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A federal jury in Dallas ordered Johnson & Johnson and one of its subsidiaries to pay more than $1 billion in damages Thursday for “despicable and vile conduct” in selling Pinnacle metal-on-metal hip implants that they knew were seriously defective, reports The Dallas Morning News.

The New Jersey pharmaceutical and medical device maker and its DePuy Orthopaedics subsidiary must pay damages to six California plaintiffs who say they suffered serious chronic and painful medical problems caused by the device.

“The trial was the third in a series of bellwether cases being held by U.S. District Judge Ed Kinkeade,” reports Mark Curriden of Texas Lawbook for The Morning News. “More than 8,900 cases against Johnson & Johnson and DePuy have been filed across the U.S. The lawsuits have been consolidated in what is known as multi-district litigation.”

Read The Morning News article.

U.S. prosecutors are bearing down on generic pharmaceutical companies in a sweeping criminal investigation into suspected price collusion, a fresh challenge for an industry that’s already reeling from public outrage over the spiraling costs of some medicines, reports Bloomberg.

David McLaughlin and Caroline Chen write that the antitrust investigation by the Justice Department spans more than a dozen companies and about two dozen drugs. A grand jury is examining whether some executives agreed with one another to raise prices, and the first charges could emerge by the end of the year, sources told the reporters.

“Among the drugmakers to have received subpoenas are industry giants Mylan NV and Teva Pharmaceutical Industries Ltd. Other companies include Actavis, which Teva bought from Allergan Plc in August, Lannett Co., Impax Laboratories Inc., Covis Pharma Holdings Sarl, Sun Pharmaceutical Industries Ltd., Mayne Pharma Group Ltd., Endo International Plc’s subsidiary Par Pharmaceutical Holdings and Taro Pharmaceutical Industries Ltd.,” according to the report.

Read the article.

The Society of Corporate Compliance and Ethics and the Health Care Compliance Association recently conducted a survey to gauge the effectiveness of compliance programs at preventing incidents from occurring.

The SCCE has made the survey results available for free downloading.

For any compliance program, a critical measure of success is its ability to prevent incidents from occurring. Determining how many events are avoided is difficult, though, the SCCE says on its website. Employees rarely come forward to report, “I was about to commit a felony and then remembered that compliance training I received.”

Yet, near misses do occur and can provide proof of a compliance program’s effectiveness. To gain a better understanding of the effectiveness of compliance programs at preventing problems, in the third quarter of 2016 the Society of Corporate Compliance and Ethics and the Health Care Compliance Association jointly fielded the survey of compliance and ethics professionals.

Download the survey results.

Elizabeth Holmes

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Partner Fund Management, a San Francisco-based hedge fund that reportedly wrote out a $96 million check to Theranos in 2014, is now suing the blood-testing startup and its founder, Elizabeth Holmes, reports TechCrunch.

In its filing, the plaintiff says Theranos duped it into investing “through a series of lies, material misstatements, and omissions,” and accusing the firm of engaging in “securities fraud and other violations by fraudulently inducing” it to invest and to maintain its investment in the company reports Connie Loizos.

Reports says that the plaintiff claims says Holmes and another former Theranos executive blatantly lied to the hedge fund by claiming it had developed “proprietary technologies that worked” and that it was nearing regulatory approvals.

Read the article.

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Mylan NV has announced it will pay $465 million to settle questions of whether it underpaid U.S. government healthcare programs by misclassifying its EpiPen emergency allergy treatment, Reuters is reporting. The announcement comes as the company is under intense scrutiny after a series of drastic price increases.

“Mylan has been lambasted by consumers and lawmakers for raising prices on the lifesaving EpiPen sixfold to over $600 for a package of two in less than a decade, making the devices unaffordable for a growing number of families,” writes Deena Beasley.

At issue is whether Mylan made more money on EpiPen than warranted from state Medicaid programs by having it classified as a generic product. That classification yielded much smaller rebates to the government health plans. Beasley explains that the Medicaid rebate for a generic prescription drug is 13 percent, compared with a minimum 23.1 percent for a branded drug.

Read the article.

