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Tag: 2018 News

FDA and FTC List 12 Fake Opioid Addiction Products

The U.S. Food and Drug Administration and the Federal Trade Commission today posted joint warning letters to the marketers and distributors of 12 opioid cessation products, for illegally marketing unapproved products with claims about their ability to help in the treatment of opioid addiction and withdrawal.

The FDA and FTC issued joint warning letters to 11 companies for their products: Opiate Freedom Center (“Opiate Freedom 5-Pack”), U4Life, LLC (“Mitadone”), CalmSupport, LLC (“CalmSupport”), TaperAid (“TaperAid” & “TaperAid Complete”), Medicus Holistic Alternatives LLC (“Natracet”), NutraCore Health Products, LLC (“Opiate Detox Pro”), Healthy Healing, LLC (“Withdrawal Support”), Soothedrawal, Inc. (“Soothedrawal”), Choice Detox Center, Inc. (“Nofeel”), GUNA, Inc. (“GUNA-ADDICT 1”), and King Bio, Inc. (“AddictaPlex”).

The FTC sent four additional warning letters to other marketers of opioid cessation products.

All of the companies use online platforms to make illegal claims about their products’ ability to cure, treat, or prevent a disease. Examples of claims made include:

– “#1 Selling Opiate Withdrawal Brand”
– “Imagine a life without the irritability, cravings, restlessness, excitability, exhaustion and discomfort associated with the nightmare of addiction and withdrawal symptoms”
– “Safe and effective natural supplements that work to ease many physical symptoms of opiate withdrawal”
– “Break the pain killer habit”
– “Relieve Your Symptoms – addiction, withdrawal, cravings.”

The FDA and FTC have requested responses from each of the companies within 15 working days. The companies are directed to inform each agency of the specific actions taken to address each agency’s concerns. The warning letters also state that failure to correct violations may result in law enforcement action such as seizure or injunction.

Also today, the FTC, in coordination with SAMHSA of the U.S. Department of Health and Human Services (HHS), issued a fact sheet to help consumers get real help for opioid addiction or withdrawal, while avoiding products that promise but do not deliver help. The fact sheet has tips that consumers and health practitioners alike can share with those considering help for opioid addiction or withdrawal.

Health care professionals and consumers are encouraged to report any adverse events related to these products to the FDA’s MedWatch Adverse Event Reporting program. To file a report, use the MedWatch Online Voluntary Reporting Form. The completed form can be submitted online or via fax to 800-FDA-0178.

MEMIC Ranked Top Comp Carrier in U.S.

The MEMIC Group has been ranked the top workers’ compensation company in the U.S. by ACORD.

The MEMIC Group includes MEMIC Indemnity Company, MEMIC Casualty Company, and parent company Maine Employers’ Mutual Insurance Company (MEMIC), a workers’ compensation specialty insurer that opened for business in January 1993. MEMIC was, and remains, the keystone to the landmark 1992 reforms of Maine workers’ compensation law passed by the Maine Legislature and signed by then Gov. John R. McKernan.

ACORD (Association for Cooperative Operations Research and Development) is the global standards-setting body for the insurance industry. ACORD maintains offices in New York and London.

In a first of its kind study of the $48 billion U.S. workers’ compensation insurance market, Maine-based MEMIC came out on top based on strong financial performance as well as measurable, superior capabilities in customer experience, employee satisfaction, and brand reputation.

The Workers’ Compensation Study examined the top 50 workers’ compensation writers in the U.S. These top 50 account for 85% of U.S. workers’ compensation premiums and the insurers generate annual premiums ranging from $200 million to $4 billion.

The results showed that top performing workers’ compensation carriers simultaneously pursued four key strategies – operational efficiency, customer experience, product differentiation and innovation. More results of the Workers’ Compensation Study, including additional analysis, will be released in a paper published later this year.

“Congratulations to MEMIC for distinguishing itself as the top workers’ compensation company in the U.S.,” said Bill Pieroni, President and CEO of ACORD. “Given MEMIC’s significant contribution to workers’ compensation in Maine and their strong reputation in the insurance industry, it’s admirable that they not only grew faster than the market but also had materially better financial performance. This is a first and we applaud everyone at their organization for their respective contributions.”

“As we celebrate our 25th anniversary year, we are thrilled with this recognition,” said MEMIC President and CEO Michael P. Bourque. “It is a reflection wonderful of everyone at our growing organization who has worked incredibly hard, year after year, to better serve our customers. – especially have to point out that this award is shared with our recently retired CEO John Leonard who led us since the beginning and during the 5 years ACORD evaluated. He set the vision of safer workplaces and the compassionate treatment of all workers that will continue to be the key to our success.”

