Tag: 2022 News

Courthouse News reports that a federal judge in San Francisco ruled that he nation’s largest health insurer can sue two pharmaceutical giants over claims that they colluded to drive up the price of life-saving HIV drugs in violation of multiple state laws.

United HealthCare Services, which insures 70 million people in the U.S. through its affiliates and subsidiaries, sued Gilead Sciences and Teva Pharmaceuticals in federal court last year. The insurer, owned by parent company UnitedHealth Group, claims the drug makers entered into a series of unfair patent settlements that delayed generic versions of HIV drugs from hitting the market and shot up prices for consumers.

UnitedHealth’s complaint against the pharma firms is part of a flurry of federal antitrust suits filed last year against the makers of HIV antiretroviral drugs. Major retailers and insurers, including Humana and Blue Cross Blue Shield, have also sued the pharmaceutical giants.

The lawsuits claim Teva struck deals to settle patent suits with Gilead that delayed the introduction of a generic form of Viread until December 2017 and generic forms of Truvada and Atripla until September 2020. They say those deals enabled the drugmakers to charge hundreds of millions of dollars in higher prices for necessary medications that would have otherwise been cheaper in a truly competitive market.

A separate suit filed against Gilead by Humana last year claims that most of the company’s HIV medications cost $10 to produce, but for nearly 20 years Gilead charged health plans thousands of dollars for a 30-day supply. HIV drugs earned Gilead nearly $17 billion in sales in 2020.

Gilead makes three of the four top-selling HIV medications in addition to other drugs used in HIV combination antiretroviral therapy, or “cART.” More than 80% of U.S. patients starting HIV treatment take one or more of Gilead’s products each day, according to lawsuits filed by retailers.

Teva and Gilead had asked U.S. District Judge Edward Chen to dismiss claims that the companies violated antitrust and consumer protection laws in Indiana, Louisiana, Mississippi, Pennsylvania and Utah.

The two drugmakers argued laws in those states only allow a consumer who buys drugs for their own personal use to file suit. Chen rejected that argument in a 16-page ruling, but he dismissed some claims for other reasons.

Judge Chen resolved a similar dispute back in March 2020 when he ruled that labor union insurers could sue drug makers for antitrust under the same state laws, even though those insurers were third-party payors.

Gilead and Teva argued that situation was different because the plaintiffs were union health and welfare funds, not for-profit corporations like UnitedHealth. Chen found the argument unavailing. “Even though a union health and welfare fund is a nonprofit entity by nature, it functions like an insurer,” Chen wrote.

The judge denied Teva and Gilead’s motions to dismiss claims under Indiana, Louisiana and Pennsylvania consumer laws. He dismissed a claim under Mississippi law without prejudice because UnitedHealth did not try to resolve the dispute through required settlement process first.

The judge refused to advance Utah state law claims on behalf of UnitedHealth’s insureds because only state residents can sue, but he allowed UnitedHealth to sue on behalf of its Utah-based subsidiary, finding the parent company would be “standing in the shoes” of its affiliate.

Chen also dismissed Massachusetts, Kansas and Vermont state law claims based on his prior analysis of those laws in a separate March 2020 ruling.

Additionally, Chen eliminated claims against Teva based on purchases made before Oct. 19, 2017, finding those claims are barred by a four-year statute of limitations.

The Labor Commissioner’s Office has cited Terranea Resort in Rancho Palos Verdes $3.3 million for failing to offer job positions to 53 employees laid off during the COVID-19 pandemic once the resort re-opened, as required by law.

The employees included housepersons, banquet servers and bartenders, junior sous chefs and massage therapists.

The Labor Commissioner’s Office started its investigation in July 2021 after receiving Reports of Labor Law Violation from Unite Here Local 11 on behalf of 14 laid-off workers.

The workers claimed they were not offered an opportunity to return to their jobs based on seniority when the hotel increased business operations in 2021. The investigation included interviews with former and current workers, depositions from Terranea’s Human Resources managers and an audit of payroll records from April 16 to December 31, 2021.

The investigation determined that DH Long Point Management, LLC dba Terranea Resort had violated the Right to Recall law and cited the hotel $3,080,000 in liquidated damages, $5,300 in civil penalties, and $208,582 in assessed interest for a total of $3,293,882.

The law entitles each worker whose rights are violated liquidated damages of $500 per day until the violation is cured and civil penalties against the employer of $100 for each employee whose rights are violated. Any employee suffering unlawful retaliation for asserting recall rights may also be awarded back pay, front pay benefits and reinstatement.

In addition to issuance of the citation for liquidated damages payable to the employees and civil penalties payable to the State, a Notice to Discontinue Labor Violations was issued that directs Terranea to offer positions to employees who should have been returned to work, but still have not had that opportunity.

