Vested Interest - News and Notes - September 2004 Issue

Doctors Write Prescriptions, Drug Company Writes a Check

The check for $10,000 arrived in the mail unsolicited. The doctor who received it from the drug maker Schering-Plough said it was made out to him personally in exchange for an attached "consulting" agreement that required nothing other than his commitment to prescribe the company’s medicines. Two other physicians said in separate interviews that they, too, received checks unbidden from Schering-Plough. Those checks and others, some of them said to be for six-figure sums, are under investigation by federal prosecutors in Boston as part of a broad government crackdown on the drug industry’s marketing tactics. Just about every big global drug company – including Johnson & Johnson, Wyeth and Bristol-Myers Squibb - has disclosed in securities filings that it has received a federal subpoena, and most are juggling subpoenas stemming from several investigations. The details of the Schering-Plough tactics, gleaned from interviews with 20 doctors, as well as industry executives and people close to the investigation, shed light on the shadowy system of financial lures that pharmaceutical companies have used to persuade physicians to favor their drugs. (ATLA Law News Digest – July 1, 2004)

Product Recalls Fail to Reach Consumers’ Ears

While the number of consumer products recalled by manufacturers has risen sharply in recent years, a large percentage of those potentially dangerous items remain in the home or on the road, according to a Consumer Reports study. The study found almost one-third of all recalled vehicles, more than half of toys, appliances and other household items, and three-quarters of child car seats aren’t being repaired or returned to stores. Many recalled products aren’t returned or repaired, the study found, because consumers often aren’t aware they own a faulty product. Companies are required to make a "good faith" effort to track down people who bought defective products, but that standard is negotiated case by case. While it is generally easy to find owners of faulty automobiles - making those recalls among the most effective - manufacturers may not be able to notify the owners of smaller problem products. Those may have changed hands, and consumers who have discarded packaging and labeling may be unaware they own a recalled product. The study faulted companies for discouraging consumers from registering products by filling registration forms with burdensome marketing questions. (ATLA Law News Digest – July 8, 2004)

Prominent Scholars Join Forces to Counter Civil Justice System Critics

For the first time, nearly twenty scholars from law and graduate schools around the country have formed a "Civil Justice Resource Group" (CJRG) to respond to the widespread disinformation by critics of the civil justice system. The CJRG is composed of leading academics with expertise in one or more issues related to the U.S. civil justice system. Several members of the group specialize in conducting empirical studies of the actual operation and effects of the civil justice system. The CJRG intends to publish briefing books and other materials to help inform the debate over these issues. (Center for Justice & Democracy – July 20, 2004)

Asbestos Deaths in U.S Skyrocketed

Asbestos deaths in the United States have skyrocketed since the late 1960s and will probably keep on climbing through the next decade because of long-ago exposure to the substance, once widely used for insulation and fireproofing, the government said. The Centers for Disease Control and Prevention said 77 people died from asbestos in 1968, and nearly 1,500 people died from it in 2000. In fact, in 1998, asbestos-related deaths overtook those from the coal miners’ disease black lung, reflecting in part the decline of the coal industry. The CDC reached its findings by reviewing the death certificates of nearly 125,000 people who had lung conditions linked to inhaling dust or fibers from minerals such as coal or asbestos. (ATLA Law News Digest – July 22, 2004)

Boston Scientific Widens Recall of Stents for Heart Treatment

The Boston Scientific Corporation said that it was voluntarily widening the recall of two of the devices it makes to treat heart disease. The recall involves about 85,000 of the drug-coated devices that the company introduced this year and another 11,000 of the devices it made without the special drug coating. Although Boston Scientific is not recalling all of the devices, called stents, the company said it decided to recall some of them because of a problem that can occur when a doctor first inserts the device into a patient. The recall follows reports of 3 deaths and 43 injuries. Patients who already have a stent are not affected. (ATLA Law News Digest – July 22, 2004)

Hurdles Await Tobacco Legislation

A bill to give the U.S. Food and Drug Administration oversight of tobacco, if enacted, would limit the tobacco industry’s ability to market all cigarettes and create strict new rules for lower-tar, reduced-risk and sweet-flavored cigarettes. But the legislation, passed by the Senate, faces obstacles in getting through the House of Representatives. The current version of the House tobacco legislation contains no provisions for FDA regulation at all. Sweet-flavored cigarettes, one of the hottest new products in the tobacco industry, would be banned entirely under the Senate bill. Tobacco companies would need FDA approval to call lower-tar cigarettes "light" or "ultra light," as is now common practice. Similarly, companies would need regulatory pre-approval for marketing of reduced-harm cigarettes. (ATLA Law News Digest – July 22, 2004)

Net Income UP 26% at A.I.G.

