Those of you who dialed into yesterday’s teleseminar given by the Reed Smith side of the blog saw an image of a leaking tube of toothpaste on one slide and a poster for the Orson Wells motion picture The Third Man on another. For those who dialed in, thank you. To those who couldn’t make it, we will probably do another one next year, so stay tuned.
As for pictures of toothpaste and old movies, they are not as random as you might think. Our point about the toothpaste was that as the law squeezes down on traditional avenues of product liability—such as through applications of the learned intermediary doctrine and/or defenses based on federal preemption—plaintiffs are squeezing around the obstacles to find alternate paths. The Third Man poster was an introduction to our segment on attempts to recover for alleged product defects from parties other than product manufacturers, i.e., third parties. That could include doctors, pharmacists, monograph publishers, pretty much anyone who touched the process with any perceived capacity to pay a judgment.
It is somewhat poetic then that we bring you today another “third man” and another novel theory of liability, and the case even involves teeth. The case is Tavilla v. Blue Cross, No. 1 CA-CV 12-0843, 2014 Ariz. App. Unpub. LEXIS 1093 (Ariz. App. Sept. 11, 2014), and the dispute was over the plaintiff’s health insurer’s refusal to cover injuries allegedly caused by off-label use of pain medication. In Tavilla, the plaintiff had a history of chronic pain, and his pain management doctor prescribed a form of fentanyl that is delivered on a plastic stick that dissolves in the patient’s mouth, like a lozenge. Id. at *2. The product, however, was indicated only for cancer patients, which the plaintiff was not. Id. at **2-3. That made the use “off label,” which is perfectly legal and sometimes is the standard of care, which we have explained countless times.
Now, the key fact is that the plaintiff’s health insurer paid for the drug, even though the plaintiff’s policy excluded coverage for drugs prescribed off label. That is to say, the insurer paid for the plaintiff’s pain medicine gratuitously and without any contractual duty to do so. Id. at **2-3.
The plaintiff later developed severe tooth decay that his dentist said was typical of decay seen in people who use sugar-containing lozenges. Id. at *3. The plaintiff therefore sued the doctor who prescribed the lozenge-like fentanyl drug for medical malpractice and the drug’s manufacturer for product liability. Id. at *4 n.4. We don’t know how that litigation came out, but we suspect it was not so promising for the plaintiff because he also sued his health insurer to pay for his extensive dental work. Id. **3-4.
As you read the remainder of this story, bear in mind the old saying “no good deed goes unpunished.” That is because the plaintiff’s theory against the insurer was that the insurer acted in bad faith by paying for the pain medicine even though it did not have to, but then denying coverage for his extensive dental work, which was also excluded under the policy. Id. at **13-20. This is the Drug and Device Law Blog, not a health insurance blog, so we will not delve into the intricacies of health insurance contracts and the implied covenant of good faith and fair dealing. Suffice it to say that the Arizona courts found no breach of contract in the insurer’s overpayment of policy benefits. They also found no bad faith in the insurer’s alleged failure to investigate the physician’s prescribing practices, prevent the prescription of the drug, or deny coverage for use that was off label. Id.
We write about this case because it is an example of a plaintiff attempt to recover for injuries allegedly caused by a prescription drug by pursuing novel claims against someone other than the drug manufacturer. But we also think the result is correct because finding potential liability in this situation would lead to numerous perverse incentives. Insurance companies already have a business incentive to pay no more than what they owe under their contracts because every dollar overpaid is a dollar off the bottom line. It would not help their policyholders (i.e., patients requiring medical treatment) to create additional incentives to deny payment by opening insurers to extracontractual damages as a penalty for funding treatment that they technical have no duty to cover.
More apropos to the drug and device practice, it also would not help patients to impose extracontractual duties on insurers to protect patients from the complications of medical treatment, including off-label use of prescription drugs. The plaintiffs in Tavilla argued that the insurance company should have investigated the physician’s off-label use of the product and prevented the physician from doing alleged harm, including by refusing to pay for the treatment or making it a drug that required “precertification” for coverage. Id. at **16-18. But as the Arizona courts observed, “To impose such a duty would put [the insurer] squarely between the insured and the insured’s own physician.” Id. at 17.
We subscribe to that mantra. Physicians practice medicine, and they make treating decisions based on their assessment of the risks and benefits as they apply to each individual patient. Absent from Tavilla is any discussion of the severity of the plaintiff’s pain, the other options considered and/or tried, what the doctor knew and/or considered vis-à-vis potential complications and risks, what the manufacturer warned about, and whether the treatment promised or resulted in substantial benefit to the patient. These are the factors that product liability and medical malpractice claims take into account, and rejecting liability in cases like Tavilla channels the inquiry onto those more traditional paths. That seems to us the correct way to go.