Philips

Philips Respironics recalled millions of CPAP, BiPAP and ventilator devices beginning in June 2021 after identifying potential health risks associated with polyester-based polyurethane (PE-PUR) foam used to reduce sound and vibration inside the machines. The FDA says the recall ultimately affected approximately 15 million devices worldwide. The foam could break down into particles or release chemicals that could potentially be inhaled or swallowed by patients. The FDA classified affected recalls as Class I, its most serious recall classification. FDA – Philips recall and enforcement history: https://www.fda.gov/medical-devices/recalled-philips-ventilators-bipap-machines-and-cpap-machines/fda-activities-related-recalled-philips-ventilators-bipap-machines-and-cpap-machines Regulatory problems continued after the recall. In April 2024, the U.S. government alleged that Philips Respironics manufactured and distributed adulterated and misbranded medical devices and failed to comply with manufacturing requirements intended to ensure device safety and effectiveness. A federal court entered a consent decree of permanent injunction on April 9, 2024. With limited exceptions, it restricted Philips from manufacturing and selling new CPAP, BiPAP and other respiratory devices at several U.S. facilities until specified regulatory requirements were satisfied. Philips was also required to implement an FDA-approved recall remediation plan and undergo independent compliance oversight. U.S. Department of Justice – consent decree: https://www.justice.gov/archives/opa/pr/court-enjoins-philips-respironics-manufacturing-and-distributing-adulterated-and-misbranded Company response: Philips agreed to the consent decree but did not admit the allegations in the government's complaint. Philips described the decree as a roadmap for demonstrating regulatory compliance and restoring its Respironics business. Key facts: Approximately 15 million devices were affected worldwide; the recall began in June 2021 over potential PE-PUR foam health risks; the FDA classified affected recalls as Class I; and a federal court imposed a permanent-injunction consent decree in April 2024 restricting production and sales until compliance requirements were met.

In 2013, Philips agreed to pay more than $4.5 million to settle SEC Foreign Corrupt Practices Act charges concerning misconduct by its Polish healthcare subsidiary. According to the SEC, from 1999 through 2007, employees of Philips Poland made improper payments to officials at Polish public healthcare facilities in connection with at least 30 public tenders for medical equipment. Philips employees allegedly worked with officials to shape tender specifications around Philips products, increasing the likelihood that Philips would win the contracts. Payments to officials were then linked to successful tenders. The SEC found that Philips' books and records did not accurately reflect the transactions and that the company lacked sufficient internal accounting controls over the subsidiary. Philips consented to the settlement without admitting or denying the SEC's findings. This is a separate historical corruption case from Philips' later China tender misconduct. Sources: SEC enforcement release — Philips Electronics https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-69327-s?utm_source=chatgpt.com https://antykorupcja.gov.pl/download/4/12603/RaportKE.pdf?utm_source=chatgpt.com European Commission healthcare corruption study discussing the Philips Poland case

In May 2023, the U.S. Securities and Exchange Commission announced that Koninklijke Philips N.V. agreed to pay more than $62 million to resolve Foreign Corrupt Practices Act-related charges concerning its medical-equipment business in China. The SEC found that between 2014 and 2019, Philips China employees, distributors and sub-dealers engaged in improper conduct intended to influence government hospital officials and increase the likelihood that Philips products would win public tenders. This included influencing tender specifications to favor Philips products and preparing additional bids involving competitors' products to create the appearance of legitimate competitive tenders. The SEC also identified distributor discounts that created risks that excessive margins could fund improper payments to government employees. Philips agreed to approximately $41.1 million in disgorgement, $6.0 million in prejudgment interest and a $15 million civil penalty. Philips settled without admitting or denying the SEC's findings and said it had cooperated, investigated the matter and taken remedial measures. Sources: SEC — Philips to Pay More Than $62 Million to Settle FCPA Charges Philips statement on SEC settlement