Amicus Curiae Brief — Riegel v. Medtronic, Inc.

\94 ©

40 No. 06-179

IN THE

Supreme Court of the United States

DONNA S. RIEGEL, INDIVIDUALLY AND AS ADMINISTRATOR OF

THE ESTATE OF CHARLES R. RIEGEL,

Petitioner,

Vv.

MEDTRONIC, INC.,

Respondent.

On Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

BRIEF OF THE ADVANCED MEDICAL

TECHNOLOGY ASSOCIATION (ADVAMED), DRI,

MEDMARC, AND THE MEDICAL DEVICE

MANUFACTURERS ASSOCIATION (MDMA)

AS AMICI CURIAE IN SUPPORT OF RESPONDENT

MICHAEL W. DAVIS CARTER G. PHILLIPS

SIDLEY AUSTIN LLP DANIEL E. TROY*

One South Dearborn Street REBECCA K. Woop

Chicago, Illinois 60603 EAMON P. JOYCE

(312) 853-7000 SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

Counsel for Amici Curiae AdvaMed and DRI

{ Additional Counsel Listed on Inside Cover]

October 19, 2007 * Counsel of Record

AALS A A TS TT

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 ~— WASHINGTON, D. C. 20002

CHRISTOPHER L. WHITE

ADVANCED MEDICAL

TECHNOLOGY ASSOCIATION

701 Pennsylvania Ave.,

N.W.

Suite 800

Washington, D.C. 20004

(202) 783-8700

Counsel for Amicus Curiae

AdvaMed

PAUL J. MALONEY

WILLIAM J. CARTER

CARR MALONEY P.C.

1615 L Street, N.W.

Suite 500

Washington, D.C. 20036

(202) 310-5500

Counsel for Amicus Curiae

Medmarc

TABLE OF CONTENTS

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TABLE OF AUTHORITIES ........cccssscssssessssecssesseseseseeeees

INTERESTS OF AMICI CURIAE .cssccssssssssessseesssecesseeeee

SUMMARY OF ARGUMENT. .......csscssssesssseessesssecesseceees

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II.

ENHANCED STATE-LAW LIABILITY

WOULD INTERFERE WITH FDA’S

EXTENSIVE PRE- AND POST-MARKETING

OVERSIGHT OF MEDICAL DEVICES, NOT

FILL A REGULATORY “GAP?” .......... pialtabcoreces

A.FDA_ Exercises Substantial Pre-Maiaeting

Oversight Of Medical Devices ..................:...:00+

B. FDA Exercises Substantial Post-Marketing

Oversight Of Medical Devices ..............:..cscee0e+

EXTENDING STATE-LAW _ LIABILITY

WOULD UNDERMINE THE BALANCE OF

PUBLIC HEALTH OBJECTIVES REFLECTED

Be RD Ge Rntnasccencnencsnsencenctunpeniosnisesatensesasansabeccoose |

A. Siate Tort Liability Stifles Innovation Of

Important And Life-Saving Medical Devices ....

B. State Tort Liability Threatens The Availability

Of Significant Medical Treatments ....................

C. State Tort Liability Increases Price And

Undermines The Affordability Of Medical

TIED isinchisliccsenscsnsetninenientindanctcdnnnnnvnnniiteitaiinsis

D. State Tort Liability Encourages Defensive

Labeling And Overwarning That Undermine

Rational Prescribing By Physicians....................

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ii

TABLE OF AUTHORITIES

CASES Page

Brooks v. Howmedica, Inc., 273 F.3d 785 (8th

Sr Se scictiniteidctanensiuanatantoennnisanninniieenttintes 7

Browning Ferris Indus. of Vt., Inc. v. Kelco

Disposal, Inc., 492 U.S. 257 (1989) .......ccceeeceeee 21

Cupek v. Medtronic, Inc., 405 F.3d 421 (6th Cir.),

cert. denied, 546 U.S. 935 (2005).................00008 7

Goodlin v. Medtronic, Inc., 167 F.3d 1367 (11th

EG, IIIT oiiiehleesieivcteesicslenstndaeibindaminneiaenratabienineceimmnnit 7

Horn v. Thoratec Corp., 376 F.3d 163 (3d Cir.

ITT srdehsissieteontsenieiniteaeniiianbaicbsinasibiainsaniiniieeaneennians 7,9, 10

Kemp v. Medtronic, Inc., 231 F.3d 216 (6th Cir

Ire icicchasebaenibniusictialnsdetncacieatapeianaiiiidsedceiaiiaidtiaaiainian 9

Martin v. Medtronic, Inc., 254 F.3d 573 (Sth Cir

SariTisstchidincheshiteebieieteeiieacamneshidiaianbidubeciniibebieaininiines 7

Martin v. Telectronics Pacing Sys., Inc., 105 F.3d

NEI: I cticniscnitcncinssciavassnisinpesiaitaniatansiees 8

McMullen v. Medtronic, Inc., 421 F.3d 482 (7th

Cir. 2005), cert. denied, 547 U.S. 1003 (2006) ... 7

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996).... 4, 6, 15,

18, 20

Rattay v. Medtronic, Inc., 482 F. ead 2d 746

Ne Se stnreiiicieniiieneinsiniaitiiaasdtaeitantnisianniien 9

Steele v. Dep«, Irthopaedics, Inc., 295 F. Supp.

eels SIU weiitieeiciinsiicsnisitniaiiccnsiteiniiaaaiienia 9

STATUTES AND REGULATIONS

Safe Medical Devices Act of 1990, Pub. L. No.

SI GE TIED: SEIT nscsenccecmcnienescvenseoninetennsnemnes 18

Se a a cicctsstinciicctndanyuonienstcbecinaines 5

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TABLE OF AUTHORITIES—continued

Page

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62 Fed. Reg. 51112 (Sept. 30, 1997)... 20

Dep’t of Health & Human Servs., FDA, Deter-

mination That Bendectin Was Not Withdrawn

From Sale for Reasons of Safety or Effective-

ness, 64 Fed. Reg. 43190 (Aug. 9, 1999)............. 23

71 Fed. Reg. 3922 (Jan. 24, 2006)...............:ccceceeees 27

iV

TABLE OF AUTHORITIES—continued

LEGISLATIVE HISTORY Page

Hearings on H.R. 5545, H.R. 974 & S. 510 Before

the Subcomm. on Health & the Environment of

the H. Comm. on Interstate & Foreign Com-

Wee S8, PUB CORE, CHITS) nccerrovcesevevevercessescecossosees 17

he Sa BRR, Gere cccscencncessncesensenensonsssnsennscsen 17

SD, Tea. BRR. SGC ED CID ecvccsccsrcesscscevecensessecscsneee 18

FLL. Raw. No. POSS (IF TE) .ncccccorovesesccescesseescosesee 17

136 Cong. Rec. $12476 (daily ed. Aug. 4, 1990)... 18

$15205 (daily ed. Oct. 12,1990).. 18

S17456 (daily ed. Oct. 27,1990)... 18

RULE

Sup. Ct. R. 48.3 (2007)....ccccccccsscccesscsssseccscssnsecescenee

SCHOLARLY AUTHORITIES

Am. Med. Ass’n, Reporting Adverse Drug &

Medical Device Events: Report of the AMA's

Council on Ethical & Judicial Affairs, 49 Food

rena 12

Anna Biernbaum, Note, Shielding the Masses:

How Litigation Changed the Faith of Birth

Control, 10 S. Cal. Rev. L. & Women’s Stud.

OE Gite Pecseccsssrcesstencenvncitininniapminainmsigtitinbtiabintias 26

David Dial et al., Tort Excess 2005: The

Necessity for Reform from a Policy, Legal and

Risk Management Perspective (2005) .........:000+++ 21

William W. George, Medical Technology and

Competitiveness in the World Market: Rein-

venting the Environment for Innovation, 50

Food & Drug L.J. 477 (1995) ......cccceceeseseeeteeeees 20

Scott Gottlieb, Latest Trends in FDA Practice,

BPS Fee Be CI cerectcsccesssnransoteemensemmenatnn 12

Vv

TABLE OF AUTHORITIES—continued

Page

Scott E. Harrington, Tort Liablity, Insurance

Rates, and the Insurance Cycle, in Brookings-

Wharton Papers on Financial Services (2004)..... 21

Reid Hastie & W. Kip Viscusi, What Juries Can't

Do Well: The Jury’s Performance As a Risk

Manager, 40 Ariz. L. Rev. 901 (1998)................ 16

Marvin E. Jaffe, Regulation, Litigation and

Innovation in the Pharmaceutical Industry: An

Equation for Safety, in Product Liability and

Innovation: Managing Risk in an Uncertain

Environment 120 (J.R. Hunziker & T.O. Jones

Liability on New Drug Developments, in The

Liablity Maze 334 (P.W. Huber & R.E. Litan

a isi ssitiiiatesinntcientnimecmnnmnencasecses 22, 23, 24, 27

Sylvia A. Law, Sex Discrimination & Insurance

for Contraception, 73 Wash. L. Rev. 363

Richard L.. Manning, Changing Rules in Tort Law

and the Market for Childhood Vaccines, 37 J.

