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Why Medical Liability Reform Matters to Manufacturers

By | Briefly Legal, Health Care | 2 Comments

The House Judiciary Committee continues to work on H.R. 5, the medical liability reform package, today in an afternoon mark-up session. We wish them well on the effort. Liability reform will help control the rising costs of health care, and this specific piece of legislation — called the HEALTH Act — contains important protections for drugmakers and medical device manufacturers. The language reflects the understanding that drugs and devices are sold into interstate commerce, approved and regulated by the federal Food and Drug Administration, and once demonstrated as safe should not be subject to trial lawyers’ efforts to use state courts to play litigation lottery.

Section 7 of the legislation, Punitive Damages, sets guidelines on punitive damage awards in health care lawsuits, including limits so punitive damages awards do not exceed the greater of $250,000 or twice economic damages.

Manufacturers of drugs and medical devices are most interested in paragraph (c), “No Punitive Damages for Products That Comply With FDA Standards.


(A) No punitive damages may be awarded against the manufacturer or distributor of a medical product, or a supplier of any component or raw material of such medical product, based on a claim that such product caused the claimant’s harm where–

(i)(I) such medical product was subject to premarket approval, clearance, or licensure by the Food and Drug Administration with respect to the safety of the formulation or performance of the aspect of such medical product which caused the claimant’s harm or the adequacy of the packaging or labeling of such medical product; and

(II) such medical product was so approved, cleared, or licensed; or

(ii) such medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable Food and Drug Administration regulations, including without limitation those related to packaging and labeling, unless the Food and Drug Administration has determined that such medical product was not manufactured or distributed in substantial compliance with applicable Food and Drug Administration statutes and regulations.

Trial lawyers have long sought to bring suits against drug and device makers into state courts, seeking venues and judges that favor the plaintiffs and huge damage awards. In the 2008 decision in Riegel v. Medtronic, the U.S. Supreme Court limited such state suits against manufacturers of medical devices that had received pre-market approval from the FDA. The court ruled that Congress had specifically preempted the devices from state regulation under § 360k(a) of the Medical Device Amendments to the Food, Drug and Cosmetic Act.

This decision was critical in affirming the principle of federal preemption, which provides effective protections for public health and safety. Congress has determined that the FDA is the proper authority with the available resources to regulate drugs and devices in interstate commerce.  Lawsuits in state courts in effect create a 50-state system of regulation for these devices and drugs, full of inconsistencies, capricious enforcement and unjustified damage awards. (No wonder the American Association for Justice and other trial lawyer lobbyists sought to reverse the Riegel decision last Congress with the so-called Medical Device Safety Act. Thankfully, they failed.)

The language in H.R. 5, Section 7, paragraph(c) draws on that general principle of preemption for its “safe harbor” language. It holds that companies that manufacture drugs and devices recognized as safe by the FDA have by definition gone through the careful development, testing and approval — the due diligence — that demonstrate the companies did not behave in a way to justify punitive damages. The legislation provides a measure of protection for companies so they can manufacture effective drugs and devices. It’s exactly the kind of medical liability reform that will reduce costs while ensuring a dynamic market that innovates and creates live-saving products.

UPDATE (4:50 p.m.): The House Judiciary Committee just voted 16-20 to defeat an amendment offered by Reps. Mike Quigley (D-IL) and Sheila Jackson-Lee (D-TX) to strike  Section 7. Rep. Franks (R-AZ) successfully opposed against the amendment, making a similar case as argued above.

Food Safety Modernization Act Passes Senate, Back to House

By | Energy, Regulations | One Comment

The Senate revived the Food Safety Modernization Act on Sunday, correcting its error to obey the U.S. Constitution’s requirement that revenue measures — in this case, a fee on companies involved in food recalls — originate in the House of Representatives.

The new language comes in a form of the amendment, SA 4890 (printed in The Congressional Record here), to H.R. 2751, Consumer Assistance to Recycle and Save Act, aka the “Cash for Clunkers” program. Don’t imagine we’ll see anything involving free money for old cars in the 112th Congress.

A dozen major trade associations representing food and beverage manufacturing, including the National Association of Manufacturers, on Nov. 30 sent a letter  urging the House of Representatives to approve the previous version of the bill, S. 510.

