Philips Healthcare

Main Article: Medical Equipment (Global Market)

Structure

In January 2019, the restructuring of Philips Healthcare was announced. The company was divided into three main divisions:

• Diagnosis and Treatment;
• Connected Care;
• Personal Health.

The new Connected Care framework includes hardware and software used to remotely monitor patient health. Previously, medical IT solutions belonged to this structure, but in early 2019 they moved to the Diagnosis and Treatment segment, which specializes in products for medical diagnostic imaging and ultrasound. At the head of Diagnosis and Treatment is Rob Cascella.

In addition, Diagnosis and Treatment is responsible for the development of the business in the field of equipment for therapy with visual control. In particular, we are talking about systems for the study of the heart, peripheral vessels and multimodal devices. This business is headed by Bert van Meurs, who, in accordance with a restructuring in early 2019, became a member of the company's executive committee.

Personal Health - the direction of personal care products. This includes light therapy devices, inhalers, oral care solutions, photoepilators, hair and skin care products, razors and clippers, and baby care products. As part of the corporate restructuring, sleep and respiratory products were allocated from this unit - they moved to the Connected Care structure under the leadership of Carla Kriwet. Personal Health is run by Roy Jacobs.

All changes described above took effect in early January 2019. Philips is going to talk in more detail about the restructuring as part of the financial report, which will be released on January 29.^[1]

Performance indicators

In 2016, sales of Philips health solutions health care amounted to 17.4 billion euros.

2018: Record revenue of €18.12 billion thanks to medical equipment

In 2018, Philips' revenue reached €18.12 billion against €17.78 billion a year earlier. Thus, the company's sales increased by 2% and turned out to be the largest in the history of the Dutch vendor. Read more here.

Acquisitions of companies and sale of assets

Main article: Acquisitions and divestment of Philips Healthcare assets

Business in Russia

Main article: Philips in Russia

2024

Philips breathing equipment works with errors and gets clogged. First death recorded

In early October 2024, Philips began recalling ventilators due to serious problems in the operation of the equipment. The recall concerns the IVL systems Trilogy Evo, Trilogy EV300, Trilogy Evo O2, Trilogy Evo Universal and is characterized by the highest level of danger, as the problem threatens the lives of patients. The recall affects about 90,000 ventilators worldwide, including about 67,000 in the United States, Philips said. Read more here

US authorities named the number of deaths from defective Philips ventilators

On July 10, 2024, the U.S. Food and Drug Administration (FDA) named the number of deaths associated with the use of defective ventilators manufactured by Philips. We are talking about BiPAP V30, BiPAP A30 and BiPAP A40 devices. Read more here.

Philips admitted to the marriage of its MRI scanners around the world due to which fires can occur

At the end of June 2024, Philips announced the presence of a defect in its magnetic resonance imaging (MRI) devices. The defect can lead to fires, as well as provoke second or third degree burns in patients. Read more here.

Philips will pay $1.1 billion for the sale of defective ventilators

On April 29, 2024, Philips announced an amicable agreement in the framework of proceedings related to the sale of defective ventilators. $1.1 billion will be allocated to resolve all claims.

We are talking about potentially dangerous devices for the therapy of snoring and apnea. The manufacturer began recalling the equipment due to concerns about sound-absorbing foam, which could theoretically decompose and enter the respiratory tract. The US Food and Drug Administration (FDA) has assigned this issue the highest hazard rating. Victims reported a wide variety of effects, including pneumonia, asthma, infections, chest pains and cancer. As of January 2024, the FDA has received 116,000 reports related to Philips breathing equipment, including 561 reports of death.

Philips announces settlement as part of proceedings related to sales of defective ventilators

Philips CEO Roy Jacobs said the settlement "covers all claims in the US, even those that can be brought within the next six months." The amount of compensation of $1.1 billion turned out to be much less than predicted by third-party analysts: experts, in particular, talked about possible payments of up to $4.5 billion. The deal is expected to end claims against Philips over faulty sleep therapy devices.

Philips itself says in an official statement that it "does not admit any guilt or liability" in connection with the supply of defective breathing equipment to the market. The company argues that the use of faulty devices does not cause "any noticeable harm" to patients. The settlement agreement was concluded in order to "end the uncertainty associated with the trial in the United States."^[2]

Philips recalls defective ventilators that suddenly turn off ventilation

On May 13, 2024, the US Food and Drug Administration (FDA) announced the recall of defective Philips Respironics ventilators. The use of these devices can trigger the death of patients. Read more here.

