Tag: 2018 News

Currently more than 70 states, cities and counties have filed lawsuits related to the costs of the opioid addiction crisis.

Discovery in litigation revealed that manufacturers cited biased medical studies to support claims that opioid addiction was rare. These companies allegedly hired pain management experts and doctors to promote use of opioids to other doctors and provided kickbacks and other incentives to doctors to promote use to other doctors.

Manufacturers also were accused of creating and funding a medical-front group to publish and promote false research and information about the drugs and published articles stating that opioid use was non-addicting, among other fraudulent acts.

An yet another city has joined in. According to the Sarasota Patch, the Sarasota City Commission has unanimously voted to retain Bill Robertson, personal injury attorney and CEO of Kirk Pinkerton P.A., and Steven W. Teppler with the Abbott Law Group to represent the City of Sarasota in a lawsuit to recover damages related to the opioid epidemic.

The attorney team will file a lawsuit in federal court with the Middle District in Tampa against as many as seven or more major pharmaceutical manufacturing companies and their distributors.

But there is a new twist. The two attorneys are taking the case on contingency, meaning the city will not incur any expenses unless recovered during the lawsuit.

“Our nation is in crisis and these pharmaceutical companies are putting profits above people by fueling the opioid epidemic with false claims and failure to disclose the long-term risks of these toxic drugs,” said Robertson. “Their conduct is fraudulent, unlawful and deceptive and municipalities have lost hundreds of thousands of dollars trying to keep up with expenses related to this malfeasance.”

“Damages to municipalities could add up to tens of millions of dollars,” said Teppler. “These firms grossly overstated the benefits of opioid therapy, leading to excessive collateral damage, including staggering costs for workers compensation, law enforcement and emergency services, relapse prevention and more.”

“We have lost so many to overdose and addiction, which is largely the reason I began a career in public service after law school — to provide a better path for people here,” said Sarasota City Commissioner Hagen Brody. “Our city has witnessed a pain pill epidemic that has led to dependence on street opiates like heroin when the supply of pills dried up. This lawsuit is an aggressive move to claw back some of the profit that pharmaceutical companies have made unscrupulously pedaling addiction in our community, and I fully support the effort.”

In 2016, Robertson and Teppler represented the City of Sarasota in the oil spill claim against BP, recovering $3 million for the city.

The California Supreme Court reversed the Court of Appeal and held that an action by the Orange County District Attorney for civil penalties under the Unfair Competition Law was not preempted by Fed/OSHA . The ruling allows public prosecutors to invoke the UCL to pursue big civil penalties and injunctive relief against employers who fail to comply with workplace safety regulations.

Solus Industrial Innovations, LLC manufactures plastics at its Orange County facility. In 2007, it installed at the facility an electric water heater that was designed for residential use. In March 2009, the water heater exploded, killing two employees.

The Division of Occupational Safety and Health determined that the explosion had been caused by a failed safety valve and the lack of any other suitable safety features on the heater. In an administrative proceeding, the agency charged Solus with five violations of state occupational safety and health regulations, and also cited Solus with a willful violation for failing to maintain the water heater in a safe condition.

In addition, because two employees had died, the Division forwarded the investigation results to the District Attorney of Orange County. (See Lab. Code, § 6315, subd. (g).) In March 2012, the district attorney filed criminal charges against Solus’s plant manager and its maintenance supervisor for felony violations of Labor Code section 6425, subdivision (a).

The Orange County District Attorney also brought an action for civil penalties under this state’s unfair competition law (UCL; Bus. & Prof. Code, § 17200) and fair advertising law (FAL; id., § 17500) against an employer. The action alleged the employer violated workplace safety standards established by the state occupational safety and health law (Cal/OSHA; Lab. Code, § 6300 et seq.) and attendant regulations.

It alleged that Solus’s failure to comply with workplace safety standards amounted to an unlawful, unfair and fraudulent business practice under Business and Professions Code section 17200, and the district attorney requested imposition of civil penalties in the amount of up to $2,500 per day, per employee, for the period from November 29, 2007, through March 19, 2009.

The second was a claim that Solus “made numerous false and misleading representations concerning its commitment to workplace safety and its compliance with all applicable workplace safety standards, and as a result of those false and misleading statements, Solus was allegedly able to retain employees and customers in violation of Business and Professions Code section 17500.” The district attorney requested imposition of civil penalties in the same amount for the same period.

