January 24, 2009
Ethics Rules May be Tightened for Drug and Medical Device Makers
The Physician Payments Sunshine Act, a bill introduced in the Senate, is a parallel effort to that in the House to require drug and device makers to report all financial links with doctors on a federal website. Here's an excerpt from the N.Y. Times piece:
“The public is clamoring for transparency,” one of the Senate sponsors, Herb Kohl, a Wisconsin Democrat, said. The co-sponsor is Charles E. Grassley, Republican of Iowa.
The nation’s biggest hip and knee makers, including Smith & Nephew, Zimmer Holdings, DePuy and Biomet, are operating under Justice Department oversight as part of a deal to resolve allegations they gave doctors illegal inducements to use their products.
Other sectors of the device industry face continuing federal inquiries or are voluntarily taking house-cleaning measures. Much of it involves the public disclosure of information that would be mandated under the Senate proposal — the names of the doctors who work for device manufacturers as consultants, lecturers, researchers or trainers, and how much each one is paid for those services.
Under their Justice Department settlements, the hip and knee makers are already disclosing such payments on their corporate Web sites. And seeing the writing on the wall, several other large device companies, including Boston Scientific and Edwards Lifesciences, recently announced they would do so voluntarily.
Meanwhile, the device industry’s main trade group, the Advanced Medical Technology Association, said it had supported the Senate measure when it was introduced two years ago.
There is little question that battles over how much companies, doctors and medical institutions disclose about their financial ties will continue. But some experts on medical conflicts of interest, seeing the rapid fall of resistance by most major companies, say that a turning point has arrived.
Today's New York Times reports that Pfizer is close to purchaing Wyeth for more than $60 billion. Pfizer is already the world's largest drug company with revenues of $48 billion in 2007. Here's an excerpt:
Still, because much of Pfizer and Wyeth’s portfolios overlap, there is potential to save billions of dollars through cutting duplicative costs, analysts say.
“If Pfizer and Wyeth combine sales forces and other operations, they will have a sleeker cost structure,” said Erik Gordon, a professor at the Ross School of Business at the University of Michigan. “Most other large companies have cut just everything they can. The only way to come up with new cuts without endangering their future is to merge in a way that creates redundancies that give the companies new job-cutting opportunities.”
Two weeks ago Pfizer said it would lay off 800 researchers, and it hinted at further job cuts. Last year, it did away with more than 10,000 jobs and announced it would focus on six therapeutic areas — cancer, pain, inflammation, diabetes, Alzheimer’s disease and schizophrenia.
It remains an open question whether mergers in the pharmaceutical industry work at all. Pfizer is itself a product of a series of mergers, with mixed results. It bought Warner-Lambert, which owned Lipitor, for more than $90 billion in stock in 2000 and three years later bought Pharmacia for stock valued at $60 billion.
"Pfizer’s tried it before, and it really hasn’t worked with other firms," said Edward F. X. Hughes, a professor who teaches pharmaceutical business at the Kellogg School of Management at Northwestern University.
Peanut Plant Closes
The Associated Press reports that the peanut plant in Blakely, Georgia, The Peanut Corp. of America, has closed its doors after salmonella investigations. To date, there are reports of 486 people becoming sick and six deaths.
January 23, 2009
New Mass Tort Blog: Jackson on Consumer Class Actions and Mass Torts
Increased Risk for Space Workers Is Not Compensable Injury
BNA reports the dismissal of a suit by space center workers arising out of exposure to beryllium-containing products was upheld by the 5th Circuit. The court held that the workers were only able to show that the exposure resulted in increased sensitivity to the toxic substance, and that this was not a compensable injury. Increased risk of developing chronic beryllum disease was not held to be sufficient to sustain the suit. The case is Paz v. Brush Engineered Materials Inc., 5th Cir., No. 08-60085, 1/13/09.
Vietnam Vet Class Action Filed Against CIA
BNA Class Action Litigation Report reports that a Vietnam veterans group has filed a class action lawsuit in the Northern District of California against the CIA seeking compensation for human experimentation conducted in the 1970s. The suit is Vietnam Veterans of America v. Central Intelligence Agency, N. D. Cal., No. 09-cv-00037, filed 1/7/09.
January 21, 2009
Effects of Tort Reform
Patricia Born (California State University), Kip Viscusi (Vanderbilt), and Tom Baker (Penn) have posted an article titled The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses that might be of general interest to tort aficionados. Here's the abstract:
Whereas the literature evaluating the effect of tort reforms has focused on insurers' reported incurred losses, this paper examines the long run effects of reforms using the developed losses from a comprehensive sample of insurers writing medical malpractice insurance from 1984-2003. The long run effects of reforms are greater than insurers' expected effects, as five year developed losses and ten year developed losses are below the initially reported incurred losses for those years following reform measures. The quantile regressions show that reforms have the greatest effects for the firms that are at the high end of the loss distribution. The beneficial effects of reforms on developed losses are more pronounced than those obtained from initially-reported losses, suggesting that insurers underestimated the true effects of the reforms.
January 20, 2009
Peanut Butter Lawsuits Begin
As posted on the Marler Blog, the first lawsuit arising out of the recent nation-wide outbreak of Salmonella in Peanut Butter has been filed in Georgia. The post is here. Marler reports that there are more than 485 infected people in 43 states so far and that numerous products have been recalled. A list of products is here.