Tag: 2019 News

Time to re-evaluate medical reserves on open claims.

Johnson & Johnson raised U.S. prices on around two dozen prescription drugs on Thursday, including the psoriasis treatment Stelara, prostate cancer drug Zytiga and blood thinner Xarelto, all among its top-selling products. It joined many other companies that raised U.S. prices on hundreds of prescription medicines earlier this month.

Most of the J&J increases were between 6 percent and 7 percent, according to data from Rx Savings Solutions, which helps health plans and employers seek lower cost prescription medicines. The company does not plan to raise prices on any more drugs this year, J&J spokesman Ernie Knewitz said.

The increases came on the same day that Democratic members of Congress introduced proposed legislation aimed at lowering the cost of prescription drugs for American consumers.

J&J said the average list price increase on its drugs will be 4.2 percent this year. However, it expects the net price it actually receives for its medicines to drop. That is because drugmakers negotiate rebates and discounts off the list price with payers in order to ensure patient access to their products.

Drugmakers kicked off 2019 with U.S. price increases on more than 250 prescription medicines by Jan. 2. That total has almost doubled, with pharmaceutical companies hiking prices on nearly 490 drugs by Jan. 10, according to Rx Savings. This includes insulin price hikes of between 4.4 percent and 5.2 percent by Sanofi and 4.9 percent by Novo Nordisk.

Sanofi said its increases were below the Centers for Medicare & Medicaid Services projections for medical inflation, and that it expects net prices to drop in 2019. Novo Nordisk said its raised list prices help offset increases in rebates to insurers and pharmacy benefit managers.

With pressure from lawmakers and the administration of President Donald Trump intensifying, the pace of drug increases has been slower than last year, when drugmakers raised prices on around 650 drugs over the first 10 days of 2018.

The United States, which leaves drug pricing to market competition, has higher prices than in other countries, where governments directly or indirectly control costs. That makes it by far the world’s most lucrative market for manufacturers.

The U.S. Department of Health and Human Services has proposed policy changes aimed at lowering drug prices and passing on more of the discounts negotiated by health insurers to patients. Those measures are not expected to provide relief to consumers in the short-term, however, and fall short of giving government health agencies direct authority to negotiate or regulate drug prices.

Save Mart Supermarkets Inc. was unable to convince the California 3rd District Court of Appeal to compel three injured workers, to arbitration in suits over alleged violation of state law statutory employment claims.

Plaintiffs Jose Robles, Christopher Rymel, and David Hagins sued defendant Save Mart Supermarkets, Inc., alleging various state law statutory employment claims.

Plaintiff Jose Robles alleged he experienced an industrial injury to his thumb and his doctor said he could work with restrictions. “He was then demeaned by having to ask permission to use the bathroom and having to wear a degrading safety vest, and when he complained he was suspended without pay,” according to the opinion.

Plaintiff Christopher Rymel alleged he had an industrial injury to his back and was on Workers’ Compensation leave. He alleged he was also ordered to do what he described as degrading work conditions when he returned to work.

Plaintiff David Hagins alleged he suffered retaliaton following his reporting of a workplace hazard. The manager replied that if Save Mart had to fix the problem it would instead shut down the warehouse and fire everyone. Soon thereafter Save Mart was cited by Cal-OSHA for this violation. Four months later Hagins suffered an industrial injury.

After he saw his doctor he was placed on light duty. Save Mart then fired him. He alleges statutory theories of medical condition discrimination, retaliation, whistleblower retaliation, failure to prevent discrimination and retaliation, and termination in violation of public policies set by statute (FEHA and the workers’ compensation laws).

After successfully moving to sever, Save Mart moved to compel arbitration as to each plaintiff. The motions were heard together, and the trial court denied the motions by substantively identical orders. The trial court reasoned that the CBA at issue did not clearly and unmistakably provide for arbitration of the claims asserted.Save Mart timely appealed in each case. The court of appeal affirmed in the published case of Rymel et. al. v Save Mart Supermarkets Inc.

Generally, a collective bargaining agreement (CBA) providing for arbitration of employment grievances does not provide for arbitration of a worker’s claims based on violations of state anti-discrimination or retaliation statutes, nor do federal labor relations laws preempt such claims.

