Recently in Medicine and Law Category

Veteran journalist John Stossel presented a powerful indictment of just how much lawsuit abuse harms the nation's economy on his program this week on the Fox Business Channel. If you missed it, the show repeats tonight at 7 pm; on Saturday at 6 pm and 9pm; and again on Sunday at 7pm (all times PDT).

If you can't watch the whole show, here are some excerpts posted on the network's website.

The Faces of Lawsuit Abuse
Lawsuit victim Crystal Chodes (from Sacramento's now-defunct Basketball Town) and Manhattan Institute's Jim Copland on how lawsuits hurt small business. The network website also features an extended Q&A with Chodes and Copland.

The Trouble With Trial Lawyers
Stossel and high-profile trial attorney Geoffrey Fieger face off on malpractice suits and whether lawyers help consumers.

How Trial Lawyers Hurt Patients
Dr. Manny Alvarez argues malpractice has dramatically changed the face of medicine.

Year's Wackiest Warning Labels
Bob Dorigo Jones, Wacky Warning Label Contest creator, lets Stossel's audience vote for the dumbest label.

Stossel also wrote a column about lawsuit abuse. And finally, an interview with Crystal Chodes is also posted on CJAC's website, in the The Problem section. Find the video by cursoring over the videos until you see "Crystal Chodes."

Some lawmakers weren't satisfied with a report from the nonpartisan Congressional Budget Office in October that estimated savings of $54 billion over the next decade if new limits were imposed on medical malpractice lawsuits.

So they asked CBO officials to explain the figure -- and received a letter from CBO Director Douglas W. Elmendorf reaffirming the $54 billion in savings and an even larger impact from tort reform over the next 10 years.

The CBO previously estimated that tort reform would lower malpractice costs nationwide by about 6%. But now, CBO estimates a reduction in malpractice costs by 10%, if a package of tort reforms was implemented nationwide. Those reforms include a $250,000 cap on damages for pain and suffering, a $500,000 cap on punitive damages, and restricting the statute of limitations on malpractice claims, according to a Legal Newsline article. None of the reforms have been included in the House and Senate health care proposals.

"CBO's estimates of the likely effects of tort reform are based on research that links changes in malpractice costs to changes in health care spending, including not only the spending changes caused by providers' responses to changes in the medical liability environment but also the spending changes resulting from associated changes in health status," Elmendorf concluded in the letter to U.S. Sen. John D. Rockefeller IV.

"With all of those factors taken into account, the weight of evidence indicates that tort reform would reduce the utilization of health care services and, thereby, spending."

The 8th U.S. Circuit Court of Appeals has ruled that a name brand prescription drug manufacturer could not be held liable for injuries caused by a generic competitor's version of the drug.

In a statement, CJAC President John H. Sullivan commended the Court's ruling and said, "the court got it right, showing a refreshing abundance of common sense in telling us that 'Traditional products liability requires a plaintiff to show that she actually consumed the defendant's product.'"

"It makes no sense to tie a company's product liability to a drug that it invented but has lost patent protection -- and which the plaintiff was not taking when the injury occurred," he added.

The plaintiff in the case, Mensing v. Wyeth, brought a failure to warn and misrepresentation case against a number of manufactures of a drug, Reglan, and its generic form. She also sued the name brand defendants for fraud and negligent misrepresentation on the theory that her doctor relied on Reglan's label when assessing the risks and proper uses of the generic.

The Court also considered and rejected an appellate court's holding in a November 2009 California court of appeal decision in Conte v. Wyeth that found Wyeth Pharmaceuticals liable for the plaintiff's negative reaction to a medication used to treat stomach conditions -- which Wyeth pioneered but no longer produced. The plaintiff in that case took a generic drug, manufactured and sold by a generic drug manufacturer, but sued Wyeth for failure to warn of risks associated with the drug. The California Supreme Court declined to review that case.

Read the opinion in Mensing v. Wyeth by clicking here. (Click the link and search for case number 08-3850.)

Previous blog posts on Conte v. Wyeth can be found by clicking here, here, and here.

In politics, just like in war, success comes not just from anticipating a direct response to your latest move, but also from looking far across the theater for your adversary's counter-measure.

