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MEDICAL DEVICE LITIGATION: COMMON MISCONCEPTIONS
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In discussions with our clients, distribution partners and other Life Science industry participants in China, we regularly encounter misconceptions about a Chinese medical device company’s potential exposure to product liability litigation, especially in relation to its exports. This article examines some of the more common misconceptions we have encountered and discusses real-life examples of lawsuits outside of China involving medical device companies.

Misconception #1 – If there is no physical defect in my company’s product, we won’t be sued.

Example – An American child who had undergone a tonsillectomy allegedly was not adequately ventilated while in recovery and suffered brain damage. The medical device company that made the breathing device on behalf of a major American medical device distributor was sued along with the distributor, the hospital, the anesthesiologist and the surgeon. The claim against the original manufacturer alone was valued at over US$2,000,000.

When it comes to medical devices in particular, there are many potential product scenarios where there is nothing discernibly wrong with a particular device in terms of physical or manufacturing defects but bodily injury arises in a patient nonetheless because the product allegedly failed to be sufficiently effective. Whether it be a defibrillator that allegedly fails to deliver an adequate charge, an infusion pump that allegedly fails to release a treatment in the correct interval or dosage, or a coronary stent that allegedly fails to sufficiently support an occluding artery, a medical device company can become the subject of a lawsuit should the apparent inefficacy of its product be linked with patient injuries.

Misconception #2 – If a physician misuses my company’s product, we aren’t responsible for the injuries caused to patients and won’t be sued.

Example – A medical device company’s surgical product was allegedly misused by a U.S. surgeon in multiple surgeries involving multiple patients. The patients claimed that they were injured due to product defect and alleged that the manufacturer had provided money and training to the doctor as an incentive to use the manufacturer’s product. In aggregate, the settlements made in American courts by the hospital, doctor and medical device manufacturer were in excess of US$90,000,000. A second manufacturer that was also involved in this litigation settled for over US$40,000,000.

In many jurisdictions around the world, medical devices are used for “off-label” purposes-- uses for which the product was not originally cleared or approved by local government regulators. If a patient is injured by an off-label use of the product and the product did not contain adequate warnings against such use, the medical device company, regardless of its national origin, may be held at least partially liable irrespective of the actions of the doctor. In the example above, the plaintiff’s attorney characterized the medical device company’s consulting fees and training sessions as incentives that biased the accused doctor towards using the medical device company’s products in an attempt to make the medical device company appear more directly responsible for the misuse of the products.

Misconception #3 – My company only supplies a component (or manufacturing service) and is not responsible for the final product. If a patient is injured, our manufacturing partner will indemnify us.

Example – The manufacturer of a knee implant was sued by hundreds of patients alleging that the product was defective and prone to failure. The manufacturer in turn demanded that the contract manufacturer that it relied upon to perform certain grooving and texturing operations on its product contribute toward payment of the damages. The contribution towards settlement that the contract manufacturer made was in excess of US$8,500,000.

In many cases of bodily injury to patients, the exact cause of injury—and therefore fault—is very difficult or impossible to isolate and determine. As a result, the many companies that make up the supply chain for the product, from the raw material suppliers and component manufacturers to the brand name manufacturer and distributor, may be forced to defend themselves and contribute towards a legal settlement. There are also times when a powerful brand name manufacturer may use its economic importance against its suppliers and seek financial contribution from them towards the settlement of litigation in which it is involved.

Misconception #4 – My company can’t be sued for something for which it is not responsible.,/p>

Example – Over 225 plaintiffs alleged that they were injured by contaminated pre-filled syringes of heparin that were used to treat cardiovascular and other illnesses. A manufacturer of pre-filled heparin products that are used exclusively for cleaning medical equipment and not for therapeutic purposes was also named in the industry-wide lawsuit. Defense expenses for the manufacturer of the heparin-based medical equipment cleaning products were estimated at approximately US$3,000,000.

When large-scale or industry-wide litigation is filed, it is not unusual to have peripheral industry participants and “innocent bystanders” also be drawn in at the initial stages. These firms, such as the medical device company cited in this claim example, can incur significant legal expenses defending themselves against the allegations before they are ultimately released from litigation.

Misconception #5 – My company is only a small supplier. We are too unimportant to be sued.

Unfortunately, as all four claim examples above illustrate, when lawsuits involving medical devices and other Life Science products, it is our experience that every entity involved in the manufacture, provision and use of the product can be targeted. To cite just the example in Misconception #1, in that case the contract manufacturer, brand-company/distributor, hospital, anesthesiologist and surgeon were all sued and, at a minimum, incurred defense expenses which can be substantial amounts on their own.