Regulatory and Legal Issues arising from Grey Market Dental Products

by Guest Editorial: Matthew Wilton

Depending on the factual circumstances, a dentist can face legal liability for damages, or allegations of professional misconduct for utilizing Grey Market dental products in his or her dental practice.

In Ontario dentists are regulated by the Royal College of Dental Surgeons, pursuant to the Ontario Dentistry Act. The RCDS has a mandate to regulate the profession, and to protect the public interest.

In Ontario, there is no specific professional misconduct provision that addresses the use of Grey Market products by dentists. This will not preclude the RCDS from prosecuting a dentist if it receives information that the dentist has intentionally or negligently used a Grey Market dental supply product on patients. If a dentist knowingly or negligently uses dental Grey Market products would this likely be a breach of the standards of practice of dentistry? In addition, if the RCDS could prove that the dentist knowingly used Grey Market dental products which endangered the patient, then the RCDS could also assert that the dentist had engaged in conduct that would be regarded by Members “as disgraceful, dishonourable, unprofessional or unethical”.

The vast majority of standards of practice prosecutions in Ontario arise not as a result of breach of a specific regulation. The RCDS establishes standards of practice of the dental profession by obtaining an expert opinion from a dentist with respect to the appropriate standard of care demanded of a dentist. If that opinion evidence is accepted at a discipline hearing, and the dentist failed to maintain the standards of practice, then the dentist will likely be convicted of professional misconduct.

I will address three hypothetical factual scenarios that could lead to differing disciplinary consequences for dentists using Grey Market products.

The first factual scenario assumes that a dentist inadvertently purchases Grey Market dental products. The dentist can prove that she has exercised due diligence in the manner in which her dental practice purchases supplies. The dentist had adopted the following procedures in her office.

She contacts the manufacturers to determine who the authorized dealers are for the dental products she uses in her dental practice;

She maintains a list of products licensed for sale in Ontario; and

The dentist checks her supplies before their use in the operatory, looking for expiry dates, unfamiliar packaging and/or any suspicious circumstances.

If a dentist could prove that she took all these steps, and yet still inadvertently purchased Grey Market dental products, then if a complaint was made to the RCDS by a patient who inadvertently received Grey Market dental products, then it is arguable that the dentist would not be guilty of professional misconduct.

If the dentist could satisfy the RCDS that she had taken all reasonable steps to avoid using Grey Market products, then it would be unlikely for the RCDS Complaints Committee (formally known as the “Investigation, Complaints and Reports Committee or ICRC”) to refer the matter for a discipline hearing. This is because the ICRC would likely conclude that the dentist met the appropriate standards of practice demanded of her in terms of exercising due diligence not to use Grey Market dental products on her patients.

The second factual scenario is where a dentist is negligent with respect to sourcing and purchasing dental supplies. The dentist has no due diligence measures, and urges her staff to purchase dental supplies from dubious sources, for the cheapest prices. Using that factual scenario, if a patient complained, or if information came to the attention of the RCDS proving this factual scenario, then that dentist could be referred to the Discipline Committee and prosecuted for failing to maintain the standards of practice of the profession. The RCDS could presumably locate a GP dentist expert who would testify that a prudent dentist should always be mindful of ensuring that the dental supplies purchased are appropriate and legal. The dentist would be convicted of failing to maintain the standards of practice of the profession by failing to have appropriate systems in place to ensure that dental supplies used in her practice are appropriate for the purpose.

The third and most serious factual scenario would be a case where a dentist deliberately and knowingly purchased Grey Market supplies, for a cheaper price than the official price. In the event that a patient suffered adverse consequences as a result of the use of the Grey Market supplies, then the dentist would likely face prosecution for failing to maintain the standards of practice of the profession, and disgraceful and dishonourable conduct. Disciplinary Tribunals tend to punish intentional wrongdoing more harshly than mere negligence or sloppiness. If the RCDS could demonstrate that the dentist deliberately purchased Grey Market dental supplies that turned out to be defective, to save money, then it is likely that a Discipline Committee would be obliged to suspend that dentist’s license for a period of time. This is because the dentist’s deliberate dishonesty and improper financial motives led directly to an adverse outcome. It is the element of intentional misconduct that will raise the ire of a Discipline Committee.

If a dentist deliberately purchases implants knowing that they are not approved for sale in Canada, and if the implants fail as a result of the deficiencies in the product, then the Discipline Committee would not look kindly on the dentist. The actions of the dentist would be seen as dishonest. Such a case could be analogised to cases of insurance or billing fraud. Typically such disciplinary infractions will result in a period of suspension of license for the dentist.