So it was no surprise when, after getting the attention of federal policymakers on the benefits of putting some legal reform into a national health-care package, backers of reform found their own flanks attacked.

"Medical malpractice insurers . . . take advantage of [a federal] antitrust exemption to maximize their profits, to the detriment of doctors who buy their coverage," a group of personal injury lawyer-backed organizations recently told federal lawmakers. "Millions of consumers and their health-care providers would benefit if real competition were restored in the health insurance and medical malpractice insurance markets," a letter from the Consumer Federation of America and others told U.S. Rep. John Conyers (D-MI) in support of H.R. 3596.

What these lobbying groups conceal from their audience when attacking medical professional liability insurance providers, however, is that the overwhelming number of U.S. physicians get their liability protection from companies they themselves own and govern. In California, for example, four major doctor-owned companies actively compete for the bulk of private practice physicians in the state.

These companies, all staunch supporters of the state's landmark Medical Injury Compensation Reform Act, help account for physician liability protection rates that are as much as half of those found in comparable states not protected by MICRA.

Moreover, an analysis by the Congressional Budget Office refutes the lawyer-backed groups' contention that rates for the two types of insurance targeted -- health and medical professional liability -- would fall under H.R. 3596 and its Senate counterpart, S. 1681. "Enacting the legislation would have no significant effect on the premiums that private health insurers would charge," according to the CBO. "[S]tate laws already bar the activities that would be prohibited under federal law if this bill was enacted."

In "The Art of War," Sun Tzu promoted sowing division among one's adversaries. So when advocates of federal medical liability reform showed that a decline in defensive medicine would save billions of health care dollars, they likely knew better than to expect a response on the merits.

But in the end, the trial lawyers' weak attempt to drive a wedge between doctors and the companies that American physicians themselves own and direct betrays a further escalation of their tactics -- to outright deception.

***
Gordon Ownby is general counsel of the Cooperative of American Physicians, Inc., www.cap-mpt.com, and can be reached at gownby@cap-mpt.com.

Care to save $54 billion? That's how much a new report from the non-partisan Congressional Budget Office estimates could be saved over the next decade by imposing new limits on medical malpractice lawsuits, according to news reports.

Requested by Sen. Orrin Hatch, the report found that significant changes to medical tort law could also reduce government spending on programs such as Medicare and Medicaid by $41 billion over 10 years and reduce budget deficits by $54 billion over that same time period, USA Today reported.

Douglas W. Elmendorf, director of the nonpartisan Congressional Budget Office, wrote that newly available research prompted CBO to update "its analysis of the effects of tort reform," according to The Washington Post. The agency's conclusion: A package of reforms that included a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages "would reduce total national health care spending by about 0.5 percent."

"A finding like this from the independent, expert, and credible Congressional Budget Office ought to end once and for all the bogus personal injury lawyer attacks against well-crafted laws establishing certainty and limits in medical liability," said CJAC President John H. Sullivan. "These laws can make it possible to direct huge amounts of money into taking care of people's health instead of feeding court battles and trial lawyer bank accounts." To read Elmendorf's letter to Sen. Hatch, click here.

Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform, said in a statement that "neglecting to include medical liability reform benefits only the plaintiffs' lawyers. Including it benefits every American participating in our health care system."

The Civil Justice Association of California has asked Senator Dianne Feinstein to withdraw S. 593, the "Ban Poisonous Additives Act of 2009." This bill would ban the use of Bisphenol A in food and beverage containers, and for other purposes.

In a letter to Senator Feinstein, CJAC explains its opposition to the bill. "In this BPA matter, it is both bad health policy and bad legal policy to enact a ban that will give lawyers a powerful excuse to sue manufacturers and suppliers when little or no evidence of the harm and causation required to sustain a legitimate lawsuit exists," wrote CJAC President John H. Sullivan. "Restraint here is especially important when the product involved has a long history of protecting public health."

Banning a safe product (BPA has been approved by the Food and Drug Administration and the European Food Safety Agency) would very likely lead to unnecessary lawsuits. The makers of silicone breast implants, for example, dealt with only 150 lawsuits in the 30 years prior to an FDA ban. This number increased to more than 5,000 per year in each of the four years following the ban. The implants were ultimately determined to be safe -- but not before the company that made them went bankrupt as a result of the lawsuits.

