Author: WorkCompAcademy

Prior to beginning his employment with Technology Credit Union (TCU) in 2020, Thomas Vo signed an employment arbitration agreement. Pursuant to the agreement, both parties agreed “to submit to mandatory binding arbitration any dispute, claim or controversy arising out of or relating to Employee’s employment with the Company.”

While employed with TCU, Vo contracted COVID-19 and developed long-term health issues, which persisted throughout his employment. Vo was eventually terminated and brought suit against TCU, alleging (1) harassment in violation of FEHA; (2) discrimination in violation of FEHA; (3) failure to accommodate in violation of FEHA; (4) failure to engage in the interactive process in violation of FEHA; (5) retaliation in violation of FEHA; (6) failure to prevent discrimination and retaliation in violation of FEHA; and (7) wrongful termination in violation of public policy.

TCU moved to compel arbitration pursuant to Code of Civil Procedure section 1281.21 and stay all proceedings. Vo opposed the motion to compel and argued the arbitration agreement was both procedurally and substantively unconscionable. The trial court, relying in part on Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52 Cal.App.5th 360 (Aixtron), found the arbitration agreement unconscionable due to the arbitrator’s inability to compel prehearing third party discovery.

The Court of Appeal reversed in the published case of Vo v. Technology Credit Union -H051619 (February 2025).

TCU contends that the discovery clause does not render the agreement substantively unconscionable when evaluated under the discovery factors established in the Supreme Court’s recent decision in Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 (Ramirez).

The Court of Appeal on its own motion took judicial notice of the JAMS Comprehensive Arbitration Rules and Procedures, effective July 1, 2014 (JAMS Rules). (Evid. Code, § 459.) JAMS Rule 17 controls prehearing exchange of information.

Rule 17(b) allows each party to take one deposition of an opposing party or individual under the control of the opposing party. (Ibid.) Any issues regarding the time, location, and duration of the deposition must be determined by the arbitrator. (Ibid.) It then states: “[t]he necessity of additional depositions shall be determined by the [a]rbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing [p]arties and the witness.” (Ibid.)

Rule 17(d) gives the arbitrator the authority to decide all “dispute[s] . . . regarding discovery issues.” (Ibid.) The arbitrator may appoint a special master to help resolve a discovery dispute. (Ibid.)

Vo contends that the discovery provision renders the agreement substantively unconscionable because: (1) the agreement covers witness intensive employment claims, (2) the discovery terms completely bar third party discovery by excluding reference to the CAA and thereby eliminate an arbitrator’s authority to order prehearing third party discovery under Aixtron, (3) third party discovery is available in conventional litigation, (4) the bar on third party discovery advantages employers as plaintiffs cannot obtain information from relevant witnesses who work for the employer and other third party entities, and (5) an arbitrator has no authority to order additional discovery due to Aixtron. He also maintains that the JAMS Rules cannot allow for third party discovery because third parties do not contractually consent to such terms.

The Court of Appeal disagreed with Vo and the trial court and noted that “This language could have been more precise but does not limit expanded discovery to parties to the arbitration agreement or those under their control and does not preclude an arbitrator from making nonparty discovery available to the parties.” And it went on to say “the Supreme Court recently clarified that we should not construe discovery provisions defining the scope of an arbitrator’s authority “in . . . a limited way” and instead should select an interpretation that renders an agreement valid. (Ramirez, supra, 16 Cal.5th at pp. 506-507.) We thus disapprove of Aixtron to the extent it interpreted the scope of an arbitrator’s authority narrowly.

The Court of Appeal concluded that the agreement allows Vo access to third party discovery that may be necessary to adequately arbitrate his FEHA claims. The trial court’s order denying Technology Credit Union’s motion to compel arbitration was reversed. The trial court was directed to enter a new order granting Technology Credit Union’s motion and staying the litigation pursuant to California Code of Civil Procedure, section 1281.4.

The U.S. Food and Drug Administration just approved Journavx (suzetrigine) 50 milligram oral tablets, a first-in-class non-opioid analgesic, to treat moderate to severe acute pain in adults. Journavx reduces pain by targeting a pain-signaling pathway involving sodium channels in the peripheral nervous system, before pain signals reach the brain.  

Journavx is the first drug to be approved in this new class of pain management medicines.

Pain is a common medical problem and relief of pain is an important therapeutic goal. Acute pain is short-term pain that is typically in response to some form of tissue injury, such as trauma or surgery. Acute pain is often treated with analgesics that may or may not contain opioids.

The FDA has long supported development of non-opioid pain treatment. As part of the FDA Overdose Prevention Framework, the agency has issued draft guidance aimed at encouraging development of non-opioid analgesics for acute pain and awarded cooperative grants to support the development and dissemination of clinical practice guidelines for the management of acute pain conditions.  