TT nice citctesnnsentdecenescees 26

Neal I. Muni et al., Challenges in Regulating

Breakthrough Medical Devices, 60 Food &

A ee 9, 12, 13,14

C. Ineke Neutel, Variation In Rates of Hospitali-

zation for Excessive Vomiting In Pregnancy By

Bendectin/Diclectin Use in Canada, available

at http://www.nvp-volumes.org/p1_9.htm........... 14

Lars Noah, The Imperative to Warn: Disen-

tangling the “Right to Know” From the “Need

to Know” About Consumer Product Hazards,

11 Yale J. on Reg. 293 (1994) ce eeceeceeeeeseeee 28

Michael E. Porter, The Competitive Advantage of

Ee 22

vi

TABLE OF AUTHORITIES—continued

Daniel G. Schultz, M.D., Director, FDA Center

for Devices and Radiological Health, Medical

Device Safety, FDA’s Postmarket Transfor-

mation Initiative, 62 Food & Drug L.J. 593

Page

ad 4,13, 14

Lawrence Tancredi & Dorothy Nelkin, Medical

Malpractice and Its Effect on Innovation, in

The Liablity Maze 251 (P.W. Huber & R.E.

RE Tre itrtarreermresnscnitintasanennineaitcnmven

Albert George Thomas Jr. & Stephanie M.

LeMelle, The Norplant System: Where Are We

in 1995, 40 J. Fam. Prac. 125 (1995)...................

W. Kip Viscusi, Corporate Risk Analysis: A

Reckless Act?, 52 Stan. L. Rev. 547 (2000).........

W. Kip Viscusi, /ndividual Rationality, Hazard

Warnings, and the Foundations of Tort Law, 48

Rutgers L. Rev. 625 (1996) .........cccccccossccserseseees

W. Kip Viscusi, Jurors, Judges, and the Mis-

treatment of Risk By the Courts, 30 J. Legal

ee Be I vicccscnanonsinennsetnnsesmnteniainianspnitaesiii

W. Kip Viscusi et al., A Statistical Profile of

Pharmaceutical Industry Liability, 1976-1989,

24 Seton Hall L. Rev. 1418 (1994)...

W. Kip Viscusi & Michael J. Moore, An

Industrial Profile of the Links Between Product

Liability & Innovation, in The Liablity Maze 81

(P.W. Huber & R.E. Litan eds., 1991).................

OTHER AUTHORITIES

Contraceptive Maker Wins Woman's Suit Over

Side Effects, N.Y. Times, Sept. 5, 1998...............

vii

TABLE OF AUTHORITIES—continued

Page

GAO-06-62, Medicare Durable Medical Equip-

ment: Class Ill Devices Do Not Warrant a

Distinct Annual Payment Update (Mar. 1,

Am. Med. Ass’n Bd. of Trs., Jmpact of Product

Liability on the Development of New Medical

PIT vcisccniinintiticinitamticnmtndpennies 21, 22

Maria Cheng, New Study: Drug-Coated Stents

Not So Bad, Associated Press Online, Sept. 2,

SITET siisisceeiiieniesieciisdiediial aeuidaarhiamalianididiniiaaiaisaes 28

FDA, FDA’s Mission Statement, http://fda.gov/

opcaom/morechoices/mission.html (last viewed

SR, Sa cnteerenrernnennctenentatinattininicnionmnes 16

FDA, FDA Statement on Coronary Drug-Eluting

es Bi A rcetennnccnenanininininnnmne 28

FDA, Guidance for Industry and FDA Staff -

Procedures for Handling Post-Approval

Studies Imposed by PMA Order (Aug. 1, 2007).. 13

FDA, Innovation or Stagnation: Challenge and

Opportunity on the Critical Path to New Medi-

cal Products (Mar. 2004), available at http://

fda.gov/oc/initiative/criticalpath/whitepaper.

icesiisusiicentahecitueisseaidciegaaiicaiiiinaaiiiatanasibaasia 10, 20, 22, 23

FDA, The Least Burdensome Provisions of the

FDA Modernization Act of 1977: Concepts and

Principals; Final Guidance for FDA and

Industry (Oct. 4, 2002), available at http://

www. fida.gov/cdrh/ode/guidance/1332.html........ 1g

FDA, FDA Recall Policies (June 2002), available

at http://www.cfsan.fda.gov/~Ird/recall2.html .... 12

FDA, Ctr. for Devices & Radsological Health,

Recognition and Use of Consensus Standards;

Final Guidance for Industry and FDA Staff

(June 20, 2001), available at http://www.fda.

gov/cdrh/ost/guidance/321 .html .............0ceeeeees 10

Vill

TABLE OF AUTHORITIES—continued

Page

FDA, Ctr. for Devices & Radiological Health,

Review Process (June 11, 2003), http://www.

fda.gov/cdrh/devadvice/pma/review_process.

ITT sisisssietiniincindetecnaiiticnhiaainmiiinianaaadiinitibaiestiinil 9,10, 11

FDA, Ctr. for Devices & Radiological Health, FY

2006 Highlights (2006)............:cccccsescsesscssereeeeeees 12, 14

FDA/NIH Conference, Clinical Pharmacology

During Pregnancy Addressing Clinical Needs

Through Science (Dec. 4, 2000), available at

http://www.fda.gov/cder/present/clinpharm

ND ciiccnsencccanieszientsnnieeiieiemneren 24

Peter Huber, Junk Science in the Courtroom,

es SD etnteereencteenscniennsinvianntnnianuenes 28

Linda A. Johnson, Wyeth Won't Resume Norplant

Sales, Associated Press Online, July 26, 2002 .. 25, 26

Gina Kolata, Will the Lawyers Kill Off Norplant?,

N.Y. Times, May 28, 19995. ...............ccccccosseseesees 25, 26

Barbara Marsh, The Product Liability Morass,

FD 8 RR eee 26

MedSun, About MedSun, https://www.medsun.

net/about2.asp (last viewed Oct. 18, 2007).....5, 13, 14

David J. Morrow, Maker of Norplant Offers a

Settlement in Suit Over Effects, N.Y. Times,

INTERESTS OF AMICI CURIAE'

Amici, whose members are active participants in the

medical device regulatory, insurance and litigation process,

are uniquely situated to alert the Court to two practical issues

of significance to its decision here.

First, notwithstanding petitioner and her amici’s view that

current federal oversight is lean and in need of all-

encompassing state-law augmentation, in actuality—as amici

here are well-aware and illustrate in detail below—the United

States Food and Drug Administration (“FDA”)

comprehensively regulates medical devices, both before and

after their launch on the United States market through the

Premarket Approval (“PMA”) process.

Second, amici are well-acquainted with numerous harmful

effects of state-law liability risks in this sensitive context, in

which Congress has charged an expert federal agency, FDA,

with striking a careful balance of public health objectives.

These harmful effects include: (i) forgoing innovation,

discouraging device development, and exacerbating a

growing “pipeline problem”; (ii) decreasing the availability of

potentially beneficial medical treatments in the United States,

particularly those relating to women’s health; (iii) increasing

medical costs; and (iv) encouraging “defensive labeling” that

interferes with rational prescribing decisions by physicians. '

The Advanced Medical Technology Association

(“AdvaMed”), formerly known as the Health Industry

Manufacturers Association, is the largest medical technology

' Petitioner and respondent have consented to the filing of this amicus

brief in letters on file with the Clerk’s office. Pursuant to Rule 37.6, amici

state that no counsel for a party authored any part of this brief, and no

person or entity other than amici and their counsel made a monetary

contribution to its preparation or submission. This brief is filed in

compliance with the Court’s May 2, 2005 rules. See Sup. Ct. R. 48.3

(2007).

2

association in the world. It represents more than 1,200

medical device, diagnostic, and health information system

manufacturers. AdvaMed’s members manufacture 90 percent

of the $75 billion of health care technology purchased

annually in the United States and more than 50 percent of the

$175 billion purchased around the world annually.

