Category: Daily News

Teva Pharmaceutical Industries Ltd.’s move to pay $85 million to resolve an Oklahoma lawsuit alleging it and other drugmakers illegally marketed opioid painkillers, fueling a public health crisis, leaves Johnson & Johnson in the uncomfortable position of being the state’s sole target in the first opioid lawsuit set to start on May 28.

Bloombert reports that the settlement with Oklahoma’s attorney general, announced Sunday, came nearly on the eve of trial and followed a $270 million deal by Purdue Pharma LP in March to resolve identical claims over the marketing of its opioid-based OxyContin painkiller. The state alleged the three companies duped doctors into prescribing the powerful medications for unapproved ailments, causing fatal overdoses and drug-addiction woes.

Oklahoma is seeking at least $10 billion in damages and penalties for current and future outlays tied to the opioid epidemic. The trial is slated to be the first test of public-nuisance laws against opioid manufacturers and distributors. At least 42 states and more than 1,900 municipalities also have sued companies in the industry, demanding billions of dollars in damages.

J&J — known for being loath to settle mass-tort litigation at the early stages — so far hasn’t cut an out-of-court deal to end the case, set to start May 28. Oklahoma Attorney General Mike Hunter has tagged the company as the “kingpin” of the opioid crisis because it once sold its own version of opioid painkillers as well as the active ingredient.

Andrew Wheatley, a spokesman for J&J and its Janssen unit, said Sunday the drugmaker was ready to defend itself at trial from Oklahoma’s claims that its painkillers caused a public nuisance in the state. Hunter contends J&J’s illegal marketing created a nuisance that forced the state to spend hundreds of millions of dollars to address the societal fall-out of opioid-related overdoses and addictions.

“We disagree with the state’s overly expansive theories of public nuisance law, which should not apply in this situation,” Wheatley said in an emailed statement. “At the same time, as with all litigation, if an appropriate resolution is possible that avoids the expense and uncertainty of a trial, we are always open to that option.”

There may be other settlements later this year as the focus on opioid litigation shifts to Cleveland, where a federal judge has set two test trials for October to allow juries to consider public-nuisance claims over drug-marketing campaigns, said Carl Tobias, a University of Richmond law professor who teaches as product-liability cases.

U.S. District Judge Dan Polster is overseeing more than 1,900 suits filed by U.S. cities and counties seeking recoup tax dollars spent fighting the opioid epidemic. Polster unsuccessfully sought to push the companies and local governments into settling and then set the test trials to get the case moving.

The Justice Department’s Tax Division announced that a federal grand jury returned an indictment against attorney Scott Norris Johnson, 57, of Carmichael, charging him with three counts of making and subscribing a false tax return.

Johnson is known to sue small businesses citing minor ADA infractions, and based on the law, he can collect thousands of dollars in violations and recoup his own attorney’s fees. He almost always settles for tens of thousands of dollars.

According to the indictment, Johnson owned and operated Disabled Access Prevents Injury Inc. (DAPI), a legal services corporation. First using DAPI, and later using a law firm, Johnson filed thousands of lawsuits in the Eastern District of California and elsewhere. Johnson named himself as the plaintiff in the lawsuits and made claims under the Americans with Disabilities Act of 1990, the California Disabled Persons Act, and the California Unruh Civil Rights Act.

The East Bay Times reported that In December 2015, attorney Catherine Corfee, who often represents small businesses sued by Johnson, said she received an email from a federal prosecutor that there was a criminal grand jury probe into Johnson’s “treatment of settlement proceeds for ADA lawsuits.”

She recounted more than a decade opposing Johnson in court and how he would try to add physical injury wording to the settlements despite not alleging any such damages in the original complaint.

“I have refused to allow the words ’caused injury’ to make sure he pays his taxes,” Corfee said.

“I’m not going to participate in tax fraud,” she said. “Not one of my cases did I ever need to request medical records. If you don’t allege (physical injuries) in the lawsuit, then why settle for it?”  But, she said, other attorneys and defendants may not be as careful when finalizing their settlements.

Under the Small Business Job Protection Act of 1996, payments related to lawsuit settlements or awards are taxable unless they were paid on account of personal physical injury or physical sickness. Johnson, however, allegedly materially underreported the taxable income he received from lawsuit settlements and awards on his income tax returns for tax years 2012, 2013, and 2014. By understating his income on his tax returns, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014.

