Tag: 2020 News

California adopted a law to allow the state to develop its own line of generic drugs, a notion designed to address the rising cost of prescription medicines that is straining many government budgets across the U.S.

Earlier this year, Governor Newsom announced a first-in-the-nation plan to lower the cost of prescription drugs by creating Cal Rx – a state-sponsored generic drug label.

Newsom has now signed SB 852, a new law that advances his proposal in January to leverage California’s purchasing power to increase generic drug manufacturing as one solution to the prescription drug affordability crisis.

The new law requires the California Health and Human Services Agency (CHHSA) to enter into partnerships, in consultation with other state departments as necessary to, among other things, increase patient access to affordable drugs.

The new law requires CHHSA to enter into partnerships to produce or distribute generic prescription drugs and at least one form of insulin, provided that a viable pathway for manufacturing a more affordable form of insulin exists at a price that results in savings.

SB 852 requires CHHSA to submit a report to the Legislature on or before July 1, 2023, that, among other things, assesses the feasibility and advantages of directly manufacturing generic prescription drugs and selling generic prescription drugs at a fair price.

The law requires CHHSA to report to the Legislature on or before July 1, 2022, a description of the status of the drugs targeted for manufacture and an analysis of how CHHSA’s activities have impacted competition, access, and costs for those drugs.

The law exempts all nonpublic information and documents relating to this program from disclosure under the California Public Records Act in order to protect proprietary, confidential information regarding manufacturer or distribution costs and drug pricing, utilization, and rebates.

The state has already begun to identify potential target medications and develop a strategic plan to promote state-led generic drug purchasing and manufacturing.

California is also transitioning all Medi-Cal pharmacy services from managed care to direct state payment in 2021, strengthening California’s ability to negotiate better prices with drug manufacturers.

Salvador Corona was a warehouse worker employed by California Walls, Inc. dba Crown Industrial Operators. He injured his knees on the job in February 2020. He was placed on modified work and did return to work.

On 03/16/2020 the employer sent all employees home due to the state and local emergency orders related to COVID-19. Applicant did not work for the employer from 03/17/2020 through 05/10/2020, and did not receive any state or federal COVID-19-related benefits.

There was no dispute that the employer did not offer modified or alternate work for the period 03/17/2020 through 05/10/2020, that his condition was not yet permanent and stationary, and that he was available to work.

Applicant sought TD indemnity from Defendant due to the employer not offering modified work during the period 03/17/2020 through 05/10/2020. The employer and Defendant carrier denied those benefits due to COVID-19.

The WCJ awarded the TD benefits and a petition for reconsideration was denied in the panel decision of Corona v. California Walls, Inc. dba Crown Industrial Operators.

The employer contended that its obligation to pay temporary disability ended when applicant returned to work with modified duties and that applicant’s inability to work was caused by the COVID-19 shelter-in-place orders and not the industrial injury.

“Here, we have the unprecedented circumstance of applicant returning to work with restrictions, which the employer accommodated for approximately one month until the COVID-19 shelter-in-place orders, which placed all the employees out of work, including applicant. Applicant was left temporarily disabled with no employment for approximately two months. The issue is whether defendant owes applicant temporary disability benefits for this two-month period.”

Here, applicant’s termination from employment was not for cause, or due to his own misconduct, but was due to COVID-19 shelter-in-place orders. As a result, defendant has not met its burden to show that it is released from paying applicant temporary disability benefits during the period in question.

The fact that it was impossible for defendant to offer modified duties to applicant because of the COVID-19 orders is inconsequential.

In Dennis v. State of California (April 30, 2020) 85 Cal.Comp.Cases 389, 406 [2020 Cal. Wrk. Comp. LEXIS 19] (Appeals Board en banc), the WCAB explained that an employer’s inability to offer regular, modified, or alternative work does not release an employer from its obligation to provide a supplemental job displacement benefits voucher.

