The Innovation Game: cracking the code for success in the current regulatory, media and legal climate

Practical Law UK Articles 3-616-6554 (Approx. 14 pages)

The Innovation Game: cracking the code for success in the current regulatory, media and legal climate

by Dorothy Flower and Peter Rudd-Clarke, RPC

The life sciences tightrope

A three year-old boy has become the first patient in the world to be cured of a potentially fatal illness with a biodegradable implant made to the patient's exact specifications by 3D printing technology. Before this procedure, children born with severe tracheobronchomalacia had little chance of surviving. Not only has the child survived but he is now free of burdensome restrictions, such as the ongoing need for powerful drugs and sessions on mechanical ventilators (Media reports, April 2015; Science Translational Medicine Journal, 29 April 2015).

While this innovation seems futuristic, the world of life sciences plays a daily role in our lives, encompassing biochemistry, genetics, neuroscience and nanotechnology, among others. When we read of achievements that have cured a child with a life-threatening condition, or the promise of total body transfer (only two years away) or even the discovery of a chemical in a poisonous plant which can treat prostate cancer, we cannot fail to be impressed by the intelligence, ingenuity and often courage of those who push the boundaries of investigation, experimentation and innovation.

Furthermore, this appears to be a widespread reaction. It is difficult to think of another industry whose products fascinate and terrify the public in equal measure, as they do in the life sciences sector.

However, manufacturers walk a tightrope between being at the forefront of revolutionary technology that has the potential dramatically to improve lives, and on the wrong side of expensive litigation when the technology fails or simply does not meet expectations. This is particularly so for two classes of manufacturer:

Manufacturers that produce the most highly regulated devices (for example, drugs or life-sustaining surgical implants).
Manufacturers that are pushing the boundaries of biodiagnostics by producing software for use not only by clinicians but also for the general public.

Despite the risks, innovative companies should not shy away from developing new products. By guarding against the risk of litigation from the outset, it is possible to mitigate the threat of claims.

The media, regulatory and legal environment

The media love stories of pioneering surgeons, pharmaceutical companies or biotech manufacturers which offer the prospect of prolonged lifespan or the empowerment of patients to overcome serious disabilities and lead more active lives. The flipside is that the media are quick to criticise companies whose products appear not to live up to the public's expectations (which were created by the media in the first place). A fanfare today for the latest biotech development can turn quickly into a scare story tomorrow. Articles topped by frightening headlines will, naturally, find a ready audience among those who have embraced the innovation but are now vulnerable to fears about the consequences. Then the cry will go up that the product is defective, that it does not meet the safety standards expected.

The media do not just target the manufacturers. Regulators are often criticised for failing to be more robust in their role of overseeing innovation and ensuring public safety. The pressure on regulators can lead to a tightening of regulatory controls, and to defensive decisions on approvals or warnings, creating an environment in which it is it more difficult for companies to innovate and bring pioneering products to market.

Cynically, there are beneficiaries of the harsh media, regulatory and legal climate in which manufacturers operate: where the media go, claimant lawyers will follow. At that point, no notice will be taken of the hundreds or thousands of people who have benefitted from the product and it will be alleged to be defective. Admittedly, there will be circumstances when claims for compensation are justified, but that is far from always the case. Anecdotal evidence suggests that a combination of media stories and claimant lawyers' advertising strategies plays a large part in some manufacturers incurring significant costs in being forced to defend baseless claims.

The effect of media, regulatory and legal pressures is that manufacturers need to develop strategies to reduce their risks. No risk-avoidance strategy can ever be litigation-proof but an awareness of the nature of products claims, and the defences to them, will prove invaluable if the worst happens. By contrast, a failure to adopt risk-reducing measures at the outset could prove to be very expensive. These strategies should be developed in tandem with the product itself, from brainstorming the initial concept through to product development, marketing and post-market surveillance.

To make sense of those strategies, it is worth looking at some of the particular concerns for manufacturers of certain types of innovative product.

