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States Take Regulatory Measures to Protect Youth from E-Cigarettes

Over the past decade, electric cigarettes or commonly referred to as e-cigarettes have become a blossoming market as technology has upgraded traditional cigarettes.  The e-cigarette industry has urged that vaping is a “safer” method of smoking. In August 2019, e-cigarettes claimed its first victim.  Earlier this year, the Center for Disease Control reported the hospitalization of a young man in Illinois for a respiratory related illness that was attributed to vaping. Eventually the young man succumbed to his illness.  Since the first incident, the CDC has attributed an additional thirty three respiratory-related deaths to routine vaping habits.

Why is vaping so popular? As technology evolves, so does the method people used to inhale tobacco.  Whether the delivery is a pipe, a cigar, a cigarette, or—today’s method—e-cigarettes, tobacco is tobacco is tobacco.  Regardless of the tobacco product, the use of tobacco increases health risk of the user. The popularity of vaping grew when companies released flavored vaping oils and tobacco products, which attracts a new, younger market.

If you offer a child a lollipop, they will gladly accept it, so comes as no surprise that teenagers and young adults are attracted to e-cigarettes, especially with flavors like strawberries or cotton candy.  States have tried to address this issue by passing statutes to restrict the minimum age requirement to purchase e-cigarettes to 18 or 21.  This hasn’t stopped teenagers and young adults from purchasing e-cigarettes.  The United States Surgeon General reported in 2018 that e-cigarette use increased among high schoolers by 78%.  So, what can the legislature do to discourage the sale of e-cigarettes to young people?

States are considering passing statutes prohibiting the sale of flavored e-cigarettes and other e-cigarette regulations.  In the meantime, state executive offices have taken the lead on dealing with this issue.  Montana Governor Steve Bullock directed the Montana Department of Health and Human Services to issue a temporary ban on flavored e-cigarettes until the state can determine what type of action to proceed with.  Montana is not alone; Michigan has also banned the sale of flavored e-cigarettes.

Other states have taken this battle into the courthouse.  The state of New York has filed suit against twenty-two online flavored e-cigarette vendors accusing them of creating a “public nuisance” by selling targeted flavors to youths under the state age limit.

State regulation has not gone unnoticed by the e-cigarette industry.  One of the largest e-cigarette retailers, JUUL, has announced it will suspend the sales of flavored e-cigarettes.  This isn’t the only change at JUUL. In September, the retailer replaced its CEO, Kevin Burns, with K.C. Crosthwaite, the CGO for Altria, a traditional tobacco company.  JUUL also announced it will suspend all television, print, and digital advertisements.  The e-cigarette industry is feeling the financial effects of the various bans.  Altria reported a 19% loss in stock prices over since the beginning of 2019.

Even with all the government regulation and voluntary removal of products, consumers can still purchase unflavored tobacco and mint e-cigarettes.  Whether the sale of these products will be enough to keep the industry afloat is undetermined.  What is certain is that a wave of change is rushing towards the e-cigarette industry which could drown the entire industry.  Compliance with government regulation and consumer claims could cause serious damage to the e-cigarette industry.

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Medicaid’s Power to Recoup: Estate Recovery and Long-Term Care

Financing long-term services and supports (LTSS) presents a concern to older adults, lawmakers, and society at large. LTSS refers to those services that meet a person’s routine health and personal care needs when he no longer can perform these tasks on his own, often due to age or disability. Affording LTSS is a challenge, as few people have the necessary financial resources to meet its high costs, and many must eventually turn to Medicaid for help. Medicaid is the largest payer of LTSS, covering 43 percent of national LTSS spending in 2013 (Nguyen). Concerns arose over the sustainability of Medicaid’s role in financing LTSS in anticipation of an aging baby boomer population that will need LTSS. One solution intended to ameliorate LTSS financing is the Medicaid Estate Recovery Program (MERP), which requires states to recover payments from individual estates for long-term care services (Estate Recovery). However, this program which is characterized by Rachel Corbett as “Medicaid’s Dark Secret,” tends to bring more distress than actual revenue.

