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Drudge Retort: The Other Side of the News
Sunday, March 29, 2020

Thirteen years ago, a group of U.S. public health officials came up with a plan to address what they regarded as one of the medical system's crucial vulnerabilities: a shortage of ventilators. The plan was to build a large fleet of inexpensive portable devices to deploy in a flu pandemic or another crisis. A multibillion-dollar maker of medical devices bought the small California company that had been hired to design the new machines. The project ultimately produced zero ventilators.

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"We definitely saw the problem," said Dr. Thomas R. Frieden, who ran the Centers for Disease Control and Prevention from 2009 to 2017. "We innovated to try and get a solution. We made really good progress, but it doesn't appear to have resulted in the volume that we needed."

The project " code-named Aura " came in the wake of a parade of near-miss pandemics: SARS, MERS, bird flu and swine flu.

The ventilators were to cost less than $3,000 each. The lower the price, the more machines the government would be able to buy. Companies submitted bids for the Project Aura job. The research agency opted not to go with a large, established device maker. Instead it chose Newport Medical Instruments, a small outfit in Costa Mesa, Calif.

Newport, which was owned by a Japanese medical device company, only made ventilators. Being a small, nimble company, Newport executives said, would help it efficiently fulfill the government's needs. In May 2012, Covidien, a large medical device manufacturer, agreed to buy Newport for just over $100 million.

Newport executives and government officials working on the ventilator contract said they immediately noticed a change when Covidien took over. Developing inexpensive portable ventilators no longer seemed like a top priority.

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.

Some Newport executives who worked on the project were reassigned to other roles. Others decided to leave the company. In 2014, with no ventilators having been delivered to the government, Covidien executives told officials at the biomedical research agency that they wanted to get out of the contract, according to three former federal officials. The executives complained that it was not sufficiently profitable for the company.

The government agreed to cancel the contract.

Want to understand why a for-profit healthcare delivery system isn't in the public's best interests, especially in times of nationwide health crises? This story can stand as a prima facie example until a better one comes along.

Capitalism exists to put profits above all else including lives. When all this is over, Americans will find themselves having very hard conversations about how our society best proceed moving forward. And maybe the needs of the living will finally take precedence over the profits of the capitalists.

#1 | Posted by tonyroma at 2020-03-29 02:46 PM | Reply | Newsworthy 3

And maybe the needs of the living will finally take precedence over the profits of the capitalists.

#1 | Posted by tonyroma

ROFLOL that is so funny.

#2 | Posted by HeliumRat at 2020-03-29 03:44 PM | Reply

"Want to understand why a for-profit healthcare delivery system isn't in the public's best interests, especially in times of nationwide health crises?"

No, we don't.
Also, you're wrong, but you're so dumb you wouldn't understand why.
Signed,
GOP.

#3 | Posted by snoofy at 2020-03-29 04:04 PM | Reply | Newsworthy 1

In May 2012, Covidien, a large medical device manufacturer, agreed to buy Newport for just over $100 million.

Now just imagine if the US Government had spent $100 million instead and bought the company and it continued honest development of low cost ventilators and they were mass produced and warehoused for a crisis like we're experiencing. And that thousands upon thousands of units could be produced for a fraction of the cost of current hospital models.

Imagine what that company's technology would be worth today.

But that would have been S-o-c-i-a-l-i-s-m and we can't stand for that.

So thousands the world over might die who otherwise could have been saved but for the fact that one company's profit margins took precedence over human lives.

Thanks capitalism....

#4 | Posted by tonyroma at 2020-03-29 06:07 PM | Reply | Newsworthy 3

Imagine if the regulatory maze were reduced and dozens of new manufacturers could have been producing them all along.

#5 | Posted by visitor_ at 2020-03-30 07:56 AM | Reply

Profits over people.
Gets us every time.

#6 | Posted by anton at 2020-03-30 08:21 AM | Reply | Newsworthy 2

To be clear... On of the great things about capitalism is it drives just such innovations. The problem in this case as with so many others is that capitalism in the form mergers and Acquisitions was allowed to happen. So many people today build companies with the mind set of looking to be bought up by bigger companies - Not to build their own legacy but to get the $$$ and move onto something else. Not that I can blame people for doing that as the giants always find a way to drive you out of business it seems. It seems like we are back to the late 1800s - early 1900s - not in that there are so many monopolies but just that so many competitors are so big there is no way to compete with them and not be crushed.

