WASHINGTON — Medical device maker Philips said Monday it will pay $1.1 billion to settle hundreds of personal injury lawsuits in the U.S. over its defective sleep apnea machines, which have been subject to a massive global recall.
The Dutch manufacturer did not admit any fault and said it reached the agreement to resolve any uncertainty over the cases. The payout also includes medical monitoring claims from patients who used the company’s devices and could be exposed to future risks.
Philips has recalled more than 5 million of breathing machines since 2021 because their internal foam can break down over time, leading users to inhale tiny particles and fumes while they sleep. Efforts to repair or replace the machines have been plagued by delays that have frustrated regulators and patients in the U.S. and other countries.
Monday’s announcement is another step toward resolving one of the biggest medical device recalls in the industry’s history, which has dragged on for nearly three years.
Philips shares rose more than 35% to a one-year high on the news.
Earlier this month the company reached a settlement with the U.S. government that requires an overhaul of how it manufactures of sleep apnea devices. The agreement also requires the company to replace or reimburse patients for recalled machines.
Most of the devices recalled are continuous positive airway pressure, or CPAP, machines. They force air through a mask to keep mouth and nasal passageways open during sleep.
Company CEO Roy Jakobs said in a statement the recent settlements are “significant milestones and provide further clarity on the way forward for Philips.”
The FDA’s website warns patients that the risks of ingesting the sound-dampening foam could include headache, asthma, allergic reactions, and more serious problems.
An FDA inspection of Philips’ Pennsylvania offices in the fall of 2021 uncovered a spate of red flags, including emails suggesting the company was warned of the problem with its foam six years before the recall.
— Matthew Perrone