Author: WorkCompAcademy

In many markets, consumers and policymakers have incomplete information on product effectiveness and quality. Consequently, firms often finance research on their own products. For example, automakers run fuel-economy tests for new vehicles, sunscreen manufacturers pay laboratories to test their products, and drug manufacturers often conduct clinical trials.

Clinical trials are a key component of pharmaceutical research and development. Trials are also expensive and risky investments. The average cost of a late-stage clinical trial is $35 million, an estimated 70% of trials are funded by industry, and the pharmaceuticals market in the United States alone is valued at $480 billion.

The results of trials shape regulatory, prescribing, and medical treatment decisions for decades afterward. For instance, trials have direct consequences for the health of the population, as seen by trials on the benefits of statins, the risks of hormone replacement therapy, and recent COVID-19 vaccines.

On one hand, firms’ research may have welfare benefits, as other parties can use the knowledge produced at minimal marginal cost. On the other hand, industry research may have specific, less relevant characteristics, and the knowledge produced may not be shared with the public. A new scientific paper written by Tama Oostrom, an assistant professor of economics at Ohio State University, published by the Journal of Political Economy measures how industry and financial incentives shape available evidence in the pharmaceutical market.

This paper quantifies how financial incentives affect the results of randomized control trials (RCTs) and specifically clinical trials. It also estimates the downstream consequences of financial incentives on trial characteristics and the availability of the research. The identification strategy uses the key insight that the exact same pairs of drugs can be tested in different RCTs conducted by parties with different financial interests.

The research method construct a novel dataset of psychiatric clinical trials where the exact same pairs of drugs are examined in trials with different sponsorship interests. And focused on antidepressants and antipsychotics due their market size as well as data availability.

As an example of the identifying variation, Wyeth Pharmaceuticals introduced a new antidepressant drug, Effexor, in 1993. Over the next decade and a half, Wyeth funded RCTs comparing the effectiveness of Effexor with Eli Lilly’s blockbuster drug Prozac. In 12 of the 14 trials funded solely by Wyeth, Effexor was more effective than Prozac. In contrast, only one of the three trials with alternate funding found Effexor to be more effective. Each of these trials is a double-blind RCT comparing the exact same two molecules and examining the same standard outcomes.

Her research analyzed the published papers of 509 trials and 1,215 treatment arms (groups of participants). Most of the trials were published after the drug gained approval from the U.S. Food and Drug Administration (FDA). About three-quarters of them examined were for antidepressants, with the remaining quarter for antipsychotic medications.The study sample included 23 FDA-approved drugs and seven nonapproved drugs.

Ultimately the research found that a drug is reported to be 49% more effective when the trial is sponsored by that drug’s manufacturing or marketing firm, compared with the same drug evaluated against the same comparators but without the drug manufacturer’s or marketer’s involvement.

Sponsored drugs are also 43% more likely to report statistically significant improvements and 73% more likely to be the most effective drug in their trial, again, compared with the same molecule tested against the same pair of drugs but without funding from the drug’s manufacturer. The author refers to the main effect as a “sponsorship effect.”

The concluding comments by the author said that the “magnitude of the effect of funding on drug efficacy has substantial implications for drug approvals and prescriptions.”

The study confirms that the funding of studies greatly influences their design and results, Dr. Chad Savage, an internal medicine specialist and founder of YourChoice Direct Care, told The Epoch Times. “Multiple attempts have been made over the years to counter this effect, such as requiring financial disclosures from authors, but none have succeeded in fully eradicating the bias that can exist,” Savage said.

According to Dr. Peter C. Gøtzsche, professor of clinical research design and analysis at the University of Copenhagen, the bias in industry-sponsored trials is massive. “In head-to-head trials where Prozac was the drug of interest, significantly more patients improved on Prozac than in trials where Prozac was the comparator drug,” Gøtzsche told The Epoch Times.

A Los Angeles woman and a San Fernando Valley man were arrestedon a 24-count federal grand jury indictment alleging a scheme to defraud Medicare out of more than $54 million via hospice and diagnostic testing services that were never provided and then laundered their illicit proceeds, including by buying millions of dollars’ worth of gold bars and coins.

Sophia Shaklian, 36, of the Larchmont area of Los Angeles, and Alex Alexsanian, 47, of Burbank, were arrested. They are scheduled to be arraigned in United States District Court in downtown Los Angeles.

Shaklian is charged with 16 counts of health care fraud and four counts of transactional money laundering. Alexsanian is charged with one count of conspiracy to launder monetary instruments and three counts of concealment money laundering.