On another note, I am sure everyone seen the $100 MIT Ventilator thread on here.

#7 | Posted by GalaxiePete at 2020-03-30 09:17 AM | Reply

Ah, an anti-capitalism thread. This type of thread is the Pied Piper for some of the DR left.

#8 | Posted by JeffJ at 2020-03-30 10:15 AM | Reply | Newsworthy 1

This is why we need to nationalize the economy. The Central Planners know best.

#9 | Posted by JeffJ at 2020-03-30 10:16 AM | Reply

Awwwwww you poor thing. Your capitalist world view of for profit healthcare is falling apart right before your eyes and you don't like it one bit. Too bad so sad.

#10 | Posted by LauraMohr at 2020-03-30 10:33 AM | Reply | Newsworthy 2

Find out what OTHER products are made by the greedy offending capitalist company, and if any of them are in your daily needs, eschew them.

#11 | Posted by john47 at 2020-03-30 11:24 AM | Reply

#9
A man made of straw, creating another man made of straw.

Nobody is talking central planning numbnutz.

#12 | Posted by bocaink at 2020-03-30 11:27 AM | Reply | Newsworthy 1

The Central Planners know best.

#9 | POSTED BY JEFFJ

Comrade! What are you saying? Only Humpy knows best.

Humpy is a Genius of the Stables is the only one who knows what is best for the American people.

Only Humpy can fix this because Humpy only hires the best people.

#13 | Posted by donnerboy at 2020-03-30 11:49 AM | Reply

This is no surprise, and is not unique to healthcare.

In capitalism, companies cannot cannibalize their own business. (And by "cannot", I mean that it is extremely difficult in a way that is approaching impossible.)

Kodak created the digital camera. And got destroyed by it. Why? Because for every digital camera the sold, that was a life-long income stream in film that they were destroying.

So another company came by, commercialized it, made tons of money (but less money than Kodak was making on film), and now Kodak is gone.

Conservatives have a perverse sort of "faith", almost as if they believe that capitalism was created by god, that the less restrained capitalism is the more "good" it is. (capitalism is inherently "good", any regulation or constraint is inherently "evil") But it is government's job to step in and restrain capitalism to ensure that companies don't engage in anti-competitive practices that are detrimental to the market and the consumer. Like buying a more efficient competitor just to kill it.

Present day example... Tesla. The established car companies will not create a "Tesla-killer". Because for every electric car they produce (and that a consumer buys), that is a service income stream for the life of the car (in spare parts and labor) that is destroyed. If they are actually innovative enough to compete with Tesla (surpass Tesla in some areas) then they are contributing to destroying their core income streams EVEN FASTER. Not gonna happen.

Buy Tesla stock. They are going to dominate the car market. Because the only point at which the established automakers are going to actually become serious about electric cars (and actually seriously try to produce them) is when electric cars are an eminent existential threat to the survival of their business. At that point it will be too late. And they will suffer the same fate as Kodak.

#14 | Posted by gtbritishskull at 2020-03-30 01:05 PM | Reply

"This is no surprise, and is not unique to healthcare."

DING DING DING we have a winner!

#15 | Posted by snoofy at 2020-03-30 01:09 PM | Reply

Ah, an anti-capitalism thread. This type of thread is the Pied Piper for some of the DR left.
#8 | POSTED BY JEFFJ

This is why we need to nationalize the economy. The Central Planners know best.
#9 | POSTED BY JEFFJ

I thought you were smarter then that. Maybe I was wrong.

Capitalism has issues. It doesn't mean we need to nationalize the economy. But nationalizing certain parts of it would help a lot.

#16 | Posted by Sycophant at 2020-03-30 01:48 PM | Reply | Newsworthy 1

Imagine if the regulatory maze were reduced and dozens of new manufacturers could have been producing them all along.

#5 | POSTED BY VISITOR_

I honestly don't know where to start with a post this stupid.

