Medtronic pay up

Los Angeles Attorney Mychal Wilson Wins Another Fortune 500 Whistleblower Case

SANTA MONICA, Calif., May 29, 2014 /PRNewswire/ -- Qui Tam ("Whistleblower") attorney Mychal Wilson, Esq. announces that Medtronic, the world's largest maker of medical devices, has agreed to pay the United States$9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic. This resolution was announced by the United States Department of Justice.

The settlement ends a federal whistleblower suit filed in Eastern District of California by the legal team of Mychal Wilson, Esq. ( www.mychalwilsonesq.com ) and Co-counsels Brooks Cutter and JR Parker of Kershaw, Cutter & Ratinoff, LLP (www.kcrlegal.com ).

Attorney Wilson said, "I would like to thank and congratulate our courageous and conscientious client for bringing justice on behalf of the United States government. We owe this individual an enormous amount of gratitude and respect. Additionally, I would like to thank our legal team, including certified fraud examiner Andy Prough, the Justice Department's Civil Division (attorney Adam Schwartz), the U.S. Attorney's Office for the Eastern District of California (attorney Catherine Swann and her staff, fraud expert David Poulson and paralegal Cassie Christensen), our expert cardiologists, and healthcare industry informants for the great teamwork."

Attorney Mychal Wilson said, "This settlement is a landmark for exposing this issue against a leading medical device company. It's very important that patients ask their physicians if they have received any money or anything of value from pharmaceutical or medical device companies. Especially, as alleged in this matter, for receiving kickbacks such as tickets to sporting events or for referral business in violation of the Federal False Claims Act. These type of improper business arrangements in the practice of medicine need to immediately cease. Not only do kickbacks put patients in harm's way, but they cause false claims for the implantation of Cardiac Rhythm Disease and Management ("CDRM") devices to be submitted to Medicare and Medicaid, which wastes American taxpayer dollars."

"Essentially, you may want to seek a second or even a third opinion before committing to any invasive surgery," said attorney Wilson, a former pharmaceutical rep turned successful whistleblower in the 2007 $515 million DOJ settlement against the pharmaceutical industry giant Bristol-Myers Squibb ("BMS") which inspired him to fight for the rights of other whistleblowers (United States ex rel. Wilson v. Bristol-Myers Squibb, Civil Action No. 06-12195-NG) (D. Mass).

"As an experienced former BMS cardiovascular and diabetes pharmaceutical sales representative, I have witnessed that kickbacks such as tickets to sporting events are often provided to physicians to induce drug prescriptions. I learned that improper financial incentives to prescribe drugs or implant medical devices potentially cloud the sound medical judgment of the physician," argues Wilson.

Attorney Wilson says, "Along with resources such as the Physicians Payment Sunshine Act, patients should check to see if their healthcare provider has received payments or items of value from drug and/or device companies. In today's digital world, patients can cross-check medical references on websites sites likewww.propublica.org ."

This settlement is the result of a coordinated and collaborative investigation between the legal team of Mychal Wilson, Esq., Co-counsels Brooks Cutter and JR Parker of Kershaw, Cutter & Ratinoff, LLP, certified fraud examiner Andy Prough, expert cardiologists, healthcare industry insiders coupled with the Justice Department's Civil Division (attorneys Jamie Yavelberg and Adam Schwartz), the U.S. Attorney's Office for the Eastern District of California (attorneys Benjamin Wagner and Catherine Swann and staff fraud expert David Poulson and paralegal Cassie Christensen), California Deputy Attorney General (attorneys Brian Frankel, Adelina Berumen and Erika Hiramatsu), the Office of Inspector General at the U.S. Department of Health and Human Services and the FBI.

The lawsuit is captioned United States ex rel. Schroeder v. Medtronic, Inc., No. 2:09-cv-0279 WBS EJB (E.D. Cal.).  The claims settled by this agreement are allegations only, and there has been no determination of liability.

Attorney Mychal Wilson has a growing Qui Tam Law practice with several ongoing cases under investigation. Mychal Wilson, Esq. is a member of the State Bar of California and the Qui Tam bar Taxpayers Against Fraud ( http://www.taf.org ). Additionally, Mychal Wilson is an entertainment attorney and media personality who serves as a legal analyst national television.

GlaxoChinaGate - Department of Irony contd.

By Patti Waldmeir in Shanghai and Andrew Ward in London

GlaxoSmithKline, the UK pharmaceutical company at the centre of a Chinese corruption scandal, is facing protests from junior employees who say the company is refusing to reimburse them for bribes they were ordered to pay by their superiors.

Beijing officials have accused senior employees at GSK’s China subsidiary of orchestrating a “massive and systemic bribery”, while the company was notified earlier this week that Britain’s Serious Fraud Office has opened its own criminal inquiry.


Now some Chinese sales staff are complaining that GSK has denied bonuses, threatened dismissal or refused to reimburse them for bribes they say were sanctioned by their superiors to boost the company’s drug sales. In some cases, managers instructed them to purchase fake receipts that were used to cover up bribes paid in cash or gifts to doctors and hospitals, according to salesmen interviewed by the Financial Times.

In some instances, managers disguised their involvement by using their personal email address to instruct staff to pay bribes and by ordering junior staff to claim on their personal expense accounts – even if the bribe was actually paid out by the manager – according to these people.

In late March, disgruntled staff sent 25 representatives to GSK’s headquarters in Shanghai, where they unfurled a banner that read: “Return my hard-earned money.” The amount owed totals tens of thousands of renminbi for many of the affected employees. Most claims cover the months before Beijing announced it was investigating GSK last July.

”All the expenses were approved by the company,” the group wrote in a letter to management.

“The expenses were paid with our own money, and although the receipts were not compliant, it was our managers who told us to buy the fake receipts,” said one former GSK salesman.

