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Mass Torts Update - Aug 1, 2014 14:27 - 0 Comments

$10 Million J&J Motrin Verdict Upheld In Pennsylvania Appeals Court

The Pennsylvania Superior Court has upheld a $10 million verdict returned against McNeil-PPC Inc., a Johnson & Johnson unit, in a case brought on behalf of a little girl who suffered skin burns and blindness after taking Children’s to treat a fever and cough. A three-judge panel rejected arguments by McNeil that there was no evidence that an omission on the warning label of the over-the-counter drug had led to the injuries suffered by Brianna Maya, who was 3 years old at the time of the illness.

In 2000, after the child came down with a fever, Maya’s mother gave her Children’s for four days. After first exhibiting a rash on her body that then led to blisters, the child was admitted to a Tennessee hospital and then transferred to a Texas burn unit. Maya was diagnosed with burns over about 84.5 percent of her body. She was later diagnosed with the disease toxic epidermal necrolysis (TEN), an especially severe form of Stevens-Johnson syndrome (SJS). Treating doctors testified that Maya had suffered severe eye damages as a result of TEN. Keith Jensen, a lawyer with Jensen & Associates, who represented Maya’s mother in this case, said in an interview:

Johnson & Johnson’s subsidiary McNeil did not challenge in its appeal that causes SJS and TEN, or that caused now 17-year-old Brianna Maya’s TEN and resultant blindness.

Maya’s mother had filed the suit against McNeil in the Court of Common Pleas in Philadelphia County in 2009. She said she would never have used over-the-counter Children’s had the package used the word “blisters” on the warning label. Judge Ford Elliott said in the court’s opinion:

Therefore, there was testimony that an adequate warning would have prevented Brianna from receiving the last four or five doses of Children’s .

The Plaintiff is represented by Howard Bashman, Scott David Levensten of the Levensten Law Firm PC and Keith Jensen of Jensen & Associates PLLC. They have done a very good job for Maya and her mother in this important case.

Source: Law360.com

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Health Care Issues - Aug 1, 2014 14:52 - 0 Comments

The Prices Of Generic Drugs Are Going Up

The total amount of money our citizens spend on prescription drugs each year has been rising in the last decade. Similarly, in most states, Medicaid agencies are seeing an increasing amount of their budget going to cover the cost of prescription drugs. Although there are certainly problems with the over-prescribing of some medicines that contribute to the rising cost, much of the increase in total expenditures is attributable to the actual price of some medicine. It is true that prescription drugs can be a cheaper form of treatment – say, cheaper than going to the emergency room – but the increasing price of some drugs, particularly generic drugs, is a troubling trend.

As you may know, prescription drugs are generally broken down into two categories – “brand name” drugs and “generic” drugs. When a prescription drug first comes to the market, it is called a brand name drug. In these instances, the law provides the pharmaceutical company that first developed the brand name drug protection from competitors in the form of a patent. Because no one else can make the exact same drug, the pharmaceutical company with the patent is the only one allowed to sell that prescription drug.

Because there is only one company making this drug, the cost is higher than if companies were allowed to compete for a customer’s business. After are significant length of time (usually more than 12 years) has passed, “generic” drug companies are allowed to start making prescription drugs that are virtually identical to the brand name drugs. However, contrary to what most people think, generic drugs aren’t always that much cheaper.

Under existing law in the U.S., the first generic drug to be sold is usually given a six-month “exclusivity” period. This means that no other generic drug of the same type can be sold during that period. Although the first generic is cheaper than the brand drug, it is only slightly cheaper and often still very expensive. After the first six months, other generic drug companies may decide to make equivalent generics. However, there is no guarantee that other companies will decide to enter the market. Typically, it has been thought that the more generic companies compete for the same business, the lower the price consumers will pay for generic drugs. But, recent data suggests that might not be true. And, for some drugs that were initially priced lower, they are experiencing price increases – in some cases between 600-1000 percent higher.

