WEEKLY MDL UPDATE by MASS TORT NEXUS for Week of November 13, 2017

The week in mass torts around the country:

By Mark York, Mass Tort Nexus (November 16, 2017)

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MASS TORT NEXUS

 Verdicts on November 16, 2017: 

J&J gets hit hard again, in a $247 million Pinnacle hip implant verdict, DePuy Orthopaedics Pinnacle Implant MDL 2244, in bellwether trial of 3:15-cv-03489 Alicea et al v. DePuy Orthopaedics Inc et al. (DePuy Pinnacle Hip Implant MDL 2244 Briefcase)

Drug maker Auxilium won a defense verdict in their Testim product bellwether trial, where plaintiffs claimed it caused a heart attack in a verdict reached in the US District Court Northern District of Illinois, Judge Kennelly, in MDL 2545 Testosterone Replacement Therapy. (Testosterone Therapy MDL 2545 USDC ND Illinois)

Johnson & Johnson Wins a Defense Verdict in Los Angeles Court Talcum Powder Mesothelioma Trial, Jury Finds J&J Not Liable in Tina Herford et al. v. Johnson & Johnson Case number BC646315, consolidated in LAOSD Asbestos Cases, case number JCCP4674, in the Superior Court of the State of California, County of Los Angeles.  (J&J Talcum Powder Cancer Litigation Briefcase)

Senator Bob Menendez  judge declares a mistrial in New Jersey federal court trial, after a hung jury cannot agree unanimously on charges. Question is- Are the Senator and his doctor friend in Florida, just that-were they just friends or was there active bribery taking place?

Recent Case Updates:

>Plaintiff in DePuy Pinnacle Hip Implant Trial Asks Texas Jury For A Hundred Million + In Punitive Damages

At the close of arguments in the latest DePuy MDL 2244 trial on Monday November 13, 2017, six New York plaintiffs asked a Texas federal jury to hit Johnson & Johnson and it’s DePuy subsidiary, with at least a nine-figure punitive damages award. Attorneys asked that J&J and DePuy be punished for making and marketing their Pinnacle model hip implants, an alleged defective line of metal-on-metal hip implants, that have caused many thousands of injuries to unsuspecting patients. If this jury follows suit on prior Pinnacle bellwether jury awards, then J&J and DePuy should be ready for a massive verdict, as the last jury awarded California plaintiffs over one billion dollars in December 2016, sending a clear message that the company’s Pinnacle design and subsequent marketing policies have failed.

METALLSOIS DAMAGE

Closing arguments wrapped up on the two-month bellwether trial, where plaintiffs claimed they suffered “metallosis” which caused tissue damage and negative reactions to the Pinnacle Ultamet line of metal-on-metal hip implants made by J&J’s DePuy Orthopaedics Inc. unit. Depending on the jury verdict, perhaps J&J will consider coming to the settlement table if another massive verdict is awarded, or they may continue the aggressive “we’ve done no wrong stance” resulting in more plaintiff verdicts in the future..

 >Travelers Insurance Wins Declaratory Judgment Suit Over Defense Coverage In Orange County and Chicago Opioid Lawsuits:

“California Appeals court says Watson not covered”

Watson Pharma, Inc. and it’s parent Activis, Inc. were denied insurance coverage in a November 6, 2017 ruling by the California State Court of Appeals in the 2014 Declaratory Judgment action filed by Travelers Insurance in an Orange County, CA court where Travelers successfully asserted claims that they were not required to defend or indemnify Watson in the underlying opioid based litigation filed by Santa Clara and Orange County against opioid manufacturers, due to Watson’s “intentional bad conduct” in their business practices related to sales and marketing of it’s opioid products. The Appeals Court also excluded Watson’s coverage in a similar opioid lawsuit against them in a Chicago, Illinois federal case where the City of Chicago filed similar claims against Watson over opioid marketing abuses in 2014. Perhaps other insurance carrier will take notice and look closer at denying policy coverage for many other opioid manufacturers who have been sued across the country in cases with almost the exact claims as those alleged by Santa Clara County and the City of Chicago.

>NEW XARELTO TRIAL:

Former FDA Commissioner Testifies in Philadelphia Xarelto Trial-

“Xarelto Warnings Are Inadequate”

— Former head of the Food and Drug Administration, Commissioner David Kessler testified during the first state court trial in Philadelphia, telling the jury on Tuesday that “warning labels for the blood thinner Xarelto failed to provide adequate information to doctors and consumers about the risk of bleeding that some patients could face when using the drug”.

