PRODUCT LIABILITY. The claimant should be put on notice regarding the plan s subrogation interest

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1 PRODUCT LIABILITY The law of product liability is the area of law which deals with the liability of the manufacturer, wholesaler or retailer of a product for injuries resulting from dangerous or defective products. The law has evolved to the point where today almost anyone injured by a defective product can bring an action for damages against any party in the distributive chain of the product. A health insurance claim can be the result of defective food products, drugs, medical devices, medical implants, asbestos, etc. When a health plan pays benefits for treatment of an illness or injury resulting from the use of a defective product, there may be an opportunity to pursue third party reimbursement if the claimant has received a settlement through an individual or class action lawsuit. This topic addresses lawsuit activity relating to some of the higher profile drug, medical device and toxic product liability cases that can be associated with a health claim. Identification of Potential Claims The Examiner should first review the subrogation and reimbursement provisions of the plan to confirm that the plan language supports reimbursement of third party liability cases involving product liability. A claims administrator should be familiar with product liability situations that affect health claim payments. Claims should be reviewed for potential indicators of an illness or injury caused by a product. ICD-9 codes, especially ICD-9 codes prefaced with an E, may indicate a condition resulting from the use of a product. Food borne illnesses, injuries associated with electrical, power, or sports equipment, as well as drugs and devices recalled by the Food and Drug Administration are targets for product liability lawsuits. If it appears the loss could be related to a defective product, a questionnaire should be sent to the claimant requesting further details. If it is determined that the illness or injury being treated is related to the use of a product, the claimant should be contacted to determine if litigation will be initiated. If the claimant indicates litigation is being pursued, or an attorney has been retained, procedures to protect the plan s right of subrogation should be initiated. The claimant should be put on notice regarding the plan s subrogation interest Trilogy Consulting Group, Inc. -- Proprietary Information 9.9-1

2 (9.9) and a lien should be filed with the claimant s attorney. Cross Reference: Section Third Party Reimbursement Class Action Suits While the use of any product may result in an illness or injury for which third party liability may be pursued by any one individual, litigation frequently involves a class action suit where large groups pursue litigation as a single entity against a product manufacturer. All individuals involved in a class action suit assert loss or harm due to the same product. Class action lawsuits are beneficial to individuals who would not otherwise be able to afford a lawsuit against a large corporation. Class action suits, due to the number of individuals involved and the amount of dollars at stake, become high profile and can take years to settle. Plaintiffs participating in a class action suit typically agree to accept the settlement and not to pursue litigation on their own. Individuals can also opt not to participate in class action suits and pursue litigation on their own. Many well known class action lawsuits that potentially impact health claims have occurred over the last few years. Asbestos related illnesses such as mesothelioma have resulted in successful class action lawsuits, as have class actions against the tobacco companies and the makers of Fen-Phen. More class action lawsuits are underway or in the process of being formed. Specific class action lawsuit information for the following drugs, exposures and medical devices can be found at Accutane Arava Asbestos- Mesothelioma Baxter Dialyzers Baycol Bextra Celebrex Celexa Breast Implants Crestor Depo-Provera Ephedra E-Ferol Fen-Phen Medtronic Defibrillators Meridia Paxil PPA Prempro Propulsid Rezulin Serzone Sulzer Hip Implant Vioxx Zyprexa Trilogy Consulting Group, Inc. -- Proprietary Information

3 The Examiner should be aware that any claim involving the removal of silicone breast implants should be investigated for potential third party liability and reimbursement. Product liability law suits have been initiated on the basis that silicone from breast implants has resulted in illness. From a medical perspective, breast implants should be removed when they show evidence of leaks or when silicone is identified in the lymph nodes. Microscopic leaks can result in accumulation of silicone in the lymph nodes. Before a claim for breast implant removal is paid, the Examiner should answer the following questions: What are the relevant plan provisions regarding coverage for the removal of the breast implant? Some plans specifically exclude coverage for complications resulting from cosmetic surgery. However, the Examiner should be aware that benefits cannot be denied under a standard cosmetic exclusion because removal of implants due to leakage or due to capsular contracture resulting in pain may be medically necessary. What are the plan provisions regarding third party liability? There may be potential for third party reimbursement since manufacturers of implants have settled many claims. What is the reason for the breast implant removal? Medical records should document the medical necessity for breast implant removal. What are the plan provisions regarding the insertion of new implants? If the reason for re-insertion is cosmetic, a plan may exclude the portion of the claim related to the insertion of replacements under the cosmetic exclusion. If the surgery is not otherwise excluded, the Examiner should request the following information to document the medical necessity of the implant removal: Trilogy Consulting Group, Inc. -- Proprietary Information 9.9-3