The parties agreed that the CBA did not explicitly refer to FEHA, the whistleblower statute, and the California workers’ compensation laws. Thus the CBA was silent on the California statutes plaintiffs contend Save Mart violated.

To be valid, an arbitration agreement must reflect the mutual intention of the parties that disputes between them will be resolved out of court; in doing so it operates as a waiver of the right to sue for redress of grievances. A party is not generally compelled to arbitrate a claim unless she has agreed to do so; arbitration is conducted by consent.

A new study published in the JAMA Network and summarized by Reuters Health says that spending on health care advertising in the U.S. has almost doubled over the past two decades as companies compete for their share of the world’s biggest health care market.

Annual health care marketing surged from $17.7 billion in 1997 to at least $29.9 billion in 2016, driven by a rapid spike in spending on direct-to-consumer (DTC) advertisements for prescription drugs, the study found. Over this period, DTC spending climbed from $2.1 billion to $9.6 billion.

Pharmaceutical marketing to health professionals accounted for the biggest outlay, and climbed from $15.6 billion to $20.3 billion despite new policies at hospitals and medical schools designed to limit industry influence over prescribing.

“While marketing may have positive effects like destigmatizing diseases (e.g., HIV) or embarrassing symptoms (e.g., impotence) it can also expand or even create disease or raise false hopes by exaggerating treatment effects – for example marketing of marginally effective Alzheimer’s drugs,” said study coauthor Dr. Steven Woloshin of the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, New Hampshire.

“This can lead to overdiagnosis, overtreatment (with associated harms) and wasted resources,” Woloshin said by email.

To compete for market share, just about every player in the industry from drugmakers to insurers to hospitals to diagnostic test makers invest in marketing to insiders who make prescribing and purchasing decisions as well as to consumers.

Health spending in the U.S. is the highest in the world, totaling $3.3 trillion in 2016, or 17.8 percent of the gross domestic product, researchers report in JAMA.

The industry marketing outlays in the current study match the roughly $30 billion budget of the National Institutes of Health and far outstrip the budget of about $5 billion for the agency in charge of policing the industry, the U.S. Food and Drug Administration (FDA), Woloshin noted.

The study focused on marketing of prescription drugs, disease awareness campaigns, health services, and laboratory tests to consumers and professionals. It underestimates total spending because researchers lacked data on so-called detailing, or sales calls to clinicians, coupons or rebates, online promotions, and spending on medical meetings and other events, the authors note.

Industry marketing budgets also include numerous other outlays that weren’t counted in the study, like the cost of training and salaries for sales reps, marketing research, fees paid to advertising agencies and lobbying campaigns, the authors also point out.

Still, it is the most comprehensive analysis of medical marketing in the U.S. that has ever been done, said Dr. Howard Bauchner, editor-in-chief of JAMA.

“For clinicians, policy makers, and patients it is important for them to be aware of the extent of medical marketing,” Bauchner said by email.

And marketing can be a mixed bag for patients.

“DTC for health services might also encourage consumers to get services they don’t need – tests in particular, and these can have negative consequences (false positives, worry about small risks),” Rosenthal added. “On the benefit side, some DTC advertisements help de-stigmatize conditions like sexually transmitted infections or depression and encourage people to seek care.”

Hours into his new job, California Governor Gavin Newsom signed an executive order on Monday that could dramatically reshape the way prescription drugs are paid for and acquired in California.

The order, along with another naming the state’s first-ever surgeon general, marks a fast start for a governor.

In his executive order, Newsom directed state officials to set up what he said would ultimately be the nation’s largest single-purchaser system for prescription drugs. Currently, public and private purchasers of prescription drugs for Medi-Cal, California’s largest purchaser of pharmaceutical services, are fragmented, left to negotiate against drug companies alone.

Newsome claims the executive order will allow all Californians – including private employers – to sit together at the bargaining table across from big drug companies when negotiating prescription drug prices.

It directed California’s massive Medicaid system to negotiate prescription drug prices for all of its 13 million recipients, changing their benefits from a managed-care or HMO approach to one that allows the state to handle all the purchases. Medicaid is the joint federal-state program that provides health insurance for the low income.

The state would create a list of drugs to be purchased in bulk or targeted for price negotiations.

