Project Aura was Newport’s first job for the federal government. Things moved quickly and smoothly, employees and federal officials said in interviews.
Every three months, officials with the biomedical research agency would visit Newport’s headquarters. Mr. Crawford submitted monthly reports detailing the company’s spending and progress.
The federal officials “would check everything,” he said. “If we said we were buying equipment, they would want to know what it was used for. There were scheduled visits, scheduled requirements and deliverables each month.”
In 2011, Newport shipped three working prototypes from the company’s California plant to Washington for federal officials to review.
Dr. Frieden, who ran the C.D.C. at the time, got a demonstration in a small conference room attached to his office. “I got all excited,” he said. “It was a multiyear effort that had resulted in something that was going to be really useful.”
In April 2012, a senior Health and Human Services official testified before Congress that the program was “on schedule to file for market approval in September 2013.” After that, the machines would go into production.
Then everything changed.
The medical device industry was undergoing rapid consolidation, with one company after another merging with or acquiring other makers. Manufacturers wanted to pitch themselves as one-stop shops for hospitals, which were getting bigger, and that meant offering a broader suite of products. In May 2012, Covidien, a large medical device manufacturer, agreed to buy Newport for just over $100 million.
Covidien — a publicly traded company with sales of $12 billion that year — already sold traditional ventilators, but that was only a small part of its multifaceted businesses. In 2012 alone, Covidien bought five other medical device companies, in addition to Newport.
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.
Newport applied in June 2012 for clearance from the Food and Drug Administration to market the device, but two former federal officials said Covidien had demanded additional funding and a higher sales price for the ventilators. The government gave the company an additional $1.4 million, a drop in the bucket for a company Covidien’s size.
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.
“Up until the time the company sold, I was really happy and excited about the project,” said Hong-Lin Du, Newport’s president at the time of its sale. “Then I was assigned to a different job.”
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. The world was focused at the time on the Ebola outbreak in West Africa. The research agency started over, awarding a new contract for $13.8 million to the giant Dutch company Philips. In 2015, Covidien was sold for $50 billion to another huge medical device company, Medtronic. Charles J. Dockendorff, Covidien’s former chief financial officer, said he did not know why the contract had fallen apart. “I am not aware of that issue,” he said in a text message.
Robert J. White, president of the minimally invasive therapies group at Medtronic who worked at Covidien during the Newport acquisition, initially said he had no recollection of the Project Aura contract. A Medtronic spokeswoman later said that Mr. White was under the impression that the contract had been winding down before Covidien bought Newport.
In a statement Sunday night, after the article was published, Medtronic said, “The prototype ventilator, developed by Newport Medical, would not have been able to meet the specifications required by the government, nor at the price required.” Medtronic said that one problem was that the machine was not going to be usable with newborns.
It wasn’t until last July that the F.D.A. signed off on the new Philips ventilator, the Trilogy Evo. The government ordered 10,000 units in December, setting a delivery date in mid-2020.
As the extent of the spread of the new coronavirus in the United States became clear, Dr. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, revealed on March 15 that the stockpile had 12,700 ventilators ready to deploy. The government has since sped up maintenance to increase the number available to 16,660 — still fewer than a quarter of what officials years earlier had estimated would be required in a moderate flu pandemic.
Last week, the Health and Human Services Department contacted ventilator makers to see how soon they could produce thousands of machines. And it began pressing Philips to speed up its planned shipments.
The stockpile is “still awaiting delivery of the Trilogy Evo,” a Health and Human Services spokeswoman said. “We do not currently have any in inventory, though we are expecting them soon.”