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Economy

Why Are Millions Of N95 Masks Sitting In A Factory Without A Buyer?

STEVE INSKEEP, HOST:

How is this possible? A year into the pandemic, some health care workers still have a shortage of N95 masks. They're the high standard masks with filters that protect the wearer as well as other people. And some health care workers have to reuse them even as manufacturers say they have plenty. Darian Woods of NPR's Planet Money podcast investigates.

DARIAN WOODS, BYLINE: Luis Arguello runs a medical supplies company in Miami.

LUIS ARGUELLO: Let me show you some of the inventory.

WOODS: OK.

I spoke to him on FaceTime. And here, he's giving me a virtual tour of his mask factory.

Wow. So what I'm seeing is what looks like pallet load upon pallet load of masks in - kind of wrapped in a blue kind of tape.

ARGUELLO: About 15 million N95s.

WOODS: About 15 million N95 masks. That's astounding.

Fifteen million N95 masks just sitting in a Miami warehouse waiting for a buyer during a mask shortage. Arguello's story starts early in the pandemic when that shortage first began. Back then, he scaled up DemeTECH from 500 staff to 2,000. When they turned on their mask-making machines, they could make a million N95 masks a day. But today, DemeTECH and other new American mask manufacturers are having a really hard time selling their N95 masks to hospitals. It was a mystery why this masks supply couldn't match up with that demand. Shikha Gupta is the executive director of the nonprofit Get Us PPE. She says the first reason for the supply-demand mismatch is dwindling budgets.

SHIKHA GUPTA: It's really the small facilities or the mid-sized facilities that are most struggling with trying to find funding.

WOODS: Gupta says that some of these small clinics' budgets are wiped out from paying huge amounts for PPE in the early days of the pandemic. And that brings us to the second reason, mistrust in the market.

GUPTA: They are really hesitant about who to trust and who not to. We've heard so many devastating stories about overpaying for PPE that didn't show up or that was counterfeit. And it's taken a massive financial toll.

WOODS: Buyers just don't know if these masks are going to be legitimate. And it's not just the quality of the masks but also how reliable the supply will be. Katie Dean is a manager in supply chain at Stanford Health Care, a large health care network.

KATIE DEAN: Some of the bigger companies, well, the benefits that they bring is that they have manufacturing plants distributed geographically.

WOODS: Dean says mask manufacturers are more resilient if they have factories spread out, diversifying their risk. One snowstorm in Texas, for example, isn't going to totally threaten the supplies. This means an advantage for large, established mask makers. So I asked Arguello, what about selling directly to consumers? And he said he had set up online orders. But there is one big roadblock that he and every other N95 mask maker is facing.

ARGUELLO: The difficulty that I have is that I'm not able to advertise. So I can't let people know on Google or on Facebook or Instagram. We're blocked.

WOODS: Facebook and Google said in emails that they want to keep PPE for health care professionals and that they are taking into account advice by the World Health Organization and the CDC. But Arguello reckons there are hundreds of millions of N95 masks just sitting in factories around the U.S. And Arguello said that just over a month ago, he had to lay off about 500 employees.

ARGUELLO: We're laying people off making a product that's needed, that is in huge shortages in the country. It defies all logic, to be honest with you.

WOODS: For now, Arguello's factory is running at half capacity.

Darian Woods, NPR News.

(SOUNDBITE OF EVOCATIV SONG, "TELL ME") Transcript provided by NPR, Copyright NPR.