The American International Group, one of the world’s largest insurers, reported a rise in net income of nearly 26 percent in the second quarter, bucking a trend toward lower commercial insurance prices and an expected slowing of earnings growth. A.I.G. reported net income of $2.86 billion for the quarter, compared with $2.28 billion for the period a year earlier. "You cannot expect rates to go up and up indefinitely," said Maurice R. Greenberg, chief executive of A.I.G. in a call with analysts. "I do not believe from what we see today that we are on a slippery slope going down to chaos." (The New York Times –July 23, 2004)

New Study: Deaths from Medical Errors Double

A new study by Health Grades Inc., a health-care consulting firm in Colorado that rates hospitals, estimated that the number of patients who die from medical errors is more than double the findings of the 1999 Institute of Medicine report. Health Grades said an average of 195,000 patients die from preventable hospital errors each year, the equivalent of more than 530 people a day. The earlier IOM report estimated that 44,000 to 98,000 preventable deaths occurred each year due to medical errors. A complete copy of the report can be found on the ITLA website at www.iltla.com. (The Wall Street Journal – July 27, 2004)

Program Targets Baby Deliveries

ProMutual Group, a Boston-based provider of medical malpractice insurance, has launched a new patient safety program aimed at reducing the incidence of shoulder dystocia. The training course is designed to define expectations for and roles of each person who may find themselves involved in a shoulder dystocia delivery. In a pilot project, every OB/GYN, family practitioner with OB privileges, or certified nurse midwife insured by ProMutual in Massachusetts received the training. Scoring of the test is done on-line. Physicians who successfully complete the exam during a policy year will receive credit at their next renewal. (Insurance Journal – July 28, 2004)

Ford Aims to Reduce Explorer Rollover Risk

Ford Motor Co. will include a rollover stability control system as standard equipment on its most popular sport-utility vehicle, the Explorer, for the 2005 model year. Safety advocates said it was the first time a major U.S. carmaker has acknowledged the need to do more to prevent such trucks from rolling over. The stability control system also will be standard on the Lincoln Aviator and Navigator and the Mercury Mountaineer for next year. Ford is convinced that the vehicles are safe without the system, which uses gyroscopes to sense the truck’s position and can reduce engine power or apply brakes to one or more wheels to prevent it from tipping over. Ford’s intention is to make advanced technologies available as soon as possible. (ATLA Law News Digest – July 29, 2004)

Malpractice Insurance Rates Stabilizing

Rate increases for commercial property insurance and medical malpractice have dropped or slowed to a near standstill, signaling the end of the hard market, said J. Robert Hunter, director of insurance for the Consumer Federation of America. According to CFA’s analysis, even though rates are sluggish, profits for commercial insurers have continued at record levels. Rates have increased steadily for three years, resulting in the continued profit jump. (Liability & Insurance Week - August 2, 2004)

Doctors Spell out Risks on Consent Form

Seven Seattle obstetricians are drafting a consent form for pregnant patients, spelling out in graphic terms the dangers their babies face coming into the world, including death, permanent severe brain damage and other lifelong disabilities. The doctors say their primary intent is not protection in the event of a suit, and lawyers say the form might not insulate doctors from suits. Instead, the doctors want to force patients, particularly highly educated, perfection-seeking professionals who have never accepted "bad outcome" as an option, to face a stark reality: In pregnancy, there are no guarantees. (ATLA Law News Digest – August 12, 2004)

Communication Problems Initiate Errors

The underlying cause for errors in primary care diagnosis or treatment more often than not could be miscommunication, according to a study in the Annals of Family Medicine. The study analyzed 75 error reports from 18 family physicians in five states and concluded that a chain or "cascade" of errors was documented in 77 percent of the incidents. Many errors were a result of mislabeling specimens as well as charts misfiled or missing. The study suggests improvements on management systems to enhance the quality of information transfer. (ATLA Law News Digest – August 12, 2004)

Connecticut Insurer’s 90% Rate Increase Challenged

Trial lawyers and consumer advocate groups are demanding that regulators investigate one company’s "unconscionable" 90 percent rate increase for medical malpractice insurance in Connecticut. The challenge is to Indiana-based GE Medical Protective’s previously reported premium increases, which average 89.6 percent in Connecticut. The state insurance department approved the increase in April. (ATLA Law News Digest – August 12, 2004)

Rural Access to Heath Care – A Global Problem, Not a Lawsuit Problem

Rural isolation. Long hours without adequate resources. Lack of nearby clinical and professional support. These are issues that create rural health care access problems throughout the world- including countries with far weaker legal systems or no right to civil jury trial. The European Charter for Rural Practice states, "evidence from across Europe and the rest of the world indicates that [rural health practitioners’] problems are similar and include issues such as high workload, limited access to training, isolation, poor morale and a decline in recruitment. The following are specific examples: AUSTRALIA – Juries are extremely rare and have been abolished in some states, "[t]he recruitment and retention of [health professionals] to rural and remote areas is a recognized problem." CANADA – In some areas of Canada, where a $250,000 cap on pain and suffering awards was imposed on the country over 20 years ago and where the universal health care system pays for medical expenses, rural areas have many problems attracting doctors. IRELAND – "It is well recognized that rural practitioners are different to their urban counterparts in that they must deliver a more comprehensive service in greater isolation from colleagues and without the same hospital back-up…Too often rural practitioners are overworked with inadequate resources and long working hours." (Center for Justice & Democracy www.centerjd.org)