Coverage of Senate action:

FDA Medical Device Proposal: Undercutting U.S. Success Story

By | Health Care, Regulations | No Comments

The medical device industry is a textbook story of manufacturing success in the United States. This industry, comprising manufacturers of devices and diagnostics, is a sector of the manufacturing where the U.S. leads the world. Medical technology represents the 11th largest manufacturing sector in terms of exports and has consistently maintained a favorable balance of trade. Yet, actions being considered by the Food and Drug Administration with respect to the approval of devices threaten to stifle innovation and cost Americans jobs.

The FDA is considering making changes to the 510(k) approval process, which in its current form, demonstrates an exemplary record of safety and effectiveness. (Federal Register notice.) However, despite significant increases in resources made available to the FDA through user fees and appropriations enacted as part of the Medical Device User Fee Act in 2002 and reauthorized in 2007, performance at the agency has markedly declined since 2003. For example, total review times, number of review cycles, amount of time manufacturers spend answering FDA questions after products are submitted for review or the withdrawal of applications before a final decision have gone up – even with the additional resources afforded the FDA. So what’s the answer from the agency? Notwithstanding an outstanding safety record, they want to make it more difficult and time consuming to get new products to patients.

The proposal under review at the FDA would do the following:

  • Impose arbitrary limits on acceptable predicate devices
  • Redefine the term “substantial equivalence”
  • Eliminate separate classification of intended use and indications for use

As the National Association of Manufacturers argues in a joint comment letter with the U.S. Chamber of Commerce, making these changes will increase approval time and costs with no appreciable benefit to consumer safety or device effectiveness. Indeed, such changes could negatively affect public health by curtailing the availability of needed treatments and cures. The FDA should carefully reconsider these proposals and err on the side of doing no harm to a process and an industry to which many Americans owe their lives and livelihood.

Joe Trauger is vice president of human resources policy at the National Association of Manufacturers (NAM).

Reasonable Regulations, Resources for Food Safety

By | Regulations | 2 Comments

The Des Moines Register reports on a news conference Monday that included representatives from business associations and “consumer activists,” both supporting a new food safety bill that might be considered soon in the U.S. Senate. From “Big biz, consumers ally on food safety“:

Consumer advocates and big business are at odds more often than not but they’re getting together this week to call on senators to pass a food-safety bill before they Washington to campaign. Officials with the Grocery Manufacturers Association and the National Association of Manufacturers appeared at a news conference today with representatives of several major consumer groups, including the Consumer Federation of America and the Center for Science in the Public Interest.

The bill would increase food inspections, require food makers to have plans for preventing contamination, authorize growing standards for fruit and vegetable growers, and provide the Food and Drug Administration with new authority to oversee farms and processors.

Rosario Palmieri, a vice president of the National Association of Manufacturers, said the legislation would “bring certainty to food and beverage manufacturers as well as the supply base that supports them.”

The bill is S. 510, the FDA Food Safety Modernization Act. Its progress has been slowed if not stalled in the Senate because of a variety of objections. (See news coverage below).

The news release from the Grocery Manufacturers Association makes the case for the bill. From “Food and Beverage Industry, Consumer Groups and Non-Governmental Organizations Call on Senate to Pass Bi-Partisan Food Safety Bill“: Read More

You There! Drop that Salt Shaker!

By | Regulations | No Comments

Washington Examiner, Gene Healey, “The coming low-sodium dystopia

In a 1997 Cato study criticizing trial lawyers’ efforts to hold tobacco companies liable for the choices of individual smokers, my colleague Bob Levy closed by deploying the much-derided “slippery slope” argument.

“What’s next?” he asked-raising the specter of an American nanny state devoted to protecting us from soft drinks, red meat, and fast foods. More than a decade later, Levy’s nightmare looks pretty plausible.

Gene, a vice president at Cato, mentions the great science fiction movies “Bladerunner” and “Fahrenheit 451” in his previews of dystopia.

How could he have missed “Demolition Man?

UPDATE (11:15 a.m.): L.A. Times,  “Happy Meal toys could be banned in Santa Clara County“:

Convinced that Happy Meals and other food promotions aimed at children could make kids fat as well as happy, county officials in Silicon Valley are poised to outlaw the little toys that often come with high-calorie offerings.

