Category: Alerts

E-Cig Makers Have 60 Days to Reduce Youth Sales

By Emily Cox

The FDA issued a historic ultimatum Wednesday to crack down on e-cigarette use among minors, sending out more than 1,300 warning letters and fines to retailers who sold to underage customers and giving five e-cig manufacturers 60 days to develop adequate plans to keep their products out of the hands of children.

The actions are in response to a nationwide undercover investigation of physical and online stores over this summer into what the FDA is calling an “epidemic” of minors using e-cig products. According to a statement the agency released Wednesday, products from Vuse, Blu, Juul, MarkTen XL, and Logic accounted for the vast majority of illegal sales. The five manufacturers account for 97 percent of the U.S. e-cig market.

Part of the measure’s focus is on e-liquids that have designs and flavors that are inherently appealing to children, like candy or cookies. The FDA indicated that it will monitor and take immediate action against companies that continue to sell nicotine and tobacco products that could be appealing to children. The FDA has looked to e-cigarettes as a way to help adults stop smoking. However, FDA Commissioner Scott Gottlieb said that the agency didn’t expect the widespread teen use.

“We didn’t foresee the extent of what’s now become one of our biggest challenges,” Gottlieb said in a statement. “We didn’t predict what I now believe is an epidemic of e-cigarette use among teenagers.”

The FDA indicates e-cigarettes are the most commonly used tobacco product among minors during the past several years. More than 2 million middle and high school students used e-cigarettes within the past year.

FDA Warns E-Cig Makers to Change Policies

In its letters to the five manufacturers, the FDA put the companies on notice that they had 60 days to submit plans to address youth access and use of their products. The regulatory body suggested that these plans may include: stopping sales to retailers that the FDA fined for selling to minors; eliminating online sales or providing evidence that these sales aren’t going to minors; revising marketing practices; developing or improving internal programs to monitor retailers; or removing flavored products from the market pending FDA authorization.

Should the companies fail to comply, the FDA said it will consider revisiting its current policy that allows the products to remain on store shelves without a marketing order.

This effort is part of measures the FDA announced in July 2017 to make cigarettes less addictive, while encouraging the development of products that deliver nicotine in less harmful ways.

“Smoking remains the number one preventable cause of death in America, killing nearly half a million people a year,” Gottlieb said. “If we aren’t successful in more sharply reducing the rate of addiction to tobacco, then we’ll continue to see this needless death and disease.”

Gottlieb went on to say that e-cigarettes represent an opportunity for smokers to move away from smoking traditional combustible cigarettes, attributing the harmful effects of cigarettes to burning them. However, he did warn that nicotine itself is harmful, especially to children whose brains are still developing, saying that the FDA still needs a stronger regulatory process for e-cigarettes.

E-Cig Company Response

CEO for JUUL Labs Kevin Burns said the company intends to work proactively with the FDA regarding its request and remains committed to preventing minors from accessing its products.

“Our mission is to improve the lives of adult smokers by providing them with a true alternative to combustible cigarettes,” he said. “Appropriate flavors play an important role in helping adult smokers switch. By working together, we believe we can help adult smokers while preventing access to minors, and we will continue to engage with the FDA to fulfill our mission.”

Blu manufacturer Fontem Ventures released a statement, indicating the company supports the FDA’s initiative to keep e-cigs out of the hands of minors, adding that it also welcomes the opportunity to demonstrate its youth access prevention policies. These include an online verification process that monitors transactions for fraudulent activity and post-market surveillance.

A Logic spokesperson said the company received the FDA’s request and will continue working with the agency to prove it only markets its products to adults.


Fentanyl Crisis Is the Driving Force Behind Opioid Epidemic

By Emily Cox
fentanyl crisis

Accounting for 60 percent of U.S opioid deaths this past year, the Fentanyl crisis is now the primary hallmark of the opioid epidemic that continues to scorch the nation.

Bloomberg reports that America’s opioid crisis has experienced a definitive shift. As the White House and Congress continue to twiddle their thumbs, the opioid death toll is unceasing in its ruthless ascent, reaching nearly 50,000 in 2017. This represents an increase of nearly 7,000 over the previous year, which is a record-breaker in and of itself. However, death’s primary harbinger is no longer regular prescription painkillers. It’s fentanyl, which is often illicitly mixed with street drugs like heroin.