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A law firm in Montgomery, Ala., says it received nearly 26,000 phone calls from people inquiring about a possible link between talcum powder and ovarian cancer after its clients won a total of $127 million in two verdicts earlier this year, reports AL.com.

Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. reported 12,221 open cases from the 25,916 calls it had received as of Thursday. In a statement, the firm said it now has 867 cases filed nationwide against Johnson & Johnson regarding talcum powder products, which plaintiffs have claimed are linked to cases of ovarian cancer.

“In February a City of St. Louis Circuit Court jury awarded the family of Jacqueline Fox $72 million, finding Johnson & Johnson liable for her ovarian cancer that led to her death,” reports Kent Faulk of AL.com. “In May another jury in St. Louis found Johnson & Johnson liable for ovarian cancer linked to genital use of its talcum powder products and awarded a South Dakota woman, Gloria Ristesund, $55 million.”

“Though it’s been discussed as a hypothesis and carefully studied for decades, there is no proven linkage between talc and ovarian cancer,” Gene Williams, outside counsel for Johnson & Johnson, told Legal NewsLine.

Read the article.

Elizabeth Holmes

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Fox Business is reporting that Theranos Inc. has withdrawn its request for emergency clearance of a Zika-virus blood test after federal regulators found that the company didn’t include proper patient safeguards in a study of the new test.

“The move is another setback for the Palo Alto, Calif., company as it tries to recover from crippling regulatory sanctions that followed revelations by The Wall Street Journal of shortcomings in Theranos’s technology and operations,” Fox Business reports. “Theranos has said it is appealing.”

Elizabeth Holmes, founder of the troubled company, recently announced development of a new blood-testing device that she said was designed for use outside a clinical laboratory and could run accurate tests from a few drops of blood.

Read the article.

Health officials reported the first spread of the Zika virus from state to state when a Texas man got the disease after visiting a section of Miami where mosquitoes have been spreading Zika.

The Zika virus can cause brain damage and other birth defects in infants if the mother is infected during pregnancy. While its dangers first appeared in Brazil, its spread to the U.S. has magnified questions about risk, including to workers whose employers want them to travel.

For example, what steps are employers legally required to take if they need an employee to travel to a hot zone? What is the liability if an employee contracts the disease, which also can be sexually transmitted and spread when a mosquito bites an infected person and carries it to someone else?

Androvett Legal Media & Marketing has posted an article on its website quoting Justin Markel, a labor and employment lawyer in the Houston office of Roberts Markel Weinberg Butler Hailey PC:

“Under the Occupational Safety and Health Act, employees may refuse to work in certain circumstances when working conditions are dangerous. Among other things, the employee must genuinely believe that an imminent danger exists, and there must be a real danger of death or serious injury. Because of the way Zika is transmitted and the availability of preventive measures, it is unlikely that an employee could refuse to travel on this ground – unless the employee is pregnant.

“However, employers should be cautious when an employee refuses such a work assignment. An employee could argue that she is protected by OSHA and is shielded from adverse employment actions.”

Markel says that employer liability depends in part on participation in the worker’s compensation system. In Texas, employers have the option of whether to participate, he notes. “If the employee is covered by workers’ comp insurance, and if it could be proven that the employee contracted Zika while working, then the employee may have a workers’ comp claim. That would also mean that workers’ comp benefits are the employee’s exclusive remedy.

“If the employer does not subscribe to workers’ comp, then the employer may be liable for failing to provide a safe work environment if the employer does not take reasonable precautions to protect against Zika exposure,” he says.

Markel says employers with workers in affected areas should focus on educating their workforce about precautionary measures. OSHA has published helpful guidance here. Employers should try to limit standing water near worksites, and employees working outside should use mosquito repellant and wear long sleeves and pants.

CNN is reporting that Kentucky’s attorney general is suing health-care giant Johnson & Johnson for millions of dollars, saying the company “concealed and misrepresented” the risk of its transvaginal mesh products to doctors and patients.

In the lawsuit, AG Andy Beshear alleged Johnson & Johnson’s medical device company, Ethicon, didn’t provide enough information about possible adverse effects to more than 15,000 women in Kentucky who had the transvaginal mesh implanted.

