Philips announced that it has reached an agreement with the U.S. Department of Justice to pay 288 million euros (equivalent to approximately 322 million dollars) to settle criminal and civil investigations linked to the widespread recall of its sleep and breathing devices. This step comes as part of the ongoing fallout from the crisis of recalling more than 15 million devices that began in 2021.
Background of the Technical Crisis
The problem began when the company discovered that the foam used for sound insulation in continuous positive airway pressure (CPAP) devices, bi-level positive airway pressure devices, and ventilators could degrade into fine particles that users might inhale. Although the company noticed issues with this foam as early as 2018 and added its replacement to maintenance schedules, it did not report this to the U.S. Food and Drug Administration (FDA) until the agency discovered these defects during a field inspection in 2021.
What This Means for Users and the Company
This settlement is separate from the consent decree imposed by the U.S. Food and Drug Administration on Philips in 2024, which still prevents the company from manufacturing or selling certain ventilators in the United States until it meets the strict standards set by the agency. The company's CEO, Roy Jakobs, confirmed that Philips does not have control over the timing of its return to the U.S. market, as this depends entirely on FDA approval after fulfilling all technical and regulatory requirements.
The company plans to pay the settlement amount during the first quarter of 2027, subject to the completion of relevant legal documentation. It is worth noting that this settlement does not cover all legal proceedings, as the company still faces other investigations, including probes by state attorneys general in the United States.