Consequently, Bloomberg is calling for an equally drastic shift in the currently latent efforts to prevent opioid deaths. The focus on tighter prescription controls for oxycodone and hydrocodone are no longer adequate to limit the supply. The U.S. desperately needs a comprehensive and multi-targeted strategy to restrict illicit fentanyl importation, as well as a broader, better-funded push to reduce demand.

Since 2011, general prescription opioid fatal overdoses have remained relatively stable. However, overdose deaths from fentanyl have skyrocketed. According to the National Center on Health Statistics, the markedly more lethal drug played a role in 60 percent of opioid deaths in 2017, marking an 11 percent increase from five years ago.

Fentanyl Crisis Management Needs to Start with China

Fentanyl emerged on the market in 1960 as a cancer pain treatment. Due to its synthetic chemical composition, it quickly gained popularity on the black market. While “natural” opioids require producers to plant and protect acres of poppies, fentanyl can be cooked in a lab. Furthermore, its exceptional potency (mere granules of the stuff packs a deadly punch) allows distributors to mail it around the world in tiny, concealable packages. Chinese drug labs fulfill online orders from U.S. users or traffickers, as well as those in Mexico, who add the fentanyl to heroin and other drugs to amplify their effects or use it to create fake prescription opioid pills.

According to U.S. law enforcement, China is the source of almost all illicit fentanyl. Inadequately regulated and monitored chemical laboratories there sell fentanyl and its precursors to U.S. users and dealers, or Mexican drug suppliers who go on to market it in the U.S.

During the Obama administration, the U.S. had started soliciting the Chinese government’s assistance in cracking down on producers. This included persuading China to add many analogues of fentanyl to its list of controlled substances. A steady and purposeful diplomatic push, along with expert support, is necessary to fortify China’s capacity to inspect and regulate the country’s thousands of drug labs.

From China, the drug pipeline flows primarily through the mail to users and dealers. Recently, Congress provided Customs and Border Protection with more chemical detection equipment for package screening. However, the volume of mail prevents scanning everything that comes into the U.S. Currently, there is legislation pending that would require the U.S. Postal Service to obtain basic identifying information from senders, including name, address, and package content descriptions. Private parcel services already mandate this information.

Battling the Fentanyl Crisis at Home

But, even with these measures, a significant amount of the drug is likely to escape detection, necessitating strenuous efforts to crack down on the fentanyl crisis within the U.S. The Justice Department recently made progress by working with Dutch authorities to shut down two major dark web sites where users made deals in virtual currencies.

However, fentanyl is also available on the regular internet. So, FDA commissioner Scott Gottlieb is demanding that internet companies work harder to remove illegal listings. For its part, the FDA could limit supply by enforcing off-label prescribing restrictions for legal fentanyl to patients who don’t need such a powerful painkiller.

Significant measures on the demand side need to be taken as well. More than 2 million Americans have opioid or heroin disorders, and few can quit without assistance. Treatment needs to be accessible at every opportunity, especially when addicts enter prisons, hospitals, or emergency rooms. Methadone, buprenorphine, and other opioid medications, along with behavioral therapy, have proven effective in overcoming these addictions.

Thus far, the Trump administration has largely ignored the need for medication-assisted therapy. While Congress is considering bills that would expand its employment somewhat, like getting Medicaid and Medicare to provide more generous funding, lawmakers continue to refuse to prioritize these measures. Currently, only five percent of U.S. doctors have completed the required training to prescribe buprenorphine. Far more doctors, nurse practitioners, and healthcare providers need to have this authority.

Fentanyl along with other opioids are killing more than 130 people each day. The fentanyl crisis especially requires a thorough and well-coordinated national response. However, the White House and Congress continue to fall short, and more Americans pay the price every day.

Opioid Doctor Sentenced 20 Years for “Hospice-Level” Scripts

By Emily Cox
opioid doctor

A Florida opioid doctor will serve nearly 20 years in prison after a jury found him guilty of selling prescriptions for the painkiller oxycodone at “hospice-level” doses without ever verifying if patients actually needed it.

In June, a federal jury found John M. Gayden Jr., 64, guilty of seven counts of “distributing oxycodone outside the course of professional practice and for no legitimate medical reason.” On Monday, District Judge Carlos E. Mendoza sentenced Gayden to 19 years and seven months in prison.