David Kessler, FDA Commissioner under President George H.W. Bush and President Bill Clinton, told jurors that Bayer AG and Johnson & Johnson’s warning labels for the medication understated the risk of significant bleeding events that had been seen in television and print ads across the country for years, and failed to disclose the true risks associated with prescribing the blockbuster drug. This trial, expected to take six weeks, is the first state court bellwether trial for the blood thinner Xarelto, in the Philadelphia Court of Common Pleas, the prior trials took place in federal courts in Louisiana and Mississippi where the defense prevailed in all 3 trials earlier this year. Those trials were all bellwether trials, as part of the Xarelto MDL 2592 in front of Judge Eldon Fallon, US District Court, ED Louisiana. Will the change of venue to Pennsylvania State Court have a different outcome than the three prior Xeralto trial losses?

>Luzerene County, Pennsylvania Files RICO Suit Over Opioid Marketing Against Drug Makers

Luzerne County in Northeast Pennsylvania has filed a federal RICO based lawsuit accusing pharmaceutical companies including Purdue, Pharma, Endo, Janssen and Teva of violating the Racketeer Influenced and Corrupt Organizations Act by illegally marketing highly addictive painkillers that have contributed to a costly national opioid epidemic. The suit filed in US district Court of Pennsylvania by Luzerne County is one of many cases opioid drugmakers and distributors are facing as state and local governments seek to recoup costs they’ve incurred in the increased marketing and prescribing of opioid painkillers, and the resultant spikes in addiction and overdose.

OPIOID MARKETING ABUSES

“The manufacturers aggressively pushed highly addictive, dangerous opioids, falsely representing to doctors that patients would only rarely succumb to drug addiction,” the complaint, which was filed on Wednesday, said. “These pharmaceutical companies … turned patients into drug addicts for their own corporate profit.”
“The lawsuit accused the drugmakers of using false and deceptive marketing practices over the course of the last two decades, including pushing the opioid painkillers for treatment of chronic pain, to boost prescriptions for the drugs

COMMON CLAIMS AGAINST ALL OPIOiD MAKERS

Among the companies’ primary claims, cited by Luzerne county and others, evidence the manufacturers intentionally misled consumers, was that the drugs were not addictive when prescribed to treat legitimate pain. This is one of the key claims used by all parties filing suit against the opioid manufacturers, across the entire country.

Case heading is: Luzerne County v. Purdue Pharma LP et al., case number 3:17-cv-2043, in the U.S. District Court for the Middle District of Pennsylvania.

>Opioid Litigation Roundup: An Overview Of Recently Filed Cases and MDL 2804

In addition to the many counties and other communities from across the country that have filed lawsuits against opioid manufacturers in MDL 2802, set for a JPML consolidation hearing November 30, 2017 a new group of plaintiffs have joined the increasing pool of parties filing suit against Big Pharma opioid manufacturers and their distributors. Unions are now joining in the suits alleging that the business practices of the opioid makers and distributors caused catastrophic healthcare and related labor problems everywhere in the country over the last 15 years. Locals from the Electrical Workers; Commercial Food Service and Teamsters are now plaintiffs in the MDL 2804, which if approved at the upcoming JPML hearings in St Louis, will probably cause a flood of additional filings by unions across the country.

State attorneys general, a Native American tribe and individual consumers are among the ever increasing pool of plaintiffs who’ve brought lawsuits against drugmakers, pharmacies and distributors allegedly responsible for epidemic levels of opioid abuse. As word spreads among the network of local governments, and discussion take place about the municipal opioid lawsuits being filed, there will be a flood of new complaints filed, that will match or exceed the number of cases filed in the massive “Tobacco Litigation” which is quickly gaining comparison as the opioid case filings are looking to be comparable in size and probably exceed the tobacco litigation in damages.

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California Appeals Court Denies Insurance Coverage For Opioid Drug Makers Defense: Will other insurers say no to opioid coverage?

Profits over Patients Continues”

Mark York (November 15, 2017)

Mass Tort Nexus

 

 

 

 

 

 

 

(MASS TORT NEXUS)  On November 6, 2017 California’s Court of Appeals, Fourth Appellate District, ruled that Travelers Property Casualty does not have a duty to defend or indemnify Watson Pharmaceuticals (Activis, Inc), in a long running opioid related lawsuit based in Orange County Superior Court, as well as a second opioid related suit in Chicago.

