Harkening back to the 1990s when states sued the big tobacco companies to offset medical expenses incurred treating tobacco related illnesses, two legislative resolutions are currently in play urging the governor and Attorney General to sue pharmaceutical companies over opioid addiction. HR 363 and a yet to be introduced companion resolution in the Senate have not passed yet, but recently, Attorney General Josh Shapiro announced he would start looking into such a suit.
Opioid suits are picking up steam across the country. Eyed up as the next cash cow by contingency fee lawyers filing suits on behalf of states, reasonable minds will determine there are significant differences between the opioid issue and the tobacco suits that were successful in the 1990s.
Opioids, unlike cigarettes at the time of tobacco suits, are regulated by the Food and Drug Administration. The agency approval for these products will no doubt be presented to juries as evidence of their safety and effectiveness. In addition, these drugs come with warnings and warning labels that inform the consumer of risks associated with the drug. Cigarettes did not contain warnings during the early days of cigarette packaging and marketing.
Initial belief that opioids were not addictive dates back to the letter published in the New England Journal of Medicine in 1980. This letter, from the Boston Collaborative Drug Surveillance Program at Boston University Medical Center, stated: “We conclude that despite widespread use of narcotic drugs in hospitals, the development of addiction is rare in medical patients with no history of addiction.” This letter, appearing in an authoritative medical journal, was relied upon by the medical community as evidence of the low risk of addiction from these painkillers. Yet, contingency fee lawyers will attempt to shift blame to the deep pocketed pharmaceutical community hoping for a big score.
Instead of looking at these facts, the House resolution (HR 363) charges without attribution, that drug companies in Pennsylvania have engaged in deceptive and unfair marketing campaigns, used misleading scientific data to convince physicians to prescribe opioids, used illegal kickbacks and set sales quotas for these drugs. Senator Jay Costa, who is planning on introducing a companion Senate Resolution, recently took his shot at the industry during a monthly Press Club lunch saying the industry’s advertising tactics toward doctors and patients were “in large part” to blame for the opioid crisis.
A historical perspective, however, demands reading between the lines. In the tobacco settlement, states were supposed to use the windfall funding as compensation for the medical costs of treating illnesses caused by smoking. Instead, much of the money went to other uses well beyond the scope of its original intent.
Pennsylvania, for example, used its tobacco settlement funding for smoking cessation programs, providing insurance to uninsured adults, health research, home and community care for seniors, tobacco prevention and cessation, hospital charity care, prescription drugs for the elderly and future health care programming. And then, as the state often does with accounts that accumulate cash, Pennsylvania even took some of the tobacco money to balance its budget!
Given Pennsylvania’s current challenging budget deficit and a legislature averse to raising revenue through additional taxes, any funding received from litigation against drug manufacturers will be a very tempting target to grab for budget balancing. And once the legislature gets ahold of a funding windfall, it will again be used to fund various favored projects with little or no connection to fighting opioid addiction. In the meantime, the contingency fee brigade will ride off with thirty percent of the proceeds leaving behind economic damage to our pharma industry and fewer dollars to fight opioid addiction.
Let’s hope common sense prevails.
Written by Curt Schroder, Executive Director of PCCJR, a coalition dedicated to bringing fairness to Pennsylvania’s courts by elevating awareness of civil justice issues and advocating for legal reform in the legislature More information at www.paforciviljusticereform.com
Pennsylvania has a budget, but not enough revenue to fund it!
Since we last updated you, the budget was passed without raising the additional revenue needed to balance it, and PCCJR members actions leaped into action to prevent a False Claims Act from becoming a potential moneymaker to help fill the budget gap. Your calls and messages sent a strong signal to lawmakers about the high costs and potential harm such a measure would have on companies doing business with the Commonwealth. More about the fruits of your efforts below!
The June 30 state budget deadline has come and gone. A $30 billion spending plan passed. However the Governor and the House and Senate members have yet to agree on how they are going to pay for it.
The governor let the spending plan become law this week without his signature. But, without the revenue, as one news report put it, the Commonwealth is “in a sort of constitutional no-man’s-land.”
There is even less consensus on how the two Chambers will approach resolving the need for a spending plan. As we write this, the Chambers are both on a “six-hour call,” in which the leaders could bring the legislators back to Harrisburg at any time. At the moment, however negotiations are quiet. There are some rumors that the Senate could be back in as early as next week, but all is subject to change.
Within the fluidity of the budget process, PCCJR will remain vigilant throughout the summer to ensure any legislative actions related to fairness and improvements in our court system have our input.
PCCJR Members Help Block False Claims Legislation
Despite the lack of action on the budget, we have had tremendous action on the part of our members that stopped the proposed False Claims Act! In response to a recent PCCJR Action Alert, leadership in the Pennsylvania House of Representatives and individual House members heard from you about your opposition to the False Claims amendment filed to SB 527. As a result, the sponsor of the amendment withdrew it before a vote was taken. It is possible, however, that a False Claims measure could be offered when the legislature moves to enact a bill to fully fund the 2017-2018 budget. The PCCJR is watching developments closely and will let you know right away if your help is needed again!