Opioid Doctor Federal Charges

Prosecutors indicate that Gayden ran a pain management clinic between 2009 to 2011 and gave out medically dubious prescriptions for cash. Patients paid him $200 to $400 for an appointment. After little to no evaluation, these patients would walk out with prescriptions for what one expert dubbed “hospice-level oxycodone doses” for trivial health issues.

According to the Department of Justice (DOJ), patients would even come from other countries to line up at his clinic for their prescriptions. Many of these patients would go on to abuse or sell the pills. Furthermore, Gayden would work with patients for years without ever verifying any long-term medication necessities or consulting with them regarding their health.

The prosecutors’ sentencing memorandum requested the maximum guidelines penalty, citing the “egregious nature and scope of the defendant’s conduct, as well as his abuse of public trust.”

“The defendant was the center of a high-volume and prolific pill mill operation that was responsible for the dispensing of large volumes of opioids into the Brevard County community during the crest of the opioid crisis in Florida,” the DOJ wrote. “The defendant’s conduct had a widespread impact on his local community, as well as the lives of his patients, several of whom died of drug overdoses while under the defendant’s care or thereafter.”

The court sealed Gayden’s own sentencing memorandum.

Exxon Pushes Supreme Court to Stop Climate Probe

By Emily Cox
exxon climate change
Exxon refinery (flickr/airguy1988)

Exxon Mobil Corp. asked the U.S. Supreme Court on Monday to review the Massachusetts’ high court’s decision not to halt the state attorney general’s investigation into the company’s climate change statements, asserting that its tenuous connections to the state aren’t sufficient to give its attorney general jurisdiction.

In its petition for certiorari, Exxon said that state Attorney General Maura Healey’s probe and the Massachusetts Supreme Court’s ruling upholding it highlights an essential and unresolved question that has split lower courts over when a court can properly assert specific jurisdiction. Furthermore, the energy giant argues that the probe is a clear violation of its due process rights under the Constitution.

Exxon Mobil, citing the Supreme Court’s 2017 ruling in Bristol-Myers Squibb v. Superior Court of California, maintains that Healey and the Supreme Judicial Court are sanctioning a far too “liberal” approach to specific jurisdiction, which may only be employed when the lawsuit “arises out of or relates to the defendant’s contacts with the forum.”

Exxon Mobil argued in Massachusetts court that Healey couldn’t assert personal jurisdiction over the Texas company simply because there are company-licensed gas stations in the state. Healey informed the company that her investigation was on the merits of potential violations of the states consumer protection law “through the marketing and/or sale of energy and other fossil fuel derived products.” However, Exxon countered that its advertising agreements with franchisees are not adequate enough to warrant the current investigation.

“In its brief analysis, the Supreme Judicial Court focused principally on potential ‘deceptive advertising to consumers,'” Exxon wrote. “But counsel for [Healey] had been refreshingly candid on that score, acknowledging that there was ‘nothing in the record … that indicates a specific advertisement to consumers’ concerning climate change, and thus nothing in the advertisements at issue that was itself deceptive.”

Exxon Says Jurisdictional Grounds Unrelated to Climate Probe

The energy company further noted that although its franchise brand fee agreements allow it to approve advertising, it has never actually exercised this right in Massachusetts.

Exxon also criticized the Supreme Judicial Court for its adoption of a “but-for” standard for personal jurisdiction. This standard allows for a court to consider a defendant’s state contacts, whatever they may be, as a “first step in a train of events” that eventually results in some injury to a plaintiff, “such that, but for the defendant’s contacts, the plaintiff would not have been injured.”

Massachusetts is not the only state that takes this approach to establishing personal jurisdiction. The Ninth Circuit and the Washington Supreme Court have established jurisdiction along these same lines. However, the company noted that the First, Third, Sixth, Seventh, and Eleventh circuits, as well as the Oregon Supreme Court take a decidedly stronger vantage point, ruling that something more than “but-for” causation is necessary before a court can assert specific jurisdiction.

Exxon Mobil said that these inherent differences in interpretation stem from the fact that the Supreme Court has never directly addressed the question and cited the court’s decisions in 1984’s Helicopteros Nacionales de Columbia v. Hall and 1991’s Carnival Cruise Lines v. Shute.