2023

Philips recalls defective MRI scanners that explode

December 20, 2023 U.S. Food and Drug Administration (FDA) announces on the recall of magnetic resonance imaging Panorama devices 1.0T the company's HFO. Philips There is the potential for these scanners to explode during operation, which can cause serious injury or even death to people nearby. More. here

New marriage found in Philips DreamStation - patients get burns and fires

On November 28, 2023, the U.S. Food and Drug Administration (FDA) reported identifying a new problem in Philips' breathing equipment. Defective devices can overheat, which creates a risk of fire, and patients can get burns. Read more here.

FDA: Philips provided insufficient data on testing defective devices

On October 5, 2023, the U.S. Food and Drug Administration (FDA) reported that the results of testing defective Philips breathing devices that the manufacturer itself provided were insufficient to fully assess the risks associated with the use of these devices.

We are talking about defective devices for creating constant positive airway pressure (CPAP) and two-level positive pressure (BiLevel PAP). The problem is with the ester polyurethane attenuation foam (PE-PUR). This foam, according to the Philips website, can break down into particles or release certain gaseous chemicals. In the first case, patients may experience inflammatory reactions, irritation (skin, eyes, and airways), headache, and adverse events from other organs (e.g., kidney or liver). In addition, toxic carcinogenic effects are not excluded. Potential risks of chemical exposure due to gas release include headache/dizziness, irritation (eye, nasal cavity, respiratory tract, skin), hypersensitivity, nausea/vomiting, toxic and carcinogenic effects.

Although Philips has concluded that exposure to foam particles and volatile compounds from these devices is unlikely to result in noticeable harm to patient health, the FDA believes more research is needed, the regulator said in a notice.

It is noted that Philips agreed to conduct a new analysis of PE-PUR foam and its potential effect on the body of patients. The recall affected about 5.5 million defective breathing devices and led to costs of about €1 billion. Philips is discussing with the FDA the details of the additional trials. The regulator said it would use any additional information provided by the manufacturer to further review the situation.^[3]

US authorities report 561 deaths related to defective Philips medical equipment

Defective medical equipment Philips provoked the death of 561 patients from April 1, 2021 to September 30, 2023. It is reported on January 31, 2024. U.S. Food and Drug Administration (FDA)

We are talking about defective breathing equipment, recalled in June 2021. These are ventilators, devices with two-level positive airway pressure (BiPAP) and devices with continuous positive airway pressure (CPAP). In them, the sound-absorbing polyester-based foam is destroyed, and the formed particles can enter the air tract, harming the patient or provoking his death.

Philips Respironics BiPAP AVAPS System One

It is noted that during the period under review, the FDA received more than 116 thousand reports on medical devices (MDR): this is a procedure by which the regulator receives information about significant side effects and defects of medical devices. At the same time, 561 deaths were registered, which may be related to Philips breathing equipment. The distribution of deaths is as follows:

April 1, 2021 - April 30, 2022: more than 21 thousand MDR and 130 deaths; May 1, 2022 - July 31, 2022: more than 48 thousand MDR and 57 deaths; August 1, 2022 - October 31, 2022: more than 21 thousand. MDR and 106 deaths; November 1, 2022 - December 31, 2022: more than 8,000 MDRs and 81 deaths; January 1, 2023 - March 31, 2023: more than 6,000 MDRs and 44 deaths; April 1, 2023 - June 30, 2023: more than 4,000 MDRs and 32 deaths; July 1, 2023 - September 30, 2023: more than 7,000 MDRs and 111 deaths.

Medical device reports have limitations and the frequency or cause of an event usually cannot be determined with this system alone due to under-reporting of incidents and inaccuracies.^[4]

Agreement to pay hundreds of millions of euros to victims of defective ventilators

On September 7, 2023, Philips announced that it had reached an amicable agreement on a class action lawsuit related to the supply of defective ventilators and other defective respiratory devices to the market.

The agreement applies to Philips itself, as well as some of its American divisions, including Philips Responics, the official statement said. The contract covers only claims related to "economic losses." At the same time, numerous additional claims for harm to health and alleged deaths provoked by defective ventilators are under consideration as of early September 2023.

The settlement must be approved by the U.S. District Court for the Western District of Pennsylvania. The final amount to be spent on class action compensation payments depends on how many patients take part in the settlement. In addition, the fees of professional specialists involved in the process will be taken into account. In the first quarter of 2023, Philips Responics recorded a reserve of €575 million to cover the expected costs. If the court finally approves the agreement, payments to the plaintiffs will begin no earlier than the first quarter of 2024.