Federal class action lawsuits -- almost half of which originated in California -- have already been filed against manufacturers of products containing BPA despite the fact that the alleged science against BPA is weak. In a press release of a subcommittee report on BPA, the FDA said: "Consumers should know that, based on all available evidence, the present consensus among regulatory agencies in the United States, Canada, Europe, and Japan is that current levels of exposure to BPA through food packaging do not pose an immediate health risk to the general population, including infants and babies."

A bill similar to S. 593 was introduced in California this legislative session. That bill, SB 797 (Pavley), failed passage -- as did another similar bill last year, SB 1713 (Migden). As the California legislature -- in failing to enact its own ban -- has demonstrated, scientists rather than lawmakers should determine which chemicals are safe.

Television advertisements soliciting plaintiffs for medical malpractice lawsuits have increased nearly 1,400% in the past four years, a new study from the U.S. Chamber Institute for Legal Reform has found.

The number of ads increased to more than 156,000 ads in 2008 from 10,150 ads in 2004. The study, conducted by the Campaign Media Analysis Group, also showed that spending for the ads spiked to almost $62 million from $3.8 million.

President Lisa Rickard said the finding is a window into what appears to be the growing role of medical malpractice cases in the overall litigation landscape.

"Lawsuits are ultimately a business driven by the plaintiffs' bar, and when you see the marketing of medical malpractice lawsuits exploding like this, it tells you that these lawsuits are a growing sector within the larger lawsuit industry," she said.

A closer look at the findings shows that medical malpractice advertising peaked in 2006, airing nearly 180,000 times in national television and cable markets.

Areas most saturated with such ads in 2008 included Baltimore (12,000 ads), New York (10,000), and Orlando (8,000).

An attempt to ban the use of the chemical Bisphenol A in baby bottles and formula containers in California has failed.

Senate Bill 797, authored by Senators Fran Pavley and Carol Liu, which CJAC opposes, twice fell short of 41 votes necessary for passage. It was moved to the inactive file on September 11, so it can be considered again in 2010. The bill was essentially a remake of last year's SB 1713 (Migden), which died on the Assembly floor.

The bill would have banned the use of BPA beginning in 2011 -- unless the chemical's use is approved through the newly-constituted green chemistry review process established by legislation last year. Banning a safe product (BPA has been approved by the FDA and the European Food Safety Agency) would have very likely led to unnecessary lawsuits. Click here to read more about CJAC's concerns with the bill.

Meanwhile, Assembly Bill 2, which CJAC opposes, passed the Senate and the Assembly and will now go to the Governor. The bill, authored by Assemblyman Hector De La Torre, would propel health care rescissions into court, thereby increasing the overall cost of insurance. It is similar to AB 1945 of last year, which the Governor vetoed.

The bill creates an independent panel to review decisions to rescind individual health care contracts. However, in a letter to the Governor urging his veto, CJAC President John H. Sullivan noted that the bill requires the independent review organization to determine whether a health plan enrollee "intentionally misrepresented" material information on his or her application in order to obtain health care. As in last year's bill, this requirement to ascertain intent renders the independent review process both impotent and moot.

"This crippling of the review organization's ability to conduct a useful review is almost certain to propel virtually every rescission approval into court," Sullivan wrote. "That will be an unhealthy outcome for health care costs -- but not for the plaintiffs' lawyers involved. Inserting lawyers into the health care system will only lead to greater complication and expense."

Assembly Bill 2 - Veto Letter to Governor Schwarzenegger.pdf

Senate Bill 797, which CJAC opposes, failed to pass the Assembly on Wednesday. It received 35 aye votes; 41 are needed.

The bill, authored by authored by Senators Fran Pavley (D-Santa Monica) and Carol Liu (D-Pasadena), is essentially a remake of last year's SB 1713 (Migden), which died on the Assembly floor. It would ban use of the chemical Bisphenol A in baby bottles and formula containers beginning in 2011 -- unless the chemical 's use is approved through the newly-constituted green chemistry review process established by legislation last year.