TRAVELERS FILES DECLARATORY COMPLAINT

Watson Pharmaceuticals aka Activis, Inc., along with several other opioid manufacturers, were sued by two California counties and the city of Chicago in 2014. The claimants were seeking redress for costs related to the opioid epidemic in their respective communities. Travelers denied Watson’s demand to pay for its defense and subsequently brought a lawsuit against the drug company. Travelers filed a Complaint for Declaratory Judgment requesting the court declare that insurance coverage or indemnification of Watson-Activis under policies issued to Watson.

The California Court of Appeal detailed in its 31-page ruling that the policy covers damages for bodily injuries caused by an accident, and that the actions of Watson-Activis were intentional and not subject to policy coverage.

OPINION CLEARLY DENIES COVERAGE

“The California action and the Chicago action do not create a potential liability for an accident because they are based, and can only be read as being based, on the deliberate and intentional conduct of Watson that produced injuries—including a resurgence in heroin use that were neither unexpected nor unforeseen,” Justice Richard Fybel wrote in the ruling.

WATSON CONDUCT IS EXCLUDED

“All of the injuries arose out of Watson’s products or the alleged statements and misrepresentations made about those products, and therefore fall within the product exclusions clause of the policies,” Fybel added.

“The takeaway is that the opioid crisis has gone into the realm of whether there is insurance coverage to pay for some of the costs being incurred by public entities,” commented Larry Golub, a lawyer and partner with Hinshaw & Culbertson who is unattached to the case.

“I think there is a potential for more cases,” Golub told Connecticut Law Tribune. “Big bucks are being spent to deal with the opioids crisis.”

This is the second time Travelers has won a ruling against Watson. In August 2016, the US Court of Appeals for the Eleventh Circuit ruled that the insurer did not have to defend Anda, a division of Watson Pharmaceuticals in a West Virginia federal court case over the “prescription drug abuse” crisis in that state. The court based its decision on the exclusions of the company’s insurance policy.

OPINION EXCERPT IN TRAVELERS vs. ANDA-WATSON

Background: Anda is a wholesale pharmaceutical distributor. The State of West Virginia has sued Anda and other pharmaceutical companies in West Virginia state court, requesting an injunction against their distribution practices and seeking compensation for expenses the state alleges it has incurred as a result of the proliferation of “Pill Mills” and the attendant “opioid epidemic.” Further stating “The judgment of the district court is affirmed, and the liability policy coverage for Anda and Watson in the West Virginia opioid suit is denied.”

Will denial of insurance coverage become a trend in the exploding number od lawsuits filed against opioid manufactures, distributors and will Big Pharma finally be forced to admit the wholesale opioid abuse designed in the boardroom and placed into American commerce by any means necessary over the last 20+ years?

 

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Targeting Big Pharma and Their Opiate Marketing Campaigns

The Major Focus Across The USA is Now Big Pharma and Their Opiate Marketing Campaigns

Mark A. York (November 3, 2017)

(Mass Tort Nexus) A bipartisan group of states and their attorneys general have started massive joint investigations into the marketing and sales practices of drug companies that manufacture opioid painkillers. These drug makers are the largest in the country and are considered at the center of the current national addiction epidemic. This includes the executive suite and boardrooms of all opiate manufacturers, as the policy and direction for the massive growth in opiate prescriptions could not have gone unnoticed by executives at the opiate drug makers, for close to 15 years. Record earnings, bonuses and SEC filings all point to “boardroom knowledge” of ever increasing opiate focused sales efforts.

The state actions are now parallel to the “Motion for Consolidation in “The Opiate Prescription Litigation MDL 2804” , filed with the Joint Panel for Multidistrict Litigation. MDL 2804 is set for a Consolidation Motion Hearing before the JMPL panel in St. Louis,  MO on November 30, 2017, where numerous Midwest counties in Ohio, Kentucky and West Virginia as well as the city of Birmingham, Alabama joined together to file suit against the 3 largest distributors of opiates in the country, McKesson Corp., Cardinal Health and AmerisourceBergen Corporation. Also named in the suit are the primary Big Pharma opiate manufacturers including Purdue Pharma, J&J’s Janssen Pharmaceuticals, Endo, Teva and others as additional defendants.

Attorney Generals from Massachusetts, Tennessee, Texas, Illinois, New Jersey, Missouri and Pennsylvania have launched full investigations, following the lead of Ohio Attorney General Mike DeWine, who sued five drug manufacturers for misrepresenting the risks of opioids. Other states are also beginning the review of opioid manufacturers and will decide if they are joining the others in filing legal claims.

“We are looking into the role of marketing and how related corporate business practices might have played into increasing prescriptions and use of these powerful and addictive drugs,” District of Columbia Attorney General Karl Racine, a Democrat, said in a statement.

