Collin Arocho
1 September 2020

Back in April, Philips announced that the US government ordered 43,000 ventilators to be delivered by the end of the year, as part of the Covid-19 response. Now, half a year later, that deal appears to be dead as the US Department of Health and Human Services (HHS) has pulled out of the agreement. In all, the Dutch health technology company will deliver just 12,300 of its EV300 ventilators for the US’s Strategic National Stockpile – leaving the company with more than 30,000 that will need to find a new home.

Philips Trilogy ventilator. Credit: Philips

The falling through of the agreement will certainly have financial ramifications for the the Amsterdam-based company. As the coronavirus spread, and demand for ventilators increased, Philips accelerated production fourfold in only a few months, adding new production lines and hiring hundreds of employees at its Pennsylvania and California factories.

“To date, we’ve delivered on our commitments to HHS. I’m proud that with great urgency and under intense pressure, we achieved a fourfold ventilator production expansion with substantial investments,” says Frans van Houten, CEO of Philips. “While we continue to see uncertainty and volatility related to the impact of Covid-19 across the world, our order book remains solid. The reduction in our ventilator deliveries to HHS will obviously impact our financial performance, but we continue to expect to return to growth and improved profitability in the second half of the year, starting in the third quarter.”