Health Law

Bloomberg News (1/14, Gullo) reports that Kaiser Foundation Health Plan, Inc., "a unit of Kaiser Permanente, the largest U.S. nonprofit health-maintenance organization, can pursue claims that Abbott Laboratories maintained an unlawful monopoly over its hypertension treatment Hytrin (terazosin)." Tuesday, in Kaiser Foundation Health Plan Inc. v. Abbott Laboratories, 06-55687, the U.S. Circuit Court of Appeals for the Ninth District (San Francisco) ruled that "Kaiser Foundation Health Plan, Inc. provided sufficient evidence for a jury to decide whether Abbott fraudulently obtained a patent for Hytrin to keep generic versions of the drug of the market," and sent "the claims back to a Los Angeles trial judge." In doing so, the "court upheld a jury verdict that Abbott's payments to a generic drugmaker didn't delay the marketing of a generic form of Hytrin."

Modern Healthcare (1/14, Zigmond) reports that the "U.S. Supreme Court has refused to hear an appeal from former HealthSouth chief financial officer Malcolm 'Tadd' McVay, who pleaded guilty in 2003 to his involvement in the rehabilitation provider's earlier accounting fraud." According to court documents, this "decision puts back in play" a ruling by the 11th Circuit Court of Appeals that "remands the case for resentencing," and thereby returns the case to the U.S. District Court for the Northern District of Alabama. Meanwhile, HealthSouth Corp. "said it had 'no comment' on the Supreme Court's decision to deny McVay's petition."

The Wall Street Journal (1/14, Fuhrmans, Zhang) reports, "Federal officials temporarily banned health insurer WellPoint Inc. from marketing or selling Medicare health or drug plans after they said computer problems caused it to deny thousands of seniors coverage for vital medications and cancel their benefits." The ban, "one of the toughest penalties levied on a private Medicare plan provider" since the drug benefit was introduced, went into effect Monday. Medicare indicated that "the company's 'longstanding and persistent failure to comply with...requirements' had begun to pose 'a serious threat to the health and safety'" of beneficiaries, in "an unusually terse letter." The agency claimed that WellPoint's "systems failed to accurately process some of the new data for its 2009 plans," and "thousands of seniors...couldn't fill or renew prescriptions" as a result.

        In its letter, the Centers for Medicare and Medicaid Services (CMS) stated that it "is taking immediate action" in response "to a sharp increase in the past twelve days in beneficiary complaints about...being denied prescription drugs," the AP (1/14) adds. The agency ordered WellPoint to focus "its efforts on correcting its significant compliance problems before further expanding the number of enrollees in its Medicare plans."

        Dow Jones Newswires (1/14, Kingsbury) notes that the letter also indicated that "in an Aug. 28 letter," CMS "highlighted three main areas of compliance weaknesses: information technology; effective implementation of program policies, procedures and operations; and effective management oversight." WellPoint "expressed surprise by" the agency's move, noting that "the company has made 'significant progress' in addressing the issues at hand." The Indianapolis Business Journal (1/13) and the Milwaukee Business Journal (1/14) also cover the story.

The Wall Street Journal (1/14, B2, Rockoff) reports, "Pfizer Inc. is laying off as many as 800 researchers in a tacit admission that its laboratories have failed to live up to the tens of billions of dollars it has poured into them in recent years." Tuesday, Pfizer "told scientists and technicians at its labs around the world that it is eliminating their jobs, according to a person familiar with the matter."

        The lay offs "represent five to eight percent of Pfizer's approximately 10,000 researchers worldwide, Raymond F. Kerins Jr., a Pfizer spokesman, said," the New York Times (1/14, B3, Wilson) adds. In 2008, Pfizer "cut more than 10,000 jobs and announced it would drop research on cardiovascular disease, obesity, and digestive disorders. The cuts announced on Tuesday were a result of reducing those areas of research and trying to raise productivity, Mr. Kerins said. They would reduce Pfizer's overall work force to about 85,000."

        In September 2008, "Pfizer said it would focus its research on Alzheimer's, oncology, schizophrenia, pain, inflammation, and diabetes," the Financial Times (1/14, Knight) points out. The reductions "reflect that realignment, said a spokesman. Forbes (1/14, LaMotta), the AP (1/13), CNNMoney (1/14, Smith), and the St. Louis Business Journal (1/14, Volkmann).

        Pfizer wants to sell 100 experimental drugs for conditions ranging from obesity to high cholesterol. Bloomberg News (1/14, Pettypiece) reports, "Pfizer Inc. wants to sell to other drugmakers 100 experimental medicines for conditions ranging from obesity to high cholesterol." The company "is cleaning out its chemical compound closet as it shifts research to medicines to treat cancer, brain disorders and pain," according to Martin MacKay, the drugmaker's research chief. In addition, the drugmaker "is shopping for acquisitions and licensing deals in stem cells and therapeutic vaccines while cutting costs, MacKay said."