It is noted that the amount of compensation will vary from $55 to $1552 plus another $100 for each device returned to Philips. In addition, additional payments are provided to those customers who purchased replacement respiratory devices after the announcement of the recall program. The company's message emphasizes that the agreement does not contain or constitute any admission of liability, wrongdoing or guilt of any of the Philips structures.^[5]

Philips angiographs irradiate patients themselves. Manufacturer admits marriage

On August 21, 2023, Philips announced the detection of a defect in its systems for performing angiographic procedures. Complexes designed to contrast blood vessels can reportedly irradiate patients. Read more here.

Philips recalls 73,000 defective ventilators that get dirt and dust

On August 14, 2023, the US Food and Drug Administration (FDA) announced another recall of defective ventilators manufactured by Philips. The use of defective devices can have dire consequences - up to the death of patients. Read more here.

Philips recalls 57,000 defective ventilators due to faulty air flow sensor

On June 2, 2023, the US Food and Drug Administration (FDA) disseminated information that Philips was forced to initiate another program to recall defective breathing apparatus. Read more here.

40 more deaths recorded due to defective Philips breathing equipment

On May 2, 2023, the US Food and Drug Administration (FDA) announced that defective Philips breathing equipment could have caused the death of another 40 people.

The problem affects more than 5 million different devices for the therapy of snoring and apnea, artificial ventilation of the lungs, etc. As stated in the official notification of the FDA, from January 1, 2023 to March 31 of the same year, a total of more than 6,000 complaints about defective Philips devices were received. Thus, the total number of such appeals exceeded 105 thousand.

The FDA documentation notes that as of the end of March 2023, 385 deaths were recorded, which, apparently, were provoked by defective Philips breathing equipment. In particular, 123 deaths were registered from April 1, 2021 to April 30, 2022, 45 cases - from May 1, 2022 to July 31 of the same year, 96 deaths - from August 1 to October 31, 2022, 81 cases - from November 1 to December 31, 2022. Another 40 deaths occurred in the first quarter of 2023.

However, Philips claims that FDA reports alone are not evidence that the device caused the death of patients or contributed to death. Moreover, the company has published the results of an independent examination of the recalled breathing apparatus: it is said that the potential impact on the patient of foam particles or volatile organic compounds from the devices "is unlikely to lead to noticeable harm to health."

The vast majority (about 94%) of the approximately 105 thousand complaints filed from April 2021 to March 2023 inclusive are alleged technical malfunctions not related to serious injuries, says Philips.[6]

Philips DreamStation defective device recall

On April 7, 2023, the US Food and Drug Administration (FDA) announced that Philips Responics had initiated a recall of a number of ventilators and treatment of apnea. Read more here.

Recall of defective ventilator equipment

On April 3, 2023, the U.S. Food and Drug Administration (FDA) announced a new recall of Philips' breathing equipment. The revealed defect in the artificial lung ventilation (IVL) devices of the Trilogy Evo series leads to the fact that the patient receives insufficient oxygen. Read more here.

Repeated recall of previously repaired ventilators

On February 16, 2023, it became known that Philips would have to re-recall thousands of breathing devices that had previously been recalled due to user health risks. Read more here.

Complaints over defective breathing equipment amid recall of millions of devices

On February 9, 2023, Philips released new information relating to a high-profile scandal involving the company's defective breathing devices. We are talking about potentially dangerous devices for the therapy of snoring and apnea, as well as other devices supplied to the market by a subsidiary of Philips Respironics. Read more here.

2022

When recalling devices, a defect was found with sound-absorbing foam and solid particles in the air path

At the end of November 2022, the US Department of Health reports that artificial lung ventilation devices from Philips, converted as part of a massive recall of respiratory devices, have new problems. Read more here.

Philips shareholders lose billions over recall of defective breathing apparatus

On September 12, 2022, it became known that the Dutch investor association VEB blames the damage caused to investors in connection with the recall of sleep apnea devices on the Philips group of companies and intends to file a lawsuit. The association estimates the damage to investors from the decline in the value of Philips shares at €16 billion.

Philips, starting in June 2021, recalled about 5.5 million ventilators when it discovered that toxic materials in them could cause serious harm to the health of patients. However, documents from the American regulator FDA indicate that there were problems back in 2015, according to a VEB letter sent to the company.

VEB said that since Philips first reported on large-scale problems with ventilators in April 2021, the market value of the group's shares has decreased by more than €27 billion ($27.23 billion). According to VEB, about €16 billion of this damage can be directly attributed to the lack of information about the problem of the devices. The association claims that the failure to provide information on the part of Philips has led to false information in recent years in financial statements, board reports and press releases.

