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Philips To Pay $1.1 Billion To Settle Breathing Machine Lawsuits

By Nithya Bose in Business News, posted April 30, 2024

Medical device maker Philips has confirmed it will pay $1.1 billion to resolve numerous personal injury lawsuits in the US over its sleep apnea machines.

The Dutch company has been embroiled in legal action over its defective breathing machines, which were pulled from the market after a global recall campaign.

The settlement does not indicate any admission of fault from Philips but is designed to eliminate uncertainty surrounding the lawsuits.

It includes provisions for medical monitoring claims from patients who have used the devices and who may face ongoing health risks.

Concerns the internal foam could deteriorate, causing users to inhale harmful particles and fumes, triggered the recall of over five million Philips breathing machines since 2021.

Delays in repairing or replacing the machines have frustrated regulators and patients worldwide.

One of the largest medical device recalls in history

This settlement marks a significant step in resolving one of the largest medical device recalls in history, spanning nearly three years.

The announcement boosted Philips shares by over 35 percent, reaching a one-year high.

Earlier in April, Philips reached an agreement with the US government that mandates an overhaul of its manufacturing of sleep apnea devices.

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This agreement also requires Philips to replace or reimburse patients for recalled machines.

The recall has mainly impacted continuous positive airway pressure (CPAP) machines, which use airflow to keep airways open during sleep.

Philips CEO Roy Jakobs highlighted the recent settlements as significant milestones, providing a clearer path forward for the company.

The FDA has warned inhaling deteriorated foam particles from these machines can lead to various health issues, from headaches and asthma to allergic reactions and more serious problems.

In 2021, an FDA inspection of Philips' Pennsylvania offices revealed several alarming signs.

It includes emails suggesting that the company had been alerted to issues with the foam years before the recall.

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