Lawsuits Seek Justice for Opioid Epidemic

There’s no shortage of blame to go around for an opioid addiction crisis that is wreaking havoc on communities across the United States.

Drug overdoses now kill more Americans than car crashes. More than 60 percent of overdose deaths involve either prescription opioids or heroin, and half of opioid deaths involve a prescription painkiller such as methadone, hydrocodone, or oxycodone.

Drug overdoses now kill more Americans than car crashes.

Prescription opioid sales have quadrupled since 1999. This legal drug trade is made possible by a nexus of manufacturers, wholesalers, doctors, and pharmacies that have put into circulation enough opioid pills to provide every American adult with a bottleful. Many of these pills end up on the black market, where they enrich criminals and create more addicts.

Communities devastated by the addiction scourge are fighting back with legal action against the people who have facilitated the epidemic.

As several recent opioid lawsuits show, there are different legal approaches to address this multi-pronged problem.

Fight Back

Huntington, West Virginia Sues Wholesalers

West Virginia is at the epicenter of the opioid overdose crisis. Over the last six years, more than 1,700 West Virginians suffered fatal opioid overdoses, as the equivalent of 433 pain pills for every man, woman, and child poured into the state.

A lawsuit filed by the City of Huntington takes aim at three drug distributors—AmerisourceBergen Drug Corporation, Cardinal Health, and McKesson Corporation—whom the city blames for the pain pill deluge. The lawsuit also names a physician who allegedly wrote opioid prescriptions to city residents. (The doctor has admitted to fraudulently prescribing oxycodone pills.)

As the Huntington lawsuit notes, no single act—or actor—could sufficiently create the opioid epidemic. The current situation results from joint negligence by medical providers, pharmacies, and distributors.

“The citizens in our city, our region and our state are living in a nightmare that was avoidable,” said Huntington Mayor Steve Williams. “Profits have been pocketed while our community has been left with the fallout and stigma of the opioid epidemic.”

Washington Community Files Lawsuit Against OxyContin Maker

Across the country, some 2,500 miles from Huntington, the small city of Everett, Washington has filed a first-of-its-kind lawsuit against OxyContin maker Purdue Pharma for its alleged contribution to illegal pain pill trafficking.

Purdue is no stranger to lawsuits; the drugmaker has been sued hundreds of times for its role in the opioid crisis. But this suit, prompted by a Los Angeles Times investigation, is substantively different. It claims that Purdue knew about corrupt doctors and pharmacies providing drug dealers and addicts with OxyContin, but failed to stem the drug flow or alert law enforcement.

“We know this is a bold action we are taking, but it is the right thing to do.”

Everett officials say OxyContin is a major contributor to crime and a related heroin epidemic. According to the CDC, four out of five heroin addicts were originally addicted to prescription opioids.

Everett and the surrounding area has experienced a surge in opioid addiction, overdose deaths, crime, homelessness, and government resources spent addressing the crisis.

Purdue is accused of “intentional, reckless, and/or negligent misconduct” that has caused “substantial damages to Everett,” say lawyers for the city.

Everett Mayor Ray Stephenson says, “We know this is a bold action we are taking, but it is the right thing to do.”

The New Hampshire attorney general may be considering similar legal action against Purdue, but the company has so far succeeded in blocking requests for information on criminal opioid trafficking in the state.

McKesson Corp. Pays $150M Settlement Over Suspicious Pill Sales

Wholesaler McKesson Corporation—which agreed in 2008 to set up a system for detecting and reporting suspicious orders of oxycodone and hydrocodone—will pay federal authorities $150 million for its alleged failure to follow through on that agreement.

In Colorado, for example, McKesson processed more than 1.6 million drug orders from June 2008 to May 2013, but only reported 16 as suspicious (1 out of 100,000 orders)—all from a single customer.

“Given a chance to implement a more robust system for monitoring the distribution of these products, the company instead chose to ignore its own compliance regime in favor of a bigger bottom-line,” said U.S. Attorney Paul. J. Fishman.

McKesson—the nation’s largest drug distributor—has been a frequent opioid lawsuit target. Last year West Virginia filed suit against McKesson for allegedly delivering 100 million doses of hydrocodone and oxycodone to the state over a five-year period.

Are You a Victim of the Opioid Trade?

While some companies and individuals have profited from the opioids flooding our communities, many more lives have been ruined by addiction.

If you became addicted to prescription painkillers, ClassAction.com wants to hear from you. Get in touch with us to learn your rights and receive updates about the opioid epidemic and related lawsuits.