For some legislators, a False Claims Act might sound promising as a way to generate new revenue for the Commonwealth. But, as we detailed in a recent report, it has harmful provisions that would be a bonanza for plaintiffs attorneys and would encourage lawsuits where fraud doesn’t even have to be proven! Many thanks to all of you who took action! Your engagement worked!
House Passes Civil Immunity for Vehicle Rescues – HB 1152
HB 1152, which provides civil immunity for any damage to a car resulting from entering the car by force to rescue an occupant passed the House unanimously and now goes to the Senate.
The bill does place several conditions on the grant of immunity. A person must determine that the vehicle is locked and no other reasonable method exists for the occupant to exit the vehicle, there must be a belief that the occupant is in imminent danger of suffering harm, law enforcement, the fire department or 911 has been contacted, and the rescuer does not use more force than necessary to enter and remove the occupant. The rescuer must also leave a note with contact information, why forced entry was used and also must remain with the rescued individual until emergency responders arrive.
IN CASE YOU MISSED IT. Tribune Review Editorial Calls for Medical Malpractice Tort Reform
The Pittsburgh Tribune review wrote an editorial this week calling medical malpractice tort reform a “remedy for fairness.”
The piece features the recent passage of The Protecting Access to Care Act in the U.S. House, which caps noneconomic damages in medical malpractice lawsuits at $250,000. Be sure to read the full piece here and consider sharing it along with information about PCCJR’s mission!
Budget negotiations grind on this week in Harrisburg. State spending authority runs out June 30 at midnight pursuant to the state constitution. But at this point it looks like we’ll be going into budget overtime and with that comes opportunities as well as challenges for civil justice issues.
Without a budget to vote on, it is an active time to move other pieces of legislation, including several bills PCCJR has been monitoring, tracking and actively lobbying. We’ve seen movement on legislation we support, and are also keeping a close eye on a few pieces of legislation and amendments we oppose, including one bill that could open the flood gates for frivolous lawsuits against Pennsylvania companies.
As we work to educate legislators about these issues, I can’t help but think PCCJR was created just in time! It’s time to have a counterbalance voice in Harrisburg!
Here’s our update:
Protecting Good Samaritan Rescuers
A bill providing civil immunity to individuals for any damage to a car resulting from entering the car by force to rescue a person passed the House Judiciary Committee by a unanimous vote. HB 1152, also known at the Hot Car Immunity bill, places several conditions on the grant of immunity, however. The person in the car must be unable to get out without assistance. The rescuer must believe the person in the car is in imminent danger of harm. A reasonable effort must be made to locate the vehicle’s driver. Law enforcement or the fire department must be contacted, and the rescuer cannot use more force than necessary to enter and remove the occupant. The rescuer must also leave a note with contact information and why forced entry was used and also must remain with the rescued individual until emergency responders arrive.
HB 1152 now goes to the full House for consideration.
Frivolous Lawsuits Advance In House!
A measure designed to harass businesses large and small with frivolous lawsuits was passed by the House Consumer Affairs Committee this week.. PCCJR is keeping tabs on this plaintiffs’ attorney-driven legislation and actively working to keep the bill from getting to the House floor.
HB 475, sponsored by Representative Anthony DeLuca (D, Allegheny) increases the minimum amount of damages in a private action under the Unfair Trade Practices and Consumer Protection Act from the current minimum of $100 to $500.
Raising the minimum recovery provides incentive to sue for small amounts of damages that otherwise would never see a courtroom, thus clogging our court system with frivolous cases. This is the same statute that is responsible for outlandish lawsuits such as the one claiming Subway’s hoagie only measured 11.5 inches instead of the advertised foot long. There are more ridiculous examples of suits brought under these statutes on our website.
PCCJR strongly opposes this bill and organized opposition to it. When it was considered by the House Consumer Affairs Committee, Representatives Warren Kampf (R-Chester/Montgomery) and Eric Nelson (R-Westmoreland) were the only two members to vote against the bill. The committee Chairman, Robert Godshall (R-Montgomery) recommended to his committee to support the bill by saying he promised the prime sponsor he would report it from committee and reminded the committee that the bill had passed in previous sessions without opposition. PCCJR heard this comment numerous times leading up to the vote. Our response: This is exactly why PCCJR was created! No longer will bills that encourage needless litigation, such as HB 475, go unchallenged without critical review and opposition!
PCCJR will continue to work to educate House members about the serious implications this bill will have on the commonwealth’s business environment. PCCJR is making it known to House leadership that this bill must never be brought to the floor for a vote.
