Philips reaches $1.1 billion settlement for CPAP machine lawsuits, admits no fault or liability

(CNN) — Medical device maker Philips announced a nearly $1.1 billion personal injury settlement over some of its CPAP, ventilators and BiPAP machines that were at the heart of a massive recall in 2021. The company also agreed to pay $25 million in a medical monitoring settlement.

The Dutch company does not admit fault, liability or that any injuries were caused by the devices with the settlement, the company said, but the money will pay people in the US who sued Philips and claimed that they had been injured by the faulty devices. Philips’ stocks rose sharply on Monday after it announced the agreement along with its first-quarter financial results.

The machines are used by people who have obstructive sleep apnea to keep breathing while they sleep. Without the machine, the disorder can cause people to briefly stop breathing while they are sleeping, sometimes several times an hour. This condition can keep a person from feeling fully rested because their brain wakes them up when the body senses that they are no longer breathing. It also makes people much more prone to developing other serious health problems such as coronary heart disease, heart failure and stroke. The World Health Organization estimates about 100 million people have this disorder globally.

The problem that triggered the recall was the polyester-based polyurethane foam used in the device to make it run quieter and to limit vibration. The foam could potentially disintegrate, and people could breathe in pieces of the foam or some of the chemicals released with the breakdown of the material, the US Food and Drug Administration said. The company said it had received complaints prior to the recall and investigated the issue on a case-by-case basis. The recall of more than 15 million machines globally was made “in an abundance of caution,” the company said.

People who used the machines reported a wide range of injuries to the FDA including pneumonia, asthma, infection, nodules, chest pain and cancer. As of January, the FDA has received 116,000 medical device reports, including 561 reports of death reportedly associated with the breakdown of the foam since April 2021, the FDA said.

In October 2023, Philips Respironics agreed to the FDA’s suggestion that it perform additional testing on the devices.

Philips’ parent company, Royal Philips CEO Roy Jakobs addressed the settlement during the earnings call.

“Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall,” Jakobs said in a news release on the company’s website. “The remediation of the sleep therapy devices for patients is almost complete, and the test results to date show the use of these devices is not expected to result in appreciable harm to health. We do regret the concern that patients may have experienced.”

The recalled devices were sold between 2008 and 2021 in the US under the Philips Respironics brand. The company says it has remediated 99% of the actionable sleep therapy device registrations to date. A list of its impacted devices are posted on its website. Philips says 58,000 people have filed claims or registered for the settlement.

Currently, the company cannot sell its sleep therapy devices in the US until it meets the terms of a consent decree with the government. Philips will service units that are still in use in the US and provide replacement parts.

Lawyers for the plaintiffs in the case said that the announcement will be a help to their clients.

“The agreements with Philips will provide compensation to those users of the now-recalled CPAP and other respiratory devices who suffer from significant physical injuries and important research for the treatment of those injuries,” a statement from the plaintiffs’ co-lead counsel Sandra L. Duggan, Kelly K. Iverson, Christopher A. Seeger and Steven A. Schwartz.

The latest agreement is in addition to an uncapped settlement that provides more than $600 million in economic compensation to affected device owners, the plaintiffs’ lawyers said.

“Ultimately, these combined agreements accomplish what we sought to achieve when this litigation began — holding Philips accountable by obtaining care for those with physical injuries and compensation for those needing new respiratory devices,” the attorneys said in the emailed statement to CNN.

For people who still have one of these recalled machines, the company will give them $100 for each recalled device they have purchased, leased, or rented if they return the device by August 9. There are more details available on the company’s website.

This latest agreement is still not final. The settlement was reached through a mediation with Judge Diane M. Welsh. The settlement still has to be filed in a federal court. Those who sued can expect to see money from the company in 2025.

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