Why Do Americans Pay So Much for Drugs?

The high cost of drugs is one of the few issues able to muster bipartisan support on Capitol Hill.

President-elect Donald Trump took aim at the pharmaceutical industry during a January 11 press conference when he said that “[drug companies] are getting away with murder—pharma has a lot of lobbyists and a lot of power. There’s very little bidding on drugs; we’re the largest buyer of drugs in the world and yet we don’t bid properly.”

“Drug companies are getting away with murder.”

That same day, across the political aisle, Senator Bernie Sanders railed against the industry from the Senate floor, saying, “The American people pay the highest prices in the world for prescription drugs, millions cannot afford the medicine they desperately need, but at the same time the drug companies make out like bandits and their CEOs earn exorbitant compensation packages.”

In the past year, Mr. Trump, Mr. Sanders, and Hillary Clinton have all proposed a simple fix to lowering drug prices: allowing federally run Medicare to negotiate drug prices directly with manufacturers. It’s an idea that 93 percent of Democrats and 74 percent of Republicans support.

Contempt for Big Pharma could be the villain that brings together populist factions on the left and the right. But lowering drug prices is, unfortunately, not as simple as allowing Medicare price negotiations, for several reasons.

Drug Prices by the Numbers

Just how expensive are U.S. prescription drugs? The numbers below help bring into focus an issue causing widespread outrage:

  • Drug prices increased by double-digit increments from 2013-2015 and by nearly 10 percent from May 2015 to May 2016. To put this in perspective, the overall U.S. inflation rate is around 1 percent per year.
  • U.S. healthcare spending on drugs increased from around 7 percent in the 1990s to nearly 17 percent in 2015.
  • Some drug prices are seeing astronomical rises. For example, prices for more than 60 prescription drugs more than doubled from 2014-2016. EpiPen prices have increased 450 percent since 2007; HIV drug Daraprim went from $13.50 to $750 per pill overnight in August 2015; and the cost of topical gel Alcortin A increased 20-fold over two years.
  • About 2 in 10 Americans went without prescription drugs in 2015 because they couldn’t afford them.
  • A March 2016 Consumer Reports survey found that about 30 percent of Americans experienced higher out-of-pocket drug expenses in the last year, often resulting in household budget crunches.

Big Pharma’s Big Lobby

The pharmaceutical and health products industry leads all other industries in political lobbying, according to the Center for Responsive Politics.

In 2015, the industry spent $231 million attempting to influence lawmakers. There are more Washington, D.C. lobbyists working for drug manufacturers than there are members of Congress—in 2015, drug company lobbyists outnumbered Congress members 894-535.

Many drug company lobbyists are so-called “revolvers” who previously held government positions. Over the last 13 years, Mother Jones reports, more than 60 percent of the drug industry’s lobbyists passed through the revolving door from government to lobbying.

The drug industry is also among the leaders in federal political campaign contributions. Pharmaceutical manufacturers have been top House and Senate campaign contributors for years. In 2016, drug companies contributed more than $19.5 million to Congressional campaigns.

Industry spending increased in the years leading up to the 2003 passage of a Medicare prescription drug benefit known as Medicare Part D, which subsidizes prescription drug costs for Medicare beneficiaries. The program, however, contains an odd restriction: under the Part D law, the federal government is banned from negotiating drug prices with manufacturers.

Lifting this restriction and allowing Medicare to set (and theoretically, lower) drug prices is what Mr. Trump, Mr. Sanders, and others have proposed.

It’s common sense, considering that the U.S. government has significant bargaining power as the nation’s (and the world’s) single-largest pharmaceutical drug purchaser.

There are more lobbyists in DC working for drug manufacturers than there are members of Congress.

So why have numerous bills introduced over the last 13 years that would allow such negotiations failed? For the same reason that the Part D restriction was added in the first place: the drug industry lobbying machine.

“It’s Exhibit A in how crony capitalism works,” says Rep. Peter Welch (D-VT). “I mean, how in the world can one explain that the government actually passed a law saying that you can’t negotiate prices? Well, campaign contributions and lobbying obviously had a big part in making that upside-down outcome occur.”

Medicare Negotiations Not a Cure-All

Allowing Medicare to negotiate drug prices is a popular reform idea, but critics contend that removing the Part D negotiation ban wouldn’t necessarily produce the desired cost-reduction effect.

In fact, the Congressional Budget Office has found that letting Medicare negotiate drug prices would have a negligible fiscal impact.