Innovative drugs and surgical implants

The very obvious but relevant feature of pharmaceuticals and in vivo devices is that they are designed for use in the human body, almost always for the treatment or management of an adverse condition. By rules of simple biology, therefore, there is an interaction with the body's own chemistry and function, which can yield unexpected consequences. Furthermore, when the product is put to the purpose for which it was designed, the recipient, by definition, is not "healthy" and might well have a range of co-morbidities. To add to those complications, even the most sophisticated and realistic patient appears to expect a magic cure. That level of patient expectation, in the face of the uncertainty associated with a novel product, can create particular problems for manufacturers of pharmaceuticals and implantable devices.

Managing expectations

If there were any doubt about the need to manage patient expectation, the point is well illustrated by evidence from the orthopaedic sphere. In the use of orthopaedic devices, NHS data consistently demonstrates that there is a problem that may be impossible to avoid, that patients expect their new prosthesis to be as good as the real thing.

Patients undergoing elective surgery for hip and knee replacements are asked to complete questionnaires before and after their operations. These Patient Reported Outcome Measures (PROMs) (www.hscic.gov.uk/proms) assess improvement in health as perceived by the patients themselves. The subjective views of the patients are collated alongside objective data recorded by their doctors, to assess their functionality following surgery. PROMs data published on 9 April 2015 reveals that there can be striking differences between patients' subjective views on the performance of medical devices and their objective performance. For knee replacements, 43.7% of respondents, when comparing the state of their health before and after surgery, reported that they had not experienced any increase in their general health. However, when the health of patients before and after surgery was compared against objective and established scoring criteria (for example, the Oxford Knee Score), the condition of 93.9% of patients was found to have improved.

The conclusions from the PROMs data raise the possibility that psychology plays a part in disputes over life sciences products. Some patients may expect too much from devices that can, at best, only attempt to restore functionality in a patient who may have other complex medical conditions. Allegations of failure may be based on pain, which is highly subjective and difficult to measure. The cause of a patient's disappointment may not be the device itself but the seriousness of the patient's underlying condition or his/her co-morbidities.

The importance of this human angle in risk management can be exacerbated by media articles criticising particular medical products. If publicity raises expectations of a device (or drug) beyond reasonable levels, then a patient is more likely to form a negative view of his own post-treatment condition. If manufacturers are unable to manage users' expectations to control this effect, they may find that the media or claimant lawyers are all too willing to do it for them.

The laboratory is not real life

For manufacturers of pharmaceuticals, Phases I and II clinical trials offer the best opportunity to predict biological responses in more significant patient populations. The statutory and regulatory controls, the industry guidelines and the recommendations of the Expert Scientific Group of 2006 ensure that every precaution is taken in the assessment of effectiveness and safety before embarking on larger Phase III and post-marketing studies. In a properly organised trial, the administration of the drug is titrated and, at any stage, it can be halted (to view the Expert Scientific Group recommendations, see

http://webarchive.nationalarchives.gov.uk/20130107105354/http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/documents/digitalasset/dh_073165.pdf).

For implantable devices, even the most carefully organised clinical trials do not afford that luxury. In many respects, a trial of an implantable device is entirely experimental and provides little more than guidance on what is likely to happen once the product is released to the market. An implantable device, intended to be in situ for many years, cannot be implanted in healthy volunteers and cannot be removed without serious consequences. Early signs of success will encourage wider use, and it might be months or years later that adverse responses and side effects are seen.

A trial of either drug or device can never take account of all the variables that will be encountered in the "real world". Phase IV trials and pharmacovigilance or post-market vigilance represent the best opportunity to continue testing and monitoring the product. If concerns are raised, the problems for the manufacturer can be acute and very expensive. A recall of a drug or device will hit the headlines and can end a very effective treatment.

One example is the case of the pain-relieving drug, rofecoxib (Vioxx), released for use in patients with arthritis and other conditions causing chronic or acute pain. Worldwide, over 80 million people were prescribed rofecoxib at some time. Although the drug had been approved in the US by the Food and Drug Administration (FDA), there were reports that the drug carried an increased risk of heart attack, which seemed to be confirmed by the manufacturer's field data. There followed a period in which the manufacturer, FDA, scientists and lawyers disputed the risks associated with the product. The end result was product withdrawal and huge litigation.