“That question is what type of relationship is required between a plaintiff’s claims and a defendant’s forum contacts in order to satisfy the constitutional requirement that the claims arise out of or relate to the contacts,” the petition said. “The court should make clear that an unexercised contractual right regarding a third-party’s in-forum behavior does not constitute a contact for purposes of the specific-jurisdiction inquiry.”

Exxon Climate Change Probe Raises Due Process Issues

Exxon indicates that the Supreme Judicial Court’s decision also raises serious due process issues. Referencing Bristol-Myers, the company asserted that the high court “has emphasized the need to delineate appropriate exercises of specific jurisdiction from those that are ‘loose and spurious forms of general jurisdiction.'”

The company said that the Massachusetts’ court findings ignored the high court’s previous statements that indicate that to establish a “minimum” contact with a state, a plaintiff must show “that the defendant has purposefully directed his activities toward the forum, and … that the litigation arises out of or relates to those activities.”

“While this court has not articulated a definitive test for relatedness, it has sought to ‘ensure that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts,'” Exxon wrote.

The company also said that any connection between a defendant’s conduct and the state needs to be “substantial.”

Cigarettes and Asbestos Caused Fatal Cancer

By Emily Cox
kool cigarettes
flickr/Tim Vrtiska

During Friday’s opening statements, a Boston jury heard that RJ Reynolds and Phillip Morris cigarettes coupled with exposure to an auto parts company’s asbestos-laden brakes caused a man to develop fatal lung cancer.

Plaintiff Joanna Summerlin’s council kicked off the trial before Middlesex County Superior Court Judge Heidi Brieger by telling the jury that the plaintiff’s late husband, Louis Summerlin, became addicted to cigarettes during a time when tobacco companies knew, and actively concealed, that their products caused cancer. The combination of smoking and exposure to Hampden Automoive Corp.’s brakes multiplied both products’ cancer-causing effects.

During their opening statements, the tobacco companies’ attorneys countered that Summerlin, by his own admission, chose to smoke because he enjoyed it and that he could quit smoking when he had proper motivation.

Summerlin’s lawyer described how his client’s husband, who died in 2015 at age 73, began smoking cigarettes when he was a teenager, outlining how he didn’t initially take to cigarettes until he tried a menthol brand, saying the cigarettes’ additives gave a cooling, numbing sensation that “made it easier for teenagers like Mr. Summerlin to become initiated as smokers.”

The attorney went on the detail internal documents that show Brown & Williamson, the company responsible for Kool cigarettes that has since merged with Reynolds, clearly knew smoking caused lung cancer in the years Summerlin became addicted. Summerlin also smoked Philip Morris Marlboro Menthols.

According to the lawyer, Summerlin became deeply addicted to cigarettes, lighting one up each day “before his feet hit the floor,” adding that years before Summerlin filed his lawsuit, his primary care doctor noted that the man “cannot stop. He has tried all aids to stop smoking.”

Cigarettes and Asbestos Exposure Contributed to Cancer

Although Summerlin quit smoking in 2009, his lung cancer diagnosis “shattered” his life with his wife. The couple’s attorney indicated that the jury would see a videotaped deposition testimony from Summerlin, who originally filed the lawsuit in the months before his death.

The lawyer also emphasized Hampden’s role, telling the jury that Summerlin worked as an auto mechanic for 25 years, being continually exposed to asbestos-containing Hampden brake linings. He asserted that the company could and should have easily discovered the asbestos exposure risks when it was distributing its products. He went on to say that asbestos and cigarettes caused Summerlin’s lethal disease.

“The two interact, there’s a synergy. The more asbestos you’re exposed to, the greater your risk for developing lung cancer from smoking; the more smoking, the greater your risk for developing lung cancer from asbestos,” he said.

During his opening statement, a Phillip Morris’ lawyer told the jury that the plaintiff’s attorneys would not present any evidence, including Summerlin’s own testimony, that shows tobacco companies influenced his decision with their fraudulent information or any other information they disseminated.

According to the defendants’ attorney, Summerlin was a “smart and strong-willed person,” who enjoyed smoking and chose to do so for years after warning labels began appearing on cigarettes and even after he had decided to quit for a short time when he felt cigarettes were affecting his stamina.

The lawyer also pointed out that Summerlin didn’t smoke Philip Morris cigarettes until the 1980s when he tried a coworker’s Marlboro Menthol. At this point, cigarette packs had warning labels, including one saying smoking causes lung cancer.

