Philips will pay $1.1 billion to resolve U.S. lawsuits over breathing machines that expel debris

Medical device maker Philips, one of Westmoreland County’s largest employers, said Monday it will pay $1.1 billion to settle hundreds of personal injury lawsuits in the United States over its defective sleep apnea machines, which have been subject to a massive global recall.

The Dutch manufacturer did not admit any fault and said it reached the agreement to resolve uncertainty over the cases. The payout also includes medical monitoring claims from patients who used the company’s devices and could be exposed to future risks.

“The remediation of the sleep therapy devices for patients is almost complete, and the test results to date show the use of these devices is not expected to result in appreciable harm to health,” company CEO Roy Jakobs said in Philips’ first-quarter financial statement for the year.

Philips has recalled more than 5 million of its breathing machines since 2021 because their internal foam can break down over time, leading users to inhale tiny particles and fumes while they sleep. Efforts to repair or replace the machines have been plagued by delays that have frustrated regulators and patients in the United States and other countries.

The announcement is another step toward resolving one of the biggest medical device recalls in the industry’s history, which has dragged on for nearly three years. Philips shares rose more than 35% to a one-year high on the news.

In early April, the U.S. Justice Department filed a complaint for a permanent injunction against the company, specifically operations at Westmoreland County locations in Murrysville, East Huntingdon and Upper Burrell, along with one in California.

The company is among the top 10 employers in Westmoreland County in terms of workforce numbers, according to Pennsylvania Department of Labor statistics from late 2023.

In addition, the company entered into a federal consent decree in April that requires an overhaul of how it manufactures sleep apnea devices. The agreement also requires the company to replace or reimburse patients for recalled machines.

Philips will be required to hire a number of experts to oversee inspections of facilities and examine procedures related to medical device reports and handling of complaints. The experts will look at the plan for ensuring the foam is safe in new or replacement devices and make sure the recall remediation devices have undergone appropriate testing.

Those inspectors are required to file plans and reports with the U.S. Food and Drug Administration.

Most of the devices recalled are continuous positive airway pressure, or CPAP, machines. They force air through a mask to keep mouth and nasal passageways open during sleep.

Jakobs said in a statement the recent settlements are “significant milestones and provide further clarity on the way forward for Philips.”

The FDA’s website warns patients the risks of ingesting the sound-dampening foam could include headache, asthma, allergic reactions and more serious problems.

An FDA inspection of Philips’ Pennsylvania offices in the fall of 2021 uncovered a spate of red flags, including emails suggesting the company was warned of the problem with its foam six years before the recall.

“Ultimately, these combined agreements accomplish what we sought to achieve when this litigation began — holding Philips accountable by obtaining care for those with physical injuries and compensation for those needing new respiratory devices,” attorneys for the plaintiffs wrote in a statement.