Its currently unclear exactly how many states are involved in the probe, though officials said a majority of attorneys general are part of the coalition. Among those leading the probe is Tennessee Attorney General Herbert Slatery, a Republican.

Officials did not specify which companies were under investigation, but suffice it to say, any company that made and marketed opioids products over the last 10 years will be scrutinized.

Opioid drugs, including prescription painkillers and heroin, killed more than 33,000 people in the United States in 2015, more than any year on record, according to the U.S. Centers for Disease Control and Prevention.

Separate lawsuits by attorneys general in Ohio, Tennessee, New Jersey and Mississippi, are pursuing opioid-related cases as of September 2017, with many more following suit very soon. They are have targeting Purdue Pharma LP, Johnson & Johnson(JNJ.N), Endo International Plc(ENDP.O), Teva Pharmaceutical Industries Ltd (TEVA.TA) and Allergan Plc(AGN.N) as well as leaving the door open to add additional defendants, based on the information revealed in the ongoing multi-state investigations.

New Jersey recently filed suit against Insys Therapeutics, Inc over marketing scheme for its Fentanyl product known as “Subsys”, and the massive off-label marketing campaign for uses other than FDA approved “cancer pain” treatments. The entire executive board of Insys was indicted in December 2016, along with many of its sales staff and numerous doctors across the country, with at least to physicians being sentenced to 20 years in prison by the US District Court in Alabama. See Insys Therapeutics, Inc Executives Indicted Over Fentanyl Sales Campaign.

Teva in a statement said on Thursday it is “committed to the appropriate promotion and use of opioids.” Representatives for the other companies did not immediately respond to requests for comment.

The companies have denied wrongdoing, saying the U.S. Food and Drug Administration approved their products as safe and effective and saying that they carried warning labels that disclosed their risks. The specific allegation focus more on “off label” and doctor targeting and marketing practices that repeatedly encouraged over-writing of opiate prescriptions for patients with minimal pain issues.

In announcing his office’s lawsuit in May 2017, Ohio Attorney General DeWine said the drug companies helped unleash the crisis by spending millions of dollars marketing and promoting such drugs as Purdue’s OxyContin, without consideration of the long term effects of the related addiction, which Purdue was absolutely aware of throughout the years of profits that now total billions of dollars.

The lawsuit said the drug companies disseminated misleading statements about the risks and benefits of opioids as part of a marketing scheme aimed at persuading doctors and patients that drugs should be used for chronic rather than short-term pain.  Pain centers and medical practices across the country started writing an ever increasing number of high dose opioid prescriptions for what would be considered low to mid-level pain treatment.

Similar lawsuits have been filed by local governments, including those in several California counties, as well as the cities of Chicago, Illinois and Dayton, Ohio, three Tennessee district attorneys, and nine New York counties have also filed individual suits.

It is unknown at this time, if all of the legal actions filed by governmental entities across the country will be consolidated into MDL 2804, which may be the most effective way to manage the soon to be massive number of legal claims against Big Pharma and their long term opiate profit centers. Municipalities across the country seeking to recoup the enormous financial losses brought on by the opioid crisis.

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Chicago Asks Federal Judge For Janssen Employee Marketing Records In Opioid Lawsuit

By Mark A. York (November 3, 2017)

 

 

 

 

 

 

 

 

Chicago Is Now Three Years Into it’s Suit Against Opioid Drug Manufacturers

(Mass Tort Nexus)  In the case of City of Chicago v. Purdue Pharma LP et al., Case No. 1:14-cv-04361 U.S. District Court for the Northern District of Illinois, the City of Chicago has requested the judge order Janssen Pharmaceuticals to turn over records of 10 employees that contain information related to the city’s claims that the drug company and others marketed opioids inappropriately.

In a motion to compel Janssen to produce the documents, Chicago said that Janssen Pharmaceuticals Inc. should include the employee related documents who were responsible for its opioid marketing, as the custodians of electronically stored information that can be searched for the relevant documents. So far, Janssen has refused to offer up the records or the employees in discovery requests, with Chicago stating “the company’s reasons are baseless” in the heavily redacted filing. Their claim that the custodians are ‘duplicative’ finds no support in Janssen’s own documents,” Chicago stated in the pleadings.

SUIT CLAIMS JANSSEN MISLED DOCTORS

Chicago sued Janssen Pharmaceuticals, Purdue Pharma LP, Teva Pharmaceuticals Industries Ltd., and other opioid manufacturers in 2014, saying they misled doctors and the public about the addictive nature of opioids and pushed prescriptions despite known dangers of addiction. As a result, the city claims that it paid for thousands of medically unnecessary prescriptions for city employees.