For manufacturers of implantable devices, the consequences of adverse reports can be no less devastating, not least because any recall involves the patients as well as the product, and the replacement process involves a surgical procedure with all the attendant risks and, inevitably, a less favourable outcome.

It has to be remembered that once a product, especially a medical device, is outside the manufacturer's control, it can be used in many different and unforeseen circumstances, depending on decisions taken by suppliers, purchasers (hospitals or the public), clinicians and users. Manufacturers of innovative life sciences products that have shown success in clinical trials should not rest on their laurels and a company's technical specialists should be as involved in the early days of a product's release as they were during its development and trials. For the life sciences sector, far more than for other industries, the difficulties associated with predicting how the product will fare in practice are acute.

Innovative diagnostic and smart technology

The need to be aware of the risks posed by the media, regulatory and legal climate is particularly important for manufacturers developing products that use "smart" technology, whether aimed at clinicians or consumers.

Products aimed at clinicians

It is claimed that smart technology could replace the need for doctors to diagnose patients in some circumstances. The founder of Facebook, Mark Zuckerberg, has invested in a company called Vicarious, which claims that its artificial intelligence software will learn how to diagnose diseases. The company says that it will be able to automate clinical tasks that rely on:

Human eyesight (for example, examining radiology).
Experience (for example, diagnosis based on seeing patients with similar conditions on multiple occasions).

At the Healthcare Information and Management Systems Society conference in Chicago in April 2015 (billed as the "largest health IT event in the industry"), conference goers saw presentations on medical devices that automatically report patient data, autonomously adjust medication based on patient health and are capable of sharing data with other networked medical devices.

The challenge for risk managers is that, while artificial intelligence will not (at least in the immediately foreseeable future) eliminate the need for clinical judgement to be exercised, those who use it might be tempted to place total reliance on it without taking proper account of its limitations or of the risks of interference. If that happens, patients could suffer injuries that could otherwise have been avoided.

It is possible to imagine how artificial intelligence could get it wrong. At the height of the Ebola crisis, health authorities around the world struggled to keep pace with the challenges posed by the disease. There were isolated cases of hospitals failing to implement protocols designed to keep the disease at bay and so failing to diagnose Ebola, thinking the symptoms were indicative of other, less serious conditions. In these cases, the use of computer algorithms could have had catastrophic consequences because the circumstances had not previously been experienced by senior medical staff, let alone machines or their programmers.

Products aimed at consumers

At the other end of the spectrum are smart devices aimed at consumers. The Apple Watch provides a high-profile illustration of the opportunities and risks for life sciences companies seeking to capitalise on the public's enthusiasm for using technology to monitor their health.

Apple hopes that its watch will change attitudes to wearable technology and prove to be a big commercial hit for the company, ranking alongside the iPhone and iPad. Apple has marketed the watch by emphasising its diagnostic potential, with CEO Tim Cook, describing it as "a comprehensive health and fitness companion".

Clinical information harvested by wearable devices includes heart rate, activity levels and sleep patterns. The Apple Watch uses its built-in accelerometer and heart rate sensors, in tandem with GPS on an iPhone, to track motion and provide a user with feedback on fitness levels. If that is the extent to which manufacturers hope consumers use the Apple Watch and similar devices, then there is little reason for the industry to be concerned by consumers' use of health data.

However, Apple has announced that apps will be able to measure activities and use risk factor information to evaluate the user's lifestyle and how it relates to key health indicators (for example, for cardiovascular health, cancer and Parkinson's). According to Apple, this information will be provided to researchers "empowering people to participate in and contribute to medical research". Apple has made it clear that the intention is to benefit the research community and that data will be protected. However, it is possible to imagine how technology-literate consumers may use this information, alongside software that drills into the raw data collected by such a device, and draw their own conclusions on lifestyle and propensity to suffer serious conditions such as heart attacks, and so attempt to diagnose themselves. It is even said that there are devices in the pipeline which will allow a smartphone to take ultrasound images of a user's heart or abdomen.

