Ripped from the Headlines: Medmarcs Risk Management Team Discusses - - PowerPoint PPT Presentation
Kathryn T. Klaus, Esq. Courtney S. Young, Esq. October 22, 2019 Ripped from the Headlines: Medmarcs Risk Management Team Discusses Todays Top Life Sciences News Stories Agenda New Life Sciences Developments and the Response of
October 22, 2019 Kathryn T. Klaus, Esq. Courtney S. Young, Esq.
Ripped from the Headlines: Medmarc’s Risk Management Team Discusses Today’s Top Life Sciences News Stories
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Agenda New Life Sciences Developments and the Response of Insurance Markets The Next FDA Commissioner Products Liability and Healthcare Medical Device Cybersecurity Lightning Round
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What’s going on?
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Hospital Liability Landscape
Manufacturers and other entities in the product supply chain can be held strictly liable for injury to end users. Over the years, several attempts have been made to impose products liability on hospitals as providers/suppliers
Courts have rejected these attempts on public policy grounds, concluding that whatever supply of products hospitals are undertaking is merely incidental to their main function of providing a service.
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Hospital Liability Evolving?
Probably not. Yet. Hospitals will still be shielded by virtue of long-standing public policy (and case law, in many states) concluding that the provision of products is merely incidental to the hospital’s primary function of delivery a service. However, as the activities hospitals undertake (3D printing, retaining the IP to products, developing products, direct-to-consumer advertising) begin to look more like that of true product sellers, these protective doctrines will likely be eroded.
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FDA Commissioner: Who’s Next? Scott Gottlieb, M.D.
Assumed office as FDA Commissioner on May 11, 2017 Resigned effective April 5, 2019
Leadership Priorities
Faster drug approval times Crackdown on tobacco and vaping
Profile
Seen as ambitious, too close with industry and industry lobbyists
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FDA Commissioner: Who’s Next? Ned Sharpless, M.D.
Assumed office as acting FDA Commissioner
Leadership Priorities
Intends to “maintain FDA’s current course of action in every area and proceed full speed ahead.”
Profile
Oncologist and former head of the National Cancer Institute Endorsed by multiple former FDA commissioners
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FDA Commissioner: Who’s Next? Stephen Hahn, M.D.
Radiation Oncologist and Chief Medical Executive, MD Anderson Cancer Center
Leadership Priorities
Unknown, but not unreasonable to expect a continued focus on drug approval times
Profile
Top choice of the administration, but lags behind Sharpless for medical community’s and former commissioners’ endorsements
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FDA Commissioner: Who’s Next?
The Federal Vacancies Reform Act only permits “acting” agency heads to remain in place for 210 days. The deadline to name a nominee is November 1st.
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Opioids – What’s going on?
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How are insurance markets responding? GL
Products/completed operations hazard exclusion
P/CO
Bodily injury Occurrence Expected/intended Exclusion
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How are insurance markets responding? Evolution of opioid-specific exclusions
BI only antagonist carve-outs Absolute Government proceedings exclusions
Creative approaches
Sub-limits, different deductible structures
Bottom line – Coverage becoming impossible to find Takeaways for life sciences companies
Scrutinize exclusions– make sure opioids are being excluded only to the extent they are “your product”
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Cannabis Products – What’s going on?
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Cannabis Market Global market
50 countries have legalized cannabis in some way Worldwide consumer spending on legal cannabis projected to reach $57 billion by 2027
New Frontier Data.
U.S. is world’s largest legal market
34 states have legalized medical marijuana $13 billion in retail sales in 2019
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U.S. Legal Cannabis Market
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How are insurance markets responding?
appetites.) McCarren-Ferguson Act
Business of insurance left to the states In those states where marijuana is legal, statutes generally legalize insuring it
Insurers still proceeding cautiously
No actuarial data Legal landscape still uncertain – federal/state divide
Boutique carriers popping up
Larger, national firms will likely wait
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How are insurance markets responding? Potentially Applicable Exclusions
Illegal acts Pollution
Distinguishing Among Product Types
Veterinary Uses Topicals vs. Ingestibles Are health claims being made?
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Medical Devices: Software as the Weak Link
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Remembering “WannaCry” 2017 global cyber attack in which hackers demanded ransom payments via Bitcoin in order to restore data access
Losses in the hundreds of millions to billions range Notably impacted was the UK National Health Service
storage refrigerators, OR equipment
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Cybersecurity and Products Liability Risk
Manufacturing Defect Design Defect Warning Defect
Your product does not effectively warn against hazards of which you knew or should have known. Something went wrong in the manufacturing process, which rendered the device less safe. There is a reasonably safer alternative design that you failed to use. You failed to effectively design the product to protect against cyber vulnerabilities and/or be interoperable without risk to other systems, networks, or components. You failed to warn me that a cyber vulnerability could result in bodily injury/ property damage. You failed to implement the appropriate security patch.
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Cybersecurity and Products Liability Risk Vulnerabilities are known to exist, particularly in devices that may be approaching their end of life Mitigate risk through preparedness
Regular security evaluation and patching Recall plan Crisis management plan
What is your product’s viable shelf life?
Data
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CBD – Is It Legal? 2018 Farm Bill
Removes hemp and hemp seeds from Schedule I of CSA Interstate transportation of hemp and hemp seeds
2018 Farm Bill regulations have not yet been written
2014 Farm Bill
Supply chain is critical for CBD
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Sales Rep Contact with Docs Declining
Half of physicians restrict visits from sales reps
Half of doctors say they never have a question for a rep that they can’t find the answer to themselves online
Physician Payment Sunshine Act What does this mean for life sciences companies?
Sales rep training Alternative methods of communication Scrutinize online content
See the DRG 2019 ePharma Physician Report.
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Drug Approvals: Another Record-Breaking Year
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Robotic Surgery & 5G
Surgical robot adoption has been relatively slow, partly because of technical limitations and the high demand for precision. Advances in processing and better data analysis could help make robotic surgery more effective The advent of 5G technology will make the connection fast enough to make robotic surgery possible form thousands of miles away.
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Vaping
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FDA’s Breakthrough Devices Program, 1 Year in Authorized in 21st Century Cures Act New pathway for the expedited approval of medical devices, diagnostics and certain combination products that aim to improve upon the safety of those currently on the market.