by Sara Dyson
This second installment of the “Crisis Management” segment of our Litigation 360 series addresses actions that a life sciences company can take immediately following notice of an adverse event to ensure the most positive outcome or least disruptive resolution. Although a company may not be able to undertake these steps until the event has occurred, preparation is no less important as pre-established procedures should be in place to provide a roadmap to follow in the wake of an adverse event. This article explores what those procedures should look like and what companies should devote attention to when preparing for and resolving an adverse event involving their products.
Product Identification: Determining Whether Your Product Was Involved
When a type of product is manufactured by multiple companies, it is not uncommon for adverse events to be reported to the wrong manufacturer. The injured party simply misidentifies the manufacturer and reports the injury to the manufacturer of a similar product. When learning of an adverse event, a company should first ensure that the product that gave rise to the alleged injury is, in fact, their product. There have been instances when companies have failed to make that determination and have litigated products liability cases only to discover that the product at issue was made by a competitor.
The recently enacted regulations requiring the manufacturers of medical devices to assign each device a Unique Device Identifier (UDI) will assist this process, though most manufacturers will not have to comply with this requirement for several years and some products are exempt from the rule. (See 21 CFR 830.)
If product identification is a potential issue for you, begin to address it now by doing the following:
Returned Product: Receiving and Handling the Product Involved in the Adverse Event
Depending on the type of product at issue, products involved in alleged adverse events may be returned to their manufacturers by end-users. When products are not returned to their manufacturers, companies should seek their recovery, though this may be difficult for the manufacturers of some products, such as over-the-counter products, implants, and drugs. Obtaining the product involved in an adverse event is extremely useful when investigating the incident, and it can be critical in a manufacturer’s defense when the adverse event gives rise to a products liability lawsuit.
Most companies have “returned goods authorization” (RGA) protocols for products being returned under any circumstances, but these protocols are likely not sufficient to handle the return of products involved in adverse events. Standard RGA protocols simply do not require the type of product inspection that is necessary under the circumstances, nor do they address preserving the products in their returned conditions. For this reason, companies should consider implementing procedures intended to be used under these special circumstances.
Should an adverse event lead to a lawsuit, you may be required to produce the device involved, assuming that it has been returned to you. Failure to do so may be considered “spoliation of evidence,” or the intentional or negligent withholding, hiding, altering, or destroying of evidence relevant to a legal proceeding, which can result in court-imposed sanctions. Preventing a spoliation claim is another good reason to develop procedures related to handling products involved in adverse events. Should a lawsuit arise, anticipate that one of the first things your legal counsel will do is assist you with notifying your employees of the need to retain pertinent evidence, including the returned device involved in the plaintiff’s alleged injury.
A procedure for returned goods involved in adverse events should do the following:
Media and Press: Protecting Your Reputation
In the previous edition of Litigation 360, we discussed the importance of communicating with the public during a crisis that involves your product. Providing information about the product and its safe use can be essential to protecting the public’s health. However, remember that any public statements that you make about your product or about any related adverse events, post-market corrective actions, or legal actions can haunt you during litigation should your messaging and your interactions with the media not be well managed. Having a written procedure in place that anticipates this aspect of a crisis and describes how you will address questions from the public can help assure that you respond appropriately.
All information you provide to the media--even the information you develop during the crisis--should undergo legal review to ensure that none of it compromises your legal case or discloses anything confidential. Certain information about your company and product will be relevant to any media inquiry. This sort of information can be prepared in advance of a crisis when there is plenty of time for legal review. For example, you may wish to prepare a company “fact sheet” or contact sheets for individuals who are authorized to act as media liaisons.
A company may choose to create a “media team” that is responsible for managing communications during a crisis. The team should be composed of individuals from a cross section of the company, including management, marketing, legal, regulatory, quality, and operations. Additionally, include someone from the information technology department to ensure that messages can be deployed electronically. Written procedures should specify the scope of the team’s responsibilities and authority and require their availability around-the-clock until the crisis is resolved. As part of its regular activities, the team should test and evaluate the procedures on an ongoing basis to ensure that they continue to be appropriate for and relevant to your business.
Products Liability Lawsuits: Responding When You Receive Notice of the Lawsuit
An adverse event that gives rise to a products liability lawsuit brings a host of additional requirements and obligations necessary to see it to resolution. Time is of the essence. If a lawsuit is filed, you have a certain amount of time in which to respond, depending on the jurisdiction in which it has been filed. Your first step should be to inform your insurance broker and your products liability carrier. In the next edition of Litigation 360, we will take a closer look at the things that a company should do immediately after a lawsuit materializes in order to mitigate the impact that the lawsuit will have on the company and to assist its defense.
Adverse events are nearly inevitable for most life sciences manufacturers. However, their impact need not be overwhelming or injurious to a company’s reputation, personnel, or bottom line. Instead, by utilizing the information provided in these last two installments of Litigation 360, life sciences companies can minimize the negative effects of adverse events and manage them appropriately to prevent larger-scale product problems down the line. The critical piece of an effective strategy for handling adverse events is preparation; the best outcomes are assured by drafting and enacting those procedures that will guide action in the event of an adverse product experience before such an event occurs.
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