No Sign of Supply Train Getting Back on Track Soon
Stanley Bergman, CEO of Henry Schein, speaks with Felice Friedson about anticipated shortages of regulated, high-quality medical masks, while stressing the importance of wearing them
Stanley Bergman, the CEO of Henry Schein, one of the largest providers of products and related services to office-based health care providers, was interviewed by Felice Friedson for the Coronavirus Unmasked podcast. Bergman talks about COVID-19’s impact on dental protocols, addresses concerns in the supply chain and explains the need for more global cooperation in the form of public-private partnerships. He expresses fear about a deadly virus that affects all economic sectors, noting that half of Henry Schein’s employees were furloughed during the pandemic. A transcript of the interview follows.
The Media Line: From South Africa to New York, Stanley Bergman worked his way up the rungs of Henry Schein, one of the largest providers of products and related services to office-based health care providers, both medical and dental. How has coronavirus changed your modus operandi?
Stanley Bergman: What has changed really in the world from a products point of view, from the Henry Schein point of view, is right now what’s called “PPE,” products that are used to prevent the spread of the virus have become key to office-space practitioners. First of all, understanding what products are needed has become far more complex and it’s been an area of great debate and discussion within health care professions as well as with organizations such as the CDC and the World Health Organization. The second, there’s been a shortage of these products, regulated products, high-quality products, but there’s a ton of products available. The world is awash in products that are not qualified by regulatory authorities and don’t meet the quality test, so, what has really changed is the need for the product and availability of product. That’s been key as our customers, many of whom have been out of business for a while start returning to work.
TML: I’m glad you brought that up. In particular, the N95 and KN95 masks used in hospitals are in high demand and as you said, lacking. What can you share about the shortage beyond that, both for the citizen, the average person who needs one and the timeline of production?
SB: Yes, Felice. I think we need to recognize that the number one priority, bar none, is to get N95s or equivalent KN95s to frontline health care professionals and then to health care professionals that are not necessarily on the front lines but are important and taking care of people outside of acute care settings. So, this shortage of these products, and it is best to channel these to the health care providers, versus the public. The public certainly needs to wear a mask, but there are other solutions, also in short supply, but what is really important is that the world’s availability of high-quality, regulated masks is reserved at the moment for health care practitioner in a priority sequence depending on the role that the health care practitioner provides. There is going to be a shortage of N95s and KN95s that are regulated and high quality for a while, probably over a year.
TML: It’s a long time. Do you see anyone else coming into the market to try to fill that gap?
SB: Well, there are a lot of players that have come into the market and of course the leading provider is 3M. There are important Chinese manufacturers. In the United States, Honeywell has entered the market and there are players that have influenced the market. The key is each country has to determine what its regulatory needs are and has to enforce those needs. And second, those who distribute these products, need to ensure that the quality is there. This is going to take a while to sort out. So, there are plenty of new players in the market but we need to ensure that the product is safe.
TML: In February, Henry Schein announced plans to provide millions of COVID-19 test kits within two months. Are you on track and is there a priority list on testing?
SB: So, testing is a very complex area. We are an important provider of testing products, not only related to COVID-19, but tests in general, for office space practitioners. That’s physicians in their offices. And generally, the tests we offer are machine tests that use reagents or what’s called quick tests; snap tests. What we announced was that we would be offering an antibody test specifically a quick test and that test we were hoping would be approved for physicians to use in a pinprick form. The test is approved in a number of countries outside the United States, but the US FDA has not yet approved the pinprick use of that test, which we hope will be achieved relatively soon. But Henry Schein is not a key player in the general laboratory tests for the PCR, which is a molecular test which is used to diagnose. The antibody test which is used in conjunction with the PCR test to help the practitioner make certain decisions about whether the patient can go back to work or not. But the basic PCR test [used] generally today is only available at least in the US using a device in one form or another and a reagent that goes with it in a swab. We are distributing those, but we are not a significant player. The big players in that field are the big laboratory companies.
TML: Your company is the leading pharmaceutical supply company in dental care and the only global distributor to dental practitioners and labs. You can’t get much closer to a patient’s mouth than the dental chair. How do you protect the dentists through your practice recovery program and patients who they treat from the spread of COVID-19?