There are already companies manufacturing wearable devices that generate reports for doctors on their patients, covering physical activity, calorie expenditure and sleep patterns. Doctors then use the data to treat their patients. It is not too fanciful to speculate that future consumers might follow this approach but bypass the doctor to diagnose their own condition (whether real or imagined). Thus the concern for manufacturers of health-monitoring devices is the risk lurking in the unpredictable nature of worried people. Faced with long waiting lists or a doctor who appears unsympathetic, an individual might rely on the smart device data, self-diagnose and try to self-medicate. Smart devices could fuel a demand for prescription-only drugs available illegally on the internet as users seek treatment based on the information fed to them by their new gadgets. Alternatively, inaccurate data or an incorrect self-diagnosis can give false reassurance and so lead to avoidable injury.

Consumers who are unaware of the potential consequences and implications of using unfamiliar software may blame the manufacturer when something goes wrong.

Clinical products in the hands of technologically literate consumers

Sophisticated consumers are generally good news for manufacturers. As Apple has shown, there is increasing demand for more complicated products. The public's enthusiasm for acquiring the latest devices is beneficial for balance sheets. But what if sophisticated consumers act in unexpected ways, for example hacking into the software embedded within devices?

Glucose monitors provide such an example. These monitors transmit data on a diabetic's blood sugar levels to an insulin pump. The two devices then communicate with each other, prompting the user to alter insulin or food intake in response to blood sugar readings. However, some parents of diabetic children have hacked into the device's coding so that the data are transmitted to their smart-phones, gathering around the hashtag #WeAreNotWaiting. While this is a benign and arguably laudable example of knowledgeable consumers changing a sophisticated device's usage, manufacturers should note that other products may be similarly vulnerable.

Increasingly, sophisticated consumers are not happy with "one size fits all" offerings. If programming used in healthcare products is vulnerable to being rewritten by users, it is inevitable that some users will manipulate it to improve their lives. Consumers might well take important decisions based on data they have collected, acting like doctors. This could become a problem as manufacturers lose control over how a medical device is used and could result in injuries. Not only may amateurs not fully appreciate the risks created by their actions but they may also place the blame on manufacturers if something goes wrong.

Regulations: burden or bulwark for innovation?

Much of the litigation in the life sciences sector in recent years has concerned products that have moved relatively quickly from being just a promising new idea to enjoying success and widespread use, before receiving negative publicity that culminates in litigation. The settlement of the Pradaxa drug litigation in the summer of 2014 had a price tag of US$650 million and serves as a text book example. In just under four years, the blood thinning drug went from being the new best thing, to a standard treatment for millions, to suffering a dramatic decline via widely publicised and damaging litigation. Similar stories have been seen concerning other products, including:

Cosmetic implants.
Contraceptive devices.
Pelvic meshes.
Certain pharmaceuticals.
Pacemakers.
Defibrillation leads.

What these devices largely have in common is that they are among the most highly regulated products. However, it does not need to be the case that the most regulated products are more susceptible to litigation. Arguably, manufacturers should embrace the regulatory regime, seeing it as a bulwark against litigation. Compliance with regulatory requirements should not be viewed as a burdensome, unwelcome distraction or unhelpful brake on the main goal of bringing a product to the market as quickly as possible. A well thought through strategy towards the regulators will make manufacturers better prepared to deal with the unhappy but all too common eventuality of future litigation.

The first step is to determine whether the regulatory regime applies to the product. For manufacturers of drugs, implants and other surgical devices, it will be clear that their products will be subject to regulation. For software-based, or smart, devices the position may not be so clear cut. Manufacturers of these products should take specialist advice to determine whether a product would be considered a medical device and therefore subject to regulatory oversight. This is particularly the case where a device is designed to assist doctors treat particular conditions. Under Directive 2007/47/EC, and guidance issued by the UK regulator, the Medicines and Healthcare Products Regulatory Agency (MHRA) ("Medical device stand-alone software including apps", 8 August 2014), software can be classified as medical devices and are subject to the regulatory regime if it is designed for the purpose of diagnosis, prevention or monitoring of diseases.