AdvaMed’s members are innovators of technologies that

save lives and increase the quality of life for hundreds of

thousands of patients every year. For example, technological

breakthroughs such as coronary stents, implantable

defibrillators, and minimally invasive bypass surgery have

helped reduce the death rate from heart disease by 40 percent

since 1980. AdvaMed’s members spend an enormous amount

——~ of money—troughly $9 billion annually—on the research and

development of these innovations. On a percentage of sales

basis, this investment constitutes more than four times the

average spent on research and development by non-

pharmaceutical manufacturers in other industries.

One of the inevitable consequences of innovation in health

care technology is that a small percentage of patients suffer

injuries that they allege were caused by these highly

specialized products. AdvaMed and its members therefore

have a significant interest in the outcome of this litigation.

Nearly all of AdvaMed’s members do now or will in the

future face the prospect of tort litigation concerning the

medical devices they manufacture, and related costs in the

form of self-insurance or insurance premiums to cover the

potential risks of alleged device-related injury.

DRI is an international organization that includes more than

22,000 attorneys involved in the defense of civil litigation.

DRI is committed to enhancing the skills, effectiveness, and

professionalism of defense attorneys. Because of this

commitment, DRI seeks to address issues germane to defense

attorneys and the civil justice system, to promote the role of

the defense attorney, and to improve the civil justice system.

DRI has long been a voice in the ongoing effort to make the

3

civil justice system more fair, efficient, and—where national

issues are involved—consistent. To promote these objectives,

DRI participates as amicus curiae in cases that raise issues of

importance to its membership and to the judicial system.

Here, to extend unbounded state tort liability to companies

that have successfully brought to market the most cutting-

edge medical devices pursuant to the PMA process, as

petitioner urges, would threaten the efficient and fair

administration of justice. Allowing states to serve as

secondary regulatory bodies able to impose different or

additional requirements on device manufacturers despite the

express preemption provision implicated here would override

Congress’s intentions with respect to the PMA process and

obstruct FDA from fulfilling its regulatory charge. Not only

would device manufacturers be subjected to costly and

uncertain litigation nationwide, but the overall economy and

public health would suffer as a result of the decreased

innovation triggered by the threat of liability.

The issues in this case are, accordingly, of substantial

concern to DRI. Because DRI’s members have first-hand

experience with medical device litigation and FDA’s

regulatory role, DRI is well-suited to address the grave

consequences of the unpredictable patchwork of state liability

that petitioner’s position would create.

Medmarc Insurance Group (Medmarc) is a specialty

insurer, owned by the life science industry, which provides

product liability coverage for medical device and life science

manufacturers. Owned and controlled by its member

policyholders in the life science industry, Medmarc was

founded in 1979 by that industry in response to volatile

conditions in the commercial insurance market for product

liability protection. Medmarc’s membership includes

approximately 700 manufacturers and distributors of medical

devices, biotech, generic pharmaceutical, and diagnostic

products.

4

The Medical Device Manufacturers Association (MDMA) is

a national trade association representing innovative and

entrepreneurial medical device designers and manufacturers.

Its membership includes over 150 makers of medical devices,

diagnostic products, and health care information systems.

MDMA seeks to improve the quality of patient care by

encouraging the development of new medical technology and

fostering the availability of innovative products in the

marketplace.

SUMMARY OF ARGUMENT

Amici will not repeat the legal arguments that are well

developed by respondent and other amici. Instead, amici

focus the Court’s aitention on two key issues.

First, in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), the

Court observed that the § 510(k)-clearance process described

in that case was “by no means comparable” to the more

“rigorous” PMA process. /d. at 477-79. Yet petitioner and

her amici understate the robust, device-specific pre- and post-

marketing review FDA exercises in the PMA context. If

anyihing, this oversight has increased since Lohr. For

example, FDA has recently further enhanced its “long history

of effective medical device safety as a result of both its

premarket review process and its postmarket surveillance and

enforcement activities” with new initiatives to enhance efforts

to “identify safety signals at any point in a product’s lifecycle

and take timely action.” Daniel G. Schultz, M.D., Director,

FDA Center for Devices and Radiological Health (“CDRH”),

Medical Device Safety, FDA’s Postmarket Transformation

Initiative, 62 Food & Drug L.J. 593, 593 (2007). One such

initiative is the Medical Device Safety Network or

“MedSun.” MedSun, which has been in effect for

approximately five years, supplements FDA’s existing,

mandatory post-marketing surveillance mechanisms with

additional “valuable data on how devices are used in the real

world of clinical practice,” id at 594, such as identifying

5

“close calls” and engaging in other “proactive prevention”

collaboratively with clinicians and manufacturers. MedSun,

About MedSun, www.medsun.net/about2.asp.

Second, the state tort liability urged by petitioner and her

amici threatens to undermine the balance of safety,

effectiveness, and innovation Congress has charged FDA with

calibrating and would threaten numerous harmful effects. By

enacting the Medical Device Amendments (“MDA”), 21

U.S.C. §§ 360c ef seg., to the Federal Food, Drug and

Cosmetic Act (“FDCA”), 21 U.S.C. §§ 301 ef seq., and

creating the PMA process, Congress charged FDA with

striking a sensitive balance between important, and often

competing, public health objectives. On the one hand,

Congress sought to ensure that cutting-edge and oftentimes

high-risk medical devices would offer, in the agency’s expert

judgment, a reasonable assurance of safety and effectiveness

based on valid scientific evidence before reaching the United

States market. On the other hand, Congress focused on

fostering a regulatory and legal environment that promotes

device innovation that is imperative to preserving and

advancing important and life-saving patient treatments.

Enhanced state-law liability poses a challenge to this

balance and threatens to, among other things: (i) harm the

device development and innovation that Congress and FDA

have endeavored to foster; (ii) undermine the availability of

medically beneficial devices already on the market; (iii) raise

prices for important and life-saving medical devices; and

(iv) fuel the proliferation of defensive “over-warning” that

undermines rational prescribing decisions, based on risks the

expert agency determines to be scientifically justified, and

discourages use of beneficial therapies.

6

ARGUMENT

I. ENHANCED STATE-LAW LIABILITY WOULD

INTERFERE WITH FDA’S EXTENSIVE PRE- AND

POST-MARKETING OVERSIGHT OF MEDICAL

DEVICES, NOT FILL A REGULATORY “GAP.”

In Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), the Court

held that state-law claims were not preempted by the MDA’s

different Section 510(k) “substantial equivalence” process

which—unlike the comprehensive PMA process at issue

here—‘“requires little information, rarely elicits a negative

response from the FDA, and gets processed very quickly,” in

an average of only 20 hours. /d. at 477-79 (internal quotation

omitted). The Lohr opinion observed that “the 510(k) process

is focused on equivalence [to another approved product], not

safety” and “[ajs a _ result, substantial equivalence

determinations provide little protection to the public.” /d. at

493 (internal quotation omitted).

In contrast, the Court juxtaposed the “rigorous” PMA

process in which FDA spends “an average of 1,200 hours on

each submission.” /d. at 477. The Court underscored that

“{tlhe §510(k) notification process is by no means

comparable to the PMA process,” id. at 478-79, and

quite unlike a case in which the Federal Government has

weighed the competing interests relevant to the particular

requirement in question, reached an wnambiguous

conclusion about how those competing considerations

should be resolved in a particular case or set of cases, and

implemented that conclusion via a specific mandate on

manufacturers or producers. [/d. at 50! (emphasis added). }

In keeping with this analysis, nearly every Circuit to have

considered the issue (including the Second Circuit below) has

7

concluded that most state-law claims with respect to PMA-

approved medical devices are preempted.’

Petitioner and her amici seek to undermine the force of this

analysis by suggesting that PMA devices actually receive

little oversight by FDA. See, e.g., Pet. Br. 4-6, 24-31; Br.

Amici Curiae Am. Ass’n for Justice et al. 22-27. They then

advance the position that state law can properly serve as “a

complement” to the PMA process and is “congenial to”

Congress’s charge and FDA’s regulation of PMA devices.

Br. Amicus Curiae Consumers Union 11. Their view is

mistaken.

As recognized in the Lohr decision, the PMA process

involves robust federal regulation affecting every stage of the

development and marketing of a medical device, both before

and after FDA permits it to reach the United States market. If

anything, this review—and the case for preemption—has

become even stronger since the time of Lohr.

A. FDA Exercises Substantial Pre-Marketing Over-

sight Of Medical Devices.

Even before the PMA process begins, manufacturers

typically must satisfy extensive FDA requirements to gain a

so-called Investigational Device Exemption (“IDE”) to

authorize clinical investigations involving human subjects.

To obtain an IDE, the manufacturer must make detailed

submissions to FDA regarding every aspect of the device and

clinical investigation. See 21 U.S.C. § 360j(g); 21 C.F.R.

