By Dan Wayman, Senior Director, Clinical Category Strategy and Becky Lowe, Category Lead, Intalere
Many counterfeit products are being offered in response to the demand generated by the COVID-19 epidemic. It is important to be diligent in reviewing the viability of the suppliers and their products to avoid unnecessary risk. In response to the number of inquires we’ve received regarding alternate sources for PPE, we’ve put together the following guidelines as a starting point for vetting the suppliers, distributors or resellers.
These guidelines are not meant to be all inclusive, but should be used as a starting point to vet potential suppliers and products. To put it most simply, the more information you can obtain the better. If the supplier is unwilling to provide the information or if the information seems off, use extreme caution.
This information below is primarily meant to evaluate gray market suppliers. Gray market would be any supplier that is not an authorized manufacturer, distributor or reseller of the original manufacturer’s product. The original manufacturer and their local rep will be able assist in determining if the supplier in question is an authorized supplier.
Terms of Sale
Review the supplier’s terms for things like warranties, indemnification, limitation of liability, return policy, and shipping and delivery terms. If warranties aren’t provided, indemnification only covers the seller. If liability falls on the buyer, returns are not allowed, or if delivery lead times cannot be provided, this is a red flag. Also be sure to ask who’s responsible for shipping and the associated charges. Once the product is received, how long do you have to inspect it for quality issues and how does that align with any payment triggers? What ability do you have to recoup funds and return faulty products?
Also, make sure to be clear on whether upfront payment is required? If yes, this is a red flag, especially if the terms listed above don’t protect the customer. Check also on where the payment actually goes. Does it go directly to the supplier or does a third party hold the funds? Please consider using a third party to escrow the funds during the transaction.
All these questions are intended to measure the risk associated with gray market suppliers. Having the right terms in place prior to committing to purchase will protect you if the product never delivers or if it’s of poor quality.
Manufacturer and Product Information
Start with fully understanding who the supplier is and how long they have been in business. Is selling PPE part of their normal business operations or are they moonlighting in this field?
The manufacturer may be different from the supplier offering the product to you. Being clear on where the product is being manufactured is critical. Certain countries are having more challenges with Coronavirus than others, which is limiting production capacity. Check to make sure the manufacturer/product or product type is listed on the CDC or FDA website. Ask for certification numbers and performance testing documents. Be aware the FDA does not issue certificates of registration, so if you see one, it’s something they created on their own.
Below are some questions to make sure to ask or clarify in the manufacturer and product area:
- Where is the product and who owns it? (The seller many times acts as a broker.)
- Who is responsible for shipping it?
- Who holds on to the funds? How long have they been in business?
- If product is in storage, is it expired?
- What are the storage conditions?
- Can a picture of the inventory be provided?
Ask the supplier/distributor for a sample of the product. If they’re claiming to have a known manufacturer’s branded product, identify if they are an authorized distributor or reseller for that manufacturer by calling their customer service or asking your local rep.
The CDC and FDA have several resources to assist you in vetting suppliers in products as well:
- Check the CDC and FDA websites to see if the supplier’s products are listed as approved. Use the “K” followed by 6-digit number (Kxxxxxx). Note: An FDA owner number is a submission number, not the clearance approval.
- This web page provides a table of NIOSH-approved N95 respirators, listed alphabetically by manufacturer. This information can also be accessed here. (Quick Search tab >> Search TC number).
- This CDC resource identifies counterfeit respirators. This is not a comprehensive list, but it does list what they’re aware of so far.
- Current FDA listing of Emergency Use Authorizations (EUA).
- CDC N95 Crisis/Alternate Strategies (Lists global performance standards).
Intalere members can also review additional resources and updates on our Member Resources website.
While times of crisis can often bring out the best in people and heighten our want and need to help, it can also be a chance for unscrupulous opportunists to take advantage of that better nature. Remaining vigilant, asking the right questions and consulting the proper resources, the supply chain community can protect ourselves and our customers and make sure we are proving the best service and products in a correct and timely manner.