According to the indictment that a federal grand jury returned on October 2, Shaklian, often using aliases, managed and submitted claims for seven health care providers enrolled with Medicare and located in Los Angeles County. These businesses included a hospice company she owned – the Pasadena-based Chateau d’Lumina Hospice and Palliative Care – and several diagnostic testing companies: Saint Gorge Radiology in Sylmar; Hope Diagnostics in North Hollywood; Direct Imaging & Diagnostics and Lab One – both located in Hollywood; and Labtech and Lifescan Diagnostics in Claremont.

From March 2019 to August 2024, these companies allegedly submitted more than $54 million in fraudulent claims to Medicare for services that were never provided and not needed. In total, they received more than $23 million for those claims. Shaklian allegedly laundered Medicare funds paid to Chateau by transferring them to accounts in the name of “Varsenic Babaian,” a synthetic or fake identity.

Alexsanian allegedly directed a foreign national to open Saint Gorge Radiology, and to acquire Medicare provider Console Hospice in Van Nuys, and then provide control of those companies and their bank accounts and the foreign national’s personal bank accounts to Alexsanian.

Alexsanian conspired with the foreign national (who soon left the country) and others to have Saint Gorge Radiology and Console Hospice submit fraudulent claims to Medicare for services not provided and then laundered the Medicare reimbursements they received, as well as funds deposited into their accounts through the “Babaian” identity, and used them to, among other things, buy more than $6 million in gold bars and coins.

If convicted of all charges, Shaklian would face a statutory maximum sentence of 10 years in federal prison for each health care fraud count and up to 20 years in federal prison for each money laundering count. Alexsanian would face up to 20 years in federal prison for each count.

The United States Department of Health and Human Services Office of the Inspector General and the FBI are investigating this matter.

Assistant United States Attorney Kristen A. Williams of the Major Frauds Section is prosecuting this case.

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed innocent until and unless proved guilty beyond a reasonable doubt.

The Justice Department sued Irvine California based Fitness International LLC, also called LA Fitness, for discriminating against people with disabilities at its gym and fitness clubs. LA Fitness is the largest chain of owner-operated gym and fitness clubs in the United States, with nearly 700 locations across the country.

The lawsuit, filed in the U.S. District Court for the Central District of California, alleges LA Fitness violated the Americans with Disabilities Act (ADA), which prohibits public accommodations, including gym and fitness clubs, from discriminating against people with disabilities. The ADA requires LA Fitness to give people with disabilities equal access to LA Fitness’ services and facilities, remove architectural barriers to make its facilities accessible to people with disabilities and maintain accessible features. The ADA also prohibits LA Fitness from charging extra fees to people with disabilities.

Yet, as the department’s lawsuit alleges, LA Fitness gym and fitness clubs have many barriers that prevent LA Fitness members with disabilities from accessing the clubs or using the clubs’ pools and fitness equipment. Common barriers include broken pool lifts and broken elevators.  Sometimes, these issues left people with mobility disabilities unable to get into clubs or pools at all.

Other times, people with disabilities have gotten stuck dangling over the water on broken pool lifts, have had to call LA Fitness staff to help them get in and out of pools or have had to crawl out of pools. Even after members with disabilities complained about these issues, LA Fitness did not fix them for long periods of time.

Through the lawsuit, the department asks the court to stop LA Fitness from discriminating against people with disabilities, including by requiring LA Fitness to make its facilities and equipment accessible. The department also seeks monetary damages for people harmed by LA Fitness’ discrimination. This includes people who were directly harmed by LA Fitness’ barriers to access and broken equipment, as well people who need help to use LA Fitness’ clubs and were charged extra fees to have a friend, nurse or personal assistant help them use LA Fitness facilities.

“Access to physical fitness activity is crucial for promoting the health and well-being of all Americans, including those with disabilities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “For over 30 years, the ADA has prohibited gyms and fitness clubs like LA Fitness from denying patrons with disabilities the opportunity to use and enjoy facilities enjoyed by patrons without disabilities. Through this lawsuit, the Justice Department seeks to eliminate LA Fitness’s discriminatory barriers and ensure that people with disabilities have equal access to fully participate at their local LA Fitness gym and fitness clubs.”

“Ensuring accessibility is key to safeguarding civil rights for all Americans,” said U.S. Attorney Martin Estrada for the Central District of California. “Our office is committed to ensuring that people with disabilities have access to public accommodations by enforcing the protections afforded by the Americans with Disabilities Act. When we support those with disabilities, our entire community benefits.”