Philips confirmed it had received the letter from VEB. We are convinced Philips acted correctly and responsibly, "Philips spokesman Steve Klink said.

In a condensed form, the company said it looked forward to any discussion with the investor association with confidence. We will carefully review the contents of the letter before responding to it, "a company spokesman said.

The Shareholders Association intends to file a claim for damages and demanded a meeting with Philips before the end of September 2022, the FD newspaper reported.^[7]

Philips recalls 17,000 defective breathing masks

In early September 2022, Philips Responics warns users of some masks for CPAP therapy or two-level PAP therapy with magnetic clips or headband straps that these devices should not be used by patients and family members who have metal implanted devices or metal objects. Read more here.

Philips forced to pay $24.75 million for kickbacks to medical equipment suppliers

On September 1, 2022, Philips agreed to pay more than $24.75 million to settle charges under the False Claims Related to Kickbacks Act.

(MoJ) Ministry of Justice USA alleged that Philips RS North America misled federal programs by health care United States paying kickbacks to suppliers of durable medical devices (UDPs). Affected programs included, Medicare Medicaid and TRICARE, a program health care for active duty service members and their families.

According to the release of the US Department of Justice, the settlement concerns allegations that Philips RS North America forced UDP suppliers to submit false applications for ventilators, oxygen concentrators, CPAP and BiPAP devices, as well as other medical equipment related to the respiratory system. Because Philips RS North America provided illegal benefits to UDP providers. The company allegedly provided UDP providers with data for free that could help in marketing among doctors.

{{quote 'Paying illegal patient referral fees undermines the integrity of our country's healthcare system! To ensure that the goods and services received by patients of the federal health care program are determined by their health needs, and not by the financial interests of third parties, we will prosecute any individual or legal entity that violates the ban on the payment of kickbacks, including manufacturers of UDPs, said Chief Deputy Assistant Attorney General Brian Boynton. }} Under the terms of the agreement, Philips RS North America will pay the United States $22.62 million. The company will also pay $2.13 million to various states affected by Medicaid actions. These payments are made in accordance with settlement agreements that Philips RS North America entered into with these states.

Philips RS North America entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG. According to the US Department of Justice, this means that the CIA obliges the company to implement and maintain a compliance program. The program includes checking agreements with referral sources and monitoring the company's sales personnel. The CIA also requires Philips RS North America to hire an independent watchdog selected by HHS-OIG to assess compliance.^[8]

Philips launched a new recall of defective ventilators

On August 30, 2022, Philips announced the expansion of the recall of its artificial lung ventilation devices, which was a continuation of the recall, which began in April 2021. Read more here.

Recall of 100 thousand ventilators due to problems in the internal electrical circuit

In mid-April 2022, Philips announced the recall of 99 thousand defective ventilators distributed in the United States and around the world. The recall is assigned the most serious class I in the safety notifications of all three models. Read more here.

2021

Recall of thousands of defective ventilators

In early August 2021, Royal Philips once again recalled thousands of defective devices. MECHANICAL VENTILATION The recall applies to many V60 Plus devices and all V60 devices updated to provide high airflow therapy (versions software 3.00 and 3.10). More. here

Recall of millions of defective ventilators cost Philips $0.5 billion

On July 26, 2021, it became known about the losses incurred by Philips in connection with the massive recall of medical equipment for ventilation of the lungs. In total, the Dutch manufacturer has reserved 500 million euros for expenses related to the global service campaign, including 250 million euros in the second quarter of 2021.

In July 2021, the Food and Drug Administration (FDA) ranked the recall of CiPAP and BiPAP ventilators as the most serious, recording more than 1,200 complaints and 100 injuries.

Speaking to reporters, Philips CEO Frans van Houten said the company is manufacturing equipment replacement and repair kits pending regulatory approval. At the same time, after the authorities give the "green light," the update process can take up to 12 months, since the problem affected a large number of devices in operation.

The company was gathering evidence of risks associated with defective devices before it faced class-action lawsuits, van Houten said. He added that only 10 cases of injuries to patients due to faulty equipment were registered, and all of them did not have serious consequences for human health.

Despite the low level of complaints (Philips cites a figure of 0.03% in 2020), the company decided to initiative the devices from the US market, where 65% of all potentially problematic devices were sold. In other countries, Philips will conduct a program of corrective measures to inform customers and users about the potential consequences for patient health and clinical use associated with the identified problem.^[9]

Recall of 4 million ventilators that can cause cancer

In mid-June 2021, Philips announced the recall of several million ventilators that could cause cancer.