“Today’s approval is an important public health milestone in acute pain management,” said Jacqueline Corrigan-Curay, J.D., M.D., acting director of the FDA’s Center for Drug Evaluation and Research. “A new non-opioid analgesic therapeutic class for acute pain offers an opportunity to mitigate certain risks associated with using an opioid for pain and provides patients with another treatment option. This action and the agency’s designations to expedite the drug’s development and review underscore FDA’s commitment to approving safe and effective alternatives to opioids for pain management.”

The efficacy of Journavx was evaluated in two randomized, double-blind, placebo- and active-controlled trials of acute surgical pain, one following abdominoplasty and the other following bunionectomy. In addition to receiving the randomized treatment, all participants in the trials with inadequate pain control were permitted to use ibuprofen as needed for “rescue” pain medication. Both trials demonstrated a statistically significant superior reduction in pain with Journavx compared to placebo.

The safety profile of Journavx is primarily based on data from the pooled, double-blind, placebo- and active-controlled trials in 874 participants with moderate to severe acute pain following abdominoplasty and bunionectomy, with supportive safety data from one single-arm, open-label study in 256 participants with moderate to severe acute pain in a range of acute pain conditions.

The most common adverse reactions in study participants who received Journavx were itching, muscle spasms, increased blood level of creatine phosphokinase, and rash. Journavx is contraindicated for concomitant use with strong CYP3A inhibitors. Additionally, patients should avoid food or drink containing grapefruit when taking Journavx.

The application received Breakthrough Therapy, Fast Track and Priority Review designations by the FDA.

There are several other promising non-opioid pain treatments currently in the pipeline seeking FDA approval such as:

– – Esketamine: Originally approved for treatment-resistant depression, esketamine is being explored for its potential in managing chronic pain.
– – Cannabidiol (CBD): Various formulations of CBD are being studied for their analgesic properties, particularly for chronic pain conditions.
– – Tanezumab: A monoclonal antibody that targets nerve growth factor (NGF), tanezumab is being evaluated for chronic pain conditions such as osteoarthritis.
– – Zynrelef (Bupivacaine and Meloxicam): This combination drug is designed to provide extended pain relief for surgical patients without the use of opioids.

These treatments represent a growing trend towards developing safer, non-addictive alternatives to traditional opioid painkillers. It’s an exciting time in pain management research!

The California Attorney General Bonta reported a nationwide settlement agreement against Pfizer-owned Biohaven Pharmaceutical Holding Company for submitting false claims to the Medicaid program and other government healthcare programs. The settlement addresses claims that Biohaven participated in a kickback scheme from 2020 to 2022, where they provided cash and extravagant gifts to healthcare providers in return for prescribing their medication, Nurtec.

The allegations against Biohaven claimed that the company engaged in several practices to provide kickbacks to healthcare providers as follows:

– – Speaker Programs: Biohaven allegedly organized company-sponsored speaker programs where healthcare providers would give presentations about their migraine medication, Nurtec ODT. These programs were intended to promote the drug to other healthcare providers. In numerous instances, speaker events were allegedly attended by the providers’ spouses, family members, and friends, who had no educational need to attend. Also, certain providers allegedly attended multiple programs on the same topic, and received expensive meals and drinks paid for by Biohaven, without obtaining any meaningful educational benefit.
– – Remuneration: Healthcare providers who participated as speakers received honoraria payments and expensive meals at high-end restaurants. Some providers were allegedly paid tens of thousands of dollars, sometimes exceeding $100,000, for participating in these programs1.
– – Repeat Attendance: Certain providers attended multiple speaker programs on the same topic, which the government alleged provided no meaningful educational benefit.
Non-Educational Attendees: Biohaven allegedly invited individuals with no educational need to attend, such as the speakers’ spouses, family members, or friends.
– – Whistleblower Allegations: The allegations were initiated by a whistleblower, Patricia Frattasio, a former Biohaven sales representative, who reported these practices. On August 5, 2021, Frattasio filed a qui tam action in the United States District Court for the Western District of New York captioned United States of America et al., ex. rel Patricia Frattasio v. Biohaven Pharmaceuticals Holding Company Ltd., Case No. 6:2 l -CV-06539.

These actions were claimed to violate the Anti-Kickback Statute, which prohibits offering or paying anything of value to induce the referral of items or services covered by federal healthcare programs.Approximately $50.2 million of the settlement constitutes the federal portion of the recovery and approximately $9.5 million constitutes a recovery for State Medicaid programs. Ms. Frattasio will receive approximately $8.4 million as her share of the federal recovery in this case.

Pfizer has agreed to pay $59,746,277, plus interest, on behalf of Biohaven to resolve allegations that Biohaven engaged in unlawful kickback practices to encourage providers to prescribe Nurtec. That payment will be shared by the federal government and several states, including California. The State of California will receive $413,776 for its share of losses to California’s Medicaid program, Medi-Cal.

Pfizer-owned Biohaven Pharmaceutical Holding Company is headquartered in New Haven, Connecticut. Biohaven was established by a group of biopharmaceutical executives in 2013 with a vision to develop innovative treatments for neurological diseases. The company focused on research and development, targeting conditions such as Alzheimer’s disease, migraine, and anxiety disorders. Pfizer announced its intention to acquire Biohaven in 2022 for approximately $11.6 billion. The acquisition included Biohaven’s breakthrough calcitonin gene-related peptide (CGRP) portfolio, including Nurtec ODT, a migraine therapy.

