Insurers Seek Compensation from St. Jude’s Medical in Class Action Lawsuit

September 22, 2017, 6:00PM. By Brenda Craig

Seattle, WAA Health Benefit Trust that covers Alaskan State Employees is the lead plaintiff in a class action lawsuit against St. Jude’s Medical and Abbott Laboratories seeking compensation for costs related to defective lithium battery powered implantable cardiac defibrillators.

“They are not happy about having to pay for a device that was defective and then having to pay to replace that device that was defective with another one and the medical costs associated with that,” says attorney Kim Stephens from the Seattle law firm of Tousley Brain Stephens that represents ASEA/AFSCME Local 52 Health Benefits Trust.

“They feel they have a duty to their members to preserve their funds which is there for people who genuinely need it for medical expenses,” he adds.

All other third party payors (TPPs) that “sustained economic injuries” caused by the defective implantable cardiac defibrillator (“ICD”) are eligible to join the class action suit. The TPPs would include any company that acts as the payor under coverage by a health care plan that bears the cost for medical device expenses.

The implantable cardiac devices, manufactured and sold by St. Jude’s Medical and Abbott Laboratories, are designed to be implanted under the skin. The device uses an electrical charge generated by a lithium battery to regulate or “pace” hearts that beat either too slow or too fast.

In October, 2016, St. Jude’s Medical issued a voluntary recall in the US for the above devices manufactured between 2010 and 2015 due to the risk of premature battery depletion caused by a buildup lithium clusters.

The FDA swiftly followed and issued its most serious type of recall, a Class I recall, for the device. Class I recalls are the most serious type reserved for situations that may cause death or serious injury.

It is believed 251,346 devices were sold in the United States and Canada and 398,740 devices sold worldwide.

The devices include St. Jude’s Medical Fortify, Unify, and Assura and Unify Quadra Implantable Cardioverter Defibrillators (ICD) and Cardiac Resynchronization Therapy Defibrillators (CRT-D).

According to the statement of claim filed in the State of Illinois, “The defendants knew or should have known that the now-recalled ICDs and CRT-Ds were defective, unreasonably dangerous, and unfit for their intended use.”

The document goes on to say, “Defendants placed thousands of patients (and TPP participants) unnecessarily at risk and caused Plaintiff and the other Nationwide and Alaska Class members to incur substantially greater costs than they should and otherwise would have paid for medical treatment of their participants.”

The plaintiffs allege the defective defibrillators will have to be replaced or have been replaced already and the class members “will continue to pay for the consequences of the defendants actions for years to come.”

“The reality of medical care in the US today is that the insurance companies are paying the lion’s share of the medical bills in many instances,” says Stephens. “The costs to insurers will be substantial.”

Insurers are becoming hyper vigilant about incurring costs when drugs or devices are found to be defective and require policy holders to incur extra medical costs. They are more likely than ever to want to demand to be part of the settlement costs in large mass tort cases.

“It is becoming more mainstream for insurers to do this, yes,” says Stephens.

Contacted by LAS for comment, Abbott Laboratories spokesperson Darcy Ross said, “We believe the lawsuit is without merit.”