In response to the complaint, a spokesperson for LA Fitness released a statement: “Ensuring all members and guests are welcome at our clubs is of paramount importance to LA Fitness. The Company takes its obligation to comply with the ADA seriously and promptly responds to any ADA issues. We intend to vigorously defend against this action.”

The #MeToo movement highlighted concerns that compelled arbitration of sexual harassment claims can perpetuate unacceptable behavior and minimize its consequences by diverting such claims from public court proceedings into a private forum. In response, Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA; 9 U.S.C. §§ 401-402).

As codified, the EFAA amended the Federal Arbitration Act (FAA; § 1 et seq.), and was placed within the FAA’s other provisions. Section 402, added by the EFAA, states, “Notwithstanding any other provision of [the FAA], at the election of the person alleging conduct constituting a sexual harassment dispute . . . , no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” (§ 402(a).)

Yongtong “Jade” Liu sued Miniso Depot CA, Inc., USA Miniso Depot, Inc., Lin Li and unnamed Doe defendants on October 5, 2023. Liu alleged that Li was the chief executive officer of the Miniso entities. According to Liu, Miniso owns and operates retail stores which sell “goods such as toys, collectables, stationary, cosmetics, and household items.”

Liu alleged she was hired by Miniso in around April 2021 as a human resources administrator, and was paid an hourly wage. In around January 2022, Miniso changed Liu’s job title and, although her duties “remained generally the same,” she was classified as exempt from various wage and hour requirements imposed by the Labor Code, Industrial Welfare Commission Wage Orders, and regulations. Liu alleged that Miniso misclassified her as an exempt employee, and as a result improperly failed to pay her for all the hours she worked, to pay her the minimum wage, to pay the required rates for overtime, and to provide her with appropriate rest and meal breaks and with accurate wage statements.

Liu, who alleges she “identifies as lesbian and dresses in a unisex non-gender specific style,” further asserted that during her employment “[she] and others in her presence were subjected to unwelcome, severe and pervasive sexual harassment, sex discrimination and race discrimination, sexual orientation/gender harassment and sexual harassment/gender discrimination.”

Liu alleged the following specific incidents and types of offensive conduct: Li and others at Miniso commented on Liu’s appearance during company meetings; Li twice suggested during meetings that if Miniso’s products looked like Liu then no one would purchase them; Li remarked that Liu was unattractive because she was “too skinny” and that she needed to eat more to have more curves. and would comment that “a man should do what a man should do, and a woman should do what a woman should do.”

Liu also alleged that Miniso asked her, in her position in human resources, to participate in practices which she considered to be illegal, including failing to pay female employees “equally or comparably to male counterparts,” “hir[ing] only young Korean employees,” and falsifying “immigration-related documents” to facilitate Miniso hiring Chinese individuals who could not legally work in the United States. Liu alleged she complained about these practices to Li and others and refused to comply. Liu alleged that after she refused to participate in various practices she believed were illegal, she faced increased harassment and discrimination.

Based on these allegations, Liu asserted the following claims: violation of various wage and hour requirements set forth in the Labor Code and California Code of Regulations, title 8, section 11040; sexual harassment in violation of the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.); sex discrimination in violation of the FEHA; sexual orientation/gender identity harassment in violation of the FEHA; sexual orientation/gender identity discrimination in violation of the FEHA; retaliation for complaining about unlawful activities in violation of Labor Code section 1102.5; retaliation for refusing to participate in unlawful activities in violation of Labor Code section 1102.5; constructive termination in violation of public policy; and intentional infliction of emotional distress. Liu sought compensatory damages, statutory penalties, punitive damages, injunctive relief, and attorney’s fees.

On January 31, 2024, Miniso filed a motion to compel arbitration of all of Liu’s claims under the Federal Arbitration Act. Miniso argued that, under the terms of the arbitration agreement, “Liu must arbitrate her entire [c]omplaint, because it consists solely of Labor Code counts, FEHA claims, and employment and other torts, all of which arise in connection with Liu’s employment with Miniso.” Miniso contended that the EFAA did not apply because Liu’s allegations of sexual harassment failed to state a claim for harassment and, thus, her complaint effectively had no harassment claim. In particular, Miniso argued that Liu’s complaint concerned “mere annoying, offensive, and stray remarks,” which could not state a viable harassment claim under the FEHA.

