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Archive for the ‘Corporate Fraud’ Category

Hopkins

News From the Tobacco Trials

Published by John Hopkins in Corporate Fraud, Defective Design, Mass Torts, Product Defect

Our law firm has tried eight trials in a row to successful plaintiffs’ verdicts; involving what has become known as the “Engle Progeny Cases”. These cases arise from the “Engle” case tried two decades ago in which juries heard 12 months of evidence and made a series of findings about cigarettes. Subsequently, the Florida Supreme Court found the following facts about the conduct of tobacco companies including:

  • Cigarettes are addictive.
  • Tobacco companies concealed important information about the dangerous health effects and the addictive nature of cigarettes from the public.
  • Smoking cigarettes cause over 20 different diseases.
  • Cigarettes are a defective product placed in the market by tobacco companies.
  • Cigarettes are unreasonably dangerous as manufactured by tobacco companies.
  • Tobacco companies conspired to conceal from the public important information about cigarettes and the dangers of smoking.
  • Tobacco companies were negligent.

Those of us in this law firm who have worked on cases against the tobacco companies have read the documents used in the Engle case and other cases, including the Minnesota Attorney General’s case. Once you read and review those documents it could not be clearer that all of the findings by the Florida Supreme Court set forth above are absolutely, crystal clear. In fact, because so much evidence and so many documents exist, most of it is never exhibited at the trials of cases against tobacco companies by tobacco company victims – most jurors never see but a small fraction of all of the evidence available .

We have seen the evidence of an industry that has made a science out of hiding, lying and manipulating. We have seen the documents summarizing plans by the tobacco companies to manipulate the nicotine in cigarettes; to create marketing plans that target teenagers; and to create “scientific” data in order to support the message that smoking cigarettes is actually good for you. Tobacco’s marketing plans for doctors to tell the public that smoking is good for you; athletes talking about smoking cigarettes improving their “wind”; and movie stars glamorizing the entire smoking genre – all are diabolically brilliant.

So, quite frankly, members of our firm were not at all surprised that we received two verdicts in favor of our clients and against the tobacco companies; in two different trials; tried in two different parts of Florida. The fact is that when anyone involved in the trial of tobacco cases hears about a verdict in favor of the tobacco companies, we are, well, shocked.

It is inspiring that two juries; in two different geographic locations; with two different sets of lawyers, can reach the same conclusion: the tobacco industry addicted people to a drug they knew was one of the single most addictive drugs in existence and then further manipulated that drug to increase its desperate hold on smokers. Then this industry literally invented the art of propaganda marketing and threw billions of dollars to make it successful.

We are pleased that our clients received their opportunity for justice in receiving verdicts of $3.5 million in one case and $2.7 million in another case. We would also like to recognize the talented attorneys who tried these cases: James Gustafson, Matthew Schultz (Levin, Papantomio law firm), Brian Denney, and Hardee Bass.

These were truly victories for “the good guys”.

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Hopkins

Tobacco Companies “Buy Out” Claims of Fraudulent Conduct

Published by John Hopkins in Corporate Fraud, Mass Torts, Product Defect

Big Tobacco has recently agreed to pay over $6 million to settle claims with the US Department of Justice.

A summary of the conduct causing the $6 million payment?

US district Court Judge Gladys Kessler, after hearing mountains of evidence, says this about the tobacco corporations:

  • They lied.
  • They misrepresented the truth.
  • They deceived.
  • They concealed.
  • They destroyed documents.
  • They distorted the truth.
  • They abused the legal system.

They conspired to keep away from the public scrutiny documents that demonstrate “smoking’s negative health effects, nicotine addiction, and altered cigarette design to increase addiction, light- and low-tar cigarettes and marketing to young consumers”.

Judge Kessler went on to say:

“In short, defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted”.

But, Big Tobacco did not act alone. Judge Kessler also had comments about Tobacco’s lawyers: they “played an absolutely central role in the creation and perpetuation of the enterprise and the implementation of its fraudulent schemes”.

These findings and Big Tobacco’s willingness to pay millions in order to avoid an airing of the evidence in a court of law come as no surprise to attorneys who have had to litigate against them. Simply reviewing the tobacco documents that have not been destroyed or hidden by Big Tobacco leads to only one conclusion. The tobacco industry has spent a hundred years perfecting a talent for hiding the truth and spinning facts to a point that fact becomes fiction.