Part of the reason is that if the government could negotiate drug prices, it would likely only focus on the most expensive Medicare-covered drugs, says John Rother of the project Campaign for Sustainable Rx Pricing.

Medicare Part D covers six “protected classes” of medications associated with complicated diseases such as HIV, cancer, and epilepsy. Part D allows patient access to “all or substantially all” medications within these classes. In other words, the government has less bargaining power for protected drugs because it doesn’t have the option to refuse coverage for them.

A similar requirement is found in private health care insurance laws that “force insurers to include essentially all expensive drugs in their policies, and a philosophy that demands that every new health care product be available to everyone, no matter how little it helps or how much it costs,” according to Peter B. Bach of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center.

Europeans pay half as much as Americans for prescription drugs.

Letting insurance companies say “no” to even a handful of drugs each year—a policy employed by many European countries—could substantially lower drug prices. Europeans pay about half as much as Americans for prescription drugs.

The U.S. Department of Veterans Affairs (VA) has more leeway to set its own formulary than Medicare does. The VA only covers about 59 percent of the 200 most popular drugs, compared to 85 percent for Medicare and 93 percent for some private firms. By one estimate, the VA pays 40 percent less than Medicare for drugs.

Narrowing consumer choice, however, is a politically salient issue. In 2014, when the Obama administration proposed removing some categories of drugs from the Part D protected list—at an annual savings of $1.3 billion—strong patient backlash squashed the plan.

By one estimate, the VA pays 40 percent less than Medicare for drugs.

There’s also a downside to price controls. If Medicare received the same discounts as the VA, it could save $155 billion over ten years. But since drug companies spend about one-quarter of revenues on research and development, this savings would take away about $36 billion from new drug development over a ten-year span.

Not All Drugs Are Created Equal

Grouping all medications together in the drug price discussion oversimplifies a complex issue.

Doctors Ari B. Friedman and Janet Weiner have written about five distinct drug price storylines, each with its own causes and solution.

Turing Pharmaceuticals raised the price of Daraprim by 5,000%—overnight.

Some drugs, they argue, such as Hepatitis C treatment Sovaldi (cost: $1,000 per pill) are cost-effective despite being extremely expensive because they cure diseases with serious consequences and poor treatments and thus provide a net societal benefit.

Other drugs, however, are new and expensive but not very effective. Their low value does not equate to an overall positive cost-benefit ratio.

Complicating matters further is the so-called “moral hazard” of insurance, or the idea that health insurance causes people to use more—and more costly—medical products and services, leading to spending increases and inefficiencies. From this standpoint, greater consumer information about drug costs and benefits, in particular regarding marginally effective drugs, can help reduce insurance’s moral hazard.

Yet another piece of the drug price puzzle is limited generic competition stemming from the FDA’s slow drug review process. There’s been a recent trend of companies acquiring formerly inexpensive generic drugs and drastically raising prices—such as the notorious Daraprim, which Turing Pharmaceuticals marked up 5,000% overnight.

Huge price spikes like this should in theory prompt more competition and lower prices, but the FDA’s three-year wait for generic drug applications discourages market competition, say Drs. Friedman and Weiner.

These distinct storylines show there is no one-size-fits-all solution for lowering drug prices. They also suggest that a well-intentioned health care policy—such as FDA oversight—can create unintended pricing consequences.

Big Pharma Blames Drug Development Prices

Pharmaceutical companies blame high drug prices on a steep rise in development costs.

The cost of developing a drug is estimated at $2.6 billion.

A 2014 report published by the Tufts Center for the Study of Drugs puts the cost of developing a prescription drug—from the laboratory to FDA approval—at $2.6 billion. That’s a 145 percent increase over the same cost estimate made in 2003.

That $2.6 billion figure includes both direct costs, such as testing and development, as well as indirect opportunity costs—the money the company could have made had it invested in something other than drug development.

Assuming these calculations are accurate, they still don’t account for the 164 percent drug price increase seen since just 2008. What’s more, one can poke numerous holes in the cost estimate.

For starters, the Tufts report is largely funded by the pharmaceutical industry, which has a vested interest in promulgating a high drug cost narrative.

The report also only takes into account new molecular entities—the most expensive type of drugs that companies develop. In addition, the estimate doesn’t reflect taxpayer funding of new drugs through the National Institutes of Health and other groups. Drug research costs are tax-deductible as well, meaning the public bears part of the expense.

Finally, the report conveniently fails to mention that drug companies spend twice as much on marketing and promoting their products as they do on research and development.

None of this is to say that developing new drugs isn’t expensive, or important for the next generation of treatments.