In China, restaurants issue a standardised official receipt for meals and other sales, but there is a brisk business in China of faking such receipts.

GSK has stepped up scrutiny of staff expense claims in China with help from auditors Ernst & Young since the scandal erupted. Staff were instructed to produce bank records to prove that they paid amounts directly to merchants. Those who were unable to do so, or who provided receipts that could not be authenticated by the tax office, were denied reimbursement and their year-end bonuses.
Some staff were warned not to implicate their supervisors, according to a former salesman: “Our manager approached each person before they were questioned and asked them not to mention his name. He even prepared a story for them to tell the investigator.”

GSK said: “We have zero tolerance for unethical or illegal behaviour and anyone who conducts such behaviour has no place in our company. We believe the vast majority of our employees uphold our values and we welcome employees speaking up if they have concerns.”

The company acknowledged in April that a “very small number” of its 7,000 Chinese employees had been dismissed following an audit of expense claims.
“Where we have found potential issues, we have thoroughly reviewed them and have withheld payments and taken disciplinary action including dismissal where appropriate. We are determined to ensure our processes are being properly followed.”

The case has cast a cloud over GSK and caused a sharp sales drop in China – an important growth market for the company. In a bid to repair the damage, Sir Andrew Witty, chief executive, late last year announced an overhaul of marketing practices, including an end to target-based pay for sales representatives.

Additional reporting by Zhang Yan in Shanghai

http://www.ft.com/cms/s/0/d27e1a18-e679-11e3-b8c7-00144feabdc0.html#axzz335zqDaXc

Pradaxa Maker Reaches $650 Million Settlement in State and Federal Litigation

Drug maker Boehringer Ingelheim announced today that it had reached a $650 million settlement of state and federal cases involving the blood thinner Pradaxa (dabigatran).

Though the company says it “stands resolutely behind” Pradaxa and believes the claims in the lawsuits lack merit, a company news release says the settlement allows BI to avoid the “distraction and uncertainty of lengthy litigation,” according to Insurancenewsnet.com.

This settlement is expected to resolve about 4,000 claims and Boehringer Ingelheim reportedly expects most, if not all, plaintiffs to accept the settlement, Insurancenewsnet reports. The company says Pradaxa is superior to the older blood thinner warfarin in reducing ischemic strokes, while having a similar rate of major bleeding events. Ischemic strokes account for nearly nine out of every 10 strokes caused by atrial fibrillation, a heart rhythm problem.

On May 13, the Food and Drug Administration (FDA) issued a Drug Safety Communication with results from a Medicare study that compared new users of Pradaxa and warfarin. The FDA reports that Pradaxa was associated with a lower risk of clot-related strokes, bleeding in the brain, and death compared to warfarin, but Pradaxa had an increased risk of major gastrointestinal bleeding, according to Insurancenewsnet.com. Vitamin K is an antidote to warfarin bleeding, but there is no antidote for bleeding with Pradaxa, making such bleeding very dangerous.
Pradaxa belongs to a new class of blood thinners, drugs developed to replace warfarin, which has been prescribed for more than 50 years. While blood thinners reduce the rate of fatal or debilitating strokes, they increase the risk of internal bleeding, which can be fatal, Reuters reports. The new blood thinners have been successful in the market because, thus far, patients using them have not needed the regular blood testing and dietary restrictions necessary with warfarin. But The New York Times reports that new studies suggest that Pradaxa users may need blood testing because individuals’ metabolic differences can leave then with too little or too much of the drug in their bloodstream. Too little diminishes the drug’s effectiveness in preventing strokes and too much increases the bleeding risk.

http://www.newsinferno.com/pradaxa-maker-reaches-650-million-settlement-in-state-and-federal-litigation/?

Dr Druin Burch, Consultant in Internal Medicine at the John Radcliffe Hospital, Oxford writes

Since 2000, each year has seen the Mental Health Foundation sponsor and deliver a springtime week of mental health awareness. Stigma, friendship, attempts to find and continue in work, attempts to balance work and life (the phrase suggesting them to be different things), and mood occupied the first 5 years. Then came exercise, alcohol, friendship, anger, fear, loneliness, sleep, benevolence and physical activity. Exercise is good for you, said one of The Wombles some years ago, laziness is not. It's a message which may not have originated in that old children's TV series but has been endlessly repeated ever since. This year Mental Health Awareness Week brings us anxiety, and in doing so it makes me worry. Might it be that fretting about the existence of anxiety does not immediately solve its problems? Exercise is good for you and laziness is not, yet repeating that in various ways does not seem to have resulted in a world where everyone is now slim, fit and athletic. As I write, the next few days offer up World Lupus Day, Eat What You Want Day (raising awareness of those going hungry), International ME Awareness Day, Spinal Cord Injury Awareness Day, World AIDS Vaccine Day (I was unaware we had one), Lost Sock Memorial Day ("donate your unwanted socks to homeless shelters") and the start of Dementia Awareness Week. "Be aware!" goes an old joke, "Your country needs wares!"

By attempting to make us all more conscious of mental health, the Foundation is trying to help those in need and to make the world a better place. Benevolence of intentions, however, doesn't mean results are worthwhile. A doctor prescribing an ineffective treatment with a good heart is still dishing out something which doesn't work, and they may be doing so at the expense of something else that might. Some awareness of this, at least, has reached the Foundation. "Research and practical evaluation lie at the heart of everything we do," they say, adding that "this evidence-based approach helps us to recognise the key issues affecting the nation's mental health and wellbeing." Looking through their historical records of past mental health awareness weeks, the superb quality of the press releases are easy to appreciate. They are professionally and eye-catchingly done, and each year I am sure they received significant media attention. It is notable that their display is unaccompanied by any evaluations of their effects.

