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Philips reaches $1.1 billion settlement of CPAP machine lawsuits and admits no fault or liability

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From Philips

Philips has reached an agreement to settle lawsuits from users of some of the company's sleep therapy machines.



CNN

Medical device manufacturer Philips announced a nearly $1.1 billion personal injury settlement for some of its CPAP, ventilators and BiPAP machines that were at the center of a massive recall in 2021. The company also agreed to $25 million to be paid in medical monitoring settlement.

The Dutch company's settlement does not admit fault, liability or that any injuries were caused by the devices, the company said, but the money will be paid to people in the U.S. who sued Philips, claiming they were injured by the defective devices. Shares of Philips rose sharply on Monday after it announced the deal along with its first-quarter financial results.

The machines are used by people with obstructive sleep apnea to help them continue breathing while they sleep. Without the machine, the condition can cause people to stop breathing briefly while sleeping, sometimes several times an hour. This condition can cause a person to not feel fully rested because their brain wakes them up when the body senses they are no longer breathing. It also makes people much more susceptible to developing other serious health problems, such as coronary heart disease, heart failure and stroke. The World Health Organization estimates that approximately 100 million people worldwide have this condition.

The issue that prompted the recall was the polyester-based polyurethane foam used in the device to provide quieter operation and reduce vibration. The foam could potentially break down and people could inhale pieces of the foam or some of the chemicals released when the material breaks down, the U.S. Food and Drug Administration said. The company said it had received complaints before the recall and investigated the issue on a case-by-case basis. The recall of more than 15 million machines worldwide was done “out of an abundance of caution,” the company said.

People using the machines reported a wide range of injuries to the FDA, including pneumonia, asthma, infection, lumps, chest pain and cancer. As of January, the FDA has received 116,000 medical device reports, including 561 reports of deaths reportedly related to foam breakdown since April 2021, the FDA said.

In October 2023, Philips Respironics agreed to the FDA's suggestion to conduct additional testing on the devices.

Philips' parent company, Royal Philips CEO Roy Jakobs, addressed the settlement during the earnings call.

“Patient safety and quality are our top priorities, and we have taken important steps to further resolve the impact of the Respironics recall,” Jakobs said in a press release. on the company's website. “The recovery of the sleep therapy devices for patients is almost complete and the test results to date show that the use of these devices is not expected to result in noticeable damage to health. We regret any concerns patients may have experienced.”

The recalled devices were sold in the US under the Philips Respironics brand between 2008 and 2021. The company says it has recovered 99% of usable sleep therapy device recordings to date. A list of affected devices will be posted on the website. Philips says 58,000 people have filed claims or signed up for the settlement.

Currently, the company cannot sell its sleep therapy devices in the US until it meets the terms of a consent decree with the government. Philips will service devices still in use in the US and provide replacement parts.

Lawyers for the plaintiffs in the case said the announcement will help their clients.

“The agreements with Philips will provide compensation to those users of the now recalled CPAP and other breathing devices who suffer significant physical injuries and important research to treat those injuries,” said a statement from the plaintiffs' co-lead attorney, Sandra L . Duggan, Kelly K. Iverson, Christopher A. Seeger and Steven A. Schwartz.

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The latest agreement is in addition to an open-ended settlement that provides more than $600 million in economic compensation to affected device owners, plaintiffs' attorneys said.

“Ultimately, these combined agreements achieve what we sought to achieve when this lawsuit began: hold Philips accountable by providing care to those with physical injuries and compensation for those who need new ventilators,” the lawyers said in the emailed statement to CNN.

People who still have one of these recalled machines will get $100 from the company for each recalled device they purchased, leased or rented if they return the device by August 9. More details are available on the company's website.

This latest agreement is still not final. The settlement was reached through mediation with Judge Diane M. Welsh. The settlement has yet to be filed in federal court. Those who filed suit can expect money from the company in 2025.

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