Responses to Liability Immunization: Evidence from Medical Devices

41 Pages Posted: 17 Jul 2019 Last revised: 2 Aug 2019

See all articles by Elissa Philip Gentry

Elissa Philip Gentry

Florida State University - College of Law

Benjamin J. McMichael

University of Alabama - School of Law

Date Written: July 15, 2019

Abstract

The Supreme Court's decision in Riegel v. Medtronic unexpectedly and immediately immunized medical device manufacturers from certain types of state tort liability. Riegel immunized manufacturers from liability if their devices had been approved through the Food and Drug Administration's most rigorous|and costly|review process, premarket approval ("PMA"). Exploiting this unanticipated decision, we examine whether manufacturers strategically respond to this new immunity. We find evidence that, following the Riegel decision, device manufacturers file more PMA applications for high risk product categories (relative to the comparable change for low risk categories), suggesting that firms are sensitive to the newly immunized risk. We additionally find evidence that physician treatment patterns with respect to medical devices also change, consistent with Riegel shifting liability away from device manufacturers and towards physicians. The analysis provides evidence that sophisticated actors respond to changes in their expected legal liability and that technical legal decisions have important ramifications for the provision of health care.

Keywords: Medical Device, Liability, FDA, Regulation

JEL Classification: I18, K13, K23

Suggested Citation

Gentry, Elissa Philip and McMichael, Benjamin J., Responses to Liability Immunization: Evidence from Medical Devices (July 15, 2019). Available at SSRN: https://ssrn.com/abstract=3420311 or http://dx.doi.org/10.2139/ssrn.3420311

Elissa Philip Gentry (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Benjamin J. McMichael

University of Alabama - School of Law ( email )

P.O. Box 870382
Tuscaloosa, AL 35487
United States

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