SB: Felice, this is a problem we’ve tackled once before in the late eighties, middle eighties once it was alleged for the first time that a dentist contracted HIV and AIDS from a patient. We came out with a manual which kind of sterilizes if your life depends on it identifying the appropriate product that dentists needed to protect themselves and their patients. We are working on such a program today. It’s complex because COVID-19 is very short from a knowledge point of view, from a science and public health point of view. The disease, the infection, in the West certainly is a disease that is only less than 90 days of age so we are working on finding the right programs for them. In this particular case, it’s not only the infection per se that is transferred as it was with HIV/AIDS from blood for example in that instance, but now it relates to the spreading of the disease through saliva, through aerosols as a result of using the drill in the office. So, there are protocols that the CDC has approved, that the World Health Organization has worked on, and others relating to using an N95 mask, a 3M KN95 mask, which is a face mask, a surgical mask, similar to a KN95 together with the face shield. These are programs and these products that can be used and are believed to be fine for a dentist or dental hygienist, but it’s not 100% certain yet as to how perfect these products are. They may never be perfect, but at the moment, this is all that we know. And I believe that dental professionals around the world are comfortable treating patients with these devices. Of course, what is important is to wear a mask and to wear gloves and to have infection-control procedures around the equipment in the office giving a solution. And at the same time, you use the aerosol systems that are now available. We believe, and so does the CDC (go to their website), that this is enough action, at this time, given the knowledge of the science, to protect patients when they go into the dentist’s office. And of course, protect the dentists, hygienists and the office.
TML: Henry Schein until recently was in the pet care market. Is there a concern of the spread of the coronavirus through pets?
SB: Oh, that’s not my area of expertise. We spun off our veterinary business about a year and change ago, but there’s plenty written on this and the best way for the public to understand whether the coronavirus has spread through animals or not, is to take a look. Go to the internet and take a look at the literature that’s been published.
TML: Stanley, what advice do you have to a public which is getting mixed messages on the vehicles which spread the virus?
SB: On the vehicles? I’m not a public health practitioner nor a physician, but one thing we know is social distancing is critical and in particular we need to understand, yes, there are age categories and certain high-risk people, but there are young people that are healthy that have passed away, so we have to be very, very careful. And my advice is social distancing is critical and we just got to take care of that. I believe that physicians can help you with this; public health people can help you with this [to] understand the issues, but I believe sometimes political influence is not appropriate and politicians should rely on health care professionals to provide advice in this area.
TML: You are listening to Corona Unmasked hosted by Felice Friedson. Joining me today is Stanley Bergman, CEO of Henry Schein. Speaking about politicians, what kind of cooperation do you have with the administration?
SB: Well, we are in a number of countries and we’ve worked well with government officials in all the countries that we’re in. I cannot at this point pass judgment as to whether government officials in a particular country did a good job or didn’t. What I can tell you is the work that I’m personally involved with and that’s FEMA. And FEMA is run by highly professional individuals, very capable and they have done a good job. Having said that, I would not want to pass judgment at this stage on how the whole supply chain is managed by different countries around the world since February. It’s far too soon and the history books will have to be written.
TML: Are companies like yours that are providing products and related services banding together to create worldwide distribution chains of tests and vaccines as they become available?
SB: Well, I don’t think the global public-private partnerships that are needed of putting in place. Henry Schein has been talking about the concern with respect to supply chain for PPE and specifically gloves and masks for over 20 years and we have been particularly advocating using the platform of the World Economic Forum. And through that platform, in 2015 we formed a loose but I think cohesive group, [a] public-private partnership known as the Pandemic Supply Chain Network, which is a group that works on harmonizing global supply chains in accordance with health products, PPE products, global supply chain, in coordination with the World Health Organization, the World Bank, a number of other entities including the World Food Program, which is the logistics arm for the UN. And we have now received very good data, actually since 2019 from the World Health Organization on the kinds of products that are needed. So, this group meets and the theory behind it all was the time to get together on a global supply chain for health care products and exchange business cards is way before an emergency occurs. And I think we have done some good work in that regard. And Dr. Ted Ross has recognized that and Dr. Jeremy Farrar, of the Wellcome Trust, has understood that, and I think it’s very, very important on the supply chain side, we have these global public-private partnerships. There are well-defined public-private partnerships in the discovery of vaccines and the delivery of vaccines. You’ve got CEPI [Coalition for Epidemic Preparedness Innovations]. You’ve got Gavi [the Vaccine Alliance] and you have a number of other programs that work on a global basis, but we need much more global public-private partnership collaboration on PPE.
TML: You speak about the supply chain and there’s been disruption. What is the point that has the worst problem? Is it the production of product? Is it the transfer of product? Where do you see the jam?
SB: Obviously, the first is in the production of product and I would say the biggest challenge is in mass, but the second is harmonization on global flow, from a regulatory point of view, on products. There are regulations to export products in certain countries that are just not clear and are not uniformly enforced by customs officials on the exporting side. There have been countries that have restricted movement of products and then there are countries are not clear on importation and regulation relative to the sale of products in a particular country. All of this is an issue, especially when governments change their minds through their regulatory agencies on short notice. So, the bottom line is yes, there’s a production issue, but second is a regulatory issue and a movement of products around the world issue and related to regulatory [practices]. This is, I would say, the biggest challenge. [inaudible] that what is a safe product? Who regulates it? Who allows it to be? Who allows it to be received in a particular country? These are the big issues that need to be worked through.