Big Tobacco wrote the playbook for all other corporations who have held “shredding parties” and data dumping get-togethers in order to hide their wrongdoing.

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Hopkins

Hospitals Snub the Florida Constitution With Impunity So Far

Published by John Hopkins in Corporate Fraud, Medical Malpractice, Uncategorized

It is a part of the Florida Constitution.

It seemed fair to patients. With hospitals and doctors claiming the medical negligence problem was over blown, Florida Section 25, “Patients’ right to know about adverse medical incidents”, seemed like a common sense and fair law.

Read it. It is not very complicated.

But, since 2004, hospitals have been spending a great deal of time and money trying to circumvent, dodge and slip under the law. Sadly, hospitals have had reasonable success in throwing up legal roadblocks to the constitutional “requirement”.

What does Section 25 set forth? It seems pretty straightforward:

  1. Patients have the right to have access to any records made or received in the course of business by a health care facility or a health care provider that relate to any adverse medical incident.
  2. The health care provider is required to redact the personal information of any patient records released in complying with the law.
  3. A patient is intended to mean: an individual who has sought, is seeking, is undergoing, or has undergone care or treatment in a health care facility or by a health care provider.
  4. The law was intended to encompass: “adverse medical incident” means medical negligence, intentional misconduct, and any other act, neglect, or default of a health care facility or health care provider that caused or could have caused injury to or death of a patient.

A Coral Springs man, Harlan Ginsberg, has run headlong into a huge roadblock constructed by Northwest Medical Center, owned by HCA (Hospital Corporation of America), in Margate, Florida.

Mr. Ginsburg suffered a kidney stone attack. In the scheme of medical problems – not exactly a four alarm emergency. Certainly a medical condition that should allow health care providers to be deliberate and careful about their treatment, right?

Before leaving Northwest Medical, however, health care providers had been successful in cutting Mr. Ginsburg’s ureter (a tube that delivers urine to the bladder) and removing a completely healthy kidney, according to testimony of a physician.

Mr. Ginsburg was, understandably, upset. I would be if you removed a perfectly good, properly working organ from my body without even, well, asking me first.

He wanted to know how many other similar incidents occurred at the hospital and what the details were of those other incidents. He asked for the records under Section 25 of the constitution. Northwest Medical refused to provide him with the records. Later, probably after getting some good legal advice, the hospital relented and agreed to search its records for Mr. Ginsburg’s requested data. First, though, the hospital wanted $77,550 up front. I think we can look at $77,550 as a pretty big roadblock.

Section 25 of the Florida Constitution does not set forth anywhere that the hospital is permitted to charge to do a search that will produce the information. In fact, one might argue that if a law requires the provision of certain information, a corporation is intentionally violating the law by not maintaining record keeping in a way that allows compliance. But, that is one of the favored excuses from hospitals – “we do not maintain our records in a way that allows us to easily locate that information”.

Let’s think about that a minute. You run a hospital. I mean let’s pretend you are the CEO of a major hospital corporation. You are sitting in your office trying to determine the types of reports you want to regularly look at to accomplish your job responsibly. Wouldn’t a report that tells you how many medical incidents of negligence or mistake occurred in your hospital be one of the top five reports you would want to see? So, how can that data not be readily available to anyone?

How long will health care facilities and malpractice insurance companies be permitted to simply ignore or to dodge a part of the Florida Constitution? When will our lawmakers start requiring corporate compliance? When will someone stand up for individual citizens rights?

So far, citizens are not seeing any standing up from the executive branch or the legislature.

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Hopkins

Corporate America Needs Protection — From Itself

Published by John Hopkins in Corporate Fraud, Mass Torts, Product Defect

Corporate America needs protection from trial lawyers!?

So goes the tort reform mantra. Trial lawyers are victimizing corporations; which is causing job loss; which is ruining the economy; which is leading to higher prices; which is causing Wall Street uncertainty; which is leading to all around chaos.

I have worked for Corporate America and I have worked for lawyers. All the lawyer jokes aside, I am happy to no longer be working in the moral ambiguity of Corporate America.

Let’s take today’s Corporate citizenship example. Pfizer, Inc.

Recently, Pfizer agreed to pay fines of a record amount, $2.3 billion, for hiding off-label drug marketing practices. That would be the practice of selling drugs for uses that the FDA has not approved them for or, in some cases, uses that the FDA has specifically prohibited. Now, Pfizer investors are suing Pfizer saying that the Corporate Pharma “promised” it would stop its off-label marketing practices, but $2.3 billion later proves otherwise.

