Philips: final approval for US settlement
(CercleFinance.com) - Philips announced on Wednesday that it has obtained final approval for the out-of-court settlement reached in the US concerning its defective respiratory aids and ventilators.
Under the terms of the settlement reached with the Department of Justice (DoJ), the Dutch healthcare equipment group has undertaken to comply with the quality system regulations established by the FDA, the US health authority.
Independent experts will be responsible for overseeing the proper application of these standards.
While Philips will be allowed to take over the maintenance of devices already installed with healthcare providers and customers, the group will not be able to market new devices in the United States until the conditions of the agreement have been met.
The case, which has been pursuing the company for almost three years, concerns a health risk linked to the polyester-based polyurethane soundproofing foam used in its devices.
With this arrangement now in place, we have a clear roadmap for gradually turning our business around, management said.
To date, Philips estimates that it has recalled and repaired over 99% of the sleep appliances and fans that were the subject of the safety notification issued in 2021.
In financial terms, the company estimates the impact of these measures at around one percentage point on its costs in 2024. Last January, it had reported a provision of E363m linked to the agreement reached with the US authorities.
Following this announcement, Philips shares rose by more than 2% in early trading on Wednesday, one of the biggest winners in Amsterdam's AEX index.
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