For every problem, wrote the American humourist H L Mencken, there is a solution which is neat, simple and wrong. Faced with an endless stream of days, weeks, months and years in which we are encouraged to be more aware of some problem or other, it is reasonable to ask what the overall effect is. Do endless reminders via mass and social media to recognise men's health, disability, cancer, mental illness and other genuine problems help ease them? Do these skilled public relations exercises do good? (The popularity of the old "Keep Calm and Carry On" slogan suggests we may feel in need of a little less awareness of misery, not necessarily more.) Might these events even do harm, covering over gulfs of inaction, inability and ignorance with a soothing appearance of activity and sympathy?

"One in six of us," says this year's Mental Health Awareness Week campaign, "struggle with mental health issues at any one time." Since the WHO tells us that health is not merely the absence of illness but "a state of complete physical, mental and social well-being" the Foundation is probably under-estimating the problem. Factor in a third of us being asleep, ineligible to be asked about our state of mind without waking up and ruining it, and 1 in 6 still implies that at all times a full half of us are walking around in a state of unblemished bliss. One gets a sense of statistics being enrolled not in pursuit of a clear sight of truth but of sound bites and press coverage. Good intentions, of course, are at their most enthusiastically infectious when they are not being dampened by an awareness of the world's complexities.

I am attempting to make a serious point. Antibiotics were a miraculous medical development. (Their name comes rather oddly from the fact they are anti-biosis, anti-life, since they were the germ warfare by which one micro-organism attempted to kill another.) Psychiatry, appropriately impressed by the immense success of targeted treatments in other medical disciplines, developed classes of drugs whose names echo the marvels of sulfonamides, penicillin and streptomycin. Antidepressants, antipsychotics and anxiolytics are reassuring terms, suggesting biochemical specificity and targeted solutions to clearly identified problems, analogous to so much that works well in other areas of medicine (What's in a name?). If your appendix has grown inflamed and ruptured, you undergo an appendicectomy. If your hip osteoarthritis is disabling, you have a joint replacement. If you are admitted to hospital with meningococcal sepsis, you are treated with antibiotics. These are direct solutions to plainly identified problems. Antidepressants, antipsychotics and anxiolytics are terms which too easily give the impression of representing similarly accurate responses to well-understood insults. They are not, however, and their false reassurance is hazardous.

What are the long-term effects, in the wide range of people in which they are used, of SSRIs and tricyclics, or of the drugs we call antipsychotics and which modulate mixes of dopamine and serotonin and other neurotransmitters in the brain? What do they do to the long-term natural history of depression or psychosis, let alone for the host of other off-label reasons they are prescribed? (In many, and particularly the dying or the elderly, arguably RCT data is not required. If one is in the position of reaching for a pill to control short-term distressing symptoms, when lifespan and physical function are already limited, then clinical experience and "n-of-1" trials really can offer correct answers to those who are thoughtful and observant.) But do we know what these drugs do to physical function, to morbidity and mortality, to overall quality of life? Flick through the Cochrane reviews of treatments for psychosis or depression and the extent of our ignorance is immediately on show. Even non-pharmacological interventions whose benefits we are repeatedly told of - like exercise, the theme of a previous Mental Health Awareness Week - are often poorly supported by good evidence (Cochrane review). Worse, where apparently good evidence exists, it has too often been shown later to be an artefact of selective publication and of poor or perhaps deliberately misleading trial design (Initial severity and antidepressant benefits). Writing journal reviews for Doctors.net.uk, I have just reviewed a paper looking at a drug for stable coronary disease. Darapladib is a selective oral inhibitor of lipoprotein-associated phospholipase A2, the latter being an enzyme known to be involved in the creation of unstable plaques. Had it been a psychiatric drug one feels it might have been used purely on the basis of such an obviously beneficial mechanism of action, or perhaps as a result of trials in a few hundred people showing it reduced some measures of plaque instability or even of angina symptoms over weeks or at best 6 or 12 months. Cardiology has learnt to do better, and this was a trial of 16,000 people with a median follow up of getting on for 4 years and a primary outcome resting not on any surrogate but on the hard endpoint of death.

The fact we don't know the long-term psychiatric effects of psychiatric drugs is bewildering. The fact that they appear to have significant physical side effects - that they seem to lead, amongst other things, to weight gain and an increased rate of cardiovascular death - makes this bad situation abysmal. We have neither properly measured the harms nor the benefits of many psychiatric interventions in many settings and over anything but the short or medium term, and as a result we use them without knowing reliably that we are doing more good than harm. This isn't good medicine, nor even what David Sackett, one of the fathers of EBM, kindly called "hopeful guesswork". We have moved on since leeches (which made agitated and febrile patients calm; a sure sign of it being good for them) and we understand that the only way to properly assess the impact of certain interventions is to test them in long-term properly blinded randomised controlled trials. In psychiatry, as out of it, that should often mean using an “active placebo” so patients cannot infer their allocation from a dry mouth or other side effects. The degree to which blinding is successful must be tested and reported. Imagine if a drug company sought to market an agent for angina which conferred short-term relief of symptoms, but whose long-term impact on them was unknown and which was noted to make patients more likely to die of cardiovascular disease - there would never be the slightest chance of it being taken seriously. The tradition of evidence in psychiatry as opposed to many other medical specialties is weakness. This should disturb us and make us angry. It should upset us sufficiently to give us no peace or calm until we improve the situation.

Campaigning for more diagnosis and treatment of mental illness seems an odd choice of emphasis when we are yet to reliably assess existing interventions. Not that we are even short of other useful things to do aside from these overdue investigations. Much of good practical sense has been suggested in the BMA's May 2014 report, Recognising the importance of physical health in mental health and intellectual disability. Despite being a report dealing with those suffering from mental illness, it focuses on the physical:

"People with mental health problems and intellectual disability have a shorter life expectancy and increased risk of early death when compared to the general population. The evidence outlined in this report makes it clear that excess morbidity and premature mortality predominantly result from the under-diagnosis, treatment and prevention of co-morbid physical health problems in mental health and intellectual disability patients. In the worst cases, people from these vulnerable groups are receiving less than optimal medical care and are suffering unnecessarily with unmet health needs.

