The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed.

[Note:  This item comes from friend David Rosenthal.  DLH]

The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed.
As the coronavirus spreads, the collapse of the project helps explain America’s acute shortage.
By Nicholas Kulish, Sarah Kliff and Jessica Silver-Greenberg
Mar 29 2020
https://www.nytimes.com/2020/03/29/business/coronavirus-us-ventilator-shortage.html

Thirteen years ago, a group of U.S. public health officials came up with a plan to address what they regarded as one of the medical system’s crucial vulnerabilities: a shortage of ventilators.

The breathing-assistance machines tended to be bulky, expensive and limited in number. The plan was to build a large fleet of inexpensive portable devices to deploy in a flu pandemic or another crisis.

Money was budgeted. A federal contract was signed. Work got underway.

And then things suddenly veered off course. A multibillion-dollar maker of medical devices bought the small California company that had been hired to design the new machines. The project ultimately produced zero ventilators.

That failure delayed the development of an affordable ventilator by at least half a decade, depriving hospitals, states and the federal government of the ability to stock up. The federal government started over with another company in 2014, whose ventilator was approved only last year and whose products have not yet been delivered.

Today, with the coronavirus ravaging America’s health care system, the nation’s emergency-response stockpile is still waiting on its first shipment. The scarcity of ventilators has become an emergency, forcing doctors to make life-or-death decisions about who gets to breathe and who does not.

The stalled efforts to create a new class of cheap, easy-to-use ventilators highlight the perils of outsourcing projects with critical public-health implications to private companies; their focus on maximizing profits is not always consistent with the government’s goal of preparing for a future crisis.

“We definitely saw the problem,” said Dr. Thomas R. Frieden, who ran the Centers for Disease Control and Prevention from 2009 to 2017. “We innovated to try and get a solution. We made really good progress, but it doesn’t appear to have resulted in the volume that we needed.”

The project — code-named Aura — came in the wake of a parade of near-miss pandemics: SARS, MERS, bird flu and swine flu.

Federal officials decided to re-evaluate their strategy for the next public health emergency. They considered vaccines, antiviral drugs, protective gear and ventilators, the last line of defense for patients suffering respiratory failure. The federal government’s Strategic National Stockpile had full-service ventilators in its warehouses, but not in the quantities that would be needed to combat a major pandemic.

In 2006, the Department of Health and Human Services established a new division, the Biomedical Advanced Research and Development Authority, with a mandate to prepare medical responses to chemical, biological and nuclear attacks, as well as infectious diseases.

In its first year in operation, the research agency considered how to expand the number of ventilators. It estimated that an additional 70,000 machines would be required in a moderate influenza pandemic.

The ventilators in the national stockpile were not ideal. In addition to being big and expensive, they required a lot of training to use. The research agency convened a panel of experts in November 2007 to devise a set of requirements for a new generation of mobile, easy-to-use ventilators.

In 2008, the government requested proposals from companies that were interested in designing and building the ventilators.

The goal was for the machines to be approved by regulators for mass development by 2010 or 2011, according to budget documents that the Department of Health and Human Services submitted to Congress in 2008. After that, the government would buy as many as 40,000 new ventilators and add them to the national stockpile.

The ventilators were to cost less than $3,000 each. The lower the price, the more machines the government would be able to buy.

Companies submitted bids for the Project Aura job. The research agency opted not to go with a large, established device maker. Instead it chose Newport Medical Instruments, a small outfit in Costa Mesa, Calif.

Newport, which was owned by a Japanese medical device company, only made ventilators. Being a small, nimble company, Newport executives said, would help it efficiently fulfill the government’s needs.

Ventilators at the time typically went for about $10,000 each, and getting the price down to $3,000 would be tough. But Newport’s executives bet they would be able to make up for any losses by selling the ventilators around the world.

“It would be very prestigious to be recognized as a supplier to the federal government,” said Richard Crawford, who was Newport’s head of research and development at the time. “We thought the international market would be strong, and there is where Newport would have a good profit on the product.”

Federal officials were pleased. In addition to replenishing the national stockpile, “we also thought they’d be so attractive that the commercial market would want to buy them, too,” said Nicole Lurie, who was then the assistant secretary for preparedness and response inside the Department of Health and Human Services. With luck, the new generation of ventilators would become ubiquitous, helping hospitals nationwide better prepare for a crisis.

The contract was officially awarded a few months after the H1N1 outbreak, which the C.D.C. estimated infected 60 million and killed 12,000 in the United States, began to taper off in 2010. The contract called for Newport to receive $6.1 million upfront, with the expectation that the government would pay millions more as it bought thousands of machines to fortify the stockpile.

Project Aura was Newport’s first job for the federal government. Things moved quickly and smoothly, employees and federal officials said in interviews.

Every three months, officials with the biomedical research agency would visit Newport’s headquarters. Mr. Crawford submitted monthly reports detailing the company’s spending and progress.

The federal officials “would check everything,” he said. “If we said we were buying equipment, they would want to know what it was used for. There were scheduled visits, scheduled requirements and deliverables each month.”

In 2011, Newport shipped three working prototypes from the company’s California plant to Washington for federal officials to review.

Dr. Frieden, who ran the C.D.C. at the time, got a demonstration in a small conference room attached to his office. “I got all excited,” he said. “It was a multiyear effort that had resulted in something that was going to be really useful.”

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