Philips increases provision for recall 

AMSTERDAM, the Netherlands – Philips Respironics recorded EUR 165 million in additional provisions related to its recall of certain CPAP devices in the first quarter of 2022, according to the company’s financial results. 

The company recorded a EUR 65 million increase in the field action provision in the quarter to account for the higher expected volume of devices eligible for remediation and the higher communication costs. It recorded a further EUR 100 million provision for the potential higher cost of execution and to ensure the speed of the program in a volatile environment.  

“We are committed to supporting the community of patients who rely on our sleep and respiratory care solutions for their health and quality of life, and the physicians and customers who are dedicated to meeting patient needs,” said Frans van Houten, CEO of Royal Philips. “We are replacing or repairing the devices related to the Respironics field action as fast as possible and are continuing to update patients and customers about the program.” 

Philips says it has more than tripled its weekly production output compared to 2020, despite ongoing global supply chain challenges. To date, it says it has produced more than 2.2 million kits and devices. 

Additionally, following another wave of patient and customer communication, Philips expects the total number of units remediated to increase by about 300,000. 

Looking ahead: The company expects to complete comprehensive testing and analyses related to the affected CPAP and BiPAP devices in the second quarter and to complete 90% of the production and shipments to customers in 2022. 

As part of its results, Philips also shared that Respironics and certain subsidiaries in the U.S. received a subpoena on April 8, 2022, from the U.S. Department of Justice to provide information related to the events leading to the recall. The company says it is cooperating with the agency.