The company called the suit justified.

“The lawsuit says women have reported chronic pelvic pain, pain associated with intercourse and/or the loss sexual function, and other health problems,” according to the report by Steve Almasy.

Read the article.

Gilead Sciences Inc. is entitled to receive the attorney fees it incurred related to hepatitis C patent litigation with drugmaker Merck & Co Inc., a U.S. district judge has ruled, reports Reuters.

“In June, Gilead was freed from paying up $200 million in damages for infringing two Merck patents related to Gilead’s blockbuster drugs Sovaldi and Harvoni, after a U.S. judge found a pattern of misconduct by Merck including lying under oath and other unethical practices,” writes Anya George Tharakan.

The court found that Giliead could receive relief from the cost of its legal fees in defending against the Merck challenge.

Read the story.

The operator of 12 hospitals and more than 200 other treatment centers in Chicago and central Illinois has agreed to the largest settlement to date with the Office for Civil Rights for multiple potential violations of the Health Insurance Portability and Accountability Act, reports Kelly A. Leahy of Shumaker, Loop & Kendrick.

The agreement will cost Advocate Health Care Network $5.5 million and force Advocate to adopt a multi-year corrective action plan that stemmed from three incidents reported to OCR in 2013.  The breaches involved Advocate’s medical group subsidiary, Advocate Medical Group, which employs more than 1,000 physicians. The incidents that cost Advocate involved data breaches involving unencrypted devices and unauthorized access to a network.

In the article, Leahy offers some suggestions for what covered entities and business associates can do to prevent costly fines and burdensome settlements.

Read the article.

Although Theranos’s history — which includes several administrative penalties for the troubled blood-testing company — has received an outsize amount of media attention, its experience with regulatory agencies highlights several important issues for start-up and emerging health care entities, writes Robert E. Wanerman in Epstein Becker & Green‘s Health Law Advisor blog.

He discusses four major questions raised in this type of case, with these headings: What Do Regulators Want?, What Do Health Care Providers and Payors Want?, Who Is Investing in the Venture?, and Who’s on Board?

On the first point, he wrote that “even in an environment that encourages innovation, health care organizations must understand the scope of regulatory oversight at the federal and state levels, and the range of remedies available to regulators for noncompliance. Every organization should also have a protocol in place for responding to regulatory inquiries or inspections.”

Read the article.

Two former executives of Acclarent Inc, a medical device company bought by Johnson & Johnson in 2010, were convicted on Wednesday by a U.S. jury on charges of promoting a product for an unapproved use, Reuters is reporting.

Prosecutors said former Acclarent Chief Executive William Facteau and former Vice President of Sales Patrick Fabian were found guilty in federal court in Boston of 10 misdemeanor counts of violating the U.S. Food, Drug and Cosmetic Act. The counts each carry a maximum prison sentence of one year.

But the jury acquitted the two defendants of felony charges of wire fraud and conspiracy, finding they did not act with intent to defraud or mislead.

“In an indictment unsealed last April, federal prosecutors said that beginning in 2006 or earlier, Facteau, 47, and Fabian, 49, promoted Acclarent’s Relieva Stratus Microflow Spacer device to deliver steroid medications to patients’ sinuses, though it was only approved by the U.S. Food and Drug Administration for keeping sinuses open,” reports Brendan Pierson for Reuters.

Read the article.

The U.S. Department of Justice has filed lawsuits to block the proposed mergers of four of the nation’s five biggest health insurers, reports The New York Times.

The proposed mergers involve Aetna and Humana, and Anthem and Cigna.

U.S. Attorney General Loretta E. Lynch said the proposed mergers “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”

“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.

“The companies responded by vowing, in varying degrees, to fight the government’s challenge,” report Leslie Picker and Reed Abelson. “Aetna, which had hoped to gain an advantage by being the first to reach a deal, aggressively defended its proposed merger, which it contended was different from the larger Anthem-Cigna deal that followed.”

Read the article.