With 8 offices across the Eastern Seaboard, The MEMIC Group holds licenses to write workers’ compensation across the country and is rated “A” (Excellent) by A.M. Best. MEMIC insures more than 20,000 employers and their estimated 300,000 employees, and holds more than $1.3 billion in assets.

DEA Now Allows More Physicians to Prescribe Buprenorphine

The U.S. Drug Enforcement Administration said on Tuesday it had changed a regulation to allow more healthcare professionals to prescribe a medication used to treat opioid addiction, opening up access in rural America where there are few doctors.

Prior to 2000, only physicians could treat those with opioid addiction and had to register with the DEA as both physicians and operators of narcotic treatment programs. The latest change is part of a 2016 law that added categories of practitioners who may prescribe the narcotic drug buprenorphine for maintenance or detoxification treatment, the DEA said in a statement.

Buprenorphine, sold under the brand name Subutex, among others, is an opioid used to treat opioid addiction, acute pain, and chronic pain. It can be used under the tongue, by injection, as a skin patch, or as an implant. When used for opioid addiction it is recommended that a health care provider observe the person while they take the medication. For longer term treatment of addiction a combination formulation of buprenorphine/naloxone is usually recommended. Maximum pain relief is generally within an hour with effects up to 24 hours.

Buprenorphine was approved for medical use in the United States in 1981.In 2012, 9.3 million prescription for the medication were written in the United States. Buprenorphine may also be used recreationally by injection or in the nose for the high it produces. Some use it as a substitute for heroin. In the United States it is a Schedule III controlled substance.

A 2017 study published by the National Rural Health Association found that 53 percent of rural counties had no physician able to prescribe medication to those addicted to opioids, the DEA said. About 90 percent of physicians allowed to prescribe such medication live in urban counties, and 30 million people live in areas where treatment is unavailable.

About 5,000 mid-level practitioners can now prescribe the medication, and nearly 43,000 practitioners may qualify to do so, the DEA said.

Rural America has more drug overdose deaths than urban areas, a 2017 study by the Centers for Disease Control and Prevention showed. Prescription drug abuse is a leading cause of death, with opioids killing more than 42,000 people in 2016, the highest U.S. death toll of any year on record, CDC said.

“This action reflects this work and the ongoing need to further expand access to the most effective treatment for opioid use disorder,” said David Fiellin, professor of medicine, emergency medicine and public health at Yale School of Medicine, in an email to Reuters, who published the story.

LAPD Valley Traffic Officer Arrested

A nine-year veteran of the Los Angeles Police Department, whose last assignment was with the Valley Traffic Division, was arrested last week on suspicion of workers’ compensation fraud.

Jason Gordon, 48, of Los Angeles County was arrested on Jan. 17 on a felony arrest warrant related to workers’ compensation fraud and attempted perjury, the Los Angeles Police Department said.

Pully, 51, was an 18-year city employee who filed a medical compensation claim in 2016.

The LAPD’s Special Operations Division Workers’ Compensation Fraud Unit conducted an investigation that began when Gordon filed a medical claim in 2015, authorities said.

Investigators worked with the L.A. County District Attorney’s Healthcare Fraud Division and the L.A. City Attorney’s Office to established probable cause to believe Gordon “knowingly engaged” in physical workout activities.

Authorities said Gordon performed activities inconsistent with his claimed injury while on temporary totally disabled status.

“Thus he received benefits to which he was not entitled,” authorities said.

Gordon was booked and released after posting $40,000 bail.

Authorities said the the Workers Compensation Fraud Unit was expanded in late 2008 to investigate fraud and other allegations involving abuse of benefits by city employees.

Gordon is the second LAPD employee to be arrested on suspicion of committing workers comp fraud in the last few weeks.

Gerald Pully, who was last assigned to the LAPD’s Records and Identification Division, was arrested on Jan. 11, on suspicion of exaggerating the extent of his injuries while receiving benefits from the police department on Jan. 11.

9th Circuit Affirms Dismissal of SCIF RICO Litigation

In 2001, Alexander Zaks M.D. formed several businesses in California’s Central Valley that focused on providing medical treatment to the region’s agricultural workers. Zaks, along with David Holmes D.C. and Daniel Reyes D.C., formed Accident Help Line Medical Group (AHL) at that time. The entities focused on patients with chronic work-related injuries. Zaks also established Millcreek Surgery Center and Alta Surgery Center. Zaks and a partner also owned Reliable Medical Supply, which provided medical equipment. In 2003 Zaks and partners also created Valley Interpreting, a translation service for patients who spoke limited or no English.