This case is the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Katherine T. Lydon and Trial Attorney Tim Russo of the Tax Division are prosecuting the case.

Last March, Business Insurance reported that OxyContin maker Purdue Pharma LP was exploring filing for bankruptcy to address potentially significant liabilities from thousands of lawsuits alleging the drug manufacturer contributed to the deadly opioid crisis sweeping the United States.

Purdue and its wealthy owners, the Sackler family, are under pressure to respond to mounting litigation accusing the pharmaceutical company of misleading doctors and patients about risks associated with prolonged use of its prescription opioids.

Perhaps in response to the suspected Purdue strategy, recently a number of states, and now this week the Minnesota Attorney General Keith Ellison is naming members of the Sackler family behind opioid manufacturer Purdue Pharma in the state’s ongoing lawsuit over marketing tactics that have been linked to a wave of addictions and overdose deaths across the country.

“Their misconduct led directly to damage and death in every community in Minnesota,” Ellison said. “They knew what they were doing, and they did it anyway. Today, we’re holding them personally accountable for the harm they and their greed have done to the people of our state.”

In a statement, the Sackler family described the lawsuit as “baseless” and a “misguided attempt to place blame where it does not belong for a complex public health crisis.”

Purdue Pharma notched a legal win this week when a North Dakota judge dismissed that state’s claim that the company minimized risks and inflated the benefits of long-term use of its narcotic painkillers. The judge found “holding Purdue solely responsible for the entire opioid epidemic in North Dakota is difficult especially given Purdue’s small share of the overall market for lawful opioids.” Minnesota Attorney General Keith Ellison

North Dakota Attorney General Wayne Stenehjem said Friday he will appeal the ruling.

Minnesota originally filed suit last year against Purdue Pharma, the Sackler-founded company in Connecticut that created OxyContin. The litigation was modeled after successful efforts to sue tobacco companies, with the aim of using a judgment to fund addiction treatment.

Ellison said that he is seeking to add eight members of the Sackler family as individual defendants after finding that each played a role in allegedly deceptive marketing tactics “at a granular level.”

According to Ellison, Sackler family members attended sales meetings and directed compensation of Purdue’s sales force in ways that encouraged inappropriate opioid prescriptions. He added that the family knew of the addictive power of opioids as early as 1999 but dismissed and withheld such information for years.

Nearly every state is involved in litigation against companies tied to opioid production or distribution, with both state and federal officials increasingly trying to force Big Pharma to foot the bill for addiction treatment and prevention. In addition to the states’ suits, a massive federal lawsuit involving 1,600 cities, counties, American Indian tribes and labor unions was consolidated last year in Ohio. Purdue Pharma is one of more than a dozen defendants named in that case.

Now, state attorneys general are increasingly trying to bring members of the Sackler family to account for their roles with Purdue Pharma. This week, Iowa, Kansas, Maryland, West Virginia and Wisconsin each announced new legal actions against Purdue Pharma, and all but Kansas targeted at least one member of the Sackler family. Minnesota’s lawsuit would be one of the more extensive pieces of litigation against the family, with eight members named.

Purdue agreed with Oklahoma in March to a $270 million settlement out of court, staving off what would have been its first trial over the opioid epidemic. Sackler family members will personally pay $75 million of that total.

Workers exposed to welding fumes are more likely to develop lung cancer than those not exposed to the fumes, and the new study published in the BMJ Occupational and Environmental Medicine suggests this holds true regardless of other risk factors like smoking or exposure to asbestos. This research will likely result in an increase of workers’ compensation claims for lung cancer by employees in this industry.

“Welding fumes have previously been classified as ‘possibly carcinogenic’ to people,” said Dr. Denitza Blagev, a researcher at the University of Utah and Intermountain Medical Center in Murray, Utah.

“Although welders have been observed to experience higher lung cancer rates, there are many other factors – including smoking, asbestos and other carcinogen exposures – that were likely contributing to that increased risk,’ Blagev, who wasn’t involved in the study, said by email according to the summary reported in Reuters Health.

For the current analysis, researchers examined data from 45 previously published studies with a total of roughly 17 million participants. Overall, people who worked as welders or had exposure to welding fumes were 43 percent more likely to develop lung cancer.

When researchers looked only at data from studies that accounted for both smoking and asbestos exposure, welding was still associated with a 17 percent higher risk of lung cancer.

