Philips goes public after closing an agreement in the US on respirators

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Philips has reached an agreement with United States Department of Justice (DOJ) and with the Food and Drug Administration (FDA, for its acronym in English) which states «clarity and a roadmap» to demonstrate compliance with regulatory requirements and restore Philips Respironics business in the country. Its shares have risen more than 2% on the Amsterdam Stock Exchange, although they have closed with losses of 0.18%. «Philips subsidiaries, Philips Holding USA and Philips Respironicshave reached a final agreement on consent decree with DOJ and FDA, which focuses primarily on Philips Respironics' US business operations, including its manufacturing facilities in Murrysville and New Kensington, its service center. in Mount Pleasant and its Respironics headquarters in Pittsburgh, Pennsylvania,» the company announced. The consent decree provides Philips Respironics with action roadmapmilestones and results defined for meet regulatory requirements relevant, as reported by the multinational on January 29, 2024. These include that Philips Respironics will continue to prioritize completing the repair of respiratory and sleep care devices that were voluntarily recalled in June 2021.»Over 99% of registered and actionable CPAP and BiPAP sleep therapy devices have been repaired globally, while the repair of the ventilators is ongoing in coordination with the relevant competent authorities. Philips Respironics to hire independent experts to review various aspects of the recall solution«, explained the company. In addition, the Philips Respironics business operations they must demonstrate continued compliance with FDA Quality System Regulations (current good manufacturing practice requirements for medical devices), for which it will hire independent experts to oversee the improvement program. In this sense, Philips Respironics may continue to service respiratory and sleep care devices that are already in the hands of healthcare providers and patients, and sell accessories (including masks), consumables (including patient circuits), and replacement parts (including repair kits). The consent decree also includes provisions to allow exports. Outside the US, Philips Respironics will continue to provide new devices, accessories (including masks), consumables (including patient circuits), replacement parts (including repair kits) and services for respiratory and sleep care, subject to certain requirements that Philips Respironics will comply. It is worth remembering that In 2021, Philips Respironics voluntarily stopped selling sleep therapy devices CPAP and BiPAP and other respiratory care devices In U.S.A. Thus, «until the requirements are met pertinent provisions of the consent decree, Philips Respironics will not resume sales of new CPAP or BiPAP devices or other respiratory care devices In U.S.A«, the company has detailed.»Strengthening patient safety and quality remains Philips' top priority and increased scrutiny will help us improve even more. With the agreement on a consent decree for Philips Respironics in place, we now have a clear path forward to gradually restore the business and serve patients around the world,» said Roy Jakobs, CEO of Philips. For his part, Steve C de Baca, director of quality and patient safety at Philips, stressed that «patient safety and quality are our number one priority. We know what we must do to comply with the requirements of the consent decree. Philips Respironics has been working with the FDA and is already making significant changes to its organization, quality management systems and operations» «This includes strengthen quality management processes and deepen the competencies of relevant teams. «We are fully committed to complying with the terms of the consent decree and continuing to serve the millions of patients who depend on our devices every day,» he added. As a result of addressing this consent decree, which is a multi-year plan, Philips expects costs of around 100 basis points in 2024 related to remediation activities and profit disgorgement payments on sales of Philips Respironics in the United States. The Group financial outlook for 2023-2025 previously reported mid-single-digit comparable sales growth, low adjusted EBITA margin and free cash flow of between €1.4 billion and €1.6 billion now takes into account the consent decree and remains unchanged. «It excludes the US Department of Justice investigation related to Respironics' field action and the impact of the ongoing litigation,» the company concluded.