Author: WorkCompAcademy

Eleven drugmakers led by Pfizer and Novartis have set aside a combined $2 billion to invest in gene therapy manufacturing since 2018, according to a Reuters analysis, in a drive to better control production of the world’s priciest medicines.

The full scope of Novartis’ $500 million plan, revealed to Reuters in an interview with the company’s gene therapy chief, has not been previously disclosed. It is second only to Pfizer, which has allocated $600 million to build its own gene therapy manufacturing plants, according to filings and interviews with industry executives.

Gene therapies aim to correct certain diseases by replacing the missing or mutated version of a gene found in a patient’s cells with healthy copies. With the potential to cure devastating illnesses in a single dose, drugmakers say they justify prices well above $1 million per patient.

The senior vice president of Pfizer’s global gene therapy business, acknowledged drugmakers take a “leap of faith” when they make big capital investment outlays for treatments before they have been approved or, in some cases, even produced data demonstrating a benefit. The rewards are potentially great, however.

Gene therapy is one of the hottest areas of drug research and, given the life-changing possibilities, the FDA is helping to speed treatments to market. It has approved two so far, including Novartis’s Zolgensma treatment for a rare muscular disorder priced at $2 million, and expects 40 new gene therapies to reach the U.S. market by 2022.

There are currently several hundred under development by around 30 drugmakers for conditions from hemophilia to Duchenne muscular dystrophy and sickle cell anemia.

The proliferation of these treatments is pushing the limits of the industry’s existing manufacturing capacity. Developers of gene therapies that need to outsource manufacturing face wait times of about 18 months to get a production slot, company executives told Reuters. They are also charged fees to reserve space that run into millions of dollars, more than double the cost of a few years ago, according to gene therapy developer RegenxBio.

As a result, companies including bluebird bio, PTC Therapeutics and Krystal Biotech are also investing in gene therapy manufacturing, according to a Reuters analysis of public filings and executive interviews. They follow Biomarin Pharmaceutical Inc, developer of a gene therapy for hemophilia, which constructed one of the industry’s largest manufacturing facilities in 2017.

The FDA is keeping a close eye on standards. This comes amid the agency’s disclosure in August that it is investigating alleged data manipulation by former executives at Novartis’ AveXis unit.

The Division of Workers’ Compensation provided an update on the development of amendments to the Medical-Legal Fee Schedule.

The division is close to finalizing the fee schedule, and intends to begin the rulemaking process by the end of the year and will hold a public hearing in early 2020. The development of the draft amendments included comprehensive review by those who work in and utilize California’s workers’ compensation system.

The division posted proposed amendments in May 2018 and after soliciting proposals and obtaining feedback from the industry, posted a revised proposal last August incorporating input from stakeholders including medical providers, public and private employers, attorneys, insurance carriers, advocates and policymakers.

The division continues to meet with stakeholders as it refines its proposed amendments and fixed fee schedule to improve the quality of medical reports, eliminate complexity factors and increase fees for medical-legal testimony. Updates on the proposed regulation including information on the public hearing will be posted on DWC’s proposed regulations webpage.

Ten California state agencies paid $20 million more for workers’ compensation insurance than they could have had selected a different insurer, according to a California State Auditor’s report published Thursday.

State law allows state agencies to decide how to provide workers’ compensation benefits to their employees. Almost 90 percent of them choose to do so using a master agreement that the California Department of Human Resources (CalHR) negotiated on their behalf with the State Compensation Insurance Fund (State Fund).

Under the master agreement, state agencies reimburse State Fund for the actual cost of workers’ compensation claims, rather than paying for insurance or maintaining a workers’ compensation reserve.

According to CalHR data, nearly 190 agencies provided benefits through the master agreement in fiscal year 2017-18, while 32 agencies opted to purchase insurance from State Fund.

The State Auditor then reviewed the costs of 10 of the 32 agencies that purchased insurance from State Fund in fiscal year 2017-18. It found that each of these agencies consistently paid more in insurance premiums than it would have paid had it provided benefits under the master agreement.

It estimated that from fiscal years 2013-14 through 2017-18, these 10 agencies collectively paid an average of $5.7 million per year in premiums but would have paid an average of less than $1.6 million per year under the master agreement.

In fact, had the 10 agencies used the master agreement, they could have saved the State more than $20 million during the period the Auditor reviewed.

However, CalHR is not required to assist agencies in deciding whether purchasing workers’ compensation insurance or using the master agreement is likely to be more cost-effective for them.

State Fund does not always provide state agencies with enough time to review settlement authorization requests before the mandatory settlement conferences. State Fund must obtain approval from agencies before entering into settlements, unless the agencies have authorized State Fund to settle cases without such preapproval.

State Fund and several of the agencies reviewed indicated that State Fund should provide agencies with 30 days to review settlement requests before the settlement conferences. However, State Fund did not provide agencies with 30 days to respond to the settlement requests for eight of the 15 claims reviewed..

