The medical device industry is highly lucrative and can be surprisingly easy to enter. Now, after a series of expensive, high-profile recalls and a growing list of dangerous or defective medical devices, insurance companies are pushing manufacturers to pay the bills that result from the faulty products. The change may serve to drive some makers out of business, while the overall impact on the safety of the devices remains to be seen.
When a medical device fails, the consequences can be catastrophic. Patients with these devices can be injured or killed when a device fails. At the very least, the patient must go through the hassle of having the device replaced. The cost of these problems often lands on the patients’ insurance companies. The insurance companies are now attempting to recoup some of this cost from the makers of the defective medical products. The insurance companies seek financial redress in the form of subrogation claims against the medical device manufacturers.
Medical devices have received scrutiny for several reasons in recent months. Questions have arisen over whether it is improper for doctors to attach their names and financial fortunes to specific devices. It has been suggested that doctors with financial ties to a device will be driven to recommend unnecessary medical care or to ignore superior devices that would be more beneficial to their patients. Further questions have arisen about the approval process used for devices that are considered an improvement on already approved devices. The reduced testing received by such devices has not always proven adequate to protect the public from harm.
If medical device companies are forced to bear a greater share of the cost when their devices fail, they will have more incentive to ensure that their products are safe for patients.
Source: Business Insurance, “When implanted medical devices go wrong, who pays?,” 8 October 2012