Defendant attorneys focused on Summerlin’s “personal choice” to begin smoking, and to keep smoking, despite knowing the risks.


Biotech Executive Pleads Guilty to $12.7M Painkiller Fraud

By Emily Coxpainkiller fraud

One of three biotech executives facing federal painkiller fraud charges pled guilty Friday to helping a company fraudulently raise roughly $12.7 million by buying stock shares at artificially elevated prices to drive the value higher.

PixarBio Corp.’s Kenneth Stromsland, 46, entered a guilty plea to one count of securities fraud and one count of obstruction of an agency proceeding. Prosecutors indicate that PixarBio CEO Francis M. Reynolds used Stromsland to artificially create market interest in the company by buying stock at the highest price possible. Reynolds also falsely advertised the company’s Neurorelease painkiller system as an end to morphine and opioid addiction.

At Reynold’s direction, Stromsland made numerous purchases of PixarBio stock to defraud investors. He further conspired with Reynolds to lie to the Securities and Exchange Commission (SEC) when it launched its investigation into the Medford, Massachusetts, company in 2017.

“Do you dispute any of that?” District Judge Douglas P. Woodlock asked after the federal prosecutor had finished outlining the charges against Stromsland.

“No, I don’t,” Stromsland replied.

“Is that what happened?” the judge asked.

“Yes, it is,” Stromsland said.

Painkiller Fraud Scheme

Stromsland is the first to own to the painkiller fraud scheme. The SEC estimates that the plot cost at least 200 victims $12.7 million in PixarBio investments. A friend of Reynolds, M. Jay Herod, 51, who also purchased company stock, is also facing painkiller fraud chargers. Reynolds and Herold are each facing securities fraud and manipulative trading allegations. The pair pled not guilty at the initial federal court appearance in April. Stromsland was arrested in New York.

The SEC filed a parallel lawsuit against all three executives and PixarBio in Massachusetts federal court and asked the court to freeze their assets the same say the three were taken into custody.

Stromsland faces up to 20 years in prison on the securities fraud count, as well as another five years for obstruction. The court did not set his sentencing date during Friday’s hearing.

FBI special agent Jennifer Kennan’s affidavit indicates Reynolds made elaborate claims that NeuroRelease would end “thousands of years of morphine and opioid addiction.”

Kennan also said Reynolds emailed investors in December 2015 with claims that his own Reynolds School of Business had developed “the cure for paralysis in humans.”

However, prosecutors say that this was far from the truth. In fact, Keenan and the charging documents indicate that the device was not even ready for clinical trials. Furthermore, Reynolds was not the biotech expert he claimed to be. Contrary to his assertions to investors from 2015 to 2017, Reynolds was not a co-inventor of the spinal support implant, NeuroScaffold. He also claimed to be in the good graces of his former employers. However, InVivo Therapeautics forced him into resignation.

Prosecutors say that the trio began making deceptive trades in late 2016 to simulate market interest and drive stock prices.

High-Risk Heart Devices Receive FDA Approval Despite Scarce Scientific Evidence

By Emily Cox
heart devices
flickr/Christopher Mance

A new study confronts significant issues with medical device approval in the US, underlining more than a dozen instances federal regulators approved heart devices under its “Priority Review” process that were later found to be dangerous and ineffective.

JAMA Internal Medicine published the study August 27. University of California San Francisco School of Medicine researchers found that the FDA relied on studies with little scientific evidence to establish cardiovascular devices were safe or even effective before approving them through its “Priority Review” program.

The report analyzed randomized clinical trials manufacturers performed to provide evidence for premarket approval from the FDA for heart devices. Researchers found that, as devices move through the Priority Review program, the quality and thoroughness of scientific evidence to justify approval of products is not known, let alone evaluated.

The researchers evaluated evidence manufacturers provided federal regulators for 14 high-risk cardiovascular devices that received FDA approval under its Priority Review program between 2007 and 2017. During that time, federal regulators approved a total of 29 devices under the fast-track program. Of these, 14 were high-risk heart devices. Manufacturers used a total of 18 studies to support that these devices were safe and effective.

