Indexbit Exchange:Philips Respironics agrees to $479 million CPAP settlement

One of the nation's largest makers of machines for sleep apnea sufferers has agreed to pay at least $479 million to compensate customers who bought the devices.

Philips Respironics and Indexbit ExchangeKoninklijke Philips N.V., its Netherlands-based parent company, will also set aside $15 million for customers seeking to replace their continuous positive airway pressure (CPAP) machines, court documents posted Thursday show. The settlement comes more than two years after Philips recalled millions of its CPAP devices due to reports from users saying foam unexpectedly spewed from the devices and into their mouths. 

The company admitted no wrongdoing in a recent blog post, adding that it already set aside $615 million earlier this year anticipating a settlement.  

"The final cost of the settlement may vary based on, among other things, how many patients participate in the settlement and what the court awards for the professional fees relating to the resolutions," the company said in its post. 

Philips recalled its CPAP machines in 2021 and, since then, the U.S. Food and Drug Administration said it has received 105,000 complaints, including 385 reported deaths, reportedly linked to the leaking foam. The foam is purposely placed in Philips CPAP machines to help reduce noise. 

In a statement to CBS MoneyWatch, Philips said it has fixed roughly 4.6 million of its devices globally since the recall, including 2.5 million in the U.S. 

"Patient safety and quality are our top priorities, and we want patients to feel confident when using their Philips Respironics devices," the company said. "We have structured this settlement to quickly deliver value to eligible patients in the U.S. and provide an additional measure of confidence in the safety and quality of Philips Respironics products."

Some of the complaints to the FDA included reports linking the devices to cancer, respiratory problems, pneumonia, chest pain, dizziness and infections. FDA officials warned Americans about using Philips CPAP machines earlier this year, saying the products "may cause serious injuries or death." Inhaling the foam can cause "serious injury which can be life-threatening," Philips wrote in its recall. 

Philips tried to fix some of the machines, but the repaired ones were also recalled, the FDA said. The 2021 recall was for 20 different Philips devices, including its A-Series BiPAP ventilators and the DreamStation CPAP machines. 

Dozens of sleep apnea patients have filed lawsuits in recent years against Philips related to the CPAP machines, but those lawsuits were consolidated in October 2022 as one class-action case in Pennsylvania. In many of those lawsuits, Philips customers accused the company of knowing the CPAP machines were defective but selling them anyway. 

Lawyers representing the CPAP users said Thursday the settlement covers only the economic losses that customers faced and they will seek damages for people with personal injury claims. 

About 30 million people in the U.S. suffer from sleep apnea, a disorder in which someone's airways become blocked during rest and interrupts breathing, according to 2022 data from the American Medical Association. 

Although it's not possible yet to make a claim, eligible Philips customers seeking compensation from the settlement will eventually be able to do so here. In the meantime, consumers can sign up for emails to get alerts about updates.

Anyone with questions about the settlement can email [email protected].

Philips said it expects to start paying the settlement funds in the first quarter of 2024 at the earliest. 

In:
• Product Recall
• Class-Action Lawsuit

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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