Health Law

The AP (2/27, Robbins) reports that Mannatech Inc., "one of the country's largest direct sellers of dietary supplements," has settled "a lawsuit filed by the Texas attorney general charging it with making false health claims." The suit alleged that Mannatech "engaged in deceptive sales practices by selling" its products "as cures for cancer and other diseases." Under the agreement, "Mannatech Inc. must distribute" $4 million "to anyone in the US who purchased the company's products without participating in its multilevel marketing scheme." The company's founder, Sam Caster, accused of hindering "efforts to police the scheme," must also "pay a $1 million civil penalty." Caster is also barred "from being affiliated with any kind of multilevel marketing program for the next five years."

        According to Texas Attorney General Greg Abbott, "tens of thousands of customers may have been duped into purchasing the company's products, thinking that they were cure-alls for Down syndrome, cystic fibrosis, cancer, and other serious illnesses," the Dallas Morning News (2/26, Roberson) added. Abbott launched a "19-month investigation" in "July 2007 after receiving complaints about the company." The settlement also requires Mannatech to "establish a marketing compliance program for its 500,000 sales associates...and pay the state $2 million in attorney and investigation fees."

        For its part, "the company said it plans to revamp oversight operations, including a larger compliance department staffed with seven new employees who will be devoted to monitoring websites to ensure compliance," the Dallas Business Journal (2/27) notes.

The AP (2/26) reported, "Forest Laboratories Inc. said Thursday 11 states and the District of Columbia are planning to become plaintiffs in a lawsuit that alleges the company committed fraud against federal health plans." The suit, filed Wednesday by the government, contends "Forest triggered thousands of fraudulent claims to plans like Medicaid" by illegally marketing "its antidepressants Lexapro (escitalopram) and Celexa (citalopram) to children," and paying physicians "to encourage them to prescribe the drugs." Federal regulations prohibit companies from actively promoting "drugs for...'off-label' use." For its part, the company stated that "off-label promotion and improper payments to medical providers have consistently been against Forest policy."

The AP (2/27) reports, "Federal health officials are adding their sternest warning to a heartburn drug that has been linked to muscle spasms." The agency claims that "the drug, widely known as Reglan [metoclopramide], has been shown to cause spasms and tics when used for long periods of time or at high doses." These problems "are usually irreversible, even after patients stop taking the drug," the FDA notes. As a result, "the agency is requiring drugmakers to add a black box warning, the most serious type available, to their products" and to "distribute medication safety guides to patients." Although "the drug's current labeling already mentions risks of developing the spasms, called dyskinesia...the agency's action Thursday elevates the warning to the top of the label."

        According to Bloomberg News (2/27, Larkin), Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research, warned that "chronic use of metoclopramide therapy should be avoided in all but rare cases where the benefit is believed to outweigh the risk." The drug works "by increasing movement of the stomach muscles, accelerating the stomach's emptying into the intestines." New research has shown that "the treatment causes more movement disorders than any other drug," officials note.

        The medications "is made by several drugmakers including Baxter Healthcare Corp.," and "the products are available in a variety of formulations including tablets, syrups, and injections," Dow Jones Newswires (2/27, Dooren) adds. It is "sold under brand names including Reglan Tablets, Reglan Oral Disintegrating Tablets, Metoclopramide Oral Solution and Reglan Injection."

The AP (2/27, Baker) reports, "Federal regulators warned a syringe manufacturer of 'several significant violations' in its quality control system two years before its needles triggered an outbreak of bacterial infections that prosecutors say led to at least five deaths and hundreds of illnesses," according to a letter released by the Food and Drug Administration (FDA) Thursday. The agency "cited AM2PAT Inc. in August 2005 for nine serious violations at its factory in Raleigh." The letter indicated that "failure to establish and maintain procedures to control the environment 'could reasonably be expected to have an adverse effect on product quality.'" The company "vowed in 2005 to correct its deficiencies...and the FDA said a follow-up inspection in January 2006 was satisfactory." But, court documents show that "the next inspection didn't take place until December 2007" and that the agency "also conducted an inspection in August 2007...and found only a labeling problem."

The AP (2/26) reported, "Medicines Co. said Thursday it completed the $42 million buyout of Targanta Therapeutics Corp., acquiring the staph infection treatment candidate oritavancin in the process." The purchase "also includes future payments if oritavancin is approved for sale in the US and the European Union, and if annual sales reach $400 million." The acquired company "will now become a subsidiary of Medicines."

Media reports are casting President Obama's first budget plan as a clear break with past US policies on a variety of issues. The story led all three network newscasts and appears on most major newspaper front pages. ABC World News (2/26, lead story, 3:20, Gibson) described the size of the budget as "staggering" and notes that "one out of every two dollars spent by the government will be deficit spending." But "it would lead to a seismic shift in policies, and would touch the lives of nearly every American."

