Indemnification in Drug and Device Cases: Avoiding Future Problems

Agreements Between Pharmaceutical Drug and Device Makers

Indemnification agreements between drug and device makers are no longer a rarity. Co-promotion agreements, licensing and marketing agreements, supply agreements, component parts agreements, intellectual property rights agreements and sales of product lines from one company to another all can raise issues in personal injury product liability litigation. When drafting such agreements, it is easy to use standard boilerplate indemnification language from form agreements, but doing so without regard to whether the form fits all potential circumstances can cause major headaches in the event of third-party litigation involving the products at issue. Practical considerations should play a role in how the indemnification is drafted, and it is important to remember that with respect to indemnification, one size really does not fit all. Unless the indemnification agreement is tailored to eliminate future points of discord or uncertainty, the parties may find themselves in extensive negotiations or even litigation between themselves when a product liability lawsuit is filed. The following factors should be considered when drafting an indemnification agreement between a drug and device manufacturer.