Once it is determined that the product will be regulated, the regulatory regime can provide manufacturers with ammunition to defend a claim if one ever materialises, such as:

The CE mark. Medical devices cannot be marketed in Europe without a CE marking. In defending claims that allege a defect, manufacturers can refer to the CE marking as part of evidence demonstrating that a product complies with regulatory requirements and, when used as intended by the manufacturer, functions properly and is safe.
Notified bodies. CE marking should be verified by a "notified body", an independent certification body appointed by the MHRA. The notified bodies are in turn audited by the MHRA. Accordingly, the CE certification regime means that a manufacturer's assertion that its product is safe is not just its own view: it represents the endorsement of an independent specialist (itself regulated) auditor.
High- risk classifications. Different requirements apply to medical devices, depending on their classification under Directive 93/42/EEC (Medical Device Directive), from Class I low-risk devices to Class III high-risk. The factors determining classification include whether the device is intended for long or short term use or is implanted via surgery. The classification system allows manufacturers of Class III devices (for example, prostheses) to defend any claim by noting that their products are manufactured in accordance with the highest level of regulatory oversight.
Clinical trials. The MHRA demands that manufacturers must be able to support their claims for the performance of the device. For more complex products, this necessitates performing, and producing the evidence from, clinical trials. Preparing to submit evidence of clinical trials to the MHRA can act as a dress rehearsal for arguing before a court that the manufacturer acted reasonably in trialing the product before making it generally available to the public.
Vigilance. Manufacturers are required to implement and document vigilance procedures, to review the experience gained from monitoring the performance of devices in the market and to implement any necessary corrective action. The manufacturer is required to notify the MHRA if its product is involved in an incident that leads to, or could give rise to, death or serious injury. This is an essential discipline for any company wanting to ensure that users of its products are safe, and to mitigate the threat of litigation: the facility to spot problems before the media pick up on them could prove invaluable.
MHRA investigations. Where the media raise concerns over a medical technique or device, the MHRA will often respond and carry out its own review. This can be good or bad news for manufacturers facing the threat of widespread litigation. The MHRA's response can include:
- issuing a "medical device alert" (which gives advice and warnings to healthcare providers);
- requiring a manufacturer to make changes to the product's design or to the information accompanying the product; or
- forcing a product recall.
If the MHRA investigates, but elects not to implement any of those measures, the manufacturer has a powerful argument against possible allegations of defect, that the MHRA has investigated and permitted the continued supply of the product (which it could not have done if its investigation had shown that the product did not meet safety standards). Conversely, if the MHRA does issue a damaging alert or forces a recall, this will be painful but can be taken into account when formulating litigation strategy. There could also be circumstances where a number of manufacturers are producing different, but similar, products; a decision by the MHRA to force the recall of one particular product, but not others, can help a manufacturer to argue that its product is safe, despite concerns over a competitor's product.
Going beyond compliance. There is a good argument for suggesting that a manufacturer should not limit itself to compliance with the requirements of regulation, however comprehensive they might be and however onerous it might find them. The regulator that approves of a product on its launch will not necessarily stand by the product in the future. In any case, regulations are slow to catch up with scientific advance. This underlines the importance and value of doing more than the bare minimum, especially if a product is launched at a time when there is limited guidance on its use from the regulators. If a manufacturer has gone beyond compliance, it can strengthen its defence to any potential future claim.

Other steps to guard against litigation risks

When the design of a new product is in its infancy, some of the steps that manufacturers should consider taking in order to avoid future problems, in tandem with their regulatory obligations, include:

Regulate the marketing and sales departments' activities. As a product becomes more widely used, more clinical information is available. The results from use of the product in real life should be studied for warning signs of side effects that can lead to personal injury or product liability claims. Risk managers may need to limit sales if data has raised questions over the safe use of the product.
Defend intellectual property. The manufacturer can expertly manage the risks associated with its product during its life cycle from research and development and clinical trials, through authorisation to marketing and regulatory compliance. However, there is always a risk that a competitor was on the verge of a similar breakthrough and, buoyed by the apparent success of the original product, will rush out a similar product that has not been through the same careful development and assessment. These "me too" products are more likely to go wrong and ruin the good work of the more careful pioneers of a new device or technique. It is worth ensuring legal protection of the design.
Publish research papers. The early signs of doubt about a product are often found in the media. The prospects of more balanced reporting will be enhanced if journalists can be referred to existing papers supporting the product. Ideally, these papers should cite clinical trials identifying that a product's potential side effects were acted upon by the manufacturer.
Prepare full disclaimers. Manufacturers may be tempted to cut corners when preparing product information, and marketing people might want to avoid including warnings in case they damage sales. It is a fallacy to think that standard disclaimer language is sufficient, or that a patient or clinician is discouraged by careful and honest identification of risk. Importantly, the prospects for avoiding future litigation are enhanced if the manufacturer can show that the literature accompanying the product comprehensively sets out possible side effects as they were known at the time, especially where the novelty of the product meant that risks were unknown. If the product information can also set out the manufacturer's expectation of how the product will be used and what constitutes unreasonable use, that will allow for reliance on certain statutory defences.
Control usage. Even a complex product can be perfectly safe if used properly. However, that pre-supposes a level of clinical expertise and experience and the product might be more likely to fail in the hands of less experienced clinicians. The manufacturer should consider permitting only selected clinicians to use the product, or providing training to ensure that it is used as the manufacturer intended.
Make software resistant to hacking. Manufacturers and suppliers of smart technology should provide clearly written disclaimers that make consumers aware that they are not liable if their devices are hacked. Once a device is changed from its original specification, it falls outside the scope of its design, which may have been approved by regulators. It becomes more likely that the product can cause injury. It also becomes more difficult for a manufacturer to mount a defence. If a manufacturer of healthcare equipment is sued because the device malfunctions, it may be impossible to determine with certainty what the cause of the injury was: was it a flaw in the device, a flaw that only existed once the equipment was hacked or was it some underlying health problem in the user that was not detected?
Oversee third party software. Special care should be taken if third parties are permitted to develop programs that interpret clinical data taken from a device. Manufacturers need to be comfortable with the nature of the medical "advice" provided by an app.
Stay one step ahead of technologically literate consumers. Manufacturers in the computer-based life sciences sector do not want to resist the trend of offering greater technological choice, and it would be a backward step if the fear of litigation prevented them from doing so. Manufacturers could consider going to greater lengths to respond to customers' demands. Monitoring internet forums will provide information on consumer demands. Programming can then be rewritten and tested for its safety and new products can be developed to meet demand.

Where litigation cannot be avoided

All is not lost if these steps fail to prevent litigation. Responding robustly at an early stage to warnings that litigation is imminent could prove invaluable. Faced with hostile research papers, media reports or isolated cases that warn of more general disputes, manufacturers should consider taking the following practical steps:

Go on the PR offensive. A manufacturer who engages with patients, surgeons and the media should find that the work put in during the early years will be beneficial. Detailed information proving the safety of the product should be readily available on the website and efforts should be made to persuade the media to publish balanced reports about the product. These steps can help to stop a media storm, based on damaging and possibly unbalanced studies, from gaining momentum.
Lobby the regulators. Regulators can be slow to respond to public concerns over the safety of a product. Additionally, supportive statements from regulators may come too late. In the Pradaxa litigation (see above, Regulations: burden or bulwark for innovation?), claims were brought from 2010 but it was not until November 2012 that the FDA released its report in support of Pradaxa that stood by the data collected from the initial clinical trials. If the manufacturer had persuaded the FDA to act sooner, it may have reduced the US$650 million cost of settling claims.
Set a litigation strategy. A manufacturer may be tempted to wait until any of the complaints in the media materialise into legal disputes. Instead, evidence supporting the defence of any claim made of the product should be collected as soon as possible. Even if court cases do not materialise, these steps will help the manufacturer's defence in the court of public opinion.
Take a global view. Medical products litigation is often a global concern. A manufacturer should monitor developments in all jurisdictions where its product is distributed, ensuring co-operation over defence strategy. The aim is to avoid an adverse development in one jurisdiction polluting the defence in others.

