Any type of business can get wrapped up in a costly lawsuit if they aren’t careful. However, some industries are at a greater risk than others due to issues of safety, security and sensitive information. It is something that is quite familiar in the world of health and science.
Laboratories have to be extremely careful and responsible if they want to avoid the three common types of lawsuits detailed below:
Public Endangerment & Personal Injury
When toxic substances, explosives and biohazards are regularly handled, the chance of an accident increases significantly. But the dangers extend well beyond the confines of the laboratory. The products created within the lab can also pose a health risk if they aren’t properly tested and promoted.
For these reasons it isn’t uncommon for labs to be sued on the grounds of personal injury and public endangerment. Five years ago Forest Labs was hit with 54 personal injury lawsuits after news broke that they suppressed study information on the prescription drugs Celexa and Lexapro. Dupont was also sued by 3,500 employees and individuals that were exposed to C8, a substance that animal testing had shown could cause health problems. Instead of making the dangers known DuPont went to great lengths to cover it up.
Transport, shipping and storage is heavily regulated, which means it is easy for a laboratory to be sued if things aren’t handled according to the law. This highlights the importance of using stringent controls in the laboratory, safe disposal methods and professional lab movers even when transports don’t cover many miles.
Patent Infringement Lawsuits
Many discoveries happen in laboratories. It’s only logical that protecting patents and intellectual property is a high priority for companies that run labs. As a result, patent infringement lawsuits are quite common.
A perfect example of this occurred in December of 2015. The University of South Florida sued a Maine laboratory stating that the lab infringed on it’s patent for genetically modified mice. The modified mice are capable of getting Alzheimer’s, which makes them important in research surrounding the disease. Because of the patent, labs must purchase modified mice through the University of South Florida. The situation has actually resulted in numerous lawsuits since the late 1990s.
Kickbacks & Other Backhanded Business Operations
Like any other company, a laboratory can get itself in hot water if it uses shady business practices. That was the case in two high-profile lawsuits in 2015.
Currently, Health Diagnostic Laboratory Inc. (HDL) is being sued by Aetna and other insurers. The blood-testing company is being accused of running a “fraudulent billing scheme”. The company was alleged to have given kickbacks to doctors that sent business their way. Earlier in the year, HDL settled a U.S. Department of Justice investigation for the same allegations by agreeing to pay $47 million. Cigna also filed a lawsuit in the matter, which claims $85 million in damages.
Whistleblower retaliation lawsuits are also quite common. In the last five years a number of lawsuits were initiated because an employee alleged they were fired after bringing information to the attention of lab managers and owners. In a recent California lawsuit, a former senior manager of StemCells, Inc. alleged that “deficiencies in the company’s cell lines put patients at risk of infection or death during clinical trials.” He claimed after discovering the potential dangers and making them known he was fired. The outcome of the case is still pending.
Laboratories are at high risk for a variety of lawsuits due to the nature of the business. Labs have to take every precaution to protect employees and the public, thoroughly test substances, be transparent in their findings and handle dangerous materials with the utmost care. It’s about more than the cost of a lawsuit. It’s about keeping people safe and running a respectable business.