MERP intends to control LTSS costs by providing a way for states to recoup the money spent on a recipient’s care. Since the beginning of the Medicaid program in 1965, states have had the option to recover from the estates of deceased beneficiaries over age 65 when they received benefits (MACPAC).            However, the highly billed savings of estate recovery have yet to materialize.

In 2005, the AARP Public Policy Institute published a study analyzing the first decade of mandatory estate recovery. The study found that Massachusetts collected an average of $16,442 per estate in 2003; offsetting a little more than one percent of its LTSS costs in total. That one percent made its efforts among the most effective in the nation. In contrast, the average amount recovered from an estate in Kentucky was $93, representing just 0.25 percent of its LTSS costs. The total amount states recovered increased from $72 million in 1996 to $347 million in 2003. Nonetheless, estate recoveries accounted for less than one percent of Medicaid’s total nursing home costs in 2003. Corbett notes that the “overwhelming majority” of estates recovered under MERP are not worth the hundreds of thousands of dollars needed to make an impact on Medicaid LTSS spending.

MERP, thus, seems more punitive than economical. As described above, the average amount recovered from an estate is far from the amount needed to reimburse the billions of dollars spent on LTSS. Financing LTSS presents one of the greatest challenges our healthcare system will face in the upcoming years. While Medicaid has met this need for now, its role as the primary LTSS payer is unsustainable. MERP was billed as a solution to manage the strain LTSS puts on state and federal budgets, but the program, with its slim returns and human cost, is not the answer. A few states have already responded to these concerns by scaling back their estate recovery programs (Corbett). More state lawmakers should consider following their lead.

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The Opioid Crisis: The Bellwether Trial Settlement

Before parties reached a $260 million settlement, litigation was set to begin this month to determine whether drug companies are responsible for the opioid crisis that reached Cuyahoga County and Summit County of Ohio. The lawsuits brought by these Ohio counties are just two of the over 2,000 pending lawsuits in response to the opioid crisis. Since 1999, the opioid crisis has resulted in over 200,000 overdose deaths in the United States. The Court consolidated pending opioid-related lawsuits into what is now referred to as the National Prescription Opiate Litigation.

The bellwether trial which focuses on the two Ohio county lawsuits was intended to try a widely contested issue and typically is representative of the other cases. This trial would likely shape how courts conduct those other pending opioid-related cases.

Before pharmaceutical companies began marketing opioid treatments for a wider range of uses, opioid medication was only prescribed in cases of extreme need.  In the late 1990s, the pills started being prescribed at higher rates and their highly addictive nature soon showed. The Drug Enforcement Agency’s Automation of Reports and Consolidated Orders System (ARCOS) nationwide analysis illustrates the magnitude of the prescription pain pills supplied to states and counties. For example, one West Virginia county was supplied with 38,269,630 pills, or enough prescription pain pills to provide each person 203 pills annually between 2006 and 2012.

Lawsuits against drug companies accuse drug manufacturers of marketing their opioid treatments in a way that failed to adequately disclose the risk of addiction and overdose. In the suit that just settled, the Ohio Counties accused defendant distributors of failing to properly  “detect, probe or report suspicious orders.” Defendants denied these allegations and asserted that they complied with federal regulations to provide medicine to people suffering from painful conditions, that doctors who over-prescribed the opioids are to blame, and that the DEA had the information necessary to stop the opioid pills from entering the black market.

Litigation did not occur as planned for the Ohio county case because on the morning of the trial start date, drug maker Teva Pharmaceuticals and drug distributors McKesson, Cardinal Health, and AmerisourceBergen agreed to a $260 million settlement. Other parties to a similar settlement included companies such as Johnson & Johnson, Mallinckrodt, and Endo International and Allergan. Johnson & Johnson reached a $20.4 million settlement, Mallinckrodt reached a $30 million settlement, and Endo International reached a $10 million settlement with up to an additional $1 million worth of medications provided to the counties. Despite settling, none of the listed defendants admitted liability.

