Speaker 1: Hello, and welcome to Bite Size Legal, where we tackle legal issues one bite at a time. My name is Drew Jenkins, and I'm an attorney licensed in the states of Georgia and Alabama. And today we're going to take another quick bite out of the CARES Act, that stimulus bill passed by Congress to help us fight the coronavirus. Now in previous episodes, we've covered the benefits to individuals and the benefits that are available for businesses. But after that, there's actually a rather lengthy section that deals directly with ensuring that there are no future shortages in either medical devices or medical drugs. So essentially, medical supplies should no longer go through shortages. And the way they're going to do this is they are convening the National Academies of Engineering and Medicine, and I forget the other, and they are going to generate a report through talking with stakeholders as well as relevant government agencies, such as the Department of Defense, the Department of State, the Department of Commerce, etc. And they're going to lay out what they believe are essential medical supplies for the future. And then they're going to do a deep dive into each one of those in order to ensure that the supply chains are resilient and redundant. So today we're having issues making sure that we have PPE and making sure we have ventilators. The government is taking a very proactive step to ensure that this never happens again in the future, which also means if you're looking at getting into the business of becoming a medical device supplier, now's a good time to do it. Because the regulations further state that instead of the secretary may simply prioritize certain applications over others, the secretary shall now expedite applications of the needed and identified medical devices or medical drugs. So it's an interesting time to get into that field because obviously we know we need it and the government is going to actually incentivize domestic production, which is always a boon for those that are going to be new into the business and they are looking to produce it locally. In addition to that, when it comes to drugs in particular, or I should say medical drugs in particular, they are looking specifically at ensuring that the relevant ingredients are also not subject to shortage or backlog or anything of that nature. So there are going to be reports that are going to be publicly available, filed with the government every so many quarters or so many days or how they're currently trying to set it, in that you as the supplier are going to identify the active ingredients in your medication and you are going to state that we believe that these ingredients are subject to shortage and here is why. Now of course the government never gives with one hand and doesn't necessarily take away with another. So there are strings involved in this. If you are identified as such an essential medical device or essential medical drug supplier, you are not going to be able to just shut down. You are now going to be obligated to tell the government at least 30 days prior to any impending shortage or shutdown or change in schedule. I don't know what the penalties are, it doesn't necessarily lay out the penalties in the CARES Act, but you are now going to have to report to the government on a regular basis about how much product you're producing and whether or not you're having any difficulties and if for some reason you intend to reduce the number, reduce the quantity that you're producing, you're going to have to get what appears to be government permission. So again, the CARES Act is going a lot further than simply caring for individuals and businesses. The CARES Act is actually becoming involved in the supply chain itself. We've seen a lot of issues with counterfeits. We've seen a lot of issues with shortages and the government is taking a step to ensure that this does not happen again, which means that the suppliers are going to be entering into a new regulatory scheme in order to help the government identify any shortages in their supply chains, any information gaps that may exist, right? So if there are certain gaps in shipping, the government wants to know where is it that you're having trouble locating your resources or having difficulty. What I thought was interesting is when you are filing these regular reports with the government if you are a supplier, one of the things to point out is, look, we're having difficulty reaching the mandated supply because of regulatory issues. I find it ironic that the government is asking these suppliers to specifically say, look, we could produce more if you would get out of our way. So it's always something to keep in mind. But the CARES Act, again, is going a lot further than just us. They are trying to be ahead of the game to ensure that we're not in the situation we are today with our shortages of PPE, ventilators, and they're even taking it a step further in trying to make sure that there are going to be no drug shortages. An interesting thing is that the report on drug shortages is actually being sent to the administrators for Medicaid and Medicare. I just find that interesting because, well, a lot of us are not on Medicaid or Medicare and I, right now, I'm not too familiar with what is within their sphere of influence. But I would imagine it's rather substantial. So again, the quick bites for today are the government wants to make sure that the issues we're having today, locating essential medical supplies, never happens again. They're going to incentivize domestic production. I don't know what form that's taking yet, but if you're thinking about becoming a domestic supplier, you're going to find your applications are expedited and there will probably be some incentives to help you produce locally. However, the trade-off is you're going to be more heavily regulated than you were in the past. You're going to have to file regular reports with the government stating about your supply chain and if you intend to shut down or reduce supply for any reason, you're going to have to give the government 30 days notice. So I hope you found this useful. If not, I hope you at least found it enjoyable and see you next week.