§§ 812.1-812.150 (regulations applicable to IDEs). During

the IDE process, FDA reviews voluminous materials and

? See, e.g., Pet. App. 2a; McMullen v. Medtronic, Inc., 421 F.3d 482

(7th Cir. 2005), cert. denied, 547 U.S. 1003 (2006); Cupek v. Medtronic,

Inc., 405 F.3d 421 (6th Cir.), cert. denied, 546 U.S. 935 (2005); Horn v.

Thoratec Corp., 376 F.3d 163 (3d Cir. 2004); Brooks v. Howmedica, Inc.,

273 F.3d 785 (8th Cir. 2001) (en banc); Martin v. Medtronic, Inc., 254

F.3d 573 (Sth Cir. 2001); but see Goodlin v. Medtronic, Inc., 167 F.3d

1367 (11th Cir. 1999).

8

evaluates whether “the anticipated benefits to the subjects and

the importance of the knowledge to be gained” from such

trials outweighs the estimated “risks to the subjects,” and

further ensures that the informed consent provisions are

adequate, the investigation is scientifically sound, and there is

no reason to believe the device will be ineffective. 21 C.F.R.

§ 812.30; see Martin v. Telectronics Pacing Sys., Inc., 105

F.3d 1090, 1095-96 (6th Cir. 1997) (describing IDE process

and related preemption issues). Clinical investigations

generally require prior approval from an Institutional Review

Board (“IRB”)}—an independent scientific reviewing body

acting under the auspices of the National Institutes of Health.

See 21 C.F.R. §§ 56.101-56.124 (IRB regulations); 45 C.F.R.

§§ 46, et seg. (Health and Human Services regulations

regarding protection of human subjects and pertaining to

IRBs); see also, e.g., 21 C.F.R. §§ 812.35(b), 812.40-812.47,

812.60-812.66, 812.150(a)-(b) (imposing IDE-specific IRB

requirements).

Before FDA can determine that a device is safe and

effective through the PMA process, 21 U.S.C.

§§ 360c(a)(1)(C)(i), 360e(d)(2), it reviews exhaustive

submissions. A PMA application must include: (1) full

reports of all safety and efficacy investigations; (2) a full

statement of the device’s components, ingredients, properties,

and principles of operation; (3) a complete description of the

methods used in, and the facilities and controls used for, the

manufacture, processing, and packing or installation of the

device; (4) information demonstrating compliance with

statutory performance standards; (5) samples of the device, if

requested by the FDA; (6) specimens of proposed labeling;

and (7) any other information FDA requires. See 21 U.S.C.

§ 360e(c)(1); id. § 360e(f)(3); 21 C.F.R. § 814.20 (requiring

statements of indications for use, device description,

alternative practices and procedures, marketing history,

summary of studies, and study conclusions).

9

These submissions typicaily include “‘thousands of pages

of documentation’” to which FDA must apply its expert

analysis to determine whether there is a reasonable assurance

of safety and efficacy. Horn v. Thoratec Corp., 376 F.3d

163, 172 (3d Cir. 2004) (quoting amicus curiae brief of the

United States); see Rattay v. Medtronic, Inc., 482 F. Supp. 2d

746, 748 (N.D.W. Va. 2007) (PMA application exceeded

1,700 pages); Steele v. DePuy Orthopaedics, Inc., 295 F.

Supp. 2d 439, 444 (D.N.J. 2003) (PMA application 2,000

pages before supplements).

During this review, FDA informs the manufacturer if there

are any “major” or “minor” deficiencies that must be

satisfactorily addressed before the PMA application can move

forward. See generally FDA, CDRH, Review Process June

11, 2003), www.fda.gov/cdrh/devadvice/pma/review_process.

html. For example, “[o]ne of the most important aspects of

the device approval process is the development of a

meaningful and accurate product label” and the agency

“works closely with the manufacturer to create this label.” I.

Muni et al., Challenges in Regulating Breakthrough Medical

Devices, 60 Food & Drug L.J. 137, 138 (2005). If FDA

determines that the application is deficient in any respect

(e.g., labeling, manufacturing, design specifications), it may

take a manufacturer months, if not years, to cure the

deficiency. See, e.g., Horn, 376 F.3d at 169-70 (PMA

process began in 1975, PMA application submitted to FDA in

1992, and device approved in 1994); Kemp v. Medtronic, Inc.,

231 F.3d 216, 219 (6th Cir. 2000) (four years between IDE

approval and PMA approval).”

During this process, the agency draws on its unique vantage

point. Indeed, FDA “holds the only broad, cross-cutting

knowledge” and “experience with the totality of other

> Such back-and-forth would not be necessary, of course, if FDA

determines the PMA application fully answers its questions in the first

instance and no remaining issues need to be addressed.

10

applications,” and also utilizes its knowledge of “the latest

science.” FDA, Jnnovation or Stagnation: Challenge and

Opportunity on the Critical Path to New Medical Products 13

(Mar. 2004), available at www.fda.gov/oc/initiatives/critical

path/whitepaper.html. To the extent an application does not

meet FDA’s standards or the agency has questions, there may

need to be substantial back-and-forth between the

manufacturer and agency. In Horn, for example, after the

manufacturer submitted its PMA application to FDA it

“supplemented it in the ensuing three years with a substantial

amount of amendments and responses to FDA questions.”

Horn, 376 F.3d at 170.

Even after a manufacturer satisfies any deficiencies flagged

by FDA, the agency generally refers the application to an

independent committee of experts, which holds a public

meeting to review the device and prepares a report and

recommendation to FDA on whether a device is safe and

effective. See 21 U.S.C. § 360e(c)(2); 21 C.F.R. pt. 14; id

§§ 814.42, 814.44; FDA, Review Process, supra. After the

committee issues its recommendation,-FDA considers that

information along with the other submissions to determine

whether the device’s “safety and effectiveness” has been

demonstrated through “valid scientific evidence.” 21 C.F.R.

§ 860.7; FDA, Review Process, supra (recognizing that even

after a committee recommendation, FDA may require

additional submissions from the manufacturer).*

* Since Lohr, FDA also has increased its scrutiny of a limited set of

§ 510(k) devices. In FDAMA, Congress augmented the § 510(k) process

by allowing manufacturers an option of gaining clearance by utilizing

conformance with FDA recognized standards to demonstrate safety and

efficacy equivalent to a predicate device. See 21 U.S.C. § 360d(c)(1); id

§ 360c(i1(A)ii); FDA, CDRH, Recognition and Use of Consensus

Standards; Final Guidance for Industry and FDA Staff (June 20, 2001),

available at www.fda.gov/cdrh/ost/guidance/321.html (“In the case of

510(k)s, information on conformance with recognized consensus

standards may help establish the substantial equivalence” and “can be

1]

If FDA determines that a manufacturer has provided

reasonable assurance that the device is safe and effective for

its intended use, the agency then issues a letter order

incorporating by reference the submissions pertaining to this

regulatory process and permitting the manufacturer to market

the device in the United States. It does so after a

manufacturer demonsiraies that the manufacturing and

processing methods and facilities conform to FDA

requirements, and that the proposed labeling is not false or

misleading. See 21 U.S.C. § 360e(d)(2); 21 C.F.R. § 814.45.

Thereafter, as described below, the manufacturer may not

alter design, labeling, or manufacturing process in any way

that would affect the safety or effectiveness of the device or

“is inconsistent with any conditions to approval specified in

the PMA approval order for the device” without FDA

approval. /d. § 814.80.

B. FDA Exercises Substantial Post-Marketing Over-

sight Of Medical Devices.

After a PMA application is approved, FDA’s compre-

hensive oversight continues—and has been enhanced further

in recent years. See, e.g., 21 C.F.R. § 814.44; FDA, Review

Process, supra. For instance, the manufacturer may have to

satisfy further conditions of approval for the device to remain

on the market. 21] C.F.R. §814.82(a). As noted, a

manufacturer may not change the approved product design,

labeling, or manufacturing process in any manner that would

affect the safety or effectiveness of the device without FDA

approval. /d § 814.80; id § 814.39 (requiring prior FDA

approval for most modifications). The manufacturer is

subject to audit and inspection by FDA. See 21 U.S.C.

§§ 360h, 360i, 360); 21 C.F.R. §§ 814.80, 814.82, 814.84.

FDA’s oversight of safety issues continues post-marketing,

as the device moves from the realm of clinical study to

used to show that the new device is as safe and effective as the predicate

in the areas covered by the standards.”).

12

broader, real-world clinical use. As the FDA Deputy

Commissioner has explained, “even for a product that is

rigorously tested preapproval, some risks will become

apparent only after approval, when the product is used in tens

of thousands or even millions of patients in the general

population.” Scott Gottlieb, Latest Trends in FDA Practice,

878 PLI/Pat 525, 536 (2006). This can occur, for example,

with respect to rare side effects. See Muni, supra, at 138-39.