Innovative judges

Manufacturers need to be prepared for the courts responding to a changing market place. Recent case law demonstrates that manufacturers' risk management strategies need to be kept under constant review and amended if the courts develop the law in unexpected directions. Recent decisions in the English and European courts illustrate the point.

The statutory provisions of the Consumer Protection Act (CPA) and Directive 85/374/EEC on liability for defective products (Product Liability Directive) are not intended to distinguish between classes of products, placing some on a pedestal for special treatment. However, in a recent European case, the court hinted at a willingness to accept arguments intended to achieve just that outcome.

This was a decision of the European Court of Justice (ECJ) in the case of Boston Scientific Medizentechnik GmbH v AOK Sachesen (C503/13 and C-504/13) , which concerned two medical products:

Pacemakers.
Implantable cardioverter defibrillators.

The German court requested a preliminary ruling from the ECJ seeking clarification of Article 6 of the Directive as to whether it is necessary to prove a defect for each individual product, or whether there can be an assumption of homogeneity for products in the same group. The ECJ's response was that:

It is necessary to consider the reasonable expectations of the public at large. This includes taking account of: "the intended purpose, the objective characteristics and properties of the product in question and the specific requirements of the group of users for whom the product is required".
Some medical devices (such as those specific to the facts of this case) are used by a particularly vulnerable group of consumers. Given the function of such devices, consumers are entitled to expect particularly high safety requirements. In this case, the ECJ also noted that the potential defect arose out of the "abnormal potential for damage which those products might cause to the person concerned".

The ECJ appears to have carved out a new type of "consumer" from the general population, namely, those who are entitled to expect unusually high levels of safety. The decision appears to be limited to products (perhaps a special category of product) where the using public gains extra protection by virtue of a device's specific features:

High-risk function.
Vulnerable user profile.
An abnormally high potential for damage.

The decision allows for a manufacturer of less high-risk products to argue the need to demonstrate a defect in, and failure of, the individual product; that where there is no special vulnerability of user, and failure is not life-threatening, it should not be assumed that a fault in one will be found in all.

Proving the real cause

A recent decision in England and Wales might, at first glance, be more difficult to turn to a manufacturer's advantage and may encourage claimants to bring claims. But there is good reason to distinguish it from claims alleging the failure of medical devices.

In the case of Hufford v Samsung Electronics [2014] All ER (D) 60, the court considered the elements that have to be proved, and how and by whom, in a product liability claim brought under the CPA. This case concerned a fridge freezer that had caught fire, which is not, at first, an obvious comparator for medical devices implanted into the human body.

The central issue in Hufford was whether the product in question was defective. Under the CPA, there is very little guidance as to the extent to which a claimant is obliged to prove the precise nature of the defect alleged. Inevitably, lawyers for the claimant and defendant advanced different possible explanations for the cause of the fire. The claimant's case was that the fridge freezer was defective because it had caught fire during the course of its normal use and therefore its safety was "not such as persons generally are entitled to expect". The defendant argued that the claimant was required to identify with specificity the nature of the defect, and had failed to do so.

The court held that in a claim under the CPA, it is not necessary for a claimant to specify or identify the precise cause of a defect; it is enough to "prove existence of a defect in broad or general terms".

Claimants may rely on the case to seek to argue that failure of the product is enough to establish a defect and they are now relieved of the obligation to show the precise nature of the defect alleged. However, the court is still required, in its assessment of what persons generally are entitled to expect, to take into account "all the circumstances" relating to the product.

In the life sciences context, the design, manufacture, and marketing of a medical device can be extremely complex. No two individuals will react the same way to the same product and an individual might have any number of complicating co-morbidity factors. Therefore, when it comes to in vivo devices, a court should, as part of its assessment, examine competing explanations as to the cause of the alleged defect. It may not be so straightforward to apply a ruling on white goods to devices designed to be implanted into the human body.

The role of the informed intermediary

If another party has been involved in the marketing or supply of the product, a recent decision in Webster v Liddington [2014] EWCA Civ 560 may provide the manufacturer with an escape route from liability. The Court of Appeal decision in Webster v Liddington involved a skin rejuvenation treatment produced by a company called Isolagen. The treatment was marketed as a natural "autologous" product, which used only the patient's own skin cells to cultivate "fibroblasts" which were injected into the patient's face in order to make them look more youthful.

