by Kathryn Tarallo Klaus, Esq.
In their years working with life sciences companies – large and small – Medmarc’s risk managers have evaluated numerous medical devices and pharmaceuticals as well as their manufacturing and distribution operations and FDA compliance histories. From these experiences, our team of risk managers has developed a unique perspective on this innovative and growing industry. Life sciences companies operate in a heavily regulated and litigated environment. Through studying these companies’ successes, and their missteps, the authors of this series have discerned common trends that can influence a company’s products liability exposure. This series will discuss these trends and what companies can do to manage the products liability risks they create.
As discussed in the previous installments of this series, risk management in the life sciences industry presents complex challenges. Often, product manufacturers struggle to comply with the letter of federal regulatory laws while also maintaining focus on the myriad circumstances that could give rise to a state law cause of action in products liability. This duality creates an inherent challenge that is the foundation of some of the preemption cases covered in the first article of this series.1
However, the U.S. Food and Drug Administration’s (FDA) Quality System Regulations (QSR)2, though they may seem cumbersome to industry participants at times, are a remarkably adaptive mechanism for ensuring safety and consistency across a broad spectrum of products. From a simple first aid kit to an artificial heart, the QSR allows a manufacturer to control the design, manufacturing, packaging, labeling, and storage processes that help to ensure specifications are met and end users of the devices are adequately safeguarded.
Medical device manufacturers are obligated to comply with FDA’s QSR, but the requirements of the QSR can serve a dual purpose in that they are also bedrock elements of a robust products liability risk mitigation protocol. In viewing regulatory obligations through a products liability lens, manufacturers can enhance the accuracy of the early warning system the regulations are intended to create and benefit from early warnings by curing defects before they cause injuries.
Complaint Handling Under FDA’s Quality System Regulations
A medical device manufacturer is required to create a clear process for receiving product complaints, reviewing the information received and determining whether an investigation is necessary, and evaluating whether the complaint describes an event that must be reported to FDA via a Medical Device Report (MDR).3,4 The complaint handling process must be documented thoroughly and completed in a timely manner, and the company is obligated to designate a specific team of people responsible for handling any complaints received.5 There is also a management review component, which is intended to ensure that the executives with ultimate responsibility for the firm’s products are aware of potential product problems and the steps the company has taken to address them.
Each of these obligations must be described in a step-by-step procedure that is incorporated into the company’s quality system. The procedure must be adequate by FDA’s standards, well-implemented by the firm through training, and—critically—followed by the firm as demonstrated by thorough documentation and recordkeeping practices.
For example, consider a manufacturer of a surgical stapler. A surgeon uses the stapler during a procedure and finds the mechanism unusually difficult to operate while holding the stapler steady. In examining the stapler following the procedure, degradation is discovered in the firing mechanism. The hospital calls the manufacturer to report this issue. The firm has implemented its complaint handling procedure properly, and the call is routed to the complaint handling unit, where a staff member speaks to the caller from the hospital and fills out a form that is designed to ensure that all of the necessary information about the product and the alleged problem is gathered. This form is the basis of a file that is then evaluated and investigated according to the complaint handling procedures. Follow-up work may include requesting from the hospital that the device be returned to the manufacturer for examination and escalating the incident to the management team as appropriate. The documentation trail that this process creates must demonstrate the firm’s compliance with its own procedures, including the decision to file an MDR. In the event that the filing of an MDR is deemed unnecessary, the process must likewise result in a documentation trail that shows the firm’s justification for not doing so.
Common Complaint Handling Mistakes
FDA routinely inspects its registered device establishments, which include all manufacturers, contract manufacturers, contract sterilizers, device importers, complaint-file facilities, manufacturers of components or accessories for commercial distribution, kit assemblers, relabelers, repackagers, remanufacturers, reprocessors of single-use devices, and specification developers.6,7 The purpose of the inspections can vary between pre-approval, for-cause, or routine quality inspections. If the firm being inspected is found to have failed to meet a QSR requirement, FDA will issue notice of the violation in a “Form 483” document.