Also, just unsealed yesterday, is a complaint filed against Pfizer for the marketing of its drug, “Vfend” (voriconazole); an antifungal medication approved for the treatment of invasive aspergillosis and candidemia. Pfizer requested FDA approval to market the drug as “empiric therapy” as well. Empiric therapy is the medical practice of initiating treatment before an actual diagnosis can be made based upon laboratory or other objective studies. Antibiotics and some antifungals are often prescribed, quite correctly, by physicians based only upon their judgment of a patient’s symptoms. Pfizer wanted the ability to market Vfend on this broad basis so that physicians would prescribe it more often and, thus, increase Pfizer’s profits proportionally.

The FDA refused to allow Pfizer to market Vfend as an empiric therapy. So, what did Pfizer do? You guessed it, they marketed Vfend for broad use anyway. Why would a corporation specifically violate FDA regulation?

Vfend was approved for the limited use of treating diagnosed fungal infections in 2002. Certainly, the fact that Pfizer made $825 million in 2010; $798 million in 2009; and $743 million in 2008 off the drug may have played into their decision. Also, Vfend was designed to replace an antifungal, Diflucan, for which Pfizer was losing its US patent. Diflucan had been generating annual sales for Pfizer averaging $1.1 billion per year – an amount they stood to lose if they could not replace Diflucan with a substitute.

The current lawsuit brought by the US government was the result of company “whistleblowers”; former employees of Pfizer who have provided information to the US government suggesting that Pfizer’s off-label marketing resulted in much higher sales and this resulted in a fraud upon Medicare and Medicaid.

Sour grapes from some disgruntled employees? Let’s take a look at those employees; both of whom reportedly resigned from Pfizer:

Catherine Brown was Senior Marketing Manager at Pfizer and had been employed by them from 1996 to 2005. She holds multiple degrees in science and business and she was, in fact, “Representative of the Year” in 1998. She resigned from Pfizer in 2005

Bernard Vezeau was a Senior Product Manager on the “Vfend Marketing Team”. Mr. Vezeau went to West Point, was a Captain in the US Army and held a Master’s degree in Business Administration. He worked for Pfizer between 1989 and 1992; and was rehired by them in 2003.

The complaint brought by the US government gives insight into what allegedly occurred. Apparently, Pfizer was using a study, “the 608 Study” to substantiate its claims that Vfend was effective in treating broad categories of fungal infections. Notably, Pfizer claimed that Vfend was effective in treating a very aggressive and potentially lethal fungal pathogen, C. glabrata. The problem explained in the complaint in detail is that the 608 study results were, first, of a small patient population and, second, the results were substantially manipulated by Pfizer in an effort to cause the study to demonstrate an effectiveness in treating broad categories of fungal infection when it, in fact, was not effective.

While Pfizer marketed Vfend as having an “extended spectrum” and recommending physicians use Vfend “at the earliest clinical suspicion of a fungal infection”, respected medical journals condemned these assertions. The New England Journal reviewers stated that the 608 study “significantly obfuscate the presentation of results” and found the study “a bit deceptive”. The Lancet published comments by a noted and respected expert in fungal infections as finding the results of the 608 study to be “most perplexing” and seeming “seriously flawed”. In English, they did not believe Pfizer’s study and, if the allegations prove to be true, these experts had good reason.

What did Brown and Vezeau do wrong? Well, from Pfizer’s perspective, they insisted on clarification of the study results and asked for substantiation for claims that Vfend was effective in treating broad categories of fungal infections, most notable a life threatening fungal like, C. glabrata. Pfizer’s medical director, Dr. Dr. Schlamm, allegedly complained that Mr. Vezeau, was asking too many questions about the 608 study.

Now, Pfizer stands accused, yet again, of marketing drugs for uses NOT approved by the FDA. In addition, they are accused of manipulating scientific studies and opinion – for what? To maximize profits.

So, ask yourself: who needs protection from whom?

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Hopkins

Alaska Tobacco Case — Was it about smoke and mirrors again?

Published by John Hopkins in Corporate Fraud, Defective Design, Mass Torts

As I have written many times before, I believe in the jury system, but it requires a well-informed jury, given all the facts and evidence, to arrive at a just decision. Based upon my own research and the below discussion, I must conclude that, more likely than not, the jurors in the case of Hunter v Phillip Morris resulted in a less than full disclosure of the evidence relating to the outrageous conduct of the tobacco industry.