According to the manufacturer, foam used to make the devices quieter can decompose and enter the respiratory tract, becoming toxic and possibly leading to cancer.

We deeply regret any problems and inconvenience that patients using affected devices may experience due to the proactive measures we are announcing today to ensure patient safety. In consultation with the relevant regulators and in close collaboration with our customers and partners, we are working hard on a solution that includes the deployment of updated operating instructions and a comprehensive program to repair and replace affected devices. Patient safety is at the heart of everything we do at Philips, "said Philips CEO Frans van Houten.

According to him, quoted by Reuters, the recall campaign affects about 3-4 million devices. The manufacturer is recalling equipment in the United States and at the same time calls for a suspension of their use around the world. In the case of various breathing devices used at home - they account for 80% of all recalled devices - Philips urges users to temporarily suspend their use.

As for ventilators used to maintain life functions, including in patients with COVID-19, the company recommends that doctors assess whether the benefits of their use outweigh the potential risks on a case-by-case basis. Philips intends to spend several hundred million euros on the recall.^[10]

2020

Purchase of Intact Vascular

Based in Wayne, Pennsylvania, Intact Vascular is developing a dedicated implantable Tack device for the treatment of peripheral artery disease that improves the outcomes of standard balloon therapy. Read more here.

Investing 100 million euros in the production of equipment to combat the pandemic

At the end of April 2020, Philips announced the investment of more than 100 million euros in the production of equipment to combat the COVID-19 coronavirus pandemic.

Philips' first-quarter order volume rose 23% as hospitals purchase patient imaging and monitoring systems as well as breathing support machines, according to company reports. The orders partially offset a drop in sales elsewhere in the companies.

Philips decided to spend more than 100 million euros "to meet the emergency demand from our customers for ventilators, patient monitors and some diagnostics," said Abhijit Bhattacharya, CFO of the company, on a quarterly conference call.

However, Philips believes that even taking into account new investments, it will take a whole year to fulfill the orders received. At the same time, there remains a risk that the company will not be able to transform production as planned, in particular, due to the fact that suppliers of individual components will not be able to expand their production in accordance with the growing list of Philips orders.

We turned to tier two and three providers to help them get back on their feet. We help them speed up logistics to get components to our plants as quickly as possible, "explained the company's CEO Frans van Houten).

Meanwhile, Philips is trying to increase production in individual divisions in order to offset the drop in demand for other products. Sales in China for the first quarter of 2020 fell seriously, as the country was the first to close its borders due to the pandemic. Although the situation in China is already improving, demand in other parts of the world has begun to fall, so Philips is preparing investors for lower sales in the second quarter.^[11]

Philips stops producing household appliances and will focus on medical tech

At the end of January 2020, Philips announced its departure from the home appliances market to fully focus on medical technology. The abandonment of the production and sale of coffee makers, air purifiers and other similar electronics will occur gradually.

First, Philips will separate the corresponding division, called Domestic Appliances, into a separate independent structure, and then put it up for sale. How much is planned to earn on this deal is not specified. The annual turnover of Domestic Appliances reaches 2.3 billion euros.

Over the years, we have significantly improved the performance of the Domestic Appliances division, which has made a very significant contribution to the development of Philips. However, this business is not strategic for us. It fits into the strategic vision of our company as a world leader in medical technology, "said Philips CEO Frans van Houten in a press release distributed by the company.

Philips management believes that it will take 12 to 18 months to separate the household appliance business. Frans van Houten is confident there will be "great interest" from potential buyers in the unit.

According to Bloomberg Intelligence analyst Jawahar Hingorani, Domestic Appliances could sell for 2.3-3.3 billion euros. Experts believe that the sale of these assets could lead to Philips making purchases in the medical market.

The sale of the Domestic Appliances division will mark Philips' complete withdrawal from non-healthcare markets. Previously, the company abandoned the production of consumer electronics, and also got rid of the Lumileds division for the production of LED (LED) components.^[12]

2019

Dismissal of employee who reported bribes

At the end of August 2019, it became known that Philips Healthcare fired an employee who reported to managers about suspicious sales of medical devices in Brazil back in 2010. After that, the company simply continued to pay bribes.

Former Philips employee Jose Israel Masiero Filho informed his executives about the suspicious and probably illegal activities of some departments of the company back in 2010. As a result, Masiero's testimony reached Philips senior management, including CEO Steve Rusckowski, who is now CEO of Quest Diagnostics. However, the company continued to sell the equipment through a Brazilian intermediary who paid bribes to representatives of the Ministry of Health to obtain the most profitable contracts.