As the American Medical Association has long recognized,

FDA’s “post marketing surveillance outside of formal studies

constitutes a vital activity in ensuring the safety of drugs and

devices.” Am. Med. Ass’n, Reporting Adverse Drug and

Medical Device Events: Report of the AMA’s Council on

Ethical and Judicial Affairs, 49 Food & Drug L.J. 359, 360

(1994). Of course, if Congress instead had enacted a different

regulatory system that effectively “forbid marketing of a

[device] until all long-term consequences and interactions are

identified through formal research{, it] would impose

unacceptable costs in the form of untreated or inadequately

treated illness.” /d.

FDA has a continuing role in notifying healthcare

professionals (and affected individuals) of risks presented by

medical devices, see 21 U.S.C. § 360h(a), requiring

manufacturers to repair or replace defective devices, id.

§ 360h(b), instituting recall campaigns, id § 360h(e),°

overseeing required recordkeeping and reports of adverse

reactions and injuries associated with devices, id. § 360i, and

requiring post-market surveillance of devices, id § 360j. In

* FDA has different classes of “recall,” most of which do not involve a

product’s removal from the market, and which range from addressing

potentially serious issues (Class |) to simply correcting matters that “are

unlikely to cause any adverse health reaction” (Class Ill). FDA, FDA

Recall Policies (June 2002) available at www.cfsan.fda.gov/~ird/

recall2.html; accord FDA, CDRH, FY 2006 Highlights 30 (2006); see 21

C.F.R. § 7.3(g)-(h); Muni, supra, at 141 (stating there are approximately

1,000 “recalis” per year yet only 10-20 per year are designated as Class I).

13

addition, FDA may revoke PMA approval if it subsequently

determines, inter alia, that a device is no longer safe and

effective or that the manufacturer has not satisfied

postapproval requirements. See id § 360e(e); 21 C.F.R.

§ 814.46. Furthermore, FDA can invoke injunctive relief,

seizure, criminal, and civil monetary penalty options for non-

compliance. See 21 U.S.C. §§ 332, 333.

Moreover, since Lohr was decided, FDA has enhanced

post-approval oversight. See generally Daniel G. Schultz,

M.D., Director of FDA’s CDRH, Medical Device Safety:

FDA’s Postmarket Transformation Initiative, 62 Food &

Drug L.J. 593, 593 (2007) (“[W]e have instituted significant

changes over the past few years in our approach to postmarket

medical device issues.”); id. at 595 (stating that the measures

rely on “expertfise]” in all aspects of medical device

development and regulation to “manage device-related public

health issues” including “comprehensive review of medical

device performance through a product’s lifecycle”); Muni,

supra, at 139 (discussing enhancements since 2002).

Among other initiatives, FDA has (i)issued guidance

regarding how post-approval studies are to be conducted, see,

e.g., FDA, Guidance for Industry and FDA Staff - Procedures

for Handling Post-Approval Studies Imposed by PMA Order

(Aug. 1, 2007); (ii) utilized Public Health Notifications and

the “FDA Patient Safety News” program to disseminate

information about device-related risk, see Muni, supra, at

141; and (iii) supplemented the existing post-marketing

Medical Device Reporting (“MDR”) system, 21 C.F.R.

§§ 803.30, 803.50, with the Medical Device Safety Network

or “MedSun.” Schultz, supra, at 594; Muni, supra, at 139.

Launched in 2002, MedSun draws on active reporting from

practitioners in healthcare facilities across the United States

“of problems like close calls or the rejection of a device over

safety concerns.” MedSun; About MedSun, www.medsun.

net/about2.asp. As an interactive surveillance and compli-

ance program, when an issue is raised, “MedSun researchers

14.

work with each facility’s representatives to clarify the

situation and fully understand the problem. Reports are later

shared without facility identification so that clinicians can

take necessary preventative actions.” /d.

FDA has been ‘active in responding to potential “safety

signals” emitted by the reporting systems, as well as engaging

in compliance and enforcement where appropriate. See

Schultz, supra, at 593 (“over the past five years, we have seen

an increase in the number of adverse event reports received”).

For instance, FDA recently reported that in the last quarter of

fiscal year 2006 alone its “safety analysts identified over 100

new and ongoing medical device safety issues” and

“responded to over 100 consult requests related to

information in the reports database.” FDA, CDRH, FY 2006

Highlights 28 (2006); see also id. at 29 (discussing fiscal year

2006 actions including ordering postmarket surveillance

studies, continuing ongoing surveillance, and issuing warning

letters for postmarket surveillance violations). During 2006,

CDRH took at least 55S enforcement actions, including four

seizures and an injunction, and initiated hundreds of

correction actions. /d. at 30.

During this process, collaboration between the agency and

the manufacturer is integral to ensuring patient safety:

[T]his cooperation between FDA and its regulated

industries has been demonstrated to be the quickest and

most reliable method to remove potentially dangerous

products from the market. This method has been

successful because it is in the interest of industry, as well

as FDA, to get unsafe and defective products out of the

hands of clinicians and patients as soon as possible.

{[Muni, supra, at 140.}

Furthermore, FDA has the expert perspective necessary to

ensure that the correct measure of oversight is employed. See

id. at 141 (noting that, in some cases, inspections may be

15

necessary whereas, in others, spot checks alone might be

sufficient to cure the identified problem).

* *+ © *

Given FDA’s continuing pre-approval scrutiny of PMA

devices, see Lohr, 518 U.S. at 477, and the increase in post-

approval! oversight, the potential for siaie-law interference has

grown since this Court last considered the MDA in Lohr. In

this light, the case for preemption in the PMA context is even

stronger than this Court previously suggested. Cf. id. at 478-

79 (contrasting § 510(k) review with PMA).

State-law tort actions, in contrast, cannot promise the

swiftness with which FDA can act; fail to account for the

safety-efficacy-innovation balance both Congress and FDA

have sought to strike; and lack the expert perspective central

to fulfilling the multiple objectives of Congress. Expansive

state tort liability not only provides a form of additional

regulation, but would “regulate” in a manner completely

‘untethered to the designs of the MDA and PMA process such

that it undoes their purposes.® Moreover, lay juries are not

institutionally well-equipped to make the kinds of nuanced

risk-benefit calculations and scientific judgments Congress

° Petitioner’s amici, including the American Association for Justice and

Public Justice, admit that tort liability functions as a form of regulation.

Br. Amici Curiae Am. Ass'n for Justice et al. 18-19. Although they posit

that the enhanced state-law liability they seek “promot{es] optimal

deterrence,” they do not (and cannot) reconcile their position with the

deterrence balance already reached by FDA, which is charged by

Congress with balancing considerations of safety, efficacy, and

innovation. /d at 18 (internal quotation omitted). To have state tort

liability promote “optimal deterrence” that hinges on “minimiz[ing] the

sum of accident costs” would necessarily unravel the PMA regime, which

purposely allows—and encourages—devices with the greatest degree of

risk to come to market under the expert agency's close oversight. In the

end, petitioner and her amici seek to have state law second-guess and

supplant the public health balance struck by Congress and the individual

balancing determinations reached by FDA as to particular devices.

16

has charged FDA—as the expert federal agency—with

making. For example, mock jury studies explain that lay

jurors tend to overestimate the level of risk of low probability

events, overreact to risks posed by new technology, and

punish defendants for undertaking risk-benefit analyses. See

Reid Hastie & W. Kip Viscusi, What Juries Can’t Do Well:

The Jury’s Performance As a Risk Manager, 40 Ariz. L. Rev.

901, 909-11 (1998).’

Il. EXTENDING STATE-LAW LIABILITY WOULD

UNDERMINE THE BALANCE OF PUBLIC

HEALTH OBJECTIVES REFLECTED IN THE MDA.

The enhanced state-law liability petitioner seeks would

threaten the calibrated public health balance at the heart of the

MDA. On the one hand, the MDA seeks to protect patients

by ensuring that medical devices are marketed in the United

States only after FDA determines that they meet the requisite

threshold of safety and effectiveness based on valid scientific

evidence. See, e.g., 21 U.S.C. §§ 360c(a)(1), 360e(d)(2); 21

C.F.R. § 860.7; FDA, FDA’s Mission Statement, www.

fda.gov/opacom/morechoices/mission.html (FDA’s mission

includes “protecting the public health by assuring the safety,

efficacy, and security of . . . medical devices”).