It will have to be in the sequel: “Toy Story V: The Purge”

(Hat tip: Rob at SayAnythingBlog, which has a nice new look.)

When the FDA Gets Its Way

By | Briefly Legal, General, Regulations | No Comments

From the restaurant scene in the ’90s flick about a peaceful, soporific, yet corrupt Los Angeles in the year 2034, “Demolition Man“:

LAPD Sergeant John Spartan (Sylvester Stallone): “You got the salt over there, Bob?”

Officer Lenina Huxley (Sandra Bullock): “Salt is not good for you, hence it is illegal.”


Walter Olson at Overlawyered has reaction to recent reports about the Food and Drug Administration’s plans to regulate salt content in food, including a well-justified knock on the FDA’s non-denial denial. From “Salt Reactions“:

The report in the Washington Post that the Food and Drug Administration intends to work toward mandatory limits on salt in processed food provoked some negative public reaction, and now the agency has issued a public statement not exactly denying the story, but complaining that it “leaves a mistaken impression that the FDA has begun the process of regulating the amount of sodium in foods. The FDA is not currently working on regulations nor has it made a decision to regulate sodium content in foods at this time.” Emphasis added to point out the cagey phrasings: there is no denial that the agency’s leadership intends to do all these things in the future, exactly as the Post reported.

Making the Lawsuits More Tasty

By | Regulations | One Comment

The Washington Post’s story Tuesday breaking the news about the FDA’s scheme to reduce salt content in food through regulation quoted one of the most radical we-know-better-than-you groups out there, the Center for Science in the Public Interest.

Michael Jacobson of the Center for Science in the Public Interest, which first petitioned the FDA to regulate sodium in 1978, said voluntary efforts by industry are laudable, “but they could change their minds tomorrow. . . . Limiting sodium might be the single most important thing the FDA can to do to promote health.”

This context would have been helpful to the reader. From a Center for Science in the Public Interest news release, July 23, 2009, “Unsafe Sodium Levels at Denny’s Prompt Class Action Lawsuit“:

WASHINGTON—Most Denny’s meals are dangerously high in sodium, putting the restaurant chain’s customers at greater risk of high blood pressure, heart attack and stroke, according to a class action lawsuit filed today by a New Jersey man with the support of the Center for Science in the Public Interest.

The lawsuit was filed in Superior Court of New Jersey in Middlesex County, and seeks to compel Denny’s to disclose on menus the amount of sodium in each of its meals and to place a notice on its menus warning about high sodium levels. CSPI is working with the New Jersey firms of Galex Wolf, LLC and Williams Cuker Berezofsky. 

Big surprise. Trial lawyers are trolling for cash.

Galex Wolf’s website is here. Williams Cuker Berezofsky’s site is here.

Here’s a good report of the Center for Science in the Public Interest’s activities over the years from ActivistCash.com.

With the war on salt gaining in activity, expect to see many news reports cite the Center for Science in the Public Interest as some sort of disinterested observer, “scientists” working on important issues. Reporters who do so are misleading the public about the group’s agenda, which correlates closely to the agenda of the trial lawyers.

The Consumption Protection Salt Intake Act

By | Regulations | No Comments

The Washington Post reports, “Fast action to limit salt in processed foods pushed by Sen. Harkin, Rep. DeLauro“:

Two members of Congress urged the Food and Drug Administration on Tuesday to move quickly to limit the amount of salt in processed foods, calling the matter a “public health crisis” that demanded a swift response from government.

“I understand they want to do it in a phased kind of a deal, but I don’t want it to be too long,” said Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee. “This is crying out for change that’s long overdue.”

Rep. Rosa DeLauro (D-Conn.) agreed, saying in a conference call with Harkin and reporters: “I don’t want this to take 10 years. . . . This is a public health crisis.”

Millions of American of Americans work in the food industry, and it’s disheartening to see members of Congress immediately jump on a regulatory scheme that could have a huge impact on those jobs.

And just because you call it a crisis, doesn’t make it one.