It’s not as if Americans are begrudging Big Pharma for making a profit. Our free-market system is built on a quid pro quo arrangement that sees innovators get rich from making publicly useful products.

High drug prices are fundamentally about fairness. Drug companies aren’t subject to the same rules as other markets, where exorbitant prices reduce customer demand.

“A drug company can increase the price of a product many times over, and people will still buy it because they need it,” says Dr. Kevin Riggs of Johns Hopkins University. “At the end of the day, they largely charge whatever the market will bear—and with lifesaving medication, that’s a lot.”

Consumers can do their part to lower drug prices by asking for generics whenever possible.

Most Americans believe the government needs to take action on drug prices and keep Big Pharma from “getting away with murder.”

Aside from price control steps the new administration may take, consumers can do their part by asking for generic drugs whenever possible, speaking out on rising drug costs, and holding companies accountable for dangerous drugs.

Victims Look for Answers as Opioid Epidemic Sweeps America

A drug overdose epidemic is sweeping America, led by a dramatic surge in deaths from opioids—a powerful, highly-addictive class of drugs that includes natural and synthetic analgesics such as morphine, oxycodone, hydrocodone, methadone, and fentanyl, as well as heroin.

Those responsible for America’s opioid epidemic have largely escaped legal consequences, but people from the hardest-hit states are starting to fight back.

Heroin is the product of an underground drug trade pushed in back alley deals. Prescription opioids are shipped from warehouses, prescribed in doctor’s offices, and picked up at pharmacies.

One drug cartel operates on the black market, the other in white lab coats. But their products are nearly identical, both in their chemical composition and their ability to destroy lives.

Indeed, a patient who begins a painkiller regimen at a clinic very often ends up buying drugs on the street. And all too often, that same patient ends up dead.

Protected by powerful interests, those responsible for America’s opioid epidemic have largely escaped legal consequences. People from the hardest-hit states, however, are beginning to fight back.

Fight Back

Prescribing Trends Drive Overdoses

Last year the U.S. death rate increased for the first time in a decade, and overall life expectancy dropped for the first time since 1993.

Since 1999, the number of prescription opioids sold has almost quadrupled.

These sobering statistics coincide with 33,091 deaths from illegal and legal opioids in 2015—an increase of more than 200% since 2000—including more than 15,000 from overdoses involving prescription opioids.

More than six out of ten overdose deaths involve an opioid. Every day, 91 Americans die from an opioid overdose. Nearly half of all opioid deaths involve a prescription opioid.

Heroin overdose deaths, which have more than tripled in the past four years, are closely correlated with prescription opioids. The CDC reports that past prescription opioids misuse is the strongest risk factor for heroin use. Four out of five heroin addicts were initially addicted to prescription opioids.

Image source: CDC
Image source: CDC

Since 1999, the amount of prescription opioids sold has almost quadrupled. Over the same period, prescription opioid deaths have more than quadrupled.

But the amount of pain Americans report has not changed. There is also a lack of evidence to support opioids’ long-term effectiveness for managing chronic pain.

In fact, a 2016 University of Colorado study found that opioids actually increase chronic pain.

This could help explain why prescription opioid users frequently require higher medication doses to achieve the same pain relief. Higher opioid doses make it more likely that a patient will become addicted.

As the dose increases, so does the overdose risk. Overdosing on opioids can stop a person’s breathing, causing permanent brain damage or death.

Drug Companies Capitalize on Expanded Indications

Before the 1980s, prescription opioids were primarily prescribed for short-term pain and chronic pain associated with cancer and the end of life.

The medical community’s fundamental rethinking of pain in the mid-80s—from a symptom that should be tolerated to a vital sign that doctors could measure and treat—paved the way for prescription narcotics’ emergence.

Drug companies, seizing on expanded pain pill uses, began introducing new drugs and aggressively marketing them.

One company in particular, Purdue Pharma, maker of OxyContin, exemplified the industry’s focus on chronic non-cancer pain.

OxyContin was approved in 1995. From 1996 to 2002, OxyContin sales increased from 300,000 prescriptions ($44 million) to 7.2 million prescriptions ($1.5 billion). Over this period the number of Purdue sales representatives more than doubled.

In 2001 alone, Purdue spent $200 million on OxyContin marketing. Sales representatives received six-figure bonuses.

In 2001 alone, Purdue spent $200 million on OxyContin marketing.

High-prescribing doctors were compiled in a company database and targeted. Branded promotional materials—including hats, plush toys, coffee mugs, and coupons for free OxyContin prescriptions—were distributed to practitioners.