The executive order also took the first steps to allow private companies and other governmental agencies to participate in the process of negotiating drug prices with pharmaceutical companies.

Newsom has hired numerous health-care advocates as aides and is expected to focus heavily on initiatives related to public health and health care as his administration moves forward.

Under a proposal expected to be released as part of the state’s budget plan later this week, Newsom will ask the legislature to allow all undocumented immigrant young adults under the age of 26 to participate in the state’s Medicaid plan.

The budget proposal will also contain a plan to increase the federal subsidy for participation in Affordable Care Act policies to families of four making as much as $150,000, and reinstate the mandate requiring people to purchase health care.

January 4 marked Gov. Jerry Brown’s last day living in the Governor’s Mansion in downtown Sacramento. In his last few days in office, he made numerous appointments to various administrative positions, some of which pertain to the worker’s compensation industry.

48 year old Craig L. Snellings who lives in Oakland, has been appointed to the California Workers’ Compensation Appeals Board. Snellings has been house counsel for Farmers Insurance since 2014. He was a workers’ compensation insurance defense attorney at Shaw, Jacobsmeyer, Crain and Claffey from 2012 to 2013, at Mullen and Filippi from 2005 to 2006 and at Adelson, Testan, Brundo, Novell and Jimenez from 2004 to 2005. Snellings served as staff counsel at the State Compensation Insurance Fund from 2006 to 2012 and from 2002 to 2004. He is a member of the Oakland Bench and Bar Committee and the Charles Houston Bar Association. Snellings earned a Juris Doctor degree from the University of California, Los Angeles School of Law. This position requires Senate confirmation and the compensation is $153,689. Snellings is a Democrat.

Christine Baker, 69, of Berkeley, has been appointed to the Fraud Assessment Commission. She was director of the Department of Industrial Relations from 2012 to 2018, where she served as chief deputy director from 2011 to 2012. Baker was executive officer of the Commission on Health and Safety and Workers’ Compensation from 1994 to 2011. She was acting deputy director at the Department of Industrial Relations’ Division of Workers’ Compensation from 1990 to 1994 and chief of the Department’s Division of Labor Statistics and Research from 1984 to 1989. Baker was a research assistant at the University of California, Berkeley from 1980 to 1982. This position does not require Senate confirmation and the compensation is $100 per diem. Baker is a Democrat.

Sean McNally, 62, of Bakersfield, has been reappointed to the Commission on Health and Safety and Workers’ Compensation, where he has served since 2007. McNally has been president of KBA Engineering since 2013. He was vice president of human resources and government affairs at Grimmway Farms from 1997 to 2013, partner and attorney at Hanna, Brophy, MacLean, McAleer, and Jensen from 1991 to 1997 and was an independent general contractor doing residential real estate development from 1984 to 1990. McNally was a municipal court deputy for the Kern County District Attorney’s Office from 1983 to 1984. This position does not require Senate confirmation and the compensation is $100 per diem. McNally is registered without party preference.

Christine Bouma, 52, of Sacramento, has been reappointed to the Commission on Health and Safety and Workers’ Compensation, where she has served since 2012. Bouma has been president of Capitol Connection since 2000, representing firefighters and other public sector workers. She was a mathematics and computer science teacher for the Hesperia Unified School District from 1989 to 1999 and an instructor at Victor Valley Community College from 1991 to 1998. She has been president of the Institute of Governmental Advocates since 2015. This position does not require Senate confirmation and the compensation is $100 per diem. Bouma is a Democrat.

Doug Bloch, 49, of Oakland, has been reappointed to the Commission on Health and Safety and Workers’ Compensation, where he has served since 2012. Bloch has been political director at Teamsters Joint Council 7 since 2010. He was the Port of Oakland campaign director for Change to Win from 2006 to 2010 and a senior research analyst at Service Employees International Union Local 1877 from 2004 to 2006. Bloch was statewide political director at the California Association of Community Organization for Reform Now from 2003 to 2004 and ran several ACORN regional offices, including Seattle and Oakland, from 1999 to 2003. He was an organizer at the Non-Governmental Organization Coordinating Committee for Northeast Thailand from 1999 to 2003. This position does not require Senate confirmation and the compensation is $100 per diem. Bloch is a Democrat.