I have read many, many of the documents that comprise those involving Big Tobacco’s evolution in the development and production of cigarettes; evolution and production because what most people think of as tobacco was abandoned by cigarette manufacturers decades ago. What they sold and continue to sell to Americans and the rest of the world is a chemically engineered plant that they have called “the best drug delivery system” ever created.

A federal judge, Judge Gladys Kessler, has also read the documents, heard the testimony and saw fit to condemn Big Tobacco for sins against the American public:

  • These cases are about an industry that profits from selling a highly addictive product that causes a staggering number of deaths each year and Big Tobacco has known about the dangers for more than 50 years.
  • “Defendants have marketed and sold their lethal products with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted.”
  • “Over the course of more than 50 years, Defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as ‘replacement’ smokers about the devastating health effects of smoking and environmental tobacco smoke.”
  • “The evidence in this case clearly establishes that Defendants have not ceased engaging in unlawful activity…. For example, most Defendants continue to fraudulently deny the adverse health effects of secondhand smoke which they recognized internally; all Defendants continue to market “low tar” cigarettes to consumers seeking to reduce their health risks or quit; all Defendants continue to fraudulently deny that they manipulate the nicotine delivery of their cigarettes in order to create and sustain addiction; some Defendants continue to deny that they market to youth in publications with significant youth readership and with imagery that targets youth; and some Defendants continue to  suppress and conceal information which might undermine their public or litigation position…. Their continuing conduct misleads consumers in order to maximize Defendants’ revenues by recruiting new smokers (the majority of whom are under the age of 18), preventing current smokers from quitting, and thereby sustaining the industry.”
  • “Despite Their Internal Knowledge, Defendants Continued, From 1964 Onward, to Falsely Deny and Distort the Serious Health Effects of Smoking”
  • “As of 2005, Defendants Still Do Not Admit the Serious Health Effects of Smoking Which They Recognized Internally Decades Ago”

Even a powerful industry like the tobacco companies does not hide, deceive or scheme on their own, though. Judge Kessler also has interesting things to say about lawyers that have counseled and defended the tobacco companies for all these decades:

  • “At every stage, (Big Tobacco’s) lawyers played an absolutely central role in the creation and perpetuation of the Enterprise and the implementation of its fraudulent schemes. They devised and coordinated both national and international strategy; they directed scientists as to what research they should and should not undertake; they vetted scientific research papers and reports as well as public relations materials to ensure that the interests of the Enterprise would be protected; they identified “friendly” scientific witnesses, subsidized them with grants from the Center for Tobacco Research and the Center for Indoor Air Research, paid them enormous fees, and often hid the relationship between those witnesses and the industry; and they devised and carried out document destruction policies and took shelter behind baseless assertions of the attorney client privilege.”
  • Through their recruiting and training of consultants around the world, Defendants created a cadre of seemingly independent consultants to support the industry’s position on secondhand smoke and to create the impression that a legitimate controversy existed among independent scientists. The global effort to create and manage this program required intense coordination among the companies and their counsel [outside lawyers].

When an objective eye is turned upon all the evidence relating to the conduct of the tobacco industry the conclusions are inescapable. So, how can jurors reach differing verdicts? The lawyers representing Big Tobacco are some of the best in the nation, possibly the world. They have had decades to refine arguments that may convince even the most experienced jurist  to exclude certain relevant evidence.

For example, in a tobacco case brought since the issuance of the Surgeon General’s report on smoking in the 1960’s and after warning labels were put on cigarettes, it might be argued that any evidence of conspiracy or fraud on the part of the tobacco companies that occurred prior to the 1960’s should be kept from the jury. Tobacco lawyers regularly challenge the experts employed by plaintiffs by arguing that those experts are simply reinterpreting prior studies from the past and have done no “independent” testing of their own. The fact is the tobacco industry spent millions of dollars “creating” research results and conducting studies that would bring forth the evidence they wanted revealed; so, actually conducting a study has questionable value.

Once all evidence of Big Tobacco’s conspiracies, fraudulent tactics and deceptive practices hits the “light of day” it Tobacco’s arguments go up in smoke.

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Hopkins

Physician: First Do No Harm..Profit is Secondary?

Published by John Hopkins in Corporate Fraud, Miscellaneous, Product Defect

“Quid pro quo” happens in business all the time. You scratch my back, I’ll scratch yours.