Banning a safe product (BPA has been approved by the FDA and the European Food Safety Agency) would very likely lead to unnecessary lawsuits. The makers of silicone breast implants, for example, dealt with only 150 lawsuits in the 30 years prior to an FDA ban. This number increased to more than 5,000 per year in each of the four years following the ban. The implants were ultimately determined to be safe -- but not before the company that made them went bankrupt as a result of the lawsuits.

The Civil Justice Association of California is concerned because almost half of the national class action lawsuits regarding BPA originated in California. Passage of this bill would enflame those lawsuits.

The alleged science behind the bill is weak. In addition to the FDA and European Union approvals, the California Environmental Protection Agency's Office of Environmental Health Hazard Assessment (OEHHA) -- the lead agency for the implementation of the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) -- declined to require Proposition 65 warning labels for BPA.

Senate Bill 797 was granted reconsideration -- and is therefore eligible for another vote before the end of session deadline on Friday.

Senate Bill 797 - Assembly Floor Alert.pdf

Assembly Bill 2, which CJAC opposes, passed the Senate on Tuesday night and will now return to the Assembly for concurrence with the Senate amendments.

This bill, authored by Assemblyman Hector De La Torre, will lead to increased lawsuits and will help lawyers -- not patients.

It creates a review panel to review rescission of health plan contracts by health plans. However, the bill contains trial lawyer amendments that prevent the review process from being helpful and fair. The reviewing body is tasked with determining the subjective point of view of the health plan applicant -- but is prevented from talking to the applicant or using expert witnesses to help them determine intent.

The process that is left will likely propel review decisions into the courts, leading to additional lawsuits.

The bill is similar to last year's AB 1945, which initially passed but was vetoed by the Governor.

Click here to read more about CJAC's position on the bill.

The Los Angeles Times reported that the Legislature passed AB 2 but that Governor Schwarzenegger has vowed to stop signing bills until further notice. He rebuked legislators for failing to make progress on the state's water needs and its prison overcrowding crisis, as well as for refusing to act on confirmation of several of his key appointments, the Times reported.

Malpractice-lawsuit fears begin the minute someone walks into the doctor's office with, say, a bump on his or her head.

"If I don't get a CAT scan, this is that one case where I'll end up in court," the doctor might think, Cecil Wilson, a physician who is president-elect of the American Medical Association, told The Wall Street Journal in an article examining tangible and unseen health-care costs.

Indirect costs that stem in part from medical professionals looking for legal protection play a far larger role in health-care spending, doctors and some analysts told the paper. And they are one reason medical liability is bubbling as an issue as Congress reviews whether to pass a health-care overhaul.

"There are significant savings that can be achieved in our health-care systems if we have prudent medical malpractice reform in place," Sen. Orrin Hatch said in a statement.

Many states have passed laws in recent years aimed at curbing liability claims, the Journal reported. A law passed in Texas in 2003 caps liability awards at $250,000 for noneconomic damages such as pain and suffering, a move that has led to fewer malpractice suits being filed, according to several prominent plaintiffs' attorneys there. According to Texans for Lawsuit Reform, medical-liability-insurance rates have declined an average of 21% in the state since the law change, with almost a quarter of doctors seeing a 50% decrease.

The driving component of California's landmark legislation, the Medical Injury Compensation Reform Act of 1975, is a $250,000 limit on non-economic damages awarded in a medical professional liability trial or arbitration.

In an amicus brief opposing a recent legal challenge to MICRA, CJAC General Counsel Fred Hiestand wrote that MICRA is a piece of well-crafted legislation that has stabilized medical malpractice insurance costs, assured public access to physicians and hospitals, and secured a fair legal procedure for plaintiffs to adjudicate their claims. Click here for more information.

A month ago, we blogged about a medical center that had cut its number of malpractice claims and reduced its backlog of open claims by admitting mistakes upfront and offering compensation before being sued.

Today, a Wall Street Journal article shows this is a growing trend. According to the Journal, "... some hospitals like Baptist Children's are taking steps to admit grievous mistakes and to learn from them in order to overhaul flawed procedures. That represents a sharp departure from hospitals' traditional response when something goes terribly wrong -- retreating behind a wall of silence to guard against potential lawsuits.