Prior to his encounter with the fraudulent scheme, Maciero worked as a top logistics and supply chain tracking manager at Philips' São Paulo branch. After an internal investigation, he was fired without explanation. Since he had no real evidence of fraud in his hands, until recently Masiero could not do anything. In Brazil, he was blacklisted and could not get a job, so he left the country with his family.

In 2018, Brazilian police launched a formal investigation into the case. Philips reports that during the current r­assledovaniya it actively cooperates with the Brazilian authorities. However, Philips refuses to discuss the former Maciero employee or the circumstances of his dismissal. US authorities also launched an investigation when its scope became clear.

It is known that after the start of the investigation, Maciero contacted the Brazilian prosecutor's office and began to actively cooperate with the investigation.^[13]

FBI investigates bribery of officials in sale of medical equipment involving Philips

On May 17, 2019, it became known that the FBI was investigating over alleged bribes that were given by Johnson & Johnson, Siemens, General Electric and Philips to  sell their medical equipment in Brazil. Read more here.

Manufacturing moves and big losses from Trump's trade war with China

At the end of January 2019, Philips Healthcare announced the forced transfer of medical equipment production from the United States to China due to the trade war waged by countries. In this regard, the company incurs additional considerable costs.

This is not a trifle. These are major changes in our supply channels, the CEO told reporters. Philips Frans van Houten

According to him, in the first half of 2019, Philips will transfer production to China for "hundreds of millions of euros." At the same time, the consequences of the trade war between the PRC and the United States will be expressed in losses of 60 million euros in 2019, van Houten expects.

He noted that the negative effect of the conflict between the countries is expressed not only by an increase in duties, but also by undermining consumer confidence in China and weakening demand for medical products there.

The head of Philips expressed the hope that in 2019 the company's revenue in the Chinese market will continue to grow, as strong sales of hospital equipment outweigh the weakness of the consumer market.

According to Reuters news agency, high demand for medical equipment in China, Latin America and Europe helped Philips generate revenues above market expectations in the fourth quarter of 2018.

In addition to tariffs imposed by China and the United States, Philips is hampered by "growing uncertainty caused by the global trade war, Brexit, a slowdown in the Chinese economy and the suspension of the American government," according to Degroof Petercam analyst Frank Claassen.

Van Houten says Philips has found specialty markets for products such as respiratory equipment and electric toothbrushes, with the latter generating "fantastic margins."

The healthcare market is resilient and this could be due to an ageing population and a lack of big sales. This is a good market for us, "Van Houten said in an interview with Bloomberg TV.[14]

Purchase of former Boston Scientific building in Plymouth for $11m

In early January 2019, it became known that Philips Healthcare bought a building in Plymouth for $11 million, which previously belonged to the manufacturer of medical equipment Boston Scientific.

The American division of the Dutch electronics manufacturer acquired the former Boston Scientific office in Plymouth - a building at 5905 Nathan Lane, which covers an area of ​ ​ more than 10 hectares and has premises with a total area of ​ ​ 20.5 thousand square meters, according to a statement of real estate values. The former Boston Scientific office was built by Opus in 1989 for Schneider USA.

The building was first put up for sale more than two years ago by Paramount Real Estate, based in Bloomington, according to Financial & Commerce. In late 2017, Boston Scientific terminated its contract with Paramount and engaged CBRE to sell the property. Boston Scientific employees who worked at the site were transferred to a unit located in Maple Grove, spokesman Kate Haranis told the Minneapolis/St. Paul Business Journal.

Philips Electronics is headquartered in the United States in Andover, Massachusetts. It was previously announced that it will move to Cambridge, Massachusetts, by 2020, where Philips Healthcare is already headquartered. More than 2,000 employees will have to move with the headquarters. The Androver campus will remain about 300 workers engaged in the production of ultrasonic diagnostic systems.

Philips said it would open a shop in the building, which is being erected in Cambridge Crossing, a large-scale development on the Cambridge-Somerville-Boston line. The new headquarters will become a global hub for Philips' healthcare business technologies, combining the innovation and commercialisation units now in Andover with research and development centres already located in Cambridge.^[15]

2018

Accusations of lack of attention to complaints about the quality of equipment in the United States

On March 20, 2018, the Food and Drug Administration (FDA) released an inspection report of Philips Healthcare's Cleveland manufacturing facility in July and August 2017. The facility produces CT scanners and modern molecular imaging systems such as SPECT and PET.

In a report, the FDA told Philips that the company was "not paying enough attention to complaints" about manufactured goods. For example, the report notes that of the 133,845 complaints received between July 2016 and July 2017, 129,736 or 97% were closed based on their assigned Severity of Potential Harm (HHM) code alone and no further research was conducted.

