Philips update: Consent decree lingers, as company completes recall in many markets 

AMSTERDAM – Philips CEO Roy Jakobs says not to read into the fact that the company still hasn’t finalized a consent decree with the Department of Justice to resolve issues related to a recall of certain CPAP and other respiratory devices, nearly a year after discussions first began.  

Jakobs had previously said that he had hoped the consent decree would be finalized in the first half of 2023. 

“I think it's important to stress there is no specific reason that this is indicating something,” he said during a conference call on July 24 to discuss the company’s second quarter financial results. “I think it only indicates that this is being worked through very diligently. I think in both parties, we are putting all our efforts into it to bring this to the best possible conclusion. The moment we get any update on timing or conclusion, of course, we will come forward with it, but it's hard to put a specific timeline on it. Also, when I said earlier in the year, I would hope for first half, that was my hope. But I also said it's not in our control.” 

The timeline is “not out of the normal,” Jakobs said, when compared to the company’s previous experience negotiating a consent decree for automated external defibrillators (AEDs), which also took more than one year and which was “smaller in size and complexity” compared to the CPAP recall. 

Jakobs said Philips has produced about 99% of the new replacement devices and repair kits required for the remediation of registered affected devices and that it has provided the “vast majority” of produced devices to patients and providers, prompting questions about the company’s eventual return to the market in the U.S. 

“So, we are, indeed, in discussions with regulators as we are also now completing, especially on the sleep side, the recall in many markets,” he said. “We have made great progress and that leads to the subsequent discussions on how and when to return to growth. That's something that we will see probably materialize further into second half.” 

Jakobs said the remediation of affected ventilators, however, is still ongoing – something that dampened the company’s financial results for Sleep & Respiratory Care, despite a strong quarter for mask sales. 

“If you look to the SRC mix, actually, you see that the ventilation side was where we saw the decline,” he said. “We’re still working through the remediation on that, so that is connected. But at the same time, we have seen masks coming back stronger and that was a positive development in the quarter.”