The wealth of evidence on excess morbidity and mortality has not been consistently acted upon, scant attention has been paid to individuals’ physical healthcare needs, and an undercurrent of low expectations for the physical health of intellectual disability and mental health patients has persisted. Delivering ‘whole person care’ has been further hampered by the geographic, institutional, and professional division of mental health, intellectual disability and physical healthcare that remains apparent across the healthcare system. Recent years have seen cuts to mental health budgets, the commissioning of mental health and intellectual disability services separately from their physical health counterparts, an absence of integrated care, and gaps in healthcare training and workforce planning. These factors inhibit the delivery of a coordinated response to the multiple needs of patients presenting with co-morbidities."

There is a lot to be said for the BMA's sensible reminder to focus on those things we properly understand and yet are still doing badly at. Beyond that, it seems a manifestation of mental ill health to be complacent about that which merits anxiety. Uncertainties in psychiatry should make us uncomfortable. What do our drugs do to our patient’s mental and physical health over the years and decades ahead of them? Why do we not know? It can be productive and helpful to be reminded of our ignorance, even to have our noses forcibly rubbed in it. We do not understand the biochemical and molecular bases of mental ill health and it may be that we never fully will. (Some properties exist only at certain levels of complexity. The aesthetic impact of a painting cannot be understood by a list of the colour saturations of its pixels but has to be considered as a whole. It may be that aspects of personality and psychological health and illness require the same, and will never be reducible into neurotransmitters and scan results. And even if they become reducible in such a way, they aren't presently. Mental health interventions, be they drugs or talking therapies, cannot be judged worthwhile on the basis of fitting a biochemical or psychological model - they must be tested.) The changing shape of post-traumatic stress disorder - it presented differently in the American civil war to how it appeared in World War I, or how it appears now, yet it was real throughout - suggests that the presentation of psychiatric problems may well shift over time in a manner quite alien to, say, appendicitis or meningococcal septicaemia.

Mental health and illness are too important to be treated glibly. They merit having their complexities and their influence honoured with seriousness and with effort, and they lend themselves better to puzzlement and painstaking long-term trials than to awareness weeks, sound bites and drug classes whose reassuring names gloss over their lack of evidence. At best, and in a small minority of cases, we know with confidence what some of the psychiatric interventions we use do over the medium term. Yet psychiatric problems afflict us over the long term, as do many of the known (but not fully measured) harms of their treatments. Since it was set up, the Mental Health Foundation has never yet used an awareness week to try and raise the profile of our ignorance, of psychiatry’s known unknowns, or to remind us of how little we know compared to what we should. The Foundation’s creditable attempts to get more funding for mental health research deserve to be matched by an awareness week reminding us how much knowledge we presently lack.

"Be true to yourself," says this year's campaign. Perhaps whoever wrote that was unaware who they were quoting. "To thine own self be true," was part of the well-intentioned but famously pompous and purposeless advice which Polonius gave Hamlet. ("Tedious old fool," concluded the latter.) Next year's Mental Health Awareness Week, this October's Mental Health Day or even some future Lost Sock Memorial Day might helpfully focus on how little we know and how uncertain even the best of our advice, if it is to remain honest, needs to be. It seems something worth being aware of.

http://www.doctors.net.uk/targetting/article.aspx?areaid=11&articleid=22747

Insurers scrutinize drug costs after $84,000 Sovaldi surprise

By Caroline Humer and Deena Beasley

NEW YORK/LOS ANGELES (Reuters) - Shocked by the rapid adoption of a new $84,000 hepatitis C treatment, U.S. health insurers are trying to make sure they aren’t blindsided by other drugs being developed and are looking for ways to limit their use from the day they are launched.

Manufacturer Gilead Sciences Inc says 30,000 people have received hepatitis drug Sovaldi so far, and that sales hit a record-breaking $2.3 billion within a few months. The treatment, typically 84 pills taken over 12 weeks, completely cures the disease in more than 90 percent of patients.

As many as 3.2 million Americans are infected by hepatitis C, and the cost of giving most of them Sovaldi would surpass $200 billion. Some insurers have already put conditions on who can get the drug, and states including California and Texas have slowed or put treatment on hold while they study what to do.

Insurers warned that these unforeseen costs will cut 2014 earnings and require rate hikes. Now, at industry conferences, in conversations with investors, and in private, they are pushing Gilead's rivals, a group that includes AbbVie Inc, Merck & Co and Bristol-Myers Squibb Co, to discount their own new hepatitis C treatments when they come to market starting this fall. Such a high-profile campaign by insurers before drugs are even approved is new.

They are also signaling they will restrict who can get coverage for new cholesterol drugs being developed by Amgen Inc, Pfizer Inc and a partnership of Regeneron Pharmaceuticals Inc and Sanofi SA.

Photos: Gas prices through the years

By law, insurers cannot deny access to new drugs if they represent a real improvement for patients, leaving drug companies with the upper hand in most price discussions. When comparable competitors, or a generic version is on the market about a decade later, insurers have room to steer patients away from the new drugs, and pharmaceutical companies cut prices steeply and give big discounts.

But insurers have not faced such a highly effective drug aimed at a widespread disease that is so expensive and so quickly adopted. The previous record for a drug reaching blockbuster status was set in 2011, when hepatitis C therapy Incivek from Vertex Pharmaceuticals raked in $1.56 billion for the entire year. Sovaldi has sold more in a quarter of the time.

As a result, insurers are taking a harder line on which patients should get Sovaldi, based on the drug’s clinical data.

