Question Period Note: Ventilator procurement

Recent questions have been raised about domestic contracting for ventilators.

• We remain steadfast in our efforts to ensure we have sufficient ventilators available for use should there be a surge in cases
  • Canada currently has 15 contracts with 13 manufacturers to deliver 40,547 ventilators. This includes contracts with domestic suppliers that answered the call to action in April 2020
  • Decision making around these contracts was based on technical assessments, science and our ongoing commitment to do everything possible to protect the health of Canadians

If pressed on domestic suppliers (Vexos, Canadian Emergency Ventilators (Starfish), CAE, FTI):

• All domestic manufacturers have received regulatory approval through Health Canada’s Interim Order
• Public Services and Procurement Canada (PSPC) continues to work closely with suppliers to monitor delivery schedules

If pressed on FTI:

• Ventilators for Canadians, a consortium of entrepreneurs, manufacturers and businesses, is 1 of 11 domestic suppliers that came forward with a proposal to supply ventilators to the Government
• Their proposal, based on an open source Medtronic design, was recommended by a review panel of technical experts, including respirologists, biomechanical engineers, and manufacturing professionals
• Following this recommendation, on April 10, Public Services and Procurement Canada awarded a contract to FTI Professional Grade Inc., the corporate entity put forward by the consortium for the purposes of this contract, for the supply and delivery of ventilators
• Baylis Medical is a subcontractor to FTI Professional Grade Inc. and a partner to Ventilators for Canadians
• FTI Professional Grade Inc. has begun to deliver ventilators under its contract

If pressed on FTI pricing:

• The pricing for the FTI ventilator contract is broadly consistent with that of other domestic suppliers
• As with other contracts through the Made-in-Canada call to action, companies such as FTI incurred costs to quickly re-tool their facilities, develop new manufacturing processes and seek Health Canada approval
• PSPC was also cognizant that pricing, at that time, could be impacted by the extreme demand for limited global supply chain for parts
• The model developed by FTI is based on the open source specifications of Medtronic’s PB560. Although Medtronic has indicated that the average selling price of this model is under $10,000 US, this is an unfair comparison, as it does not take into account expenses associated with ramping up manufacturing. These additional costs were built into the contract with FTI

If pressed on for the process that led to contract awards:

• A broad Call to Action was issued by Innovation, Science and Economic Development Canada (ISED) to solicit interest from Canadian companies that were able to support Canada’s COVID-19 response
• As part of this Call to Action, a number of companies identified their interest in supplying Canada with ventilators. Separately, potential ventilator suppliers had also come forward to the National Research Council and to the NGEN supercluster
• All of these companies—11 in total—were subsequently invited to send proposals to ISED covering the design of the ventilator, its clinical functionality, and the manufacturing plan, including details on the supply chain
• Proposals were reviewed by a panel of experts to assess the viability of technology and manufacturing approaches. The panel, which included medical clinicians, respirologists, biomechanical engineers, and manufacturing professionals, was asked to provide government with their best advice as to which designs would be most useful in the fight against COVID and could be manufactured quickly to meet the needs of Canada’s public health system
• The review panel also included technical experts from within the Government of Canada (Health Canada and the Public Health Agency of Canada). Staff from PSPC participated in the panel, however recommendations were based on feedback from technical experts
• Based on the advice of this panel of experts, Government of Canada officials identified four Made-in-Canada ventilators, and contracts were subsequently awarded to CAE Inc., FTI Professional Grade Inc., Canadian Emergency Ventilators (Starfish), and Vexos for 37,500 ventilators
• Each of the 4 companies subsequently worked with Health Canada officials through the regulatory process to ensure the ventilators met all the regulatory requirements to receive approval under the Interim Order

If pressed on corporate structure:

• In response to challenges, such as the Government’s Call to Action, and in particular for complex deliverables such as ventilator manufacturing, it is not uncommon to see project-specific consortiums formed
• For example, Starfish also formed a new entity, Canadian Emergency Ventilators, for the purposes of its contract
• As well, given the scope and complexity of the requirement, partnerships were formed as follows:
  • Vexos partnered with JMP Solutions, a member of the V4C consortium
  • Starfish (Canadian Emergency Ventilators) partnered with Celestica
  • Thornhill partnered with Linamar, to increase its production capacity

If pressed on pricing:

• Ventilator pricing for domestic contracts takes into account a number of factors. This pricing reflects costs to quickly re-tool facilities, develop new manufacturing processes and seek Health Canada approval

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