Philips suspends production of defibrillators for US market

October 11, 2017

Dutch electronics giant Philips announced Wednesday it is temporarily suspending production of defibrillators for the US market to allow closer inspections in a deal reached with the American government.

Philips insisted that the decision was not related to any question about the quality of the machines and they posed no health risk to patients.

But the deal, reached after lengthy talks with the Department of Justice, would help ensure Philips was in compliance with regulations set out by the Food and Drugs Administration (FDA), said chief executive Frans van Houten.

The production halt would likely last until about the third quarter of 2018 and could cut earnings before interest and taxes by some 20 million euros ($24 million) in the final quarter of 2017, and a further 60 million euros in 2018.

"Philips will suspend the manufacture and distribution of manufactured at these facilities ... until the FDA certifies through inspection the facilities' compliance," the company said in a statement.

The facilities concerned are at Andover, Massachusetts and Bothell, Washington state.

Under the deal, Philips will be allowed to continue production of defibrillators for export at its US plants, but will have to halt manufacture for the US domestic market.

The sites are Philips main production sites of defibrillators for its global markets—although there is a facility in China—and in 2016 combined sales of such machines amounted made in the US amounted to 35 million euros per quarter.

By comparison, Philips' overall group sales amounted to 4.3 billion euros in the second quarter of 2017.

Van Houten stressed in an early conference call with reporters that "there is no concern on product quality."

"Defibrillators currently in use by customers are recommended by Philips to remain in use, and should not be taken out of service as Philips has no reason to believe they pose a risk to patients," the company said.

Explore further: Philips profits plunge 32.9% in second quarter

Related Stories

Philips buys US cardiac-implant firm for 1.9 bln euros

June 28, 2017

Dutch electronics giant Philips Wednesday announced it was buying for 1.9 billion euros ($2.2 billion) a specialist US company manufacturing ground-breaking treatments for heart and vascular diseases to broaden its health ...

Healthy profit rise for Philips

July 27, 2015

Rising sales of medical equipment helped drive a 12 percent increase in second quarter net profit at Dutch electronics manufacturer Philips, the company said Monday.

Recommended for you

Pushing lithium ion batteries to the next performance level

December 13, 2018

Conventional lithium ion batteries, such as those widely used in smartphones and notebooks, have reached performance limits. Materials chemist Freddy Kleitz from the Faculty of Chemistry of the University of Vienna and international ...

Uber filed paperwork for IPO: report

December 8, 2018

Ride-share company Uber quietly filed paperwork this week for its initial public offering, the Wall Street Journal reported late Friday.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.