4 (9.9) Hospital records and an operative report relating to the original implant surgery; Hospital records, including all pathology reports and x-ray or ultrasound readings for the current confinement relating to the implant removal; and Treatment notes and operative reports from the attending physician and surgeon for the implant removal. When medical records and treatment notes are received, the claim should be referred to the medical consultant to answer the following questions: What were the original implants made of? There may be third party reimbursement potential if the implants were made of silicone. What was the reason for the initial implant? If the surgery was originally for cosmetic reasons and the silicone implants are being replaced, there is a higher likelihood that the removal may be for cosmetic reasons. What was the size of the original implant? Implant size is measured in cubic centimeters. The size of the original implant as documented in the operative report for the original surgery should be compared to the size documented in the pathology report for the removed implant. If the volume matches, and there is no evidence of silicone accumulation in the lymph nodes, it may be a signal that the removal was performed for cosmetic reasons. What do the pathology and operative reports indicate about the condition of the surgically removed implant? Any leakage or lymph node involvement substantiating medical necessity for the implant removal should be documented in the medical records. If the claim documentation indicates the breast implant removal may have been performed for medical reasons relating to a defective product, the Examiner should contact the claimant to determine if she is a participant in a settlement Trilogy Consulting Group, Inc. -- Proprietary Information

5 action or is pursuing an individual lawsuit. Manufacturers of breast implants have agreed to settlements relating to breast implant litigation and information on the status of settlements and litigation is available on the Internet. The Settlement Facility for Dow Corning Trust Web site provides information on the current status of settlements relating to breast implants. The Web site for U. S. District Court for the Eastern District of Michigan provides current information relating to the Dow Corning Litigation. The Claimants Advisory Committee Web site provides current information relating to settlement and litigation options relating to breast implants. Drugs The following medications have resulted in lawsuits due to claims of dangerous side effects that resulted in injury. Drug Name Accutane Arava Avandia Baycol Bextra Byetta An acne medication alleged to trigger depression and possible suicidal behavior. Prescribed for patients with rheumatoid arthritis it has been associated with liver damage. A diabetes medication, it has been shown to increase the risk of heart attacks, strokes, congestive heart failure and death. A cholesterol drug, whose manufacturer reportedly suppressed information about known dangers. Bayer recalled the drug in 2001 because of reports of sometimes fatal rhabdomyolysis, a severe muscle reaction. Bextra is a pain medication that is reported to cause a hypersensitivity or severe skin reaction. Side effects of the diabetes drug Byetta have included reports of pancreatitis and death. Trilogy Consulting Group, Inc. -- Proprietary Information 9.9-5

6 (9.9) Celebrex Chantix Cipro/Levaquin Crestor Depakote Depo-Provera Manufactured by Pfizer it is a non-steroidal anti-inflammatory medication that has been shown to result in an increased risk of heart attacks. The anti-smoking pill has been linked to a risk of suicidal thoughts and suicidal behavior. Use may be related to selfinflicted physical injuries. Use of fluoroquinolone antibiotics has been associated with an increased risk of tendon ruptures and other tendon damage. A statin medication, it is reported to cause rhabdomyolsis, kidney damage, myoglobinuria, drug induced hepatitis and acute renal failure. Use of the epilepsy drug Depakote during pregnancy has been linked to serious birth defects. A class action suit was filed against Pfizer claiming that women who used this birth control drug developed severe bone loss leading to osteoporosis Trilogy Consulting Group, Inc. -- Proprietary Information

7 Drug Name Digitek Tablets Drug Eluting Stents Ephedra Fenatyl (Duragesic Patch/Actiq Lollipop) Fen-Phen Fleet Phospho Soda Fosamax Heparin Hydroxycut Diet Drug Ketek Antibiotic Levaquin Meridia Ortho Evra Birth Control Patch A Digitek recall was issued due to manufacturing defects which caused twice the active ingredients to be included in digoxin tablets. Drug coated stents can increase the risk of blood clots for years after surgery. This could result in reclogging of the artery, heart attack or death. A dietary supplement to assist with weight loss and muscle enhancement, it has been associated with a higher risk of heart palpitations, gastrointestinal effects, tremor and insomnia. Fentanyl lawsuits are being pursued for users of the Duragesic Patch and Actiq Fentanyl Lollipop who suffered a serious injury or death. Two diet drugs sold under the brand names of Redux and Pondimin were removed from the market when studies indicated they caused heart damage. Wyeth settled a class action lawsuit. When used a bowel prep for colonoscopy patients, the laxative has been linked to kidney damage. An osteoporosis medication, it has been linked to an increased risk of osteonecrosis of the jaw, which involves decay of the jawbone. Contaminated heparin has been recalled and has been associated with adverse allergic hypersensitivity reactions. A diet drug associated with liver damage. Side effects of Ketek could result in liver damage, liver failure, acute respiratory failure, aggravation of myasthenia gravis or death. Use of fluoroquinolone antibiotics has been associated with an increased risk of tendon ruptures and other tendon damage. A diet drug associated with increased risk of cardiovascular conditions. Ortho Evra Birth Control Patch side effects could result in a heart attack, stroke, blood clots, deep vein thrombosis, pulmonary embolism or death. Trilogy Consulting Group, Inc. -- Proprietary Information 9.9-7