Usually, the exchange is relatively even and the result doesn’t really cause any harm to anyone… or at least any harm of real consequence.

But, give me a million dollars for my “quo” and your “quid” must be huge!

That is what is happening between doctors and medical device manufacturers. Both drug companies and medical device manufacturers have been playing this game for decades. Whether it is a case in which the doctor gets paid for putting their name on an article they did not write and supporting the latest, greatest drug or they are paid for “consulting fees” that result in the doctor’s support of a particular new medical device. The result is the same – a respected name gets attached to the latest, greatest widget and sales rise.

The Chicago Tribune reports that “orthopedic surgeons have received hundreds of millions of dollars from joint implant manufacturers…” Yes. You read that correctly – hundreds with six 0’s following them.

In 2007, device manufacturers were told they were going to be required to disclose payments made like this; so, since then the total amounts in tribute paid has dropped, while the amount of individual payments has gone up. So, manufacturers are simply being more selective in choosing “which” doctor and agreeable to paying a 40 % higher amount of “tribute” to each. The average payments per doctor have risen from $212,740 to $233,108; with some individual payments being as high as $1 million according to an analysis of statistics by Dr. Robert Steinbrook from Yale University School of Medicine.

Dr. Steinbrook notes that conflicts of interest continue as recently reported in The Spine Journal, in connection with a Medtronic clinical trial for recombinant bone morphogenetic protein:

“Financial information was available for 12 of the 13 original studies: “the median-known financial associations between the authors and Medtronic Inc were found to be approximately $12,000,000 to $16,000,000 per study (range, $560 000-$23 500 000). An editorial noted ‘a rising, if not malignant, doubt about the spine field’s ability to honestly assess and report on clinical practice and new technologies.”

Only 4% of physicians ever are treated with these bonuses by medical device manufacturers; so is it really a problem?

Yes.

The way your physician makes decisions about recommending drugs and medical devices is by reading about them in journals, going to conferences, and hearing about them from manufacturer sales representatives. The sales reps are a given that the information is slanted in favor of the manufacturer.

So, that leaves articles and conferences.

If the respected men and women in a given field are willing to receive payment for supporting a particular medical device or drug by making speeches at conferences or by talking to fellow physicians at them, then we are down to journal articles. We have already read the reports about articles being ghost written by marketing professionals and “experts” being paid to add their names as authors.

Who can your physician trust? Your physician who is simply trying to provide the best care he or she can – how do they make the best judgments of which device is the best and which new drug is the most effective? They read. They listen. The problem is…who are they listening to?

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Hopkins

Better Health Through Shoes and Drugs

Published by John Hopkins in Corporate Fraud, Mass Torts, Product Defect

Wow, the federal regulatory agency, Federal trade Commission (FTC), has taken a firm stand on products that promise “a better way to a better butt”. The FTC has reached a settlement with shoemaker, Reebok, over its claims concerning the popular EasyTone shoes.

I must confess that until reading the article in The Washington Post, I had not heard of EasyTone shoes and the claims Reebok was making about them. Apparently both the claims and the advertising were something that hit home with consumers because Reebok reportedly sold over $500 million of them in 2010.

I wanted to do a little investigating since I had never seen any of the commercials for EasyTone or the shoes that make similar claims made by Skechers. Here is one of the commercials:

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I can understand why the FTC would get so worked up about the claims if they are false. I mean assuming they do not do what they claim; we could have sagging all over America. What if you actually had to exercise? I mean its absolutely outrageous.

Okay, I agree that if any manufacturer makes a claim about a product and it is not true (although Reebok and Skecher claim theirs is true), they should have to pay a price for false advertising. In this case, the FTC settled with Reebok for $25 million; probably representing some fraction of their profit margin in a single year. That is significant and important – and, it is exactly what the Federal Trade Commission is in the business to do.

I guess my “tongue in cheek” reaction results from comparing the FTC nailing Reebok for sagging butts, while drug manufacturers play in advertising Shangri-La on a regular basis. Take a look at the Reebok ad again. See all the imagery and visual suggestion? Drug companies do exactly the same thing; except drug companies are selling drugs, not the newest “uplift” device.

Ask yourself, what does attractive, successful, professional women sitting in a very expensive bar, have to do with Yaz birth control medication? Or, what does Humira have to do with planting sun flowers? How does Vioxx really relate to walking down a beach to go fishing as the sun rises radiantly over the ocean?