The FDA report also noted that 3,623 complaints were reported with low HHM severity (i.e., the events were moderate in severity and did not carry a significant risk to the patient), but with a high risk of adverse effects. According to the FDA, 1,792 of these complaints should have been referred to a special complaints processing department for further investigation.

In the past, Philips Healthcare has already had problems with the FDA regarding quality control and complaint handling. The company shut down production of CT scanners at the Cleveland facility in 2015 and recalled six CT scanner models in July of that year. In February 2018, Philips announced that production at the Cleveland facility would be completely discontinued in the second half of 2018. Instead, the company intends to open a new research center.

Philips provided an official response to the FDA report and noted that it records only the inspectors' comments, which "are not the final FDA opinion on this issue." Regarding the Cleveland facility's closure, the company said the decision was solely due to economic reasons, and the facility's production is less than 3% of the company's diagnostic equipment sales.^[16]

Partnership with American Well

Royal Philips and American Well announced a multi-year strategic partnership agreement in January 2018. The goal of the collaboration is to provide access to telemedicine services and enable people around the world to monitor their health on their own. As part of the technology partnership, the companies intend to integrate American Well telemedicine services into a number of Philips solutions for all stages of the health continuum. Read more here.

It is also planned that in 2018 Philips telemedicine solution will be launched in Russia together with a local partner of telemedicine services.

2017

Prohibition of sale of defibrillators due to problems with their quality

In November 2017, the U.S. Food and Drug Administration (FDA) banned Philips Healthcare from distributing two of the four types of automatic external defibrillators on the American market.

The company's losses from this ban are estimated at 140 million euros per year, which is about 0.8% of the manufacturer's total sales. Competitors can take advantage of these legal problems of Philips, said Jason McGorman, senior analyst at Bloomberg Intelligence, specializing in health research. According to the expert, the gap that arose in the defibrillator market due to the departure of Philips products can be filled by Stryker (Physio Control brand), Zoll Medical (owned by Asahi Kasei) and Cardiac Science (owned by private investment company Aurora Capital)

The FDA's decision was made public after a court ruled to stop selling defibrillators based on a product quality review that was conducted in 2015. The audit revealed that Philips did not take any action in response to complaints from buyers who noted violations in the operation of the HeartStart HS1 and FRx defibrillators, as well as the Q-CPR system (chest compression control system for cardiopulmonary resuscitation). In addition, the Dutch vendor ignored complaints about the inconvenient design of one of the defibrillators, due to which patients could not replace the battery.

As the Bloomberg news agency notes, usually such issues are resolved behind closed doors, but this time the Office of Product Quality Supervision held the company's management accountable, recalling that the manufacturer is responsible for monitoring and implementing corrective measures.

To resume sales, Philips must hire an independent expert within 10 days to monitor the production of first aid. Philips said the company intends to correct errors in the production of defibrillators and resume sales during 2018.^[17]

New tools for ultrasound in pregnancy

In 2017, Philips Healthcare introduced new imaging tools for its ultrasound diagnostic systems. The presentation took place at the conference of the American College of Obstetricians-Gynecologists (ACOG) in San Diego (California, USA).

The new features, called TrueVue, GlassVue and aReveal A.I., are designed for Epiq 7 and Epiq 5, Affiniti 70 and Affiniti 50 ultrasound devices. Working together, they are designed to provide photorealistic transparent 3D visualization with one touch to the device, the manufacturer said in a press release. First of all, new items are developed for obstetric and gynecological ultrasound.

TrueVue is responsible for creating a three-dimensional picture of the organs under study in quality close to photography. Advanced technology allows an ultrasound equipment operator to move light sources on a computer, adding volume to the objects in the images.

The GlassVue function is created for transparent 3D rendering. She uses her own light source and displays a more natural (with correct light transmission) picture with a fetus in the womb compared to traditional ultrasound.

aReveal A.I. is an intelligent ultrasound diagnostic algorithm for the abdomen of a pregnant woman. It automatically erases excess information from the screen to clearly display the child's head during an ultrasound.

Philips' latest technological advances in ultrasound are innovations and allow doctors to conduct additional fetal research, says Dr. Michael Ruma, who represents the Perinatal Associates in New Mexico. - The ability to produce high-quality realistic images not only increases clinicians' confidence in diagnosis, but also maintains an important link between mother and fetus.[18]

Building an augmented reality surgical navigation system

In January 2017, Philips announced the development of what it claims is the world's first fully automated augmented reality surgical navigation system. With its help, surgeons will be able to carry out under visual control on the spine and skull not open, but minimally invasive operations.