8 (9.9) Plavix Prempro & Premarin Propulsid The blood thinner Plavix could increase the risk of a heart attack, stroke, gastrointestinal bleeding, recurrent ulcers and TTP blood disorder. Litigation is being discussed relating to these hormone therapy drugs. A medication prescribed for nightime heartburn, it has been associated with severe cardiac arrhythmia Trilogy Consulting Group, Inc. -- Proprietary Information

9 Drug Name Reglan Rezulin Selective Serotonin Reuptake Inhibitor (SSRI) Seroquel Serzone Trasylol Viagra Vioxx Yaz/Yasmin Zelnorm Zyprexa Side effects of Reglan drugs containing metoclopramide can lead to the development of a movement disorder known as Tardive Dyskinesia. A medication designed to treat diabetes, it was removed from the market due to increased risk of hepatocellular cancer and cirrhosis of the liver. When used during pregnancy, these drugs (e.g., Paxil, Prozac, Zoloft) have been found to cause an increase in birth defects. This anti-psychotic medication has been linked to an increased risk of diabetes and other life-threatening side effects. An anti-depressant medication, it has been associated with liver disease. A drug used during heart bypass surgery to lower blood loss, it has been found to cause kidney damage, heart attacks and strokes. Lawsuits have been filed against Pfizer, Inc. on behalf of patients taking Viagra, following claims that these patients later suffered blindness in one or both eyes due to insufficient blood flow to the optic nerve. In most patients, symptoms began with blurred vision and color blindness. A medication voluntarily recalled, it was used to relieve osteoarthritis symptoms, menstrual pain and for the management of acute pain. It has been linked to an increased risk of cardiovascular conditions. Side effects of these birth control pills can include an increased risk of heart attack, stroke, gallbladder disease and blood clot injuries. A Zelnorm recall was issued as a result of an increased risk of heart attacks, strokes, angina, gastrointestinal injuries and ischemic colitis. An antipsychotic medication, it is associated with a heightened risk of diabetes, hyperglycemia, and ketoacidosis. Trilogy Consulting Group, Inc. -- Proprietary Information 9.9-9

10 (9.9) Defective Medical Products & Devices Product liability lawsuits have been filed relating to the following medical products and devices which have been alleged to cause serious injury. Product/Device Bard Avaulta Vaginal Mesh Bausch & Lomb Renu Contact Lens Solution Baxter Blood Filters Baxter Infusion Pumps Complete MoisturePlus Contact Lens Solution DePuy ASR Metal Hip Replacement Implants Drug Coated Stents Guidant Ancure Endograft System Guidant Defibrillator Kugel Hernia Repair Mesh Medtronic Cardioverter Defibrillators Mentor ObTape Vaginal Sling This system for the treatment of pelvic organ prolapse has been linked to a number of medical problems. Bausch & Lomb Renu with Moisture Loc was linked to Fusarium keratitis. Deaths were reported in patients undergoing dialysis using Baxter dialyzers. Certain Baxter infusion pumps have been recalled due to battery problems, electronic failures, software glitches and other defects which could cause life sustaining therapy to be interrupted. A contact lens solution, Complete MoisturePlus was recalled due to an increased risk of Acanthamoeba keratitis, a serious and potentially blinding eye infection. This hip implant has been associated with complications caused by design defects. Drug eluting stents may increase the risk of blood clots for years after surgery. This could result in re-clogging of the artery, heart attack or death. Failures have been associated with the stent graft that is part of this system. Implantable cardioverter defibrillators or pacemakers were recalled when a malfunction was discovered with a seal. The seal may leak allowing moisture to affect the electronic circuits. Different types of Kugel Hernia Repair Mesh have been recalled by the manufacturer due to reports of serious intestinal injury, bowel perforation and death caused by design defects. Medtronic recalls were issued for implantable cardioverter defibrillators or pacemakers and for all Sprint Fidelis leads used to connect defibrillators to the heart. There is a risk that the wire may fracture or break. Used to treat female stress urinary incontinence, this product has been linked to a number of medical problems Trilogy Consulting Group, Inc. -- Proprietary Information

