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HHS Announces Ventilator Contract with Philips under Defense Production Act

The Department of Health and Human Services announced the second contract for ventilator production rated under the Defense Production Act (DPA), to Philips. Philips’s contract, at a total contract price of $646.7 million, is for a production schedule allowing for the delivery of 2,500 ventilators to the Strategic National Stockpile by the end of May 2020 and a total of 43,000 ventilators to be delivered by the end of December 2020. 

“We are actively collaborating with the U.S. government to help save lives in the U.S. and across the globe,” said Frans van Houten, CEO of Royal Philips. “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. We believe in fair allocation of scarce medical equipment to those who need it the most, and we are ramping up to deliver 43,000 units to the most critical regions in the U.S. in the coming weeks and months through December 2020.” 

In the first three months of this year, Philips delivered several thousand ventilators to U.S. hospitals. As a result of its production ramp up, Philips was able to deliver an additional batch of ventilators to one of New York’s hospitals, to help provide immediate relief to the surge of COVID-19 patients within the city.

Philips states they believe that critical medical equipment, such as hospital ventilators, should be made available across the world using a fair and ethical approach to allocate supply to acute patient demands based on data such as the COVID-19 statistics per country/region (e.g. provided by the WHO and Johns Hopkins Coronavirus Resource Center) and the available critical care capacity. Philips may divide orders into batches to be delivered in phases, so that the company can simultaneously serve multiple countries/regions in need.

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