These price increases affect not only consumers, but also small “mom and pop” pharmacies that can’t compete with the big chain pharmacies when it comes to bulk discounts. Recently, the National Community Pharmacy Association called for congressional hearings on generic drug prices. In a recent New York Times investigation, the newspaper found that drug prices on certain prescriptions had tripled in the last nine months and can be as much as $1000 per monthly supply. Even with good insurance, these price increases can translate into hefty co-pays for many Americans.

Industry insiders claim that price increases for generic drugs are only temporary and usually are due to some type of production shortage or shut down. However, the Food and Drug Administration (FDA) has clearly found instances where there were large price increases and no apparent shortage. In fact, what appears to be happening is that one drug manufacturer will raise its prices and the others will follow suit and match the increase. This phenomenon sometimes happens in the airline industry. One company will raise prices or start charging more for baggage, and the others will follow suit and raise their prices. Instead of competition lowering prices, in many cases it works to raise the cost of flying.

In the drug industry, this effect generally occurs when there are only two to three generic companies making a certain drug. For there to be true competition that results in lower prices, some studies show you need four or five generic companies competing. Hopefully, Congress will wake up soon and start helping those Americans who are being crushed by monthly prescription drug costs. If the goal of the system is to get generics to compete in order to lower prices, that system simply isn’t working. Pharmaceutical companies are “gaming” the system and need to be held accountable. It is the job of Congress to see that this is done.

If you need more information on this subject, contact Roman Shaul, a lawyer in our Consumer Fraud Section, at 800-898-2034 or by email at Roman.Shaul@beasleyallen.com.

Source: New York Times, “Rapid Price Increases for Some Generic Drugs Catch Users by Surprise.” July 8, 2014.

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Predatory Lending - Aug 1, 2014 14:44 - 0 Comments

Safeguards Needed To Protect The Public Against Predatory Lenders

I can’t think of many industries that do as much damage to ordinary folks who have to borrow money than the payday and title lenders that prey on the most vulnerable citizens, trapping them in a nightmarish cycle of debt when they already face financial distress. These predatory lenders typically operate in low-income neighborhoods and lure unsuspecting borrowers with advertisements offering easy access to cash. They target customers who are down on their luck and who have little ability to pay off their loans, but who trust, wrongly, that the lenders are subject to regulations that protect consumers from usurious rates and unfair practices. Alabama is one of the worst offenders when it comes to protecting the payday and title lenders.

The predatory lenders in Alabama have no incentive to act as a responsible lender would. That’s because of our legislature’s failure to pass laws regulating them. The profit model of these predatory lenders is based on extending irresponsible loans that consumers cannot possibly repay on time. Our elected officials must step in to ensure that these lenders can no longer drain needed resources from our most vulnerable communities. Alabama Arise has made some solid and well-reasoned recommendations that should serve as a guide to lawmakers in establishing much-needed protections for small-dollar borrowers. I will set those recommendations, which I agree with, out below:

• Annual interest rate should be limited to 36 percent;

• A minimum repayment period of 90 days should be set;

• The number of loans per year must be limited;

• There must be a meaningful assessment of a borrower’s ability to repay;

• A workable centralized database must be created;

• Incentive and commission payments for employees – based on outstanding loan amounts – must be prohibited;

• Direct access to bank accounts and social security funds must be prohibited;

• Lender buyouts of unpaid title loans must be prohibited;

• Lenders must be required to return surplus obtained in sale of repossessed vehicles;

• Incentives must be created for savings and small-loan products; and

• Financial education and credit counseling must be required.

Policymakers have a duty to regulate both payday and title loans and to protect consumers from these predatory lenders. Without adequate regulation, Alabama lenders, many of which are engaged in both payday and title lending, will simply push their customers to take out whichever loan is more favorable to the lender under the new regulatory structure. The Alabama Legislature must take a strong stand on protecting vulnerable communities by addressing both types of predatory loans. Unfortunately, our Legislature has a history of protecting predatory lenders and it’s time for that protection to stop. Hopefully, the next group of legislators will start protecting the public in this arena.

Source: Alabama Arise

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