Category: Daily News

A push to resolve more than 350 lawsuits against the makers and distributors of opioid painkillers has hit a snag, so a federal judge cleared the way for lawyers to start collecting evidence for trials.

U.S. District Judge Dan Polster in Cleveland said Wednesday “substantial progress” has been made in talks between U.S. cities and counties and Purdue Pharma LLP and other opioid makers and distributors, but both sides have found “barriers to a global settlement.”

Allowing local governments’ and opioid makers’ attorneys to get ready to go to trial is the “quickest way to surmount at least some of those barriers,” Polster said in an order the day after the most recent negotiating session.

“We are pleased Judge Polster is pursuing settlement possibilities while simultaneously allowing for litigation steps to be taken,” Paul Hanly, a New York-based lawyer helping to lead the case on behalf of cities and counties. “Hopefully, the two tracks converge in a global resolution.”

The judge is backing away from an earlier decision to put litigation efforts on hold while lawyers for Purdue, Johnson & Johnson, McKesson Corp., Endo International Plc, Teva Pharmaceutical Industries Ltd. and other companies talked with cities’ and counties’ attorneys about settling the cases.

Polster has made clear he wants a “meaningful” resolution of cases blaming the companies for creating a public-health crisis that is claiming the lives of more than 100 Americans every day. The judge has said he wants a deal addressing the companies’ business practices and the roots of the crisis.

Opioid Crisis Point Man Is Cleveland Judge in Midst of Epidemic

City and county officials contend Purdue and other opioid makers downplayed the painkillers’ health risks and oversold their benefits through hyper-aggressive marketing campaigns. They are seeking to recoup the societal costs of dealing with opioid addictions and overdoses as part of a settlement similar to the 1998 Big Tobacco accord that generated $246 billion.

“We are committed to being part of the ongoing dialogue and to doing our part to find ways to address this crisis,” said Jessica Castles Smith, a spokeswoman for J&J’s Janssen unit.

Teva spokeswoman Kaelan Hollon declined to comment. Purdue spokesman John Puskar declined to comment. Heather Zoumas Lubeski, an Endo spokeswoman, declined to comment

The companies also have been in settlement talks with a group of states attorneys general, some of whom have already sued opioid makers and distributors seeking to recoup tax dollars spent to address the crisis. Polster also has had some AGs involved in his settlement negotiations.

Polster has said if the federal opioid cases must be weighed by juries, he’d set the state of Ohio’s claims for trial in 2019. Oklahoma has a May 28 trial date set for its claims against Purdue and the other companies in state court.

Mike DeWine, Ohio’s attorney general, hasn’t said how much he wants from pharmaceutical companies and distributors to address the crisis in his state, but noted an Ohio State University study found that opioids cost the Buckeye State as much as $8 billion annually.

Polster is giving lawyers for both sides until March 16 to come up a litigation plan for the consolidated cases and will hold the next negotiating session on May 10. As with others, the session won’t be open to the public.

The case is In Re: National Prescription Opiate Litigation, 17-cv-2804, U.S. District Court, Northern District of Ohio (Cleveland).

Five Manhattan doctors were paid more than $800,000 by a pharmaceutical company to prescribe a spray version of the highly potent and addictive opioid fentanyl to more and more patients whether they needed it or not, according to an indictment unsealed last Friday in federal court.

The money was earmarked as “speaker fees” for educational lectures on the drug that the doctors had agreed to give to medical professionals. In reality, according to federal prosecutors, the “lectures” were just booze-fueled social gatherings, and the fees were kickbacks paid to prescribe the drug, Subsys.

And doctors who went along with the arrangement got other perks, prosecutors say: tickets to sporting events, free meals delivered to their office workers, casino and nightclub outings and a $4,100 evening of lap dances at a strip club — all paid for by the drugmaker, Insys Therapeutics.

On Friday, the five physicians, several of whom are affiliated with prestigious hospitals, were indicted on conspiracy and other charges that carry up to 20 years in prison. Drs. Gordon Freedman, Jeffrey Goldstein, Todd Schlifstein, Dialecti Voudouris and Alexandru Burducea all pleaded not guilty and were released on $200,000 bond each.

At the same time, prosecutors unsealed the guilty pleas of two former Insys executives, Jonathan Roper and Fernando Serrano, who were charged last year and are now cooperating. The company’s billionaire founder, John Kapoor, and other Insys officials and employees are also under indictment in a scandal that has been unfolding since 2014.

