Philips to halt production of external defibrillators in two U.S. facilities

por Lauren Dubinsky, Senior Reporter | October 12, 2017
Business Affairs Cardiology Medical Devices
Philips North America LLC announced on Wednesday that it will suspend the production of external defibrillators at its operations in Andover, Massachusetts and Bothell, Washington.

These are the terms of a consent decree the company reached with the U.S. government.

"Following FDA inspections at the Andover and Bothell facilities from 2009 to 2015, FDA investigators made observations regarding Philips' compliance with the Good Manufacturing Practices and medical device reporting requirements of the Food, Drug and Cosmetic Act, with a focus on how Philips addressed issues of its defibrillators," Carla Kriwet, chief business leader of connected care and health informatics at Philips, told HCB News.

The facilities will resume production once FDA inspections confirm that they comply with the Quality System Regulation. Philips has already taken steps to restructure its company-wide Q&R function with new Q&R leadership, reporting lines, training and culture change initiatives.

"Philips takes this matter extremely seriously," said Kriwet. "The company is committed to fulfilling the terms of the Consent Decree, and we have already taken actions since 2015 to address this."

She added that Philips defibrillators currently in use are recommended to remain in use because the company found no reason to believe they pose a risk to patients.

The facilities are still permitted to manufacture and distribute certain automated external defibrillator models, including its HeartStart HS1 AEDs. The company will also continue to service devices in its emergency care and resuscitation portfolio, and provide consumables and relevant accessories.

In 2014, Philips was involved in a similar situation with the FDA that concerned medical scanners at its factories in Cleveland, Ohio. CEO Frans van Houten told Reuters that the current situation is different because Philips had invested in quality control in recent years.

“We have made tremendous progress since 2015 but that didn’t matter,” he said. “This is a consequence of past sins.”

As a result of the decree, Philips expects a loss of about EUR 20 million in the fourth quarter of this year, and about EUR 60 million in 2018. That’s mostly due to the suspension of production, profit disgorgement payments, and incremental costs to prepare for and handle the regulatory inspections.

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