TML: Stanley, under your helm, investors have had a 1,400% return on investment, I believe even beyond that in 2019. What have been the losses and gains both in terms of product production and finances for your company during COVID-19?
SB: I’m not sure you have the rate right but our investors have done OK since we’ve been public 25 years ago. But when we bought realizing there was an issue, and by the way we became first concerned in early February when we attended the World Economic Forum and there was a press conference specifically on the virus and I for one and many executives in my company believe that viruses cannot be contained with passports and visas. Viruses jump over borders, regardless of what happens at immigration. So when things like this happen we have to respond very quickly on a global basis. What did Henry Schein do? We immediately planned three things. One is focused on three areas, shall we say. First, we ensured that our team and the families of our team be safe. The second area that we focused significantly on, even before I believe the world even recognized this issue, the COVID-19 issue, is what we would do to help our customers and health care practitioners. And we work with about a million-and-a-half health care practitioners around the world. What will we do to help them deal with the challenges that they’re experiencing in the workplace whether it’s working for a larger entity or in a practitioner’s own practice? How would we help them deal with the issues they would be facing as potentially practices would have to shut down and what would we do to help these practitioners re-engage once it became safe? And the third area to deal with is finance. We needed to ensure that we had enough capital to get through a sustained period of the virus, our customers re-emerging, and potentially a rebound of the virus. So, we had to make drastic decisions, like many companies around the world, to reduce our payroll costs. We had to furlough a lot of people. Fortunately, in many countries there is government support. Some programs were better than others. But we had to furlough well over half of our people in one way or another, including reducing compensation and in some ways touching payroll costs in one way or another. At the same time, we had to reduce all our expenses. We think we can do that. Stop all capital expenditure and also stop repurchase of stock of a company which in a way should turn the cash over to our shareholders and to preserve the cash. We always had a pretty good balance sheet and we just needed to strengthen that balance sheet relative to the challenges that we thought we would face. That’s what we did in response to the virus. When we first became aware of potential concern, I guess was in the beginning of February.
TML: Stanley, you recently penned a commencement address to graduates of medicine and dentistry saying that they will move from the classroom to the front lines of COVID-19 and advised to think big. What changes need to be made in 2020 and how the world works together in fighting super viruses?
SB: Well, practitioners in dentistry need to understand, young and old, that oral care is really important for the continuum of health care. It’s not about cosmetics only. Yes, there is [that], but we know that there’s a direct correlation between good oral care and good health care – whether it’s pulmonary, cardiac, diabetes, or even Alzheimer’s, there are now studies showing that. Well, practitioners need to understand, and I think they, the important role they play. And then practitioners need to be active in the community they’re in to make sure that decision-makers, whether it’s business or government, understand the direct correlation between good oral care and good health. So, I’m optimistic about the role of dentists in the health care continuum, but dentists can’t rely on others to advocate for them. It will be others that could advocate for him, but they need to be key advocates themselves. And I would say that this is a place where office space practitioners in general, office space practitioners play a key role. We know that it makes much more sense to take care of a patient, when one can, outside of a hospital, in the ultimate care setting, whether it’s a doctor or a dentist’s office or the surgery center. It is much more effective and much healthier from an infection control point of view. These are the areas that we focus [on] by the practitioner and advocate for the practitioner and will be very, very important for the future. I’m very optimistic about the ultimate care setting or health care as wellness and prevention become much more important than the health care dollars point of view then actually curing people’s sicknesses when they’re sick.
TML: Before I let you go, it took one person to infest our world. What is your greatest concern as a humanitarian, having advised countries around the world who lack the resources to control this virus?
SB: I’m very, very concerned with the economic divide, that there’s going to be products available to fight the virus for people that have economic sway, versus those that don’t, and I think everyone needs to understand that this virus is not going to be contained or limited to any one group in society. It’s going to spread and it is likely this is not the last virus that we’re going to see. How we all come together to fight these viruses is important and we can’t have one country, one group of people within a country feel that if they take care of themselves, they will be protected. It will not work. We’re going to have to take care of the world and all citizens and every country will have to be treated equally from a prevention point of view. That’s my biggest concern. The world is now fully understanding what I’ve just said.
TML: On that note, Stanley Bergman, CEO of Henry Schein, an honor to have you with us today. You are listening to Coronavirus Unmasked. For the trusted Mideast source, go to themedialine.org. We will uncover the story. Stay informed. Stay safe.