A report from Democrats on the House Oversight and Reform Committee released Friday finds that the Trump administration overpaid by as much as $500 million for ventilators and was slow to respond to an offer to accelerate shipments in the early days of the coronavirus outbreak.
The report finds that the Trump administration paid the manufacturer Philips $15,000 per ventilator, more than any other American purchaser. Some purchasers buying as few as just one ventilator negotiated prices down to as low as $9,327 per ventilator, the report said.
The committee said the administration failed to negotiate the price down and labeled the talks “inept negotiations led by White House official Peter Navarro.”
“The Trump Administration’s mishandling of ventilator procurement for the nation’s stockpile cost the American people dearly during the worst public health crisis of our generation,” Rep. Raja Krishnamoorthi (D-Ill.), the chairman of the Oversight and Reform subcommittee that did the report, said in a statement.
“Not only did the Administration jeopardize the health and safety of the American people — but it squandered more than half-a-billion dollars that could have been used to better support our nation’s crisis response efforts.”
While there was a scramble for ventilators in the early weeks of the coronavirus outbreak in the U.S. and fears of running out, the situation on ventilators has since stabilized and there are no documented cases of anyone needing a ventilator who did not get one.
Still, in addition to overpaying, the committee report also said that the administration failed to take Philips up on an offer to accelerate shipments of ventilators under an existing contract early on.
Krishnamoorthi also said the experience with ventilators raised questions about what other ways the administration has been mishandling contracts.
Frans van Houten, CEO of Philips, said the company had not raised prices on its ventilators to benefit from the crisis, and noted it has had a fourfold increase in production since March.
“We do not recognize the conclusions in the subcommittee’s report, and we believe that not all the information that we provided has been reflected in the report,” he said in a statement. “I would like to make clear that at no occasion, Philips has raised prices to benefit from the crisis situation.”
On Jan. 21, a Philips official emailed a Department of Health and Human Services official: “Please let us know how we could help out or if you may expect a need to accelerate any shipments,” according to one of the emails obtained by the committee.
But the report found that the administration did not respond to this offer for six weeks, until it finally asked about speeding up production on March 4.
The White House blasted the report in a statement.
“This partisan report is nothing more than a stunt that is only meant to politicize the coronavirus,” White House spokesman Judd Deere said. “Because of the President’s leadership, the United States leads the world in the production and acquisition of ventilators. No American who needed a ventilator was denied one, and no American who needs a ventilator in the future will be denied one. Democrats should be ashamed of themselves for this misleading and inaccurate report.”
Philips had an existing contract for ventilators first made under the Obama administration, the report said. The Trump administration granted an extension on this contract but then negotiated a new contract, where the report said the government overpaid.
The original contract was for 10,000 ventilators and made in 2014. It was delayed, but an extension given by the Obama administration had a deadline of November 2019, the committee said, in time for the pandemic.
The Trump administration gave three additional extensions in 2017 and 2018, the report said. “Had the Trump Administration held Philips to the terms of the Obama-era contract, the country would have had 10,000 ventilators that it needed when the coronavirus crisis struck,” the committee said.
Updated at 10:17 a.m.