Philips will stop selling sleep apnea devices in the U.S. under a consent decree agreement with the FDA.
The company announced the agreement in its fourth quarter and annual results report published Jan. 29. Under the agreement, Philips will not sell new sleep apnea machines and ventilators through its Respironics division. The Dutch company will continue to serve existing customers with supply accessories and replacement parts.
"The consent decree is being finalized and will be submitted to the relevant US court for approval," Philips said in a news release on its quarterly report. "The decree will provide Philips Respironics with a defined roadmap of defined actions, milestones and deliverables to demonstrate compliance with regulatory requirements and to restore the business."
The company said additional details on the agreement will be available once it is finalized. It will likely take five to seven years before Philips completes improvements under the agreement and can resume sales of the sleep apnea products, the company's CEO, Roy Jakobs, told Reuters.
After the announcement, several analysts said it will be difficult for Philips to recover its Respironics market position in the U.S. Philips said it the consent decree does not change its financial targets for 2025.
The consent decree is related to the recall of millions of breathing machines in 2021 after Philips found that foam used in the machines could break down and potentially release "toxic and carcinogenic material." The Department of Justice is also investigating the company's handling of the recall, Bloomberg reported.
"Patient safety and quality remain Philips' highest priority across the company," Mr. Jakobs said in a news release. "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. We are fully committed to complying with the consent decree, which is an important step and provides a clear path forward."