To ensure that all state agencies provide workers’ compensation in the most cost-effective manner, CalHR should provide each agency that purchases workers’ compensation insurance with a cost-benefit analysis every five years that compares the cost of purchasing this insurance through State Fund with the cost of obtaining coverage through the master agreement. State Fund. CalHR agreed to implement this recommendation.

State Fund should create and follow a policy to provide settlement authorization requests to agencies at least 30 days before settlement conferences. State Fund did not agree with the Auditor’s recommendation, asserting that it will strive to meet a guideline that State Fund will complete settlement requests at the earliest opportunity.

In separate incidents, Miguel Velazquez and Servando Velazquez suffered injuries, and each required Spanish language interpreting services in connection with their medical care. Meadowbrook was the carrier for the claimants’ employers and accepted both claims and administered benefits.

DFS Interpreting, provided interpreter services to each claimant, and timely submitted invoices to Meadowbrook. Meadowbrook issued explanations of review pursuant to Labor Code section 4603.3, explaining that it refused to pay the invoices DFS submitted.

DFS objected to those explanations of review, but did not request a second review pursuant to section 4603.2, subdivision (e) or California Code of Regulations, title 8, section 9792.5.5.

After each underlying case resolved, the cases were consolidated to determine whether DFS properly contested Meadowbrook’s explanations of review, and, if not, whether to award further payment to DFS. The parties stipulated that the interpreters were necessary at all medical treatment appointments, DFS timely submitted the invoices, Meadowbrook timely issued the explanations of review, and DFS objected to the explanations of review but did not request a second review.

The WCJ issued her findings and award and order in favor of DFS, and found that the liens were not barred by its failure to request a second review, because the administrative director had not adopted a fee schedule pursuant to section 4600, subdivision (g).

The WCAB denied the reconsideration petition. It reasoned that the AD had not specifically adopted a fee schedule for interpreters after the Legislature enacted Senate Bill No. 863. Thus, there was not an applicable fee schedule and DFS was not required to submit a request for second review.

The Court of Appeal reversed in the published case of Meadowbrook v WCAB.

The AD adopted Title 8, section 9795.3, entitled “Fees for Interpreter Services” in 1994. The section also describes interpreter fees that “shall be presumed to be reasonable.”

There is no requirement that the AD adopt a fee schedule after Senate Bill No. 863 was enacted. Title 8, section 9795.3 is an applicable fee schedule as required by the labor code and regulations.The parties offer no authority establishing that the schedule of fees set out in Title 8, section 9795.3 is not a “fee schedule” such that it qualifies as such under the relevant regulation.

“Because the fee schedule set out in Title 8, section 9795.3 is an “applicable fee schedule” as required by Title 8, section 9792.5.4, we hold that DFS’s liens are barred by its failure to request a second review. Because the WCAB’s interpretation of the law is clearly mistaken, the WCAB’s opinion and decision on reconsideration must be annulled.”

Several hospitals owned and operated by Sutter Health, a California-based healthcare services provider, and Sacramento Cardiovascular Surgeons Medical Group, Inc., a practice group of three cardiovascular surgeons, have agreed to pay the United States a total of $46,123,516.36 to resolve allegations related to reimbursement claims they submitted to the Medicare program.

The Physician Self Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The law is intended to ensure that medical decisions are not influenced by improper financial incentives.

As part of the settlements, one of Sutter’s hospitals, Sutter Memorial Center Sacramento, has agreed to pay $30.5 million to resolve allegations that, from 2012 to 2014, it violated the Stark Law by billing Medicare for services referred by Sac Cardio physicians, to whom it paid amounts under a series of compensation arrangements that exceeded the fair market value of the services provided.

Relatedly, Sac Cardio has agreed to pay $506,000 to resolve allegations that it improperly submitted duplicative bills to Medicare for services performed by physician assistants that it was leasing to SMCS under one of those compensation arrangements.

Separately, Sutter has agreed to pay $15,117,516.36 to resolve other conduct that the company itself disclosed to the United States, principally concerning additional violations of the Stark Law.

Specifically, Sutter hospitals submitted Medicare claims that resulted from referrals by physicians to whom those hospitals (1) paid compensation under personal services arrangements that exceeded the fair market value of the services provided; (2) leased office space at below-market rates; and (3) paid reimbursements of physician-recruitment expenses that exceeded the actual recruitment expenses at issue.

Additionally, several Sutter ambulatory surgical centers double-billed the Medicare program by submitting claims that included radiological services for which Medicare separately paid another entity that had performed those services.

The allegations relating to SMCS and Sac Cardio were originally brought by Laurie Hanvey in a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private parties to bring suit on behalf of the federal government and to share in any recovery. The whistleblower will receive $5,891,140 as her share of the federal government’s recovery in this case.

These matters were handled on behalf of the government by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, and the U.S. Attorney’s Office for the Eastern District of California. Investigative support was provided by the Department of Health and Human Services’ Office of the Inspector General.