[Drug and Device Law] Medical Device Manufacturers as "Health Care Providers"
We’ve read a fascinating new case out of Texas, Verticor, Ltd. v. Wood, ___ S.W.3d ___, 2015 WL 7166024, No. 03-14-00277-CV, slip op. (Tex. App. Nov. 13, 2015), posing the question whether a medical device company can be a “health care provider” within the meaning of that state’s pretty restrictive laws regarding medical malpractice. While rejecting the manufacturer’s appeal on the record before it, the court in Venticor didn’t flatly say “no.” Instead, it held:
As the issue is framed here, [[manufacturer’s] license authorizes it “to provide” (at least in the sense of manufacturing and selling) the [device] − and nothing more. Consequently, [manufacturer] can be “licensed . . . by the State of Texas to provide health care” only if the [device] is, in itself, “health care” as the [statute] defines that term. . . . Under it, “health care” is distinguished by either of two nouns − “act” or “treatment” − that is “performed or furnished,” or should have been, “for, to, or on behalf of a patient during the patient’s medical care, treatment, or confinement.” The first alternative, an “act,” denotes some sort of deed or activity. As an inanimate object, [the device], in itself, could not be an “act,” although it might be utilized in acts that qualify as “health care,” such as surgery. Similarly, the other alternative, “treatment” also denotes some form of activity that is performed or furnished for or to a patient. Consequently, the [device] would not, in itself, be a “treatment,” although it might be utilized in a “treatment.”
Verticor, slip op. at 10 (footnotes omitted). All this manufacturer submitted was that it was licensed to manufacture medical devices. That wasn’t enough. Texas medical malpractice tort reform was separate from that state’s product liability tort reform. Id. at 11-12. Further, the “common usage” (how such statutes are construed) of the term “health care” denoted something different from manufacturing:
In common usage, one associates “health care” with medical intervention, assistance, or other acts − e.g., one’s family doctor performing an annual physical or a nurse administering a flu shot − as opposed to the mere making or selling of a product used in providing such services. Focusing as it does on acts and treatment provided to patients, the [statute’s] definition of “health care” does not clearly depart from this basic notion.
Id. at 13.
OK, but the court didn’t shut the door all the way:
That is not to say, however, that the acts or treatments distinguishing “health care” or “health care providers” under the [statute] cannot ever encompass some element of product manufacture or sale that would implicate [the product liability statute], or vice versa. In [the product liability statute], for example, the Legislature contemplated that the defendants in a “products liability action alleging that an injury was caused by a failure to provide adequate warnings or information with regard to pharmaceutical products” may potentially include “a health care provider”. . . . And some of our sister courts have held that persons or entities operating under licenses similar to [the manufacturer’s] can, in some circumstances, fall within “health care providers” under the [statute].
Id. at 13-14 (footnotes and citations omitted). The two cases cited involved manufacturer’s employees who custom fit prosthetics for individual patients (Strobel v. Marlow, 341 S.W.3d 470 (Tex. App. 2011)), or set up an administration system for a prescription drug at an individual patient’s residence (San Antonio Extended Medical Care, Inc. v. Vasquez, 327 S.W.3d 193 (Tex. App. 2010)). They went beyond simply manufacturing a product. Verticor, slip op. at 16-17. “Without more,” than just manufacturing, a medical device company could not take advantage of the Texas medical malpractice statute’s restrictions – chiefly the expert opinion requirements.
Here’s where we see this going. Ordinary product liability cases are probably covered by the holding in Verticor, and there are a number of reasons why, such as the learned intermediary rule, prescription medical product manufacturers would often resist being characterized as health care providers. So the result in Verticor is likely to be the general rule, and for good reason.
But there are some cases where that may not be so. Verticor was a medical device case, and when we think medical devices, we think preemption (at least as to PMA devices). One of the avenues some plaintiffs have used to escape preemption is to include allegations that the defendant’s sales representatives said things or did things with respect to a particular plaintiff’s prescribers/treaters that adversely affected the result. The poorly reasoned Malander case – discussed here − is an example of that. We’ve discussed a number of these cases, which often assert Good Samaritan liability, and these posts are collected under our “manufacturer’s representatives” topic. Given what the court had to say in Verticor, we believe that there’s a pretty good shot (depending on the particular sales rep conduct alleged) that these allegations about reps supposedly giving advice to doctors would fit within the “health care provider” definition used in the Texas statute, and quite possibly in other states that have enacted medical malpractice reform. Thus, we recommend that defense counsel confronted with manufacturer’s representative allegations – usually, but not necessarily, in a preemption context – consider whether those allegations, which are separate from the manufacturing function, might subject the plaintiff making them to various limitations imposed by medical malpractice statutes.
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Posted By Bexis to Drug and Device Law at 11/18/2015 08:06:00 AM --
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