Frankly, we’re surprised the members of Congress didn’t vow tough legislation to crack down on those nefarious salt merchants. Maybe one of the lawmakers who want to control more of Americans’ lives will introduce the bill, the Consumption Protection Salt Intake Act. We know how well the last CPSIA worked out.

Earlier: “From the Latin: We’re Going to Regulate Every Aspect of Life

UPDATE (3:40 p.m.): Ramesh Ponnuru comments at WashingtonPost.com, Right Matters:

This strikes me as outrageous. Leave aside the irresponsibility of demanding immediate action when the FDA has not yet solved the many practical problems its ambitions require it to solve. The deeper problem is one of principle. There may be things that government can reasonably do to reduce the number of people who suffer from hypertension. Trying to force changes to every American’s diet isn’t one of them. Congress should change the law to block the FDA.

From the Latin: We’re Going to Regulate Every Aspect of Life

By | Regulations | One Comment

Washington Post, “FDA plans to limit amount of salt allowed in processed foods for health reasons“:

The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products.

Food manufacturers are undertaking serious, voluntary efforts to reduce the salt content in their products.

Voluntary? Hah!

“We can’t just rely on the individual to do something,” says Cheryl Anderson, an epidemiologist at the Johns Hopkins Bloomberg School of Public Health.

Here’s an idea. Salt is one of the most important commodities and even currencies in the history of man. The word “salary” comes from the Latin “salarium,” meaning money paid to soldiers to buy salt.

So, why not just wrap salt regulation in under the financial regulation bill in the Senate? As John Berlau of the Competitive Enterprise Institute argues, the financial regulation bill defines large (non-banking) sectors of the economy as banks in order to regulate them. If you sell salt or use it in your products, you’re a bank!

In other salt-related news, Mark Kurlansky, author of Salt, has a new book out, “Eastern Stars,” about the great baseball players from San Pedro, the Dominican Republic. He speaks Wednesday evening at the DC bookstore, Politics & Prose. Salt is a very entertaining, commodity-oriented history of the world. We were hoping Zinc was next.

UPDATE (10:10 a.m.): Walter Olson comments at Overlawyered.com:

We’ve been warning of such developments for a while, and they come as little surprise given President Obama’s pick of hyper-regulator Margaret Hamburg as FDA commissioner.

P.S. Perhaps we should invite comment from the New York Times journalist who sternly admonished an interview subject recently: “You shouldn’t trivialize issues of health and safety by calling them nanny issues.”

The Encompassing Tax on Medical Devices, 2.9 Percent

By | Health Care, Taxation | One Comment

Subtitle E, Section 1405 in the House substitute amendment to the health care legislation is “Excise tax on medical device manufacturers”

The section states:

(a) IN GENERAL.-There is hereby imposed on the
sale of any taxable medical device by the manufacturer,
producer, or importer a tax equal to 2.9 percent of the
price for which so sold. 

There are exemptions for eyeglasses, contact lens, hearing aids and items purchased by the general public at retail stores, things like tongue depressors. Even with the exemptions, there’s much covered under the bill’s definiion of “taxable medical device,” which “means any device (as defined in section 201(h) of the Federal Food, Drug, and CosmeticAct) intended for humans.”

From the FDA, “Is The Product a Medical Device?”

Medical Device Definition

Medical devices range from simple tongue depressors and bedpans [presumably exempt as noted above] to complex programmable pacemakers with micro-chip technology and laser surgical devices. In addition, medical devices include in vitro diagnostic products, such as general purpose lab equipment, reagents, and test kits, which may include monoclonal antibody technology. Certain electronic radiation emitting products3 with medical application and claims meet the definition of medical device. Examples include diagnostic ultrasound products, x-ray machines and medical lasers. If a product is labeled, promoted or used in a manner that meets the following definition in section 201(h) of the Federal Food Drug & Cosmetic (FD&C) Act it will be regulated by the Food and Drug Administration (FDA)4 as a medical device and is subject to premarketing and postmarketing regulatory controls. A device is:

  • “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory which is:

    • recognized in the official National Formulary, or the United States Pharmacopoeia, or any supplement to them,
    • intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or
  • intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of it’s primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.
  •  Funny how health care “cost controls” so easily morph into tax increases.