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Philips has inked a massive deal with the American government to accelerate the production of hospital ventilators. The Dutch health technology company was awarded a contract, totaling almost 600 million euros, in an effort to boost manufacturing of respiration devices at its US facilities. In all, Philips has agreed to double production to 2,500 ventilators by the end of May and hit a goal of 43,000 units delivered by the year’s end.
To hit these benchmarks, Philips plans to invest several tens of millions of dollars in its US production sites. Additionally, the Trump Administration is stepping in, using the US’s Defense of Production Act (DPA) to order suppliers to make Philips’ shipments a priority. Ironically, this comes after Philips CEO Frans van Houten recently warned that US protectionism might hinder the company’s ability to deliver units, citing the DPA.
“We’re actively collaborating with the US government to help save lives in the US and across the globe,” says Van Houten. “There’s an unprecedented global demand for medical equipment to help diagnose and treat patients with COVID-19. We welcome the support of the US 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’re ramping up to deliver 43,000 units to the most critical regions in the US in the coming weeks and months.”