Cost of Manufacturing Problems – Part 2 Medical Devices

 

The repercussion for manufacturing mistakes is different from industry to industry as well as by individual case. Some of the most severe result in product recalls and litigation. In the medical device industry, manufacturing errors can cause harm and even death to the patients the devices are suppose to help. This has led to some highly publicized lawsuits and product recalls.

 

Medical devices present a challenge to manufacturing and strict guidelines to follow. Contract manufacturing facilities typically have to have special certification and capabilities such as a cleanroom. Finding a high quality, reliable manufacturing partner can be a daunting task and should be done using as much information as possible.

 

Looking at hip replacement recalls from 2002 – 2013 shows a variety of issues that can go wrong during the manufacturing process. Biomet, Depuy, Smith & Nephew, Stryker, Wright Medical and Zimmer all had labeling issues. This might seem minor, but labeling with the wrong size implant or incorrect expiration date opens up patients to potential harm or suboptimal outcomes

 

More serious all the companies also had more serious manufacturing issues that can lead to premature failure or other serious complications. Biomet had a flawed implant head that could fracture as did their surgical tools. Smith and Nephew’s acetabular liner was “compromised during manufacturing”. Stryker’s acetabular shells were machined too thick, hip stems did not meet strength specifications. Also they were manufactured from raw materials that did not meet required specifications. Wright Medical implant coatings had missing fragments. Zimmer might have had the most with shell pore sizes being too small, shell missing hole threads, threads not being completely machined and residue from the machining process being left on the femoral heads.

 

How much do manufacturing errors like these cost a company? It is hard to say, as you need to include recall costs, litigation expenses and awards, lost sells from tarnish reputation and more. But looking at some of the recent judgments, jury’s seem to be awarding $100,000 – $300,000+ per case. As you can imagine, this alone can put smaller companies out of business. Five thousand cases could cost over $1.5 billion before all is said and done.

 

Large companies are able to survive this but smaller companies startups, a product recall and litigation is a kiss of death.

 

We previously looked at how manufacturing mistakes cost Tesla Motors billions in lost revenue and market cap.

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