Literally, I don't have enough crayons to explain how dumb you are.

#17 | Posted by Sycophant at 2020-03-30 01:52 PM | Reply

"Imagine if the regulatory maze were reduced and dozens of new manufacturers could have been producing them all along.
#5 | POSTED BY VISITOR_"

Yes, imagine if Trump had cut through all that red tape.

#18 | Posted by snoofy at 2020-03-30 01:57 PM | Reply

It doesn't mean we need to nationalize the economy. But nationalizing certain parts of it would help a lot.

#16 | POSTED BY SYCOPHANT

I was being snarky. To your point, specifically nationalizing which parts of our economy would help a lot. Please note: I am not talking about as a short-term means of doing everything we can to mitigate this pandemic. This will pass at some point. I'm talking about on a more permanent basis, not crises-specific.

#19 | Posted by JeffJ at 2020-03-30 03:09 PM | Reply

Imagine what that company's technology would be worth today.

#4 | POSTED BY TONYROMA AT 2020-03-29 06:07 PM | FLAG:

We don't have to imagine. This was a government project.

#20 | Posted by sitzkrieg at 2020-03-30 03:09 PM | Reply

Sycophant, what are your views on the college students, hackers and makers working on ventilators and ventilator substitutes?

#21 | Posted by visitor_ at 2020-03-30 03:10 PM | Reply

We don't have to imagine. This was a government project.

No it wasn't. It was a government contract. The technology looks like it would have belonged to the company, not the government.

If someone knows better, please correct this, but I believe the government laid out the specs and the company's job was to fulfill them by their own invention.

#22 | Posted by tonyroma at 2020-03-30 03:25 PM | Reply

Don't worry Visitor.

Trumpy has plenty of them "real" ventilators you seek

But first he just needs a little favor.

Don't forget your knee pads and butt cream.

#23 | Posted by donnerboy at 2020-03-30 03:27 PM | Reply

Sycophant, what are your views on the college students, hackers and makers working on ventilators and ventilator substitutes?

#21 | POSTED BY VISITOR_

Too little too late to make a huge difference unfortunately.

And many will likely be sued for any patent infringement that may occur.

But that's Capitalism in our country, right?

#24 | Posted by Sycophant at 2020-03-30 04:56 PM | Reply

It doesn't mean we need to nationalize the economy. But nationalizing certain parts of it would help a lot.=
#16 | POSTED BY SYCOPHANT

I was being snarky. To your point, specifically nationalizing which parts of our economy would help a lot. Please note: I am not talking about as a short-term means of doing everything we can to mitigate this pandemic. This will pass at some point. I'm talking about on a more permanent basis, not crises-specific.
#19 | POSTED BY JEFFJ

Oh so if its short term, then its fine? Glad short term Socialist policies are okay.

Ironically, we already have Socialist policies for so much: utilities, education, fire and police, Federal Reserve, etc etc.

But long run, the government needs a greater stake in medical insurance and medical equipment manufacturing. They likely also need a greater ownership interest in the internet. They don't have to take over these fields completely but to avoid these types of emergencies or at least handle them better, we'll need these types of government ownership in part of these areas.

#25 | Posted by Sycophant at 2020-03-30 04:59 PM | Reply

No it wasn't. It was a government contract. The technology looks like it would have belonged to the company, not the government.

#22 | POSTED BY TONYROMA AT 2020-03-30 03:25 PM | FLAG:

"Looks like". Okay. That means government, that's supposed to manage this efficiently and create and hold breakthrough technologies for the good of the public, can't even contract for a simple engineering prototype. That's the one thing the fed should be reasonably expected to be good at, negotiating public-private parnterships like this one.

#26 | Posted by sitzkrieg at 2020-03-30 05:04 PM | Reply

Oh so if its short term, then its fine? Glad short term Socialist policies are okay.

I wasn't saying that. I couldn't tell from your post whether you were talking about this particular pandemic or the economy in both good and bad times.

I was putting parameters on what I was looking for so that we are on the same page.

#27 | Posted by JeffJ at 2020-03-30 05:14 PM | Reply

"To your point, specifically nationalizing which parts of our economy would help a lot."

