What consumers should know as Philips agrees to $1.1 billion CPAP settlement

Millions of CPAP sleep apnea machines made by the medical device maker Philips and a subsidiary were found to have a dangerous problem, triggering consumer lawsuits and a massive recall in 2021. Now, Philips has reached a $1.1 billion deal to settle claims from people who say they were injured. A portion of the funds will also go toward medical monitoring.

Some 15 million Philips CPAP and ventilator machines worldwide are affected by the Class I recall, a designation reflecting "a reasonable probability that the use of, or exposure to, the products will cause serious adverse health consequences or death," according to the Food and Drug Administration.

The devices were sold between 2008 and 2021 in the U.S. under the Philips Respironics brand, according to Philips' recall notice.

"Since April 2021, the FDA has received more than 116,000 MDRs [Medical Device Reports], including 561 reports of death," that were either reported or suspected to be related to problems with insulating foam in the Philips devices, the FDA said earlier this year.

"Philips and Philips Respironics do not admit any fault or liability, or that any injuries were caused by Respironics' devices," the company said as it announced the new settlement agreement.

Here's an overview of the recall and where consumers stand:

Settlement money will likely flow next year

The $1.1 billion deal — which includes $25 million for medical monitoring — stems from mediation by retired magistrate judge Diane M. Welsh, but it's not yet final, as the agreement must be filed with a federal court in Pennsylvania — a main state where the machines were produced.

Philips announced the new settlement on Monday, along with its first-quarter financial results. The Dutch-based corporation then saw its stock price vault to a likely one-day record gain, as investors welcomed news that the recall issue seems to have been resolved at a lower cost than analysts predicted.

"The remediation of the sleep therapy devices for patients is almost complete," said Roy Jakobs, CEO of parent company Royal Philips, in a statement. He added, "We do regret the concern that patients may have experienced."

"We are pleased to have reached a resolution" of personal injury claims, the plaintiffs' co-lead attorneys, Sandra L. Duggan; Kelly K. Iverson; Christopher A. Seeger; and Steven A. Schwartz, said in a joint statement to NPR.

The money will go to "users of the now-recalled CPAP and other respiratory devices who suffer from significant physical injuries," and to fund research into treating their injuries, the attorneys said. Philips says some 58,000 people have filed claims or registered for the settlement.

As for when consumers could see money from the deal, Philips said it expects to make the payments in 2025.

This isn't the only settlement

News of the personal injury settlement comes a week after Philips settled a class-action lawsuit over economic damages from the recall.

That settlement is worth a minimum of $613.3 million, including $94.4 million in attorneys' fees. It offers reimbursement to users and "payers" — e.g., insurance companies — for recalled machines they had bought or leased.

The deal was approved last Thursday by senior U.S. district judge Joy Flowers Conti in the federal Court in western Philadelphia. The judge had previously appointed Welsh to serve as mediator in the injury-related class-action suit.

Philips says it expects to pay that money out this year.

What can consumers do?

Under the financial-loss settlement, users are entitled to a $100 award if they return their recalled device by Aug. 9, 2024 — the claim deadline.

People who suspect they own or use one of the affected devices should act soon to verify that if they haven't already, the FDA says. The agency notes that Philips' recall page offers ways to check serial numbers and register a product.

A specially dedicated website is accepting claims for the financial-loss settlement, and it notes that taking part in that deal "does not affect or release any claims for personal injuries or medical monitoring relief."

Under the financial-loss settlement, users are also eligible for a payment for each recalled device they purchased, leased, or rented — and if they paid out of their own pocket to replace a recalled machine, they could be entitled to a device replacement award, according to the website.

The arrangement includes a prepaid shipping label, although the administrators also warn users to consult with their doctor before returning a device they're still using.

A similar claims process will likely emerge for the injury-related deal once its terms are finalized.

Defective machines can send particles, VOCs into airways

The recall was triggered by thousands of health complaints from CPAP users. An investigation found that a polyester-based polyurethane foam built into the devices to dampen sound and vibration also had a risk of breaking down — especially when used in warm and humid conditions.

"If the foam breaks down, black pieces of foam, or certain chemicals that are not visible, could be breathed in or swallowed by the person using the device," the FDA said.

The agency said in a letter to Philips in 2022 that the foam also "may degrade and/or emit harmful chemicals, potentially resulting in toxic and carcinogenic effects and other significant harms to device users," listing formaldehyde and other volatile organic compounds, or VOCs.

"Philips has acknowledged that, in a worst-case scenario, exposure to VOCs as a class may cause possible toxic and carcinogenic effects, as well as irritation of the respiratory tract, eyes, nose, and skin, nausea or vomiting, hypersensitivity reactions, dizziness, and headache," the FDA said.

Resulting problems "could potentially result in serious injury and may require medical intervention to prevent permanent injury," the agency said.

The plan to fix machines with the problem call for replacing the polyester-based foam with one that uses silicone as its base.

What is the current status of Philips CPAP machines?

U.S. sales of Philips' popular DreamStation and other respiratory units are currently on hold; the company says it plans to resume selling the devices once it has satisfied the terms of a consent decree with the U.S. government.

Philips also says it will continue to service units that are still in use, including by providing replacement parts.

Lawsuits against the company contend that Philips designed its CPAP machine poorly and put it on the market without appropriate warnings.

The FDA accuses Philips of not taking appropriate action about the dangers of the degrading foam in its CPAP and ventilator devices despite learning about the risk as early as 2015. That year, the FDA said in a letter to the company, a Philips subsidiary began a preventative procedure because of complaints about the foam breaking down. The agency says it learned about the matter when the FDA inspected a manufacturing plant in Murrysville, Pa., in 2021.

When asked about the 2015 revelation, a company representative said the only documentation of the issue was a single email, with other communications handled over the phone, the FDA said in its letter.

What is sleep apnea, and how much do CPAP machines cost?

Sleep apnea is a disorder that prevents people from getting enough oxygen while they're sleeping — it's often characterized by long pauses in breathing, and loud snoring. People diagnosed with the disorder rely on continuous positive airway pressure, or CPAP, machines to keep their airways open and help them stay asleep.

Last June, the White House said President Biden was using a CPAP machine to help with sleep apnea.

Prices for many units range from around $500 to more than $1300.

"The average cost of a CPAP machine is about $800 among those we reviewed," the National Council on Aging said last year.

The recall also covers some models of Philips' more complicated BiPAP ventilators, which facilitate both inhalation and exhalation and routinely cost hundreds of dollars more.

Many apnea and ventilator devices' users also face additional costs, from replacements parts and upkeep to buying an additional machine for travel.