Congressional subcommittee seeks review of Philips ventilator contract
A congressional subcommittee is seeking a government probe of a $ 646 million contract that was awarded in April to the parent company of Philips Respironics for hospital ventilators.
The House Subcommittee on Economic and Consumer Policy is seeking an investigation by the Inspector General into the contract awarded by the U. S. Department of Health and Human Services to supply the Strategic National Stockpile, the nation’s medical reserve.
The contract was cut short, with less than onefourth of the order delivered, because the agreement was undergoing an internal HHS investigation and legal review, an HHS spokeswoman said Monday. Details of the review were not disclosed.
On July 31, the subcommittee released the findings of its investigation, which allegedly uncovered “fraud, waste and abuse” in the contract. The subcommittee claimed that the U. S. paid Philips more than four times the amount of the previous contract with the company for a functionally identical product, resulting in a loss to taxpayers as high as $ 504 million.
“No other U. S. purchaser paid more than HHS,” subcommittee chairman Raja Krishnamoorthi wrote to the HHS inspector general Aug. 6. “Despite buying ventilators in bulk, the administration paid $ 15,000 Mr. van per ventilator, while small Houten wrote. The subcommittee purchasers across the country said the units could negotiated much better be purchased at still lower deals.” prices.
Royal Philips CEO Frans Previously, the company van Houten denied the built 10,000 ventilators for claims, saying the company HHS’ Biomedical Advanced had fully complied with the Research and Development subcommittee’s request for Authority at a “price considerably information about Philips’ lower than commercial government contracts. prices,” Philips
“We do not recognize the said, but that agreement conclusions in the subcommittee’s was “chiefly a research and report and we believe development contract.” that not all of the information Along with the recent that we provided Philips contract, HHS terminated has been reflected in the report,” two other contracts he wrote in a July 31 with ventilator makers response. “I would like to earlier than planned, although make clear that at no occasion, for different reasons. Philips has raised Vyaire Medical Inc., of prices to benefit from the Chicago, and Hamilton crisis situation.” Medical Inc., of Reno, Nev.,
The company’s ventilators both had supply contracts had a list price exceeding cut short, according to HHS, $ 21,000, which were being because the department believed sold to HHS at a discounted the national stockpile price of $ 15,000 to was fully supplied to reflect higher costs related handle a future emergency. to the government’s expedited The government had contracted delivery requirements, with different companies to make what was then described as more than 187,000 ventilators by the end of the year.
The early endings of the contracts will reduce by 38,000 the number of ventilators scheduled for delivery to the Strategic National Stockpile by the end of the year, “saving the U. S. taxpayer millions of dollars by halting delivery of additional ventilators that are no longer required,” the HHS spokeswoman said.
There are nearly 120,000 ventilators available in the nation’s emergency reserves of medical supplies, which is “enough ventilators to meet maximum national capacity in a crisis,” according to the spokeswoman.
No shortages of the devices have been reported by hospitals or public health agencies treating people with COVID- 19.
Philips Sleep and Respiratory Care has nearly 2,000 employees in five Western Pennsylvania locations. The final assembly and testing of the ventilators was done in Murrysville and at a second facility in Carlsbad, Calif.
A Philips spokesperson said Tuesday that it was too early to say what effect the end of the government contract would have on employment. “The COVID- 19 pandemic is far from over and we continue to see solid demand for our products,” she said.