Companies across the global economy are teaming up with the medical world to ramp up ventilator production to meet the spike in demand and shortages at hospitals treating COVID-19, the disease caused by the coronavirus.

As hospitals around the world are dealing with or preparing for an influx of patients from the coronavirus outbreak, medical companies are either increasing ventilator production on their own or collaborating with other industries, including automakers and academia.

The medical device industry has responded to the ventilator shortage by increasing production across the globe. Data analytics company GlobalData estimated in March that about 880,000 ventilators are in demand worldwide, with a shortage of 75,000 in the U.S. alone. Larger public companies that provide the U.S. with the devices include General Electric Co., Medtronic PLC, Hill-Rom Holdings Inc., ResMed Inc. and Sweden's Getinge AB.

U.S. President Donald Trump ordered General Motors Co. on March 27 to produce ventilators for U.S. hospitals after invoking the Defense Production Act earlier in the month. Ford Motor Co. and Tesla Inc. are independently working on plans to bring the devices to hospitals. Daimler AG-owned Mercedes-Benz, Volkswagen AG, Ferrari NV and Nissan Motor Co. Ltd. are among the global automakers helping to increase production.

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Nonmedical industries face challenges with regulations and learning to produce a new product, according to experts. The efforts also might not be fast enough to meet the current demand for ventilators but will help new patients in the coming months.

California-based medical equipment company Resmed is a major U.S importer of ventilators, according to Panjiva, a division of S&P Global Market Intelligence. Shipments linked to the company accounted for 34.9% of seaborne ventilator imports in the 12 months to Feb. 28.

Demand for ventilators

As confirmed global cases of COVID-19 surpass 870,000, medical experts worry that the number of patients will outweigh the number of ventilators needed at hospitals.

"Medtronic recognizes the demand for ventilators in this environment has far outstripped supply," said Bob White, president of the Minimally Invasive Therapies Group at Medtronic, in a March 18 statement announcing that the company would increase ventilator production by more than 40%. "No single company will be able to fill the current demands of global healthcare systems."

The shortage has also expedited M&A in some areas, as demonstrated by California's Masimo Corp., which acquired the German ventilator manufacturer TNI medical AG in mid-March. CEO Joe Kiani said in a statement that the timing would allow Masimo to scale up manufacturing more quickly.

Newer medical technologies also have begun to take advantage of loosened restrictions in the regulation of ventilators and other devices that can be used for the same purpose. The U.S. Food and Drug Administration announced March 23 that it would be making it easier for manufacturers to produce such devices.

Bellerophon Therapeutics Inc. announced the first COVID-19 patient to be treated with the New Jersey company's INOpulse inhaled nitric oxide system, which is designed to improve lung function to delay the need for a ventilator, a spokesperson said in an email.

Physician Roger Alvarez, who treated the patient at the University of Miami School of Medicine, said the new system would allow "ventilators to be preserved for the most critically ill."

Auto industry and mass production

Automakers are also working on plans to help produce more ventilators for U.S. hospitals facing a shortage, but experts say they face hurdles with regulations and timing.

GM and Ventec Life Systems are using a GM plant to make ventilators and plan to deliver the first batch in April before ramping up to produce 10,000 per month. Ford is working with GE Healthcare to expand production of a simplified version of the medical company's existing ventilator design. Ford will produce 50,000 devices within 100 days and up to 30,000 a month afterward as needed.

Meanwhile, Tesla CEO Elon Musk shipped 1,255 FDA-approved ResMed, Philips and Medtronic ventilators from China and to Los Angeles. Musk said more ventilators would be delivered to New York, which has seen the majority of U.S. COVID-19 cases, and the company will ship more to hospitals worldwide within Tesla's delivery network.

Automakers want to use their facilities and mass production skills to pump out machines, but building medical devices presents challenges not faced when building cars, experts said.

If a customer drives a car off the lot and hears a rattle three weeks later, there is "very little chance anybody dies," Erik Gordon, clinical assistant professor at the University of Michigan's business school, said in an interview. Life-sustaining ventilators need to be reliable in a way that cars are not as the consequences are different, Gordon added.

The FDA also requires the highest level of quality assurance for life-sustaining devices like ventilators. But the agency has loosened restrictions and said it would be flexible around production requirements during the pandemic.

Automakers can also help by producing ventilator components that are in short supply because of high demand or because they are sourced from China, said Sri Talluri, professor of supply chain management at Michigan State University.

"Retooling may not be such a big problem if the focus is on parts production," Talluri said.

Production will not be quick enough for people who are in the hospital today, Gordon said, but it will help people who are in the hospital eight to 12 weeks from now.

Analysts at Cox Automotive said smaller shops within the car companies would produce these components instead of larger plants. Automakers have suspended production in North America, along with Europe, during the outbreak.

"These facilities are excellent hubs for logistics and parts and storage, so shipping into them would be relatively easy," Cox Automotive spokesman Mark Schirmer said, citing the company's analysts. "And they have many engineers in place and a capable workforce."

University of Oxford associate professor in engineering science Mark Thompson

Source: University of Oxford

Help from academia

Academics also have stepped up with new ventilator designs that could help simplify manufacturing and more easily scale the devices for mass production.

A team of engineers, anesthetists and surgeons at the University of Oxford and King's College London have designed a prototype "bag-in-a-bottle" ventilator that could be assembled using some off-the-shelf components, Oxford Professor Mark Thompson told S&P Global Market Intelligence in an interview.

The team plans to begin testing the device by early April in a small number of patients in hospitals in Oxford and London, with a scaled manufacturing effort up and running in two to three months, Thompson said. The design will be available for manufacturers in other areas like the auto industry to start production, as well.

"The huge benefit is that there's a limited amount of testing you have to do before you get to patients because many of the components are already in use, and regulators will be happy," Thompson said. "And the familiarity for healthcare workers is really important."

The world's unpreparedness in the wake of the coronavirus pandemic has given some perspective on how quickly devices like ventilators can become a limited healthcare need, Thompson said.

"It will be a lesson for governments around the world that, despite the fact there are pandemic plans in place, they might not have taken this as seriously as might have been preferable."