The COVID-19 pandemic has magnified a problem that supply and logistics professionals such as E.V. Clarke and Scott Broussard say they have known for years: The supply chain for medical products can be put under enormous strain by disasters and other disruptive events.
The pandemic has led to shortages for essential products needed by hospitals and other healthcare providers, including basic protective gear such as masks, gloves, and medical gowns.
So Clarke and Broussard have developed a startup company — Health Products Xchange LLC — with the goal of bringing more resiliency and flexibility to the medical supply chain.
“COVID caused a tsunami of impacts — there was a wave of shortages,” said Clarke, whose career has included working in management for two medical supply companies and as a business strategy consultant.
Broussard, too, has years of experience in supply-chain and logistics management. Both of them worked in the past for Hanover County-based medical products distributor Owens & Minor Inc., and Clarke also worked for McKesson Corp.
Even before the COVID-19 outbreak, the medical-supply chain experienced periodic disruptions for particular products, Clarke and Broussard said. For instance, in 2018, Hurricane Maria hit Puerto Rico and shut down one of the only manufacturers for IV fluid bags, causing a shortage.
Henrico County-based Health Products Xchange has introduced a web-based platform called HPX Connect, designed to help health care providers, manufacturers, distributors and other companies in the industry better manage inventories and locate supplies.
“We are onboarding our team as well as pursuing customers now, because the platform is operational,” said Clarke, who serves as the company’s chief executive officer.
One of the key problems the company is tackling is a lack of visibility within the industry about where excess inventories might be available. HPXconnect.com operates as a type of online marketplace where products can be bought, sold, traded or donated.
“Whether you are a manufacturer, a distributor or a health care provider, we need to provide a mechanism for you to have visibility to move and trade supplies,” Clarke said.
Clarke and Broussard have worked for about two years to develop the platform, which recently became operational.
“This was something we recognized long before it manifested itself with COVID,” Clarke said.
One study by the consulting firm Navigant indicated that hospital chains bought about $25 billion worth of supplies in 2018 that were never consumed.
“The whole goal here is to maximize the consumption of medical products,” said Broussard, who serves as president and chief operating officer. “There is a lot of product that goes bad on the shelf. Our goal is to make sure that doesn’t happen.”
HPX Connect won’t operate like most other online marketplaces, though, because medical supplies need a much higher level of validation compared with other products such as consumer goods. Clarke and Broussard said the company has established a credentialing and validation process to make sure that products on the site meet requirements for medical use and have not expired or been recalled.
“Our secret sauce and what differentiates us is really the steps we have taken to provide validation around the supply chain,” Clarke said.
The company’s system enables it to do audits to make sure products can be traced through a chain of custody, and the company utilizes an FDA medical products database and a recall database to ensure the viability of products.
The site is open for hospitals, manufacturers and other firms in the industry to sign up as members. HPX makes money by charging referral fees for a percentage of sales, along with subscriptions for groups of healthcare providers who want to form private exchange networks.
HPX also has a dedicated relationship with FedEx for shipping products, though members can use other shipping options if they prefer.
The company is operating from an office in the Innsbrook Corporate Center in Henrico. In addition to Clarke and Broussard, it has three other partners with supply chain experience, and two advisors.