Tentative Agreement Reached with Regulators
Philips, the company behind a global recall of sleep apnea machines, announced on Monday that it will cease selling the devices in the United States. The decision comes as part of a tentative agreement between the company and regulators, which could result in a financial hit of nearly $400 million for Philips.
Recall Due to Foam Breakdown
The recall was initiated due to the risks associated with the breakdown of internal foam in over 5 million pressurized breathing devices. This breakdown can lead users to inhale tiny particles while they sleep. While the issue was first announced in mid-2021, efforts to repair or replace the machines have been met with delays, causing frustration among patients in the US and other affected countries.
Consent Decree with FDA and DOJ
Philips has reached a consent decree with the Food and Drug Administration (FDA) and the Department of Justice (DOJ). However, the agreement is still pending finalization and will need approval from a US judge. During a quarterly earnings update, Philips executives disclosed the tentative agreement.
Continued Servicing, No New Sales
According to the terms of the agreement, Philips will continue to service the recalled machines in the US but will not be permitted to sell new devices until it meets the corrective actions outlined by the FDA. To address the expenses required for compliance, the company has allocated $393 million.
Philips CEO Roy Jakobs assured analysts and investors that the company is committed to prioritizing safety and quality. He stated, “We will put safety and quality at the center of everything we do with a greater level of accountability.”
Health Risks and Legal Challenges
The FDA’s website warns patients about the potential risks of ingesting the foam particles, which include headaches, asthma, allergic reactions, and more severe health issues. Additionally, the agency issued a warning in November that the machines can overheat, posing a fire hazard in rare cases.
While the announcement addresses the US market, it does not resolve the 675 personal injury lawsuits filed against Philips regarding the sleep apnea devices. These lawsuits have been consolidated in a federal court in Pennsylvania. Furthermore, Philips also faces legal action in other countries such as Canada, Australia, Israel, and Chile.
Long Road to Resolution
The recall and subsequent resolution have been ongoing for several years, with customers reporting significant delays in obtaining refunds or replacement devices. Continuous positive airway pressure (CPAP) machines, as they are known, are crucial for managing sleep apnea by keeping airways open during sleep. Untreated sleep apnea can lead to severe health issues, including dangerous drowsiness and an increased risk of heart attacks.
As the final agreement between Philips and regulators is yet to be signed and filed with the court, the FDA refrained from commenting on the recent announcement. However, the company’s commitment to addressing the issue and prioritizing customer safety remains crucial, as patients continue to seek resolution and compensation for the risks they faced.
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