Philips reached a settlement on Thursday in a class action lawsuit filed by patients and hospitals who purchased its recalled respiratory devices.
The company began a recall of sleep apnea devices and ventilators in June 2021, after discovering the foam used to soundproof the machines could break down, potentially exposing people to toxic chemicals. The total number of recalled devices now surpasses 10.8 million, according to a Thursday court filing.
Philips has agreed to pay out a minimum of $479 million to people who incurred out-of-pocket costs from purchasing or renting the recalled devices, and to payers who reimbursed patients for the cost of the devices.
The company will pay between $55 and $1,552 to users for each recalled device, a group of attorneys representing the plaintiffs wrote in a Thursday statement. Patients will also receive an additional $100 for each recalled device returned to Philips. Insurance companies will be paid separately. Philips will also pay attorneys’ fees.
The settlement is subject to final approval by Judge Joy Flowers Conti in the U.S. District Court for the Western District of Pennsylvania. Notably, the agreement does not include personal injury and medical monitoring claims.
“While this settlement marks a significant milestone, our work is far from finished. We will continue to pursue personal injury and medical monitoring claims on behalf of all plaintiffs against Philips, which are specifically excluded from this resolution,” the plaintiffs’ co-lead counsel said in a statement. “We are confident in these claims and we look forward to holding Philips accountable for the physical harms they caused patients.”
Philips said in a Thursday statement that the settlement does not include any admission of liability or wrongdoing. The company recorded a provision of 575 million euros in the first quarter of 2023 to cover the estimated final costs, which could vary depending on how many patients participate in the settlement and what the court awards for professional fees. Payments to class members would not start until the first quarter of 2024.
“Patient safety and quality are our top priorities, and we want patients to feel confident when using their Philips Respironics devices. We have structured this settlement to quickly deliver value to eligible patients in the US and provide an additional measure of confidence in the safety and quality of Philips Respironics products,” a spokesperson for Philips wrote in an email.
Philips is still in talks with the Department of Justice about a consent decree related to the recall. New CEO Roy Jakobs had previously hoped to finalize an agreement in the first half of 2023.