The Right to Recall law went into effect on April 16, 2021 and runs through December 31, 2024. Covered workers include employees at hotels or private clubs with 50 or more guest rooms, airports, airport service providers, and event centers. Also included are laid-off employees engaged in building services such as janitorial, maintenance and security services at retail and commercial buildings.

A new California Workers’ Compensation Institute study finds that overall, injured workers’ access to medical care for their initial treatment remained relatively consistent between 2010 and 2020, though average and median wait times for the first doctor visit varied by type of care, and as in group health and other systems, rural residents have the farthest to travel and access to fewer providers, especially specialists.  

For its access study, CWCI used data from more than 1.5 million job injury claims from accident year (AY) 2010 -AY 2020 to measure changes in the amount of time that elapsed between an employer’s notice of injury and the first treatment, and the average distance that injured workers traveled to receive their initial care.

The average wait time from employer notice to the initial treatment showed some variation across the 11-year span, ranging from a low of 3.3 days for AY 2011 claims to 4.4 days for claims from AY 2020 – the first year of the pandemic, but the median number of days to first treatment showed no change, as the median values across all 11 years indicated initial care rendered on the same day that the employer was notified of the injury.  The average time from the employer’s notice to the first E&M visit also rose slightly over the 11-year span, ranging from 4.1 days for AY 2011 claims to 5.2 days for AY 2020 claims, but again the median values for all years indicated that the initial E&M visit occurred on the same day that the employer was notified of the injury.

On the other hand, the average wait time for some specialty services showed greater variation over time.  For example, the average wait time to a first PM visit increased from 31.8 days for AY 2010 claims to 37.5 days for AY 2015 claims, but then trended back down to 31.2 days by AY 2020.  

The median number of days to first PM visit showed a similar pattern, climbing from 15 days to 20 days between AY 2010 and AY 2015, then falling back to 15 days by AY 2020.  Notably, most of the increase in the number of days to the first PM visit began in 2013, coinciding with legislative reforms and emergency regulations impacting workers’ comp Medical Provider Networks (MPNs) and the Utilization Review (UR) process – including a mandate that treating physicians use a new Request for Authorization form effective January 1, 2013, and a requirement that disputes over medical necessity of a requested treatment be resolved through a new Independent Medical Review (IMR) process.  

CWCI notes that the subsequent declines in the average and median days to the first PM visit may have resulted from improved processes by physicians and payers as they became familiar with these new requirements.

In addition to measuring changes in the wait times for various treatment services, the Institute also calculated the average distance from each injured worker’s residence to the location of their initial treatment, with results broken out by year.  

This analysis found that the average distance traveled by California injured workers to their initial treatment was remarkably stable across the 11-year study period, ranging between 5.3 and 5.7 miles.  

Segmenting the results into geographic subcategories (urban, suburban, and rural) the study found that the average distances that injured workers living in the more densely populated urban and suburban regions traveled to receive their initial care was about one-third to one-half of the average for those living in less densely populated rural parts of the state.  

But even among rural residents, who in AY 2020 accounted for 8.8 percent of all California injured workers, the average distance traveled showed only minor variations during the study period, ranging from 11.0 miles in 2010 to 13.1 miles in 2017.  

Notably, in all cases, the average distances injured workers had to travel were well within the medical access standards set by the state for MPNs, which provide nearly 92 percent of all workers’ compensation treatment in the state.  Those standards require that injured workers have a choice of 3 primary care providers within 30 minutes or 15 miles of their home or workplace; a choice of 3 medical specialty providers within 60 minutes or 30 miles; and a hospital emergency room or non-hospital provider of all emergency healthcare services within 30 minutes or 15 miles.  

The latest proximity to care findings also track with results of CWCI’s April 2021 research which found that 99 percent of claims in which treatment was rendered by an MPN provider, and 98 percent of non-MPN claims met the state’s access standards.

The California Attorney General announced a $6 billion settlement with Purdue Pharma and the Sackler family over their role in the opioid epidemic. California is estimated to receive approximately $486 million from the settlement to fund opioid addiction treatment and prevention.

If approved, the settlement will keep intact provisions of the Purdue bankruptcy plan forcing the company to be dissolved or sold by 2024 and banning the Sacklers from the opioid business. The initial bankruptcy plan required Purdue and the Sacklers to make public over 30 million documents. The settlement forces disclosure of additional records previously withheld as privileged legal advice.

Neither this agreement nor the prior bankruptcy plan releases the Sacklers from any potential future criminal liability.