Sovaldi is “game-changing” for insurers thinking said John Whang, president of Intelligence Reimbursement, a consulting firm that helps pharmaceutical companies set prices. The only way for them to respond is to control the volume of treatment used, he said.


PUBLIC SHAMING

In a sign of how serious the industry has become, the largest insurer lobby group last week took Gilead to task at a public conference.

The company in this case is asking for a blank check and you can't give anyone anymore a blank check because it will blow up family budgets, state Medicaid budgets, employer costs and wreak havoc on the federal debt," said Karen Ignagni, president of America's Health Insurance Plans.



Gilead argues that Sovaldi’s price is worth it, since it will replace even costlier spending on hospital visits and treatments for cirrhosis or liver failure. It has not budged on price for the hepatitis C drug, although Gregg Alton, Gilead's executive vice president for corporate and medical affairs, acknowledged that insurers are going to start negotiating.

U.S. drug spending reached a record $329 billion in 2013, driven by a double-digit increase in prices for new cancer, HIV and hepatitis C therapies. Express Scripts, the nation’s largest pharmacy benefit manager, expects spending on such specialty drugs to rise an additional 63 percent from 2014 to 2016, driven by an 1,800 percent increase in hepatitis C drug costs.

Successful drugs can cost $1 billion to bring to market, including spending on research, development and marketing. Supporters of drug companies say big advances necessitate high prices.

"We are the only country in the world that pays exorbitant prices to provide innovation first here, but that's what we need and that's what the American people have come to expect," said Richard Burr, a Republican Senator from North Carolina who has spent decades working on bipartisan health bills.


LIMITING USE

Hepatitis C complications can take years to develop, which gives insurers and government health agencies leeway to determine when treatment should start.

Many insurers, which manage most of the 150 million people covered by employer-based plans as well as some government Medicare and Medicaid plans, require patients to get authorization before using Sovaldi. Some limit the drug to patients with a certain genetic type of the disease.

Express Scripts has been pushing for all but the sickest patients to wait for new therapies that are expected to compete head-to-head with Sovaldi late this year. It is also pressing rival manufacturers for low prices, hoping to avoid the shock of Sovaldi, which sped through trials and regulatory approval and caught insurers by surprise.

"In this particular case there was very little discussion pre-launch. But other companies are now already discussing potential future price points in response," said Stuart Miller, Express Scripts Chief Medical Officer.

AbbVie and Merck both declined to comment on whether discussions with insurers about their new drugs were underway.

Gilead, which says it discussed the Sovaldi launch with insurers, is in talks over which patients should be treated with its next hepatitis C pill. That will be a two-drug combination that will eliminate the need for a companion drug that nearly doubles Sovaldi’s current total cost.

Industry analysts expect the company will price it closer to Sovaldi’s $84,000 than to the $150,000 cost of a combination of Sovaldi and a Johnson & Johnson drug that some doctors prescribe.

Mick Kolassa, chairman of pricing consultancy Medical Marketing Economics, in Oxford, Mississippi, who advises pharma companies, says insurers are being aggressive. “We are seeing some of them step up and flex their muscles,” he said.


CHOLESTEROL DRUGS IN SIGHT

More scrutiny of new pricing is likely ahead as the country comes to terms with how it should pay for expensive drugs, according to John Castellani, Chief Executive Officer of leading drug industry lobby group Pharmaceutical Research and Manufacturers of America or PhRMA.

Sovaldi has shown that patients are bearing too much of the drug's costs because of rising co-payments, co-insurance and deductibles, he told Reuters, laying the blame on factors controlled by insurance companies.

But patient advocates are not choosing sides yet, which may have the effect of giving insurers room for action.

“I think the fault lies with both the for-profit insurers and the drug companies," said Anne Donnelly, director of healthcare policy at the San Francisco-based Project Inform, which advocates for hepatitis C patients. The system has not changed to reflect the impact of new effective, expensive drugs, she said.

The next big price battle centers on a new class of cholesterol drugs known as PCSK9 inhibitors, which help the liver to clear “bad” LDL cholesterol from the blood.

Large-scale studies show the new drugs can help patients who cannot tolerate, or get enough benefit from, the most widely-used cholesterol drugs, statins. The PCSK9 therapies are expected to cost thousands of dollars a year, far above the price of statins sold as generics.

Drugmakers are expected to push for the new medicines to be used by 7 million to 20 million people, or up to 30 percent of the 71 million Americans with high cholesterol. Insurers already are questioning whether the estimates of use are legitimate.

There is really no need to take these new medications and spread them out across a larger community of people who will respond to existing treatments, many of which are generic,” Aetna Inc’s National Medical Director for Pharmacy Policy Ed Pezalla said in an interview.


(Editing by Michele Gershberg and Peter Henderson)

http://www.sun-sentinel.com/health/sns-rt-us-usa-healthcare-hepatitisc-insight-20140528,0,7343413,full.story

UK Serious Fraud Office invites GSK whistleblowers to come forward

GlaxoSmithKline is under criminal investigation from the Serious Fraud Office (SFO) following a series of international bribery allegations.

The British pharmaceuticals giant has been in contact with the watchdog in recent months in the wake of claims that it funnelled hundreds of millions of pounds to doctors and officials in countries around the globe to boost sales of its drugs.

Chinese police have accused the company of dispensing 3bn yuan (£285m) in bribes under the leadership Mark Reilly, the former head of its Chinese business. Authorities in the country say the bribes resulted in billions of pounds in “illegal revenue” for the company.

Mr Reilly left China as the allegations surfaced. He returned to the country to assist with the investigation, but has since been barred from leaving. Earlier this month he was alleged to have pressured sales teams into bribing health workers, and accused of fraud.

GSK has described the accusations as “shameful”. In a statement, the company said the SFO had “opened a formal criminal investigation into the group’s commercial practices”.