Purdue also conducted “pain conferences” where physicians gave paid speeches and targeted doctors with medical journal advertisements.

But the marketing frenzy was based on a fundamental lie. Purdue claimed that OxyContin’s patented time-release formula posed an addiction risk of less than 1 percent. Sales reps told some doctors that the drug didn’t even cause a buzz. Meanwhile, Purdue rolled out stronger pills with even higher addiction and abuse risks.

In this way, a supposedly non-addictive, heroin-like drug was prescribed to millions of patients who in years past would have been given an over-the-counter drug.

Distributors, Doctors, and Pharmacies Get in on the Game

Drug companies like Purdue Pharma bear outsize blame for America’s opioid epidemic, but they’re not the only ones responsible for flooding communities with narcotic pain pills.

West Virginia—one of the states hit hardest by the epidemic—shows a multi-pronged conspiracy.

Over six years, according to the Charleston Gazette-Mail, 1,728 West Virginians suffered fatal opioid overdoses as drug wholesalers poured 780 million hydrocodone and oxycodone pills into the state—an amount equal to 433 pain pills per resident.

Image source: CDC
Image source: CDC

Just three wholesalers supplied more than half of the pills. The companies have total revenues exceeding $400 billion. Their top executives pulled in more than $450 in compensation over the past four years as the West Virginia opioid death toll climbed.

The middlemen, however, had help from pharmacies and doctors.

For example, the Gazette-Mail reports that some small, independent drugstores and pharmacies ordered 1.1 million to 4.7 million opioid pills per year.

A report in The Guardian describes one “pill mill” pharmacy in Williamson, West Virginia that filled up to 200 opioid prescriptions per day.

Some doctors and clinics are willing pill mill accomplices.

Opioid-addicted patients, many of whom get hooked after an initial prescription for pain, “doctor shop” among numerous providers. Some doctors and clinics, however, are willing pill mill accomplices.

One Williamson clinic with a reputation for no-questions-asked prescriptions made $4.5 million per year. The doctors—including a Pennsylvania physician who sent blank, pre-signed prescriptions to the clinic—often did not even see the patients for whom they were prescribing pills.

Lawsuits Seek Accountability

In 2006, as the opioid epidemic gained attention, the Drug Enforcement Agency (DEA) began cracking down on the drug distribution chain.

A groundbreaking West Virginia lawsuit seeks damages from doctors, pharmacies, and distributors that formed a “veritable rogue’s gallery of pill-pushing.”

Civil cases against manufacturers, distributors, pharmacies, and doctors reached 131 in 2011 but dropped to 40 in 2014, reports The Washington Post.

The reason for the decline was industry pushback. Drug companies hired former DEA and Justice Department officials to lobby against industry prosecution. Soon after, DEA officials began delaying and blocking enforcement actions.

At the state level as well, drug-makers have blocked measures aimed at curbing prescription opioid distribution. Using lobbyists and campaign contributions, drug companies have outspent anti-opioid activists by more than 200 times, according to the Associated Press.

The state of New Hampshire, which had the third highest rate of drug overdose deaths in 2014, has filed subpoenas against drug companies seeking information about how prescription painkiller are marketed in the state. The state has three attorneys on the case. The pharmaceutical companies have 19. So far, the investigation hasn’t produced a single document.

But not all legal efforts against the prescription opioid racket have fallen flat.

In 2007, Purdue Pharma pleaded guilty to misleading doctors and patients about the addictive potential of OxyContin and misbranding the drug as “abuse resistant.” And in 2015, after a nine-year legal battle, Purdue agreed to a $24 million settlement with the state of Kentucky for alleged Medicaid fraud involving OxyContin.

A groundbreaking West Virginia lawsuit filed by 29 plaintiffs who survived opioid addiction or lost a loved one to painkiller addiction seeks damages from doctors, pharmacies, and distributors that formed a “veritable rogue’s gallery of pill-pushing.”

West Virginia’s highest court rejected claims by the defense that admitted drug abusers should not be able to sue, citing the legal principle of comparative fault.

“What is it going to take before we as a nation accept that we are the victims for the most part and the doctor, the pharmacist and pharmacies are the perpetrators feeding off the lives of others?” said plaintiff and former opioid addict Wilbert Hatcher.

America’s opioid epidemic is an unprecedented public health crisis. Holding the responsible parties accountable may just require unprecedented litigation.

Invokana Lawsuits Consolidated into New Jersey MDL

A federal judicial panel has centralized more than 50 Invokana lawsuits in New Jersey federal court.