Trial Lawyers Oppose Measure to Curb Opioid Addiction!
It is no secret that Pennsylvania is in the midst of an opioid crisis. More than 4,600 deathsoccurred in Pennsylvania due to overdoses in 2016. While health care providers, law enforcement, treatment professionals and state officials are seeking solutions to the crisis, unbelievably, plaintiff’s lawyers in the workers’ comp arena are standing in the way of a bill to help curb opioid abuse in Pennsylvania.
That bill is HB 18, sponsored by Representative Ryan Mackenzie (R-Berks/Lehigh), which would regulate what drugs could be prescribed for injured workers under worker’s compensation by implementing a list of acceptable pain drugs, called a formulary. Such formularies have been enacted in states such as Texas, Ohio, and California and have helped to reduce the number of injured workers who become addicted to dangerous opioid medicine, reducing costs for the system, and in some cases, saving the lives of the injured workers.
Opioid use is high among individuals filing workers’ comp claims. A study recently found that Pennsylvania ranks the second-highest number of opioid pills per prescription per claim and the third-highest number of opioid prescriptions per injured worker.
So why are workers comp lawyers opposed to something that will save lives? At least one Philadelphia workers’ compensation firm, Pond, Lehocky, Stern and Giordano also happens to own a pharmacy, and is running a digital campaign to defeat the bill. This isn’t about people. It’s about a payday.
HB 18 received enough votes to pass the House Labor and Industry Committee, but instead of coming up for a vote it was sent to the House Human Services Committee and now the bill sits in the Rules Committee with no indication it will move anytime soon.
It is inconcievable that House members would allow the wishes of conflicted plaintiffs’ lawyers looking to protect their income prevail at the expense of the public’s health. However, that appears to be just what is happening.
As we enter the last few weeks of June, Pennsylvania finds itself in an all too familiar situation. Once again, legislators and the Governor are scrambling to pass a budget before the constitutional authority to spend runs out on June 30. With a projected budget deficit of a billion dollars plus, legislators adverse to raising taxes to cover the budget hole look to other more creative ways to raise revenue. Why would we be discussing this in the context of civil justice reform you ask?
One very bad idea for revenue production that has been introduced in Pennsylvania is House Bill 1027 or a so-called “False Claims Act.” This measure may sound creative and appealing on the surface, but the consequences are fraught with peril.
The original “False Claims Act” came about when fraud in government contracts was pervasive during the American Civil War. Many corrupt contractors sold the army rancid food, defective weapons and weak horses and mules. There were very few law enforcement officers to investigate claims since most were involved with the effort to preserve the union.
In response, the United States Congress passed the False Claims Act on March 2, 1863. In 1986, Congress amended the False Claims Act to increase incentives for individuals to file lawsuits on behalf of the government. Since 1986, legal head hunters, called qui tam plaintiffs, have filed suit on behalf of the federal government to recover money paid based on inaccurate claims.
In 2005 Congress offered incentives for states to enact False Claims Acts by offering 10 percent of any federal recovery to states that have enacted a False Claims Act that meets the onerous federal requirements.
No taxpayer wants to see government pay claims based on incorrect or misleading information. But is a state False Claims Act the right remedy? No!
There are numerous problems with a False Claims Act. First, because many of these claims are related to human services and Medicaid, the Attorney General already has a Medicaid Fraud unit that does this kind of work. If more help is needed, the staff in this unit should be beefed up to handle the problem. Another issue is that the state act MUST conform to federal law or PA does not get an additional 10 percent from federal recoveries. Those advocating for such an act usually reject any attempts to correct the many deficiencies of the federal law for this reason. Chief among those flaws is the fact that fraud does not have to be proven! With millions of dollars and state contractors’ reputations at stake, intent to commit fraud should be proven under the act. Under the theory of implied false certification, a violation of any fine-print regulatory requirement, even though not mentioned in a government contract or invoice, can provide a basis for treble damages and penalties.
The system is also a financial bonanza for plaintiffs’ attorneys. Attorneys not only get their contingency fee percentage but ALSO recover attorney’s fees from defendants. False Claims acts are the only cases in which the contingency fee is not meant to cover all the attorney’s fees and expenses. Instead the attorney recovers the usual 33 percent that would otherwise be paid back to the state AND gets all expenses and fees paid for by the defendant on top of that! This is unheard of in litigation except for False Claims.
The biggest problem is conceptual. A state False Claims Act creates a perverse incentive for the qui tam plaintiffs to bring these suits, even after attorney generals deem them not worthy of filing suit. The qui tam is less interested in stopping so called “false claims” (remember, it doesn’t have to be fraud) than in filing suit to get wealthy!
Finally, no one can credibly predict the revenues a False Claims Act might produce to augment the state budget this year. Anyone who puts a number on it is engaging in pure guesswork!
And that will not lead to deficit reduction.