Australia rejected huge offers for medical supplies


In some cases, Health Minister Greg Hunt has personally involved himself in negotiations to ensure the government was getting value for money.

Mr Hunt said the Australian government’s strategy from the beginning of the outbreak was to offer long-term deals, not big one-off deals at inflated prices.

“While early on there were attempts to sell masks at inflated prices, they were rejected,” Mr Hunt said.

“What we offered and were able to secure was longer-term contracts for volume and time, not one-off inflated purchases.”

In February, two teams were set up within the departments of health and industry to coordinate the national response to procuring supplies. They were charged with negotiating with major producers overseas and ramping up local production.

Mr Hunt said he, Chief Medical Officer Brendan Murphy and Prime Minister Scott Morrison went for a policy of “containment and capacity”.

“This was tested, refined and endorsed through a rigorous National Security Committee process,” Mr Hunt said.

“We foresaw a great global rush for test kits and locked in our supply lines early. We also established procurement teams for masks, test kits and ventilators.”

In other instances, high-level diplomacy has been needed behind the scenes on deals that, on the surface, looked like commercial agreements.

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In April, Australia reached a deal with Taiwan to send 1 million litres of alcohol to make sanitiser and vaccines in exchange for three tonnes of material to make face masks.

The strategy to only focus on long-term deals has been credited with this week’s decision to resume up to 25 per cent of elective surgery from Monday, weeks before any of the government’s top health advisers expected.

While the Australian government has not raised any issues with receiving faulty equipment, defective testing kits from China have been reported by governments in Britain, Spain, Turkey and the Netherlands.

The desperation for supplies became so intense that Britain decided to accept a risky “take-it-or-leave-it” offer from two Chinese companies for two million home test kits for at least $20 million, which were later found to be faulty. In the United States a cheque worth $5.6 million for 1.5 million masks from a Chinese middleman was reportedly handed over in a McDonald’s car park in Illinois.

In the private sector, the combination of travel bans and sky-rocketing demand sent prices for masks through the roof. In some pharmacies across NSW and Victoria, the cost of a single N95 mask jumped from $1.30 to $38.50 – a 1500 per cent increase that has been referred to the Australian Competition and Consumer Commission.

Chemist Warehouse chief operating officer Mario Tascone said there had been a “lot of sharks” in the market.

“I can see where other people can get into trouble out there,” Mr Tascone said.

Australian Medical Association president Tony Bartone said there had been “massive competitive pressure put on dwindling amounts of production around the world”.

“I have colleagues overseas who have either fallen ill or lost their lives to COVID-19,” he said.

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