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NYT: Covidien buys Newport, and a working model of a $3,000 ventilator disappears before it can be produced for the US government: profit motives derail a great product

2020-03-29

(photo courtesy of pixabay)

An article in today’s New York Times demonstrates that the profit motive, manifested as industry consolidation, has handicapped preparations for today’s pandemic of novel coronavirus:

Government officials and executives at rival ventilator companies said they suspected that Covidien had acquired Newport to prevent it from building a cheaper product that would undermine Covidien’s profits from its existing ventilator business.

Back in April 2012, a small specialty manufacturer of ventilators (devices that inflate the lungs with oxygenated air to relieve shortness of breath due to weakened lung function) demonstrated a working model of a $3,000 ventilator that had been commissioned by the Centers for Disease Control (CDC) to fill the national stockpile.  Projections that the US would need 70,000 ventilators in case of a flu pandemic (H1N1 had just passed through the world) alarmed experts at CDC, and they developed with Newport a contract to produce 40,000 of them, redesigned to be simpler and more portable.

Just as the demonstrator working models were rolled out, Newport was bought out by a larger generalist producer of medical equipment, Covidien, for $100 million.  In May 2012, apparently fearing that the cheap ventilator would cut into its profits on selling larger, more complex ones, Covidien demanded more front money and a higher price for the new machine.  The project fell apart, and no new ventilators that could be stockpiled for use in emergencies were produced.

Once again, the profit motive has over-ruled the altruistic motive in the boardroom.  We can see that capitalism without regulation and oversight is deadly to the human race.  Communism, with its totalitarian tendencies and its use of unrealistically high expectations to prod superhuman efforts from motivated “commies”, would be even worse.  Don’t tell that to our Commander in Cheat: he’s too busy preening in front of his bathroom mirror.  Time and time again, projects that use our motives for the common good to spur low-profit production have been derailed by Tea Partiers crying “communism!” to tar socialist policies with the unwarranted slur of totalitarianism.  When will these red-baiters learn that we are all in this together?

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