Health Law

The New York Times (1/22, A25, Goodnough) reported that "Rhode Island will be the first state to cap overall spending on Medicaid in an experiment starting early this year, a result of a controversial deal between Gov. Donald L. Carcieri (R) and the Bush administration." For its part, Rhode Island "will be allowed to change healthcare programs that have been tightly controlled by the federal government." In exchange, the state will "limit Medicaid spending to $12 billion over the next five years, a move critics call foolish in light of the worsening economy." However, "Gary D. Alexander, director of the state's Department of Human Services, said Rhode Island's Medicaid rolls had bucked the national trend by decreasing over the last year, a phenomenon he could not explain." Critics fear the spending cap "will sharply limit the number of elderly people eligible for nursing homes paid for by Medicaid." Alexander said, though, "that more people would be cared for in their own homes or group homes under the plan, but that no current residents of nursing homes would be forced out."

On the front page of its Business Day section, the New York Times (1/23, B1, Pollack) reports, "In a research milestone, the federal government will allow the world's first test in people of a therapy derived from human embryonic stem cells." The approval is expected "to be announced Friday by Geron, the biotechnology company that first applied to the Food and Drug Administration (FDA) to conduct the trial last March." Agency officials stated that "political considerations had no role in the decision." Still, "others said they suspected it was more than a coincidence that approval was granted right after the new administration took office." In the past, "the Bush administration restricted federal financing for research on embryonic stem cells because creation of the cells entails the destruction of human embryos."

        For the study, Geron "will enroll paralyzed patients who can be treated within 14 days of their injury," the Wall Street Journal (1/23, Winslow, Mundy) adds. Participants will then "be evaluated for at least one year, after which, if the treatment proves safe, the company hopes to increase the dose and expand the potential candidates for the therapy." And, because "regulating stem-cell therapy is new turf for both industry and the FDA," the agency took "nearly a year to review Geron's 21,000-page application." The company "has developed banks of embryonic stem cells and found a way to coax them into differentiating as they do in nature into progenitors of specific cells that make spinal-cord tissue, heart muscle, cartilage and other organs and tissues."

        According to the AP (1/23, Ritter), "the injections will be made in the spine at the site of damage," in "four to seven medical centers around the country," Dr. Thomas Okarma, president and CEO of Geron, said. Participants will "receive a low dose of anti-rejection drugs for about two months, because after that time the medications shouldn't be needed," he explained. Previous studies on animals have shown that "once injected, the cells will mature and repair what is essentially a lack of insulation around damaged nerves, and also pump out substances that nerves need to function and grow." Dr. Okarma added that researchers will also look for "signs of improvement in the patient." CNN (1/23) also covered the story.

MedPage Today (1/22, Gever) reported, "The American Academy of Allergy, Asthma and Immunology (AAAAI) has cancelled plans to hold its 2015 annual meeting" in Boston, "citing a strict new Massachusetts law regulating medical industry marketing." The legislation "prohibits pharmaceutical and medical device companies from giving" gifts "that are not educational in nature" to physicians. The measure also requires companies to "disclose all payments to physicians...in excess of $50." But, according to AAAAI officials, a provision barring "industry from sponsoring or supporting" continuing medical education (CME) "activities that do not meet standards for industry support" was the main reason behind the group's move. Such standards are set by the Accreditation Council for Continuing Medical Education (ACCME). AAAAI Executive Director Kay Whalen noted that "under the ACCME's current rules, credits may not be awarded for sessions including industry employees as presenters." Whalen claimed that "the law may effectively disallow CME credits for any part of the meeting."

The Wall Street Journal (1/23, B6, Brin) reports that "UnitedHealth Group Inc. posted a 40 percent decline in fourth-quarter profit, driven by legal settlement charges, rising costs, and lower enrollment in commercial health-insurance plans."  The company is "the largest U.S. health insurer in terms of revenue" and "the first to report quarterly earnings." While "the in-line results capped a rough year for the company and the sector," the Journal notes that "the lack of any nasty surprises, and signs the company is turning around the customer service and pricing problems that plagued it last year, propelled its shares more than eight percent higher."

        The AP (1/23, Murphy) explains that the "struggling economy has hurt insurance companies by leading to investment losses and enrollment declines as employers trim jobs and reduce the number of people covered by their insurance. Many insurers compounded the problems last year by pricing premiums too low for the medical costs they incurred." However, in one of "several positive signs," UnitedHealth's "quarterly revenue was $20.45 billion, up nine percent from $20.16 billion."