Annually, after the close of each fiscal year, FDA issues a report regarding the inspections it performed during the previous year. The report discloses the number of facilities inspected by each operational center, the number of facilities that received a Form 483, and the total number of times each violation of the QSR was cited by FDA over the course of the year. Complaint handling has been the second most frequently cited violation for seven straight years, and but for one year at number four, it has been the most or second most frequently cited observation for more than a decade.8 In fact, various complaint handling infractions have been cited by FDA nearly 4,000 times since 2008. More than half of these citations address the adequacy of complaint handling procedures and their implementation. Companies also struggle with determining when a complaint should trigger an investigation as well as with implementing appropriate recordkeeping practices for complaint files.9
In working with device facilities, certain profiles emerge that can be predictive of an increased potential for complaint handling difficulties. For example, firms manufacturing primarily low-risk products often struggle in the event of a complaint, because they do not receive a sufficient volume of complaints to warrant a dedicated complaint-handling unit, nor do employees have the opportunity to polish their skills in this area simply because of the infrequency of complaints. On the other hand, companies that have experienced rapid growth or which have expanded their product portfolios to include more complicated or invasive offerings may struggle to manage complaints properly. Finally, smaller firms with well-implemented procedures that are managed entirely by one person may struggle in the event that person departs.
Why does complaint handling matter for products liability?
While not the specific intent of the QSR, the policies and procedures written to comply with these FDA requirements can be a valuable tool in preventing the circumstances that can give rise to products liability claims. Because the QSR seeks to ensure the safety, effectiveness, and quality of all medical devices entering the U.S. market, compliance with these regulations tends to correlate with products liability risk mitigation. The “case studies” discussed below are intended to illustrate the relationship between a company’s complaint-handling practices and its products liability exposures. However, it is important first to understand the basis for most products liability claims.
In a products liability action, a plaintiff alleges that a defect in a product caused his or her injury, whether the injury is bodily injury or damage to property. Typically, a plaintiff will assert one or more of the following three major theories to prove his or her case:
A Test Case: Failure to Warn
A small, family-owned medical device manufacturer, “MedCo,” designs and manufactures low-risk patient-aid devices. These products are intended for use by patients with mobility challenges in order to assist with their day-to-day needs, such as grooming, dressing, and eating. Though small, this forty-year-old company has focused on its particular market niche and has a strong reputation in its product category. The company’s founder recently passed away and his son, the new CEO, has taken over operations. He wants to build on his father’s legacy and expand MedCo’s product offerings. Given the strong reputation of MedCo among patients with impaired mobility, he considers wheelchairs, both mechanical and powered, to be the next logical addition to MedCo’s catalog of products and soon enters the market.
Due to MedCo’s reputation, initial sales are quite strong and the wheelchairs quickly gain in market share. However, wheelchairs are a much more problematic product than the simple personal care aids the company has traditionally focused on, and with the growth in sales, comes a significant increase in customer complaints. While MedCo used to receive one or two complaints per year, they now receive one or two calls per day. Complaints have always been handled by the quality manager, who runs a disciplined operation and prides herself on the thoroughness and timeliness of complaint and investigation management. However, between the huge increase in call volume and her significantly increased duties in producing this new product line, the entire quality department is overwhelmed.
The new CEO steps in with an offer to help and says that complaints should now be routed to him. However, the CEO has a “big-picture” view of the company’s operations. His background is in design rather than regulatory compliance, so when the calls reach him, he is more focused on the patient’s experience and improving the design than on MedCo’s procedures. He receives several calls in which users complain about the braking mechanism and their confusion over how to set the brake. The CEO walks them through the two-step process after which they are satisfied and confident they can use the product appropriately, even appreciating the secondary safety brake. The CEO uses their feedback to begin tinkering with his next design idea, certain MedCo can make the best chair on the market.
However, the CEO glosses over the details of the complaint handling procedure. His documentation of the calls is focused on his design ideas rather than the information necessary to investigate a complaint. He does not communicate with the quality or regulatory staff members, who would have been able to weigh in on the FDA obligations that arise after receiving such complaints. As he is the executive with oversight responsibility, there is no official check on his handling of the complaints he receives. As a result, this series of complaints that should have been investigated and likely triggered both MDRs (given their propensity to cause patient injury if the product problem were to recur) and a field correction (needed to amend the device labeling to clarify the proper use and avoid risk of misuse of the product) was not handled properly.10
Jane Smith purchased a MedCo wheelchair for her own use. While her daughter was picking Jane up to drive her to a medical appointment, she wheeled Jane out to the car and set the wheelchair’s brake so that she could return to the house to gather Jane’s belongings. Unaware of the proper braking procedure, the daughter did not engage the braking mechanism properly. The brake released with Jane still in the chair, and Jane rolled down the driveway before tipping out of the chair, falling to the ground, and breaking her hip. Jane sued MedCo under both design defect and failure-to-warn theories. Jane’s attorney sees that there were several MDRs filed with MedCo regarding the braking mechanism but notes that there was no recall or correction following these reports.