Dr. Khan and Dr. Zaks engaged in some cross marketing of their respective services to attorneys representing clients with workers’ compensation issues.

Bruce Roth, then a senior attorney with State Fund, was assigned to defend State Fund against the Zaks Entities’ WCAB liens. Suspecting possible fraud, Roth led an investigation of the Zaks Entities. In January 2006, Roth filed a petition with the WCAB to consolidate the Khan Entities’ and Zaks Entities’ 1,200+ liens against State Fund.

In October 2009, after losing on several issues before the WCAB, Roth settled the consolidated case with the Zaks Defendants without first gaining the approval of his manager at State Fund or State Fund’s claims department. Once Roth’s superiors learned of the settlement they removed Roth from the case, contacted the Zaks Entities, and disavowed the settlement on the basis that Roth lacked authority to enter into it. They forced Roth to resign and referred the case to other attorneys.

State Fund then entered into superseding settlement agreements with the Zaks Entities for substantially the same amount of money as provided for in the 2009 Settlement Memorandum negotiated by Roth. State Fund asserts that it did so in large part out of concern that the WCAB might have enforced the original 2009 Settlement Memorandum between Roth and the Zaks Entities based on Roth’s ostensible authority to bind State Fund. The newer 2010 Settlement Agreement between State Fund and the Zaks Entities released both State Fund and the Zaks Entities from all claims they had against each other up until the time of that agreement.

The State Fund then filed a federal suit for violation of the federal Racketeering and Corrupt Organizations Act (RICO) statute against defendants Alexander Zaks, M.D., Sana Khan, M.D., David Holmes, D.C., and Daniel Reyes, D.C.; their various companies and State Fund’s own former employee, attorney Bruce Roth.

After three years of litigation and extensive discovery, the Zaks Defendants, the Khan Defendants, and Roth filed three separate motions for summary judgment which were granted in March 2016. SCIF appealed the summary judgment to the 9th Circuit Court of Appeal which just affirmed the trial court in the unpublished case of SCIF v Kahn, Zaks

State Fund’s claims against these Defendants-Appellees were precluded by the broad liability releases contained in the 2010 Settlement Agreements. The district court correctly determined that the releases protected all of these Defendants-Appellees because even State Fund’s claims against the Individual Zaks Defendants were premised on acts within the scope of their agency relationships with lien claimants, such that liability was precluded by the releases’ plain terms.

The court also correctly held that there were no grounds for rescinding the 2010 Settlement Agreements. For fraud to justify rescission, however, it must be extrinsic. Here, there was no extrinsic fraud to justify rescission.

Report Claims Medicaid Helps Drive Opioid Crisis

One of the largest entitlement programs in the country is incentivizing prescription drug trafficking and exacerbating the national opioid epidemic, according to a new Senate report published last week.

The Senate Committee on Homeland Security and Governmental Affairs released a Major Staff report, which details how Medicaid policies governing prescription drug prices, expanded at the state level through the Affordable Care Act (ACA) in 2014, “perversely” incentivize opioid abuse and illicit sales, as well as larger scale trafficking operations involving both criminal drug lords and respected doctors.

The Majority Staff Report presents evidence that financial incentives provided through Medicaid are negatively contributing to the ongoing addiction crisis, contradicting the common media narrative that Medicaid expansion under the ACA is essential to combating the epidemic because of its funding for addiction treatment programs.

It offers Clay County, Kentucky, as an example, where the number of residents on Medicaid rose from 35 percent to 60 percent in the three years following Medicaid expansion under the ACA. Over that same time period, opioid abuse increased, as did wait lists for inpatient drug treatment centers.

The report notes that roughly 70 million people are covered under Medicaid, “more than one fifth of the U.S. population,” which has created, “a series of incentives for potential abuse of opioids, which are rooted in federal law itself.” It points out Medicaid patients usually do not not pay for “covered medical expenses,” and that federal law mandates additional costs such as co-payments be kept small for lower income groups.

The incentives were made worse, according to the report, through an Obama administration rule mandating that states could charge no more than $4 to Medicaid patients for certain groups of prescription drugs, including opioid painkillers. In some states patients on Medicaid pay as little as a $1 co-payment for up to 240 prescription pills that carry a street value of roughly $4,000.