The AP (1/13) reported, "Medicines Co. said Tuesday it will make a bid to buy Targanta Therapeutics Corp. for $42 million, acquiring Targanta's staph infection treatment candidate oritavancin in the process." Medicines' "offer values Targanta stock at $2 per share. ... The company will make additional payments if oritavancin is approved for sale in the U.S. and the European Union, and if annual sales reach $400 million."

        The bid "comes after Targanta's lead drug candidate narrowly failed to win a recommendation from a federal advisory panel in November, and the company's stock price plummeted," the Boston Globe (1/13, Reidy) added. Forbes (1/14, LaMotta) also covers the story.

The Los Angeles Times (1/14, Levey) reports, "Even as President-elect Barack Obama plans an ambitious push to expand health coverage nationwide, states are slashing health services to their poorest residents amid" a recession that is causing millions of Americans to lose "their jobs and health insurance." The recession has "all but killed trailblazing state campaigns to expand coverage for the working poor -- once seen as hopeful signs for national healthcare reform." Remarking on the size and range of state cuts, AARP vice president Elaine Ryan said, "The scale of this is unprecedented." She added, "I really have never seen anything like this."

The Jacksonville (FL) Business Journal (1/13) reported that Florida Chief Financial Officer Alex Sink and U.S. Rep. Kathy Castor (D-FL) "have asked President-elect Barack Obama to support a plan to expand health insurance coverage for children" under the State Children's Health Insurance Program (SCHIP). The federal-state program is geared toward "families that earn too much to qualify for Medicaid but not enough to afford private insurance." Currently, states are required to "match the federal dollars they receive for children's insurance." In a letter to Obama, however, Sink and Rep. Castor noted that some states "are having a hard time coming up with the match" due to their "multi-billion dollar budget deficits." They "proposed a one-year waiver for states to provide the match," which "would apply in states that have a relatively high number of uninsured children and a minimum 10 percent projected budget deficit in the upcoming fiscal year."

Connecticut's Hartford Courant (1/13, Becker) reported that the Universal Health Care Foundation of Connecticut has put forth a "proposal calling for major changes in the health system, and a plan that the group says could insure 98 percent of state residents by 2014." In Connecticut, it is estimated that 300,000 people lack health insurance. According to Juan A. Figueroa, president of the Universal Health Care Foundation, "the proposal calls for a new health program, called SustiNet after the Latin word for 'sustains,' that would extend health insurance to anyone who wants it, while emphasizing preventive care and other changes." The proposed plan "would begin enrollment in 2011," and "would create a gigantic health-insurance pool by combining the existing pool of state employees and retirees with people now covered under state assistance programs." In addition, the pool "also be open to the public," and is "intended to compete with, not replace, private insurance plans."

The Boston Globe (1/14, Lazar) reports that "more than 44,000" senior citizens in Massachusetts "are facing steep increases in the cost of their prescription-drug copayments, the result of an $11 million cut in" the state-funded Prescription Advantage "program that, until Jan. 1, helped to defray their pharmacy costs." As a result, many seniors are "seeing their copayments double or triple, officials said." According to pharmacist Mary Sullivan, "director of MassMedLine, a nonprofit organization run by the Massachusetts College of Pharmacy and Health Sciences," some "are simply leaving their prescriptions on the pharmacy counter, rather than pay a price they feel they can't afford." The Globe notes that the program cuts "were part of the $1 billion cut the Patrick administration made in October, as the recession began eating into state revenues."

Government Health IT (1/13, Robinson) reported, "Current efforts aimed at boosting the adoption of health information technology are insufficient to meet the needs of healthcare workers and patients, and might even be harming the cause, according to a recent report" released "by the National Research Council (NRC), a federally chartered advisory body." The NRC stated that "many of the systems that have been installed to date don't provide the kind of help with decision-making and problem solving that users want from them," and that typically, "they only add to clinicians' workload."

        The report also described "difficulties with data sharing and integration, deployment of new IT capabilities, and large-scale data management," Healthcare IT News (1/13, Merrill) added. The authors concluded that "greater emphasis should be placed on IT that provides healthcare workers and patients with cognitive support." They also suggested that "government, healthcare providers, and healthcare IT vendors should embrace measurable improvements in quality of care as the driving rationale for adopting healthcare IT, and should avoid programs that focus on adoption of specific clinical applications."

The AP (1/14, Johnson) reports, "Uninsured patients are filing claims for discounts on their bills from eight Chicago and suburban Catholic hospitals following the settlement of a class-action lawsuit." The agreement "resolves claims covering more than 200,000 patients of Resurrection Health Care" stemming from a lawsuit filed in 2004. At issue was whether "Resurrection hospitals overcharged uninsured patients by millions of dollars," violating the Consumer Fraud and Deceptive Business Practices Act. The patients alleged that "no one told them about the hospitals' charity care programs and" that they "ended up paying...many times more what insurance companies would pay for the same care." Under the settlement, Resurrection will "modify its billing structure and reduce charges to uninsured patients." Patients who file claims will have their bills recalculated, and the Resurrection will "give refunds and vouchers to people who have already paid $500 or more." A Resurrection spokesman noted, however, that "the hospitals deny any wrongdoing."

