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Teaching Hospital Update - June 29 - July 2, 2009


Email Alert

By Jennifer P. Viegas*

July 2, 2009

Johnson & Johnson Wins $1.67 Billion Lawsuit Against Abbott

Johnson & Johnson won a $1.67 billion patent infringement lawsuit against Abbott Laboratories over the pharmaceutical giants' two competing rheumatoid arthritis drugs. A U.S. District Court jury in Marshall, Texas, ruled that Humira, the drug produced by Abbott, violated the patent of Johnson & Johnson's Remicade. Johnson & Johnson was gratified that the jury recognized their valuable intellectual property, finding their patent both valid and infringed.

Abbott Laboratories plans to appeal the ruling and is confident in the merits of their case. Abbott. Humira was approved by the Food and Drug Administration in December 2002. Remicade gained FDA approval in November 1999.

Rebecca Vesely, J&J Wins $1.67 Billion Lawsuit Against Abbott, Modern Healthcare's Daily Dose (June 30, 2009) (note: registration is required to view this content).

FDA Reviewing Safety Data for Insulin Glargine

In light of four recently published studies showing a link between insulin glargine (Lantus) and cancer, the Food and Drug Administration (FDA) announced it is reviewing safety for the drug, but urged diabetic patients not to stop treatment without consulting a physician.

Three of the four studies found some type of cancer-related association with the long-acting insulin analog. However, limitations of the studies and discrepant findings call into question the validity of the association.

The FDA noted the duration of patient follow-up in all four studies was shorter than what is generally considered necessary to evaluate for cancer risk from drug exposure. Also, the FDA noted, inconsistencies in findings within and across individual studies raise concerns as to whether an association between the use of insulin glargine and cancer truly exists. Additionally, differences in patient characteristics across the treatment groups may have contributed to a finding of increased cancer risk. All four of the studies showed some association between use of glargine or other forms of insulin and an increased risk of cancer. The association, however, emerged only in statistically adjusted or subgroup analyses.

The American Diabetes Association, American Association for Clinical Endocrinologists, and European Association for the Study of Diabetes all issued cautionary statements about the studies. Generally characterizing the findings as preliminary, the organizations discouraged any hasty actions by patients or clinicians.

According to the FDA statement, the agency is currently reviewing many sources of safety data for Lantus, including these newly published observational studies, data from all completed controlled clinical trials, and information about ongoing controlled clinical trials, to better understand the risk, if any, for cancer associated with the use of Lantus.

Charles Bankhead, FDA Reviewing Safety Data for Insulin Glargine, MedPage Today (July 1, 2009).

Michigan Class Action Settlement on Autism Treatment Hailed as Landmark Case

In what plaintiffs lawyers are calling a landmark autism case, a Michigan insurance company has agreed to reimburse at least 100 families for costs involving treatments for their autistic children.

The $1 million class action settlement from Blue Cross Blue Shield of Michigan comes amid a legislative wave in which a growing number of states are passing laws that require insurance companies to pay for autism treatments and screenings. To date, 13 states have such laws, the most recent being Connecticut, Colorado and Nevada.

The Michigan settlement, meanwhile, has autism advocates hopeful that insurance companies will stop claiming that behavioral therapy for autistic children is experimental, and start paying for it.

In the case, Johns v. Blue Cross Blue Shield of Michigan, filed in the Eastern District of Michigan, the family of an autistic child sued Blue Cross for allegedly failing to acknowledge that a treatment known as Applied Behavioral Analysis (ABA) is scientifically valid. ABA therapy attempts to change behavior through positive and negative reinforcements.

In the suit, the plaintiffs alleged that Blue Cross' pattern and practice of characterizing ABA as "experimental" was arbitrary, capricious, illegal and contradicted by many years of scientific validation. Blue Cross sought dismissal of the case, but a judge permitted it to go forward.

The case settled shortly after plaintiffs counsel obtained a court order requiring Blue Cross to produce documents that validated the effectiveness of ABA. Among the documents obtained was a draft of a 2005 Blue Cross Blue Shield medical policy, which stated: "ABA is currently the most thoroughly researched treatment modality for early intervention approaches to autism spectrum disorders and is the standard of care recommended by the American Academy of Pediatrics, National Academy of Sciences Committee and the Association for Science in Autism Treatment, among others."

Blue Cross' documents also stated: "The earlier the disorder is diagnosed, the sooner the child can be helped through treatment interventions."

Under the settlement, Blue Cross will pay for behavioral therapy rendered to more than 100 children in the past six years.

Separate from the lawsuit, Blue Cross Blue Shield of Michigan recently announced on May 11 that it will offer its customer groups the ability to purchase coverage for autism treatment programs that provide intensive early intervention. The new benefit option involves coverage for children aged two to five years old who use ABA, although the insurance carrier said that it still considers ABA an investigational and experimental treatment.

Tresa Baldas, Michigan Class Action Settlement on Autism Treatment Hailed as Landmark Case, The National Law Journal (June 23, 2009).

CMS Proposes 21.5% Cut in Medicare Physician Payments

Physicians would receive a 21.5% cut to their Medicare payments starting Jan. 1, 2010, under a proposed rule issued by the Centers for Medicare and Medicaid (CMS).

In a major step to revise the way it pays physicians, the agency is also proposing to remove physician-administered drugs from the formula used to calculate Medicare's physician fee schedule. The proposal to take drugs out of the formula will not prevent the anticipated cut in 2010; however, physicians will experience fewer years of negative updates if it is implemented.

The American Medical Association (AMA), which has been pushing for this measure for years, applauded the proposal. The AMA has been calling for this action since 2002 so that Congress can afford to repeal the flawed Medicare physician payment formula."

The sustainable growth rate formula ties Medicare physician payments to several factors, including changes in the economy. Physicians would experience the 21.5% cut in 2010 unless Congress intervenes, as it has in the past.

In other provisions, the CMS is proposing changes that are expected to increase payment rates for primary-care services, such as revising the treatment of malpractice premiums.

The changes proposed to physician payment rates in 2010 will affect more than 1 million physicians and nonphysician practitioners who are paid under the fee schedule.

Jennifer Lubell, CMS Proposes 21.5% Cut in Medicare Doc Payments,
(July 1, 2009) (note: registration is required to view this content).

*AHLA would like to thank Jennifer P. Viegas, Esquire (Hall Render Killian Health & Lyman PC, Troy, MI) for providing this week's update.

AHLA Teaching Hospital Updates are intended to provide quick summaries of cutting-edge issues of interest to teaching hospitals and their counsel. Additional information and more in-depth coverage on these topics may be available from AHLA Health Lawyers Weekly and appropriate AHLA Practice Groups.

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