McLaren Health Care announced that it has partnered with Premier, Inc., a leading health care improvement company, to acquire a minority stake in Prestige Ameritech, the largest domestic manufacturer of PPE products, including N95 respirators and surgical masks. In addition to the equity investment, McLaren will purchase at least 15 percent of all respirators and masks they use annually from Prestige Ameritech at competitive prices for a minimum three-year term. After three years, contracts will be reviewed and renegotiated by Premier to ensure market-competitive prices. McLaren will have the option to renew its contract for an additional three-year term.
McLaren said PPE products critical for the daily operations of health systems are overwhelmingly sourced overseas, with about 80 percent coming from China and Southeast Asia. The risks of this overreliance on Asia came into sharp focus as COVID-19 swept across the globe and these nations closed borders and prevented U.S. access to supplies, triggering widespread shortages of PPE needed to protect health care workers and patients. In contrast, Prestige Ameritech provides a domestic supply chain, with production in the United States. Prestige also sells 100 percent of its products to U.S. customers.
“Overreliance on foreign manufacturers is a key reason why we’ve had such pervasive shortages of PPE during the COVID-19 pandemic,” said David Bueby, Vice President – Supply Chain for McLaren. “With this long-term agreement, McLaren is breaking that cycle to fund domestic alternatives. Not only does this create more diversity in the overall supply chain, but it also helps ensure that our workforce has the supplies they need to stay safe, healthy and able to provide quality care for the patients that count on us.”
“As COVID-19 proves, the United States is almost completely at the mercy of foreign nations for vital supplies,” said Dan Reese, Prestige Ameritech co-founder and CEO. “Diverse and on-shore manufacturing of critical health care products is clearly a national security issue. With this agreement, we have long-term, multi-year commitments that give us certainty and allow us to dedicate our resources to increase production. Not only does that help us today with COVID-19, but long-term commitments also create economies of scale for when we return to business as usual.”
“McLaren is a true innovator, as they are the first to step up and commit to funding the long-term domestic manufacturing of health care products,” said Premier, Inc. President Michael J. Alkire. “This agreement and the added domestic supply it enables would not be possible without McLaren’s commitment. McLaren deserves recognition for their leadership and for their work to bring manufacturing back home to America.”
The financial terms of the agreement were not disclosed.