Philips has reached an agreement with the US Department of Justice, representing the US Food and Drug Administration, on the terms of a consent decree focused on Philips Respironics in the US over its recall of certain CPAPs, BiPAP, and ventilators.

The consent decree, announced Monday, is being finalized and will be submitted to the relevant US court for approval. The decree will provide Philips Respironics with a roadmap of defined actions, milestones, and deliverables to demonstrate compliance with regulatory requirements and to restore the business.

“Resolving the consequences of the Respironics recall for our patients and customers is a key focus area, and I acknowledge and apologize for the distress and concern caused. We are fully committed to complying with the consent decree, which is an important step and provides a clear path forward,” says Roy Jakobs, CEO of Royal Philips, in a release. 

In the US, Philips Respironics will continue to service sleep and respiratory care devices already with healthcare providers and patients and supply accessories (including patient interfaces), consumables (including patient circuits), and replacement parts (including repair kits). 

Until the relevant requirements of the consent decree are met, Philips Respironics will not sell new CPAP or BiPAP sleep therapy devices or other respiratory care devices in the US.

As a consequence of addressing this consent decree, which is a multi-year plan, Philips recorded a provision of EUR 363 million in Q4 2023 that relates to remediation activities, inventory write-downs, and onerous contract provisions. In 2024, Philips expects around 100 basis points of costs that relate to remediation activities and disgorgement payments for Philips Respironics sales in the US.

Further details will become available once the consent decree has been finalized and submitted to the relevant US court for approval.

Outside the US, Philips Respironics will continue to provide new sleep and respiratory care devices, accessories (including patient interfaces), consumables (including patient circuits), replacement parts (including repair kits), and services, subject to certain requirements.

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