It said it would co-operate with the investigation and said it was committed to operating its business to the “highest ethical standards”.

GSK has been in regular contact with both the SFO and the Department of Justice in the US – where it has a secondary stock market listing – since the Chinese allegations surfaced last July. Both countries have strong anti-bribery and corruption laws which can make companies liable for prosecution even if no crimes were committed on UK or US soil.

Under Britain's Bribery Act, companies can be found liable for corruption by failing to prevent it or, more seriously, if top management is found to have turned a blind eye. The most serious offences can result in damaging fines and debarment from public contracts, according to legal experts.

In April, GSK said it was launching its own investigations into accusations of bribery in Poland, Iraq, Jordan and Lebanon. The company has repeatedly insisted that it does not have a systemic problem with bribery, and any wrongdoing that may be found was performed by rogue salesmen out of the company’s control processes.

The SFO did not give any details beyond confirming the existence of the investigation.

http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/10859388/Serious-Fraud-Office-opens-criminal-investigation-into-GlaxoSmithKline.html

Johnson & Johnson 'failed to take action' on defective hip implants

By Quentin McDermott: exclusive

Updated 2 hours 16 minutes ago

Photo: Widespread failure 'hidden from surgeons': The DePuy ASR XL hip implant (Supplied)

A company's failure to manufacture a medical implant to the correct specifications may have caused the implant to shed harmful metal debris, injuring thousands of patients around the world, many of whom have had to undergo further painful surgery to remove the device.

The device in question, known as the DePuy ASR, was marketed in two versions: as a hip replacement prosthesis, and also as a hip resurfacing implant.

But only one – the total hip replacement version – was authorised by the Food and Drug Administration (FDA) to be used in the United States.

The device was designed, manufactured and marketed by DePuy International, a subsidiary of Johnson & Johnson, the world's largest medical devices company.

Nearly 100,000 patients around the world were implanted with the device - 5,500 of whom were in Australia.

DePuy announced a worldwide recall of the device in August 2010, after national joint replacement registries in Australia and the UK recorded rates of revision – or surgery in patients to remove the ASR device – which were far higher than average.

Tonight's Four Corners program, The Walking Wounded, tells the inside story of how the ASR was developed, tested, manufactured and marketed by DePuy, and how the widespread failure of the device was hidden from surgeons, some of whom were working with DePuy to monitor the progress of the device.

Mr Antoni Nargol, a consultant orthopaedic surgeon at the University Hospital of North Tees, in the north of England, is one of the surgeons who worked with DePuy when the ASR was put on the market.

His role was to audit the progress of the implant in his patients.

Video: Surgeons angry over hip implant failures(ABC News)

Later he worked with David Langton, an orthopaedic registrar who researches metal-on-metal hip prostheses, and who has published widely on the failure of the ASR hip – and why it failed.

Mr Langton and Mr Nargol have appeared as witnesses for patients seeking compensation for the failure of their ASR implants.

Mr Nargol told Four Corners: "When we measured the dimensions of the implants, they seemed to be outside of the specification, which was quite extraordinary because it's a precision implant."

He added: "A lot of the implants were not meeting the specification that they were meant to. So we put this to DePuy and we gave them some implants and said, 'Look, these are out of specification. Will you check them?' And they came back and said, 'We've looked at the implants and they're fine'. But what was interesting was that they weren't fine. They're absolutely not fine, but we were told they were."

Johnson & Johnson, in a lengthy statement to Four Corners, insists that the ASR device was manufactured to the correct specifications.

"DePuy has a robust quality control system for all of its products. We are not aware of any evidence that an ASR Hip System device did not meet manufacturing specifications. Further, it appears the sources of this claim are paid witnesses in litigation against the company," Johnson & Johnson said.

Company insider 'admitted implants were faulty'

But Mr Nargol told the ABC that his findings had been confirmed from high up within DePuy.

"I happened to be at a meeting and one of the senior people from the company came up to me and said to me, 'These implants that you'd brought over were not made correctly, were too small'. It was quite a shock because it was the opposite of what we'd been told by DePuy at the time."

The ASR device featured a very low clearance, or gap, between the head and the cup, which was intended to aid lubrication of the joint inside the body.

But Mr Langton, who carried out detailed measurements on devices which had been removed from patients after they had failed, told Four Corners: "There was an advertised dimension of the head and the cup, which the research and the advertisements were based on. But our findings are that that's not actually how they were manufactured, that the cup seems to be smaller than was actually intended."

Mr Langton told the ABC that between 20 and 40 per cent of the samples he had tested appeared to have been manufactured outside their advertised specifications. Mr Langton told Four Corners that the devices were measured on a coordinate measuring machine, the same machine which is used by DePuy in its factories.

The allegation that DePuy failed to manufacture the ASR device to its correct specifications follows on from other findings made by Mr Langton and other researchers, which suggest that the overall design of the ASR XL – the total hip replacement version of the device – led to more metal debris being shed in patients, than from comparable metal-on-metal devices.

Mr Nargol told Four Corners that in total, between 2004 and January 2009, he had implanted the DePuy ASR in about 500 patients.

He said 30 per cent of the ASR resurfacing devices had failed, as had 60 per cent of the ASR XL units.

Johnson & Johnson said in their statement to the ABC: "The totality of the data showed that up until mid-2010, the ASR Hip System was performing in line with other large diameter metal-on-metal monoblock and resurfacing hip devices. Ultimately, after receiving the new 2010 UK National Joint Registry data, the company decided that it was in the best interests of patients to voluntarily recall the ASR Hip System worldwide. This data showed a five-year revision rate of approximately 12 per cent for the ASR Hip Resurfacing System and approximately 13 per cent for the ASR XL Acetabular System, which was higher than expected and not in line with data previously reported in that registry."