        The CBS Evening News (2/26, lead story, 3:10, Reid) reported, "The budget also includes a long list of White House spending priorities. The largest by far, $634 billion over the next 10 years to take a big step towards universal healthcare. About half of that would come from taxes on high-income earners, the rest from cutting payments to insurance companies, hospitals, and doctors."

        NBC Nightly News (2/26, lead story, 3:20, Williams) also noted that "the budget calls for $635 billion over ten years, as a down payment on healthcare reform, paid for in part by cuts in Medicare spending."

        In a front-page story, the New York Times (2/27, A1, Calmes) explains that "with higher taxes on the wealthy and savings squeezed from healthcare providers, drugmakers, and insurers, Mr. Obama would create a $634 billion, 10-year 'health reform reserve' as a down payment to finance disease prevention, wellness programs and research on cost-effective treatments ultimately to cut healthcare costs. More than any other expense, healthcare is driving future projections of unsustainable deficits. The health reserve would also be used to create affordable insurance programs for individuals and employers."

        In its front-page story, the Washington Post (2/27, A1, Balz) asks whether Obama will be able to build a coalition in support of healthcare reform noting, "The prospects for healthcare reform may be brighter than they were when President Bill Clinton tried unsuccessfully to enact his program in 1993-94, but Obama will still have to defeat the arm of interests and lobbyists that sank Clinton's plan." And "he may run into resistance from some Democrats as well, given the size of his ambitions."

        The Los Angeles Times (2/27, Reynolds) reports, "The budget outline -- which included broad goals and few line items -- was largely a political document, designed to underscore the effects of 'an era of profound irresponsibility that engulfed both private and public institutions, from some of our largest companies' executive suites to the seats of power in Washington, DC,' Obama wrote in his message." USA Today (2/27, Wolf, Jackson), the Financial Times (2/27), the AP (2/27, Crutsinger), McClatchy (2/27, Thomma, Lightman), The Hill (2/27, Alarkon), Bloomberg News (2/27, Donmoyer), and AFP (2/27) also cover the story.

        Budget proposal includes plan to legalize importation of foreign-made drugs. The Washington Times (2/27, Lengell) reports, "President Obama's 2010 budget proposal introduced Thursday reopens some long-standing healthcare debates, including a plan to legalize the importation of foreign-made drugs." The proposal "supports the Food and Drug Administration's (FDA) new efforts to allow Americans to buy safe and effective drugs from other countries." Supporters contend that "the practice would lead to lower subscription drug prices." Meanwhile, "most Republicans and drug manufacturers decry such action, saying it would be impossible to ensure the safety of pharmaceuticals made outside the United States." Currently, the regulation prohibiting bringing "most prescription drugs from other countries...into the United States" is "rarely enforced." And, "the vaguely worded budget proposal offers no details on how a drug-importation program would work." Len Nichols, director of health policy at the New America Foundation, noted, however, that "the point of" this provision "is to make a statement that the president is willing to commit a lot of resources to this."

        US pharmaceutical shares drop following announcement of plan to import drugs. The AP (2/27, Johnson) reports, "Stock prices for major drugmakers fell sharply Thursday as investors were apparently worried about provisions of President Obama's budget proposal that could significantly reduce profits across the pharmaceutical sector." As shares dropped by as much as 5 or 6 percent for some companies, analyst Steve Brozak of WBB Securities said the plan is "opening a Pandora's box" of uncertainties for the industry. Specifically, "one item in the budget that spooked shareholders was support for 'new efforts' by the Food and Drug Administration to allow Americans to 'buy safe and effective drugs from other countries.'" The pharmaceutical industry has opposed such a measure, "claiming that it would reduce the money they have available to fund research to develop new medicines."

        Bloomberg News (2/27, Randall) reports, "Pharmaceutical stocks fell after Eli Lilly & Co. and AstraZeneca Plc said they would lose 'several hundred million' dollars each in drug sales if a healthcare plan proposed today by President Barack Obama is approved." Industry representatives argued that "Obama's budget proposal would raise rebates that drugmakers must provide for patients on Medicaid, the nation's health plan for the poor, to 22 percent of the manufacturer's price, from 15 percent." An analyst for Deutche Bank warned, "We are going to move more toward government intervention and there will be more restraint and greater discounts, and that is the reality of healthcare going forward. ... I think the question is what will the rate of change be and the magnitude of the change." The Washington Post (2/27, D4, Lazo) and the Wall Street Journal (2/27) also cover the story.

        Health insurance share prices plummet as Obama targets Medicare Advantage. The Wall Street Journal (2/27, Fuhrmans) reports, "Health-insurance stocks plunged Thursday, led by a 19 percent drop in Humana Inc. shares, after the Obama administration outlined plans to finance a big chunk of its health-reform agenda with $175 billion in cuts to private Medicare plans." The "biggest portion" of the budget proposal will come from "requiring health insurers to competitively bid to offer so-called Medicare Advantage plans." Medicare Advantage has "been a hot political target of Democrats because the plans are paid an average 14 percent more per beneficiary than what traditional government Medicare spends." Karen Ignani, president of the health-insurance lobby America's Health Insurance Plans, argued that private Medicare plans "have made inroads in better managing patient's care."

