ResMed a major U.S. respiratory company has revealed a likely settlement of $40 with the U.S. Justice Dept. to settle an investigation of its resupply business. The respiratory company said it set aside $41.2 million to cover the $39.5 million settlement and any legal and administrative costs.
In July 2016 the Justice Dept. subpoenaed ResMed for information on its “industry offerings of patient resupply software to home medical equipment providers,” The company has indicated that the settlement, if consummated, would cover four main areas: resupply trial offers, marketing and financing issues and how it made its ApneaLink home sleep testing device available.
ResMed last week reported profits of $68.8 million, or 48¢ per share, on sales of $705.0 million for the three months ended June 30, for a bottom-line slide of -37.3% on sales growth of 13.1% compared with fiscal Q4 2018. Adjusted to exclude one-time items, earnings per share were 95¢, 3¢ ahead of the consensus on Wall Street, where analysts were looking for sales of $701.6 million.
Fiscal 2019 profits were $404.6 million, or $2.80 per share, on sales of $2.61 billion, marking a 28.2% profit gain on sales growth of 11.4% compared with fiscal 2018. Adjusted EPS came in at $3.64, missing the consensus by 31¢; analysts were looking for sales of $2.87 billion.
The San Diego, California-based maker of sleep apnea and respiratory care devices is not alone in attracting the scrutiny” of federal regulators. In 2016, competitor Respironics, a unit of Royal Philips NV, agreed to pay $34.8 million to settle DOJ claims it provided kickbacks in the form of free call center services to induce durable medical equipment suppliers to buy its sleep apnea masks.