Highlights from the proposed settlement include:

– – The Sackler family must pay up to $6 billion to the bankruptcy estate – $1.7 billion above the initial bankruptcy plan. The payments will be spread over 18 years, with larger payments frontloaded so states receive more money, sooner as compared to the previous bankruptcy plan.
– – If it is confirmed, the enhanced bankruptcy plan will provide California with nearly half a billion dollars that will be used to fund opioid addiction treatment and prevention.
– – The Sackler family must allow institutions to remove the family name from buildings, scholarships, and fellowships.  
– – Responding to state requests, mediator Judge Shelley C. Chapman urged the Bankruptcy Court to require members of the Sackler family to participate in a public hearing where victims and their survivors would be given an opportunity to directly address the family.
– – Purdue must make public additional documents previously withheld as privileged legal advice, including legal advice regarding advocacy before Congress, the promotion, sale, and distribution of Purdue opioids, structure of the Purdue Compliance Department and its monitoring and abuse deterrence systems, and documents regarding recommendations from McKinsey & Company, Razorfish, and Publicis related to the sale and marketing of opioids. These documents will be held in a repository co-hosted by the University of California San Francisco, which also hosts an archive of tobacco industry documents.
– – States reserve the right to object to nonconsensual third-party releases, including advising the court that agreement to the settlement does not indicate belief that those releases that remain in the Purdue bankruptcy plan are legal. The settlement also preserves the right of the states to file amicus briefs arguing against nonconsensual third-party releases if the case makes it to the U.S. Supreme Court.

The Attorney General’s Office filed a lawsuit against Purdue and members of the Sackler family in 2019, for unlawful practices in the promotion and sale of opioids. The lawsuit alleged that Purdue’s misleading marketing and sales practices, which the Sackler family approved, played a major role in contributing to the nationwide opioid crisis. The deceptive sales and marketing practices, which misled healthcare providers and patients about the addictive nature of opioids, contributed to an over-supply of opioids in the market and helped create the crisis the country faces today.

Purdue Pharma filed for bankruptcy in September 2019. In 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan that unlawfully blocked states like California from pursuing claims against the family, even though the Sackler family members had never themselves declared bankruptcy. The plan required the Sackler family to pay $4.3 billion over nine years to the states, municipalities, and others. California, Connecticut, Delaware, Maryland, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia objected to and ultimately appealed the plan. The United States Trustee, an arm of the U.S. Department of Justice, also appealed.  

In December 2021, the U.S. District Court vacated the Purdue bankruptcy order, agreeing with the non-consenting states that the bankruptcy court lacked authority to force states to release their claims against the Sackler family. In the wake of this victory by the states, the Sacklers have agreed to pay more than $1 billion to obtain releases from the ten states that objected to the bankruptcy plan. Purdue has appealed to the United States Court of Appeals for the Second Circuit, and that appeal will proceed.

The National Association of Insurance Commissioners (NAIC) released data on life/fraternal and property/casualty insurers. The reports provide market share information and identify leading insurance writers in several key lines of business. The reports reflect data filed by insurers as of March 1 and will be refreshed daily through March 4 and then each Monday throughout March.

The 2021 market share data include countrywide direct written premiums for the top 25 groups and companies as reported on the state page of the annual financial statement for insurers that report to the NAIC.

The Property/Casualty Market Share report contains cumulative market share data for the following lines of business: personal auto, commercial auto, workers’ compensation, medical professional liability, homeowners, and other liability (excluding auto liability) insurance.

Highlights from the report include:

– – With 67.36% of property and casualty insurance companies reporting so far, direct premiums written for all lines of business are $574,678,926,948.
– – The Top 10 property and casualty companies reporting so far have a cumulative market share of 51.84%.
– – Total private passenger auto insurance has the largest amount of direct premiums written reported as of March 1st, 2022, at $179,440,143,179, which is about 31% of all written premiums.

The top ten workers’ compensation carriers who have the cumulative market share of 48.92% of the market are:

– – 1) TRAVELERS GRP – 9.46%
– – 2) HARTFORD FIRE & CAS GRP – 8.79%
– – 3) CHUBB LTD GRP – 5.88
– – 4) AMTRUST FINANCIAL SERV GRP – 5.00%
– – 5) STATE INS FUND – 4.62%
– – 6) OLD REPUBLIC GRP – 3.45%
– – 7) STATE COMPENSATION INS FUND – 3.30%
– – 8) WR BERKLEY CORP GRP – 3.04%
– – 9) BERKSHIRE HATHAWAY GRP – 2.76%
– – 10) AMERICAN FINANCIAL GRP – 2.62%

The Life/Fraternal Market Share report contains cumulative market share data for life insurance, annuity considerations, and an aggregate total of life insurance, annuity considerations, deposit-type contract funds, other considerations, and accident/health insurance.

Highlights from the report include:

– – With 67.95% percent of life and accident/health insurance companies reporting, direct premiums written for life insurance are $159,735,690,559.
– – The Top 10 life insurance companies reporting so far have a cumulative market share of 54.69%.
– – Total reported premiums for life insurance, including annuity considerations, deposit-type contract funds, other considerations, and accident and health are $818,022,824,054 as of March 1.

The full 2021 Market Share Reports for Life/Fraternal Groups and Companies and 2021 Market Share Reports for Property/Casualty Groups and Companies will be available this summer and will contain more in-depth information.