Philips has now announced the terms of an agreement with the United States government on its new sleep apnea machines. On Tuesday, a U.S. federal court issued a decree to restrict the production and sale of Philips’ new sleep apnea machines at several facilities in the country.
The U.S. District Court for the Western District of Pennsylvania has entered into what is known as a consent decree against the company’s subsidiary Philips Respironics to curb the sale and production until certain requirements are met, Reuters reported.
According to a Reuters report, Philips said it had reached what is known as a consent decree that spells out the improvements it needs to make at its Respironics plants in the United States. Reportedly, the device has already cost the company over 360 million euros in the fourth quarter of 2023.
In January, Philips said the costs of the consent decree led to a provision of 363 million euros in the fourth quarter of 2023, and were expected to be about 1% of total revenue in 2024.
The agreement followed the recall of millions of breathing devices and ventilators used to treat sleep apnea in 2021, because of concerns that foam used to reduce noise from the devices could degrade and become toxic, carrying potential cancer risks. The company also stopped selling new devices at that point, Reuters reported.
Earlier this year, the FDA said 561 deaths had been reported since 2021 related to the use of recalled ventilators and machines.
“It provides clarity and a roadmap to demonstrate compliance with regulatory requirements and to restore the Philips Respironics business,” the company said in a statement detailing the main terms of the decree.
CEO Roy Jakobs in January noted on average it takes five to seven years to comply with consent decrees in the medical equipment industry. Under the terms of the agreement, Philips Respironics will continue the recall.
The company said that more than 99 percent of the sleep therapy devices have been repaired globally, while the repair of the ventilators is ongoing. Philips Respironics will be allowed to continue servicing its already operating devices, including selling accessories and replacement parts. The consent decree also allows for exports of the machines.
Philips said its devices with the new silicone sound abatement foam have been subject to extensive testing and the company has not identified any safety issues. Philips confirmed the consent decree would not change its 2023–2025 financial outlook, Reuters reported.
The decree also requires implementation of a recall remediation plan, agreed to by the FDA and Philips, to help ensure relief is provided to patients impacted by the recall, as per Reuters.
Reportedly, the plan outlines remediation options such as a new or reworked device for the patients with the option for partial refund of certain devices. As part of this plan, Philips is also required to make several attempts to contact a patient or a medical equipment provider regarding actions they must take to help ensure patients receive remediation promptly.
Almost the whole of the company’s actionable registered sleep therapy devices have been remediated globally, Philips told Reuters, adding that it will retain experts to review aspects of the remediation.
The company said it will continue to provide new sleep and respiratory care devices outside the United States as the consent decree allows for exports, it stated.