As of late October, Walgreens has not settled and will likely go to trial within the next six months. It argues that it is different from the defendants who already settled because it merely fills prescriptions and never manufactured, promoted, or prescribed any opioid medications.

Today, the Centers for Disease Control and Prevention estimates that the opioid crisis has a $78.5 billion economic burden annually across the United States alone. The goal of this Ohio case was to provide funding for what is expected to be a decades-long recovery process. There is already discussion regarding the distribution of the settlement money. While reaching settlements with these Ohio counties avoided litigating this trial, the settlements do not resolve the other 2,000 pending cases.

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Maryland wants to Decriminalize Suicide.

The issue of suicide as a felony has resurfaced. This time, however, the discussion isn’t centered around physician-assisted suicide. Instead, the focus is the criminality of attempted suicide. In February 2019, a 56-year-old man in Maryland plead guilty to a count of “attempted suicide” and was sentenced to a three-year suspended jail sentence, and two years of probation (Washington Post, 2019). Oddly enough, this is only one of ten attempted suicides that have been prosecuted in Maryland in the past five years (Washington Post, 2019).   

Suicide as a criminal offense dates back to 13th-century English common law, where suicide was considered a crime against “God and the King” (Washington Post, 2019). Early common law held suicide as punishable by ignominious burial on the highway, and by forfeiture of goods and chattels (Markson, 1969). This common law rule was initiated after America declared its Independence from Britain in 1776. However, many states eliminated the common law by total reliance on statutory law, whereby suicide was ignored and the common law against suicide was made ineffective (Wright, 1975). Still, several states maintained the common law principle that suicide was, in fact, a crime (Wright, 1975).

State courts continued to be confronted with this issue, and faced with the question of how suicide should be dealt with in the law. Many states have refrained from decriminalization based on the opinion that criminalization will deter suicide attempts, or at least provide grounds for involuntary hospitalization or treatment.

This debate has spanned from 13th-century common law all the way to 2019, where Del. David Moon (D-Montgomery) recently passed a bill to decriminalize the act in Maryland (Washington Post, 2019). Moon highlighted that one of the reasons prosecutors still resort to using this dated law is to get people into involuntary hospitalization and treatment. His bill received criticism from lawmakers who feared this would garner support to legalizing physician-assisted suicide; however, suicide prevention groups vocalized their support, noting it may help shift the discourse to prevention and de-stigmatization rather than punishment. After much debate, Moon’s bill decriminalizing attempted suicide in Maryland was passed in April, 2019. This ruling may re-ignite conversations in states like Virginia, where attempts to decriminalize attempted suicide have failed.

This discussion goes beyond the specific issue of decriminalization of suicide attempts, and raises important questions about how the justice system should deal with mental illness. Moon notes that “if we keep enabling the law enforcement function to take over the public health function, we are never going to fix [these mental health issues]” (Washington Post, 2019). Suicide is currently the 10th leading cause of death in the United States, and is continuously on the rise (National Institute for Mental Health, 2019). Is the best way to combat this public health issue to criminalize the act? While it is undisputed that suicide prevention and deterrence is of the utmost importance, it is questionable how continued criminalization of attempt will achieve this. If anything, it may incentivize attempters to use more lethal means to ensure they do not survive and be faced with criminal charges. Even more, this may actually prevent people with suicidal ideation from getting help on their own volition for fear of criminal repercussions. As we become more aware of mental illness as a public health concern, it is important to explore even the most well-meaning efforts for prevention under a critical eye, and assess the consequences of dealing with mental illness through the criminal justice system.