"Now, some hospitals are hoping to stem the tide of lawsuits by being more open with aggrieved patients and their families. While some experts warn that disclosure will lead to an increase in litigation and costs, there are some indications that patients are less likely to sue if they receive full disclosure and an apology, along with an offer of compensation. But longer term, some administrators say the solution is to improve hospital safety records."

Another hospital cited in the story, University of Illinois Medical Center in Chicago, has had a policy since 2006 of fully disclosing medical errors, apologizing when they occur, and swiftly offering a financial settlement.

During the past four years, the number of lawsuits against the center is down 40% compared to the period between 1999 and 2004, even though the number of procedures increased 23%, according to the Journal. The chief safety officer for the hospital told the paper that while he can't say for sure that the disclosure problem was responsible for the decreases, "we can certainly say that it has not caused an increase in lawsuits or payouts."

It's a scheme that sounds more fit for a legal thriller than real life: A group of top plaintiffs' lawyers and doctors conspiring to recruit accident victims and persuade them to undergo serious -- sometimes needless -- surgeries, to inflate the size of personal-injury claims.

The result, as Fortune magazine reported, was multimillion-dollar insurance settlements, even for dubious cases, and lucrative fees for the doctors, the lawyers, and one man whom prosecutors allege was at the center of the fraud: Howard Awand, who called himself a "medical consultant."

According to Fortune:

The alleged scheme began in 1999 and lasted for at least six years, prosecutors charge. Business and court records and local press reports suggest that the group -- which numbered about 30 -- colluded in hundreds of suits that yielded hundreds of millions in settlements. According to government evidence, the group coordinated their testimony as expert witnesses, lied under oath, protected one another from malpractice lawsuits -- even after the surgeries left a few patients paralyzed -- and ate away at the plaintiffs' settlement money with kickbacks disguised as contingency fees.

In May 2007, federal prosecutors unveiled indictments against Awand and plaintiffs' lawyer Noel Gage that charged them with conspiracy, fraud, and (in Awand's case) witness tampering. But so far, Awand and his associates have thwarted medical prosecutors. A judge dismissed indictments against Awand and one plaintiffs' lawyer because a key witness wouldn't testify.

Awand moved to Indiana in 2007, but now faces a second case: He and his wife were charged with four counts of misdemeanor tax evasion. They have pleaded not guilty and the trial is scheduled for September.

One medical center has cut its number of malpractice claims and reduced its backlog of open claims with a simple change: by admitting mistakes upfront and offering compensation before being sued.

That method has brought about remarkable savings in money, time, and feelings, according to an Associated Press story about the University of Michigan Health System.

"Apologies for medical errors, along with upfront compensation, (reduces) anger of patients and families, which leads to a reduction in medical malpractice lawsuits and associated defense litigation expenses," said Doug Wojieszak, a spokesman for The Sorry Works! Coalition, which includes doctors, lawyers, insurers, and patient advocates.

Malpractice claims against the health system fell from 121 in 2001 to 61 in 2006, while the backlog of open claims went from 262 in 2001 to 106 in 2006 and 83 in 2007. Between 2001 and 2007, the average time to process a claim fell from about 20 months to about eight months, costs per claim were halved and insurance reserves dropped by two-thirds.

The openness approach is catching on at places from Boston Medical Center to the University of Illinois to California's Stanford University hospital, the AP reported.

However, said Jim Copland, director of the Manhattan Institute's Center for Legal Policy, for this method to work, doctors need protection from having their own honesty used against them in court. A number of states have or are considering shield laws that would, for example, exclude an apology from admission as evidence in a malpractice suit. California's apology law can be found in Evidence Code section 1160, which states that statements of apologies or other benevolent gestures are inadmissible as evidence of an admission of liability in a civil action.

The Civil Justice Association of California supported the bill that created this change to the Evidence Code. In a letter of support for AB 2804 in 2000, CJAC cited an article in the ABA Journal, which said apologies are underrated and underused in litigation.