Theranos Inc.’s Chief Executive Officer Elizabeth Holmes was banned for two years from owning or operating laboratories by U.S. regulators, a major blow against the controversial blood-testing startup that’s come under scrutiny for risking patient harm with unreliable tests, reports Doni Bloomfield for Bloomberg Technology.

“The once high-flying Silicon Valley company was also penalized for an undisclosed amount and lost its eligibility to get payments from federal health insurance programs for lab services, according to a statement late Thursday from Theranos, citing a notice it received from the Centers for Medicare and Medicaid Services,” the report says. “The closely-held firm is shutting down its Newark, California, lab and plans to rebuild it, Holmes said.”

The company founded by Holmes at one time had a $9 billion private valuation, based on technology that it said would allow for cheap, less-painful blood tests processed with breakthrough analyzers. Regulators soon stepped in, citing violations that put patients’ health and safety at risk.

Read the article.

A federal judge found a pattern of misconduct by Merck & Co., including lying under oath and other unethical practices, freeing Gilead Sciences Inc from paying any damages for infringing Merck’s patents with its lucrative treatments for hepatitis C, Sovaldi and Harvoni, according to a Reuters report.

The ruling follows a March 24 jury verdict that ordered Gilead to pay $200 million in damages, based on findings that Merck’s patents were valid.

In this week’s ruling, U.S. District Judge Beth Labson Freeman said Merck deceptively used confidential information from Pharmasset, Inc, a company Gilead bought in 2011.

“Freeman also said Merck cannot enforce the patents because Merck’s own lawyer gave inconsistent and untruthful testimony during the trial. ‘Merck’s acts are even more egregious because the main perpetrator of its misconduct was its attorney,’ she said,” reports Andrew Chung.

Read the article.

Compliancy Group will present a complimentary webinar designed to give individuals and entities operating in the health care sector the skills they need to be prepared to identify, respond and manage data breaches in a timely, efficient and compliant manner.

The event will be Wednesday, June 15, beginning at 2 p.m.

“Data breaches are becoming more and more common among health care providers, payers and their vendors,” the company says on its website. “Some estimates indicate that one-third of all Americans had their health information breached in 2015 alone, and data breach costs are approaching $250 per affected individual – not including the million dollar penalties with government regulators have recently issued.

This webinar will give listeners the tools they need to develop a data breach plan to protect their organization.

Register for the webinar.

Foley & Lardner LLP announced that Dana Lach has returned to the firm’s Health Care Finance, Public Finance and Finance & Financial Institutions Practices in the Milwaukee office.

In a release, the firm said Lach has extensive experience counseling health care and other nonprofit organizations, including colleges and universities, in tax-exempt and taxable bond transactions, commercial loans, non-traditional financing products such as commercial paper programs and securitizations, and derivative transactions. Lach regularly serves as counsel to investment banks, purchasers and commercial banks in connection with tax-exempt and taxable financing transactions. Lach’s participation as borrower’s or underwriter’s counsel on more than 150 securities transactions has totaled in excess of $20 billion.

“Dana’s deep experience structuring complex securities transactions across many public sectors, particularly the health care industry, will play a key role as we work to sustain and grow our established public finance bench,” said Laura Bilas, chair of Foley’s Public Finance Practice.

Lach has worked on post-issuance compliance, including ongoing tax, covenant and disclosure compliance. She has helped develop policies and procedures for both tax and primary and secondary market disclosure requirements and has provided guidance on remedial actions for changes in use of bond financed facilities and information reporting for the U.S. Internal Revenue Service Form 990, Schedule K.

“We are thrilled to welcome Dana back to Foley. Her immense knowledge in the health care, nonprofit and municipal financing arenas will contribute vastly to our existing and expanding client base,” said Linda Benfield, managing partner of Foley’s Milwaukee office.

Actiance, a provider in communications compliance, archiving, and analytics, has announced the Actiance Platform for the healthcare and pharmaceutical industries.

“Actiance’s next-generation, cloud-based, unified platform addresses new and existing regulatory retention and security and privacy requirements, while reducing the risk and expense of costly eDiscovery and compliance activities,” the company said in a release. “With the Actiance Platform for the healthcare and pharmaceutical industries, organizations can embrace new communications channels while protecting data and ensuring compliance.”

