Replacing Philips breathing machines costs billions


As of: May 15, 2024 8:46 a.m

It is the largest recall of medical devices: millions of Philips breathing devices have to be replaced due to health risks. But this is slow and expensive.

By Christian Baars, Lea Busch and Brid Roesner, NDR

“It was a completely surreal situation,” says a Philips employee. Back in June 2021, Philips sent out an urgent safety notice about a whole range of breathing devices. They are said to be capable of causing injuries that could be “life-threatening.” It was a shock for the Philips employee, who wishes to remain anonymous, and his colleagues, “an incredibly emotional burden for all of us.”

The problem is a foam that was used to make the breathing machines quieter. However, it can apparently decompose over time – small particles can then be inhaled by patients. The foam can also “release certain chemicals,” Philips said in its safety notice. The group warned, among other things, of a risk of cancer.

The security announcement caught the employees completely unprepared. There was chaos, says the employee in an interview with ARD magazine Panorama. A number of models were affected, a total of around five million devices that were in use at the time worldwide – and therefore around the same number of patients. There were also hundreds of thousands in Germany.

It is probably the largest recall of a medical device ever carried out. The devices were sometimes used in clinics and nursing facilities – or at home with people who suffer from sleep apnea, i.e. who stop breathing at night.

Sick through Foam particles?

Nermin Ukejnovic is one of these patients. In 2013, his doctor prescribed such a Philips device. Because of his pauses in breathing, his doctor explained that he was at high risk of suffering a stroke or a heart attack. Ukejnovic used the breathing machine every night for years. He slept much better again, “like a baby.”

But over time his device became louder and louder; at first it was “a humming sound”, later “a real humming sound”, says his wife Mirjana Ukejnovic. It was therefore replaced in May 2020. They wouldn’t have thought anything of it back then – until the safety notice from Philips was sent out in the summer of 2021 about problems with the sound-absorbing foam.

Shortly before, a tumor was discovered in Nermin Ukejnovic’s case, a very rare cancer in the nose. The couple suspect that the breathing machine could be the cause. The Ukejnovics are suing Philips and want compensation – also because the manufacturer apparently knew about the problem with the foam years earlier.

Has the problem existed for much longer?

The device is manufactured by the Philips subsidiary Philips Respironics in the USA. According to data from the US Food and Drug Administration (FDA), a case was reported to it back in 2010 in which “the sound-dampening foam of a device degraded and caused pulmonary complications in the patient, which led to death.” Further reports of decomposing material or black particles followed.

An FDA report shows that Philips employees became aware of the problem by the end of 2015 at the latest. Internal emails show that they asked about the durability of the foam. The manufacturer’s answer: It would “not surprise him if the foam showed signs of hydrolysis” after just one year, i.e. if it gradually decomposed.

In 2018, there were also proven photos of crumbled foam – and when asked again in May 2018, a manager at the manufacturer wrote: “We would not recommend using this foam.” He later explained that Philips had not purchased the material directly from them and had never previously asked whether it was suitable for such devices.

Recall eleven years after the first report

It was not until mid-2021 – eleven years after the first known report – that the company started the recall. In the earlier cases, before 2021, Philips Respironics acted on a case-by-case basis, explains Steve Klink, press spokesman for Philips, in panorama-Interview. “When the parent company became aware of the issue and its possible significance in early 2021, we spared no effort and expense to resolve the issue.”

In addition, as the Philips press spokesman in Amsterdam now explains, based on current knowledge, “significant health damage to patients is hardly to be expected.” This is proven by extensive studies that have been commissioned since the recall.

According to Alexander Schäfer, the family’s lawyer, Philips also denies any connection in the ongoing trial in the case of Nermin Ukejnovic. It is “very strange,” says Schäfer, that the company is now claiming that the product did not cause any harm after recalling the devices because of possible health risks. There is a risk of a year-long process.

Sales ban and settlement in the USA

It is also too early for the American Food and Drug Administration (FDA) to give the all-clear. In her most recent statement on the case from October 2023, she wrote that the study results presented by Philips were not sufficient to fully assess the risks. Overall, the FDA “remains dissatisfied with the status of this recall, and we will continue to take action to protect the health and safety of people who use these devices.”

In fact, a tough measure followed: Since the end of January 2024, Philips has no longer been allowed to sell ventilators in the USA. The company then reached an agreement with the authorities in order to avoid a trial. In addition, Philips agreed to a settlement in a mass lawsuit in the USA at the end of April. The group has pledged around one billion euros for this – for currently around 58,000 patients.

“We have decided to end the legal dispute with this settlement,” says Philips spokesman Klink. “But we also want to make it clear that this is not an admission of guilt. And we do not believe that the device caused any harm.”

That’s probably why Philips doesn’t seem to generally want to pay anywhere else. “In other countries we will decide on a case-by-case basis,” explains Klink. From the perspective of shareholders, the group seems to be getting away with it rather favorably. When the company announced the settlement in the USA at the end of April, the share price shot up by more than 40 percent.

AOK fears costs running into millions

In addition to the costs of the legal disputes in the USA, Philips is paying around 1.5 billion euros worldwide to replace or repair devices, says spokesman Klink. With five million affected devices, that’s around 300 euros per case. In Germany, the AOK does not assume that all costs are covered. Because just buying a new device is significantly more expensive. In addition, there are the costs of a hospital stay, which, according to the AOK, is necessary for many patients if they are switched to another device. Health insurance assumes a total loss of several billion.

The AOK itself is also affected: it has rented a lot of equipment for its insured persons, but has also purchased several thousand. Now she fears that she will be stuck with the costs of purchasing the equipment and the hospital stays, a total of around 45 million euros for the AOK alone. “Philips has so far refused to negotiate directly with us about reimbursements in any form,” says Jürgen Malzahn from the AOK Federal Association. From their point of view, it is clear: the damage is the responsibility of the manufacturer and “does not have to be paid for in any way by the insured”.

Philips explains that the company has offered its business customers in Germany fair solutions. However, the AOK did not buy the affected devices directly from Philips or a subsidiary, which is why Philips cannot make any payments to the health insurance company.

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