MEXICO - 2021/01/21: People wearing face masks wait in a line to refill their oxygen tanks.
The country faces a shortage of oxygen tanks and a fourfold rise in prices as cases of Covid-19 increase.
People line up to buy oxygen for their relatives infected with the coronavirus disease (COVID-19), to help them breath during the illness. (Photo by Guillermo Diaz/SOPA Images/LightRocket via Getty Images)
Building an oxygen plant seemed the obvious choice.
Benjamin Espinoza Zavala, an administrator in Guanajuato, Mexico, had seen an entire floor of his small hospital converted into Covid-19 wards when the pandemic began in March 2020. “We saw good things and bad things,” he said. “It was beautiful when doctors won the battle, but there were many patients who lost.”
The hospital’s need for oxygen skyrocketed and occasionally deliveries from CryoInfra, one of Mexico’s main medical oxygen suppliers and part of Grupo Infra, slowed to once every couple of days, Espinoza said. He had to buy in more than needed to cover sudden gaps in supply. And Grupo Infra prices kept rising.
Espinoza needed a solution. So in January this year, the hospital built an onsite oxygen generator plant at a cost of 3.5-million pesos (about R2.7-million). It could supply the entire hospital, and has already paid for itself in savings.
But Grupo Infra noticed that orders had fallen. “Top executives, directors, administrators, doctors came here to the hospital to see the plant,” Espinoza said. “The administrators that visited were very kind, polite. We were on good terms.”
Then, in June, the lawyers came.
The Bureau of Investigative Journalism can reveal that, amid devastating shortages, Mexico’s two main suppliers of liquid oxygen have been accused of spreading fear, doubt and misinformation about onsite oxygen plants, deterring hospitals from switching to cheaper and more convenient supplies, with the effect of protecting their own profits in the process.
Both companies falsely claimed that onsite oxygen plants could kill patients.
Grupo Infra and Praxair Mexico — who together control 70% of the country’s oxygen market — also sent letters to at least five other Mexican hospitals that contained misleading information about onsite oxygen generator plants. After reading Grupo Infra’s letter, some hospitals in Mexico cancelled plans to build such plants, which are used safely in more than 100 countries. At least one hospital has been threatened with legal action and financial penalties for breach of contract for trying to provide oxygen for patients.
An ex-employee of Praxair Mexico — owned by Linde, one of the world’s biggest industrial gas companies — told the Bureau that in their experience it was common for employees to spread misinformation about onsite oxygen plants to doctors and hospital managers.
“This seems to be the playbook for some big gas companies,” said Leith Greenslade, co-ordinator of the Every Breath Counts Coalition. “When countries introduce oxygen generator plants, liquid gas profits fall. So they have a strong incentive to restrict access by exploiting lack of awareness about oxygen purity specifications among hospitals and health ministries to maintain their market share.”
“It’s in the best interest of patients worldwide to have access to oxygen from any source,” said Adrian Gelb, president of the World Federation of Societies of Anaesthesiologists. “Anybody lobbying harder in the other direction likely has commercial interests, or a gross misunderstanding of the science and data that exists in this area.”
Grupo Infra said its actions were justified and told the Bureau it stands by everything it said in the letter. It added that the company has made “large donations to public hospitals and launched aid programs giving free oxygen in various locations around the country” during the Covid crisis.
Wave after wave
At least 246 000 people have died from Covid-19 in Mexico, the world’s fourth-highest national death toll. Researchers believe the true figure could be nearly three times as high, as many people die at home without being tested for the virus, and overall testing numbers are low.
Oxygen is one of the main treatments for Covid-19, and demand in the country has soared since the pandemic began. In December 2020, a wave of cases in Mexico City overwhelmed hospitals and caused shortages. The government resorted to sending the national guard to protect oxygen delivery trucks and ordered gas producers to prioritise medical oxygen.
Oxygen suppliers had their own priorities. In Mexico’s northern states, customers of Grupo Infra and Praxair were sent letters informing them that the companies needed to send medical oxygen to their US clients before they could continue supplying their Mexican customers. Prices of oxygen cylinders, refills and concentrators sold to patients at home more than tripled. A black market emerged, including many scammers.
Most hospitals in Mexico rely on liquid or cylinder oxygen from Praxair Mexico or Grupo Infra, which is partly owned by US giant Air Products. Both own cryogenic plants, freezing air to separate oxygen from nitrogen and produce liquid oxygen at a concentration of 99.5%. The liquid oxygen is then trucked either in bulk in special tanks or in smaller volumes as pressurised gas in cylinders, as some hospitals lack the infrastructure to use liquid tanks. Cylinders are also sold over the counter to patients through the company’s distributors.
