Personal Injury and Social Security Disability Blog

Eli Lilly In Settlement Talks With U.S. Over Zyprexa

The New York Times is reporting that drug maker Eli Lilly is in settlement talks with the federal government regarding  the company’s marketing of the antipsychotic drug Zyprexa. The talks could result in Lilly’s paying more than $1 billion to federal and state governments -- the largest such settlement in history. Here are excerpts from the Times article:

Zyprexa has serious side effects and is approved only to treat people with schizophrenia and severe bipolar disorder. But documents from Lilly show that between 2000 and 2003, Lilly encouraged doctors to prescribe Zyprexa to people with age-related dementia, as well as people with mild bipolar disorder who had previously been diagnosed only as depressed.

Although doctors can prescribe drugs for any use once they are on the market, it is illegal for drug makers to promote their medicines any uses not formally approved by the Food and Drug Administration.

Lilly may also plead guilty to a misdemeanor criminal charge as part of the agreement, the people involved with the investigation said. But the company would be allowed to keep selling Zyprexa to Medicare and Medicaid, the government programs that are the biggest customers for the drug. Zyprexa is Lilly’s most profitable product and among the world’s best-selling medicines, with 2007 sales of $4.8 billion, about half in the United States.

“We have been and are continuing to cooperate in state and federal investigations related to Zyprexa, including providing a broad range of documents and information,” Lilly said in a statement Wednesday afternoon. “As part of that cooperation we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so.”

The fine would be in addition to $1.2 billion that Lilly has already paid to settle 30,000 lawsuits from people who claim that Zyprexa caused them to suffer diabetes or other diseases. Zyprexa can cause severe weight gain in many patients and has been linked to diabetes by the American Diabetes Association.

While expensive for Lilly, the settlement would end a four-year federal investigation and remove a cloud over Zyprexa. While Zyprexa prescriptions are falling, its overall dollar volume of sales is rising because Lilly has raised Zyprexa’s price about 40 percent since 2003.

In late 2000, Lilly began a marketing campaign called Viva Zyprexa and told its sales representatives to suggest that doctors prescribe Zyprexa to older patients with symptoms of dementia.

Virginia "Bad Driver" Law Is Backfiring

My friend, Virginia lawyer Ben Glass, has written about the recent (and ridiculous) Virginia laws that charge bad drivers enormous fines. Besides the outrage from drivers being fined literally thousands of dollars for minor traffic violations, there now exists the very real possibility that hundreds of thousands of drivers could have their licenses suspended for inability to pay the fines.

The latest development is that the Legislature was going to try to just order the courts not to collect the fines. Oops -- there happens to be a 130-year-old state law that prohibits lawmakers doing that. So back to the drawing board...

Texas Supreme Court Backlog Reaches Record Level

I have mixed feelings about the story in the Dallas Morning News today reporting that the backlog of cases pending before the Texas Supreme Court has reached a record level. On the one hand, if the justices would quit illegally using their campaign funds for frequent trips home, maybe they could clear more cases. On the other hand, since this Court finds in favor of big corporations about 70% of the time, maybe we're better off with the Court just leaving all the cases piled up in the corner. Here are excerpts from the Dallas Morning News article:

The Texas Supreme Court left a record number of cases pending at the end of the 2007 fiscal year, even as it agreed to hear more cases.

The delay is drawing fire from at least one candidate for the Supreme Court.

"Texans don't need to be told they need to take a number and get in line and wait," said Jim Jordan, a Democrat challenging Republican Chief Justice Wallace Jefferson. "These kinds of delays create a distrust in the legal system."

Jordan, a Dallas trial judge, said parties that reach the Supreme Court have already spent considerable time and money in the legal process.

But Justice Paul Green, who wrote the fewest opinions during the fiscal year, defended the time he and others spend outside the office, speaking to groups and doing other appearances outside the court.

Texas Supreme Court Is Simply Out Of Control

I have written a couple of times about the recent ethics charges against certain justices on our Texas Supreme Court, and many times about the moral challenges this Court seems unable to overcome. Now Paul Burka has today written an excellent post on his blog about the same subjects. I encourage everyone to read his post in full. I'll quote only the concluding paragraphs:

The Texas Supreme Court has become a public spectacle. It's bad enough that a majority of the Court performs as a wholly owned subsidiary of Texans for Lawsuit Reform. Now it's apparent that a third of the judges -- Nathan Hecht, Paul Green, and David Medina -- have no compunction about flouting ethics rules by using campaign funds as a piggybank for their personal travel to and from work. Texas Watch has filed complaints against all three judges with the Texas Ethics Commission.