The Arizona Daily Star (1/14, Innes) reports that on Jan. 13, a group of registered nurses, including representatives from the California Nurses Association (CNA), "a healthcare union," lobbied at the Arizona state Capitol for a bill proposing "minimum staffing ratios and whistle-blower protection." The measure, called the Arizona Hospital Patient Protection Act, "was announced...by representatives of the" CNA and Arizona state Rep. Phil Lopes (D-Tucson). The act "would set uniform, statewide nurse-to-patient ratios according to the type of patient." But, the bill faces opposition. For example, Bridget O'Gara, of the Arizona Hospital and Healthcare Association, stated, "Fixed ratios are not a good way of determining individual patient needs." For its part, "the Arizona Nurses Association believes there should not be a 'one-size-fits-all' approach to nurse-patient ratios." Its president, Jennifer Mensik, called the legislation "an attempt by the California Nurses Association to organize a union in Arizona."

The AP (1/14) reports that a Michigan judge "has ruled for Blue Cross Blue Shield of Michigan in a state lawsuit accusing the health insurer of illegally shifting money to buy three workers' compensation companies." The suit, brought by Attorney General Mike Cox, alleged that "the Accident Fund -- the Blue Cross' for-profit subsidiary -- didn't meet certain requirements to buy insurance companies."

        Blue Cross contends that the "purchases help keep the Accident Fund...financially healthy, and, in turn, return money that helps Blue Cross keep down health costs," the Detroit Free Press (1/13, Anstett) added. And, Judge Paula Manderfield's ruling "found the 2005 purchase of CWI Holdings Inc. by the Accident Fund to be legal." The decision upheld a similar ruling by State Insurance Commissioner Ken Ross last May. Cox said the ruling was "unfortunate and disappointing," and, according to a spokesman, "the office was reviewing the decision to decide whether to appeal."

The Boston Globe (1/14, Krasner) reports that Blue Cross Blue Shield of Massachusetts announced that "it has signed an innovative contract with a hospital and two physicians groups that will slow the rate of medical cost increases while rewarding top-performing doctors with bigger paychecks." Massachusetts' "largest health insurer" said that "Mount Auburn Hospital in Cambridge and its affiliated doctors and Hampden County Physician Associates of Springfield signed the so-called Alternative Quality Contract, which offers the possibility of higher payments over five years if doctors meet quality and efficiency targets." According to Blue Cross, the "new approach could change the way medical payments are made," and could "cut annual increases in payments in half, to about five percent, by reducing hospital expenses for care and procedures."

Life Sciences Law

The New York Times (1/14, B4, Meier) reports, "A scientific dispute has become a slander suit, in a legal case involving NMT Medical and its device for closing congenital holes in the heart." The company filed a suit in 2007 "after a clinical trial failed to show that its device could eliminate migraine headaches in people with the congenital heart opening, known as a patent foramen ovale, or PFO." The suit alleges that "one of the British researchers in the study," Dr. Peter Wilmshurst, "slandered and libeled" the company "when he was quoted in an online publication as saying the trial may have failed because the product did not work well." Dr. Wilmshurst also stated that "the company withheld trial data because it feared that it might undercut sales of the device for other uses." The company, however, disputed Dr. Wilmshurst's claims, arguing that the researcher "turned on them because the trial's failure undermined his theory of a link between PFO and migraine." A trial date has not yet been set.

On the front page of its Business Day section, the New York Times (1/14, B1, Meier) reports that for several years, physicians have been implanting "a small, flexible seal in the hearts of thousands of stroke patients," hoping that "closing the hole will prevent future strokes by blocking a pathway for blood clots." But, the "devices are not currently approved by federal regulators for that procedure, which can cost up to $30,000." In addition, "it is not clear whether the implants actually help stroke victims -- or might even harm some of them." Since "the devices have been used so widely, it has been difficult to find enough untreated patients to mount a study to prove their effectiveness and safety." The Times notes that this situation "is a case study of how the actions of doctors, regulators, device makers, and patients themselves can combine to undercut the gathering of reliable medical evidence."

On its front page, the New York Times (1/14, A1, Singer) reports that, at the end of this month, Allergan "plans to introduce Latisse (bimatoprost), the first federally approved prescription drug for growing longer, lusher lashes." Latisse "has the same formula as Allergan's eye drops for glaucoma, called Lumigan (bimatoprost ophthalmic)," which is a prostaglandin analog "meant to reduce dangerous pressure in the eyeball." One of bimatoprost's side effects is "to make the eyelashes of many patients longer and fuller." Now, "some medical experts say they worry that cosmetic customers may occasionally experience some of the glaucoma drug's other side effects, which can include red, itchy eyes and changes in eyelid pigmentation." Meanwhile, "some financial analysts...wonder how many people will want to spend $120 for a monthly dose of lash-lengthening Latisse." Nevertheless, "Allergan plans to introduce Latisse this month primarily to cosmetic doctors like dermatologists, but declined to discuss marketing plans."

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