On the other hand, the MDA recognizes that device

development, innovation, and availability are essential to

improving public health. Indeed, Congress expressly sought

to foster innovation in medical device technology and “to

encourage, to the extent consistent with the protection of the

public health and safety and with ethical standards, the

discovery and development of useful devices intended for

” See, e.g., W. Kip Viscusi, Jurors, Judges, and the Mistreatment of

Risk By the Courts, 30 J. Legal Stud. 107, 111-14 (2001). (finding mock

jurors misapplied cost-benefit analyses particularly in low-probability,

large-loss cases); W. Kip Viscusi, Corporate Risk Analysis: A Reckless

Act?, 52 Stan. L. Rev. 547, 588 (2000) (jury awards and attitudes skeptical

of risk-benefit analyses).

17

human use.” 21 U.S.C. § 360j(g)(1). As the Senate

Committee Report explains:

As medicine progresses, as research makes new

breakthroughs, an increasing number of sophisticated,

critically important medical devices are being developed

and used in the United States. These devices hold the

promise of improving the health and longevity of the

American people. The Committee wants to encourage

their research and development. [S. Rep. No. 94-33, at 2

(1975).].

Such innovation leads to more effective, safer, and more

affordable treatments. See id.

The express preemption provision at issue here arose in this

context of balancing important public health objectives.*

Addressing the propriety of the express preemption provision

in light of the importance of device development, the House

Report counseled that “if a substantial number of differing

requirements applicable to a medical device are imposed by

jurisdictions other than the federal government, interstate

commerce will be unduly burdened,” and preemption will be

necessary to ensure that “innovations in medical device

technology are not stifled by unnecessary regulation.” H.R.

Rep. No. 94-853, at 12, 45 (1976); see id. at 10 (protecting

the public from unsafe devices is “counterbalanced by an

equally strong conviction that excessive or ill-conceived

Federal device regulation would stifle progress in this field”);

id. at 12 (stating that MDA “reflects the need to develop

innovative new devices”); Hearings on H.R. 5545, H.R. 974

& S. 510 Before the Subcomm. on Health & the Environment

of the H. Comm. on Interstate & Foreign Commerce, 94th

* The express preemption provision appears at 21 U.S.C. § 360k(a).

The briefs of respondent and its other amici, as well as the Second

Circuit’s decision below ably detail! the application of this provision to the

PMA context. We will not burden the Court by repeating that analysis

here.

18

Cong. 201 (1975) (Statement of Rep. Fred Rooney) (urging

passage of the MDA to replace the “piecemeal” and “after the

fact” approach typifie4 by then-existing judicial remedies).

In 1990, Congress reaffirmed that its goals included

encouraging medical device development to flourish when it

amended the MDA. See Safe Medical Devices Act of 1990,

Pub. L. No. 101-629, 104 Stat. 4511 (“SMDA”). “Simply

put, the [MDA] sought to avoid overregulation, thus

eliminating unnecessary resource costs to industry and

government, foster incentives to encourage innovation in a

relatively youthful industry and, most importantly, provide

the public reasonable assurances of safe and effective

devices.” S. Rep. No. 101-513, at 13 (1990).°

Following Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996),

Congress again sought to encourage innovation through the

Food and Drug Administration Modernization Act of 1997

(“FDAMA”). There, Congress further refined FDA’s

mission, requiring the agency, inter alia, to “promote the

public health by promptly and efficiently reviewing clinical

research and taking appropriate action on the marketing of

regulated products in a timely manner.” 21 U.S.C.

§ 393(b)(1). Indeed, “[a] central purpose of the [FDAMA] is

‘to ensure the timely availability of safe and effective new

products that will benefit the public and to ensure that our

Nation continues to lead the world in new product innovation

and development.’” FDA, The Least Burdensome Provisions

of the FDA Modernization Act of 1997: Concepts &

* Statements by a cross-section of members of Congress echo these

objectives. See, e.g., 136 Cong. Rec. $15205, S15211 (daily ed. Oct. 12,

1990) (statement of Sen. Kennedy) (objectives include “encourag[ing]}

technological innovation”); id at S12493 (daily ed. Aug. 4, 1990)

(statement of Sen. Dodd) (MDA “‘is structured to guard against excessive

governmental restrictions which might inhibit innovation in the

development and advancement of biomedical products”); id at $17459

(daily ed. Oct. 27, 1990) (statement of Sen. Hatch) (legislation “balance[s]

the need for regulation with the benefits of innovation’).

19

Principles; Final Guidance for FDA & Industry (Oct. 4,

2002) (quoting S. Rep. No. 105-43 (1997)) (“Congress’[s]

goal was to streamline the regulatory process (i.e., reduce

burden) to improve patient access to breakthrough tech-

nologics.”), available at www.fda.gov/c4rh/ode/guidance/

1332.html.

The state-law liability petitioner seeks to impose would

trigger, or exacerbate, harmful effects contrary to these

congressional purposes. These effects include discouraged

innovation, diminished availability, increased costs, and

defensive labeling—each of which would undermine public

health. '°

A. State Tort Liability Stifles Innovatior Of Impor-

tant And Life-Saving Medical Devices.

The state tort liability for which petitioner advocates would

stifle medical device innovation, thereby exacerbating an

already serious “pipeline problem” in the development of

important medical devices. Robust research and development

is the catalyst for safer devices and new devices that may

address previously untreatable or poorly controlled

conditions. Indeed, the Medtronic catheter at issue here, like

all Class III medical devices, is so-classified because it is

used “in supporting or sustaining human life.” 21 U.S.C.

§ 360c(a)(1)(C)(ii)(1). Congress subjected these devices to

the stringent federal regulatory oversight of the PMA process

because they intrinsically “present[] a potential unreasonable

'° Although not presented in this appeal, this is not to suggest that all

State tort claims with respect to a PMA-approved medical device

necessarily would be preempted. It may be the case that certain

manufacturing flaw claims—those premised not on a challenge to the

overall FDA-approved manufacturing process but on the specific device

the patient received containing a manufacturing flaw reflecting a deviation

from the FDA-approved design and manufacturing process—would

survive a preemption analysis. See, e.g., Pet. App. 3Sa (addressing

manufacturing flaw claim that otherwise failed to survive summary

judgment).

20

risk of illness and injury.” /d. § 360c(ay(1)(C)(ii)(I1); see

Lohr, 518 U.S. at 477 (juxtaposing § 510(k) review and

explaining that FDA takes, on average, 1,200 hours to review

a PMA application). Yet Congress freed such devices from

additional state regulatory requirements, thereby facilitating

continued innovation.

AdvaMed’s members alone spend roughly $9 billion

annually on research and development to facilitate device

innovations. Even a decade ago, this trajectory was evident:

In 1995, the average research and development expense

underlying a PMA-approved device was approximately $75

million, a three-fold increase from 1990. See William W.

George, Medical Technology and Competitiveness in the

World Market: Reinventing the Environment for Innovation,

50 Food & Drug L.J. 477, 480 (1995). In addition to

threshold research and development costs, the PMA

application itself imposes significant costs. The United States

Government Accountability Office found that user fees

charged by FDA for PMA review of a device averaged over

$239,000 per device in 2005. GAO-06-62, Medicare Durable

Medical Equipment: Class Ill Devices Do Not Warrant a

Distinct Annual Payment Update 3 (Mar. 1, 2006). And, over

ten years ago, FDA estimated that PMA applications and

supplements cost the industry approximately $35 million per

year. See 62 Fed. Reg. 51112, 51113 (Sept. 30, 1997).

These costs, and the length of PMA approval, contribute to

a background “pipeline problem” in bringing new and

innovative medical products to market that is further

exacerbated by state tort liability risks. See generally FDA,

Innovation or Stagnation, supra, at | (recognizing a “growing

crisis in moving basic discoveries to the market where they

can be made available to patients”); id. (noting the decrease in

the number of device applications). FDA recently expressed

its “growing concern that many of the new basic science

discoveries made in recent years may not quickly yield more

effective, more affordable, and safe medical products for

21

patients. This is because the current medical product

development path is becoming increasingly challenging,

inefficient, and costly.” /d. ‘

The American Medical Association has observed that

“{ijnnovative new products are not being developed or are

being withheld from the market because of liability concerns

or inability to obtain adequate insurance.” Am. Med. Ass’n

Bd. of Trs., Impact of Product Liability on the Development

of New Medical Technologies | (1988). It remains difficult to

properly insure against state tort risks. '!

“[M]edical equipment companies are increasingly reluctant

to innovate because of concern about suits with larger

numbers of claimants and extraordinary awards.” Lawrence

Tancredi & Dorothy Nelkin, Medical Malpractice and Its

Effect on Innovation 251, 260, in The Liability Maze (P.W.

