Philips agrees to consent decree with FDA regarding Respironics business

Philips agrees on the terms of a consent decree with the US Department of Justice, or DOJ, representing the U.S. FDA. The consent decree primarily focuses on Philips Respironics’ business operations in the U.S. The consent decree is being finalized and will be submitted to the relevant U.S. court for approval. The decree will provide Philips Respironics with a roadmap of defined actions, milestones, and deliverables to demonstrate compliance with regulatory requirements and to restore the business. In the U.S., Philips Respironics will continue to service sleep and respiratory care devices already with healthcare providers and patients, and supply accessories, consumables and replacement parts. Until the relevant requirements of the consent decree are met, Philips Respironics will not sell new CPAP or BiPAP sleep therapy devices or other respiratory care devices in the U.S. Outside the U.S., Philips Respironics will continue to provide new sleep and respiratory care devices, accessories, consumables, replacement parts and services, subject to certain requirements. As a consequence of addressing this consent decree, which is a multi-year plan, Philips recorded a provision of EUR 363M in Q4 2023 that relates to remediation activities, inventory write-downs and onerous contract provisions. In 2024, Philips expects around 100 basis points of costs that relate to remediation activities and disgorgement payments for Philips Respironics sales in the U.S. Further details will become available once the consent decree has been finalized and submitted to the relevant U.S. court for approval.