The employer contended, and the Trial Court and Court of Appeal ruled that the district attorney’s action was preempted by the federal Occupational Safety and Health Act of 1970. The California Supreme Court reversed in the case of Solus Industrial Innovations, LLC v The Superior Court of Orange County.

The Supreme Court concluded that “the federal OSH Act contemplates a cooperative system of workplace safety regulation, not an exclusively federal one. When federal schemes involve cooperation and concurrent jurisdiction, this circumstance also suggests that the scope of preemption was not intended to be broad.”

“Finally, we reiterate the strong presumption against preemption, arising both from the fact that the federal legislation addresses an area that has been the long-standing subject of state regulation and from the fact that California has assumed responsibility under the federal OSH Act to regulate worker safety and health, thereby preempting federal law.”

California’s insurance commissioner has launched an investigation into Aetna after learning a former medical director for the insurer admitted under oath he never looked at patients’ records when deciding whether to approve or deny care.

California Insurance Commissioner Dave Jones expressed outrage after CNN showed him a transcript of the testimony and said his office is looking into how widespread the practice is within Aetna.

“If the health insurer is making decisions to deny coverage without a physician actually ever reviewing medical records, that’s of significant concern to me as insurance commissioner in California — and potentially a violation of law,” he said.

Aetna, the nation’s third-largest insurance provider with 23.1 million customers, told CNN it looked forward to “explaining our clinical review process” to the commissioner.

The California probe centers on a deposition by Dr. Jay Ken Iinuma, who served as medical director for Aetna for Southern California from March 2012 to February 2015, according to the insurer.

The deposition came as part of a lawsuit filed against Aetna filed by Gillen Washington, a college student who suffers from a rare immune disorder. Washington was diagnosed with common variable immunodeficiency, or CVID, in high school, The case is expected to go to trial later this week in California Superior Court.

During his videotaped deposition in October 2016, Iinuma — who signed the pre-authorization denial — said he never read Washington’s medical records and knew next to nothing about his disorder. The doctor said he was following Aetna’s training, in which nurses reviewed records and made recommendations to him.

Questioned about Washington’s condition, Iinuma said he wasn’t sure what the drug of choice would be for people who suffer from his condition. Iinuma further says he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient. “Do I know what happens?” the doctor said. “Again, I’m not sure. … I don’t treat it.”

Aetna defended Iinuma, who is no longer with the company, saying in its legal brief that he relied on his “years of experience” as a trained physician in making his decision about Washington’s treatment and that he was following Aetna’s Clinical Policy Bulletin appropriately.

Jones said his expectation would be “that physicians would be reviewing treatment authorization requests,” and that it’s troubling that “during the entire course of time he was employed at Aetna, he never once looked at patients’ medical records himself.”

“That’s why we’ve contacted Aetna and asked that they provide us information about how they are making these claims decisions and why we’ve opened this investigation.”

He said his investigation will review every individual denial of coverage or pre-authorization during the medical director’s tenure to determine “whether it was appropriate or not for that decision to be made by someone other than a physician.”

If the probe determines that violations occurred, he said, California insurance code sets monetary penalties for each individual violation.

The White House Office of Management and Budget Director Mick Mulvaney and newly-confirmed Health and Human Services Secretary Alex Azar sat down with a small group of reporters Thursday morning to exclusively preview the White House’s Fiscal Year 2019 budget and how the administration plans to make good on the president’s commitment to tamper down drug prices.

Azar said the administration is framing the issue through two key questions: “How can we try to start flipping some of those incentives in the system geared towards higher prices? How do we find pockets of our programs where we maybe don’t negotiate enough or have people negotiating on our behalf to get as good of a deal?”

The administration is targeting a number of federal agencies, like the U.S. Food and Drug Administration (FDA), and federal policies, like Medicaid (Parts B and D), to accomplish those objectives.

The administration is planning on asking Congress to clarify the definition of generic, over-the-counter drugs in an effort to avoid misclassifications that lead to exorbitant waste and provide potential loopholes for manufacturers to game the system. Azar said the goal of asking Congress to specifically clarify drugs is to ensure that “generic and branded drugs are paying properly on the Medicaid rebate program.”