In a statement, Pfizer emphasized that the settlement relates to conduct that occurred before Pfizer’s acquisition of Biohaven in October 2022. They also mentioned that they are pleased to resolve this legacy matter so they can continue focusing on patient needs. Pfizer promptly terminated the speaker programs once the acquisition was completed, which may have contributed to the favorable terms of the settlement.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

The FTC commissioners voted unanimously this month to publish a second report which makes similar critical allegations against the controversial drug middlemen known as Pharmacy Benefit Managers or PBMs, as did the agency’s first report released last summer. This second report, titled “Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers,” was released to the public on January 14, 2025.

According to the FTC prescription drugs represent a large and growing amount of healthcare spending – increasing from $393 billion in 2016 to $600 billion in 2023. While traditional drugs dispensed through retail and mail order pharmacies account for much of this spending, a disproportionate share of the growth has come from spending on a class of drugs known as specialty drugs, which more than doubled from $113 billion in 2016 to $237 billion in 2023.2

Historically, specialty drugs were characterized by their need for special handling and administration. This is no longer necessarily the case. There is no standard definition for a specialty drug, and today specialty drugs may be characterized by variety of factors, including their high cost.

The First Interim Staff Report provided an overview of the vertically integrated and highly concentrated markets in which pharmacy benefit managers (“PBMs”) operate and highlighted the increasing importance of specialty drugs to the three largest PBMs, Caremark Rx, LLC (“CVS”), Express Scripts, Inc. (“ESI”), and OptumRx, Inc. (“OptumRx”) (collectively the “Big 3 PBMs”) and their affiliated pharmacies. Among many other findings, the First Interim Staff Report showed:

– – Pharmacies affiliated with the Big 3 PBMs received 68% of the dispensing revenue generated by specialty drugs in 2023, up from 54% in 2016.6
– – The Big 3 PBMs marked up two specialty generic cancer drugs by thousands of percent and then paid their affiliated pharmacies hundreds of millions of dollars of dispensing revenue in excess of estimated acquisition costs for each drug annually.

Two months after this first report, the FTC sued Caremark, Express Scripts and Optum Rx.The lawsuit, filed in September 2024 is ongoing and alleges that these pharmacy benefit managers engaged in anticompetitive and unfair rebating practices that artificially inflated the list price of insulin drugs. The case is currently being overseen by Chief Administrative Law Judge D. Michael Chappell.

Cigna’s Express Scripts filed a countersuit against the FTC calling the report “unfair, biased, erroneous, and defamatory.” We don’t take this step lightly, but … we cannot let the FTC’s unlawful actions and false information stand,” Andrea Nelson, Cigna’s chief legal officer, said in a statement.

Yet “the FTC stands by our study,” said Douglas Farrar, a spokesperson for the agency, in a statement. “This is a complicated and opaque market, and the FTC is committed to using its clear authority to help the public and policymakers understand it.”

Express Scripts, which Cigna acquired for $67 billion six years ago, brought in $26.6 billion in revenue in the second quarter – 44% of Cigna’s entire topline.

This new January 2025 staff report relies on additional data and documents to analyze a broader subset of specialty generic drugs and expands on FTC staff’s initial findings regarding specialty drugs published in the  July 2024 staff report.Key findings in this January 2025 staff report include:

– – The Big 3 PBMs marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent.
– – A larger share of commercial prescriptions for the most profitable specialty generic drugs were dispensed by the Big 3 PBMs’ affiliated pharmacies compared with unaffiliated pharmacies.
– – The Big 3 PBMs’ affiliated pharmacies generated over $7.3 billion of dispensing revenue in excess of NADAC on specialty generic drugs over the study period.
– – In the aggregate, the Big 3 PBMs also generated significant income on the specialty generic drugs assessed in this report from spread pricing – i.e., billing their plan sponsor clients more than they reimburse pharmacies for drugs.
– – The top specialty generic drugs accounted for a significant share of the relevant business segments reported by the Big 3 PBMs’ parent healthcare conglomerates.
– – Plan sponsor expenditures and patient cost sharing on specialty generic drugs increased at double-digit compound annual growth rates during the study period.

These results illustrate the increasing financial importance of specialty generic drugs to the Big 3 PBMs, as well as to plan sponsors and patients. The results also reveal that the two case study drugs analyzed in its First Interim Staff Report were not isolated examples. This report confirms that the Big 3 PBMs impose significant markups on a wide array of specialty generic drugs.

The California Attorney General has filed litigation against drug manufacturers Eli Lilly, Novo Nordisk, and Sanofi, along with major PBMs CVS Caremark, Cigna’s Express Scripts and UnitedHealth Group’s OptumRx for allegedly leveraging their market power to overcharge patients for insulin.