(The Hague) Dutch medical device maker Philips, struggling after a sleep apnea breathing device recall, set aside 575 million euros in the first quarter to face US lawsuits , he announced on Monday.
This provision largely contributed to the net loss of 583 million euros recorded by the group in the first three months of 2023.
At the same time, the group’s turnover increased by 6% to 4.2 billion euros, with CEO Roy Jakobs saying he was “confident” for 2023 despite “uncertainties”.
Philips said it is involved in “several class actions and individual proceedings” in the United States because of failures in the security of its devices.
Philips Respironics has thus made a provision of 575 million euros (635 million dollars) “related to claims for compensation for economic damage”, “an important step to deal with litigation related to the recall”, specified the band.
The company was thrown into trouble after a massive recall in 2021 of sleep apnea breathing devices. Users risked inhaling or swallowing pieces of toxic sound-deadening foam that could cause irritation and headaches. The group then also mentioned a “potential” risk of long-term cancers.
Philips then assured that, based on extensive testing, the devices were “within safe limits” and advised users to consult their healthcare professional to decide on a course of action.
In the red in 2022, the group had announced the elimination of 10,000 positions in total worldwide following this recall.
On Monday, Philips announced that 5,400 jobs had already been cut, with the CEO saying he was aware “that we are asking a lot of our employees to adapt to the necessary changes”.
More than 95% of new replacement devices and repair kits for defective devices have been produced and a “large majority” of those devices distributed to patients, according to the group.
“Resolving issues related to the Philips Respironics recall remains the group’s top priority,” said the CEO.
In addition to legal proceedings across the Atlantic, the group was ordered in early April in Italy to speed up recall and replacement operations for its defective devices.
