Philips Respironics (PHGFF.PK,PHG) announced on Monday that on settling with the Food and Drug Administration, it has decided to halt the sales of the company's ventilators and CPAP breathing machines over complaints that the machines were blowing gas and bits of foam into user's airways.
The Dutch-based company's continuous positive airway pressure or CPAP machines were popular for the treatment of sleep apnea and other breathing disorders.
The settlement with the FDA and Justice Department requires the company to keep servicing the machines which are already in use while stopping the sale of new machines.
"Resolving the consequences of the Respironics recall for our patients and customers is a key focus area and I acknowledge and apologize for the distress and concern caused," Philips chief executive Roy Jakobs stated. "We are fully committed to complying with the consent decree, which is an important step and provides a clear path forward."
Last year, the company had recalled more than 1 million breathing machines, over the concerns that the machine's polyester-based foam could easily break down. The foam is used to reduce sound and vibration in the machines.
The FDA explained that "If the foam breaks down, black pieces of foam, or certain chemicals that are not visible, could be breathed in or swallowed by the person using the device."
The company conducted many tests in July, which showed that the levels of particulate matter released into users' airways were "within the applicable safety limits and are unlikely to result in appreciable harm to health of patients."
However, the FDA remained unsatisfied with the company's conclusions citing that Philips testing and analysis strategy could not fully evaluate the risks posed to the users.
According to the company's Securities and Exchange Commission filing, it has made a provision of approximately $392 million and informed the investors that it expects to incur additional costs in 2024 related to the settlement.
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