Posted 06 March 2015 | By Michael Mezher 

Boston Scientific Ordered to Pay Surgical Costs for Faulty Pacemakers

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A prominent European court has ruled that Boston Scientific’s German branch is responsible for paying the surgical costs associated with replacing faulty implantable devices made by one of the company’s subsidiaries.

In 2005, Guidant Corporation – which was acquired by Boston Scientific in 2006 – informed doctors it had identified potentially faulty components in three of its implantable products, two pacemakers and an implantable cardioverter defibrillator.

Main Proceedings

The main proceedings in the case brought to the Court of Justice, the EU’s highest court, stem from two cases being fought at German regional courts.

In the first case, Guidant discovered that a seal used in its Pulsar 470 and Meridian 976 pacemakers was potentially faulty. If present, the defective seal caused the devices to deplete their battery earlier than intended, which could pose a serious threat to patients using the device.

At the time, Guidant advised doctors to consider replacing the pacemakers, saying it would replace them free of charge, regardless of their warranty status.

AOK Sachsen-Anhalt, the insurer for two patients who replaced their affected pacemakers, brought Boston Scientific to a local court in Stendal, Germany, to get the company to pay for the surgical costs associated with replacing the pacemakers. The court found in in the insurer’s favor, ordering Boston Scientific to pay the requested amounts.

The second case involves a magnetic switch used in Guidant’s Contak Renewal 4 AVT 6 implantable cardioverter defibrillator. The switch in question could potentially get stuck in the “closed” position, which would prevent the device from functioning properly during a cardiac event.

In this case, Guidant advised doctors to deactivate the faulty switch. However, in the case of one patient, doctors replaced the device entirely. The patient’s insurer, Betriebskrankenkasse RWE, asked Boston Scientific to reimburse it for the costs associated with replacing the device. A regional court ruled against Boston Scientific, but following the company’s appeal, a higher court modified the ruling, reducing the amount the company would have to pay.

The European Court of Justice’s Ruling

In both cases Boston Scientific appealed the lower court's decision. The appeals were reviewed by the Federal Court of Justice of Germany, which raised two legal questions that it would pass on to the European Court of Justice to consider.

The fi

rst question in the case had to do with whether the devices could be considered defective based on the fact that there was knowledge of a risk of failure, without the specific devices being found faulty through individual examination. The second question pertained to whether the surgeries to replace the devices constitute an injury caused by a defective product.

To answer the first question, the court looked at the legal requirements in Article 6(1) of Council Directive 85/374/EEC, which states:

“A product is defective when it does not provide the safety which a person is entitled to expect, taking all circumstances into account, including:

1. the presentation of the product;
2. the use to which it could reasonably be expected that the product would be put;
3. the time when the product was put into circulation.”

The court found that for products such as pacemakers and defibrillators that carry a high risk, the “potential lack of safety” observed in the products would constitute a defect.

The court goes on to say, “Where it is found that products belonging to the same group or forming part of the same production series … have a potential defect, such a product may be classified as defective without there being any need to establish that that product has such defect.” Meaning that the potential for risk in this case is adequate to meet the criteria of a defect, and that it is not necessary to verify whether the replaced products actually contained the defects.

To answer the second question, the court referred to Articles 1 and 9(a) of Council Directive 85/374/EEC:

Article 1 – “The   producer shall be liable for damage caused by a defect in his product.”

Article 9 – “For the purpose of Article 1, 'damage' means:

1. damage caused by death or by personal injuries;”

The court found that the surgical removal of a product found to be defective meets the definition of damage in Article 9(a), meaning Boston Scientific would be held liable for paying the surgical costs for replacing the defective products.

The court also looked to Article 4 of the same directive, which states:

“The injured person shall be required to prove the damage, the defect and the causal relationship between defect and damage.”

For the case dealing with the Guidant pacemakers, the court found it clear that Guidant’s recommendation for the pacemakers to be replaced is sufficient to establish the causal relationship. However, in the case of the defibrillator, the court defers to the German courts to determine whether “the deactivation of the magnetic switch is sufficient for the purposes of overcoming a defective product, such as a pacemaker or implantable cardioverter defibrillator.”

The court does not make any ruling on the actual costs associated with the cases, as that determination will be left to the national court where the main proceedings are still pending.

 

Court of Justice Ruling