To help meet the increased demand for oxygen across the globe, agencies including the World Health Organisation (WHO), Unicef and the World Bank are helping hospitals in low- and middle-income countries build onsite oxygen plants, which produce 93% oxygen from air.
Grupo Infra told the Bureau that “there was no [oxygen] shortage at any time”. Praxair did not respond to the Bureau’s request for comment. Experts say that a lack of oxygen has significantly contributed to the death count.
In Guanajuato, Grupo Infra’s lawyers said Espinoza’s hospital had breached its contract by installing the plant. An exclusivity clause meant the hospital could buy its oxygen only from Grupo Infra.
Espinoza checked the contract and was shocked. Although it had originally been signed in 2015, it contained a clause automatically renewing it every five years. “It caught us off guard,” he said. Contracts that automatically renew for more than one year have been banned by the Mexican competition authority for industrial oxygen – but not for medical oxygen. Grupo Infra said: “Automatic renewal in medical oxygen is very important to ensure the supply of a key element to preserve human life.” The company added that it needed to include these clauses to protect its investments.
Espinoza said there was also a hefty penalty. “If we stopped buying from them, we faced a fine of 1 300 000 pesos (about R978 000).” He objected, arguing that the hospital had never stopped buying the company’s oxygen, only reduced its order. “The contract doesn’t say anything about the amount we are obligated to buy,” he said. Grupo Infra later wrote to him increasing the penalty to more than 10 000 000 pesos (about R8.4-million). He has been negotiating with Grupo Infra since June, but no agreement has been reached.
Espinoza said the legal threat proved more stressful than anything else the pandemic had thrown up. “This situation with Grupo Infra worried me more than the drugs we ran out of, because the fine was very large,” he said. Grupo Infra told the Bureau it was “not aware of any legal action taken against any hospital” for attempting to install onsite oxygen plants.
Like Espinoza, Dr Marta Hernández Vázquez*, the director of a private hospital in Michoacán, was growing tired of being reliant on Grupo Infra. Her facility treated many patients with respiratory issues (although not Covid patients, who were referred elsewhere), and she needed up to 40 cylinders a month, costing 30 000 pesos (about R21 000).
She thought an onsite oxygen generator seemed like a good solution. A plant was installed at her hospital in October 2020 and, according to Hernández, made the oxygen supply much more convenient and affordable. She now needed fewer cylinders a month from Grupo Infra.
On 6 October that year, she received a letter from Grupo Infra’s lawyer. She had heard about similar letters from colleagues at other hospitals. Now, it seemed, was her turn.
Illustration: Victor Bizar Gómez for the Bureau of Investigative Journalism
Sending a message
The letter, printed on paper with the Grupo Infra logo, runs over nine pages. It is packed full of technical terms, numbers and tables. The final page, full of mind-boggling combinations of bold, italic and underlined text, warned that the company would take away its oxygen cylinders if the hospitals used them at the same time as using oxygen from its new plant.
Contained within the engineering jargon and technical minutiae, Hernández realised, were serious warnings about the plants. For example, claims that onsite generator plants — rather than providing life-saving oxygen — “put human life at risk”.
The letter claimed that these plants, also known as Pressure Swing Adsorption or PSA plants, did not comply with Mexican regulations, that they produced lower-quality oxygen than Grupo Infra, that they could potentially release pollution and even cause infections, fires and explosions.
Hernández sent the letter to Ignacio Andrade, a biomedical engineer at HCPromedical, who imported the plant from the US. “You know, the first time I read it, I said ‘I don’t want to sell these [plants] anymore, because if they’re telling the truth, we’re gonna kill some people’,” Andrade told the Bureau.
He followed up, contacting AirSep, the US manufacturer of the plants. It assured him that the letter’s arguments did not reflect the truth.
The Bureau asked doctors, NGOs and PSA plant manufacturers to review the key points in the letter and they agreed some of the arguments were either false or deeply misleading.
In the opinion of Jim Stunkel, vice president of Assist International, an NGO building plants worldwide: “I can easily say it appears obvious that the points of the letter are intended to block the implementation of PSA plants.”
Illustration: Victor Bizar Gómez for the Bureau of Investigative Journalism
What the letter claimed
Some of the most egregious claims made in the letters include:
1. “According to international law” these plants “can only be used in rural and remote communities and in mobile medical units used in warzones”.