The 75-page indictment, unsealed Friday in New York, alleges that as the doctors pocketed more money from Insys, the more Subsys they prescribed.

An email from one sales representative to Freedman gave explicit instructions on how many new patients were needed to help meet a company target, according to the indictment.

“I’d rather you put 20 (or more, of course LOL) new patients (commercially insured of course, as always) on it in April even if we wind up getting only 10-14 approved, rather than only have you go with the safe 6-7 that you think will all get approved,” the email said. Freedman replied: “Got it.”

Prosecutors said Freedman received approximately $308,000 in “speaker program fees” and by the last quarter of 2014 was the fourth-highest prescriber of Subsys in the nation, accounting for more than $1 million in sales.

The indictment says that when Goldstein began prescribing a lot of a competing product, Insys put pressure on him and he began recommending Subsys more often. After a bitter argument with a company executive, he convinced Insys to send him a $9,800 check for a home security system and then dummied up an invoice without buying one, prosecutors alleged.

Burducea married an Insys sales rep and then lied to federal investigators about how long they had been dating so their relationship couldn’t be linked to his high prescription rate, the indictment says. Voudouris had Insys’ Serrano take an exam for her so she would be eligible to prescribe Subsys, prosecutors said.

When she didn’t write enough prescriptions, the indictment says, Insys got upset. An email from Roper to sales reps said they had “invested way too much” to be satisfied with just a few patients.

“1 new PT [patient] a day is what was agreed upon,” the email said. “Don’t let the doctor sell you, you sell the doctor!”

Rose Barrett of the Berkshire Hathaway Group was elected chair of the California Workers’ Compensation Institute board of directors for 2018.

Barrett was first elected to the CWCI board as a representative of AIG in 2014 and has been a member of the institute’s executive committee since 2015, serving as vice-chair in 2017.

Also on CWCI’s 2018 executive committee will be Martin Brady of Schools Insurance Authority, an associate member; Susan Gordon, Zurich North America; David Mitchell, Republic Indemnity Company of America; Rob Shatsnider, CompWest Insurance Co.; Vernon Steiner, State Compensation Insurance Fund; and Matthew Zender, AmTrust North America.

Those elected to serve on CWCI’s 2018 board were:

– Sharon Thaler, AIG;
– Roger Moseley, Alaska National Insurance Co.;
– Paul Ziegler, Allianz Global Corporate and Specialty;
– Justin Boardman, CHUBB;
– David Macy, EMPLOYERS;
– Gretchen Thompson, The Hartford Insurance Group;
– Amanda Granger, ICW Group;
– John Dickey, Liberty Mutual Insurance;
– Kris Mathis, Pacific Compensation Insurance Company;
– Eric Hansen, Preferred Employers Group;
– Eric Belk, Travelers;
– Diana Harrelson, Zenith Insurance Co.; and
– Kevin Confetti, University of California, an associate member.

CWCI members include 24 insurer groups comprised of nearly 200 underwriting companies that write and service more than 83 percent of California statewide workers’ comp premium, as well as 32 of the largest public and private self-insured employers in the state.

A San Gabriel Valley doctor who pleaded guilty to a federal drug trafficking charge for illegally distributing OxyContin was sentenced to over 13 years in federal prison.

Dr. Daniel Cham, 49, a Covina resident who formerly operated a clinic in La Puente, was sentenced by United States District Judge Andrew J. Guilford.

Acting on tip about a pharmacy that was filling a large number of prescriptions written by Cham, special agents with the Drug Enforcement Administration discovered a “large-scale criminal operation” in which Cham was writing thousands of prescriptions for powerful painkillers, often in combination with alprazolam (often sold under brand name Xanax) or carisoprodol (often sold under the brand name Soma), according to court documents. “The combination of these drugs is particularly dangerous, and is associated with the majority of overdose deaths,” according to a sentencing memorandum filed in court.

An affidavit previously filed in this case discussed how an undercover officer made three visits to Cham’s La Puente office in 2014, and how Cham wrote prescriptions for controlled substances in exchange for $200 or $300 in cash or money orders. As discussed in the court document, Cham issued a prescription for oxycodone even though the undercover operative said he “had been high and drunk while receiving controlled substance prescriptions” previously from Cham.