The findings indicate that none of the 18 studies were double-blind trials. This research benchmark is generally considered essential for high-quality data. At least 13 of the studies used surrogate end points. Furthermore, none of the studies were large-scale, enrolling only an average of 500 patients.

Heart Devices Point to Regulatory Failings

In total, the FDA convened nine safety expert advisory panels to review the effectiveness and safety of the heart devices. Four of these panels found that the devices were safe. However, they did not find the devices were effective in treating the cardiovascular problems at issue. But, regulators pushed the devices through anyway. For 13 of the 14 devices, the FDA asked for post-approval studies for further information.

As of May 23, 2018, there have been two Class I and 13 Class II recalls for six of the heart devices. Earlier this year, Medtronic heart implants, which were among the products covered in the recent report, were recalled because of defects that stopped the devices from providing life-saving shocks.

Study authors warn that the majority of the recalled heart devices received approval based on a single nonrandomized, non-blinded study. They are calling for regulators to make some changes to Priority Review during premarket approval.

“To lower the odds of recall the new program should demand high-quality pre-approval data, larger scale studies, and longer followup,” researchers wrote.

Study Authors Call for Regulatory Changes

The push for high-quality research for approvals stands diametrically opposed to the FDA’s recent efforts to make medical device approvals ever easier and faster. This year the FDA also announced an action plain to spur innovation by further streamlining the premarket and post-market process.

Bringing devices to market faster along with the integration of the premarket and post-market processes only deepens already substantial concerns that patients will pay the ultimate price for devices coming to market through a rushed and ineffective approval process.

Consequently, researchers are calling for the FDA to take action to ensure that post-market studies are completed within a specified time limit. This way, if any problems are revealed, like those that could warrant a recall, the post-market study might help pick up these problems before a significant number of patients are harmed.


Insys Prosecutors Push Back Against Expert Witness Disqualification

By Emily Cox
Insys Prosecutors
flickr/Bryan Furnace

The founder of Insys and several former top executives at the opioid company are accusing a doctor of double-crossing them by agreeing to testify for the federal government in an upcoming racketeering trial after meeting with the pharmaceutical company’s attorneys on multiple occasions. Consequently, the company is moving for the court to disqualify the expert from testifying; however, the federal government fought back Tuesday, saying that the doctor should still be able to take the stand for Insys prosecutors.

The government retained Dr. Christopher Gilligan as one of numerous pain management experts to possibly testify against Insys’ founder, billionaire John Kapoor, and his predecessor as CEO, Michael Babich, who Insys prosecutors allege created a fraudulent speaker program to conceal illegal kickbacks for doctors to prescribe the powerful Schedule II narcotic Subsys and illicitly boost sales. According to Insys executives, Gilligan met with their attorneys several times before the government retained his assistance. The executives further assert that Gilligan learned confidential information about their case and defense strategy during these meetings.

However, Insys prosecutors pushed back Tuesday, telling District Judge Allison D. Burroughs that the court should allow Gilligan to testify, arguing that the information he learned from defense lawyers wasn’t significant enough to substantiate an agreement of confidentiality.

“The lack of any confidentiality agreement is a telling factor, which weighs heavily against the defendants’ claims,” the government stated in its opposition. “The defendants do not assert that they advised, or even requested, that Dr. Gilligan keep his interactions with counsel confidential.”

“Despite that omission, defense counsel claim that they ‘repeatedly’ held ‘privileged calls and meetings’ with the witness during which they shared confidential information,” prosecutors continued. “That experienced counsel failed to contemplate the need to simply request confidentially from a possible expert strongly suggests confidentiality was simply unnecessary.”

Insys Prosecutors Opposition to Expert Disqualification

Gilligan, who the government has retained in other cases, told Insys prosecutors about his meetings with defense counsel when the government first reached out to him in July. According to Gilligan, defense lawyers asked him about off-label marketing and if he had prescribed Subsys. Prosecutors argue that these lines of discourse do nothing to tip the defense’s hand. Furthermore, if they do, then the defendants should have exercised more caution.

“This court should not reward the defendants’ failure to protect whatever confidential information they believed they needed to protect, particularly from a doctor whom the government has previously called upon,” the opposition stated. “Such a ruling would be contrary to the interests of justice.”

Insys prosecutors conceded that confidentiality isn’t exclusive to having an agreement. However, they added that it is ““also true that this court can reject any assertion that it is objectively reasonable to believe that a confidential relationship existed where experienced counsel, from respected law firms, failed even to mention confidentiality in five different meetings with the witness.”