        Analyst Sheryl Skolnick told Bloomberg News (1/23, Goldstein), "Medicaid is the saving grace for this company in this quarter."  She said that "while Obama's plans to extend insurance coverage to more Americans may benefit UnitedHealth and other insurers with Medicaid plans, an improvement in the economy may nullify those gains."  Bloomberg notes that "UnitedHealth won or renewed Medicaid contracts in Arizona, Connecticut, the District of Columbia, Florida, and Tennessee in 2008. It runs Medicaid plans in 22 states through its AmeriChoice business. States contribute a portion of the funding and award the contracts." Minnesota's Star Tribune (1/23, Yee) and the Triangle Business Journal (1/23, Newmarker) also cover the story.

The Wall Street Journal (1/23, Karnitschnig, Rockoff) reports, "Pfizer Inc. is in talks to acquire rival drug maker Wyeth in a deal that could be valued at more than $60 billion, said people familiar with the matter."  The combining of Pfizer and Wyeth "would create a behemoth with combined revenue of about $75 billion and a line of blockbuster drugs including Pfizer's cholesterol drug Lipitor (atorvastatin) and Wyeth's pediatric vaccine Prevnar (pneumococcal conjugate vaccine)."  According to the Journal, "if completed, a deal could create billions in cost savings through the combination of back-office operations, research and development, sales, and manufacturing.  Like other major pharmaceutical companies, Pfizer and Wyeth face the looming expiration of patents on their most lucrative products as well as intense competition from makers of generic drugs."  Furthermore, "a tougher regulatory environment in the U.S. and overseas has made it more difficult to win approval for new treatments, forcing companies to narrow their research focus."  Bloomberg News (1/23, Johnson, Peterson), TheStreet.com (1/23), and MarketWatch (1/23, Letzing) also cover the story.

The Wall Street Journal (1/23, Ahmed) reports, "Ranbaxy Laboratories Ltd. turned in a fourth-quarter net loss, hurt by foreign-exchange volatility and a U.S. ban on some of its drugs."  Ranbaxy, "which receives almost 80 percent of its revenue from exports, is vulnerable to currency volatility because of its high level of hedged positions on foreign-currency receivables and the large amount of its overseas loans."  Ranbaxy "reported a net loss of 6.8 billion rupees ($138.7 million), compared with a year-earlier net profit of 1.88 billion rupees."

        The company's "sales rose six percent to 19.1 billion rupees," Bloomberg News (1/22, Chatterjee) added.  In North America, "the company's biggest market," sales "fell 8.8 percent to $103 million from $113 million in the year earlier. Sales in the region rose 14 percent when converted to Indian rupees."  In addition, "sales in Canada increased 88 percent. European sales, including Romania, fell 13 percent to 3.63 billion rupees."  The Times of India (1/23) and India's Business Standard (1/23) also cover the story.

CongressDaily (1/23, Edney) reports, "Senate Majority Leader Reid (D-NV) said Thursday the Senate will move to legislation expanding the State Children's Health Insurance Program next week without filing cloture. Instead, he said, the Senate will spend most of next week on what he expects will be many amendments." Sen. Reid said he "wants SCHIP finished next week so the Senate can complete work on the economic stimulus package before the Presidents Day recess. Finance ranking member Charles Grassley (R-IA) said earlier Thursday he did not expect SCHIP consideration to be drawn out, as long as Republicans have the chance to offer germane amendments."

The Salt Lake Tribune (1/23, May) reports that two Utah "lawmakers and 30 community supporters promoted a bill Thursday that would require insurance companies to cover up to $50,000 a year in autism therapy." While "bill drafters have not yet calculated how much the mandate would cost Utahns who pay private insurance premiums," the measure's "supporters said states with similar mandates have found premiums rise on average up to $1.25 per policy holder per year. It would also cost the state and local governments an undetermined amount, because government employees' insurance plan would be part of the mandate." The bill would direct "mandate coverage for a variety of treatments, including occupational and speech therapies, drugs and psychological care." Specifically, "for 'early intensive behavior therapy,' the bill...mandates up to $50,000 per year for children up to age 9. The coverage amount would drop to $25,000 a year for such treatment for children ages 9 to 17."

The AP (1/22) reported, "The Minnesota attorney general sued Allina Health System, alleging that it charged illegally high interest rates of up to 18 percent on medical debts." According to Attorney General Lori Swanson, "state usury laws cap interest rates on such debts at eight percent." But, Allina "typically presented patients with medical debts three options, including paying quickly or spreading payments over time through Allina's MedCredit subsidiary," she claimed. The suit alleges that "MedCredit charged interest of 18 percent on debts up to $4,999 and 12 percent on debts from $5,000 up to $9,999." In addition, Allina "didn't fully disclose the terms of MedCredit financing" to some patients."