The new technology, designed for use in hybrid operating rooms, is unique in that it combines optical and X-ray 3D images to create a three-dimensional representation of the patient's body. In real time, the picture is displayed on the screen and changes as doctors intervene.

The system uses high-resolution video cameras that scan the external parts of the patient's body, as well as an X-ray detector, thanks to which an image of internal organs is built. The equipment processes the picture and forms a combined image, according to which it is possible to plan the course of the operation and navigate surgical instruments taking into account the physiological characteristics of each person to whom the operation is performed.

The new development aims to minimize surgery during surgeries by reducing blood loss and soft tissue damage. In addition, the technology will increase the accuracy of the installation of implants, provide high control over the course of the operation and save additional computed tomography (as a result, a person will not receive a harmful dose of radiation).

By the beginning of 2017, a surgical navigation system developed by Philips with augmented reality support was tested at the Karolinska University Hospital in Stockholm (Sweden) and the Cincinnati Children's Hospital Medical Center (USA ). The manufacturer does not report anything about the development entering the commercial market.^[19]

2016

Market Entry for Medical Diagnostics Software

November 27, 2016 it became known about the entry of Philips into the market of software for medical diagnostics. The company is starting to compete with General Electric and Siemens, which occupy much of this fast-growing market.

According to Bloomberg, citing Philips CEO Frans van Houten, the company is creating software to diagnose cancer and other diseases. In particular, applications will improve the interpretation of data from medical images by highlighting elements in different colors, the differences between which are not visible to the naked eye, said the head of Philips.

The world does not need more scanning capabilities, it needs a better interpretation of the data, - said Frans van Houten, adding that about half of the diagnoses in the world are made by mistake.

According to Bloomberg, Philips is already developing software that brings the company about 3 billion euros in annual revenue with a total turnover of 17 billion euros. The medical software market has growth potential that doubles the dynamics of sales of healthcare equipment.

Philips' main competitors in the medical solutions market - GE Healthcare and Siemens Healthcare - are actively promoting software for doctors. For example, General Electric Healthcare offers a cloud platform that connects visual medical diagnostics equipment with devices to which patients are directly connected.

Bloomberg notes that as part of the development of the IT-Business, Philips prefers to develop products on its own instead of receiving them with the purchase of another company. The annual R&D expenses of Philips are estimated at 1.7 billion euros, and the amount of own funds by November 27, 2016 is estimated at 300 million euros^[20]

Announcement of the first consumer medical gadgets

On August 1, 2016, Philips Healthcare entered the consumer medical gadget market. The company presented several such devices at once: smart watches, scales, a thermometer and a tonometer.

The products are released in the framework of the Personal Health Program initiative, which involves the creation of smart devices that can be connected to a single data collection center - the HealthSuite Health mobile application.

The most noticeable among the new products is the Health Watch, which serves for continuous monitoring of the heartbeat and differs from analogues in the clinical accuracy of the recorded data. In addition, the device worn on the hand can track steps, calories, sleep phases and respiratory rate, as well as determine the types of physical activity (walking, running, cycling).

The device is capable of working without recharging for up to four days, which is a good indicator, given the always-on display. The watch is water-resistant, so you can not take it off in the shower and while swimming. The Health Watch will cost $250.

Philips' ear thermometer detects body temperature in just two seconds, so it will work for kids who struggle to sit for a few minutes in the same spot as a mercury armpit thermometer. The gadget is priced at $60.

A feature of the Philips scales presented was the determination of body fat percentage and body mass index (BMI). The product will be offered in black and white body colors for $100.

Finally, the manufacturer showed a device for measuring blood pressure, which will be released in versions worn on the wrist (will cost $90) and on the shoulder ($100).

All devices that were presented by Philips went on sale on August 1, 2016. There was no information about the timing of their availability on the Russian market at the time of the announcement.^[21]

2011: In the World's Top Three for Medical Solutions

For 2011, Philips is one of the three leading companies in the medical solutions market.

The company's activities at this time can be divided into five areas:

• "Visualization systems" (with a sales volume of 2.7 billion euros)
• "Medical Informatics and Clinical Systems" (with sales of 1.9 billion euros)
• "Service" (with a sales volume of 1.9 billion euros)
• "Home Medical Solutions" - this area was founded at the end of 2004 and by 2011 time includes the combined capacities of Lifeline (acquired in 2006), Healthwatch, Raytel and Respironics located in the USA (acquired in 2007).

Notes