Insys Executives Motion to Disqualify

The defendants’ motion to disqualify indicates that Gilligan met with their lawyers repeatedly, discussing confidential case strategy with them. Gilligan informed them that he had not spoken about the case with the government, saying he would be open to acting as a defense witness. In May, Gilligan notified them that his employer would not allow him to serve as a witness in the case and even offered to help find a replacement.

After discovering that the government had named Gilligan as a potential expert, the executives tried to figure out what happened. They said they informed the government about their past involvement with Gilligan and asked for assurance that the government would drop him as an expert witness. According to the defendants, the government told them that it would not communicate with the doctor until the court settled the matter. However, the government wrote in a Friday letter that an assistant US attorney had spoken with the doctor five days before its expert witnesses’ disclosure deadline and that Gilligan had told the government lawyer he had previously met with the defendants’ attorneys.

The Insys prosecutors included a footnote in Tuesday’s filing, saying that they would have no further contact with Gilligan until the court decided on the motion. If the court opts to remove Gilligan as a witness, prosecutors requested 60 days to locate a replacement.

Insys Racketeering Indictment

The Insys indictment claims that at least nine doctors and one nurse took bribes to distribute the fentanyl-based spray. The company organized parties or intimate meetings to disperse these payments, cloaking them as speaking events to people who did not need it to treat breakthrough cancer pain, which is the only FDA-approved use for Subsys. Company executive Michael J. Gurry and Babich reportedly directed the Insys call centers to fraudulently tell insurance companies that patients needed the spray to get them to cover the prescription cost.

Federal prosecutors say Kapoor and Baich hired four sales executives to network with prescribers and launch the plan into action. Alec Burlakoff, Sunrise Lee, Joseph A. Rowan, and Richard M. Simon are the other defendants in the case.

The executives claim the conspiracy is actually a series of perfectly legal marketing strategies that “safe harbors” laws specifically protect. They also argue the indictment fails to sufficiently show that the executives targeted doctors they knew would break the law.

State Farm Agrees to $250M Settlement in Judge Rigging Trial

By Emily Cox
State Farm
flickr/State Farm

State Farm agreed to pay $250 million Tuesday to settle a lawsuit over the insurance company secretly working to help elect an Illinois Supreme Court Justice to overturn a billion-dollar verdict against it.

The deal was overseen by District Judge David Herndon from the bench, ending more than 20 years of litigation on the same day the trial was to begin.

The court had scheduled opening arguments to begin Tuesday, six years after plaintiffs filed the current Racketeer Influenced and Corrupt Organizations (RICO) Act class action, and more than two decades after a group of plaintiffs first came forward against State Farm, alleging the insurer violated policy contracts by refusing to replace crash-damaged vehicle parts with Original Equipment Manufacturer (OEM) parts in favor of less expensive replacements.

In 1997, a jury awarded a class of 4.7 million policyholders a staggering $1.186 billion, including disgorgements and punitive damages. However, the court later reduced this award to $1.05 billion.

Eight years later the Illinois Supreme Court would overturn the verdict entirely. This was done, in part, through finding that the issue of “uniform contractual interpretation” across State Farm policies was never adequately addressed during the class certification stage. However, plaintiffs indicate that State Farm in-house attorney William Shepherd helped coordinate a well-funded effort to get Judge Lloyd Karmeier on the state Supreme Court. Furthermore, experts further allege that the deceit went back more than a decade with the insurance company’s outside counsel in regard to State Farm’s connection to the Judge Karmeier campaign.

State Farm Strides to Get Karmeier on the Bench

Following oral arguments in May 2003, Judge Karmeier, a longtime Illinois circuit judge, won in a close race for a vacancy on the state’s Supreme Court. It was the most expensive judicial election in US history at the time. Several months after he joined the bench, Judge Karmeier cast a decisive vote in State Farm’s favor to get the billion-dollar verdict overturned.

Class action plaintiffs claim that, between the oral arguments and the court tossing the verdict, Shepherd, an in-house lawyer-lobbyist for State Farm’s Bloomington headquarters, along with other State Farm insiders, recruited Justice Karmeier to run, covertly managing his campaign and donor network and concealing millions in donations through various groups, including the US Chamber of Commerce, to win the election for Justice Karmeier so that he could help the company overturn the massive judgement.

