Intuitive Surgical (ISRG), a maker of robotic instruments used in prostate operations, hysterectomies, and other surgeries, has successfully defended itself in the first of more than two dozen lawsuits alleging injuries caused by the ministrations of the machines. On Thursday, a jury in Port Orchard, Wash., cleared the company and its da Vinci Surgical System in the death of Fred Taylor, who underwent robo-surgery in 2008 and died about four years later from complications linked to a half-dozen subsequent procedures.
As Bloomberg Businessweek reported earlier this year, a raft of litigation has loomed over what a booming segment of the medical-technology sector, as well as over Intuitive Surgical, the top company in the field:
The Sunnyvale (Calif.)-based company received almost all its $2.2 billion in revenue in 2012 from its da Vinci Surgical System and related products. The original prototype was developed under a U.S. Army contract in the 1980s to build a system for remote-controlled battlefield surgery. Intuitive’s robot was cleared for use in 2000, and the company’s products remain the only robotic systems approved in the U.S. for soft-tissue procedures that include general surgery, gynecological surgery, and prostate operations. The machines, which can cost about $1.5 million apiece, were used in 367,000 U.S. procedures in 2012, up from 228,000 two years earlier.
Intuitive’s shares rose nearly 5 percent on Friday to 501.53, following a 5.5 percent advance in late trading Thursday after news of the jury verdict broke—a sign that the concerns over litigation weighing on the stock have lifted somewhat. “We had viewed the Taylor case as an important harbinger of things to come for Intuitive, as precedent (and sentiment) could inevitably filter into subsequent proceedings,” wrote David Roman, an analyst for Goldman Sachs. “An unfavorable decision may have also reignited the potential for class action proceedings, though we believe this risk has now been materially mitigated by the high-profile Taylor case.”
In the Taylor case, lawyers for the deceased man’s family had argued that Intuitive took shortcuts in its training programs as a way to sell more da Vinci systems. The successful defense case centered on arguments that Taylor’s extreme obesity had made him a poor robo-surgery candidate—something his urologist should have known.
More than 365,000 procedures were performed last year using the da Vinci system, the only robotic device approved for soft-tissue procedures in the United States, such as gynecological and prostate surgeries. The Bloomberg Businessweek story offered a glimpse at how it works:
In robo-surgery, a doctor peers into a video game-style console several feet from the patient. Foot pedals and hand controls allow the physician, guided by a 3D camera, to maneuver mechanical arms equipped with surgical tools. This differs from other minimally invasive operations in which doctors stand over a patient and manually manipulate instruments and cameras through small incisions. (Many surgeries are still of the traditional variety, with doctors making larger incisions that take longer to recover from.)
The Intuitive machine’s benefits include a high-definition camera system and robot arms and joints designed to precisely mimic natural hand movements, the company says. Critics point to the high price and the lack of large, controlled trials showing clear long-term benefits, compared with standard less invasive operations. A study published in February in the Journal of the American Medical Association found that robotic uterus removal costs 33 percent more than standard minimally invasive hysterectomies, without lowering the complication rate.