While evidence of fraud concerning opioids exists in many other federal programs, the authors of the Majority Staff Report argue, that Medicaid is the federal program most prone to abuse, and the primary government funding source for the epidemic.- More than 80 percent of the cases presented in the report are from states participating in ACA Medicaid expansion.

450 Hospitals Plan to Manufacture Generic Drugs

For years, hospital executives have expressed frustration when essential drugs like heart medicines have become scarce, or when prices have skyrocketed because investors manipulated the market.

Now, some of the country’s largest hospital systems are taking an aggressive step to combat the problem: They plan to go into the drug business themselves, in a move that appears to be the first on this scale.

Intermountain Healthcare is a not-for-profit health system based in Salt Lake City, Utah, with 22 hospitals, a broad range of clinics and services, about 1,400 employed primary care and secondary care physicians at more than 185 clinics in the Intermountain Medical Group, and health insurance plans from SelectHealth.

The organization just announced a bold initiative to establish a not-for-profit generic drug company aimed at ending shortages and reducing prices. Intermountain Healthcare is leading a collaboration with Ascension, SSM Health, and Trinity Health, in consultation with the U.S. Department of Veterans Affairs, to form the company. The five organizations represent more than 450 hospitals around the U.S. The press release made clear price and availability are the key issues.

The story on Forbes says the new company intends to be an FDA approved manufacturer and will either directly manufacture generic drugs or sub-contract manufacturing to reputable contract manufacturing organizations, providing patients an affordable alternative to products from generic drug companies whose capricious and unfair pricing practices are damaging the generic drug market and hurting consumers.

The company will also seek to stabilize the supply of essential generic medications administered in hospitals, many of which have fallen into chronic shortage. The new initiative will result in lower costs and more predictable supplies of essential generic medicines, helping ensure that patients and their needs come first in the generic drug marketplace.

Several major hospital systems, including Ascension, a Catholic system that is the nation’s largest nonprofit hospital group, plan to participate the new nonprofit company, that will provide a number of generic drugs to the hospitals. The Department of Veterans Affairs is also expressing interest in participating. Other hospitals are expected to join.

“This is a shot across the bow of the bad guys,” said Dr. Marc Harrison, the chief executive of Intermountain Healthcare, the nonprofit that is spearheading the effort. “We are not going to lay down. We are going to go ahead and try and fix it.”

Dr. Carolyn Clancy, the executive in charge of the Veterans Health Administration, said its pharmacy experts have consulted with the other systems about the project and is now working out the details of its possible involvement. “Our strong interest here is minimizing the impact of any shortages of generic drugs,” she said. While she said the agency is able to negotiate good prices for veterans, “we don’t necessarily control supply” and have experienced many of the same shortages, including the recent lack of saline fluids, as the other health groups.

Dr. Kevin A. Schulman, a professor of medicine at the Duke University School of Medicine who has studied the generic drug market and is advising the effort, said: “If they all agree to buy enough to sustain this effort, you will have a huge threat to people that are trying to manipulate the generic drug market. They will want to think twice.”

FDA Plans to Restrict Drug Compounders

The head of the U.S. Food and Drug Administration on Thursday said it is preparing a new, more restrictive policy targeting what drugs compounding pharmacies can produce that do not go through the agency’s approval process.

FDA Commissioner Scott Gottlieb said the agency in March will issue draft guidance with new criteria for determining what substances can be used to produce drugs in bulk for hospitals and doctors’ offices without individual patient prescriptions.

“Ultimately, there’s no question that the framework we will be laying out will place more restrictions on what they can do,” Gottlieb told Reuters.

The announcement was one of several by the FDA on Thursday regarding its priorities in 2018 for drug compounding, which involves pharmacists making drugs to meet patients’ specific needs.

Gottlieb said the FDA is also preparing a new policy to give state boards of pharmacy more flexibility to oversee compounding pharmacies that ship drugs interstate and is still working on guidance to encourage more pharmacies to register with the FDA.

According to the American Pharmacists Association, 7,500 pharmacies specialize in compounding medicines, which traditionally involved mixing tailored doses for individual patients in response to a specific prescription.

The story in Reuters claims that by 2012, the practice had mushroomed, with some pharmacies selling thousands of doses of regularly used mixtures without prescriptions for physicians to keep for future use.