Similarly, an employer’s inability to accommodate a temporarily disabled employee’s work restrictions does not release it from its obligation to pay temporary disability benefits. “Labor Code section 3202 requires the courts to view the Workers’ Compensation Act from the standpoint of the injured worker, with the objective of securing the maximum benefits to which he or she is entitled.”

Here, applicant was temporarily disabled due to an industrial injury and there is no misconduct on the part of applicant to justify the termination of temporary disability benefits. Therefore, applicant is entitled to temporary disability benefits regardless of whether defendant is able to provide modified work.

That defendant is not able to release itself from paying temporary disability benefits because of its inability to provide modified work is inconsequential.

Earlier this month, the Beverly Hills Police Department learned criminals were fraudulently obtaining EDD benefits loaded onto EDD debit cards using stolen identities. The monetary value placed on the cards by EDD can be as high as $20,000. Cardholders are able to withdraw up to $1,000 per day, per card.

Suspects have traveled primarily from out of state to obtain these fraudulent EDD cards in California. The suspects will most often have numerous EDD cards in their possession with other people’s identities, along with large amounts of cash. They will then use the cards to lease short-term rentals, rent luxury vehicles, dine at restaurants and purchase high-end merchandise.

The Mercury News reports that In less than two weeks, Beverly Hills Police have found 87 people who are allegedly connected to EDD fraud and identity theft.

Detectives said that they recovered 181 fraudulent EDD cards with a value of over $3.6 million. They also found another $466,000 in case and seven handguns.

“Shoes, clothing, purses. Anything of high dollar value they were spending on EDD cards,” said Beverly Hills Police Department Lt. Max Subin. “Eighty percent of the arrestees were from out of state, and they were renting Airbnb’s and renting high end cars.” Subin credits alert officers and investigators as well as astute shop owners in Beverly Hills for catching the fraud.

Some of those fraudsters have turned informant, showing investigators just how easy it is to defraud EDD.

“We’ve had some of those informants actually log onto a computer and show us how easy it is to go on to the website and log on to EDD,” said Beverly Hills police Lt. Max Subin. “So yes, they are using names of deceased people, using names of people who are incarcerated, using names of people who have businesses and pretty much they are going into the computer and selecting the card.” Subin said many of those names and the associated personal information were simply purchased online.

The Beverly Hills Police Department said it is working with the FBI and the Department of Labor due to the scope of the fraud. Those arrested did not have weapons on them and were booked for identity theft. However, since it is a nonviolent offense, there is no bail due to coronavirus, so they are released.

Meanwhile, Riverside police detectives are investigating a new scam involving unemployment benefits that are fraudulently obtained when thieves apply for the assistance, and then have the benefits mailed to unsuspecting victims’ addresses.

Detective Brian Money said in some cases the people at the listed addresses are suspects, but in most cases they’re innocent victims completely oblivious as to why the unemployment benefits are arriving in their mailboxes. “We found that a lot of these people are completely not associated with the mail,” Money said.

“They don’t know why it’s going to their address; they don’t know who the people are who are listed on the mail.” Money said in some cases the scam has led to confrontations when the thieves go to the victims’ homes to try to collect the benefits they claim belongs to them.

“We have noticed some recent reports where suspects are going to homes, and demanding this mail, to the point of being threatening to our citizens in Riverside.”

Pharmaceutical company Gilead Sciences, based in Foster City, California, has agreed to pay $97 million to resolve claims that it violated the False Claims Act by illegally using a foundation, Caring Voice Coalition, as a conduit to pay the Medicare co-pays for its own drug, Letairis.

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs.

The government alleged that Gilead used Caring Voice Coalition, which claimed 501(c)(3) status for tax purposes, as a conduit to pay the co-pay obligations of thousands of Medicare patients taking Letairis, which is approved to treat pulmonary arterial hypertension. According to the government’s allegations, Gilead used CVC to cover the patients’ co-pays in order to induce those patients’ purchases of Letairis. Gilead knew that the prices it set for Letairis otherwise could have posed a barrier to those purchases.