To guard against any regulatory complaints or prosecutions, dentists should have a system of due diligence with respect to the purchase of dental supplies and products. Dentists should keep the necessary documents to prove due diligence. A check list of steps to be taken in the office on a monthly basis could assist in proving that a due diligence system was in place.

Different considerations apply in respect of Associate dentists working in a dental office. If we assume that the Associate dentist has no role in sourcing and ordering dental supplies what can the Associate do to fulfill his or her obligation to ensure that no Grey Market products are provided to patients? The best approach would be for the Associate to communicate with the Principal dentist, to ascertain what safeguards are in place to ensure that, deliberately or inadvertently, Grey Market products are not being used in the practice. It is likely that an Associate dentist would be protected if the Associate made an inquiry of the principal, and had a written record of the dialogue. The Associate should record what the Principal tells the Associate about the system, (if any) in place in the dental practice to guard against Grey Market products. If the Principal advises the Associate that there are no safeguards in place, the Associate should suggest that a basic due diligence process should be adopted. If the Principal refuses, then the Associate should adopt his or her own measures to rule out the possibility of using unsafe products and supplies. Of course, the Associate dentist cannot be willfully blind, in the event that there is evidence that Grey Market products are being used.

Civil Liability Issues Arising From Use of Grey Market Products
Canadian dentists are obliged to maintain mandatory malpractice insurance. The factual scenario I would like to examine is where a dentist deliberately uses Grey Market dental supplies, which defective product causes an adverse outcome for a patient. The patient retains a lawyer who sues the dentist for malpractice. In Ontario the malpractice insurance policy for Ontario dentists specifically excludes coverage for punitive, aggravated exemplary or similar damages. Punitive damages are rarely awa
rded by Courts, and are designed not to be compensatory in nature, but to indicate the displeasure of the Court and to punish. The purpose of an award of punitive damages is to demonstrate to the offender that the law will not tolerate conduct that willfully disregards the rights of others.

In the area of health care, punitive damages are often awarded where a battery has taken place. A battery occurs where patients’ consent is obtained on false pretences. The law provides that a patient must provide informed consent to a dentist before the dentist performs physically intrusive treatment on the patient. If a dentist obtains the patient’s consent improperly, by providing false information, then the civil tort of battery is said to have been committed by the dentist. For example, if a dentist advises her patient that she will be receiving implants of the highest quality, and yet knowingly uses Grey Market implants that turn out to be defective, then the dentist has likely committed a battery on the patient. The patient would not have consented to the procedure if the dentist had disclosed to the patient that the implants being used were Grey Market implants, which might not be fit for the purpose. In cases involving physicians, Canadian courts have awarded punitive damages in malpractice cases where the Court concludes that the physician has abused his or her position of power of trust. In a 1995 Ontario Court of Appeal case in Gerula v. Flores, a punitive damages award of $40,000.00 against a physician was imposed, where the physician had deliberately altered the medical records to conceal the fact that an operation that was performed on a patient was unnecessary. The consent to the operation was not a true consent, and there was a battery. The Court concluded that the physician’s acts “were motivated by self interest detrimental to the patient’s interest”.

A patient’s lawyer who discovers evidence that the dentist deliberately purchased Grey Market products for financial savings, which led to pain and suffering for the patient, would likely advance a claim for punitive damages. Under these circumstances, in Ontario, the malpractice insurer would not provide coverage for these punitive damages claims. The dentist would be obliged to obtain/retain separate counsel to deal with that aspect of the case, and if punitive damages were awarded at trial the dentist would have to pay those damages herself.

There may also be criminal consequences for a dentist who can be deliberately shown to have purchased Grey Market products, and knowingly deceived patients with respect to their provenance. Such conduct would likely be considered a type of fraud, to wit, deliberately misrepresenting the nature of a product, in order to earn money.

Thus the bottom line is due diligence, in regard to purchasing and using all dental materials. If the goods used are Grey Market, there is a possibility that they might be counterfeit or the formula or ingredients of the product, while bearing the same name, may not be the same as the formula for use in Canada. The best protection is to manage the risk and buy only from licensed distributors. Yes it may cost more, but the consequences of the other scenarios are far more damaging and disruptive to your practice and to your patient’s well being.OH

Oral Health welcomes this original article.