Preemption and the Vanishing Threat of Liability

Posted by Armand RossettiSeptember 09, 2008 2:32 PM

Today, when Americans use defective products that cause injury they have a remedy. Injured consumers usually sue the product’s manufacturer in state court. However, this opportunity for the courts to make consumers whole once again may soon disappear.

Recently, the pharmaceutical industry, the Food & Drug Administration and the Bush Administration have been working hard to replace the current court remedy with a blanket federal preemption doctrine. And the US Supreme Court is in the process of deciding whether state courts, or the FDA, will determine the future course that manufacturers will be taking to supply American consumers with safe drugs and medical devices.

Why is preemption coming to the forefront, right now, as the end solution?

In the past, the FDA has actually welcomed state liability cases to aid its ability to regulate drugs and medical devices. There is widespread knowledge that he FDA has been chronically underfunded, and that the FDA has little consistent ability to regulate product design. Instead of having total command of what happens in the drug and device industries, the FDA relies on the manufacturer to perform the necessary research to show that a particular drug or device is safe. The FDA also relies on the manufacturer to conduct post release follow up studies during consumer use to confirm the safety of those drugs or devices. Furthermore, the FDA relies on manufacturers to timely report adverse events when consumers use a product that cause serious injury or that are life threatening.

The FDA does not provide manufacturers with safe designs. The FDA does not mandate certain studies that Manufacturers must follow to prove safety and efficacy. Nor does the FDA require manufacturers to design drugs or devices in any certain way. There is no FDA oversight other than scrutiny of the information and studies that Manufacturers voluntarily provide to the FDA.

While preemption might seem like it could be a workable (although less desirable) option, preemption can only work if the FDA was able to ensure: 1) that it would always have adequate funding; 2) that it would remain ahead of the technological curve at all times; or 3) that the FDA would require manufacturers to follow a well scrutinized and regulated product designing process. However many believe that the FDA will be eternally incapable of maintaining such regulatory practices. On the contrary, all too frequently, the consuming public has witnessed the horrors of the current loose regulatory scheme of FDA approval, reporting requirements and oversight.

Many seem to think that the FDA is not ready to participate in preemption versus the alternative means, the state civil courts. And it seems evident that the FDA might never be able to assure the public that all drugs and medical devices are safe, or that the FDA will timely intervene when problems arise. In the words of Congressman Henry Waxman, Chairman of the House Committee on Oversight and Reform.

“As a result of chronic under-funding and weak leadership, FDA's ability to protect the public is plummeting. FDA’s own Science Board just issued a report that said the agency is so starved of resources that American lives are at risk. But even with an FDA with more funding and better leadership, there would sti1l be a compelling need for our system of State liability laws.”

To illustrate Congressman Waxman’s statement, we have the case of 21 year old Joshua Oukrop who died in 2005 when his cardiac defibrillator malfunctioned. The device had a design flaw that the manufacturer knew about at the time Joshua died. However, neither Joshua, his parents nor his doctor knew about that defect.

Three years went by between the time that the manufacturer knew about the defect until it withdrew the device from the market. During that period doctors, who could not have known about the defect, continued to implant that same device in other patients.

In lawsuits that followed, the manufacturer argued that the FDA had approved the device and that approval provided the company with immunity from liability. The manufacturer’s argument was strengthened because of an earlier Supreme Court ruling that FDA approval of a complicated medical device preempts most liability claims.

Here is a complex reason why Preemption might not be the right regulatory choice for consumers (taken from Hearing On; Should FDA Drug and Medical Device Regulation Bar State Liability Claims, House Committee on Oversight and Government Reform, Washington, DC, Wednesday, May 14, 2008):

Some drug and device companies have

• hidden and manipulated important safety data;
• manipulated important safety data;
• failed to report serious adverse events;
• failed to disclose known defects; and
• conducted clinical trials that are not adequate to detect risks.

Considering all of the above activities, if the threat of manufacturer liability vanishes, there will be no (or certainly much less) incentive for manufacturers to head themselves in the right direction, and these abusive practices will only increase. And as Congressman Waxman has stated, “No amount of resources would fix the problem.” Without manufacturer liability, patients who are injured will not be able to seek compensation to help them deal with their costly medical procedures, permanent disabilities, and their inability to work.

Those advocates who back preemption argue that patient health and consumer protection are at a loggerhead with the whims of predatory trial lawyers chasing fees versus FDA regulated companies trying to protect themselves from post-approval claims. They say that a scheme involving total litigation and no preemption raises medical costs, interferes with drug and device development and subjects companies and consumers to an endless number of conflicting standards in 50 different jurisdictions.

Despite those fears, however, the state court system seems to have been working very well. As Congressman Bruce Braley (D-IA) stated during the House Committee hearing referred to above:

“It is time for us to talk about what is going on here. My friend [Congressman Davis] talked about the increasingly litigious environment, but that is completely contrary to documented evidence which shows that in State courts across this Country the number of products liability claims is declining every year, and there is a doctrine already in place in those State court claims called the state of the art defense, which is a total defense to product liability cases, and in order to prove that defense you simply have to show that the product and the language used to describe it conform to the state of the art at the time it was manufactured and distributed.

When the FDA has an extensive approval process like the one we are talking about here today, that is a fundamental component of a state of the art defense, so there is already substantial opportunity in State court proceedings to assert the very defense that we are here to talk about today.”

Legislators are not the only ones questioning the FDA’s ability to super regulate through preemption. During the same House committee hearing, Dr. William H. Maisel, a professor of medicine at Harvard, Director of the Medical Safety Device Institute, and a consultant to the FDA’s Center for Devices and Radiological Health (CDRH) since 2003 stated the following:

“The FDA annually receives reports of more than 200,000 device-related injuries and malfunctions and more than 2,000 device-related deaths, and it is challenging for them to identify patterns of malfunction among the deluge of adverse event reports. In the majority of cases, FDA relies upon industry to identify, correct, and report the problems, but there is obviously an inherent financial conflict of interest for the manufacturers, sometimes measured in billions of dollars.

Implanted medical devices have enriched and extended the lives of countless people, but device malfunctions and software glitches have become modern diseases that will continue to occur. The failure of manufacturers and the FDA to provide the public with timely critical information about device performance, malfunctions, and fixes enables potentially defective devices to reach unwary consumers.”

Add allegations of manufacturer kickbacks to doctors to the mix, and clearly, more work from the FDA and from manufacturers remains necessary, before consumers can expect greater safety under FDA preemption.