Products Liability Litigation Challenges for Life Sciences Companies, Part II

In addition to the challenges that were addressed in the previous installment of Litigation 360—negative jury biases and joint and several liability implications—there are a couple of other elements complicating the products liability litigation landscape for life sciences companies that deserve consideration. These are: (1) transparency as a regulated industry and (2) the sensitivity of life sciences consumers as a plaintiff class. This article will address each in turn. Finally, this two-part look at litigation challenges for life sciences companies will conclude by turning to what companies can do to overcome these challenges and maximize their products liability defensibility.

Transparency as a Regulated Industry

One hurdle that is relatively unique to life sciences companies comes from their status as members of a regulated industry. Beyond the time and resources life sciences companies must utilize to maintain compliance with the Food and Drug Administration’s (FDA) barrage of regulations, being part of a regulated industry also means that the public has rare access to information about life sciences companies and their activities that it does not with respect to non-regulated entities. For example, through the FDA’s website, the public can obtain records of a company’s FDA inspections, consumer complaints, adverse events involving their products, and agency enforcement actions.

This kind of transparency heightens products liability risk for life sciences companies in two ways. First, plaintiffs’ attorneys can use information gleaned from recalls, MAUDE (Manufacturer and User Facility Device Experience), and enforcement actions to identify potential product problems and troll for viable lawsuits. Second, once involved in products liability claims, plaintiffs often utilize publicly available information about companies’ enforcement histories, past recalls, or adverse events to paint defendants in a negative light at trial or in settlement negotiations.

Many plaintiffs’ attorneys have learned to use the wealth of information the FDA provides about life sciences companies and their products in order to find potential lawsuits and plaintiffs. That a company has undertaken a large-scale recall for a defect that may have safety implications may be seen as a significant opportunity by the plaintiffs’ bar. This alerts them that there exists a group of potential plaintiffs that may have experienced a problem with this product. Often, this is when attorneys will start advertising to identify plaintiffs (product users) that have had adverse experiences. Plaintiffs’ attorneys know that even without a single “strong” case, life sciences companies may be amenable to settling when faced with a multitude of potential lawsuits and the expense and bad publicity that necessarily accompany such suits.

Beyond alerting the plaintiffs’ bar to possible lawsuit material, publicly available information on product recalls, adverse events, and enforcement actions can play a pivotal role in life sciences companies’ existing claims and litigation. A plaintiff’s attorney may introduce MAUDE reports on the product at issue in a claim to show that the defendant-company had prior knowledge of a particular risk or product hazard. A Warning Letter may be used to depict the company as a poor corporate citizen that doesn’t take compliance (and, impliedly, safety) seriously. Even recalls of a different product than the one involved in the present suit can be used to demonstrate a company’s lack of care of oversight.

Regulatory compliance and products liability are integrally linked. In addition to full compliance with Quality System Regulations (QSR) making manufacturing defects less likely (as well as the corresponding products liability actions based on such defects), compliance also goes a long way in aiding a company’s defense position should a claim arise.

Sensitivity of Potential Plaintiff Classes

Another unique facet of life sciences companies’ operational environment that can make their products liability risk greater and their defense more difficult is a function of the type of end-users for which the majority of drugs and devices are intended. Most drugs and devices are necessarily for use by individuals affected by a disease or other harmful or undesirable health condition. Many of these diseases or conditions make these individuals especially vulnerable to harm. This heightened vulnerability has practical and legal ramifications for drug and device companies.

Practically speaking, a drug’s side effect may be much more harmful to someone with an already compromised immune system, for example, than a healthy individual. Likewise, a healthy individual falling out of a chair may only sustain minor injuries, while a fall from a wheelchair for someone with significant existing spinal damage may have catastrophic effects. In essence, the compromised health or condition of many users of drug and devices typically has the effect of amplifying the adverse effects of a drug or device failure.

The law says that a tortfeasor (for our purposes, a drug or device company) is no less responsible for harm suffered just because an individual had a heightened vulnerability to a particular harm. This is a principal of tort law known as the “eggshell plaintiff doctrine.” Essentially, this doctrine says that the defendant must take the victim as they find him or her. If the victim is more susceptible to injury than an average individual would be, the defendant is still liable for all the damages that occur. Even without this principal being formalized in law, however, the practical reality would likely exert the same effect; individuals with adverse health conditions and particular vulnerabilities generally make sympathetic plaintiffs. Sympathetic plaintiffs often yield large jury awards.

Overcoming Environmental Challenges to Minimize Products Liability Risk

Once life sciences companies have an understanding of the adversities of the environment they are operating within, they can start to mount a strategy to overcome those environmental challenges. The single most effective means of accomplishing this is to elevate the safety of end-users as a priority above all else. This is fundamental to a products liability risk in two ways: (1) ensuring that components and raw materials are selected, and processes and procedures developed with the end-users’ safety in mind, life sciences companies will make safer products, which are less likely to be involved in the adverse events that form the basis of many products liability claims; and (2) should a claim arise, being prepared and able to demonstrate concern for safety will curb negative jury biases and likely eliminate punitive damages that may have otherwise been awarded.

Surmounting Negative Perceptions by Demonstrating Commitment to Safety

Given social attitudes about corporate greed (discussed in Part I here), one of the most successful strategies a plaintiff’s attorney has against a life sciences company-defendant is to demonstrate that the company put “profits over people.” Establishing and leveraging a positive corporate “story”—likely one that speaks to the company’s orientation around improving users’ lives—goes a long way to combat such an implication.

A company’s commitment to safety should be readily apparently through examination of its quality system and standard operating procedures (SOPs). For example, in the company’s SOPs for design changes, consideration should be given as to how each proposed change might affect the product’s safety and such deliberation should be documented thoroughly. A commitment to safety should also be communicated more overtly through the company’s website, product literature, and marketing materials. For instance, the company’s mission statement—which should be easily located on the company’s website as well as on the physical premises of the company’s operations—should include mention of patient/consumer safety and/or the creation, distribution, etc., of safe drugs or devices.

Documentation – Careful Creation and Cautious Retention

Besides ensuring that product safety is foremost among your company’s concerns, the next most effective means by which to increase your likelihood of success in litigation is by establishing a comprehensive, company-wide approach to documentation. Such an approach has two distinct but equally important parts: (1) guidance and restrictions on document creation, and (2) procedures for document retention and disposal.

Defensive writing and document retention will be discussed in greater detail in an upcoming issue of Litigation 360 by Sara Dyson, Esq., on risk management and steps you can take to minimize your exposure before a claim arises.

Conclusion

Although a variety of factors can exacerbate the potential and severity of life sciences companies’ products liability, many such challenges can be minimized or overcome by undertaking careful and conscientious product development and documentation practices. The noble function that most life sciences companies exist to serve—improving lives by enhancing the comfort and well-being of individuals affected by a negative health condition—should be entrenched in every aspect of the companies’ operations and form the basis of the companies’ “story.”