The author, Steven Keeva, quoted statistics that found "in the medical malpractice context, somewhere around 30% of plaintiffs claim they wouldn't have sued if only there had been an apology." (Click here to read a follow-up piece Keeva wrote in 2004.)

After some months of speculation on whether President Obama would include federal tort reform in his promised plan for overhauling the nation's health care system, it now appears that California-like solutions to the problem of high medical costs are not being contemplated.

"I'm not advocating caps on malpractice awards, which I personally believe can be unfair to people who have been wrongfully harmed," Obama told delegates at the American Medical Association on June 15. The driving component of California's landmark legislation, the Medical Injury Compensation Reform Act of 1975 is a $250,000 limit on non-economic damages awarded in a medical professional liability trial or arbitration.

The president did acknowledge the need to reduce defensive medicine (i.e., tests and procedures ordered in an attempt to prevent lawsuits), which has been described as a significant cost nationwide. "Doctors feel like they are constantly looking over their shoulders for fear of lawsuits," Obama told the AMA. But instead of limiting awards, which has proven effective in reducing medical professional liability costs and thus increasing patient access to care in California, the president encouraged "broader use of evidence-based guidelines."

"Replicating best practices. Incentivizing excellence. Closing cost disparities. Any legislation sent to my desk that does not achieve these goals does not earn the title of reform," Obama told the doctors at the Chicago meeting.

As a large number of parties engage in addressing the nation's health care delivery system, finding a solution that reduces unmeritorious lawsuits -- and the defensive medicine they promote -- will remain one of their core challenges.

***
Gordon Ownby is general counsel of the Cooperative of American Physicians, Inc., www.cap-mpt.com, and can be reached at gownby@cap-mpt.com.

The 5th District Court of Appeal in an unpublished opinion unanimously upheld the constitutionality of the state's landmark Medical Injury Compensation Reform Act of 1975.

The case, James Van Buren v. Sian Evans, M.D. and Yosemite Surgery Associates, involved a $2.5 million noneconomic damages award to a plaintiff against a doctor and the doctor's assistant. A Superior Court judge lowered the award to $250,000 pursuant to MICRA.

The plaintiff argued that MICRA's $250,000 cap on recoverable noneconomic damages deprived him of his constitutional rights to a jury trial and to equal protection of the law.

In its amicus brief, CJAC General Counsel Fred J. Hiestand noted that MICRA's noneconomic damage ceiling fully complies with the U.S. and California constitutions. The brief also argued that MICRA is a piece of well-crafted legislation that has stabilized medical malpractice insurance costs, assured public access to physicians and hospitals, and secured a fair legal procedure for plaintiffs to adjudicate their claims.

In its ruling, the court wrote: "... appellant contends that the Legislature does not have [the authority to limit recoverable damages] -- only a jury does. This argument was made and rejected more than 20 years ago. ... We reject it again."

Van Buren v. Evans - Opinion.pdf

As a journalist, Michael Kinsley, former host of CNN's "Crossfire," said he has written about the damage done to the economy and the country by excessive litigation and lawsuits over medical care gone wrong.

As a sufferer of Parkinson's disease, Kinsley said he is a grateful customer of the pharmaceutical and medical device industries.

Kinsley drew on both experiences while testifying before a Congressional committee against a bill that would lead to lawsuits against manufacturers of lifesaving medical devices. The misnamed Medical Device Safety Act of 2009, H.R. 1346, would end pre-emption, the federal liability protection for FDA-approved medical devices, opening the gates wide for product liability suits in state courts.

"Differences in state law or just the randomness of juries produce dozens of different answers," he said, in written testimony. "The direct cost is horrendous: delivering a dollar to a victim costs far more than a dollar in expenses -- mostly lawyers' bills. The indirect cost is immeasurable. Lawsuits focus on the victim of some medical product. By their nature, they undervalue the benefit that same product has brought to other users, or even to the victim herself."

The Washington Times noted in an editorial, "This bill would kill innovation. If manufacturers know they will be subject not just to regulation by the FDA but to uncertain justice under 50 different state standards, the manufacturers are far less likely to bring that device to the market. All those other beneficiaries -- the Michael Kinsleys of the world -- would be harmed by a law undermining the FDA's authority. The Medical Device Safety Act favors litigious trial lawyers over sick patients. Its passage would amount to serious legislative malpractice."

