Media Release - Emergency procurement of ventilators by the Health Service Executive
7 March 2023
A report of the Comptroller and Auditor General on the emergency procurement of ventilators by the Health Service Executive has been presented to the Houses of the Oireachtas today.
Main findings
In early March 2020, the HSE identified an urgent need for additional ventilators to deal with the expected surge in demand for critical care, following the declaration of the Covid-19 pandemic.
The subsequent emergency procurement of ventilators cost the HSE a net €51 million. Of this amount, €20.5 million was paid to the HSE’s established suppliers, for 581 ventilators. These devices met the required standard for use in Ireland (and the EU) and have been deployed to hospitals or are held in reserve for future use.
The HSE did not received benefit or use from expenditure totalling €30.5 million, which represents a loss of value.
Advance payments totalling €81 million were made to new suppliers the HSE had not previously done business with. Following subsequent cancellation of orders, the HSE received refunds totalling €50.5 million. It is continuing to pursue refunds of €22.3 million for orders that were cancelled or where the ventilators received were deemed not fit for purpose.
The HSE considers that a further €8.1 million of expenditure is unrecoverable. The majority of this relates to ventilators received that the HSE decided not to use.
Assessment of ventilators needed
Between 3 March 2020 and 14 April 2020, the HSE placed orders for almost 3,500 ventilators, at a total cost of €129 million. The examination found that the HSE did not identify a target number of ventilators required before the purchase orders were placed.
HSE staff quickly identified the acute hospital system had a total of 533 ventilators available for use for adult patients. By late March 2020, they estimated as part of the HSE’s ‘surge capacity planning’ that up to 326 additional ventilators could be clinically used. The number of ventilators ordered by the HSE was over ten times this level.
On 21 March 2020, the Department of Health approved a proposal from the HSE to purchase 1,900 ventilators at an estimated cost of €73.5 million. No business case was presented to support the proposal. Without any further approval from the Department, the HSE placed orders for almost double the approved number of devices.
Sourcing suppliers
Due to HSE concerns around the capacity of its established suppliers to meet its planned purchases of ventilators, the HSE identified three potential new suppliers with the assistance of IDA Ireland. These were manufacturers of medical devices, located in China.
The HSE also received a number of direct approaches from companies with offers of assistance. These approaches were from intermediaries not directly involved in the manufacture of ventilators, who had little or no experience in the supply of such devices.
The examination found that no due diligence checks at all were carried out for four of the ten new suppliers to whom the HSE made advance payments. The extent of checks completed for the other six varied from commercial research to a high-level risk assessment. These checks flagged various financial and quality risks with the new suppliers. Nevertheless, the HSE considered that its perceived need for additional supply of ventilators outweighed the risks.
Quality of ventilators purchased
By the end of December 2021, the majority of the ventilators purchased from the HSE’s established suppliers had been deployed to hospitals for clinical use (468 ventilators) or were held in storage for future use (104 ventilators).
Quality issues emerged quickly after the first deliveries of devices from some of the new suppliers. The usual clinical and technical support was not available to the HSE from the new suppliers, and HSE staff had no experience using any of the ventilator models being offered by the new suppliers. The HSE commissioned an independent third party to test the ventilators delivered by the new suppliers. Of the first 100 examined, 41 failed the performance tests.
A further desk based review by the Health Products Regulatory Authority of supplier documentation for the delivered devices found that two models did not comply with the EU regulatory framework and that three models required further investigation.
Ultimately, none of the total of 467 ventilators received from the new suppliers were put into clinical use in Ireland. Of these, 102 were not put into use following performance testing. The remaining 365 devices were disposed of through donation to health authorities in India.
Cost and deployment
The price per unit for the ventilators ordered by the HSE ranged between €12,850 and €65,000. The examination received no evidence that the HSE completed any form of benchmarking analysis of prices prior to placing orders with the new suppliers.
Where a significant level of unplanned expenditure occurs in a short period, it is important that the established oversight and accountability arrangements continue to operate to the extent possible. Although the HSE was providing the Department and the Department of Public Expenditure NDP Delivery and Reform with weekly reports of expenditure in response to Covid-19, those reports did not include information on the advance payments made to ventilator suppliers. This was seriously misleading and negated the effectiveness of the Departments’ oversight of the expenditure.
Notes for Editors:
The Comptroller and Auditor General is an independent constitutional officer with responsibility for the audit of public funds. He reports to Dáil Éireann.
The report was signed by the Comptroller and Auditor General and sent to the Minister for Health on 7 December 2022. Under section 11 of the Comptroller and Auditor General (Amendment) Act 1993, the Minister is required to present the report to Dáil Éireann within three months of the date on which the report was submitted to him.
Since the report was sent to the Minister, the name of the Department of Public Expenditure and Reform has been altered to the Department of Public Expenditure NDP Delivery and Reform.
Click here to read the full text of the report.
Enquiries about the report should be directed to Ruth Foley at ruth.foley@audit.gov.ie or 018638618