Huber & R.E. Litan eds., 1991). “The threat of . . . enormous

awards has a detrimental effect on the research and

development of new products. Some manufacturers of

prescription drugs, for example, have decided that it is better

to avoid uncertain liability than to introduce a new pill or

vaccine into the market.” Browning Ferris Indus. of Vt., Inc.

v. Kelco Disposal, Inc., 492 U.S. 257, 282 (1989) (O’Connor,

J., concurring in part and dissenting in part).

'' See, e.g., David Dial et al., Tort Excess 2005: The Necessity for

Reform from a Policy, Legal and Risk Management Perspective 9-10

(2005) (“[t}he unpredictable and catastrophic nature of U.S. tort

exposures... has made insuring large-scale liability risks substantially

more challenging” in recent years, and “the scarcity of coverage” for

pharmaceuticals “has reached critical. proportions”); Scott E. Harrington,

Tort Liability, Insurance Rates, and the Insurance Cycle, Brookings-

Wharton Papers on Financial Services (2004) (“An expanding tort

liability system that entails substantial uncertainty about the cost of future

claims will inevitably lead to increasingly expensive [insurance]

coverage.”).

22

Numerous commentators have remarked on _ this

phenomenon.’? For example, Professor Michael E. Porter of

the Harvard Business School has explained that in the United

States “product liability is so extreme and uncertain as to

retard innovation” because “the legal and regulatory climate

places firms in constant jeopardy of costly and, as

importantly, lengthy product liability suits” and “goes beyond

any reasonable need to protect consumers.” Michael E.

Porter, The Competitive Advantage of Nations 649 (1990)

(emphasis added). State tort exposure’s “profound negative

impact on the development of new medical technologies,”

AMA, Bd. of Trs., supra, at 1, unfortunately reflects a

reasoned response by manufacturers to pull back in the face

of unreasonable and unpredictable liability.

Similarly, the threat of liability skews device-development

incentives in a manner that can undermine public health. For

example, FDA has recognized that rising costs create

incentives for manufacturers to focus on low risk, high profit

products. See generally FDA, /nnovation or Stagnation

(“Because of rising costs, innovators often concentrate their

efforts on products with potentially high market return.”). At

the same time, manufacturers are discouraged from

? See, e.g., Louis Lasagna, The Chilling Effect of Product Liability on

New Drug Development in The Liability Maze 34, 337, supra (“concern

about liability has led to serious delays in product development and to

increased liability insurance costs”); W. Kip Viscusi & Michael J. Moore,

An Industrial Profile of the Links Between Product Liability & Innovation

in The Liability Maze 8\, 83, 94-96, supra (recognizing that product

liability can cause lags in drug development and that losses exceeded

premiums for insurers of pharmaceutical companies throughout the

1980s); W. Kip Viscusi, et al., A Statistical Profile of Pharmaceutical

Industry Liability, 1976-1989, 24 Seton Hal! L. Rev. 1418, 1434 (1994)

(“The pharmaceutical industry, which is ‘one of the most innovative

industries in the economy, has been particularly hard hit by the surge in

liability costs.”); id at 1419 (recognizing that a National Academy of

Science panel also found that increased liability costs had discouraged

innovation in the pharmaceutical industry).

23

developing medical treatments which, despite potentially life-

saving benefits, also pose heightened risks. See id. (“For very

innovative and unproven technologies, the probability of an

individual product’s success is highly uncertain, and the risks

are perceived as extremely high.”); see also id. (“[iJnventors

of candidate artificial organs, bioengineered tissues, and other

novel devices face serious challenges and uncertainties”).

B. State Tort Liability Threatens The Availability

Of Significant Medical Treatments.

The specter of state liability threatens the availability of

important medical treatments and can have a chilling effect

on marketing treatments in the United States that are available

abroad. Historically, this phenomenon has been particularly

acute in the area of women’s health.

Bendectin, the only prescription medication approved by

FDA for treating significant morning sickness during

pregnancy, provides a classic example of this dynamic. See

Lasagna, supra, at 337-41. Extreme morning sickness can

have a devastating medical impact both on the pregnant

woman and on the developing child and requires medical

treatment. Although no scientifically reliable study ever

found a causal relationship between the medication and birth

defects, and FDA repeatedly found the product to be safe and

effective, the manufacturer faced nearly 2,000 tort suits

seeking to recover for alleged birth defects. See generally

Dep’t of Health & Human Servs., FDA, Determination That

Bendectin Was Not Withdrawn From Sale For Reasons Of

Safety Or Effectiveness, 64 Fed. Reg. 43190 (Aug. 9, 1999).

And even though its manufacturer was successful in

defending the litigation on the merits, Bendectin was

withdrawn from the market in 1983, in light of $18 million

per year insurance and legal costs, as compared to only $20

million in annual sales. See, eg., Marvin E. Jaffe,

Regulation, Litigation and Innovation in the Pharmaceutical

Industry: An Equation for Safety, in Product Liability &

Innovation: Managing Risk in an Uncertain Environment

24

120, 126 (J.R. Hunziker & T.O. Jones eds., 1994); Lasagna,

supra, at 338 (“[Bendectin’s] doom was traceable to the flood

of legal actions that followed assertions in the scientific

literature that Bendectin could produce congenital defects in

- both animals and humans.”).

This experience has had a ripple effect in discouraging the

future development of morning sickness treatments in the

United States. See Lasagna, supra, at 341 (stating that after

the Bendectin experience “[i]t seems safe to predict” that no

manufacturer will seek FDA approval for a morning sickness

drug). In the absence of a viable treatment such as Bendectin,

“treatment for severe nausea during pregnancy” accounted for

“nearly $40 million of the nation’s annual hospital bill” in

1994 alone, and “[ijt is unlikely that any new drug will be

developed to close this therapeutic gap.” Jaffe, supra, at 126.

Moreover, since the withdrawal of Bendectin from the United

States market, hospitalizations due to severe morning sickness

have increased three-fold in the United States, while such

hospitalizations have declined, for example, in Canada, where

the drug has remained available under the name “Diclectin.”

FDA/NIH Conference, Clinical Pharmacology During

Pregnancy Addressing Clinical Needs Through Science (Dec.

4, 2000), available at www.fda.gov/cder/present/

clinpharm2000/1204preg.txt; see C. Ineke Neutel, Variation

In Rates of Hospitalization for Excessive Vomiting In

Pregnancy By Bendectin/Diclectin Use in Canada, available

at www.nvp-volumes.org/p1_9.htm (“What is then the impact

of the withdrawal of Bendectin? The increase of

hospitalization for [excessive vomiting in pregnancy] for

thousands of women for more than a decade led to increased

cost and hardship to the women and their families, as well as

to the healthcare system.”).

The withdrawal of Norplant from the United States market

also illustrates the point. Norplant, a set of implanted rods

that release a hormone to inhibit ovulation, was acclaimed

upon introduction to the market in 1991 and had

25

approximately one million users by 1995. See Linda A.

Johnson, Wyeth Won't Resume Norplant Sales, Associated

Press Online, July 26, 2002; Albert George Thomas Jr. &

Stephanie M. LeMelle, The Norplant System: Where Are We

in 1995, 40 J. Fam. Prac. 125, 125 (1995). FDA repeatediy

found Norplant to be an effective method of birth control.

See, e.g., Johnson, supra; Syivia A. Law, Sex Discrimination

& Insurance for Contraception, 73 Wash. L. Rev. 363, 371

(1998) (“Norplant has been subject to extensive testing and

appears to be highly effective and safe.”). Yet Norplant was

withdrawn from the United States market in August 2000,

amidst allegations that certain individual lots might not be

effective. See Johnson, supra.

Despite positive public health findings by FDA, the World

Health Organization, and the American Society of

Reproductive Medicine, commentators have observed that

Norplant was “killed off,’” as lawsuits based on “untru{ths]”

and “misperceptions” hurt sales, and Norplant’s manufacturer

made a “business decision” to no longer market the product.

Johnson, supra; Gina Kolata, Will the Lawyers Kill Off

Norplant?, N.Y. Times, May 28, 1995, at C1.'° Even the

company’s “‘legal success has come at a steep price because

lawsuits are time consuming, expensive and have a chilling

effect on research.’” Morrow, supra (quoting manufacturer’s

North American President).

In the end, ligation stifled a medical treatment that was

beneficial to many women, leaving in its wake a poor climate

for future development of contraceptive devices. As Dr.

Felicia Stewart, ther:-deputy assistant for population affairs at

'? Over the course of Norplant litigation, more than 50,000 plaintiffs

purportedly sued the company. See Contraceptive Maker Wins Woman's

Suit Over Side Effects, N.Y. Times, Sept. 5, 1998. No plaintiff won a jury

verdict and the manufacturer won multiple trials, numerous summary

judgment motions, and had tens of thousands of cases dismissed. David J.