When the Bureau asked Grupo Infra for proof of this, it referred us to the Mexican Pharmacopeia, the official document that regulates drugs and their use in Mexico, which makes no such statement.
“There is no international law restricting PSA plants to these settings,” Dr Hamish Graham, a consultant paediatrician who researches improving oxygen access, said. “There is clear WHO and Unicef guidance regarding the role of PSA plants as a central component of hospital oxygen systems globally.”
2. Oxygen of 93% concentration from onsite generator plants should not be used in hospitals
The Mexican Pharmacopeia allows 93% oxygen to be used as medical oxygen, but prohibits its use in various situations, including in anaesthesia and through ventilators. Grupo Infra used this limitation to argue in the letter that 93% oxygen should not be used in hospitals at all. The company now accepts that PSA equipment is suitable for hospitals located in hard-to-reach areas.
However, hospitalised Covid-19 patients typically receive oxygen through masks and nasal cannulas, a plastic tube with two prongs in the nostrils, allowing oxygen from plants to be used to treat most patients within Mexican regulations. The WHO is in the process of clarifying the International Pharmacopeia to make it clear that both 93% oxygen and 99.5% oxygen are safe to use. It has also recently updated its website guidance to support use of 93% oxygen from PSA plants.
3. That 93% and 99.5% oxygen are two different products
The letter perpetuates the misunderstanding that 93% and 99.5% oxygen are “different gas qualities” and two different products, stating that they should be distributed through separate pipelines.
Medical oxygen is mixed with ambient air before being given to the patient and it is not the purity of the supplemental oxygen that matters, but the concentration that reaches the patient’s lungs. The same concentration can be achieved with either 93% or 99.5% oxygen.
Doctors told the Bureau both oxygen concentrations are the same and used for the same purposes. They said it had been common for some gas companies to spread the idea that 99.5% oxygen from cryogenic gas plants is somehow better than 93% oxygen, when in reality there is no difference in quality between the two.
4. Oxygen plants put lives at risk
The letter said the plant “puts human life at risk” and if the hospital used the generator and Infra’s cylinders at the same time, the company would be forced to remove its equipment and stop supplying oxygen.
“What will put human life at risk is if a compressed gas supplier were to abruptly ‘take away its equipment’ from a hospital in the midst of a pandemic,” said Dr Paul Sonenthal of Partners In Health, an NGO which is working to increase medical oxygen supply.
Grupo Infra says it is obligated to take away its equipment if there is another source of oxygen within the hospital network
5. Argon emitted with the oxygen can cause health risks for patients
PSA plants emit argon alongside the oxygen created, and Grupo Infra suggested this could cause health problems, including referring to a study describing the effects of argon when used to inflate a pig’s abdomen for keyhole surgery, a completely different exposure than inhalation.
“My guess is that they just looked up bad effects of argon medically, and found this thing about what happens with argon when you fill up someone’s abdomen,” said Dr Sonenthal. When the Bureau asked Grupo Infra to explain why it had included the information, it simply referred back to the irrelevant study.
Doctors said argon is an inert gas and has no significant health risks.
6. Plants can cause fires and explosions
Experts said these were all risks that were not specific to PSA plants and that they could all be mitigated. In fact, they said the risk of explosion from storing and transporting liquid oxygen was much higher. Grupo Infra said it has a “very well-known reputation for its high safety standards”.
7. Plants can cause infections in patients
Grupo Infra claimed pollutants could become trapped in part of the plant, leading to hospital-acquired infections. Doctors told the Bureau that routine hospital sanitation procedures can mitigate infections from all medical equipment, and there is no evidence oxygen plants increase the risk. “The main risks for hospital-acquired infections are staff–patient interactions at the bedside,” Dr Graham said.
“When faced with the choice between a partial supply of 99.5% oxygen or an adequate supply of 93% oxygen, I would choose 93% oxygen every time,” Dr Sonenthal said. “Increasing availability of 93% oxygen worldwide has the potential to save countless lives.”
Dr Hernández, who received the letter from Grupo Infra, was unruffled and continued to use the oxygen generator plant. “It is an unfounded letter that was nothing more to pressure me or scare me,” she said. “We are very happy with the results [of the plant]. It is a comfort that we generate oxygen here.”
Andrade said at least five of his other hospital clients received the same letter and he understands that some were frightened enough to pull out of installing the plants. “If you don’t know a lot about this issue and you received this letter, believe me that you’re going to be scared,” he said. “You won’t want anything to do with PSA plants even though you don’t have liquid oxygen.”
