The US Department of Health and Human Services (HHS) has partially terminated a contract signed in April this year for Royal Philips’ hospital ventilators.
While the contract was for Philips to deliver a total of 43,000 ventilators, the medical technology company will now provide 12,300 bundled ventilator configurations to the Strategic National Stockpile.
The HHS has asked the company to not supply the remaining 30,700 Philips EV300 ventilators.
This move comes after a July report by the US Congress House Subcommittee on Economic and Consumer Policy said that the White House had overpaid Philips by at least $500m, noted Reuters. Philips denied any profiteering on ventilators.
Royal Philips CEO Frans van Houten said: “The Covid-19 pandemic is far from over, and we will continue to focus on our triple duty of care: meeting critical customer needs, ensuring business continuity, and safeguarding the health and safety of our employees.
“In the US, Philips is committed to work with the government and several of its agencies to support healthcare providers with the diagnosis, treatment, monitoring and management of Covid-19 patients, as well as the provision of regular health care.”
Philips was one of several companies contracted by the HHS to deliver 187,000 ventilators to the Strategic National Stockpile by the end of the year to treat Covid-19 patients.
From March this year, the company made a fourfold increase in its ventilators production, adding production lines in the US and creating new jobs.
It expanded the ventilators production capacity in Pennsylvania and California.
Earlier this month, Philips launched its Rapid Equipment Deployment kit to help manage increase in capacity in the ICU amid Covid-19 pandemic.