Drug manufacturers spend billions every year trying to tell us about the latest disease and, oh yeah, sell us their latest cure for the latest disease. In 2005 alone drug companies spent over $58 billion for promotion of pharmaceutical drugs to consumers. Drugs consumers can not just go buy, but must get a prescription from their doctor in order to obtain them.

In 2005, drug companies only spent $32 billion on research. That is nearly 50% of what they spent on advertising and that is both a startling and telling statistic.

What are the priorities for Big Pharma? They need the latest, greatest disease so they can tell you about it, suggest you may have it and convince you that they have the answer for you. And, the pressure is on them, because they have to do all of this before the studies come out that tell us the latest cure is simply making people sicker, killing people or that it simply does not really work. The profit must be made before the truth is known.

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Be sure that drug companies are in the profit business. Although I know there are plenty of well-intentioned scientists employed by Big Pharma companies who are interested in helping people, finding the great cure for the worst disease. But, at the end of the day, drug companies make decisions based from profit motives and their marketing departments drive decisions a whole lot more than their research and science departments.

So, I am happy that the FTC takes their job seriously and, if Reebok’s claims were untrue, I am happy that they were forced to pay some penalty.

But when will the Food & Drug Administration take some pages from the FTC’s playbook and start bringing down real regulation on drug company advertising to consumers. When will the FDA put a stop to advertising that dilutes drug complications, expands drug benefits and suggests to consumers that if they do not feel sick, maybe they should think about it a little more

I went back and took a look at many of the drug companies advertisements and I seem to have remembered seeing every one of them. The Reebok ad, though, is one I missed and, I am reasonably certain I would have remembered it.

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Hopkins

Tobacco Companies Can Not Sell Their Stories in Connecticut Either

Published by John Hopkins in Corporate Fraud, Defective Design, Mass Torts, Product Defect

Big Tobacco is not only finding it hot in the great State of Florida, but also in the great State of Connecticut as well.

There, a federal court judge, Hon. Stefan Underhill, was asked by RJ Reynolds to overturn a jury verdict for the plaintiff in the amount of $28 million (Izzarelli v. RJ Reynolds Tobacco Co; case no. 3:99-cv-2338). Judge Underhill apparently did not buy what Big Tobacco was selling any more than the jury did.

Santa Smokes So It Must Be Good

This new Connecticut case is interesting in a few ways. Big Tobacco brought on its typical defenses of cigarettes are not addictive, but if they are addictive, the plaintiff could have quit if she really tried; that there were warnings about the dangers of smoking on the cigarette packages, if they are dangerous; and that if cigarettes are dangerous, they only are because of the ingredients that are naturally found in tobacco.

The court set forth a number of things brought into evidence in the case that justified the jury verdict of $28 million.

During the 1970’s, RJ Reynolds was losing market share in the new smoker group and was desirous of catching up with their competitors in the ability to addict people to cigarettes. They had known for a very long time that a cigarette is really nothing more than a delivery system for nicotine in a form that is acceptable to the user. In other words, Big Tobacco could sell something that allowed the user to inject the drug nicotine into their system through a cigarette much easier than they could by selling it in hypodermic needles. Big Tobacco had also known for quite some time that it is “free nicotine” that really gives the smoker the “kick” of nicotine into the system and, more importantly, Big Tobacco knew they could control the levels of “free nicotine” in cigarettes, thus controlling the “kick”.

What RJ Reynolds and the other manufacturers really craved for was to lure potential smokers under the age of 18 into the cigarette addicted population. Sadly for RJ Reynolds, Kool cigarettes, manufactured by Phillip Morris, had been burning them on market share. RJ Reynolds quickly undertook to fix this problem through manipulation of nicotine in their product:

“Notably, R.J.Reynolds discovered that (when altered with fructose alone or a fructose/ammonia gas mixture) the tobacco blend formulation G7 used in its Winston and Salem products increased the amount of nicotine in the cigarette as well as the percentage of nicotine transferred to the smoker.”

And:

“With respect to the effective dose range of nicotine required to maintain addiction, R.J. Reynolds understood that, although an increase in free nicotine would enhance the addictive property of the cigarette, a decrease in the nicotine yield of the cigarette would increase the number of cigarettes required to meet the addiction demand.”