“Of course, there was no guarantee for State Farm that the appeal would not be decided before the [Karmeier election in November 2004] but the risk — a $2 to $4 million investment for a possible $1.05 billion return — was sufficiently minimal to make it a worthwhile gamble,” the policyholders’ 2012 RICO complaint stated.

Trial themes were going to include a complex money trail and emails that show Judge Karmeier was being kept up-to-date by defendant Edward Murnane about who was financing his campaign. Murnane was the president of the Illinois Civil Justice League. Shepherd founded this organization as a vehicle for State Farm’s plan.

Rather than face the policyholders’ allegations in court, State Farm reached the settlement just prior to opening arguments were to begin.


McAfee Exposes Medical Device Cybersecurity Weaknesses

By Emily Cox
flick/Fotos GOVBA

McAfee researchers recently hacked into a central patient monitoring station for medical devices to demonstrate potential cybersecurity weaknesses.

The McAfee team performed the demonstration this past month at Defcon, a large annual hacker convention in Las Vegas, Nevada. Researchers simulated a patient whose heartbeat had flatlined to show how they could alter patient vital signs.

While researchers did not perform the demonstration remotely, they warned that it could be done from great distances as long as the hospital’s system is connected to the internet.

The team highlighted the security weakness just ahead of the new McAfee Advance Threat Research Lab’s opening in Oregon. The facility will also be used to demonstrate potential cybersecurity threats to all forms of new technology.

Two years ago, numerous U.S. hospital systems were hacked, infecting their systems with malware that stopped staff from communicating with the computers. The hospitals paid ransom through bitcoin to regain control.

In at least one instance, when a hospital refused to pay the ransom, administrators had to shut down portions of the facility until they could regain control. Consequently, they had to move some of the patients, impacting care.

America isn’t isolated in its vulnerability to medical device cybersecurity risks. Hackers have broken into health trusts in the U.K. and Germany, as well. In most cases, the hospitals end up paying bitcoin ransoms to protect patients in their care. Some hospitals have even hired law firms to buy bitcoin in case hackers hit them with malware, which is becoming known as ransomware.

FDA Action on Medical Device Cybersecurity

In 2016, the FDA issued new guidance on medical device cybersecurity. The document indicated that manufacturers need to detect and monitor potential cybersecurity vulnerabilities in medical devices, as well as research the level of vulnerabilities and risks to patients and establish a protocol for sharing cybersecurity information among manufacturers to limit hacking risks.

The agency indicated that manufacturers should design medical device software with upgrading capabilities to be able to combat newly discovered vulnerabilities for the device’s entire lifespan. The FDA warned that products that cannot be upgraded will become obsolete quickly and put patients in harm’s way. The agency indicates that these measures will allow manufacturers to ensure medical device safety and effectiveness at all stages of deployment and distribution, as well as encourages continuous quality improvement.

Medical Device Cybersecurity Concerns

Medical cybersecurity concerns have been escalating over the past few years as vulnerabilities to healthcare organizations’ record systems and medical devices continue to surface.

Since 2014, the Department of Homeland Security (DHS) has actively investigated at least two dozed cases of probable cybersecurity flaws in hospital equipment and medical devices. According to DHS, if the medical field does not take preventative actions to strengthen its cybersecurity issues, hackers could exploit these vulnerabilities, and patients will pay the ultimate price.

Department of Health and Human Services (DHHS) manager Jason Lay says the medical field’s vulnerabilities are a significant danger. Lay indicates the possibility of hacks to medical devices are an extraordinarily real possibility, saying that hackers could potentially exploit medical devices to gain access to healthcare organizations’ health record systems.

Furthermore, a demonstration at the 2012 San Francisco RSA security conference showed researchers could hack medical devices like insulin pumps from as far as 300 feet away. Researchers further showed how hackers could take control of insulin devices remotely, overriding them to deliver lethal doses of insulin to patients without any notification.

Since the White House issued Executive Order 13536 in 2013, the FDA has worked on improving the medical field’s cybersecurity. The Order called on the private and public sectors to collectively strengthen the gap in cybersecurity infrastructures. In October 2014, the agency issued its first guidance, recommending medical device manufacturers to include strong anti-hack programs during the design stages of development.




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