Australian class action postponed

Tonight's Four Corners tells the story of a patient in the United States, Loren 'Bill' Kransky, who was awarded $US8 million in compensation by a jury for the injuries caused to him by his ASR hip replacement. The jury declined to award punitive damages against the company.

In Australia, a class action on behalf of hundreds of patients whose ASR devices have failed was due to come to trial in the Federal Court next week, and was set down for a 10-week hearing. But after volumes of fresh evidence were sent by DePuy to lawyers representing the patients, the trial has been postponed until next year.

In the United States, patients whose ASRs failed have been offered a base payment of $US250,000 in compensation, but Australian patients have been offered just $33,000 – although in many cases, the revisions and associated medical costs have been paid for by DePuy.

The Australian class action is being run by law firms Maurice Blackburn and Shine Lawyers. Maurice Blackburn's principal Ben Slade told Four Corners: "We want compensation for all those people who have been, we allege, injured by the defective product, and we think that that compensation should be paid at the level that Australian courts would consider to be the right amount of compensation, not the amount of compensation that the company chooses itself to pay."

He added: "We allege that in 2006 DePuy and Johnson & Johnson knew or ought to have known that the increased incidence of failure was greater than other metal-on-metal hip implants, and that in 2007 they knew that the increased revision rate was such that they should've taken action at that stage.

"It is incredibly sad that the victims are suffering so much. Certainly from the very outset we have demanded that the respondents come to the table and talk it through. Well, they haven't yet. Hopefully they soon will. At any stage now we hope there will be a mediation and there will be a settlement of these claims."

DePuy denies the design of the ASR was defective, and has not admitted liability for any harm or injuries caused to patients by the device.

DePuy told the ABC: "Regarding the class action proceeding in Australia, the company will defend itself against the allegations raised, and DePuy believes the evidence will show the company acted appropriately and responsibly."

Watch Four Corners at 8:30pm on ABC1.

Topics: medical-procedures, health, australia

http://www.abc.net.au/news/2014-05-26/four-corners-hip-implants/5477332?

The $84,000 question: Will focusing on drug prices rein in costs?

Meg Tirrell | @megtirrell

29 Mins AgoCNBC.com

1

COMMENTJoin the Discussion

The mounting scrutiny of prescription drug prices in the U.S. reached fever pitch when a new drug for hepatitis C was priced at about $1,000 a day.Gilead Sciences' Sovaldi, approved in December, cures the viral liver infection in most cases. it takes about 12 weeks, and costs $84,000.

Health insurers as recently as this week have called the price astronomical and unsustainable. Sovaldi has become the poster child for the outcry over prescription drug prices: In March, Congress sent a letter to Gilead asking it to explain how it set Sovaldi's price, contributing to a swoon in biotech stocks over the following month as investors worried pricing may finally come under pressure in the U.S.

AP

About 40 protesters from across the country converged on Gilead Sciences headquarters in Foster City, Calif., Nov. 14, 2012, calling on the drug maker to lower prices for its Stribild AIDS medication.

Sovaldi's not alone. Spending on specialty medicines, for diseases such as cancer, rheumatoid arthritis and multiple sclerosis, helped boost total spending on prescription drugs last year 3.2 percent, to $329.2 billion, according to industry researcher IMS Health. That followed a decline in spending in 2012 as cheaper generic copies of some brand-name drugs hit the market. 

Cancer drugs, in particular, have seen prices soar. The average cost of a branded cancer medicine in the U.S. has doubled in the last decade, to about $10,000 a month, IMS said.

The rising prices have concerned some doctors, leading Memorial Sloan-Kettering Cancer Center in 2012 to make a bold move: It refused to prescribe the cancer drug Zaltrap, writing in a New York Times op-ed that the medicine provided no benefit to an older therapy, Avastin, yet cost twice as much. The maker of the drug, French pharma company Sanofi, subsequently halved the price.

Last year, more than 100 physicians signed on to an editorial in the journalBlood calling for lower prices on medicines for chronic myeloid leukemia. The blood cancer has seen some of the most striking advances in medicine with the use of Novartis' drug Gleevec and other therapies that followed. Patients with CML can now expect to live almost normal life spans, wrote the authors, led by Hagop Kantarjian of MD Anderson Cancer Center.

Read MoreUnpaid medical bills hurt credit scores

The problem: Gleevec was priced at about $30,000 when it was approved in 2001, and its cost more than tripled to about $92,000 in 2012. That's lower than other drugs on the market for the disease, like Novartis' Tasigna, at $115,500, and Bristol-Myers Squibb's Sprycel, at $123,500, the authors wrote. The costs, they say, are unsustainable.

Novartis said the majority of patients pay less than $100 out of pocket each month for its CML treatments. Yet doctors argue despite insurance coverage and co-pay assistance, specialty drugs can still be expensive for patients.

"Access really is a problem for a lot of patients in relation to these very costly medicines," said Jerry Avorn, a professor at Harvard Medical School and chief of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women's Hospital. "We sometimes think, 'Well, people have insurance, and under Obamacare there's a lot more coverage,' but what that doesn't take into account is that very often there is a very big co-payment that the patient has to come up with that is often many, many hundreds or thousands of dollars."

The American Society of Clinical Oncology, whose annual meeting is in Chicago next week, has started a task force to consider how much value cancer treatments bring patients, aiming to differentiate between those that add just a few weeks or months of survival and have severe side effects and medicines that provide much more substantial benefits.

"It's really the value of the treatment that we're interested in," Lowell Schnipper, chairman of the society's task force and chief of hematology and oncology at Beth Israel Deaconess Medical Center, said in an interview. "By no means is it the focus on cost."

Value vs. price

That balance between value and price is cited frequently by Gilead in its defense of Sovaldi's $84,000 price tag.

