When I graduated from high school, I spent a summer in Japan courtesy of the Boy Scouts of America, the Boy Scouts of Japan and the Japanese Government. Among the many places we visited was the Shrine of the Three Monkeys in Nikko. Until then I had no idea that the Three Monkeys derived from a Japanese Shrine and wasn’t a children’s folk tale. The Ivory carvings set in Gold were spectacular. They perfectly depict the state of the Medical Device and Life Sciences sector in the US, no one – not Top Management nor Corporate Counsel, nor regulatory Managers and certainly not Quality Managers take responsibility for potential exposure to product liability lawsuits. It also frightens foreign manufacturers from entering the litigious environment of the American Medical Device and Life Science market.
What is the issue?
While it may not be apparent, Quality Management Systems have been involved in litigation for several years. In the Defense industry, the US Department of Justice has prosecuted numerous firms for failing to follow their ISO 9001 Quality Management Systems resulting in flawed products that compromised the safety of military personnel. The fines levied by the Department of Justice exceed well over $4 Billion Dollars
In the domestic market, several lawsuits have involved ISO 9001 resulting in out-of-court judgments against various manufacturers. The role of ISO 9001 in these lawsuits has ranged from Defendant Companies failing to follow their QMS procedures for contracts, inadequate supplier oversight, inadequate supplier audits, failing to remove nonconforming product from the marketplace, inadequate post sales surveillance, lack of design control, etc. Altogether Defendant settlements with Plaintiffs’ are estimated at $5 to $8 Billion Dollars and very likely double that amount.
For Medical Devices and the Life Sciences, the Quality Management Systems are FDA’s Quality Management Regulation, EU and Canada’s ISO 13485 QMS and Suppliers’ ISO 9001 QMS. In (FY) 2008 FDA Enforcement Statistics tallied Fines and Restitutions at $ 846,591,080 followed by product liability litigation losses to Plaintiffs for at least four times that amount. FDA has initiated Consent Decrees (CD) against a Medical Device Manufacturer for $100 Million Dollars and a Pharmaceutical Manufacturer for $500 Million Dollars for failing to maintain their regulatory mandated Quality Management Systems. Both FDA actions were followed by Plaintiff product liability lawsuit losses greater than the consent decree penalties. As noted earlier, these are sealed settlements, but the estimated total product liability losses exceed several billion dollars. However, because these settlements are sealed the degree of risk is not visible.
In a recent publication the Accounting firm Deloitte stated, “A typical CD lasts three to five years and can cost upwards of $500M in fines, penalties, remediation expenses and lost sales. [(Not counting the product liability losses following the CD which will substantially exceed the $500M figure!] Beyond the economic impact, it can also damage a companies culture, image and patients.
Finally, to the preceding economic losses could be added criminal and civil penalties levied against medical device and life science companies and their top management! Failure to consider the risk of product liability litigation and the adverse financial impact as a significant element of risk management is not effective risk management.
What are some of the problem areas?
- To begin, different studies reveal there is an assumption among Medical Device and Life Science Companies that compliance with FDA’s Quality System Regulation (QSR) and/or EU & Canada’s ISO 13485 is an adequate defense against product liability lawsuits. Plaintiffs’ Attorneys quickly discovered that Quality Policy statements frequently are filled with generic platitudes about meeting and exceeding customers’ expectations, the kind of language often found in ISO 9001 Quality Management Systems (QMS), but no mention of patient safety and product safety. Indeed, ISO 9001 doesn’t mention product safety, it has to be built into the fabric of the QMS. Medical Device and Life Science Firms do a little better on building safety into their respective QMS, but only a little bit better. The primary focus is on making certain that all of QMS requirements are covered. Product safety and patient safety generally is a secondary concern.
- Document Control is critical in product liability avoidance. What is stated and how it is stated is critical. Plaintiffs’ Attorneys have accused medical device and life science documents of being paper only Quality Management Statements that are not carefully followed in managing device design, manufacturing, process control and post sale surveillance. How these documents are addressed and followed will have a direct responsibility on product liability lawsuits. FDA Warning Letters identifying failures to effectively implement QSR requirements are public knowledge offering Plaintiffs’ Attorneys a window on how to proceed with their lawsuit. Commonsense document management and word control are vital skills for product liability avoidance. Because QMS documentation does not address product liability avoidance, QMS documentation has been successfully used by Plaintiffs Attorneys against medical device manufacturers.
