Toward a More Strategic National Shortage

Abstract

The COVID–19 pandemic exposed major deficiencies in the United States’ approach to stockpiling for emergencies. States, cities, and hospitals across the country had meager inventories of critical medical items on hand when the pandemic first reached U.S. soil, and the federal government’s Strategic National Stockpile proved far too small to serve the country’s needs in the first several months of the crisis. As nationwide shortages spread, many state governments were compelled to bid against each other to procure scarce medical supplies—a distribution approach that disadvantaged low-income and minority communities and left countless healthcare professionals and staff ill-equipped to protect themselves against a deadly virus. These severe supply shortages, which hindered the country’s early pandemic response, have since generated an unprecedented push to reform the nation’s stockpiling policy structure. This Article uses a simple cost-benefit model to highlight shortcomings in the existing U.S. stockpiling policy regime and to identify specific avenues for addressing them. Among other things, U.S. stockpiling policies need to better account for important differences in the rotatability of supplies and should incentivize more private stockpiling of the most rotatable emergency items. Targeted reforms of commandeering laws and price-gouging restrictions could further strengthen private incentives to stockpile and may even help to clarify how states and the federal government share responsibilities in the nation’s stockpiling effort. And much more federal support is needed to incentivize the build-out and maintenance of domestic supply chains for the least-rotatable emergency goods. Such tailoring of policies and programs to better fit the unique attributes of stockpiling activities can help ensure the nation is far better equipped to respond the next time disaster strikes.