Janssen argues that including these employees would be “duplicative,” but it’s unlikely that employees working in the same area would carry out the same tasks in a way that would make their documents the same, the city said.

“Janssen has complained of the yet unproven ‘burden’ of searching the files of additional custodians,” the city said. “Janssen offers no specifics in support of this argument.”
Janssen hasn’t declared the size or scope of the additional data in the electronic files, nor has it shared with the city any costs for searching through more employees’ information, the searches are generally standard and it’s probable all the requested data has been collected in some format, Janssen is just playing hardball in giving it up.
“It merely argues that it has collected ‘nearly a terabyte’ of data from unspecified sources and therefore refuses to collect and search anymore,” this is not a valid argument as the collection of massive amounts of data in complex litigation is standard practice and the process is very well defined in cases of this type.
“Chicago has identified more than 125 parties whose files it will search for responsive electronically stored information. Janssen has agreed to search only 17 custodians,” according to the city “In contrast, the Endo defendants have agreed to search 62 ESI custodians and the Actavis defendants have agreed to search 43 ESI custodians.”

LOCAL GOVERNMENTS IN OPIOID MDL

The city’s suit is one of a number filed by municipalities over the ongoing opioid epidemic, there is now a Motion to Consolidate the “Opiate Prescription Litigation as MDL 2804” (see OPIOID CRISIS: MDL 2804 OPIATE PRESCRIPTION LITIGATION) pending before the Joint Panel on Multidistrict Litigation, set for November 30th in St. Louis. In addition, the Cherokee Nation tribe gas filed against the drug makers, and at least one class action was filed on behalf of individuals in Arkansas, which has been placed on hold pending the outcome of the JPML motion hearing in St. Louis on November 30th.

More than 40 state attorneys general have also launched a joint investigation into at least half a dozen opiate drugmakers and distributors and many are close to moving forward in not only civil claims but looking very closely at potential criminal charges. The state AGs’ probe initially focused on OxyContin maker Purdue Pharma, now widened to include other opioid drugmakers and distributors such as Endo, Allergen, McKesson and Teva.

CRIMINAL INVESTIGATIONS

The US Department of Justice is now pursuing criminal charges against select opioid drug manufacturers in Massachusetts, where Insys Therapeutics, Inc. is under indictment. In a surprise move, the US Attorney’s office in Connecticut has opened a criminal review of Oxycontin maker, Purdue Pharma, LP, and it’s opioid drug marketing practices.

“We look forward to fully responding to this latest motion once we have the opportunity to review it with counsel,” stated Janssen, “We recognize opioid abuse is a serious public health issue that must be addressed. At the same time, we firmly believe the allegations in these lawsuits are both legally and factually unfounded

As the legal heat is turned up across the country on opioid drug manufactures, it remains to be seen how they will react to what is being termed as a repeat of the legal strategy followed in the massive and financially damaging “Tobacco Litigation.”

 

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AS EXPECTED A “NATIONAL PRESCRIPTION OPIATE LITIGATION MDL FILING” IS ON THE JPML DOCKET

Transfer Motion Filed To Create New Opioid Rx Multidistrict Litigation

By Mark A. York

Mass Tort nexus (September 28, 2017)

A Motion to Transfer and Consolidate the “National Prescription Opiate Litigation”, was filed on September 25, 2017 see “JPML Motion to Consolidate Prescription Opiate Litigation”, with the Joint Panel on Multidistrict Litigation. An MDL number designation has not been assigned as of Thursday the 28th, but the filing and designation are under JPML review.  The motion was filed by Hill, Peterson, Carper, Bee & Dietzler, based in Charleston, WV. The filing is the long expected result of the ongoing “Opioid Crisis” which has seemingly overtaken many aspects of day to day life in America, with a particular emphasis on rural America. The many small towns and counties have seen unheard of increases in overdose deaths and 911 calls for drug overdoses, which have depleted budgets and caused ever mounting levels of grief for stricken families as well as tension in government council meetings everywhere, when attempting to address the crisis.

The consolidation filing is followed in the Mass Tort Nexus briefcase, “National Prescription Opiate Litigation MDL”,as the motion directly cites the nation’s three largest wholesalers of opioId drugs, McKesson Corporation, AmerisourceBergen Corporation and Cardinal Health, Inc. as well as naming primary drug makers Purdue Pharma, Teva, Cephalon, Janssen, Endo, Actavis and Mallinckrodt as defendants in certain actions. Opiate drug makers and their executives are now firmly in the sights of not only mass tort lawyers, but facing the full force of criminal investigation by the US Department of Justice in every state, as indictments have already been handed down in several federal venues. The MDL filing contains complaints that specifically reference RICO claims in many of the 66 federal actions cited in the motion, to be transferred into the JPML venue.

