One of the most crucial things the United States can do to prepare for the surging coronavirus outbreak is to beef up our stockpile of ventilators. These mechanical breathing machines are crucial for keeping patients with severe cases of COVID-19 alive. The United States currently has around 170,000 of the devices; experts say that may not be enough if the number of coronavirus cases continues to grow exponentially.
On Sunday, President Donald Trump tweeted that “Ford, General Motors and Tesla are being given the go ahead to make ventilators and other metal products, FAST!” (Presumably he meant “medical products.”)
This is an apparent reference to new guidance from the Food and Drug Administration, published Sunday, that dramatically loosens the agency’s normally strict oversight of ventilator technology. The new policy not only gives medical professionals broader latitude to modify existing FDA-approved ventilators, it also creates a streamlined process for complete newcomers to the ventilator market to get FDA approval.
So car companies have been swinging into action. GM announced a partnership with ventilator manufacturer Ventec last Friday. On Tuesday morning, Ford announced its own ventilator partnership with GE Healthcare.
But ventilators are complex machines that can cost as much as $50,000 apiece. Reliability is crucial, since even a brief malfunction or loss of power could cost a patient his or her life. So it wouldn’t be practical for any company to design and build ventilators from scratch in a few months. Instead, car companies are looking for ways to help existing vendors expand their output.
GM and Ford are supporting existing ventilator companies
In a Friday press release, GM announced a partnership with medical device company Ventec.
“Ventec will leverage GM’s logistics, purchasing and manufacturing expertise to build more of their critically important ventilators,” the two companies wrote in a joint press release.
GM’s main contribution seems to be helping Ventec beef up its supply chain. Like other automakers, GM sits at the apex of a vast network of suppliers, some of which have sophisticated manufacturing capabilities. GM is working to connect Ventec with suppliers who can supply scarce parts, allowing Ventec to boost output.
Dustin Walsh, writing for Crain’s Detroit, points to one example where GM has been helping Ventec. A GM supplier called Meridian is “helping GM procure six different ventilator compressor parts made of magnesium for an estimated 200,000 ventilators,” Walsh wrote. Meridian’s own machines couldn’t produce the necessary parts, but Meridian connected GM with two other companies—competitors of Meridian—that were able to produce them.
Another GM supplier “plans to start manufacturing foam parts for ventilators,” according to Walsh.
On Tuesday, Ford announced it was also getting into the ventilator business, though the details remain hazy.
“Ford and GE Healthcare are working together to expand production of a simplified version of GE Healthcare’s existing ventilator design to support patients with respiratory failure or difficulty breathing caused by COVID-19,” Ford said in a press release. “These ventilators could be produced at a Ford manufacturing site in addition to a GE location.”
Ford says that “work on this initiative ties to a request for help from US government officials.”
Ford is also planning to manufacture other medical equipment, including respirators (in partnership with 3M) and face shields.
Other ventilator makers are expanding on their own
Tesla, meanwhile, has talked to leading medical device company Medtronic.
“Just had a long engineering discussion with Medtronic about state-of-the-art ventilators,” Elon Musk tweeted on Saturday. “Very impressive team!”
Medtronic’s own tweet about the meeting was cordial but noncommittal: “ We are grateful for the discussion with @ElonMusk and @Tesla as we work across industries to solve problems and get patients and hospitals the tools they need to continue saving lives,” the company wrote.
Medtronic has been working to boost its output without help from Tesla. Last week, the company announced that it was on track to double its rate of ventilator production and said it intended to double the workforce at its ventilator factory in Ireland.
“Ventilator manufacturing is a complex process that relies on a skilled workforce, a global supply chain and a rigorous regulatory regime to ensure patient safety,” Medtronic said in its press statement.
Meanwhile, existing ventilator makers have been rushing to increase their output. GE’s Health Care division announced plans to increase ventilator production—including having staff work around the clock. Swedish medical device company Getinge, Swiss company Hamilton, and Dutch electronics giant Philips are also working to boost ventilator production.
The importance of government orders
One of the most important things governments can do to promote ventilator production is to commit to buying ventilators in the future. Right now, medical device companies are able to sell ventilators as fast as they come off their existing assembly lines.
But big increases in ventilator output will require companies to make expensive investments in new manufacturing capacity. That’s a risky bet because the investments might become worthless if the coronavirus crisis peters out after a few months. The world could wind up with a big surplus of ventilators. Hospitals, too, may be reluctant to spend tens of thousands of dollars on ventilators that they might only need for a few months.
Governments can reduce the risk manufacturers face by placing big orders for ventilators now. Having big orders in hand will make manufacturers more willing to make up-front investments to fill those orders.
Of course, that creates a risk that the government will end up with a glut of ventilators it doesn’t need. But it seems better to risk having too many ventilators in a few months than to risk having too few.