Product Liability risks in the fight against COVID-19

The pandemic has deeply affected many aspects of business life, including insurance requirements, cover terms and limits. However, one area potentially being overlooked, amidst a euphoria surrounding UK vaccine rollouts, is the latent risk, which some businesses have often unwittingly adopted, whilst assisting the fight against COVID-19. 

Tackling a global health crisis has seen resources within clinical trial environments, pushed to never before seen limits through a combination of the overriding necessity to find health solutions, the need to respond to Government demands and a desire to satisfy public expectation.

Drugs companies have asked Governments to directly indemnify them against possible future product liability actions. A process taking an average of 12 years – that of moving a drug from concept to approved-forpatient-use status, has been achieved in less than a year. All companies have the issues surrounding the drug Vioxx in their consciousness – a drug which was in use for five years, before links to strokes and cardiovascular problems became apparent. Thousands of deaths occurred and litigation event of almost $5 billion emerged.17 

As a leading insurer highlights, COVID-19 has not suspended product liability laws and organisations must ensure that patient safety is not compromised. Defences against future liability claims in the field of life sciences could be protracted and financially damaging. 

Whilst this is a major consideration for vaccine developers and product owners whose drugs are being tested against the disease, it also has ramifications for companies that threw themselves into the war on COVID-19, by converting products or processes, to create a wide range of possible solutions, from ventilators and hand gels, to PPE and protective screening. 

Many such products were produced under Emergency Use Authorisations (EUAs), which facilitated their market entry, by bypassing standard authorisation processes.18 With these sometimes taking a year, there simply was not time to approve products urgently required.

What many manufacturers may not have realised, is that they bear a regulatory responsibility for these products. For their entire lifespan, these products are now a potential liability for these businesses and it is their duty to monitor and maintain them. 

EUAs only allowed such products to be used during the pandemic, so manufacturers must withdraw them from use thereafter. In the meantime, they should reduce their risk, by ensuring correct product usage and no adaptations or uses other than those intended. Given the pressures faced by hospital staff, however, product manufacturers will probably find it difficult to ascertain how their products are being used in practice. 

The advice is for manufacturers to issue as many visible ‘warnings’ as possible, notifying authorities and any direct purchasers about correct product usage, reminding them of any possible negative effects of adaptations of that use and putting clear instructions for use on their websites. Keeping evidence of this is vital for any future defence, should a patient or their family sue in future. 

Knowing what stock is still in circulation after the pandemic, and how to recall it or insist on its withdrawal from use, is also problematic but an issue that must be tackled. Similarly, if a product had a shelf-life and that has expired, or is due to, this must also be addressed, through communication to customers who may still be holding stock. 

In some instances, Governments may have taken on the risk. Some manufacturers are protected through two Crown indemnities19, which the UK Government introduced, to prevent manufacturers of Rapidly Manufactured Ventilator Systems facing product liability actions. It is worth checking whether your product has this protection. 

However, others will not be protected in this way and, although there is a thought that governments may establish their own financial compensation schemes, through which to directly compensate victims of rushed procedures and products or drugs that slipped through quality controls, nothing is definite at present. 

For now, product manufacturers need to take all steps to ensure their quality management systems are robust and that instructions in relation to the use of their products are clear. They have a duty of care over the maintenance of their products and should find means of delivering on this legal expectation and encouraging users to keep maintenance top of mind. 

A conversation with your individual insurance broker about Product Liability and Recall Insurance is advised, if these covers are not in place and you are putting products into the market. The current situation is complex and that usually means that risks are elevated and more complicated than might be perceived. Analysing what yours are, is a good strategy, whatever type of product you produce.

17 https://www.chubb.com/content/dam/chubb-sites/chubb-com/uk-en/business/life-science-in-the-era-of-pandemics/documents/pdf/5500_ Chubb_LS_R5_Supply-chain_UK_Acc.pdf
18 https://www.chubb.com/content/dam/chubb-sites/chubb-com/uk-en/business/life-science-in-the-era-of-pandemics/documents/pdf/5500_ chubb_ls_r1_clinical-trials_final.pdf 
19 Crown Indemnity is the practice of the organisation taking on the risk rather than the medical personnel, like a Surgeon or Nurse. In normal practice this would be the NHS Trust, in Covid-19 the Government has taken on this responsibility - https://www.hempsons.co.uk/news-articles/indemnity-cover-need-know