News & Events
Potential Physician Liability: Distinguishing Medical Services from Health-Related Products
Law has long established physicians cannot be held liable on a products liability theory for a defective product that was used on a patient during a course of treatment. Silverhart v. Mount Zion Hospital (1971) 20 Cal.App.3d 1028. A doctor’s business is to provide medical services. Thus, courts have reasoned doctors are “consumers” of the products they employ in conjunction with medical services, not “suppliers” of those products. Pierson v. Sharp Memorial Hospital (1989) 216 Cal.App.3d 346.
In today’s practice, physicians and medical groups often recommend certain products over others. Many practices make products available to patients for sale or rental directly from their offices. Physicians should be aware of potential liability issues this may create.
First, products sold and/or rented for profit should be directly related to the medical services provided to patients. Skin cream sold by a dermatologist pursuant to a course of treatment, or a knee brace sold by a sports medicine practice following surgery are examples of items that would exempt the physician from a defective product liability lawsuit. Courts have distinguished, on the other hand, hospital gift shops or medical practices that sell items which are not specifically recommended to supplement a patient’s course of treatment. Hector v. Cedars Sinai Medical Center (1986) 180 Cal. App. 3rd 493. In situations where health-related products are made available for sale to a general clientele, the medical practice is construed no differently from any other commercial supplier. Id.
Additionally, when a medical office does offer products for sale or rental, there may be requirements to disclose financial interests. The American Medical Association’s Code of Medical Ethics, Opinion 8.063, concerning the sale of health-related products, requires physicians to fully disclose “the nature of their financial arrangement with a manufacturer or supplier before selling health-related products.”
“Health-related products” are defined, broadly, as “any product that, according to the manufacturer or distributor, benefits health.” “Selling” incorporates not only dispensing the item from the physician’s office, but also “the activity of endorsing a product the patient may purchase elsewhere that results in direct remuneration for the physician.”
Opinion 8.063 is primarily concerned with products that are not scientifically validated. Physicians who choose to sell health-related products from their offices should rely on peer-reviewed literature and other un-biased sources that review evidence in a reliable fashion.
Health-related products that require a prescription are treated differently under law and ethical cannons. Such products are regulated by the Food and Drug Administration, which lends implied credibility to their medical benefit. Physicians who prescribe a product and make it available for sale are exempted from the financial interest disclosure mandates of Opinion 8.063.
However, physicians are not free from regulation and potential liability just because the product sold to patients requires a prescription. Opinion 8.06 prohibits physicians from accepting direct compensation from manufacturers to prescribe and sell their products; emphasizing prescriptive medical decisions should not be influenced by financial interests.
Like any other business, it is fully permissible for medical practices to sell products for profit. While endorsing and selling health-related products provides benefits such as convenience to patients and ancillary income for the practice, it is the physician’s responsibility to ensure the products offered are related to individualized medical services and patients receive appropriate disclosures.
Jonathan R. Ehtessabian is an associate at Neil Dymott and concentrates his practice on professional liability and general civil litigation. Mr. Ehtessabian may be reached at (619) 238-1712 or jehtessabian@neildymott.com