11 Product/Device Minimed Diabetic Infusion Pump MRI Dyes NuvaRing Olympus Bronchoscopes Phenylpropanolamine (PPA) Shoulder Pain Management Pumps Sulzer Inter-Op Acetabular Shells for Hip Replacements Zimmer Durom Cup Artificial Hip Replacements This device was recalled by Medtronic due to a problem with tubing. It has been associated with hospitalizations due to high levels of blood sugar. Gadolinium based contrast agents in MRIs and MRAs (e.g., Omniscan) have been found to cause a serious skin disorder called nephrogenic systemic fibrosis or nephrogenic fibrosing dermopathy. Lawsuits are being reviewed over side effects of this birth control ring that could increase the risk of blood clot injuries like heart attack, stroke, deep vein thrombosis, pulmonary embolism or death. Has been associated with individuals becoming seriously ill from lung infections following a bronchoscopy. A chemical additive in over the counter weight loss drugs as well as cold and cough medications, it has been associated with hemorrhagic strokes. Following arthroscopic shoulder surgery, these pain pumps used to deliver medication could result in permanent cartilage damage, requiring shoulder joint replacement surgery. A recall was issued due to reactions to the residue of a lubricant that resulted in a loosening of the artificial hip socket. Zimmer suspended sales of their Durom Cup hip replacement component after doctors encountered high rates of the hip implant loosening and requiring additional surgery. Toxic Substances Exposure to toxic substances, consumption of contaminated food, and use of dangerous products can result in serious medical conditions. Asbestos Toxic Substance Mesothelioma is a rare form of cancer caused by exposure to asbestos and breathing asbestos fibers. For those diagnosed with mesothelioma, financial compensation may be available. Although many of these cases are work related and would be denied under most medical plans as work related, mesothelioma can result from exposure to asbestos in a variety of products. Trilogy Consulting Group, Inc. -- Proprietary Information

12 (9.9) Toxic Substance Food Poisoning Hemophiliac/AIDS Settlement, Blood Clotting Products Lead Paint Poisoning Mold Tires Tobacco In many cases food poisoning outbreaks are caused by negligence during the manufacturing, packaging or preparation of food products. Lawsuits can be filed for illness caused by foods contaminated with E Coli, Salmonella or Botulism bacteria. A class action suit was settled to compensate hemophiliacs who contracted AIDS through HIV-tainted blood-clotting products. The Examiner should be aware that a claim with a diagnosis of AIDS and hemophilia should be investigated for potential third party liability and reimbursement. Lead paint found in older homes and defective toys can lead to elevated lead poisoning for young children. Elevated lead blood levels can result in serious injury. Mold has been blamed for an increase in allergic reactions and asthma attacks. Homeowner policies may specifically exclude losses due to mold. However, courts have generally held that loss due to mold which is the consequence of a fortuitous, sudden and accidental loss such as water damage from a fire, flood or storm should be covered. Potential for subrogation and third party liability may exist if an individual asserts a claim against the homeowners policy alleging health problems related to mold as the result of water damage from a fortuitous, sudden and accidental loss. An individual may also file suit against a builder when it is alleged that poor building practices resulted in the growth of mold related to health problems. An individual may also file suit against the owner of any building, i.e., landlord, school, etc., when it is asserted that mold in the building is related to a health problem. Bridgestone/Firestone, Inc., has recalled millions of tires. Due to blowouts, tread separation and other tire defects, certain automobiles were involved in rollover accidents. Numerous diagnoses may be related to the use of tobacco including respiratory and cardiac conditions. The Examiner should be aware that numerous lawsuits against the tobacco industry have been filed. In the event claim documentation or correspondence indicates an attorney is involved with a claim for a tobacco related condition, the subrogation interest of the plan should be protected Trilogy Consulting Group, Inc. -- Proprietary Information

13 Additional Information Information on the safety of drugs and medical devices including warnings and recall activity is available at: A government sponsored site for information on product recalls is available at: Web sites maintained by product liability law firms include links to view the status of litigation and settlement actions: Trilogy Consulting Group, Inc. -- Proprietary Information