When Jane’s attorney deposes the CEO, she asks about the complaints the company had received, whether the complaints were investigated, and what steps the company took in response to the complaints. Upon hearing her client’s answers to these questions (which reflect that MedCo did not follow its own procedures for complaint investigation and likely did not comply with FDA requirements for complaint handling), MedCo’s defense attorney advises the CEO that they should settle the case. Even if they could prevail against the design-defect theory, MedCo knew there was confusion over how to set the brake properly, yet they took no action with regard to the chairs already on the market.
Further Repercussions: The Plaintiffs’ Bar
While relieved that MedCo provided her with a settlement sufficient to pay for the long-term care she will require, Jane is still furious that the company’s failures caused her such pain and suffering and further limited her mobility. She does not want anyone else to experience what she did, and she files a user-report MDR with FDA.
Concurrently, the quality manager at MedCo has made cleaning up the CEO’s files her top priority. When she sees all of the piecemeal complaint records, she realizes how dire the situation is and immediately opens a Corrective and Preventive Action (CAPA). Following her investigation, she recognizes the instruction deficiency regarding the braking mechanism. She prepares a notice of correction, files it with FDA, and painstakingly ensures that every customer in possession of a MedCo chair receives a copy of the notice and a warning sticker to be applied to the chair that provides instructions for setting the brake properly.
Between Jane’s MDR and the proper notice of correction filed with FDA, the agency determines that it is time for an inspection of the MedCo facility. An FDA investigator is on-site at MedCo within the month and spends a full week reviewing design histories, manufacturing operations, and recordkeeping documents, in addition to interviewing various staff members. At the meeting that concludes the inspection, the investigator hands the CEO a Form 483, listing numerous deficiencies. His design history files were incomplete and the design was inadequately validated; manufacturing processes were inadequately validated; complaint procedures were not followed; complaint files were not adequately maintained; MDR procedures were not followed; CAPA procedures were not followed; procedures for management review were not adequately established; MDR reports were not filed within 30 days; quality audits were not performed; and the organizational structure was not established and maintained in a manner that would allow compliance with the QSR.
Given the significance of the violations in the Form 483, FDA decides that a Warning Letter is necessary. Warning Letters are public record and published on FDA’s website.11 The personal injury plaintiffs’ bar is well aware of the public nature of FDA’s enforcement actions and regularly mines FDA’s website for news of companies and products that are alleged to have caused injuries. One such industrious plaintiff’s attorney takes note of MedCo’s enforcement action and notes the number of similar complaints reported in FDA’s MDR database. The attorney decides to put out some feelers for patients injured by MedCo chairs. He creates a website and pays for Google ads to return his page when people search for “MedCo wheelchair.” He creates one of the ubiquitous personal injury television ads running in the middle of the night – “If you have been injured by a MedCo wheelchair, call the law offices of...” The plaintiff’s attorney receives a few promising calls and begins investigating additional potential suits against MedCo.
A Test Case: Documentation Practices
While FDA regulations require manufacturers to submit adverse event reports in the form of an MDR, merely filing the report is insufficient to mitigate products liability risk. Manufacturers must also be concerned with the content of MDRs, as these reports can become important records in products liability actions due to the descriptive nature of the information they contain—specifically, descriptions of alleged product failures. If a manufacturer fails to draft MDR submissions carefully and accurately, the document may contradict the manufacturer’s later description of what went wrong and inhibit the manufacturer’s ability to properly defend itself.
The MedCo example above is intended to provide a very clear picture of how inadequate complaint handling can cause significant products liability troubles for device firms. Now consider the following fact pattern in which MedCo follows both the QSR and its own procedures perfectly, but faces complications created by failing to consider products liability implications when writing and implementing complaint handling procedures.
In this alternate version, MedCo’s CEO is experienced in the life sciences industry and has dedicated significant effort to developing a culture that rewards open communication and continuous improvement. In this version, MedCo’s management anticipates the increased workload for the quality department following the expansion of the product portfolio and allocates sufficient resources in advance of the expansion to ensure that the department is able to keep up with demand. As part of this quality department expansion, MedCo hires a number of young customer service associates and conducts a thorough on-boarding training. The new staffers quickly become knowledgeable with regard to the regulatory obligations that flow from their work and are trained in creating complete and thorough complaint files to aid in the further review and evaluation of the complaints by the quality managers.
However, in their robust training program for the new customer service associates, MedCo’s focus is strictly on the regulatory requirements. They fail to contemplate the potential products liability impact of the customer service associates’ work. MedCo does not address the importance of language—specifically, neutral language—in taking customer complaints.