The lawsuits claim that Invokana can cause ketoacidosis and other injuries.

The lawsuits claim that diabetes medications Invokana and Invokamet cause ketoacidosis, kidney damage, and other injuries.

More cases are expected in the multidistrict litigation (MDL) over Johnson & Johnson’s blockbuster drug, which was recently revealed as a top-spending brand on doctor payments.

Hold J&J Accountable

Judges Grant Centralization, Citing Commonality

Plaintiffs alleging harm from Invokana and Invokamet in September requested that the U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidate 55 individual lawsuits in Jew Jersey federal court, citing enhanced efficiency.

On December 7 the JMPL agreed and issued an order transferring lawsuits from California, Georgia, Illinois, Kentucky, Louisiana, and Minnesota to the District of New Jersey under Judge Brian R. Martinotti.

“We find that the Invokana/Invokamet actions involve common questions of fact, and that centralization of these cases will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation,” the Panel wrote. “The actions share factual questions arising from allegations that taking Invokana or Invokamet may result in patients suffering various injuries, including diabetic ketoacidosis and kidney damage.”

Plaintiffs claimed in their consolidation request that J&J knew about kidney damage and ketoacidosis caused by Invokana/Invokamet, but did not warn patients while continuing to promote the drug. Plaintiffs also allege that Invokana and Invokamet are defectively designed and were not adequately tested.

Multidistrict litigation centralizes similar cases for pretrial proceedings, making it easier for lawyers to coordinate their activities. Individual cases are tried in the jurisdictions where they were originally filed.

Several MDL cases, known as bellwether cases, are typically singled out and tried first.

The Panel says it is aware of 44 additional related federal lawsuits.

New—but Not Necessarily Improved—Diabetes Drug

Invokana (canagliflozin) was approved in 2013 to treat Type 2 diabetes. It belongs to a new class of diabetic drugs known as sodium-glucose co-transporter 2 (SGLT2) inhibitors. Invokana works differently than older diabetes drugs, and poses new risks.

Invokana works differently than older diabetes drugs, and poses new risks.

Diabetic patients do not produce enough insulin, causing dangerous blood sugar spikes that damage the body over time.

Older diabetes drugs increase insulin levels, but SGLT2 inhibitors are different. They reduce the amount of blood sugar the kidneys reabsorb into the body by expelling some sugar through urination.

This mechanism of action is associated with an increased risk of acute kidney damage. The FDA strengthened existing kidney damage warnings for Invokana and other SGLT2 inhibitors in June 2016, but some say this was too little, too late.

Invokana is also linked to potentially-fatal excessive blood acids (ketoacidosis), increased bone fracture risk, cardiovascular side effects, and amputations.

J&J Spent Millions on Invokana Doctor Payments

In 2015, Invokana’s second full year on the market, sales surged 123% to $1.3 billion.

That same year, public records show, J&J spent $20.9 million promoting Invokana to physicians. Only two brands—Xarelto and Humira—were associated with higher doctor spending. Other top-spending brands for 2015 were Viekira, Eliquis, and Androgel.

These figures come from ProPublica’s Dollars for Docs, which is based on disclosures required under the Physicians Payments Sunshine Act, part of the 2010 Affordable Care Act.

Included in the payments data is money for speaking, consulting, meals, travel, gifts, and royalties. Although doctors who receive drug company money are not formally obligated to prescribe certain products, research shows that doctors receiving payments tend to prescribe more brand-name drugs than those not receiving payments.

Invokana spending reflects increased SGLT2 competition in a growing diabetes treatment market.

Contact us to report an Invokana complication and learn your legal rights.

FDA Chief’s Conflicts of Interest and the “Revolving Door” Problem

When a government official holds or has held a professional position in the same industry that he or she is charged with regulating, it raises questions about whether public or private interests are being served.

The “revolving door” between the public and private sectors is a major impediment to responsible democratic governance.

The current U.S. Food and Drug Administration (FDA) commissioner, Dr. Robert M. Califf, has extensive pharmaceutical industry ties and has been accused of undermining public health and safety.

With President-elect Donald Trump set to choose a new FDA chief, ClassAction.com looks at how an official’s non-government experience can muddy the regulatory waters.

What Is the Revolving Door?

The revolving door refers to the practice of switching back and forth between public and private employment.

This phenomenon is commonly observed among members of Congress who leave the federal government and become lobbyists, although it can occur whenever someone with government experience gains employment in a private sector job where they can influence public policy decisions, or vice versa.

Lobbying’s return on investment bears out its effectiveness.

