Big Pharma slapped back in two separate tries at buck-raking

sacklerdendurtemple-225x300Fortunately for desperate regular folks, Big Pharma doesn’t always carry the day with its rapacious schemes.

Just look at how a federal judge has upended a plutocratic family’s ploy to shield themselves from a wave of lawsuits over their company’s deceitful inundating of the country with powerful painkiller, or how public furor has pummeled a firm that wanted to charge nosebleed prices for a dubious prescription medication targeted at treating Alzheimer’s.

Officials from the District of Columbia and Maryland helped stymie the wealthy Sacklers from an ugly legal bargain in a multilbillion-dollar bankruptcy case involving the family-run Purdue Pharmaceuticals and thousands of lawsuits over the company’s OxyContin painkiller.

The Sacklers and their lawyers sought to outfox states, counties, cities, Indian tribes, and other plaintiffs by moving the matters against them out of a court in Cleveland, where the federal system has consolidated the sizable number of opioid abuse and drug overdose lawsuits in hopes a judge can strike a global settlement. Instead, the purportedly philanthropic clan handpicked a judge and a bankruptcy court in suburban New York to deal with the debts and insolvency of Purdue.

The family and its members, though, never put themselves into bankruptcy. Instead, court officials found, the Sacklers for years quietly pulled huge sums out of Purdue and parked them in offshore accounts. They dickered and agreed to a bankruptcy settlement for their company. Sure, the family would have put up several billion dollars from its stash. Purdue would be liquidated, with billions of dollars from that consequence going to claimants to deal with the opioid crisis.

But in turn, the deal the family struck would absolve them and many others connected with Purdue from further civil liability. The Sacklers declined to accept responsibility for any role in the opioid crisis that has killed a half million Americans in a decade, left substantial numbers of others addicted and debilitated, and has only worsened during the pandemic. They would have kept a family fortune estimated at $11 billion, and, apparently, skated away from any potential criminal charges.

The family has insisted it did nothing wrong and the deal — eventually — would provide desperately billions of dollars to governments savaged by the costs of dealing with the opioid crisis. Many government claimants in the case — excluding Maryland and the District of Columbia — had accepted the deal, reasoning that it was better to extract some relief from the Sacklers rather than engage in protracted legal combat with uncertain outcomes.

But as the New York Times reported:

“After [the bankruptcy judge] approved the plan, it was immediately appealed by the United States Trustee, a branch of the Justice Department that monitors bankruptcy cases; eight states, including Maryland, Washington and Connecticut; the District of Columbia; and about 2,000 individuals. The appeal was filed in federal district court. Lawyers challenging the plan argued that the Sacklers had essentially gamed the bankruptcy system. Moreover, they argued, [the bankruptcy court] lacked the authority to shut off a state’s power to pursue the Sacklers under its own civil consumer protection laws.”

U.S. District Judge Colleen McMahon agreed with the parties appealing the Purdue settlement, taking note in oral arguments her concern that the Sacklers should not be rewarded for pulling money out of their company and helping to send it into a financial tailspin.

McMahon also reviewed in detail in her ruling the bankruptcy court’s effort to immunize the Sacklers against further lawsuits that might arise out of claims separate from those considered in the current case, including whether family members engaged in “fraud, misrepresentation, and willful misconduct under various state consumer protection statutes.”

McMahon said appellate courts and even perhaps the U.S. Supreme Court needed to weigh in and decide whether bankruptcy courts can grant sweeping legal immunity to parties before them. She said her reading of the law says a flat “No.”

The Sacklers have said they will appeal.

 Biogen reaps what it sowed

Critics have ripped federal regulators for approving Aduhelm, a prescription drug targeted at Alzheimer’s treatment, based on the thinnest of evidence. But the mysterious force of capitalism — “the market” — has taken note that respected experts, major academic medical centers, insurers, and the Department of Veteran Affairs all have turned on the drug. This is especially true because Biogen, its maker, priced the care regimen with it at a reviled price of thousands of dollars annually.

The company did so, apparently believing that the sketchy blessing of Aduhelm from the federal Food and Drug Administration would make the drug a gold mine.

It has not. Instead, doctors have declined to prescribe it and revenues from the med have amounted to a couple hundred thousand dollars for a quarter — a paltry sum in Big Pharma terms, especially considering the time and money spent to get Aduhelm to market.

The abysmal results with the drug have led Biogen to plan a punishing set of actions — against its staff, with the firm’s board prepared for major layoffs and cost reductions, according to the medical-science news site Stat. (Its story is behind a paywall, but other trade reporting sites have carried information on Stat’s reporting).

Biogen also has announced an expedited plan to conduct more clinical trials on Aduhelm. Those results won’t be in for years but will come faster than federal regulators initially had required. Analysts say the company — which got blurry information from two previous and large trials — may be seeking to buttress confidence in the drug. It is supposed to help clear beta amyloid, a protein in the brain implicated but never proven to be a cause of Alzheimer’s.

The company also took the rare step of slashing in half the announced annual cost of an Aduhelm treatment regimen, making it a still steep $28,000 (versus the $56,000 it had sought before).

Taxpayers already have been hit with the cost of Biogen’s high pricing of Aduhelm, with seniors facing one of the largest Medicare cost increases seen in recent times. Officials say the price hike reflects the need for the government to cover skyrocketing prescription drug costs, notably for Aduhelm. Once that drug won approval from the federal Food and Drug Administration it became a likely cost burden for Medicare, though officials insist it will be reviewed and it is possible that it will not be covered.

Aduhelm, in the meantime, has raised specialists’ concerns with a death of patient in a clinical trial, and with persistent worries about the substantial drug’s side-effects, including brain bleeding and swelling. Part of the Aduhelm regimen requires patients to undergo regular infusions of the drug, procedures that increase its costs because they can only be done in doctors’ offices, clinics, and hospitals. Patients also must have regular and expensive brain scans to ensure they are not experiencing bleeding or swelling.

To be clear, Aduhelm in the most optimistic interpretation of data presented by Biogen and approved by the FDA showed only faint benefit for early-stage Alzheimer’s patients, though federal regulators — in a step that only added to the furor over the drug — allowed it to be used more widely (though officials tried to walk that back in its labeling).

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them by dangerous drugs.

The opioid crisis took time to blow up, fueled by Big Pharma and abetted by doctors, nurses, hospitals, insurers, and many others in health care. While progress appeared to have been made, this public health menace exploded anew during the coronavirus pandemic, and it demands a full-on response to put down. It is unacceptable that this nightmare will claim 100,000-plus American lives this year. It is ghastly that criminals are tainting all kinds of pills with super powerful fentanyl, a synthetic and increasingly prevalent street opioid that is lethal in even tiny doses.

While the Purdue settlement, over an extended period, would have funded desperately needed efforts to battle the opioid crisis, it is good to see a federal judge also protect a fundamental, constitutional right of Americans to seek justice in the civil system. This right cannot be bought away, excusing those who may have done wrong, even with the promise of billions of dollars — which came from extreme profiteering from the pain of others. The Sacklers have become so notorious for their conduct that one of the preeminent art institutions in the nation has scrubbed their name from its galleries, despite the lavish gifts the plutocrats bestowed over time. (The famed Temple of Dendur at the Metropolitan Museum in New York, shown above, no longer is in the “Sackler wing.”)

As for Biogen, let’s see if the executives there (except the one who reportedly was pushed out over Aduhelm’s weak performance) keep enriching themselves as their staff, patients, and taxpayers struggle.

We have much work to do to ensure patients get the safe, effective, accessible, and affordable prescription medications they need and deserve.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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