The HHS Office of Inspector General found that drug manufacturers likely misclassified 3 percent of the drugs in the Medicaid rebate program in 2016. The OIG found that misclassifications cost Medicaid more than $1 billion from 2012-2016.

Another initiative the admin will be pursuing is lobbying Congress to give HHS the authority to allow a small group of states to see if they are able to negotiate with manufacturers and get a better deal from manufactures than the federal government is currently able to negotiate from the Medicaid statutory rebate programs. “If they would like to take a shot at managing their formulary and negotiating better deals than we can get, we would like to do a pilot where up to 5 states could do that,” Azar said.

The administration is also trying to give Part D providers greater flexibility in how they provide benefits to seniors, like making generic medications completely free to Part D seniors.

“The first is actions that we could take address excessive price increases in Part B – the physician administered drugs that we currently pay for in Part B with what is called Average Sales Price (ASP) plus 6 methodology,” Azar said. Medicare Part B pays physicians and hospital systems for outpatient services. ASP is the current payment formula set in 2003. The rate is set from the average sales price, plus an additional 6 percent. Azar wants to take the payment rate for newly launched drugs, or drugs with no set ASP value, and move them toward a new payment rate of 103 percent.

Another of the key areas of focus will be on ending the gaming of FDA generic drug approval process. Barring some exceptions, after the FDA grants a manufacturer a “180-day exclusivity” period for a generic drug, it “cannot approve subsequently submitted” applications until that period has expired. In other words, some argue that the rule bars competing generic drugs from entering the market.

Getting rid of the ruling will help spark more market competition, which could help drive down prices, Azar argues. “This will accelerate the approval of generics and the entry to market from one particular aspect of gaming around the 180-day exclusivity that keeps multiple new entries from coming to market in the generic space,” Azar told reporters.

“What we would ask Congress to clarify is that once the FDA approves another drug, the clock on that 180-days starts. As it stands, the first to file gets approved. Right now, some companies will just sit on that and park it.”

The White House will roll out its plans in more detail Monday, along with its 2019 budget.

A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization that is either private or public. Recognizing the public value of whistleblowing has been increasing over the last 50 years. In the United States, both state and Federal statutes have been put in place to protect whistleblowers from retaliation.

The False Claims Act is the federal Government’s primary litigation tool in combating fraud against the Government. The law includes a qui tam provision that allows people who are not affiliated with the government to file actions on behalf of the government, informally called “whistleblowing” especially when employed by the organization accused in the suit.

Whistleblowers who bring qui tam suits are required to file their cases under seal. The DOJ likes it that way, because it may pursue its investigation in a manner that does not tip off the target of the investigation.

California has a similar False Claims Act with qui tam provisions. Also under the California law, the whistleblower’s lawsuit is filed under seal to permit the California Attorney General or local prosecuting authority to investigate and, if warranted, intervene in the action.

But, Jeffrey Werkin, a former high-stakes corporate-fraud prosecutor with the Department of Justice, had secretly stockpiled sealed lawsuits brought by whistleblowers. His plan was to sell copies of the suits to the very targets of the pending government investigations – and his services to defend them.

Wertkin carried out his plan for months, right up until the day an FBI agent arrested him in a California hotel lobby last year. On that day, Wertkin believed he was meeting at a Cupertino hotel with a representative from a company with whom he would exchange the sealed whistleblower complaint for a duffel bag filled with $310,000. In truth, Wertkin was meeting with an undercover employee of the FBI.

The 41-year-old partner at the prominent DC firm of Akin Gump Strauss Hauer & Feld  was caught wearing a wig and fake mustache trying to peddle a sealed federal lawsuit for $310,000 to a Silicon Valley technology company. “My life is over,” he told the undercover agent after his arrest at an intended cash drop at the Cupertino hotel.

Wertkin recently pleaded guilty to two counts of obstruction of justice and one count of transportation of stolen property.

Wertkin admitted that during the last month of his employment as a trial attorney with the Department of Justice, he began secretly reviewing and collecting sealed qui tam complaints that were not assigned to him. Further, Wertkin has admitted that after he left the Department of Justice, he used the stolen information to improperly solicit clients that were the subject of the sealed complaints.

He is scheduled to be sentenced on March 14, 2018 at 2:15 pm by federal judge Maxine M. Chesney.