According to marketing claims, implants are intended for long-term use and represent sustained improvement in the quality of life. From the viewpoint of the third-party liability insurer, however, many implants fall into the highest risk class. Munich Re has examined the risk spectrum for medical devices of this nature and urges caution when underwriting.
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In Germany alone, about 400,000 artificial hips and knees are implanted each year. A further 100,000 patients receive a cardiac pacemaker or a defibrillator. The further development of tools and surgical techniques as well as demographic trends means that this type of surgical intervention will become more common. For the use of implants is a great advance in improving the quality of life – especially for elderly people.
Millions in damages with product recall of implants
But not all implants deliver what the marketing promises. On average, problems arise in about 10% of all joint implants. Defective products often have to be exchanged. The reason for revision surgery is often loosening of the implant or faulty arrangement of the individual components, which may lead to infections or bone fractures. As metal rubs against metal in many orthopaedic implants, the eroded metal particles may cause pain and tissue reaction if any hypersensitivity (allergy) to metal exists. If such product defects give rise to third-party liability claims, damages and compensation for pain and suffering may rapidly soar to hundreds of millions of dollars.
Implants fall into the highest risk class
Artificial hips are not the only implants associated with risk. The spectrum covers the whole range of medical implants, including cardiac pacemakers and stents.
An interdisciplinary team in our Casualty Risk Consulting unit is looking very closely at the development of risk for implants: products and manufacturing processes are continuously developing. Sometimes there are no empirical values on which to base an exact assessment of risk. Munich Re covers such product liability risks worldwide and urges great caution when underwriting this liability risk.
Adequate trials for regulatory approval?
The deciding factors in risk analysis are the assessments of the danger from the product itself but also from the manufacturing processes, quality controls and traceability. The regulatory approval procedure carried out for an implant has also to be viewed critically. In almost all countries, implants are defined as medical devices, but they do not necessarily have to be approved by a central public authority. In Europe, medical device manufacturers can select their own certification body, e.g. the TÜV in Germany. Once it has passed examination, the implant is awarded the CE marking and then has valid regulatory approval throughout the EU. In the USA, on the other hand, approval is regulated by the Food and Drug Administration (FDA), i.e. a central public authority.
Risks from the viewpoint of product liability
Manufacturers must ensure that their products are safe and can be used without complication. Possible risks from the viewpoint of product liability are a defective or health-threatening product design, production errors, and inaccurate, inadequate or unclear instructions for the surgeon performing the procedure. Unforeseen complications frequently arise because there is no corresponding warning in the product description or instructions for use.
Services in assessing liability risks
Casualty Risk Consulting provides support in assessing implant risks from a technical and scientific perspective in the context of product liability or recall cost insurance. We also provide support together with claim management in the technical analysis of claims. A publication on implants is currently being prepared and will be published in the next few months.
Munich Re Experts
Dr. Wolfgang Lanzner
is a pharmacist and consultant in the Casualty Risk Consulting Unit at Munich Re.
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