Although generally seen as negative, the revolving door has a practical upside. Namely, corporate experience gives regulators and policymakers a deeper understanding of complex issues that, in a capitalist system, cannot be divorced entirely from private interests.

However, the opposite also holds true: once a public official leaves office, he or she can leverage knowledge about the workings of government into lucrative private sector compensation.

Lobbying’s return on investment bears out its effectiveness. Research conducted by the Sunlight Foundation found that from 2007-2012, 200 corporations spent $5.8 billion on federal lobbying and campaign contributions and got back $4.4 trillion in federal business and support.

In other words, for every dollar these corporations spent on influencing politics, they received $760 from the government.

Lobbying-ROI-1024x461
Credit: UnitedRepublic.org/Represent.us

Robert Califf, Big Pharma, and the FDA

Current FDA commissioner Robert Califf, a cardiologist and clinical researcher tapped by President Obama to run the nation’s drug regulatory agency, was criticized at the time of his nomination for his drug company connections.

The New York Times reported that Dr. Califf “has deeper ties to the pharmaceutical industry than any FDA commissioner in recent memory, and some public health advocates question whether his background could tilt him in the direction of an industry he would be in charge of supervising.”

Dr. Califf’s disclosed industry ties include financial support from Johnson & Johnson, Lilly, Merck, Bayer, Boehringer Ingelheim, GlaxoSmithKline, Medtronic, and Bayer. He also has financial links to Gambro, Regeneron, Gilead, AstraZeneca, Roche, Genetech, Medscape LLC, Portola Pharmaceuticals, and other companies.

Dr. Califf first joined the FDA as deputy commissioner for medical products and tobacco. Before his government tenure, he ran a multimillion-dollar clinical research center at Duke University that was a major contractor to the pharmaceutical industry. The center was more than 60% industry-funded.

Califf Ran Troubled Xarelto Trial

While at Duke, Johnson & Johnson paid Dr. Califf to conduct an important clinical study of the blood-thinner Xarelto. That study was criticized for being biased in the drug’s favor.

Although the FDA approved the anticoagulant Xarelto, FDA scientists expressed misgivings about its safety and effectiveness, warning that it could pose greater stroke and/or bleeding risks than its predecessor, warfarin.

Xarelto is a blockbuster drug for Johnson & Johnson but it has also been the target of thousands of lawsuits alleging the drug caused serious bleeding events and deaths. Unlike warfarin, Xarelto does not have an antidote to stop internal bleeding.

Some Question Califf’s Involvement in 21st Century Cures Act

Congress recently passed the 21st Century Cures Act, a sweeping health bill some say is too friendly to drug and device companies.

“It should be unimaginable that the most senior [FDA] officials would collude with the lead medical device trade association.”

Leading the legislation’s criticism was Ralph Nader’s Public Citizen. In 2015, when an earlier version of the bill was being considered and Dr. Califf was awaiting confirmation as FDA chief, Public Citizen criticized him for participating in at least one high-level strategy meeting with the industry about the bill.

“It should be unimaginable that the most senior Food and Drug Administration officials would collude with the lead medical device trade association to write legislation to weaken the agency’s regulatory oversight and approval standards for medical devices. But that is exactly what appears to have happened,” said Public Citizen’s Dr. Michael Carmone in a statement.

New Nomination, New Questions

The incoming Trump administration hasn’t officially nominated an FDA commissioner, but rumored picks are drawing scrutiny.

Leading candidates to run Trump’s FDA include Jim O’Neill and Dr. Scott Gottlieb.

Potential nominee Jim O’Neill, a self-described libertarian, served as principal associate secretary of health and human services under George W. Bush and is a managing director at Peter Thiel’s Mithril Capital Management.

While Mr. O’Neill doesn’t have a medical background, perhaps more worrying is his endorsement of what he calls “progressive approval,” which would allow drugs proven safe—but not necessarily effective—by the FDA to be marketed.

Another potential Trump FDA pick, Dr. Scott Gottlieb, has medical credentials as well as government experience, having served as a senior adviser to the FDA commissioner in 2003-2004, senior adviser to the Centers for Medicare and Medicaid Services in 2004, and FDA deputy commissioner for medical and scientific affairs from 2005-2007. But Dr. Gottlieb also has deep pharmaceutical industry ties, reports Reuters.

Trump’s eventual nominee requires Senate approval. But despite a divided government, the revolving door between government and industry has bipartisan support: after all, Robert Califf was confirmed in an 89-4 vote.

