NETHERLANDS— Philips Holding USA and Philips Respironics, subsidiaries of Royal Philips, have reached a definitive agreement with the US Department of Justice (DOJ) and US Food and Drug Administration (FDA).

This deal, announced on January 29, 2024, follows the FDA’s inspection of Philips Respironics’ Murrysville facility in 2021, which prompted conversations between the DOJ, representing the FDA, and Royal Philips in July 2022.

The agreement focuses on Philips Respironics’ US businesses, which include manufacturing sites in Murrysville and New Kensington, a service facility in Mount Pleasant, and the Respironics headquarters in Pittsburgh, Pennsylvania.

The deal primarily addresses Philips Respironics’ business operations in the United States, including its production plants in Murrysville and New Kensington, service center in Mount Pleasant, and Respironics headquarters in Pittsburgh, Pennsylvania.

The consent decree outlines a systematic plan of action, milestones, and deliverables designed to ensure regulatory compliance.

Key provisions include completing remediation activities for sleep and respiratory care devices affected by Respironics’ voluntary June 2021 recall, as well as adhering to the FDA’s Quality System Regulations.

Furthermore, the decree authorizes the continued servicing of existing sleep and respiratory care devices with healthcare providers and patients in the United States, as well as the sale of accessories, consumables, and replacement components.

However, it requires the suspension of new CPAP or BiPAP equipment, as well as other respiratory care devices, in the United States until the decree’s conditions are met.

Export clauses are also included, allowing Philips Respironics to continue distributing sleep and respiratory care devices and related items outside of the United States, subject to specific conditions.

Philips Respironics has conducted extensive testing on devices with the new silicone sound abatement foam, confirming their safety for use in accordance with instructions.

Speaking during the announcement, Roy Jakobs, CEO at Philips, emphasized the company’s commitment to patient safety and quality improvement.

“With the agreement on a consent decree for Philips Respironics in place, we now have a clear path forward to gradually restore the business, serving patients around the world,” he stated.  

On his part, Philips’ Chief Patient Safety and Quality Officer, Steve C de Baca, reiterated the company’s dedication to meeting the consent decree requirements.

He affirmed, “We are fully committed to meeting the terms of the consent decree and continuing to serve the millions of patients who rely on our devices every day.”

In light of the consent decree, Philips expects costs of around 100 basis points in 2024, primarily related to remediation activities and profit disgorgement payments for Philips Respironics sales in the US.

However, the previously stated 2023-2025 Group financial outlook remains unchanged, excluding the impact of ongoing litigation and investigations by the US DOJ related to the Respironics field. 

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