STATES HAVE FILED SUIT ALREADY

The pharmaceutical industry already faces dozens of lawsuits brought by cities, counties and states — including Ohio, Missouri and Oklahoma. Some are trying to recoup the costs incurred from the surge in emergency response from spikes in opioid-related overdoses. The strategy is reminiscent of the successful litigation brought by states and municipalities three decades ago against tobacco companies.  The common understanding is that the “Opiate Rx Litigation MDL” and related lawsuits across the country, may equal or surpass the tobacco litigation in both scope and financial penalties paid by drug makers.

The opioid drug industry expanded in the 1990s in response to the medical community’s push to better treat pain and chronic pain.

A primary focus is the how and why millions of opioid users became addicted to opioids, or heroin, after being prescribed the medication by doctors and the apparent failure of corporate executives to address the ever mounting evidence in light of the enormous profits, year in and year out.

WARNINGS TO DOCTORS INADEQUATE

Many doctors, in turn, said they were assured by the drugmakers that the opioids were less addictive or even not addictive, which in the civil matters will be a point of very high contention and potentially a focus of US DOJ investigators.

Some states have obtained consent decrees and financial penalties from drug makers, including Illinois, “My investigations have shown that drug companies pressure physicians into prescribing powerful, addictive drugs without regard for the law or patients’ well-being,” said Illinois Attorney General Lisa Madigan, who is also party to the new investigation.

 

 

 

 

 

 

 

 

 

Intent On Reversing Its Opioid Epidemic, A State Limits Prescriptions

Now, many state prosecutors say they will examine whether the industry as a whole, was complicit in creating the epidemic and whether it should now be responsible for helping pay for the damage caused to many communities.

Allergan said it was “working cooperatively” with the attorneys generals on their requests for information. The other companies being investigated did not immediately issue statements, and industry lobbying group PhRMA didn’t respond to a request for comment.

The number of opioid prescriptions has declined in recent years, after federal regulators placed new limits on the drugs. That reduced the amount of opioids prescribed by 18 percent in 2015, from a peak in 2010, according to the Centers for Disease Control and Prevention.

Still, as the state attorneys general and other community leaders note, the slowdown in prescriptions has been offset by greater demand for cheaper alternatives such as heroin, now recognized by medical industry leaders, substance abuse professionals, law enforcement and now mass tort lawyers, as a primary direct result of the massive opioid prescription writing campaign for so many years.

ADDICTIONS STARTED WITH A PRESCRIPTION

“For millions of Americans, their personal battle with opioid addiction did not start in a back alley with a tourniquet and syringe,” industry leaders are stating “They got hooked on medicine they were prescribed for pain or that they found in a medicine cabinet.”

“Governmental entities across the country are now joining together and stating “We are taking this action today because our communities and homes have been broken and families torn apart by this epidemic,” and this known danger was ignored by opioid drug makers, “This epidemic has claimed victims from all walks of life, and both the financial and emotional costs to our citizens.”

Primary allegations include “That the manufacturing companies pushed highly addictive, dangerous opioids, falsely representing to doctors that patients would only rarely succumb to drug addiction, while the distributors breached their legal duties to monitor, detect, investigate, refuse and report suspicious orders of prescription opioid, which is applicable to all afflicted communities across the country.

From the extensive research by Mass Tort Nexus to date, it appears that this is just the tip of the litigation iceberg that will be brought against all levels of opiate pharmaceutical manufacturers and affiliated distributors in the USA. Based on US Dept. of Justice criminal filings, the executive suites and boardrooms are not exempt from indictments and criminal charges,  as well as the many doctors, sale and marketing professionals and others who helped facilitate the current opioid crisis, which directly results in related civil and mass tort actions against all involved.

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$54 M Settlement against Salix Pharma for “Speaker Programs” Used to Pay Kickbacks to Doctors

$54 M Settlement against Salix Pharma for “Speaker Programs” Used to Pay Kickbacks to DoctorsFederal law enforcement agencies announced a $54 million settlement against Salix Pharmaceuticals for using “speaker programs” to pay kickbacks to doctors so they would prescribe company drugs and medical devices.

