Washington, D.C. -Today, Rep. Raja Krishnamoorthi, the Chairman of the Subcommittee on Economic and Consumer Policy, sent a letter requesting documents and information from Philips North America Corporation regarding its contract to produce low-cost, portable ventilators intended to be stockpiled by the federal government in the event of a pandemic, like the coronavirus crisis now ravaging the country.
Last September, the Department of Health and Human Services (HHS) entered into a contract with Respironics, Inc.-a subsidiary of Philips North America Corporation-to provide 10,000 ventilators to the Strategic National Stockpile by September 2022 at a cost of $3,280 each.
“When the coronavirus crisis hit at the beginning of this year, Respironics, Inc. did not expedite the delivery of ventilators under this contract," Krishnamoorthi wrote. “Instead, the company’s spokesman reported that it would not begin producing those ventilators until at least next year. In the meantime, Philips reportedly has been selling ventilators to foreign clients at much higher prices. Philips’ foreign sales reportedly are topping $17,000 per ventilator-more than five times the price it would have received for ventilators under the HHS contract."
On April 2, 2020, President Trump invoked the Defense Production Act (DPA) against Philips. However, the President did not use the DPA to force Philips to speed up the delivery of $3,820 ventilators under the existing HHS contract. Instead, the Administration struck a new deal to purchase 43,000 ventilators from Philips for more than $15,000 per ventilator-a deal worth approximately $646 million to Philips.
The low-cost model of the ventilator was developed with the assistance of HHS’s Biomedical Advanced Research and Development Authority (BARDA), and the Food and Drug Administration approved the design in July 2019. Experts believe it would be a “game changer" for hospitals confronting an influx of coronavirus patients because of its simple functionality and portability.
During a press conference last night at the White House, President Trump appeared to denigrate the more inexpensive, portable ventilators developed over the last decade with BARDA, approved by the FDA in 2019, and under contract with HHS since last September. Instead, he boasted about ordering more costly ventilators, stating: “These are high quality ventilators. We had a choice. We could do inexpensive, less productive ventilators, or high quality. We’ve done a high-quality ventilator."