“…the jury could have reasonably found that R.J. Reynolds manipulated and altered the tobacco and the chemical additives in Salem Kings to enhance the addictive nature of the product, increase the number of cigarettes smoked by the consumer, and ultimately deliver a higher level of carcinogens to the consumer as compared to other cigarette products.”

The evidence in this case set forth that not only were Big Tobacco targeting teens in hopes of adding them to the addicted masses, for 20 years after the plaintiff (Izzarelli) began smoking and as late as the mid-1990’s, Big Tobacco persisted in its efforts to “dispel the notion that cigarettes are an addictive product and to discredit health warnings about cigarettes maintain the dangers of cigarette smoking have been well known for a century, while testifying under oath that the claimed dangers of their products do not exist at all.

In Florida, Big Tobacco regularly stands before juries and tells them the same lies that their own CEO’s have previously testified about under oath. Tobacco company lawyers stand before juries and tell them all about how the dangers of smoking cigarettes have been known to everyone for ever. They claim that nicotine, although addictive, is a naturally occurring ingredient in tobacco that is, well, not THAT addictive. They tell jurors all about “free will” and that, well shucks, they are just a bunch of poor farmers trying to eke out a living.

The truth is Big Tobacco has taken a natural product (tobacco) and spent billions of dollars trying to re-engineer it into the “best drug delivery system in the world”, while they tinker with the addictive ingredients of their product to try and increase market share. All the while Big Tobacco has been telling the public things like this excerpt of a 1976 letter from Public Relations employee TK Cahill:

Big Tobacco's Script

The truth is that Tobacco companies want the public to believe its version of revised history. Big Tobacco needs the public and juries to believe they did not manipulate cigarettes to increase addictiveness and that anyone can quit anytime they want; they need them to believe the industry did not spend billions of dollars trying to convince the public that cigarettes were not just safe, but actually healthy for you; and they need them to believe that smokers who started smoking back in the 1940’s and 1950’s knew about the dangers of smoking.

In sum, Big Tobacco is still selling poison. They still have cigarettes on the market that addict and kill people every day. Now, though, they are also selling lies, fiction and fables to jurors and the public; well, at least to those who do not remember anything but Tobacco’s revisionist history.

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Brenda Fulmer

Drug and Medical Device Corporations — Are They Above the Law

Published by Brenda Fulmer in Corporate Fraud, Defective Design, Mass Torts, Product Defect

Not a week goes by without a headline reporting on yet another settlement between a multi-national pharmaceutical company and state or federal prosecutors. Medical device manufacturers are often also frequently subject to similar prosecutions.  While it is laudable that governmental authorities are finally taking action against chronic wrongdoers, the frequency of these prosecutions and settlements, and the very high recidivism rate, leads one to wonder whether drug and medical device manufacturers see these payments for wrongdoing as merely yet another cost of doing business. And, perhaps, more troubling, a very small price to pay to have a chance at marketing the next multi-billion dollar blockbuster drug or must-have medical device.

The problem is that while our government is modestly increasing its coffers with these settlements and fines, little attention has been paid by regulators to the other victims of their misrepresentations and deceptive and unfair trade practices – patients who have, at best, been defrauded and, at worst, have been harmed by defective drugs and medical devices with which they never would have come in contact but for the improper marketing.

For many years, there have been dozens of announcements of investigations and settlements involving a number of transgressions of drug and medical device manufacturers:

  • Fraudulent direct-to-consumer advertising
  • Unfair trade practices, price-fixing, and collusion with pharmacy benefit managers and others that has contributed to escalating drug costs
  • Kickbacks and improper payments to doctors
  • Pollution of scientific articles and medical literature (through “ghostwriting” and other efforts) which have the effect of preventing doctors and patients from making important decisions regarding the risks versus the benefits of drugs
  • Knowingly manufacturing adulterated or contaminated products
  • Promotion of drugs and devices for indications and “off-label” uses that have not been approved by the FDA because they are unsafe or have insufficient proof of safety
  • Manipulation of clinical trials to under-report or mask safety issues
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Just this week, yet another study was published (this time in the online medical journal of PLOS – Public Library of Science, a non-profit organization devoted to making the world’s scientific and medical literature more accessible) which found that less than 20% of the advertisements that are placed in journals by drug and medical device companies who are marketing their wares to physicians are fully compliant with FDA guidelines.  Nearly 60% of the marketing pieces minimized risks associated with the product, and almost 30% failed to provide complete information on the medical product’s efficacy, which essentially means that physicians who are charged with assisting patients in balancing risks vs. benefits of a particular drug are unable to do so because so many of the advertisements and other materials that have informed the physician were false.