The larger concern is that the judges did not make sufficient effort to investigate the legality of their conversion of sizable sums of money from their contributors. They used campaign funds to subsidize their lifestyle. Judges should be held to the highest standard of ethics. Let me rephrase that. Judges should hold themselves to the highest standard of ethics. But the judges on the Texas Supreme Court do not have to worry about how they are perceived, because there is no accountability. The judges are bulletproof. All of them are Republicans. While Democrats have had some electoral success in courthouse and legislative races, they haven't won a statewide election since 1994. Republican judges have little to fear at election time because they are protected by TLR and the big firms with the big clients who always win -- BP being the most recent example. The Court is consistently criticized for being result-oriented at legal conferences, but there is no incentive for judges to change their behavior, either in their decisions or in their ethics, and there won't be until somebody loses a race.

Please read Mr. Burka's post, and while you're there, subscribe. It's always worthwhile and enlightening reading.

Library Of Congress Photo Collection

I'm sure there must be a legal application for this, but you'll have to figure that out on your own. For me, the photographic collection from the U.S. Library of Congress is just interesting.

Friday Fun

I love this silly little game called Zwingo. It's sort of a ball-on-a-string, protect-your-base-from-the-bad-guys game. Check it out.

Texas Supreme Court & Ethics Laws -- A Bad Mix?

This is getting ridiculous. Now we have three Texas Supreme Court justices under ethics investigations. And one of the three just had criminal charges controversially dismissed in an unrelated matter. There have been a series of stories recently in the Dallas Morning News about these justices. Here are excerpts from the latest:

Texas Supreme Court Justice Nathan Hecht said Wednesday he used campaign cash to pay for dozens of flights to his hometown last year because he was campaigning, even though he's not up for re-election until 2012.

Justice Hecht reported 48 payments to airlines for in-state trips last year and acknowledged that "a good bit" of them were for travel to his hometown of Carrollton, where he still owns a home and attends church.

Using political contributions for personal use is against state law, and the Texas Ethics Commission has interpreted the law to ban appellate judges from using campaign donations to pay the costs of commuting between the judge's home city and the city where the court is located.

Justice Hecht told The Associated Press that his homestead has been in Travis County for 20 years. "[But] I feel like it advances my campaign to go up there [to Carrollton] and I almost always work when I'm there," he said.

Justice Hecht was re-elected to a six-year term in 2006.

He refused to produce documents proving that trips to Carrollton were business related.

"I think this is a waste of time," he said.

He is the third Supreme Court justice to face similar campaign finance questions recently.

Texas Watch accused Justice Paul Green of improperly using campaign funds to reimburse his mileage expenses between his home in San Antonio and the court in Austin.

Justice David Medina has said he will repay political funds that he used for commuting between Houston and Austin. He said he received incorrect advice when he used the campaign funds.

Baby Boomer Retirement - What Effect Will It Have On Social Security Solvency?

This post was written for inclusion in the upcoming Facing Up blog carnival on Social Security.

What effect will aging Baby Boomers have on the Social Security retirement and disability programs? Huge might be an understatement. The Baby Boom generation is defined as those roughly 80 million Americans born between 1946 and 1964. The first of the Baby Boomers began to turn 62 in January of 2008. That, of course, is the early retirement age for Social Security benefits. The Social Security Administration predicts that about a million Baby Boomers will take early retirement, even though their monthly checks will be 25 percent lower than if they waited until the normal retirement age of 66.

As "Boomers" begin to retire, the effect on the Social Security system will be twofold – first, there will be more retirees receiving benefits. Second, there will be fewer workers paying into the system to support those retirees. Boomers didn’t have as many children per family as our preceding generation did. We had about two children per family, compared with three children per family in our parents’ generation. So we didn’t produce as many new workers to support the old workers now retiring.

In fact, experts say that we have gone from about 16 workers paying into Social Security for every person drawing benefits in 1950, to a little more than three to one today. In a few more years we’ll be down to about two to one. This is not guesswork. We absolutely know how many new adult workers we will have 20 years from now, because they have already been born. We’re not going to have a sudden, unexpected increase in the number of workers. (Unless we have a major change in our immigration laws.)