Morrow, Maker of Norplant Offers a Settlement in Suit Over Effects, N.Y.

Times, Aug. 27, 1999.

26

the Department of Health and Human Servives, recognized

““fijt’s clear watching what happened with Norplant why a

company thinking about marketing a new contraceptive

product might say it isn’t worth making an investment.’”

Kolata, supra; see, e.g., Johnson, supra (noting that the

manufacturer also declined to introduce a successor device to

the United States market although it had done so abroad’;

Anna Biernbaum, Note, Shielding the Masses: How Litigation

Changed the Face of Birth Control, 10 S. Cal. Rev. L. &

Women’s Stud. 411, 412-13 (2001) (“Due to the bad publicity

Norplant received, few women are using this safe and

effective form of birth control.... [T]here is no longer an

incentive for drug companies to research and market new

birth control devices, since the threat of litigation is

something that they are keenly aware of in the wake of

Norplant.”). Under the rule for which petitioner and her

amici advocate, there is no reason to believe that the threats to

innovation will be any less severe with respect to PMA-

approved medical devices.

C. State Tort Liability Increases Price And Under-

mines The Affordability Of Medical Treatments.

State tort liability increases the price of medical therapies.

See, e.g., Barbara Marsh, The Product Liability Morass;

Complications Set In; Big Suppliers Pulling Out of Medical

Market, L.A. Times, May 6, 1995, at Al. For example,

manufacturers of certain catheters, heart valves and other

devices were forced to withdraw from the market when

silicone prices increased to $100 per pound from $6 per

pound due to product liability litigation. /d Vaccines

provide another example of the point. Between 1980 and

1989, the wholesale price of most vaccines doubled or tripled;

in contrast, the price of two vaccines with a higher perceived

liability potential increased by factors of 40 and seven in the

same period. Richard L. Manning, Changing Rules in Tort

Law and the Market for Childhood Vaccines, 37 J. L. & Econ.

247, 254-57, 273 (1994) (describing, respectively, the

27

increased price of the diphtheria, pertussism and tetanus

(DPT) vaccine and the oral polio vaccine).

In setting the price of medical therapies, not only must a

manufacturer recoup its research, development, and

production costs through device sales—a goal managers of

publicly held companies may have a fiduciary duty to

pursue—but it also must insure against litigation risks. As

described above, companies “often have to self-insure”

against the prospect of large tort awards in a climate of

“present and future risks that are almost impossible to

quantify but that may be potentially large enough to include

financial catastrophe for the manufacturer.” Lasagna, supra,

at 337. Moreover, endeavoring to comply with 50-plus

divergent state standards governing the marketing, design,

and labeling of a device—trather than a single federal

standard—would pose considerable incremental costs that

would be reflected in increased price.

D. State Tort Liability Encourages Defensive Label-

ing And Overwarning That Undermine Rational

Prescribing By Physicians.

FDA has cautioned that state common-law tort actions

which “encourage, and in fact require, lay judges and juries to

second-guess” FDA’s balancing of the benefits and risks of a

specific device, create pressures for “‘defensive labeling’ . . .

resulting in scientifically unsubstantiated warnings and

underutilization of beneficial treatments.” Br. Amicus Curiae

of the United States at *25-26, Horn, available at 2004 WL

1143720 (filed 3d Cir. May 14, 2004) (recognizing potential

harm to public health); cf. 71 Fed. Reg. 3922, 3935 (Jan. 24,

2006) (“[A]dditional [state-law] requirements for the

disclosure of risk information are not necessarily more

protective of patients. Instead, they can erode and disrupt the

careful and truthful representation of benefits and risks that

prescribers need to make appropriate judgments about drug

use.”).

28

In an attempt to avoid state liability where plaintiffs allege

they were not adequately warned of a particular risk,

manufacturers have an inappropriate incentive to disregard

FDA’s expert judgment about the proper balance of risk

information and instead warn of each and every conceivable

risk of using the product, no matter how remote. This creates

a serious danger that manufacturers include warnings with

respect to medical devices that are not scientifically

substantiated and overemphasize warnings as to marginal

risks—thereby inappropriately de-emphasizing more serious

risks.

Defensive labeling is far from benign. A _ physician’s

prescription decision is rational only when he or she has an

accurate understanding of the risks and benefits of the

prescription device under consideration and can compare

those risks and benefits to those associated with other

treatment alternatives. A fog of unmanaged warnings,

unfiltered by FDA’s expert judgment, impairs the ability of

prescribing physicians to properly assess whether the

potential benefits of the therapy for a particular patient

outweigh its potential risks. Defensive labeling may cause

physicians to prescribe a treatment that is riskier than they

realize because serious risks are obscured in a blur of low

risks, and may ultimately dissuade physicians from

prescribing (and patients from undergoing) therapies that

have more potential good than harm for a given patient

because of unsubstantiated fears. '

'* See, e.g., Horm Amicus Br., supra, at 25-26; Brooks, 273 F.3d at 797;

W. Kip Viscusi, /ndividual Rationality, Hazard Warnings, and the

Foundations of Tort Law, 48 Rutgers L. Rev. 625, 665-66 (1996)

(“Excessive wamings are not innocuous. If wamings indicate a high

relative risk when there is none, they will distort relative product

comparisons, thus compromising credibility. Similarly, if warnings are

included for inconsequential risks, they will serve to further dilute the

warnings for the real hazards that should be identified to consumers.”);

Lars Noah, The Imperative to Warn: Disentangling the “Right to Know”

29

Inappropriate incentives with respect to defensive warnings

are particularly acute given that “[t]ime and again, one sees

how an avalanche of lawsuits can be set loose by a tiny

hiccup of error in scientific research.” Peter Huber, Junk

Science in the Courtroom, Forbes, July 8, 199i, at 68. The

following example illustrates the point:

[L]awyers won a spectacular $5.1 million verdict ...

largely on the strength of a single study that had very

tentatively suggested that spermicides might cause birth

defects. Not quite two years after the verdict, however,

the several authors of that study spoke out again. One

acknowledged that their work “was not corroborated by

subsequent studies,” and that their “study’s definition of

exposure to spermicide near the time of conception was

grossly inaccurate.” Another conceded: “I believe our

article should never have been published. In our present

_ litigious environment, the reservations and qualifications

written into a published report are often ignored, and the

article is used as ‘proof of a causal relationship.” [/d.'*]

Tort risks such as these encourage “defensive labeling.”

From the “Need to Know” About Consumer Product Hazards, \\ Yale J.

on Reg. 293, 380 (1994) (discussing dangers of overwarning and

recognizing that FDA “generally frowns upon and will not approve

defensive labeling”).

'S A similar research “blip” occurred recently with respect to drug-

coated heart stents—stents with a drug coating to help minimize re-

narrowing of heart structures following surgery. Last year, researchers

presented preliminary data at academic conferences “that suggest[ed] a

small but significant increased risk of stent thrombosis [i.e., blood clots] in

patients who have drug-eluting stents” as opposed to bare-metal stents

FDA, FDA Statement on Coronary Drug-Eluting Stents (Sept. 14, 2006).

FDA concluded that the drug-coated stents remained safe and effective,

and pledged further study. See id. Soon thereafter, the same researchers

concluded (after completing an additional year of study) that there was no

Statistically significant difference in the risk posed by drug-coated stents.

See Maria Cheng, New Study: Drug-Coated Stents Not So Bad, Associated

Press Online, Sept. 2, 2007.

30

CONCLUSION

For these reasons, as well as those set forth in respondent’s

brief, the decision below should be affirmed.

MICHAEL W. DAVIS

SIDLEY AUSTIN LLP

One South Dearborn Street

Chicago, Illinois 60603

(312) 853-7000

Counsel for Amici Curiae

AdvaMed and DRI

CHRISTOPHER L. WHITE

ADVANCED MEDICAL

TECHNOLOGY ASSOCIATION

701 Pennsylvania Ave.,

N.W.

Suite 800

Washington, D.C. 20004

(202) 783-8700

Counsel for Amicus Curiae

AdvaMed

October 19, 2007

Respectfully submitted,

CARTER G. PHILLIPS

DANIEL E. TROy*

REBECCA K. Woop

EAMON P. JOYCE

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

Counsel for Amici Curiae

AdvaMed and DRI

PAUL J. MALONEY

WILLIAM J. CARTER

CARR MALONEY P.C.

1615 L Street, N.W.

Suite 500

Washington, D.C. 20036

(202) 310-5500

Counsel for Amicus Curiae

Medmarc

* Counsel of Record