The U.S. Chamber Institute for Legal Reform also has a video with excerpts of Kinsley's testimony.

The Civil Justice Association of California opposes Assembly Bill 1521, authored by Dave Jones (D-Sacramento), which is set for hearing on April 14 in the Assembly Health Committee.

The bill creates a fiduciary duty for brokers or salespeople of health insurance, owed to their client purchasers.

The problem with imposing a fiduciary duty on brokers of health insurance is that it will be relatively easy for a lawyer to allege that a duty was breached and a lawsuit should therefore follow. Additionally, this duty would apply equally to independent brokers and brokers who represent only one line of insurance. This creates a "Catch-22" situation for brokers who work for one particular company because they also owe a duty to their employer.

Position paper - Assembly Bill 1521.pdf

A California appellate court's decision on generic drug liability -- which the state Supreme Court declined to review last week -- upended 14 years of precedent, according to an article in Inside Counsel magazine.

The article, published before the Supreme Court's decision was made public, makes several interesting points about Conte v. Wyeth.

First, some background: The plaintiff in the case sued Wyeth for her injuries even though she took a generic version of a drug that Wyeth pioneered but didn't sell to her. The appeals court's decision is at odds with traditional tort liability, which holds that fundamentally manufacturers are responsible for their own products but not responsible for the products made by competitors.

From Inside Counsel:

• The appeals court decision departs from more than a decade of case law in other jurisdictions. The court, however, wrote that it was rooted in "common sense and California common law."

• Given the nature of the pharmaceutical market, in which it's not uncommon for generics to have 80% or 90% of the market share over time, such a specter could surely dampen pioneer companies' willingness to innovate, Mark Haddad, a partner in Sidley Austin and chair of the firm's appellate practice group, told the magazine.

• The case could have broad implications outside the pharmaceutical arena. "If there's a sufficient similarity between whatever product the consumer ultimately uses and whatever product the entity in question is making a statement about, the court could say it's foreseeable that statements about Product X could impact on the consumer's decision to buy or use Product Y," Haddad said.

Today, the California Supreme Court announced its decision not to take up the case holding drug maker Wyeth liable for injuries to a patient who took a generic version of a drug that Wyeth pioneered but didn't sell to her.

When the lower court's decision Conte v. Wyeth was handed down last year, observers were astounded by its extension of product liability law. See the Drug and Device Law blog for criticisms of the decision. The CJAC blog also has a previous post on the case.

An appellate court dismissed Elizabeth Conte's claim against the generic manufacturer -- who made the product she actually took -- but allowed the case against Wyeth, saying:

"We hold that the common law duty to use due care owed by a name-brand prescription drug manufacturer when providing product warnings extends not only to consumers of its own product, but also to those whose doctors foreseeably rely on the name-brand manufacturer's product information when prescribing a medication, even if the prescription is filled with the generic version of the prescribed drug."

This conclusion is at odds with traditional tort liability, which holds that manufacturers are responsible for their own products but not responsible for the products made by competitors. Unfortunately, since the Supreme Court denied review in this case, Conte v. Wyeth will stand as new California law.

For years, frivolous litigation has been driving up health-care costs, reducing patient access to life-saving medicines, suffocating physicians, and undermining medical research and investment.

And if the pre-emption case currently being considered by the U.S. Supreme Court, Wyeth v. Levine, is decided in the plaintiff's favor, then the trend of plaintiff's lawyers filing as many cases as possible, searching for a deep-pocket defendant, will only increase.

That's the subject of an article published in the Atlanta Journal-Constitution. It's a good read for those wondering how frivolous lawsuits have stalled innovation and affected patients' ability to get safe and effective medicines.

A Houston woman quit the smoking-cessation drug Chantix for a second time after reading a so-called early-communication letter issued by the Food and Drug Administration late last year. The letter warned that the drug could be linked to increases in suicidal thoughts.

Deborah DeRousse is now smoking again, according to a Wall Street Journal article that examines whether patients may be overwhelmed by the amount of information about drug safety they receive through the media, consumer watchdog groups, and the FDA.