The patients subsequently discovered that, in fact, the injected material contained (or might have contained) traces of "foetal calf serum" used during the cultivation process. Isolagen had gone into liquidation and, therefore, the patients sued the clinicians who had treated them and who had given the patients product information. The issues to be decided by the Court of Appeal were:

Are the appellant clinicians responsible for the contents of the information brochures?
Were the identified sentences in the brochures misrepresentations?

Lord Justice Jackson delivered the judgment. On the first question, he applied a test formulated by Justice Toulson in the case of IFE v Goldman Sachs [2007] All ER (D) 476 and held that: "a reasonable person standing in the shoes of any of the claimants would conclude that the clinician was adopting the contents of the brochure which he handed over."

It was of particular significance that there was a clear imbalance of knowledge between the qualified clinicians and the consumer claimants. If the clinician had not wished to take responsibility, he should have issued a disclaimer, which set out his lack of personal knowledge of the product and his reliance on information from the manufacturer.

On the second question, Jackson LJ held that even small traces of the bovine serum amounted to a material risk, and the statements in the brochures were therefore a misrepresentation. If accurate information had been given, the claimants might not have gone ahead with the treatment.

Liability therefore fell upon the clinicians who had "sold" the product, raising the expectations of their patients and going beyond their own knowledge. This has the potential for wide application in the life sciences sphere where it is often not the manufacturer but a medical practitioner or other intermediary who has the face-to-face contact with the patient when the decision is being made.

Cracking the code

The march of science, a generation that is living for longer and in better health than ever before, and the rise of sophisticated consumers who are keen to take charge of monitoring their own health, means that there is a compelling need for innovation in the medical products sphere. This provides risks and opportunities in equal measure for innovative manufacturers as consumers have greater expectations but are ever more litigious. Claimant lawyers and the courts can be as nimble as the companies in responding to the complexities of an ever-changing marketplace. Against this backdrop, manufacturers of life sciences products rightly fear the fall of the product and the litigation that can follow. However, these risks must not be ignored. Facing up to the risks and taking steps to mitigate them will always be the best form of defence. Whether developing the latest drug, implant or wearable technology, manufacturers will wish to stay one step ahead of the media, claimant lawyers and the courts to protect themselves from the risks of future litigation.

Contributor details

Dorothy Flower, Partner

Reynolds Porter Chamberlain

Image 1 within The Innovation Game: cracking the code for success in the current regulatory, media and legal climate

T +44 20 3060 6481
F +44 20 3060 7000
E [email protected]
W www.rpc.co.uk

Professional qualifications. Solicitor (England and Wales), 1992

Areas of practice. Insurance and reinsurance; product; professions; regulatory.

Non-professional qualifications. LLB Hons, Exeter University, 1989

Recent transactions

Specialises in health-related advice and representation, medical malpractice, clinical trials and product liability.
Acting for individuals investigated by the GMC and HCPC.
Advising insurers on policy coverage and drafting policy wordings.
Dealing with commercial disputes and injury claims arising from clinical trials.
Acting for private sector organisations and individuals in medical malpractice cases.

Professional associations/memberships. Dorothy is currently recognised in The Lawyer's Hot 100 2015.

Peter Rudd-Clarke, Senior Associate

Reynolds Porter Chamberlain

Image 2 within The Innovation Game: cracking the code for success in the current regulatory, media and legal climate

T +44 20 3060 6000
F +44 20 3060 7000
E [email protected]
W www.rpc.co.uk

Professional qualifications. Solicitor (England and Wales), 2004

Areas of practice. Product liability; global casualty; life sciences.

Recent transactions

Specialising in defending manufacturers of complex products against liability claims, including those in the life sciences sector.
Handling claims in product liability and casualty classes of business for London market insurers and reinsurers.
Worked as a claims adjuster on secondment to a major international insurer's claims team and in a general counsel role for another company.

Languages. English, Spanish.

The Innovation Game: cracking the code for success in the current regulatory, media and legal climate | Practical Law