Duodenoscope Risks in the United States

「The company had been collecting older models through a trade-in program, but during the current consolidated fiscal year decided to exchange them free of charge for new models recommended by the FDA in order to accelerate progress. Because the amount deemed necessary for the market response changed, the company reversed ¥4.153 billion of the provision for the duodenoscope market response.」

「Subsequently, the company completed the post-market study in cooperation with the FDA and submitted the final report on the post-market study in February 2020. A post-market study is currently being conducted on a successor model that began sales in the United States in 2020, but further regulatory action by the FDA may be taken depending on future developments.」

「Operating profit in the Endoscopic Solutions business decreased due to lower revenue and the recording, under cost of sales, of costs related to the voluntary recall of endoscopy products during the second quarter of the current consolidated fiscal year, despite progress in improving cost efficiency.」

「Although the Endoscopic Solutions business recorded ¥10.368 billion in market response costs during the current fiscal year to voluntarily transition duodenoscope products from older models with fixed distal caps to new models with removable distal caps that are easier to clean and disinfect, operating profit increased due to cost efficiencies and the absence of costs related to the plea agreement with the U.S. Department of Justice that had been recorded under "Other expenses" in the previous fiscal year, among other factors.」

「Based on the current situation, we do not believe the impact on the group's operating results and financial position will be significant. In addition, in March 2018, the U.S. Food and Drug Administration (FDA) issued warning letters to duodenoscope manufacturers, including the group, on the grounds that they had failed to comply with requirements to conduct post-market studies concerning the cleaning and disinfection of the products.」

「The company entered into a plea agreement with the department on 3 December 2018 concerning this matter, and the agreement was approved and finalized by a U.S. court on 10 December of the same year. The company therefore paid ¥9.653 billion, representing criminal fines, criminal forfeiture and related amounts. As of the filing date of this report, civil lawsuits had been filed in the United States against the group by parties claiming to have been harmed by the group's duodenoscopes.」

「As of the end of the second quarter of the current consolidated fiscal year, in light of the status of the investigation, the company recorded a provision of ¥9.653 billion for the estimated losses deemed necessary. As of the filing date of this report, civil lawsuits had been filed in the United States against the group by parties claiming to have been harmed by the group's duodenoscopes. Depending on future developments in these matters, the group's operating results and financial position may be affected.」

「In March and August 2015, the U.S. Department of Justice issued subpoenas to Olympus Medical Systems Corporation, a subsidiary of the company, seeking information concerning duodenoscopes manufactured and sold by the group. The department's investigation into the facts has continued since then.」

「In March and August 2015, the U.S. Department of Justice issued subpoenas to Olympus Medical Systems Corporation, a subsidiary of the company, seeking information concerning duodenoscopes manufactured and sold by the group. The department's investigation into the facts has continued since then. Depending on future developments, the group's consolidated results may be affected, but the amount of the impact cannot reasonably be estimated at this time.」

「In March and August 2015, the U.S. Department of Justice issued subpoenas to Olympus Medical Systems Corporation, a subsidiary of the company, seeking information concerning duodenoscopes manufactured and sold by the group. The department's investigation into the facts has continued since then.」

「In March and August 2015, the U.S. Department of Justice issued subpoenas to Olympus Medical Systems Corporation, a subsidiary of the company, seeking information concerning duodenoscopes manufactured and sold by the group. As of the filing date of this annual securities report, civil lawsuits had also been filed in the United States against the group by parties claiming to have been harmed by the group's duodenoscopes.」