Under-pressure Dutch medical techmaker Royal Philips NV yesterday said it has set aside 575 million euros (US$632.74 million) to resolve expected lawsuits in the US, resulting from its massive recall of faulty sleep respirators.
The Amsterdam-based firm said it was a defendant “in several class-action lawsuits and individual personal injury claims” in the US due to safety issues with the device.
“This quarter, Philips Respironics recorded a 575 million euro provision in connection with the anticipated resolution of the economic loss class action,” Philips said as it announced its first-quarter results.
The move is “an important step in addressing litigation to the recall,” it said.
The provision is largely for the 583 million-euro net loss posted for the first three months of the year, Philips added.
Once famous for making lightbulbs and televisions, among other products, Philips in the past few years sold its subsidiaries to focus on medical care technology.
However, it was forced to issue a global recall in 2021 of devices that help people suffering from sleep apnoea, a disorder in which breathing stops and starts during sleep.
Philips said sound-dampening foam in the machines could degrade, causing people to inhale or swallow pieces of the foam with “possible toxic and carcinogenic effects.”
The recall hit the 132-year-old company hard, and by January it had announced it was slashing 10,000 jobs.
The company yesterday said it has cut 5,400 jobs so far.
“I realize that we are asking a lot from our employees to work through the necessary changes,” Philips CEO Roy Jakobs said.
Philips said to date more than 95 percent of the new replacement devices and repair kits for fixing registered devices have been produced, with the “vast majority” having been sent to customers and home care providers.
“Resolving the Philips Respironics recall for patients remains our highest priority,” Jakobs said.
Philips’ first-quarter sales increased by 6 percent to 4.2 billion euros.
“We are confident in our plan for the year 2023, acknowledging that uncertainties remain,” Jakobs said.
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