The dramatic increase in recent years of medical device recalls and resulting litigation has put a financial burden on the insurers, who are, in turn, forcing manufacturers to share the costs. Experts are looking at the 2010 recall of St. Jude Medical's Riata defibrillators as the next battleground between insurers and manufacturers.
The Food and Drug Administration has advised nearly 80,000 Americans with the Riata defibrillator implants to get imaging tests to see whether wire insulation has eroded – tests that could add up to $45.3 million for all patients. Some insurance companies are reluctant to cover the costs of the procedure for patients, which could trigger lawsuits. St. Jude is paying for the initial test under its warranty in such cases, which experts say is a wise move.
“It would not be in device makers' best interest to balk at paying these costs,” said one analyst. “In the end, they do have to stand behind their product and these products do sometimes fail.”