– Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, today provided an update on its plans to double the production of its hospital ventilators by May 2020 and achieve a four-fold increase by the third quarter of 2020. This plan builds on Philips’ initial production increase in the first three months of the year, which already enabled the supply of additional ventilators – that are critical for the treatment of COVID-19 patients – to hospitals in the most affected regions in China, southern Europe and the US. To further address the huge global demand, Philips introduced its new Philips Respironics E30 ventilator, a versatile and easy-to-use non-invasive and invasive ventilator, which has been designed for large scale production.
“In line with Philips’ mission, we are fully committed to helping as many healthcare providers as possible diagnose, treat and monitor the growing numbers of COVID-19 patients,” said Frans van Houten, CEO of Royal Philips. “We have been mobilizing as a company to do so since January. The collaboration with our trusted partners Flex and Jabil will rapidly expand our hospital ventilator production capacity, and reinforce the supply chain to enable the ramp up to a production of 4,000 hospital ventilators per week by the third quarter. To complement this, our team has developed the new Philips Respironics E30 ventilator, which can be safely used when there is limited access to a fully featured critical care ventilator. The Philips Respironics E30 ventilator can deliver a range of treatment options, and we will quickly scale its production to 15,000 units per week in April.”
Ramp up of hospital ventilator production for critical COVID-19 patients
Philips has engaged manufacturing solutions partners Flex and Jabil, as well as other partners, to further expand its hospital ventilator assembly lines and strengthen its supply chain. Flex and Jabil have expertise in medical device technologies, and possess a global industry footprint, as well as a network of certified materials and component suppliers. Flex already produces one of Philips’ other respiratory products.
The assembly lines at Philips’ manufacturing site in Murrysville in western Pennsylvania (US) and at Flex focus on the production of the Philips Trilogy hospital ventilator for invasive and non-invasive ventilation, while the assembly lines at Philips’ site in California (US) and at Jabil focus on the production of the Philips Respironics V60 hospital ventilator for invasive and non-invasive ventilation. The combined hospital ventilator output is projected to increase to 4,000 units per week by the third quarter of 2020.
Philips is working with its suppliers in the US, Europe and Asia to ensure a sufficient and uninterrupted supply of the 650+ different components that are needed for the assembly of Philips’ hospital ventilators. This is the rate-limiting step, and requires the support of all countries involved.
Introduction of Philips Respironics E30 for emergency use to fill the critical hospital ventilation shortage
To further address the pressing need for critical care ventilators, Philips has been working closely with leading respiratory physicians and medical device regulators in the U.S. and other countries to develop a readily available ventilator that fills the critical hospital ventilation shortage.
Designed for large scale production by a team deeply experienced in respiratory care, the Philips Respironics E30 ventilator is optimized to treat patients with respiratory insufficiency. This easy-to-use ventilator offers quick set-up and simple operations allowing healthcare providers with a wide range of skill sets to treat and monitor patients. The Philips Respironics E30 can be used non-invasively, as well as invasively, offering the flexibility to adapt to the treatment needs of patients with COVID-19.
Philips is now quickly scaling the production of this new ventilator with the unprecedented needs of healthcare providers and COVID-19 patients in mind, while also complying with medical device quality standards. On April 8, 2020, the US FDA authorized the device for use in the US during the COVID-19 public health emergency through its Emergency Use Authorization (EUA) process. Philips is working with the relevant regulatory authorities to also distribute the device globally. Philips started the production of the Philips Respironics E30 ventilator in its New Kensington site in western Pennsylvania (US). Philips targets a production of 15,000 of these ventilators per week in April.
Production expansion investments
To facilitate the production expansion across its three ventilator manufacturing sites in the US, Philips is investing several tens of millions in additional tools and molds, final assembly lines and test facilities. Moreover, the company is hiring extra manufacturing employees and changing to 24/7 shifts.
COVID-19 treatment depends on international collaboration
As COVID-19 treatment depends on the global availability of ventilators and components, Philips continues to engage with governments, health authorities, and relevant industries to safeguard the production expansion of materials, components and final products, as well as their shipment between countries. This is fully in line with the call to action by the International Chamber of Commerce (ICC) and World Health Organization (WHO) in March 2020.
Fair and ethical allocation of scarce medical equipment
Philips believes that scarce medical equipment, such as hospital ventilators, should be made available across the world using a fair and ethical approach to allocate supply to acute patient demands based on data such as the COVID-19 statistics per country/region (e.g. provided by the WHO and Johns Hopkins Coronavirus Resource Center) and the available critical care capacity. Philips may divide orders into batches to be delivered in phases, so that the company can simultaneously serve multiple countries/regions in need.
For further information, please contact:
Philips Global Press Office
Tel.: +31 6 10888824
Philips Investor Relations
Tel.: +31 20 59 77222
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people’s health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Philips’ health technology portfolio generated 2019 sales of EUR 19.5 billion and employs approximately 80,000 employees with sales and services in more than 100 countries. News about Philips can be found at http://www.philips.com/newscenter.
This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about the strategy, estimates of sales growth, future EBITA, future developments in Philips’ organic business and the completion of acquisitions and divestments. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
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