Recently, the health insurer Humana filed a lawsuit against device maker St. Jude Medical, alleging that the company hid the fact that its pacemakers were defective. As a result, this caused the insurer to have to foot the bill when patients needed surgery to correct the issues caused by the defective pacemakers. Specifically, the lawsuit alleges that the device maker took steps to conceal the fact that the pacemaker had a defective battery.
According to the lawsuit, St. Jude sold these pacemakers for four years, knowing the entire time that they contained the defect. Specifically, there were reports that the battery would form something called “lithium clusters” during charging. These clusters would remain in the battery and cause issues during the operation of the device. The most prevalent type of damage from the lithium clusters is that they would cause a short circuit of the battery. Then, the battery would drain within a day to a few weeks after the charging.
Needless to say, when the pacemaker’s battery fails, it cannot perform its intended function of regulating abnormal heart rhythms. This causes the patient’s life to be endangered, and there were reports of deaths associated with this battery failure. In fact, of the reported instances of this battery failure, two deaths were linked to this defect. As a result of the defect, countless patients were forced to undergo surgery to remove the defective device and implant a new one. Any type of cardiac procedure is expensive, and the costs of these surgeries are considerable. At the time, it was the insurer that was required to foot the bill for the procedure.
St. Jude informed the FDA of this issue in 2015, after the pacemaker had been available on the market for some time. When it made the report, St. Jude stated that it had received 841 reports of the premature battery depletion.While this is a small proportion of the overall number of pacemakers implanted, it still is objectively a high number. At the time that the company reported this issue to the public, St. Jude was in the process of being acquired by pharmaceutical giant Abbott Labs.
After the report of the defect, the FDA issued a recall of the pacemaker. The recall was given a Class I designation, which is the most serious category of recall. Over 175,000 devices were the subject of a recall, however the FDA did not order the removal of every implanted pacemaker. Instead, it just halted sales of the product for a time. After some time, St. Jude advised physicians they had another product which could alert physicians of abnormal battery performance. Prior to that, there were numerous surgeries performed to replace the devices.
According to Humana, there was something more nefarious at work. The insurer alleges that St. Jude took steps to cover up the defect and avoid reporting it. The lawsuit claims that the only reason St. Jude disclosed this defect was because they were in the middle of being acquired by Abbott. Thus, they had to disclose all potential liabilities to Abbott to avoid repercussions with securities laws. If not for that, Humana claims that St. Jude would have continued to say nothing about the defect.
The lawsuit alleges that St. Jude knew of the problem as far back as 2011. However, Humana claims that for four years, St. Jude suppressed the evidence of defects. Instead, St. Jude allegedly offered patients who needed a new pacemaker their out-of-pocket costs for replacing the pacemaker plus an additional $2,500 for their inconvenience. However, the insurance company covered the bulk of the costs of replacing the device and St. Jude’s arrangement did nothing to address Humana’s expenses in paying for these surgeries, leaving Humana to pay its own bills.
In the lawsuit, Humana is seeking double damages under a law that enables it to do so as a Medicare secondary payer. Pacemakers are considered a high-risk medical device and are subject to preemption. This means that it is difficult for private plaintiffs to file a lawsuit against St. Jude unless they can find an exception to this doctrine. Generally, lawsuits relating to products that go through the FDA’s most stringent form of review which is called the premarket process are preempted, or protected.
The pacemaker is not the only St. Jude medical device to experience problems in recent years. St. Jude’s defibrilator also was the subject of a product liability lawsuit. The issue with the defibrillator caused it to fire prematurely for some patients. Unlike the pacemaker, patients have the ability to sue over the defibrillator since it is not a Class I medical device. Like the pacemaker, the lawsuits alleged that St. Jude similarly knew about the problems with this device for years, but did not disclose them to patients or their physicians. In 2015, St. Jude settled hundreds of lawsuits for a total of $14 million.
So far, Abbot has been successful in defending against similar suits brought by other third-party plaintiffs. It remains to be seen whether there are different facts or legal theories with Humana’s lawsuit that will enable it to succeed where the other lawsuits did not.
Learn more about Medical Device Lawsuits.