The scam violated the federal Anti-Kickback Statute and False Claims Act. Big Pharma is a corrupt industry that has often been nailed for paying kickbacks and committing fraud to bloat their profits:

Amgen $762 million Aranesp 2012
AstraZeneca $520 million Seroquel 2010
Bristol-Myers Squibb $515 million Abilify, Serzone 2007
GlaxoSmithKline $3 billion Avandia, Wellbutrin, Paxil, Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex; 2012
Johnson & Johnson $2.2 billion Risperdal, Invega, Nesiritide 2013
Merck $650 million Zocor, Vioxx, Pepsid 2008
Novartis $423 million Trileptal 2010
Pfizer $2.3 billion Bextra, Geodon, Zyvox, Lyrica 2009
Schering-Plough $435 million Temodar, Intron A, K-Dur, Claritin RediTabs 2006
Serono $704 million Serostim 2005
TAP Pharmaceutical Products $875 million Lupron 2001

Sham speaker programs

Announcing the settlement were the US Attorney for the Southern District of New York, the U.S. Department of Health and Human Services, the Office of Inspector General’s New York Region, and the FBI.

Salix held sham speaker programs, often at high-end restaurants (such as Nobu and Le Bernardin in New York City), with per-person costs exceeding $300. The doctors got substantial speaker fees at fake continuing medical education (CME) programs and spent little or no time discussing the product.

Under the settlement, Salix must pay about $46.53 million to the federal government plus $7.47 million to resolve the state law civil fraud claims.

“Salix found a way to pay doctors money and treated them to fancy meals to push their drugs.  With today’s settlement, Salix has taken responsibility for its conduct and agreed to pay a significant financial penalty.  This is part of our continuing effort to pursue health care providers who put their profits ahead of patient safety,” said Manhattan U.S. Attorney Preet Bharara.

FBI Assistant Director-in-Charge Diego Rodriguez said, “The simple idea behind the pitch eats away at the faith patients have in their doctors to put their health and wellbeing above the interests of a corporation.”

Salix is a specialty pharmaceutical company based in Raleigh, North Carolina, that sells products used to treat various gastroenterology conditions. From January 2009 to December 2013, Salix’s speaker programs for Xifaxan, Apriso, Relistor, MoviPrep, OsmoPrep, Solesta, and Deflux were nothing more than social events where Salix wined and dined doctors to induce them to write prescriptions for these products.

Doc-in-the-box programs

At many of its speaker programs, Salix repeatedly invited the same doctors, who often were from the same practice or otherwise knew each other, to attend the same program on the same topic. In pre-recorded programs – which Salix staff called “doc-in-the-box programs” – the pre-recorded video often was not played or was intentionally played in a way so it could be ignored.

Many of these doctors increased their prescription-writing for Salix drugs after becoming speakers or repeatedly attending sham speaker programs. Salix spent about $25 million on speaker payments and meals.

Salix admitted and accepted responsibility for the following conduct:

  • The speaker programs were an important part of Salix’s strategy for increasing sales of its drugs. The company conducted about 10,000 speaker programs, including about 8,000 programs alone for Xifaxan, Apriso and Relistor.
  • Speaker honoraria payments ranged from $250 (for a doctor available on call to answer questions) to $4,500 (for a doctor who spoke at an in-person program). Salix paid more than 500 physicians honoraria for serving as speakers about their products, with dozens of physicians earning more than $50,000, and several earning more than $100,000.

The government joined two private whistleblower lawsuits that had previously been filed under seal pursuant to the False Claims Act.

 

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Feds: 3 Reasons to Ban Arbitration Clauses in Consumer Contracts


Bureau Seeks Comment on Proposal to Ban a Contract Gotcha that Prevents Consumers from Suing Consumer Financial Companies 

arbitration clause001Washington, DC — Today the Consumer Financial Protection Bureau (CFPB) proposed rules that would prohibit mandatory arbitration clauses that deny groups of consumers their day in court.

Many consumer financial products like credit cards and bank accounts have contract “gotchas” that generally prevent consumers from joining together to sue their bank or financial company for wrongdoing. These widely-used clauses leave consumers with no choice but to seek relief on their own – usually over small amounts. With this contract gotcha, companies can sidestep the legal system, avoid accountability, and continue to pursue profitable practices that may violate the law and harm countless consumers.

“Signing up for a credit card or opening a bank account can often mean signing away your right to take the company to court if things go wrong,” said CFPB Director Richard Cordray. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them. Our proposal seeks comment on whether to ban this contract gotcha that effectively denies groups of consumers the right to seek justice and relief for wrongdoing.”

