, warning states and hospitals of known scammers, and even launching investigations into how the scams took advantage of existing loopholes to better inform FDA policy going forward.

Next, the FDA ought to take a hard look at hospital and state-level procurement processes. Besides considering further federal oversight of how these buyers choose among competing sellers, the FDA should also consider requiring samples and splitting payments to ensure that buyers are able to vet the quality of what they purchase before paying in full. Demands of an up-or-down response on an initial offering in less than 24 hours and upfront payment, for instance, tend to signal a seller’s dubious credentials, and the FDA should consider embargoing them outright. A slightly more burdensome process for getting the full payment for their delivery may, on the contrary, end up yielding manufacturers who are putting the utmost care and professionalism into their operations.

Finally, when scams do occur, the FDA should put the entire weight of the federal government behind negotiating adequate compensation for affected states and hospitals, which often have found themselves unable to recoup their full expenditure. Only in this way can the US expect to indemnify scammed importers to the fullest possible extent.

Medical device shortages during a worldwide pandemic create a significant market for scammers. Now is the time for the FDA to learn from recent experience and fully guard the nation against these nefarious practices.

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