Imaging system manufacturer Royal Philips has signed a $646.7 million deal with Health and Human Services to produce tens of thousands of ventilators in the coming months.
The Amsterdam-based company said it plans to double production at its U.S. sites by May, with a four-fold increase expected by July. Such ventilators have been a crucial tool for treating patients with COVID-19, but quantities have become scarce during the pandemic.
“We are actively collaborating with the U.S. government to help save lives in the U.S. and across the globe,” Philips CEO Frans van Houten said in a statement. “There is an unprecedented global demand for medical equipment to help diagnose and treat patients with COVID-19. We welcome the support of the U.S. government in our efforts to aggressively increase the production of hospital ventilators.”
This is the second contract signed by HHS under the Defense Production Act this week. Officials announced a similar deal with General Motors on April 8, tasking the automaker with producing tens of thousands more ventilators as part of the $489 million agreement.
Under the Philips deal, the imaging manufacturer will deliver 2,500 ventilators to the Strategic National Stockpile next month, and 43,000 more by the end of 2020.
Philips said it’s investing “tens of millions” in U.S. factories to meet its commitments. The company added that it’s hoping to distribute its output evenly amongst countries across the globe hit hardest by the pandemic.
“The DPA is allowing the federal government to work with manufacturers, such as Philips, to accelerate production of ventilators and ensure that they go where they’re needed most,” Secretary Alex Azar said in a separate statement. “HHS will continue awarding contracts to companies for which it has invoked the DPA for ventilator production, while we explore every possible avenue to get life-saving supplies to the frontlines of this war on the virus.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.