The trial court denied Miniso’s motion to compel arbitration in the published case of Liu v. Miniso Depot CA, Inc. – B338090 (October 2024)

Miniso’s sole appellate contention is that the trial court erred in concluding the parties’ arbitration agreement was unenforceable as to all of Liu’s claims, and not just as to the two harassment claims. In other words, Miniso contends the trial court should have compelled Liu to arbitrate all of her claims except for the two harassment claims.

“We disagree. Under the EFAA, when a plaintiff’s lawsuit contains at least one claim that fits within the scope of the act, the arbitration agreement is unenforceable as to all claims asserted in the lawsuit.”

“We agree with our colleagues in Division Three of this appellate district, who recently concluded in Doe v. Second Street Corp. (Sept. 30, 2024, B330281) ___ Cal.App.5th ___ [2024 WL 4350420] that the plain language of the EFAA exempts a plaintiff’s entire case from arbitration where the plaintiff asserts at least one sexual harassment claim subject to the act. Here, at least one of Liu’s claims is subject to the EFAA, and thus the trial court did not err in refusing to compel Liu to arbitrate any of her claims.”

In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) (9 U.S.C. §§ 401- 402). In general terms, the EFAA renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases that arise or accrue on or after March 3, 2022, the EFAA’s effective date.

In October 2021, the Second Street Corporation dba The Huntley Hotel hired Jane Doe’s (fictitiously named plaintiff) co-worker Rivani as its food and beverage director. During Rivani’s training, plaintiff’s manager told Rivani that Jackson had sexually assaulted Jane Doe and should not be scheduled with her unless it was absolutely necessary.

The following month, Rivani called Jane Doe into his office and asked for details of the assault. Jane Doe said she did not feel comfortable describing it, but Rivani said he would schedule Doe and Jackson together unless she did. After Jane Doe described the assault, Rivani told her it was her fault.

The following day, Rivani scheduled Doe and Jackson to work on the same shift, and after that, Doe and Jackson were regularly scheduled to work together. Jane Doe began throwing up before nearly every shift. In February 2022, Raman told Doe’s general manager that Doe and Jackson had a consensual sexual relationship.

In April 2022, Jane Doe ran into Jackson when she arrived for her shift. She ran up to the stairwell and tried to access the roof, but the exit code to the roof access door had been changed. Doe was relieved because she had thoughts of jumping off the roof. When she came down the stairs, Rivani saw that she was crying and asked, “Is this work related?” Rivani then “looked her up and down and . . . walked away.”

In early May 2022, when Rivani saw Jane Doe, he loudly asked another employee, “[W]hat [is] the new code to the roof?” Doe began to have another panic attack and called in sick.

Several days later, Jane Doe reported to her medical provider that she was suicidal, and she was placed on an involuntary psychiatric hold pursuant to Welfare and Institutions Code section 5150. On the advice of her doctors, plaintiff has not returned to work since May 10, 2022.

Jane Doe filed the present case against Second Street Corporation dba The Huntley Hotel and two of its supervisors in 2023. The operative complaint alleges a pattern of sexual harassment and discrimination both before and after the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act’s effective date, as well as a variety of wage-and-hour violations.

Defendants moved to compel arbitration, citing an arbitration provision in the hotel’s employee handbook. The trial court denied the motion to compel, concluding that the EFAA rendered the arbitration provision unenforceable as to all of plaintiff’s claims. The trial court also granted plaintiff leave to file a first amended complaint adding additional claims, including a claim for constructive wrongful termination.

The California Court of Appeal affirmed the trial court in the published case of Doe v Second Street Corporation -B330281 (Sept 2024).

The hotel contends that where, as here, a plaintiff alleges sexually harassing conduct that occurred both before and after the EFAA’s effective date, the case should be sent to arbitration if the plaintiff’s claims accrued, or the “crux” of the alleged wrongful conduct occurred, before the EFAA’s effective date.

The parties agreed that no California case has addressed when a sexual harassment claim “accrues” under the EFAA where, as here, a plaintiff alleges sexually harassing conduct

“By its terms, the EFAA applies “with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act” i.e., March 3, 2022. Courts have interpreted this occurring both before and after the EFAA’s enactment.

“We affirm the trial court’s order in its entirety. We conclude that the trial court properly found that under the EFAA’s plain language, (1) plaintiff’s sexual harassment claims alleging continuing violations both before and after the EFAA’s effective date are exempt from mandatory arbitration, and (2) plaintiff’s other causes of action are also exempt from mandatory arbitration under the EFAA because they are part of the same “case.” Accordingly, the trial court properly denied defendants’ motion to compel arbitration.”

“We further conclude that the trial court did not abuse its discretion by permitting plaintiff to file a first amended complaint.”