Today in The NY Times a story that shows good government intentions thwarted by multibillion dollar corporations
The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed.
The stalled efforts to create a new class of cheap, easy-to-use ventilators highlight the perils of outsourcing projects with critical public-health implications to private companies; their focus on maximizing profits is not always consistent with the government’s goal of preparing for a future crisis.
Article tells how starting in 2006 the CDC saw the need to prepare for the next pandemic with among other things, more ventilators — assessing a shortage of 70,000. At that time ventilators were large, expensive, and complicated requiring significant training to operate. They set a goal of developing a small, portable, easy. to use, much less expensive device and stockpiling them for the. next crisis.
They requested bids in 2008 and let a contract to a small California based company Newport Medical Instruments for 6.1 million for upfront development of a $3,000 machine. All progressed well, and in 2011 they delivered 3 working prototypes to the CDC. The head of the CDC at the time got a demonstration of the ventilators and:
“I got all excited,” he said. “It was a multiyear effort that had resulted in something that was going to be really useful.”
But soon after that Newport was bought by a large medical device company Covidien (who among other things made traditional large expensive ventilators), and the project slowed and eventually stalled:
Newport applied in June 2012 for clearance from the Food and Drug Administration to market the device, but two former federal officials said Covidien had demanded additional funding and a higher sales price for the ventilators. The government gave the company an additional $1.4 million, a drop in the bucket for a company Covidien’s size.
Many of the Newport people working on the project were reassigned, or left the company, discouraged at the sidelining of the project. Then in 2014 Covidien asked to break the contract. Per the Times 3 former federal officials stated that Covidien executives complained that the contract was not sufficiently profitable.
Government officials and executives at rival ventilator companies said they suspected that Covidien had acquired Newport to prevent it from building a cheaper product that would undermine Covidien’s profits from its existing ventilator business.
So the government began over and let a new contract with the first deliveries of a modestly priced, portable, easier to use ventilator. The Trilogy Evo was approved by the FDA in July 2019, and the government ordered 10,000 scheduled for mid 2020 (too little and too late for the Covid19 pandemic).
Meanwhile after quashing Newport, in 2015 Covidien was sold to another medical device giant for $50 billion