Dutch healthcare giant now expected to recall about 5.2 million devices, says supply-chain crisis has hit sales
“It is difficult to refuse repairs to a patient with an older unit if they are still using it,” chief executive Frans van Houten said on a call with investors. “So we felt that we needed to be more generous in accepting all the registrations that were coming in to our database in all of their units.” Insurers in the US typically pay for a replacement device every five years, but some customers continue to use equipment that is older than that.
most of Equipment affected by the recall There are so-called CPAP and BiPAP machines, devices that control breathing by gently pushing air into the lungs through a mask. They are primarily used to treat sleep apnea, a condition that causes sufferers to stop breathing for short periods of time while they are asleep. The recall, first announced in June, also affects some ventilators.
Philips began shipping replacement equipment in September, and the company said Wednesday that about 700,000 replacement or repaired devices have now reached customers. It said it expects to complete the process in the fourth quarter of 2022.
The recall has sowed anxiety and despair among sleep apnea sufferers, many of whom have been forced to choose between prior treatment or continuing to use a device that could harm them.
Philips also said on Wednesday that it would increase the financial provision related to the recall to €725 million, which equates to approximately $824 million, which is €225 million more than the amount already set aside. This primarily relates to the cost of the repair and replacement program. It does not include any costs of potential legal action arising from the recall.
The update on the recall came as the company cautioned that it now expects sales of €4.9 billion in the fourth quarter of 2021, down about 10% from the same period a year ago and about €350 million compared to the prior year. is less. ,
Philips attributed the weak data to supply-chain tensions, including loss of electronic components and freight capacity, as well as equipment-installation postponements.
Write Denise Roland at [email protected]