Philips readies to settle class action 

AMSTERDAM – Philips has recorded a EUR 575 million provision in the first quarter for the anticipated resolution of an economic loss class action related to its recall of certain sleep therapy and ventilator devices. 

“As previously disclosed, Philips is a defendant in several class-action lawsuits and individual personal injury claims,” the company stated in a press release disclosing its financial results for the first quarter. “In the U.S., an economic loss class action, a medical monitoring class action and personal injury claims have been filed. This quarter, Philips Respironics recorded a EUR 575 million provision in connection with the anticipated resolution of the economic loss class action, an important step in addressing the litigation related to the recall.” 

Philips stated that an investigation by the U.S. Department of Justice, as well as discussions with the U.S. Food and Drug Administration, related to a proposed consent decree are ongoing. 

The company stated that more than 95% of the new replacement devices and repair kits required for the remediation of recalled, registered devices have been produced, with the vast majority sent to patients and home care providers. Earlier this month, the FDA sought to clarify the number of replacement devices it has shipped to customers.   

For the first quarter, Philips reported group sales increased EUR 4.2 billion, representing comparable growth of 6%. Order intake was flat, however, with double-digit growth in the Diagnosis & Treatment businesses, offset by a decline in the Connected Care businesses. Adjusted EBITDA increased to EUR 359 million, or 8.6% of sales, in the first quarter compared to EUR 243 million, or 6.2% of sales, in the same period last year. 

Looking ahead to the second quarter, Philips stated it expects to report on the VOC testing of ozone-induced foam degradation in the first-generation DreamStation devices and on the complete set of testing results for the SystemOne and DreamStation Go sleep therapy devices. The company previously reported in June 2022 that a comprehensive testing and research program on the PE-PUR foam in certain CPAP, BiPAP and mechanical ventilator devices showed very low prevalence of visible degradation.