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Philips to Pay Over $1 Billion to Resolve Lawsuits Over Sleep Apnea Devices

— Payout includes medical monitoring claims from patients who used company's CPAP, BiPAP machines

MedpageToday
A photo of the Philips Center, in Amsterdam, Netherlands
(AP Photo/Peter Dejong, File)

Medical device maker Philips said Monday it will in the U.S. 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 any 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.

Philips has recalled more than 5 million of its continuous positive airway pressure (CPAP) and bilevel positive airway pressure (BiPAP) machines since 2021 because their internal sound-dampening 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 U.S. and other countries.

Monday's announcement is another step toward resolving one of the recalls in the industry's history, which has dragged on for nearly 3 years.

Philips shares rose more than 35% to a 1-year high on the news.

Earlier this month the company reached a settlement with the U.S. government that requires an overhaul of how it manufactures its sleep apnea devices. The agreement also requires the company to replace or reimburse patients for recalled machines.

Most of the recalled devices are CPAP machines, which force air through a mask to keep mouth and nasal passageways open during sleep.

Company CEO Roy Jakobs said in a statement the recent settlements are "significant milestones and provide further clarity on the way forward for Philips."

The patients that the risks of ingesting the polyester-based polyurethane 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 6 years before the recall.

Last April, the FDA announced another recall related to Philips' CPAP and BiPAP devices, saying that some reworked machines may not deliver the correct therapy. And in November, the agency issued a new warning that the DreamStation 2 machines can overheat and in rare cases cause fires.