Companies from the US to Vietnam sign license deals to make life-saving devices amid supply-chain bottlenecks.
Car manufacturers and medical equipment specialists are joining forces to overcome a shortage of life-saving devices amid supply-chain bottlenecks during the coronavirus pandemic.
Manufacturing ventilators in advanced and emerging countries has become a priority for hospitals scrambling to save tens of thousands of people with severe respiratory difficulties caused by the Covid-19 disease. New York state alone estimated a need for 30,000 ventilators at the peak of the epidemic in April.
However, manufacturers cannot produce enough ventilators alone during a pandemic, especially as governments curb exports of critical equipment to boost domestic supply. The problem is particularly evident in a medical device industry relying on most exports of devices and components from only 25 countries, according to the report “Tackling Covid-19 Together” by Switzerland-based trade policy observatory Global Trade Alert (GTA).
“Unilateral purchases simply are not going to work in an industry where international supply chains are needed in order to get these ventilators produced in large numbers,” explains Simon Evenett, Professor of International Trade and Economic Development, University of St. Gallen, and author of the report.
Bottlenecks Leave Emerging Markets Exposed
As of March 21, 54 governments had implemented some form of export curb on medical supplies and medicines, according to GTA. The European Union has decided that non-EU exports of medical equipment be authorized by member states to preserve levels in the bloc’s new strategic stockpile.
The EU is among one of the largest manufacturers and exporters of medical devices in a market worth $75.8 billion, according to GTA estimates. The largest exporters include just one nation in Latin America and no nations in Africa, the CIS region, the Middle East, or South Africa.
“A lot of African and Middle Eastern countries even if they have the money will not be able to buy the medical supplies they need,” Evenett says.
Working at breakneck speed, equipment manufacturers are retooling plants, sharing facilities and buying parts from other industries, and licensing designs on open platforms to overcome supply chain hurdles.
In the United States, carmaker General Motors is working with respiratory care Ventec Life Systems to make as many as 60,000 ventilators for the federal stockpile, while Ford is partnering with GE Healthcare to produce more than 50,000 ventilators. GE Healthcare licensed the ventilator design from Airon, a private company specializing in high-tech pneumatic life support products.
”GM is in the position to help build more ventilators because of the remarkable performance of GM and Ventec’s global supply base,” CEO Mary Barra says. “Our joint teams have moved mountains to find real solutions to save lives and fight the pandemic.” GM will also produce surgical masks.
Vyaire Medical, one of several manufacturers along with GM compelled by US President Donald Trump under the Korean War-era Defense Production Act to step up domestic production, says it is exploring potential partnerships with non-medical equipment makers to increase the availability of the devices.
Fiat Chrysler Automobiles has teamed up with Siare Engineering International Group in severely hit Italy to scale up the production of electrovalves for ventilators.
The Mother of Invention
As the global death toll from the coronavirus outbreak tops 89,000, companies like GM are producing at component cost. Collaborations spread across the globe.
In Vietnam, conglomerate Vingroup said it has signed a license agreement with Dublin-based Medtronic to use their design for an invasive ventilator. The company is also researching a non-invasive ventilator based on a community-shared design by MIT. Like GM, Vingroup says it will supply the devices at their component cost.
“Necessity is the mother of invention. We will see some impressive improvements which will be operational in a couple of months and will help save lives. This may be the positive side of the story,” Evenett says.
Medtronic is boosting its production of ventilators five-fold and is publicly sharing the design specifications of its lightweight portable model to facilitate rapid global manufacturing at scale.
“One Medtronic ventilator is composed of more than 1,500 parts from 100 suppliers in 14 countries, and so we need an open and unrestricted supply chain,” the company says.
Engineers at electric carmaker Tesla are working to supply an important valve for Medtronic and trying to make their ventilator with Tesla car parts.
Startups and engineering teams have flocked to Facebook groups and open source platforms like GitHub to create new models that could be built in countries where supply is scarce.
The Montreal General Hospital Foundation and the Research Institute of the McGill University Health Center have launched a Code Life Ventilator Challenge to design an affordable, easy to use and safe ventilator. They received applications from more than 2,600 participants in 94 countries including the US, Canada, Egypt, India, Colombia, Germany, Brazil, France and Pakistan.
“The open source trend started with technology but in a crisis like this will become more mainstream because we are all focused on finding a solution,” says Sylvie Riendau, Director of Communications of the Montreal General Hospital Foundation.
“Our idea is not to replace the other machines but to have an alternative to save more lives at a time of emergency,” she says.
Three prototype projects will be available in open source from next week. The final winner will be eventually licensed for production.