Gilead routinely obtained data from CVC detailing how many Letairis patients CVC had assisted, how much CVC had spent on those patients, and how much CVC expected to spend on those patients in the future. Gilead allegedly received this information through funding requests, telephone calls, and written reports.

Gilead then used this information to budget for future payments to CVC to cover the co-pays of patients taking Letairis, but not of patients taking other manufacturers’ similar drugs. The government alleged that Gilead engaged in this practice even though it knew it should not receive or use data concerning CVC’s expenditures on co-pays for Letairis. The government also alleged that, to generate revenue from Medicare, Gilead referred Medicare patients to CVC, which resulted in claims to Medicare to cover the cost of Letairis.

“Like its competitors, Actelion and United Therapeutics, Gilead used data from CVC that it knew it should not have, and effectively set up a proprietary fund within CVC to cover the co-pays of just its own drug,” said United States Attorney Andrew E. Lelling. “Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices. During the period covered by today’s settlement, Gilead raised the price of Letairis by over seven times the rate of overall inflation in the United States.”

To date, the Department of Justice has collected over $1 billion from eleven pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, Amgen, Sanofi, Novartis, and Gilead) that allegedly used third-party foundations as kickback vehicles. The Department also has reached settlements with four foundations (Patient Access Network Foundation, Chronic Disease Fund, The Assistance Fund, and Patient Services, Inc.) and a pharmacy (Advanced Care Scripts, Inc.) that allegedly conspired or coordinated with pharmaceutical companies on these kickback schemes.

Cal/OSHA has cited six Bay Area employers including hospitals, skilled nursing facilities and a police department for failing to protect their employees from COVID-19. The employers listed below were cited for various health and safety violations including some classified as serious, with proposed penalties ranging from $2,060 to $32,000.

The employers were cited for not protecting workers from exposure to COVID-19 because they did not take steps to update their workplace safety plans to properly address hazards related to the virus.

Several occupational safety and health standards, including Cal/OSHA’s Bloodborne Pathogens Standard adopted in 1992 and the Aerosol Transmissible Diseases (ATD) standard adopted in 2009, address worker protections such as proper respiratory protection when exposure to airborne diseases including COVID-19 may occur in a health care setting.

The ATD standard applies to hospital workers and emergency medical services, as well as workers in skilled nursing facilities, biological laboratories, workers performing cleaning and decontamination, and public safety employees who may be exposed to infectious disease hazards. The employers cited allegedly failed to comply with the ATD standard.

Cal/OSHA claims the Santa Rosa Police Department failed to implement required screening and referral procedures for persons exhibiting COVID-19 symptoms during the month of March 2020, and failed to report to Cal/OSHA multiple serious illnesses suffered by employees who contracted COVID-19. An employee died from COVID-19 after being exposed by another employee who had exhibited signs and symptoms of COVID-19. Cal/OSHA did not learn of the fatality until two weeks after the death.

Cal/OSHA determined that the Gateway Care & Rehabilitation Center skilled nursing facility in Hayward exposed nurses and housekeeping workers to COVID-19 when it failed to follow requirements for providing necessary personal protective equipment.

Sutter Bay Hospitals’ CPMC Davies Campus did not ensure their health care workers in the administrative medical offices and security guards in the emergency department wore respiratory protection. In one incident, a suspect COVID-19 patient underwent a medical procedure in the operating room while medical staff did not have N95 masks or other proper protection.

Cal/OSHA inspectors determined that the Santa Clara Valley Medical Center’s hospital on South Bascom failed to provide effective training for its employees. The Santa Clara Valley Medical Center on North Jackson Avenue was also cited for failing to provide clear communication to their health care workers who were deployed to two skilled nursing facilities. The workers were exposed to COVID-19 suspect and confirmed patients at the Ridge Post-Acute and Canyon Springs Post-Acute facilities. Neither of the skilled nursing facilities trained the deployed health care workers.

Cal/OSHA has created guidance for many industries in multiple languages including videos, daily checklists and detailed guidelines on how to protect workers from the virus. This guidance provides a roadmap for employers on their existing obligations to protect workers from COVID-19.