Stifling Class Actions

In recent years, many contracts for consumer financial products and services – from bank accounts to credit cards – have included mandatory arbitration clauses. They affect hundreds of millions of consumer contracts. These clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals (arbitrators) except for cases brought in small claims court.

With these clauses, corporations can generally block lawsuits from proceeding in court. These clauses also typically bar consumers from bringing group claims through the arbitration process. As a result, no matter how many consumers are injured by the same conduct, consumers must proceed to resolve their claims individually against the company.

Through the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets. Congress also gave the Bureau the power to issue regulations that are in the public interest, for the protection of consumers, and consistent with the study.

Released in March 2015, the CFPB’s study showed that very few consumers ever bring – or think about bringing – individual actions against their financial service providers either in court or in arbitration. The study found that class actions provide a more effective means for consumers to challenge problematic practices by these companies.

According to the study, class actions succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year and cause companies to alter their legally questionable conduct. The study showed that at least 160 million class members were eligible for relief over the five-year period studied. Those settlements totaled $2.7 billion in cash, in-kind relief, and attorney’s fees and expenses. In addition, these figures do not include the potential value to consumers of class action settlements requiring companies to change their behavior. However, where mandatory arbitration clauses are in place, companies are able to use those clauses to block class actions.

3 Reasons to Prohibit arbitration clauses

The CFPB proposal is seeking comment on a proposal to prohibit companies from putting mandatory arbitration clauses in new contracts that prevent class action lawsuits. The proposal would open up the legal system to consumers so they could file a class action or join a class action when someone else files it. Under the proposal, companies would still be able to include arbitration clauses in their contracts. However, for contracts subject to the proposal, the clauses would have to say explicitly that they cannot be used to stop consumers from being part of a class action in court. The proposal would provide the specific language that companies must use.

The proposal would also require companies with arbitration clauses to submit to the CFPB claims, awards, and certain related materials that are filed in arbitration cases. This would allow the Bureau to monitor consumer finance arbitrations to ensure that the arbitration process is fair for consumers. The Bureau is also considering publishing information it would collect in some form so the public can monitor the arbitration process as well.

The benefits to the CFPB proposal would include:

  • A day in court for consumers: The proposed rules would allow groups of consumers to obtain relief when companies skirt the law. Most consumers do not even realize when their rights have been violated. Often the harm may be too small to make it practical for a single consumer to pursue an individual dispute, even when the cumulative harm to all affected consumers is significant. The CFPB study found that only around 2 percent of consumers with credit cards who were surveyed would consult an attorney or otherwise pursue legal action as a means of resolving a small-dollar dispute. With class action lawsuits, consumers have opportunities to obtain relief from the legal system that, in practice, they otherwise would not receive.
  • Deterrent effect: The proposed rules would incentivize companies to comply with the law to avoid group lawsuits. Arbitration clauses enable companies to avoid being held accountable for their conduct. When companies know they can be called to account for their misconduct, they are less likely to engage in unlawful practices that can harm consumers. Further, public attention on the practices of one company can affect or influence their business practices and the business practices of other companies more broadly.
  • Increased transparency: The proposed rules would make the individual arbitration process more transparent by requiring companies that use arbitration clauses to submit any claims filed and awards issued in arbitration to the CFPB. The Bureau would also collect correspondence from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to adhere to the arbitration forum’s standards of conduct. The collection of these materials would enable the CFPB to better understand and monitor arbitration. It would also provide insight into whether companies are abusing arbitration or whether the process itself is fair.

The proposed rules which the CFPB is seeking comment on would apply to most consumer financial products and services that the CFPB oversees, including those related to the core consumer financial markets that involve lending money, storing money, and moving or exchanging money. Congress already prohibited arbitration agreements in the largest market that the Bureau oversees – the residential mortgage market.

In October 2015, the Bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. In addition to consulting with small business representatives, the Bureau sought input from the public, consumer groups, industry, and other stakeholders before continuing with the rulemaking. That process concluded in December 2015 with a written report to the Bureau’s director, which is also being released today.

The public is invited to comment on these proposed regulations when they are published in the Federal Register. Written comments will be carefully considered before final regulations are issued.

The proposal is available at:http://files.consumerfinance.gov/f/documents/CFPB_Arbitration_Agreements_Notice_of_Proposed_Rulemaking.pdf

The Small Business Review Panel report is available at:http://files.consumerfinance.gov/f/documents/CFPB_SBREFA_Panel_Report_on_Pre-Dispute_Arbitration_Agreements_FINAL.pdf

The March 2015 CFPB report on arbitration is available at:http://www.consumerfinance.gov/reports/arbitration-study-report-to-congress-2015/

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