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Increased Regulatory Scrutiny of Pharma Mergers & Acquisitions Raises Concerns for the Industry

This year has been another significant year for consolidation within the biopharmaceutical industry. There has been an estimated $208 billion in transactions ; including Bristol-Myers’ $74 billion acquisition of Celgene in January to AbbVie’s $63 billion acquisition of Allergan in June which allows large biopharmaceutical companies to dominate the broader deal landscape in the industry. There are emerging signs, however, that the government is beginning to take a closer look at biopharmaceutical consolidation, pushing for divestments or potentially blocking the deals in court.

Signs of greater regulatory scrutiny have been most evident within the pending acquisition by Roche of Spark Therapeutics. Roche entered into an agreement to purchase Spark Therapeutics in February for $4.8 billion. Spark Therapeutics currently markets the only FDA approved gene therapy, Luxturna, which is used to treat certain retinal eye diseases. Roche is hoping to take advantage of other gene therapy treatments developed by Spark, particularly their hemophilia A research which Roche believes will complements their own hemophilia treatment, Hemlibra. Despite being a relatively small transaction in terms of size, both the Federal Trade Commission (FTC) and the Competition and Markets Authority (CMA) in the United Kingdom have taken note of the transaction, with the CMA filing an ‘Initial Enforcement Order’ to temporally block the transaction from being completed. Just this past week, Roche extended the deadline for shareholders of Spark Therapeutics to tender their shares to approve Roche’s acquisition, the seventh time that Roche has pushed back the tender offer deadline for Spark Therapeutics.

There is little official mention of what concerns the FTC and the CMA have with Roche’s acquisition of Spark Therapeutics, but some analysts point to the potential overlap between the two companies’ hemophilia business and may push Roche to divest Hemlibra to obtain approval for the Spark Therapeutics acquisition. Some feel this is an unusual step for the FTC to request, particularly in light of the robust existing market for hemophilia products. Analysts, however, point to the consent degree between Bristol-Myers and the FTC that permit their acquisition of Celgene if Bristol-Myers chose to divest rights to Otezla, a drug to treat psoriasis, to Amgen for $13.4 billion. Otezla was considered one of Celgene’s most profitable products, expected to generate $2.3 billion in annual sales by 2023. Given that Amgen already has a strong psoriasis pipeline, including Enbrel and Amgevita, a biosimilar to AbbVie’s Humira, some were confused as to why the FTC permitted Amgen to acquire Otezla.

AbbVie’s pending acquisition of Allergan did not raise the degree of early scrutiny that the Bristol-Myers-Celgene transaction did, but this trend is starting to move. In September, the FTC sent an additional ‘Request for Additional Information’ letter to AbbVie, delaying the completion of the transaction at least an additional thirty days. AbbVie has kept with the early-2020 date as when the transaction will be finalized. A number of consumer advocacy groups have requested the FTC intervene in the pending transaction. They point specifically to AbbVie’s manufacturing of Humira, which continues to be the best-selling drug in the world. Humira continues to invite scrutiny due to its high price, set at $58,612 in 2017. Allergan also markets Botox, primarily used for cosmetic purposes. These advocacy groups are concerned that another large biopharmaceutical tie-up will raise the prices of a greater drug portfolio, particularly in light of Humira’s expiring patent in 2023.

Increased biopharmaceutical consolidation continues to raise concern among Congress. Last month, Sen. Amy Klobuchar (D-MN) and eight senators sent a letter to FTC Commissioner Joseph Simons requesting the FTC take greater scrutiny of these transactions and ensure that any anti-competitive activities are remedied. Sen. Klobuchar, along with Sens. Cory Booker (D-NJ), Kamala Harris (D-CA), Elizabeth Warren (D-MA) and Bernie Sanders (I-VT)[sk1]  are all competing to be the 2020 Democratic presidential nominee. Given the continued focus on the price of prescription drugs, both in Congress and by President Trump, the FTC may push for larger divestments and more aggressive consent decrees to limit future price increases among acquired companies.

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