- Post Market incidents and customer complaints that are not fully investigated and appropriate CAPA actions taken, including design review and design changes, have been successfully cited as safety failures in product liability lawsuits. FDA has been increasingly vigorous in focusing on post sale failures and mishaps. These actions provide a welcome springboard for Plaintiffs Attorneys’ to pursue. The issues have become more complex with medical device and life science suppliers introducing tainted ingredients that are not adequately vetted before being incorporated into medical device and life science products sold to the public resulting in serious and sometimes fatal health consequences. FDA’s attention to CAPA has increased dramatically followed closely by Plaintiffs’ Attorneys.
- Just as Plaintiffs’ Attorneys have increased their knowledge of Quality Management Systems, i.e., FDA’s QSR, EU & Canada’s ISO 13485 and suppliers ISO 9001, Medical Device & Life Science Firms need to task key personnel to study these QMS systems from the perspective of product liability avoidance. Quality documents need to be vetted for what is written and how it is written. In this era of digital communication and texting reducing writing to fewer sentences and words or lack thereof continue to have legal consequences. I recall teaching a university class and asking a student about the meaning of a particular paragraph. His response was, “it was just a bunch of words”, not the type of person you would want overseeing your company’s Quality Management System, but a welcome employee for a Plaintiff’s deposition.
Medical Device Risk Management has improved significantly in the past several years. ISO 14971 first in 2000 and then in 2007 with ISO 14971:2007 Medical Devices – Application of risk management to medical devices followed by ISO 14971Medical Devices (ISO 14971:2007, Corrected version 2007-10-01). These are excellent improvements to the creation and manufacture of medical devices, but they are focused on medical device quality and safety as they should be. Regulatory bodies are tasked with protecting public health and safety, they are not concerned with the legal risks facing Medical Device and Life Science firms. It is illogical to expect that compliance with regulatory requirements confers an exemption from legal scrutiny and litigation. Therefore, each Medical Device and Life Science Company must create their own Risk Management approach to the legal aspects of Product Liability Exposure and Product Liability Lawsuits.
- In order to be successful in Product Liability Avoidance and Product Liability Litigation, Medical Device Manufacturers and other Life Science Firm’s CEO, President, CFO, CIO, Corporate Counsel, Regulatory Managers, Quality Managers and Defense Counsel must understand the type of legal platform created by a Quality Management System – how it works for you and how it works against you. The fact that these Quality Management Systems are FDA and/or EU regulatory requirements, create additional legal opportunities for Plaintiffs’ Attorneys. For Example, FDA Warning Letters and Legal Sanctions is public information that can be quickly used by Plaintiffs’ Attorneys to support their clients’ lawsuits.
- The four major sources of Product Liability Lawsuits are – Product Design, Manufacturing and Process Control, Post Sale Surveillance & CAPA, Regulatory Oversight and Sanctions specifically addressed by documented procedures and clauses in every Quality Management System. How these sources are addressed will have a direct legal impact on any product liability litigation.
- Corporate counsel and Product Liability Defense Counsel do not fully understand and appreciate the impact of documented regulatory Quality Management Systems (QMS) on product liability litigation. Plaintiffs’ Attorneys are successfully using the requirements of FDA’s QSR and the EU’s Medical Devices Directives and ISO 13485 against Medical Device Manufacturers and Life Science Firms in product liability litigation. To date, Plaintiffs’ Attorneys have only scratched the surface and are beginning to examine in depth the internal structure, quality manual, quality procedures, required documents and records required to operate these systems. Broken regulatory QMS systems are rich with data and potential to be used successfully against Medical Device Manufacturers and Life Science Firms.
As noted in previous, blogs I have joined a group of International colleagues to work with medical device companies in the US and in the EU where there is a fear of product liability litigation in the US market. We combine legal expertise in risk management, human factors, document control, insurance, loss control, preventive law, Product Liability Audits that can be applied to FDA’s Quality System Regulation, EU Medical Devices Directives, and ISO 13485 & ISO 9001 Quality Management Systems. We use a QMS as a platform for Product Liability Avoidance, including document management and “word control” training and the creation of a Product Safety Management System. We are preparing new approaches to work with companies to address these concerns. In particular we focus on the legal aspects of Product Liability Exposure.
My primary focus has been on International Regulatory Compliance, which includes both the requirements of US & EU regulatory authorities and the legal implications of compliance, non-compliance, documentation and sloppy attention to detail that could result in a lawsuit in a US Federal Court or state courts. I focus on product safety, product liability and the steps necessary to create a safe product. I also serve as Legal Expert/Expert Witness where safety has been compromised or ignored resulting in damage, injury and/or death. If you have questions regarding ISO 9001, ISO 13485, FDA’s Quality System Regulation or CE Marking lawsuits you can contact me for a free preliminary consultation at my e-mail address firstname.lastname@example.org