On another occasion, Cham prescribed oxycodone even though the undercover law enforcement officer presented, in lieu of photo identification, a written notice that his license had been suspended for driving under the influence.

Cham pleaded guilty in April 2016 to one count of distribution of oxycodone, a powerful and addictive painkiller marketed under various names, including OxyContin, Vicodin and Norco. Cham also pleaded guilty to one count of money laundering.

Prosecutors wrote in court documents that Cham “stands before the court for selling prescriptions for massive amounts of oxycodone to persons he well knew were drug dealers and addicts, in exchange for hundreds of thousands of dollars in cash. Defendant’s illegal prescriptions killed at least two addicted youths, including a 22-year-old woman and 28-year-old man.”

The young woman, who was a resident of Oregon, died after ingesting narcotics prescribed by Cham to members of Oregon-based drug trafficking conspiracy. Cham issued prescriptions in the names of the Oregon drug traffickers – many of whom he had never met – and Cham created fake paperwork to make it falsely appear he had examined the “patients.” Investigators in Oregon identified over 12,000 pills of oxycodone that Cham illegally prescribed to the drug traffickers in that state.

In a plea agreement filed in this case, Cham admitted that he unlawfully prescribed oxycodone to an undercover agent posing as a patient in March 2014 in exchange for $300 in money orders, which Cham then deposited into a bank account held in the name of another business. Cham made the deposit “knowing that the transaction was designed to conceal and disguise the nature and source of the money orders,” according to the plea agreement.

New data on the Independent Medical Review (IMR) process used to resolve California workers’ comp medical disputes show that IMR volume dipped for the first time ever in 2017, but the outcomes were unchanged as IMR physicians again upheld 91.2% of modified or denied medical service requests that they reviewed.

The California Workers’ Compensation Institute (CWCI) analysis is based on a review of 648,450 IMR decision letters issued from 2014 through 2017 in response to applications submitted to the state after a UR physician modified or denied a requested medical service. In adopting IMR in 2012 state lawmakers anticipated that once doctors, attorneys and others came to know which services could be approved as meeting evidence-based medicine standards the process would reduce treatment disputes, but 2017 marks the first time in the five years since its inception that IMR volume has declined, as the Division of Workers’ Compensation data show 3,808 fewer cases in 2017 than in 2016, which translates to a relatively modest 2.2% decline.

A review of the 2017 IMR results shows that IMR physicians upheld the Utilization Review (UR) doctors’ modifications or denials of requested services 91.2% of the time, which was exactly the same uphold rate as in 2014 and in 2016.

The mix of service requests reviewed by IMR physicians in 2017 showed only minor changes from 2016, as prescription drug requests (29.1% of which were for opioids) again accounted for the largest share of the IMRs (46.0% vs. 47.9% in 2016), with UR determinations on pharmaceutical requests upheld 92.0% of the time. Aside from the opioid requests, requests for musculoskeletal drugs, dermatologicals, and anti-inflammatory drugs topped the list of pharmaceutical IMRs, while compound drug requests fell from 6.5% of the prescription drug IMRs in 2016 to 4.2% in 2017, the biggest decline of any prescription drug category, which may be linked to the fact that IMR physicians have consistently deemed them not medically necessary in 99% of the cases.

Similar results were noted for most of the dermatological requests, with IMR physicians upholding modifications or denials of requests for topical local anesthetics, manufactured topicals, and topical corticosteroids 97% to 98% of the time. Among other medical service categories, physical therapy, injections, and durable medical equipment once again combined for about a quarter of the IMRs in 2017, but no other medical service category represented more than 5% of the disputed requests. Among all medical service categories, requests for evaluation and management services (primarily referrals for consultations) again had the best chance of being overturned by IMR, (an IMR uphold rate of 79.2%), while modifications or denials of physical therapy and acupuncture were the least likely to be overturned, with IMR upheld 94.0% of the time for both categories.

As in prior years, most of the disputed requests that went through IMR in 2017 came from a small number of physicians, with the top 10% of physicians who were named in decision letters (1,150 physicians) accounting for 85% of the disputed requests, while the top 1% (115 providers) accounting for 45%. Los Angeles and Bay Area continue to represent a disproportionately high share of the IMR cases relative to their share of paid medical services, while the more rural areas have a disproportionately low share of the IMR cases.

CWCI has released a more detailed analysis of the 2017 IMR results in a Research Update, “Independent Medical Review Decisions: January 2014 Through December 2017.”