According to the Journal, a Pfizer Inc. survey of 300 medical professionals in March found that 89% of respondents were at least somewhat concerned that patients might stop their medications if potentially negative safety information was released to the public too early.

"Consumers may forget about the benefits of a medication if they focus only on risk," wrote reporter Shirley S. Wang. "And the health consequences associated with stopping a medication, particularly for a chronic condition, may be far worse than the possibility of a side effect."

During the 2007-08 legislative session, CJAC opposed a bill that could have also increased liability for makers of prescription medicines while potentially decreasing patient access to appropriate medication. In response to Assembly Bill 2690 (Krekorian), drug companies might respond by giving consumers the highly technical and complex information that doctors receive.

The bill would have eliminated a long-held legal defense, the "learned intermediary doctrine," which requires companies to direct their warnings to physicians, who act as "learned intermediaries" between the drug company and the patients. The rule recognizes that a physician, not a manufacturer, is best suited to evaluate the risks and benefits of a particular drug for each individual patient.

Fortunately for consumers, the bill died May 29 on the Assembly floor without a vote.

Assembly Bill 1945, the health care rescission bill vetoed by Governor Arnold Schwarzenegger, did not contain real consumer protections as its author claimed, Cindy Ehnes, director of the state Department of Managed Health Care (DMHC), wrote in an October commentary in Capitol Weekly.

The exclusion of basic consumer protections raised concerns that the bill wasn't about protecting consumers at all, but instead would protect the fees that plaintiffs' lawyers could collect by suing health plans, she wrote.

Ehnes noted that the Civil Justice Association of California opposed the bill after trial lawyers "significantly changed AB 1945 from its original intent." She quoted CJAC's argument that the revised bill would have taken the final rescission decision away from an independent third party review panel and would have been another way for litigation to needlessly drain away health care dollars.

Also, Ehnes wrote, for the past two years, Schwarzenegger's DMHC "has fought for -- and won -- the important changes needed within the health insurance industry to protect consumers.

"However, the Governor simply could not sign a bill that would not offer even close to the same level of consumer protections as gained by the DMHC, and would also raise costs and limit access to individual health coverage."

An op-ed by John Sullivan, president of the Civil Justice Association of California (CJAC), published today in Sacramento's Capitol Weekly outlines CJAC's concerns with a dangerous bill that would increase liability for manufacturers of prescription medicine and even possibly decrease patient safety.

Assembly Bill 2690 would repeal a long-standing rule that recognizes the warnings which accompany medicines and medical devices are directed to physicians, who are best suited to evaluate the risks and benefits associated with such medicines and make an informed decision for their patients.

The bill, now on the Assembly Floor second reading file, would bring a new duty to prescription drug manufacturers to directly warn consumers the same way they do doctors about possible side effects. Personal injury lawyers -- not a health care or patient organization -- are behind the measure, led by their statewide group.

Sullivan explains what would happen if the bill becomes law: "Some warnings ... might cause patients to overreact, to stop taking their prescriptions or quit following their doctor's orders. We'd see lawsuits over that, too. Litigation spawned by AB 2690 could cause some useful drugs to be pulled off the market altogether."

Learn more about AB 2690 by going to www.cjac.org and clicking on "Legislative Center."

An Investor's Business Daily article applauds California's 33-year-old healthcare reforms and urges other states to take a cue to reduce the cost of their medical malpractice premiums, attract new doctors, and increase the quality of healthcare.

David Ridenour, vice president of the National Center for Public Policy Research, writes that some greed-filled lawsuits "play a major role in our nation's ever-escalating health care costs."

"Lawsuits that unnecessarily increase the liability risk of healthcare providers only tend to increase costs and add to the current crisis," he writes, citing as an example the case of a physician who sued the Charleston (W.V.) Area Medical Center after it refused to recognize his medical malpractice self-insurance plan. The physician was awarded $25 million from local jurors.

"With America's healthcare increases far outpacing the cost-of-living index, West Virginia and other 'judicial hellhole' states should wake up and take a cue from California and Texas," Ridenour concludes.