A fungal meningitis outbreak that year caused by contaminated steroids produced by a Massachusetts compounding pharmacy, New England Compounding Center, sickened hundreds of patients and killed 76, prosecutors said.

After the outbreak, Congress in 2013 passed the Drug Quality and Security Act to bring more compounding pharmacies, traditionally overseen by states, under FDA oversight.

The law established “outsourcing facilities” that could register with the FDA, allowing them to sell products in bulk without individual prescriptions while following federal manufacturing standards.

The FDA was required to determine that bulk compounding using a drug substance was necessary to satisfy an unmet “clinical need” and include those substances on a list.

But the FDA has not yet developed a final list of those substances, and instead adopted an interim policy allowing bulk compounding using drug substances that compounders could nominate for eventual inclusion on the list.

In October, Endo International Plc subsidiaries filed a lawsuit arguing that under that policy, the FDA had improperly authorized the bulk compounding of hundreds of drugs, including essentially a copy of its blood pressure drug Vasostrict.

Judge Orders $2M Money Judgment Against Philip Sobol M.D.

According to federal prosecutors, Philip Sobol, an orthopedic surgeon, agreed with Michael Drobot to receive kickbacks in exchange for performing surgeries at Pacific Hospital of Long Beach or referring spinal surgery patients to physicians who would perform the spinal surgeries at Pacific Hospital.

Sobol and Drobot concealed the kickbacks through a series of sham agreements including a management agreement and option agreement. Sobol received approximately $5.2 million dollars in kickbacks.

On November 24, 2015, Sobol entered into an agreement to plead guilty to a two-count information that charged him with Conspiracy in violation of 18 U.S.C. § 371, and Interstate Travel in Aid of a Racketeering Enterprise in violation of 18 U.S.C. § 1952.

Sobol further agreed to forfeit the sum of $5,200,000.00 which he admitted represented proceeds he obtained as a result of the offenses to which he entered the guilty plea.

In furtherance of this stipulation, on January 16, 2018, Federal Judge Josephine L. Stanton ordered a money judgment in the amount of $2,000,000.00 in favor of the United States of America and against Defendant Philip A. Sobol.

She furthered ordered that “This Money Judgment is part of the sentence imposed on Defendant Sobol in this case.” He remains to be sentenced in February.

Prosecutors filed a Sentencing Report in his criminal case on December 5. On February 24, 2017, the United States Probation Office reported that his sentencing range was 46-57 months’ imprisonment. The report noted that Sobol had agreed to pay restitution but “did not identify any victims from the harm.”

But prosecutors say the Court should apply an additional two level increase because the offense involved more than ten victims.

Prosecutors reported that “it is difficult to determine exactly how many surgeries defendant referred where he received a kickback because the kickbacks were paid through sham management and option agreements that were designed to approximate the number of surgeries referred or performed at Pacific Hospital, Drobot admitted in his plea agreement that he paid between $10,000 and $15,000 per surgery performed.”

His Sentencing Hearing is currently set for February 16, 2018 at 8:30 a.m.

Burbank Approves Expedited AME List for Firefighters

Burbank City Council members unanimously voted to approve an alternative dispute resolution with the Burbank Fire Fighters’ Assn. with the goal of significantly reducing the dispute process.

The Los Angeles Times reports that Betsy McClinton, the city’s management services director, said the agreement will establish a list of 29 independent medical examiners approved by both the city and firefighters’ association that the labor organization will use during a medical dispute when filing a workers’ compensation claim.

An examiner from that list will be required to see that employee within 30 days of a request by city staff. The physician will then be required to prepare their report within 30 days of the appointment, McClinton said.

Under the city’s current workers’ compensation process with other labor groups, it could take up to two to three months for the city and labor group to select an agreed medical examiner or state-qualified medical examiner to resolve a medical dispute.

McClinton added that it could take additional months after finding an examiner to make an appointment and get the results.

“The dispute resolution is greatly delayed, and, therefore, treatment and return for the employee is also delayed, and that could result in a poor medical outcome for the employee,” McClinton said.

Workers’ compensation costs make up a large chunk of Burbank’s overall payroll.

For example, workers’ compensation for fire personnel for the current fiscal year is roughly 24% of the total payroll; about 18% of the total payroll goes to workers’ compensation for police personnel; and approximately 13.5% is for public works and parks and recreation field employees, McClinton said.

According to an analysis conducted by Aon, Burbank’s insurance broker, the city could have saved about $3.7 million across the 8,545 workers’ compensation claims filed historically with the city if each claim was reduced by 30 days, McClinton added.