To All . . . This article has been showing up in a variety of regional business journals. Does anyone have any information on the alleged supply problems? If it is a real problem, I would expect companies like Medtronic to disclose it.
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Liability issues scaring off medical device suppliers
Business First of Buffalo, Monday, August 25, 1997 at 16:31
WASHINGTON - On a breezy fall afternoon last year, researchers at
Medtronic Inc., a Minneapolis-based maker of permanent heart
devices, were ecstatic.
After four grueling years, they finally had figured out how to
make the heart pacemaker more reliable and longer-lasting on human
beings. For the product to work, however, they needed a specific
insulating material from an outside source.
That raw material never landed on the manufacturing line. That's
because the material supplier was afraid the product potentially
would expose the supplier to multimillion-dollar product liability
suits.
The pacemaker project was dumped, and Medtronic researchers went
back to the drawing board.
The Minneapolis company is not alone.
Over the past six months, more than 16 suppliers of raw materials
to the medical implant industry have pulled their supplies, leaving
manufacturers wondering whether they will be able to make their
products next year.
Sen. Joseph Lieberman, D-Conn., and Sen. John McCain, R-Ariz.,
wanted to tackle this situation by indemnifying the raw material
suppliers from product liability suits. So they introduced the
Biomaterials Access Assurance Act in April.
But there was one problem. The biomaterials bill also was a part
of the broad product liability reform bill introduced by the same
two senators.
A Lieberman aide said the senator wants the broader product
liability bill to pass first.
"If that doesn't work, we will put a lot of pressure to pass the
biomaterials bill as it stands," an aide said.
In the meantime, as Congress decides which way to go on product
liability reform, some medical implant manufacturers say they are
running short on time.
"We have supplies to last us perhaps another year at the most,"
said Dick Reid with Medtronic, which makes devices used for
cardiovascular and neurological diseases. "We do not know what will
happen after that."
More than 2 million Americans have some form of cardiovascular and
thoracic surgery every year, and Medtronic is one of the largest
suppliers of products used in these surgeries. Other companies, such
as Guidant Inc., which makes similar products, also report a severe
shortage of raw materials.
Jim Benson, executive vice president at the Health Industry
Manufacturers Association, a Washington-based trade group, said
manufacturers are trying to insure material suppliers from liability
suits by indemnifying them.
"But indemnification is still not enough to insulate these
suppliers from being dragged into product liability suits," Benson
said. "So they have decided to stay away from the medical implant
field."
In one case, according to an HIMA study, a supplier resumed supply
of raw materials to the manufacturer after the manufacturer bought a
$600 million insurance policy on the company, the value of the
suppliers' entire company.
Trial lawyers argue the medical implant industry is painting a
dismal picture on the business impact of product liability suits
only to avoid penalties for companies that make faulty products.
But McCain and others in Congress contend that raw material
suppliers do not manufacture nor market products and therefore
should not be dragged into product liability suits.
Researchers in the medical implant industry say they are spending
millions of additional dollars to find alternate materials or
materials that can easily be attained to make products such as
defibrillators, and hip and knee replicas.
"It's costing more to build these products, and eventually the
consumers have to pay more when they use it," Benson said.
When Congress comes back in session next month, members are
expected to discuss the Product Liability Reform Bill with the White
House and come up with agreeable language. If the bill fails, Senate
and House members are expected to push the biomaterials bill later
in September.
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Regards - PerryA |