If your banker failed to comply with banking laws 80% of the time, federal regulators would move swiftly to close them down.  If your car only operated as represented 30% of the time, there would no doubt be an outcry for a recall and the broadcast of TV reports from consumer fraud investigators.  If only 20% of the facts taught to our children were accurate, would we continue to permit those educators to continue to teach?  Of course, not.

So, why do drug and medical device manufacturers get a pass?

Although Big Pharma might disagree, our laws still apply to them (despite their best efforts to carve out numerous exceptions).   We still expect big corporations to follow the same lessons that we teach our children – be honest, tell the truth, admit mistakes when you make them, be cautious and safe, and protect others from harm.  Is it too much to ask that the FDA and governmental regulators get tough with drug and medical device manufacturers in hopes that they might learn their lessons this time?

Perhaps, a three-strike rule might deter the repeat offenders?

Or withholding Medicare payments and reimbursements for the drugs and medical devices that are subject to fraudulent marketing practices (which might make more of an impact on the bottom line than the fractions of pennies that are currently being paid to resolve attorney general investigations)?

Better yet, how about criminal prosecutions of corporate executives who have authorized illegal activities under the guise of marketing?

The fraud that has been perpetrated by some in the drug and medical device industry certainly is every bit as offensive as the crimes of Bernie Madoff, but far worse, in that patients have been harmed or died as a result.  One can always hope . .  .

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Hopkins

Guess What Florida Legislators Think Our Elder Citizens Are Worth?

Published by John Hopkins in Corporate Fraud, Medical Malpractice

Please just take a moment to concentrate.

Close your eyes and try to imagine that you are lying back in a bed. This bed has not had the bed clothes changed for a while and you are currently laying in feces and urine because you are not able to get out of bed by yourself. You have not seen anyone come by or into the room for several hours. You have open bedsores that, although bandaged, are infected and now soaked with urine and feces. You are 85 years old and during your life you helped a great many people and contributed to many people’s lives. You want to cry, but the tears will not come.

Sound severe? Sound like it is exaggerated?

I have been involved reviewing and evaluating a number of claims for nursing home negligence and abuse over the years for both the defense and the plaintiff. This story is not an exaggeration and it is not too severe.

There are many good nursing home facilities and, although some are better than others, most make an honest effort at reasonable care for those to whom we owe good care – our elderly citizens. For those who have contributed to our society over the years and for those who often can not care for themselves.

Sadly, there are those nursing homes that are not good and who do not staff sufficiently to properly take care of the people they have promised they would. There are facilities in which the interests of the owners are to make as much money as possible and to do so with as low an overhead as they can possibly have. There are nursing homes in which the staff is so low that needy patients go hours and sometimes days without any meaningful care.

The Florida legislature currently has proposed to pass Senate Bill 1396, relating to the liability of nursing homes for negligence and gross negligence. The bill has nothing to do with improving nursing home care or helping to ease the burdens of the elderly.

What the legislature has done with this bill is go out of the way to protect the best interests of nursing home owners; there boards of directors and virtually all the management level people. The legislators have engineered a procedure requiring a hearing in order to substantiate claims against these officers and the bill seems a little unclear to me whether they are going to permit the hearing to occur after the injured nursing home resident is permitted to conduct discovery of facts and documents or before.

The proposed bill also has legislators fixing the value of elderly people at $300,000. The facts do not matter; it does not matter how much you loved mom; it does not matter that, but for the abuse, mom would have lived another 20 years; mom is not worth more than $300,000 according to Florida legislators. In addition to this, legislators also employ some legal maneuverings to limit damages even more if the injured elderly person dies.

The legislators have also crafted some language to protect the corporate officers and the corporation owning the nursing home. The corporation and its officers can only be held liable for punitive damages if the intentional misconduct or the gross negligence was “condoned, ratified, or consented” to by the “officers, directors, or managers of the actual employer corporation”. So, if the corporation is not spending the money to provide supervision of their nursing aides and they allow grandma to be ignored to the point she dies, the corporation can not be held liable for the damages unless specific knowledge can be proved.

Should this bill pass, the only objective thing, which can be said about it is that running a nursing home in Florida just got a great deal more profitable and being elderly in Florida just got a great deal more scary.

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