        "Swanson said she wants Allina to reduce interest rates charged by its MedCredit Financial Services unit and make refunds to patients who were charged high rates in the past," Minnesota's Star Tribune (1/23, Yee) adds. The attorney general is also "pursuing civil penalties of up to $25,000 per violation." For its part, Allina "said it had earlier decided to reduce the interest rate on all current and future MedCredit accounts to eight percent," and "maintained that its previous interest rates were 'fully consistent with Minnesota law.'"

Modern Healthcare (1/23, Rhea) reports, "A new version of the Physician Payments Sunshine Act...was introduced in the Senate" by Sens. Chuck Grassley (R-Iowa) and Herb Kohl (D-WI). The bill "would require medical-device makers and pharmaceutical companies to disclose payments and other kinds of considerations given to doctors for consulting and research work." Compared to the previous version, "introduced in October 2007," this bill "features greater and more specific disclosure requirements." Under the legislation, medical-product companies would be required to disclose "an explanation of the types of services for which physicians were compensated," as well as "the names of products doctors consulted on or researched, and whether there was a previous-year disclosure violation." The draft stated that "accidental disclosure omissions could cost companies up to $150,000 annually while knowingly failing to report payments to doctors could cost up to $1 million."

Life Sciences Law

The AP (1/23, Foley) reports, "Nearly one-quarter of Wisconsin lawmakers asked the University of Wisconsin (UW) Hospital on Thursday to back off a plan to provide late-term abortions at a private clinic." The hospital's board of directors is considering a proposal from UW and Meriter hospital physicians to perform "abortions for patients between 13 and 22 weeks pregnant at the Madison Surgery Center, which the hospitals jointly operate." But, a letter from "28 Republican senators and representatives and the Legislature's one independent" to Hospital CEO Donna Katen-Bahensky "called second-trimester abortion a barbaric procedure that kills viable babies." Those in favor of the plan claim that the area lacks "a second-trimester abortion provider and there's a public health need for the service." Meanwhile, opponents "object to the late abortions because fetuses develop rapidly during the second-trimester." A spokeswoman for UW Health stated that the board's decision "will be 'based primarily on the needs of the patients involved' but thoughtful feedback also will be considered." The board is expected to make a decision in February.

In the Wall Street Journal (1/22) Health Blog, Jacob Goldstein wrote, "Last August, a judge capped lawyers' fees in the $4.85 billion Vioxx settlement at 32 percent plus fees." Now, "some lawyers are asking the judge to get rid of the cap," because the contingency fees they "had negotiated with plaintiffs" were higher than the cap allows. A motion filed by "lawyers from five law firms in Texas and Louisiana," who represent "about 2,000 plaintiffs...questions the judge's authority to impose the cap and arguing that their work justified fees as high as 40 percent."

        In his August 2008 ruling, U.S. Judge Eldon Fallon indicated that although the cap "may fall short of some lawyers' standard fees," he was aiming "to ensure the public maintained its trust in the judicial process," the Dow Jones Newswires (1/23, Loftus) adds. He noted that "such trust could be undermined if it appeared that attorneys' fees in the Vioxx settlement were excessive." Judge Fallon also claimed that "many Vioxx users were elderly and in poor health, making it more difficult for them to negotiate fair contingent-fee contracts."

        Former Vioxx users to receive more money under settlement with health insurers. The AP (1/23) reports, "Former Vioxx users getting part of a $4.85-billion settlement that ends most personal injury suits over the withdrawn painkiller will get a bigger piece of the pie, thanks to an unusual settlement Thursday with their health insurers." The deal involved insurers "who paid medical expenses for claimants in the settlement" and had "placed liens against any amounts recovered by thousands of former Vioxx users or their survivors." Under the agreement, "the amount that the more than 100 private insurers participating in the deal can recover from liens will be reduced by at least half," according to Christopher Seeger, an attorney "who negotiated the agreement." He explained that "insurers could get at most 15 percent of a $100,000 settlement, or $15,000, and 10 percent of any settlements worth more than $250,000."

The AP (1/23, Fox) reports that the "European Union (EU) said Thursday that cancer screenings across the continent must double to meet minimum standards adopted by member states in 2003."  The announcement came after an "EU report said cancer is the second most common cause of death after heart problems, leading to two out of every ten deaths for women and three out of every ten for men in 2006. Yet less than half of the minimum recommended screenings take place each year."

        In fact, only "22 of the 27 EU member nations are running or setting up population based screening plans for breast cancer, only 15 for cervical cancer, and just 12 for colorectal cancer," AFP (1/23) reports. "To meet the targets set five years ago, the countries would have to conduct 125 million screenings, more than double the number currently being carried out."

Copyright © 2008 by Custom Briefings | 11190 Sunrise Valley Drive, Suite 130 | Reston, VA 20191