The medical supplies they used to make a lot more of in Puerto Rico before Hurricane Maria www.cbsnews.com

#28 | Posted by snoofy at 2020-03-30 05:20 PM | Reply

#26

Did you even bother to read the damn article? "Government" wasn't the problem, capitalism was. The company was developing exactly what the government wanted but was then bought out by another company that didn't want the government's ordered product to undercut their more expensive - read more profitable - model(s).

That was why the company cancelled the project, not the government.

#29 | Posted by tonyroma at 2020-03-30 05:21 PM | Reply

TonyRoma,
They're blaming the Kenyan Marxist Muslim for not stopping Capitalism.
Like that's a thing they wanted him to do.

#30 | Posted by snoofy at 2020-03-30 05:23 PM | Reply

"To your point, specifically nationalizing which parts of our economy would help a lot."

How about this:
Anything and everything currently considered "essential."

#31 | Posted by snoofy at 2020-03-30 05:32 PM | Reply

Anything and everything currently considered "essential."

Good luck nationalizing gun stores.

#32 | Posted by REDIAL at 2020-03-30 05:49 PM | Reply

"Did you even bother to read the damn article? "Government" wasn't the problem, capitalism was"

The acquisition of the company wasn't the government's fault...but perhaps the govt. has some skin in this...

"That failure delayed the development of an affordable ventilator by at least half a decade, depriving hospitals, states and the federal government of the ability to stock up. The federal government started over with another company in 2014, whose ventilator was approved only last year and whose products have not yet been delivered."

Are you sure the govt was serious about getting these ventilators produced? If it was important then maybe this could have been moved along a little quicker.

It's not like we ran out of companies unwilling to make a product to sell to the US government. Do any of us know the details of exactly why it took so long to get these made? Without knowing that for sure, then I'm going to have to keep open the strong possibility that a slow and bureaucratic govt was a factor.

#33 | Posted by eberly at 2020-03-30 05:51 PM | Reply

"Good luck nationalizing gun stores."

They could k be state-ized, like lots of this nation's liquor stores are.

#34 | Posted by snoofy at 2020-03-30 06:14 PM | Reply | Newsworthy 1

It failed in 2012 and our gov't failed. The gov't oversight was on target and then failed to ensure the contract was honored.

Thank you Trump for not making sure in 2012 that this investment was completed.

#35 | Posted by Petrous at 2020-03-30 07:00 PM | Reply

#8 | Posted by JeffJ

The form of capitalism that dominated the US and world prior to the 80s was Stakeholder capitalism that worked pretty well - not perfectly mind you but well. It took into account everyone. However Shareholder capitalism became the norm during the 80s and that serves society poorly. Shareholder capitalism focuses on maximizing profits at all costs.

Here's nice article on Shareholder capitalism and a quote from the article:

And yet, in an important 2007 article in the Journal of Business Ethics, 31 of 34 directors surveyed (each of whom served on an average of six Fortune 200 boards) said they'd cut down a mature forest or release a dangerous, unregulated toxin into the environment in order to increase profits. Whatever they could legally do to maximize shareholder wealth, they believed it was their duty to do.

Now understand, I am very pro-capitalism. However capitalism can NOT be free reign as the right and CEOs wants. There needs to be checks on it because of the very attitude laid out in this article and quote - over 91% of CEOs are perfectly fine with doing unconscionable things. PFAS is a GREAT example of that.

#36 | Posted by GalaxiePete at 2020-03-30 08:13 PM | Reply | Newsworthy 1

#35 | Posted by Petrous

Agreed. Well because capitalism you know? Trying to make an unwilling party produce something - especially something that works well in life or death scenarios is an exercise in futility or stupidity. Of course the company could have drawn it out to today even had they not cut our losses.

#37 | Posted by GalaxiePete at 2020-03-30 08:17 PM | Reply

Did anyone ever figure out why we need 2400 F35s.

Also, how many of the high dollar ventilators could have been bought if we only had 2398 or 2399 of them?

#38 | Posted by MrSilenceDogood at 2020-03-31 07:35 AM | Reply

Unwilling? There was a contract.

#39 | Posted by Petrous at 2020-03-31 07:42 PM | Reply

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