House Approves Controversial 21st Century Cures Act

The 21st Century Cures Act—a nearly 1,000-page omnibus healthcare spending bill—has been approved by the House and is now under Senate review.

Supporters say the bipartisan bill will accelerate medicinal and medical device innovation. Detractors claim it makes industry concessions that weaken regulatory oversight and undermine public health.

If Senators approve the legislation as expected, President Obama could sign it into law before the end of the year.

Act Will Streamline FDA Approval Process

A lot is covered in the sprawling, 996-page bill, from foster care to mental health to stem-cell therapies and Medicare.

Changes primarily revolve around the National Institutes of Health (NIH), which provides federal funding for healthcare research, and the Food and Drug Administration, the agency responsible for pharmaceutical and medical device safety and efficacy.

Major provisions include:

  • Increased NIH funding: NIH will receive $4.8 billion in new funding over ten years, including money for brain, cancer, and precision medicine research, as well as $1 billion for the nation’s opioid crisis. A top priority is Vice President Biden’s “Cancer Moonshot,” a plan that aims to accomplish 10 years of cancer research in half the time. Additional support for young emerging scientists would be created through a loan repayment program.
  • Faster action on new drugs and devices: The FDA has been criticized for a slow approval process that prevents faster adoption of healthcare breakthroughs. Proposals in the 21st Century Act aim to streamline the drug and device approval process. Specific initiatives include an accelerated approval pathway for regenerative medicines, using “real world evidence” (such as observational studies and registries) to support new indications for approved drugs, and broader categorization of “breakthrough” devices.

The bill also places new requirements on the Centers for Disease Control and Prevention (to expand neurological disease surveillance) and the Department of Health and Human Services (to revise health information privacy rules).

“A Grab Bag of Goodies for Big Pharma”?

Critics have voiced concerns about what’s in the legislation, as well as what’s not in it.

“The bill has been sold erroneously as a commonsense, bipartisan compromise that enables scientific breakthroughs for America.”

Public Citizen says the Senate should reject 21st Century Cures, calling it a corporate giveaway disguised as reform.

“The bill has been sold erroneously as a commonsense, bipartisan compromise that enables scientific breakthroughs for America. But in reality, the legislation includes a grab bag of goodies for Big Pharma and medical devices companies that would undermine requirements for ensuring safe and effective drugs and medical devices,” said Public Citizen’s Dr. Michael Carmone in a statement.

Public Citizen further notes the new NIH money must be reauthorized each year, making its programs non-guaranteed.

A letter to Congressional leaders from Public Citizen and a dozen other organizations singles out the legislation’s failure to relieve high prescription drug costs.

“There is no justification for moving forward with legislation that provides substantial benefits to the drug industry without asking for something in return,” the letter states.

Critics blame what they consider already-lax FDA oversight for failed medical devices such as the Essure permanent birth control. Essure received fast-track FDA approval in 2002 and has since been linked to thousands of injuries, several deaths, and an unacceptably high pregnancy rate. As a result, the FDA recently slapped Essure with a black box warning.

1,500 Lobbyists Fought for the Act

The 21st Century Cures Act passed the House last year but died in the Senate. Republican lawmakers unveiled a revised version during the Thanksgiving holiday weekend and it passed 392-26 during the lame-duck session.

Now under Senate consideration, the Act enjoys bipartisan support but has drawn disparate comments along partisan lines.

“It really is a David and Goliath issue of where the money is.”

Senate Majority Leader Mitch McConnell (R-KY) called the bill “the most important legislation Congress will consider this year.”

Elizabeth Warren (D-MA) said, “I cannot vote for this bill,” and described the Act as “a tiny fig leaf” covering “huge giveaways to giant drug companies.”

So who actually benefits from the 21st Century Act? The money trail provides answers.

According to Kaiser Health News, nearly 1,500 lobbyists representing 400 organizations petitioned Congress regarding the Act. That’s the fourth-most lobbying activity for any bill this congressional cycle.

Major lobbying efforts were made by:

  • Pharmaceutical, device, and biotech companies: $192 million
  • Medical schools, hospitals, and doctors: $120 million
  • Chamber of Commerce: $87.1 million
  • Health information technology and software companies: $35 million
  • Patient groups (funded by drug and device companies): $6.4 million
  • Mental health, psychology, and psychiatry groups: $1.8 million

In contrast, opposition generally comes from nonprofit patient advocacy and research groups.

“It really is a David and Goliath issue of where the money is,” said Diana Zuckerman of the nonprofit National Center for Health Research, which is running a campaign against the bill.

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