Economic predictions are all over the map on this, but one guesstimate is that about the year 2017 the Social Security system will start to see that incoming payroll taxes aren’t enough to match outgoing retirement and disability benefits. The timing is less important than the inevitability of the event. Every year from 2008 until 2025 will see another wave of Boomers retiring. Somewhere during that time span, the benefits will outgrow the income.

That doesn’t mean the system will collapse at that time, because there’s enough money in the Social Security Trust Fund to carry us for another 20-25 years beyond the point at which benefits begin to outweigh income. Or at least there is supposed to be money in the Social Security Trust Fund. Unfortunately, the politicians have been raiding that fund for years, and it now consists primarily of IOUs from the federal government.

When the Trust Fund runs out of money, that’s when the crunch will come. Politicians will have to make some difficult decisions – increase taxes, decrease benefits, or both. We all know that politicians are loath to make hard choices, but it’s going to have to be done. And really, it won’t take all that much of a change to get the Social Security system back in balance.

But an even bigger problem will be the Medicare and Medicaid crisis looming ahead of us. These programs face not only the demographic changes the aging Baby Boomers present, but also the runaway inflationary costs of medical and pharmaceutical care. The Medicare shortfall could be roughly five times as large as the Social Security shortfall. That should well and truly frighten you.

Some estimates are that by the year 2040, Social Security and Medicare will consume as much as 60 percent of income taxes collected. The remaining 40 percent of tax revenue would have to finance all the rest of the federal government.

My own, uneducated, guess is that Congress will not significantly reduce benefits for people already receiving Social Security retirement benefits, but will probably have to make major changes to Medicare and thereby reduce medical benefits. I suspect the government will also tighten rules even more on disability benefits, and try to save money by denying obviously qualified Social Security disability applicants.

The future is not hopeless for Social Security and Medicare but it’s certainly not rosy. Big changes are coming, and the sooner they come, the better off we’ll be. The question is whether Congress and the Administration will have the political willpower to deal with the tidal wave on the horizon or whether they will hide their heads in the sand, as usual.

Finding Wi-Fi On The Road

I've written before about finding Wi-Fi hot spots on the road. It's getting easier to do as more and more businesses and hotels offer connections. In Texas, all the highway rest stops have Wi-Fi now, and other states are joining this trend. Besides the usual Starbucks hot spots, Wi-Fi can be found in many public libraries. In fact, if you just park near a library or motel you're likely to find a free hotspot available for you. Not that I would suggest you do that.

If you have time to plan ahead, you can check for hotspots by visiting jiwire.com. or you could go to boingo.com and pay $21.95 per month to use any of more than 100,000 hot spots around the world. And if you have trouble getting connections, you can visit hfield.com and buy a Wi-Fi extender that will let you connect from longer distances.

Allstate Temporarily Banned From Florida

As reported in the Florida Sun-Sentinel, the State of Florida temporarily banned Allstate insurance Company from doing business in Florida because of Allstate's failure to turn over certain documents in an investigation into Allstate's pricing practices. The ban was enacted by the State Department of Insurance, but lifted later by a District Court. The decision is now on appeal. From the article:

The battle between state regulators and Allstate Insurance Co. heated up Friday as the First District Court of Appeal lifted the state's ban on 10 Allstate companies.

Regulators barred the insurer Thursday from issuing any new policies in the state as a punishment for failing to submit documents demanded by the state. Allstate took the first step in appealing the suspension late Thursday and the Court lifted the ban, giving the Office of Insurance Regulation 10 days to prove the need for it.

McCarty cut short a hearing this week investigating Allstate's pricing practices after it failed to submit all the documents required. It's the first time his office has suspended a company for not producing documents.

The potential ban would apply to Allstate Floridian Insurance Co., Allstate Indemnity, Allstate Property & Casualty Insurance Co., Allstate Insurance Co., Allstate Fire and Casualty Insurance Co., Encompass Insurance Co. of America, Encompass Indemnity Co., Encompass Floridian Insurance Co. and Encompass Floridian Indemnity Co.

If the ban takes effect again, Allstate is expected to be hit hardest in its auto insurance business; it collected $1.93 billion in auto premiums last year in Florida and has recently been adding 3,500 new policies a week in the state.