The release continues:

Similar to financial services, the healthcare and pharmaceutical industries are highly regulated and highly litigious. The introduction of new regulations, constant changes to existing protocols, and the explosion of collaboration technology has necessitated healthcare and pharmaceutical companies to update their information management strategies. Regulations, including the 2009 American Recovery and Reinvestment Act (ARRA), the 2013 HIPAA Omnibus Final Rule, the Affordable Care Act (ACA), and the Physician Payment Sunshine Act final rule (42 CFR Parts 402 and 403), govern processes like Electronic Health Record (EHR) adoption, Centers for Medicare and Medicaid Services (CMS) reimbursement, and document retention and management for everything from drug research and development to sales and marketing. Innovations, such as telemedicine and doctor-patient chat, led to laws for Protected Health Information (PHI) and Electronically Stored Information (ESI).

“Patients are taking greater control of healthcare decisions and increasingly demand real-time communications across new channels such as Skype and social media. However, due to regulatory and legal requirements associated with health-related data, the healthcare industry has been slow to respond. With the strain of new channels and huge increase in health data, existing record retention systems originally designed for email capture are reaching their breaking points,” Kailash Ambwani, CEO, Actiance. “The Actiance Platform empowers healthcare and pharmaceutical organizations to meet the needs of today’s patients without worrying about regulatory compliance. This solution is another step in the right direction as healthcare decision makers grapple with the growing demand for infrastructure that meets their needs and increased regulations.”

As new communications channels and networks become available to the healthcare and pharmaceutical industries, records management responsibilities become even more critical. Implementing new communications and social channels without the necessary safeguards and processes exposes firms to non-compliance with industry regulations, potential litigation, and an increased threat of security breaches and data leakage. Organizations risk steep fines and reputational damage without the proper processes, procedures, and technology in place to help manage these complex requirements.

The Actiance Platform for the healthcare and pharmaceutical industries provides:
A single point of control and security for regulated structured and unstructured content, with context, from a variety of sources, in real-time;
The ability to automatically meet regulatory compliance, data security, retention and disposition requirements for more than 70 communications channels;
Cost-effective and quick responses to eDiscovery requests, without impacting employees;
Access to employee identities and profiles maintained across enterprise and public social channels, including first-degree connections;
Increased employee productivity through automated capture, policy management, and archiving of various communications channels in one data repository;
Effective early case assessment with access to the complete archive of all relevant communications;
Automatic classification and tagging of Title 21 CFR Part 11 records based on custom lexicons; and,
Ensured compliance with FDA social media use guidelines by pharmaceutical sales and marketing departments

To learn more about the Actiance Platform, download our healthcare and pharmaceutical white papers.

Additional Information
Stay up to date with Actiance: http://www.actiance.com/blog
Become a fan of Actiance: http://www.facebook.com/actiance
Follow Actiance on Twitter: http://www.twitter.com/actiance

About Actiance
Actiance is the leader in communications compliance, archiving, and analytics. We provide compliance across the broadest set of communications and social channels with insights on what’s being captured. Actiance customers manage over 500 million daily conversations across 70 channels and growing. Customers include the top 10 U.S., top 5 Canadian and top 8 European and top 3 Asian banks. The Actiance advantage is customers stay ahead of compliance and uncover patterns and relationships hidden within their data. Learn more at www.actiance.com.

Actiance headquarters are in Redwood City, California. For more information, visit http://www.actiance.com or call 1-888-349-3223.

Theodore M. Sullivan has joined Quarles & Brady LLP‘s Washington, D.C. office as a partner in its Health & Life Sciences Practice Group.

Sullivan counsels and advises clients on Food and Drug Administration (FDA) regulations and matters related to over-the-counter drug regulation, drug exclusivity issues, food and dietary supplement labeling and advertising, and import detention of FDA-regulated products. He has worked closely with clients in guiding new drugs and medical devices through the FDA’s approval processes, and has assisted clients resolving conflicts with the agency regarding approved products.

He received his law degree, with honors, from Chicago-Kent College of Law and his bachelor’s degree from George Mason University.