"Sovaldi reduces total treatment costs for HCV—taking into account the cost of medications (including those for side effects or complications) and health-care visits—and it represents a finite cure, an important point to consider when comparing the price of a pill or bottle to the lifetime costs of treating a chronic disease," Gilead spokeswoman Cara Miller said in an email.

Some doctors agree.

David Paul Morris | Bloomberg | Getty Images

A researcher works on a hepatitis C virus drug at Gilead Sciences lab in Foster City, Calif.

"I don't think there's any question that treating patients with hepatitis C will lower overall health-care costs in the coming 20 years," Dr. Douglas Dieterich, a liver disease specialist at Mount Sinai Hospital, said in an interview. He has consulted for pharmaceutical companies including Gilead. "If we could get rid of the liver disease in these patients with hepatitis C, prevent them from dying of liver cancer, cirrhosis and liver failure, then there's no question the cost will be less."

Read MoreObamacare monopoly would be sad: CEO

A liver transplant can cost upwards of $200,000, Dieterich said. Patients must then take immunosuppressive drugs that can cost $40,000 a year for the rest of their lives. The price of Sovaldi, then, looks like a bargain.

Perhaps not so much when compared to what other countries pay. In the U.K., the price is about $57,000, while in Germany, it's about $66,000. In Egypt, Gilead said it will charge about $900.

US pays more

Why are U.S. prices so much higher? For one, governments in other countries negotiate drug prices, something Medicare, the U.S. insurance plan for the elderly and disabled, is prohibited by law from doing. For another, it's still politically untenable in the U.S. to push back on drug prices, said Mark Schoenebaum, an analyst with ISI Group.

Read MoreCorporate angels: Flying cancer patients for free

"In America we're not yet ready to say no," Schoenebaum said in an interview. "The Brits, with a system called the NICE system, National Institute for Clinical Excellence, they will just say no, you can't have that cancer drug, it's too expensive. We don't do that in the U.S. So if you have a monopoly system, the system allows you to charge whatever you want."

Will that change at any point soon? It's been debated for years. But, Schoenebaum points out, it's widely believed that pharmaceutical and biotech companies agreed to support the Affordable Care Act (aka Obamacare) in exchange for guarantees that the law wouldn't allow the U.S. government to negotiate or set drug prices.

Read MoreHepatitis C drug costs beat alternative: Merck

So if the government is unlikely to step in at any point soon, could competition weigh on prices instead?

That's an especially important question in hepatitis C, as Gilead will face competition from Bristol-Myers, Merck and others in the coming years as their drug regimens reach the market. Traditionally, though, increased competition hasn't necessarily weighed on prices: Gleevec continued its ascent even as other drugs in the class, called tyrosine-kinase inhibitors, entered the market.

Insurers and pharmacy benefits managers, though, have signaled they'll use the competing hepatitis C drugs as leverage. Their urge to do so may have become even more acute after Gilead reported first-quarter sales of $2.27 billion, burying analysts' estimates and setting a record for the fastest launch of a drug in history.

—By CNBC's Meg Tirrell.

Department of Irony contd.

AllTrials: Make clinical trials count

GSK dodged millions in China drug tax scam: state media

(Reuters) - A Chinese state-run newspaper has accused British drugmaker GlaxoSmithKline Plc of evading at least 100 million yuan ($16.04 million) in taxes, adding to pressure on the firm which is already struggling with graft charges against executives.

Chinese police on Wednesday said they had charged the former boss of GSK's China business and other colleagues, in the biggest corruption scandal to hit a foreign company there since four Rio Tinto executives were jailed in 2009.

Although the corruption charges target executives rather than the company itself, the mounting allegations made by Chinese media suggest the drugmaker is far from safe.

The Legal Daily newspaper, run by the ruling Chinese Communist Party's Political and Legal Committee, reported on Friday that GSK intentionally imported Lamivudine, used to treat HIV as well as hepatitis, at an elevated cost.

Along with using tax loopholes for charitable donations, this helped GSK "avoid over 100 million yuan in import value-added tax and corporate income tax," the report said.

The report followed less-detailed allegations by state news agency Xinhua saying GSK used transfer pricing to artificially reduce its profits and tax bill in China.

GSK officials in Shanghai and London declined to comment, despite repeated phone, text and email requests from Reuters since Friday. The drugmaker said on Wednesday that the graft charges were "shameful" and that it hoped to reach a resolution to enable it to continue serving Chinese consumers.

Chinese police charged Mark Reilly, the former British boss of GSK's China business, and other colleagues with corruption last week, after a 10-month probe found the firm made billions of yuan from elaborate schemes to bribe doctors and hospitals.

The allegations against GSK have damaged its reputation and led to an overhaul of operations in what is set to become the world's second-biggest pharmaceutical market behind the United States within three years, according to consultancy IMS Health.

HIDING PROFITS

The Legal Daily report also said that GSK had avoided import taxes by donating some of the imported drug to support state-backed treatment of the disease, adding GSK could have donated cheaper drugs that it produced at a plant in Suzhou instead.

"The most serious thing is that through this sham charity, GSK blocked the Chinese government making its own generic drugs to treat AIDS, so that it could attain a monopoly over the hepatitis drug market," the Legal Daily said.

Xinhua also reported earlier that GSK had spent tens of millions of yuan to bribe hospitals to use Lamivudine after it lost patent protection in 2010.

Legal sources and one source with direct knowledge of the GSK investigation have said that Chinese authorities may be looking to charge the company itself, which could put the drugmakers license to operate in China at risk.

($1 = 6.2334 Chinese Yuan)

(Reporting by Adam Jourdan in SHANGHAI, Sui-Lee Wee and Xiaoyi Shao in BEIJING; Editing by Michael Urquhart)

http://www.reuters.com/article/2014/05/19/us-gsk-china-idUSBREA4I06D20140519