        The Los Angeles Times (2/27, Petruno) reports, "Managed-care companies took the biggest hit: The HMO index of 11 major healthcare providers plunged 10 percent, bringing its decline so far this week to 20 percent." For example, "UnitedHealth Group slumped 13 percent and is down 28 percent this week. Humana plunged 19 percent, giving it a 42 percent decline so far this week. Woodland Hills-based Health Net slid 9.4 percent and is down 20 percent for the week."

        The Wall Street Journal (2/27, Jannarone), the Chicago Tribune (2/27), and the Financial Times (2/27) also cover the story.

The Los Angeles Times (2/27, Levey) reports that "the Obama administration today will move to rescind a controversial rule that allows healthcare workers to deny abortion counseling or other family planning services if doing so would violate their moral beliefs, according to administration officials." So far, "seven states, including California, Illinois and Connecticut, and two family-planning groups have filed lawsuits challenging the Bush rule," arguing that "it sacrifices the health of patients to the religious beliefs of medical providers." But, "before the administration finalizes the rollback, a standard 30-day comment period seeks input from people across the ideological spectrum." Officials also indicated that "the administration would consider drafting a new rule to clarify what healthcare workers could reasonably refuse to do for their patients." They added that "the administration's goal is to make the rule clearer rather than force doctors to provide abortions."

The Los Angeles Times (2/27, Larrubia) reports, "Tens of thousands of Kaiser Permanente's California workers have signed a petition to leave United Healthcare Workers (UHW) West and join the newly formed National Union of Healthcare Workers (NUHW), officials announced Thursday." The NUHW "was created last month by former leaders of the UHW after" the group "was placed under trusteeship by its parent organization, the Service Employees International Union (SEIU)." NUHW has since filed "requests with government officials, seeking elections at UHW-represented workplaces," as well as requests "for Kaiser's facilities Thursday, bringing to 80,000 the number of unionized employees in play, a majority of the UHW's 150,000 members." But, "more than 100 staffers from across the country have been sent to California to keep workers in the UHW and run the local." This "tug-of-war...stems from a dispute between" Sal Rosselli, "who was ousted as UHW president by the SEIU," and SEIU President Andy Stern, "over 65,000 home health aides and other workers that the SEIU wanted to peel away from the UHW and place under a single California local."

Life Sciences Law

The New York Times (2/27, B2, Meier) reports that in light of "conflicting data [revealed] this week about the failure rate of a critical and widely used Medtronic heart device," some experts are arguing that problems could have been avoided if "federal officials, medical device makers, and more doctors had [better supported] efforts to develop a national database of patients who get heart devices." In 2004, Medicare mandated "the creation of a national registry for defibrillators," but despite the requirement, the agency "has never put any money into supporting it, said Dr. Stephen Hammill, a cardiologist at the Mayo Clinic who has headed the defibrillator effort." The database is currently run by the American College of Cardiology and the Heart Rhythm Society, while hospitals pay for it in return for "reports about how their own patients' short-term complication rates compare with nationwide rates." But, the Times notes, "limited financial support, as well as technical problems that make it hard to merge registry information with Medicare records, have undermined the registry's utility."

The AP (2/27) reports, "Synta Pharmaceuticals Inc. said Thursday it is suspending a late-stage study of its cancer drug candidate elesclomol over safety concerns, including a higher number of deaths in patients taking the drug." The study was comparing "the benefit of elesclomol in combination with the cancer treatment paclitaxel versus only using paclitaxel for late-stage metastatic melanoma patients."

        Elesclomol "was supposed to work based on the novel theory that increasing oxidative stress -- one of the same factors involved in inflammation caused by atherosclerosis or other disease -- could cause cancer cells to self destruct," Forbes (2/27, Langreth) explains. "Cancer cells, according to Synta's theory, were more sensitive to oxidative stress than healthy cells." However, Synta's "main study of the medicine was stopped because there were excess deaths in the drug group, even though the drug does seem to be slowing tumor progression somewhat."

Bloomberg News (2/26, Mbachu) reported, "Nigeria's government offered Pfizer Inc. its final terms to end civil and criminal charges against the company over a 1996 drugs trial, the prosecutor in charge of the case said." In 1996, the company conducted a drug trail "in the northern city of Kano that [Nigeria's federal government] claims was illegal. Criminal charges have also been brought against Pfizer officials accused of using an untested meningitis drug, known as Trovan [trovafloxacin and azithromycin], in a trial involving 200 children during an epidemic." The company "is also facing a separate civil suit brought by the Kano state government."

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