Philips responds to Congressional report
July 31 2020 - 9:15AM
Philips responds to Congressional report
July 31, 2020
Amsterdam, the Netherlands – Royal Philips
(NYSE: PHG, AEX: PHIA), a global leader in health technology, today
announced that it has received the report from the U.S. House of
Representatives Subcommittee on Economic and Consumer Policy and is
providing an initial response.
In April, 2020, Philips received a letter from the subcommittee,
requesting information about Philips’ hospital ventilator
activities in connection with the contracts for the delivery of
10,000 Trilogy Universal ventilators and 43,000 EV300 ventilators
to the U.S. Department of Health and Human Services (HHS). Philips
has cooperated with the subcommittee’s information requests.
“Philips is supporting healthcare providers in the U.S. and
globally to combat the COVID-19 pandemic,” said Frans van Houten,
CEO of Royal Philips. “We have been transparent about our
production ramp up plans, pricing and allocation policies. We have
cooperated and delivered the requested information to the
subcommittee. 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. I would like to
make clear that at no occasion, Philips has raised prices to
benefit from the crisis situation. Philips is proud to make its
contribution to combatting the pandemic through its acute patient
care and diagnostic products.”
As the epicenter of the COVID-19 pandemic started to transfer to
the west in February of 2020, Philips reached out to various
governments around the world to discuss how to collaborate to
combat the COVID-19 pandemic. Philips is investing over 100 million
dollars in 2020 in the production ramp up of acute care products to
diagnose, threat, manage and monitor COVID-19 patients. From March,
2020 onwards, Philips has achieved a massive fourfold increase of
ventilator production in just five months, adding three production
lines in the U.S. as well as hundreds of jobs. Philips’ employees
in the factories in Western Pennsylvania and California are working
around the clock to produce these ventilators.
The EV300 contractPhilips is on track with the
production and delivery of the 43,000 EV300 hospital ventilators
according to the April 2020 contract with HHS. The list price of
the specific bundle of the EV300 ventilator plus roll-stand and
accessories, as selected by HHS, is over $21,000 and is being
provided to the U.S. government for $15,000. The agreed price
reflects a discount, while taking into account part of the higher
costs for the expedited delivery schedule.
The BARDA R&D contractThe contract that
Philips entered with HHS/BARDA (Biomedical Advanced Research and
Development Authority) in 2014 to develop a stockpile ventilator,
which was yet to be developed and manufactured, was chiefly a
research and development contract. Tied to this contract, BARDA
requested a one-time purchase option for 10,000 of these units be
included in the contract for a price considerably lower than
commercial prices. Philips is producing and delivering this
ventilator to HHS in line with the agreed delivery
schedule.
For further information, please
contact:
Ben ZwirsPhilips Global Press OfficeTel.: +31 6 15213446E-mail:
ben.zwirs@philips.com
Derya GuzelPhilips Investor RelationsTel.: +31 20 59
77055E-mail: derya.guzel@philips.com
About Royal PhilipsRoyal 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 generated 2019 sales of EUR 19.5 billion and
employs approximately 81,000 employees with sales and services in
more than 100 countries. News about Philips can be found at
www.philips.com/newscenter.
Forward-looking statements 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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