“It is now clear that the increased lung cancer risk in welders is not fully explained by these other factors,” Blagev said by email. “And with this review, welding fumes can be classified as ‘carcinogenic’ to humans.”

Worldwide, an estimated 110 million workers are exposed to welding fumes either as welders or as bystanders, Dr. Neela Guha of the California Environmental Protection Agency and colleagues note in Occupational & Environmental Medicine.

Welding fumes are generated when metals are heated above their melting point and then vaporize and condense into very fine solid particles in the air. The exact blend of chemicals in these vapors can depend on the type of metals involved, the welding process, and the occupational setting where the work is performed.

For example, nickel compounds and chromium are both known to cause lung cancer and are typically present in fumes when workers weld stainless steel, the study team writes. These metals are in much lower concentrations in other types of steel, which tend to produce fumes with more fine particulate matter – tiny solid and liquid bits of soot, dust and chemicals that can damage the lungs.

“The process can take decades of exposure,” said Paul Cullinan, an occupational and environmental health researcher at Royal Brompton Hospital and Imperial College London in the UK.

A team of Internet entrepreneurs in downtown Manhattan wants to revolutionize how Americans get prescription drugs. Their company, Blink Health, has a crazy idea: let customers shop for the best deal. The founders of Blink Health seek to eliminate the middlemen and comparison-shop at their website to see if you can get a better deal than what’s being offered by and insurance plan or the drugstore.

Blink Health claims that the pharmacy business remains largely untouched because customers haven’t easily been able to shop online for a better price. They’re buying drugs the way they bought them in the predigital age – at the drugstore. The middlemen still flourish, at the expense of everyone else..

The dominant middlemen are the pharmacy benefit managers, or PBMs, which are hired by private and government health-insurance plans to administer drug benefits. Dozens of small PBMs once competed for business, but today three large firms – Express Scripts, CVS Caremark, and OptumRx – together control more than 75 percent of the market.

While other twentysomethings were launching Internet startups, Geoffrey Chaiken was wondering why there was no Uber or Airbnb in the pharmacy industry. After dropping out of Yale to start a company developing epilepsy drugs, he began studying the industry’s supply chain.

Together with his younger brother, Matthew, he started Blink Health in his downtown apartment four years ago. Today, it has 600,000 customers and an office in SoHo with 220 employees. To help them run the company, the Chaikens brought in veterans of online companies like Kayak as well as the drug industry, including Bill Doyle, who’d spent decades working for Johnson & Johnson.

Blink negotiates with drug manufacturers, using its purchasing power to extract discounts off the list price. Then, instead of collecting secret rebates or steering patients to a preferred drug, it posts all the discounted prices on its website (and makes money by charging the patient slightly more than it reimburses the pharmacy). Instead of forcing patients to turn over their prescription to a pharmacist to find out what it will cost, Blink lets doctors and patients shop on the web before making a commitment.

For example, a month’s supply for the generic version of Lipitor (atorvastatin) would typically cost more than $100 at CVS and more than $200 at Walgreens. The generic version of Crestor (rosuvastatin) would cost more than $175 at either chain. If your plan covered the Lipitor but not the Crestor generic, you might spend between $5 and $40 for the Lipitor, but you’d have to pay the full $175 for the Crestor – so you might not buy it, even though it would be the better option for you.

At Blink’s website, you can typically find the Lipitor generic priced under $9 and the Crestor under $12. If you buy it from Blink, you can get it delivered to your home or pick it up at a local drugstore. Independent pharmacies have been eager to work with Blink because it’s simpler and more profitable than dealing with insurance plans.

Blink makes straightforward payments for the drugs and doesn’t impose complicated contracts (or gag clauses). The PBMs often pay less, and they impose various fees, like charging pharmacists $5 if they call their help desk to deal with a prescription. The PBMs can decide months after a transaction that the pharmacy must give back part of the reimbursement—a retroactive penalty called a “clawback”—which can cause the pharmacy to lose money on the prescription.

Blink Health has shown that the same market forces that liberated airlines and their passengers can liberate drugmakers and patients. These forces could transform the rest of the health-care industry. The prices of most medical procedures and hospital stays are as complex and opaque as they are for prescription drugs. The prices are known, again, only to the middlemen, so it’s not surprising that costs keep rising.