Greenslade worries other hospitals and health ministries may have the same reaction. “To receive a long letter filled with legal jargon, serious medical claims, and highly technical engineering and infrastructure terms is meant to bamboozle the reader into submission,” she believes: “In this case, ‘don’t choose any alternative but our oxygen solution’. And it looks like it has an effect in many places, because we still hear hospital officials and government officials and health ministry officials saying, ‘99% oxygen is really the best, it’s the only option, that only safe option’ — which is not true.”
Praxair Mexico sent a letter making similar false and misleading claims to at least one Mexican hospital. It said that using oxygen from an onsite plant was in violation of the hospital’s contract with Praxair. It added the hospital was breaking the law by using an onsite oxygen plant and, if it continued, Praxair would stop supplying its oxygen to the hospital.
It even said that oxygen from onsite generator plants could aggravate respiratory conditions and cause “the potential death of the patient”.
An ex-employee of Praxair, who worked there for over a decade before moving to a competitor, alleged to the Bureau that this claim was also made verbally to customers. “When I was in that company, we said to the physicians or to the health sector: ‘Now, if you don’t use the 99.5% [oxygen] your patients could die.’ When you repeat this lie many, many times it converts to a truth.”
They claimed that this was “a common practice” and they used to repeat the same message to universities and in other public forums. “Schools of medicine even started to repeat what we say.”
They suggested Praxair and Grupo Infra had such a big market share and little competition in Mexico that they could charge high prices, and Praxair had a profit margin of nearly 40% on medical oxygen. “If you want to charge very high prices in a hospital, you can do it without any problem,” they said.
Praxair’s owner, Linde, operates in more than 100 countries and its other subsidiaries include British Oxygen Company and Afrox. Praxair did not respond to the Bureau’s request for comment.
The Every Breath Counts coalition is now writing to hospital associations and government officials in Mexico to clarify that generator plants and the oxygen they produce is safe. “There’s no one-size-fits-all solution,” Greenslade said. “For hospitals, they can choose liquid oxygen, they can choose PSA plants. And they can have oxygen concentrators, the little mobile units. It’s very important that hospitals have options and choices during a period of oxygen shortages, which we’re in right now.
“We have a massive underserved market at the moment; we need many more players in the mix, providing solutions. People are dying every day across Africa, Asia and Latin America because they can’t get medical oxygen,” she continued.
“So now is the time to be increasing supply and the number of companies who are providing it, not restricting it. This is the part that makes many of us working in oxygen and particularly the doctors and health professionals furious.”
Mexico’s cases have more than doubled in the past month, and so has its need for oxygen. It now needs more than 100 000 cylinders a day just for Covid-19 patients.
in Guanajuato, Benjamin Espinoza Zavala, does not regret installing the oxygen plant, even despite the fallout, and would advise others to do the same. “The pandemic came and changed the ballgame for everyone when it comes to costs.”
On 13 August 2020, Canacintra, an industry group for Mexico’s industrial sector, recognised Grupo Infra with an award for “solidarity and commitment” in “timely medical oxygen care in hospitals and home services” during the pandemic.
“What they did to supply oxygen for everyone, we thank them. They are rewarded,” said Espinoza. “But that has nothing to do with costs.
“If you raise your cost and you get enrichment from that, well, that is good for your business. But it does not mean that you should deny people the opportunity to be self-sufficient and generate their own oxygen. They are two totally different things.”
Additional reporting by Rosa Furneaux
* Name has been changed
Illustration: Victor Bizar Gómez for the Bureau of Investigative Journalism
A history of bad behaviour
Grupo Infra and Praxair have a questionable history.
A previous investigation into both companies found they were engaging in anti-competitive behaviour. In 2014, Praxair Mexico and Grupo Infra were investigated by Mexico’s competition authority, Cofece, for monopolistic practices around sales of their industrial gases, including oxygen.
Cofece found the companies demanded complete exclusivity from the customer and automatically renewed contracts, which included forced terms and penalties for early termination. In 2018, the companies agreed to stop these activities in future and were required to hand over lists of their contracts to Cofece. In 2021, Praxair was fined 237,876,000 pesos (about R179-million) for not adhering to the conditions.
Some of these practices, banned in sales of industrial oxygen, are continuing on the medical side. Nor is this a problem confined to Mexico. Both companies have also been investigated and fined for anti-competitive activities in other parts of the world.
“Anti-competitive behaviour in any industry is a major problem. But in the oxygen industry, at this time, that kind of behaviour potentially increases the number of deaths from Covid-19. So it’s completely unacceptable,” said Leith Greenslade, coordinator of the Every Breath Counts Coalition.