Philips is aiming to wrap first settlements in CPAP recall this year, CEO says

Nearly two years into its recall of 5.5 million CPAP and BiPAP machines and other respiratory devices, Philips is now the subject of hundreds of class-action and standalone lawsuits. In the cases, thousands of plaintiffs are seeking reimbursement for their recalled devices and, in some cases, damages for injuries they say were allegedly caused by the breathing machines.

Philips is hoping to reach an agreement with the former group within the next several months. CEO Roy Jakobs said as much in an interview with Dutch newspaper Het Financieele Dagblad this week, Reuters reports.

“I think that we can reach a settlement about compensation for economic damage this year, at least,” Jakobs told FD, according to a translation of the interview.

Jakobs didn’t offer any information about how large the settlement might turn out to be—though analysts have suggested it will land in the billions-of-euros range, per FD—but he noted that reaching the agreement quickly is crucial to Philips’ efforts to restore confidence in the company.

A settlement with those seeking damages for injuries allegedly caused by Philips’ devices, however, will come further down the line.

“That process is more complicated and is still in an earlier phase,” Jakobs said in the interview, adding that an agreement in that arena likely won’t arrive until next year.

The recall stems from findings that the polyester-based polyurethane foam used to muffle sound and vibrations in many of Philips’ respiratory devices could break down over time, potentially sending bits of debris and chemicals into a user’s airflow. In recall notices, the FDA suggested that the foam breakdown could irritate the skin, eyes and respiratory tract, cause headaches or asthma and have toxic effects on certain organs, among other potential effects.

In an updated tally published last month, the FDA counted a total of 98,000 medical device reports that had been filed in response to the recall, spanning from April 2021 through the end of last year. Those reports include a total of 346 patient deaths—though, as both the FDA and Philips have pointed out, MDRs aren’t thoroughly vetted by the agency and therefore can’t be definitively linked to any particular device or cause.

In fact, Philips has argued that the disintegrating foam is unlikely to cause any injuries. As it released safety test results in December, the Dutch devicemaker said the particles released by the foam were “unlikely to result in an appreciable harm to health in patients” and that volatile organic compounds emitted during the breakdown process presented “no appreciable harm to health.”

Those affected by the recall beg to differ. In a joint statement sent to Fierce Medtech in the wake of those test results, several law firms representing many of the class-action plaintiffs wrote, “Today, thousands of patients who put their trust in Philips are suffering from cancer and respiratory illnesses, while millions more are forced to rely on the company’s dangerously defective devices while waiting for a replacement. We look forward to holding Philips fully accountable for its misconduct.”

Jakobs also told FD that Philips is expecting to reach a settlement with the FDA within the first half of this year. The regulator has kept a close eye on Philips throughout the recall period, including issuing an order in March 2022 requiring the company to immediately alert all patients, healthcare providers and manufacturers affected by the recall about the safety action, since Philips’ communications to date had been “inadequate,” according to the FDA. A few months later, it proposed another order that would force Philips to repair, replace or refund all of the recalled machines, though it has yet to officially instate that mandate.

Along with those settlement goals, Philips has also previously suggested that it will wrap up the repair-and-replace program for the recalled devices this year. According to the company, as of late January, it had already produced 90% of the needed replacement devices and repair kits, and nearly 2.5 million of them had already been shipped out in the U.S., where most of the affected devices are located.