Vested Interest - News and Notes - December 2006 Issue

Malpractice Payouts Dropping

Three years after the Legislature capped medical malpractice payouts, insurance company payouts have decreased dramatically, but not their rates. Recently, Florida regulators agreed to give the state’s insurance consumer advocate a hearing contending premiums ought to be slashed 40 percent to 50 percent.

The legislature undertook major reform and they did it with the explicit reasoning of lowering the cost of malpractice to the medical community and ultimately to the patients. The Legislature did not undertake all of the extremely difficult decisions in order to provide a windfall profit for the medical malpractice insurance industry. A national accounting firm at the time estimated the savings to insurers would be 7.8 percent. The reality has been dramatically steeper. Recent insurance industry data shows medical malpractice legal costs and payouts since 2003 have dropped 43.6 percent, from $989 million to $557 million. A report from the Office of Insurance Regulation said Florida’s 15 largest medical malpractice insurers had 2005 profits of $803 million. (Pensacola News Journal – December 7, 2006)

FDA Creates Express Lane for Approving Some Generic Drugs

The FDA will accelerate its reviews of certain generic drugs, a move the industry said could help get some cheaper alternatives on the market sooner. Companies will be given priority if their application is the first one proposing a generic version of a brand-name drug that is no longer protected by a patent or market exclusivity. Applications filed before a patent or exclusivity ends will not be eligible under the new procedures. (ATLA Law News Digest – October 26, 2006)

Rare Illness Seen After Vaccine

The FDA said 12 cases of a rare neurological disorder have been reported since October 2005 following the administration of a vaccine manufactured by Sanofi Pasteur to prevent meningococcal disease. The neurological disease, called Guillain Barre Syndrome, can occur either spontaneously or after certain infections, often in healthy individuals. It typically causes increasing weakness in leg, arm and other muscles that can be severe and require hospitalization. The disorder usually resolves on its own, although some people may have residual neurological deficits. (ATLA Law News Digest – October 26, 2006)

A Proposal for Federal Protection from Catastrophe Divides Insurers

Even as profits on home insurance are soaring, some of the nation’s big insurers are turning to Washington to bid to gain protection against future catastrophic losses. The two biggest companies, Allstate and State Farm, which provide nearly 35% of the insurance on American homes, are seeking legislation that would offer the same kind of program for hurricanes and other natural disasters as the government now promises to provide to commercial insurers in a future terrorism attack. The details are still being worked out, but the insurers and their supporters in Congress are talking about the state and federal support kicking in after the industry has paid the first $4.5 billion in damage, compared with the first $25 billion in a terror attack. (ATLA Law News Digest – November 2, 2006)