In this scenario, Jane Smith’s daughter notices that walking distances is becoming more painful for Jane and purchases a MedCo wheelchair at a yard sale.12 The wheelchair is used but appears to be in good condition, though the seller is no longer in possession of the user manual, and some of the labels have been partially peeled off the chair, leaving only the outline of sticker residue. Unbeknownst to Jane and her daughter, one of those stickers was the warning label regarding the dual-mechanism brake. Jane’s daughter arrives with the chair and wheels her mother to the car for her medical appointment, sets the brake in what she thinks is the correct manner, and returns to the house to collect Jane’s belongings. Jane rolls backward, the chair tips, Jane falls, and her hip is broken.
When Jane calls MedCo to complain, she reaches one of the new customer service associates who is very conscientious and compassionate in speaking with her. Jane tells the customer service associate, “My daughter set the brake exactly like she was supposed to and stepped away just for a minute and the whole brake just gave right out. If that brake hadn’t failed, I never would have broken my hip.” In the interest of creating a thorough file, the customer service associate transcribes exactly what Jane told her. When the quality managers review the complaint, they determine an MDR is necessary and the customer service associate’s narrative—in Jane’s words—is also entered into the MDR filing.
Now, when Jane’s attorney begins researching the MedCo product, she finds a public record on FDA’s website written by MedCo that makes her entire case for her. Indeed, the MDR itself states that the brake was set properly, but failed, causing Jane’s injury. Even if the eventual investigation of the incident by MedCo reveals nothing of the sort, their ability to argue this point later during litigation has been damaged by the content of the MDR.
What if the complaint narrative had instead stated: “Patient acquired used chair from yard sale; used chair did not have a user manual and patient did not seek manual online or from customer service. Patient claims brake mechanism failed. Return of device has been requested for investigation.” Upon investigation of the device, MedCo would have been able to establish that the warnings had been tampered with and that the brake was functional when used properly. In this case, MedCo may even have determined that an MDR was not necessary. Language is not contemplated by the QSR, but for products liability purposes, it is just as critical a factor as regulatory compliance.
Conclusion: Using Procedures to Mitigate Products Liability Risk
Medical device firms spend a significant amount of resources on regulatory compliance, which is a necessary feature of participation in this industry. It is also of great benefit in helping firms create procedures that result in quality products reaching the marketplace. However, as is evident in the examples above, regulatory compliance is not the only framework worthy of significant attention. Because FDA regulations come at the beginning of a product’s life, they tend to garner more of a firm’s initial focus. They are a roadblock to commercialization that must be navigated. Far too frequently, it is not until firms run into products liability trouble that they begin evaluating steps they can take to mitigate risk and limit their liability exposures.
However, when procedures are drafted with a dual focus—regulatory compliance and an awareness of the common theories of products liability recovery—firms can better insulate themselves from future risk. Some best practices include:
Each of these measures stems from the QSR framework required by FDA, but its implementation has a uniquely risk-oriented approach. Following a quality system comprising procedures drafted with products liability risk mitigation in mind may seem like a challenge at the beginning of product development, but such an approach can reap significant rewards in future peace of mind.
In our next installment of Risk Management 360, Sara Dyson, Esq., AVP, Risk Management, will address best practices to mitigate failure-to-warn claims.
1 See Riegel v. Medtronic, 552 U.S. 312 (2008); Wyeth v. Levine, 555 U.S. 555 (2009); PLIVA v. Mensing, 564 U.S. 604 (2011); and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013).
2 21 CFR § 820, et seq.
3 See 21 CFR § 820.198, “Complaint Files.”
4 See 21 CFR § 803, “Medical Device Reporting.”
6 21 U.S.C. § 374(a).
7 See 21 CFR § 807.20, et seq., “Establishment Registration and Device Listing for Manufacturers and Initial Importers of Devices.”
8 See FDA’s Office of Regulatory Affairs website on Inspection Observations, available at https://www.fda.gov/ICECI/Inspections/ucm250720.htm.
9 See FDA’s Office of Regulatory Affairs website on Inspection Citations, available at https://www.fda.gov/ICECI/Inspections/ucm346077.htm, specifically, the Inspection Citations Dataset, available at https://www.fda.gov/downloads/ICECI/Inspections/UCM576541.xlsx.
10 See 21 CFR § 806.2(d).
12 Note: This scenario has been crafted to emphasize the importance of defensive writing; it is not a statement on manufacturer liability for used products, which is highly dependent upon both the facts of the case and the jurisdiction in which the case is filed.
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