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Workers' Compensation Daily News for Mar 06, 2015

35 L.A. Car Washes Cited by Labor Commissioner
Thu, 5 Mar 2015 12:03:00 - Pacific Time
The California Labor Commissioner’s Office last week cited car wash businesses in the Los Angeles area more than $1.3 million for wage theft following a two-day enforcement activity. The majority of the violations were found at 35 car wash businesses that failed to register with the Labor Commissioner’s Office, as required by law. The inspections uncovered numerous violations of state wage and hour laws affecting nearly 400 workers.

"These citations serve as a reminder that wage theft will not be tolerated. The Labor Commissioner’s office targets its enforcement efforts on employers who intentionally skirt the law," said Christine Baker, Director of the Department of Industrial Relations (DIR), which oversees the Labor Commissioner’s Office.

The 35 unregistered car wash businesses reflect a significant drop in registration from 2013 to 2014.

"When car wash businesses fail to register, it is often an indicator of wage theft. We are also following up with some of the inspected car washes to conduct full wage audits," said Labor Commissioner Julie A. Su. "We want to make sure car wash workers are paid what they are owed and that employers who follow the law know we are on their side."

Violations cited included the failure to pay workers minimum wage and overtime, which resulted in $412,200 in penalties and $308,584 in liquidated damages. An additional 17 violations with citations totaling $218,000 were issued to employers who did not carry workers’ compensation insurance coverage.

The Labor Commissioner’s Office, formally known as the Division of Labor Standards Enforcement, inspects workplaces for wage and hour violations, adjudicates wage claims, enforces prevailing wage rates and apprenticeship standards in public works projects, investigates retaliation and whistleblower complaints, issues licenses and registrations for businesses, and educates the public on labor laws. Updated information on California labor laws is available online.

The Wage Theft is a Crime public awareness campaign, launched last year by DIR and its Labor Commissioner’s Office, has helped inform workers of their rights. The campaign includes multilingual print and outdoor advertising as well as radio commercials on ethnic stations in English, Spanish, Chinese, Vietnamese, Hmong and Tagalog.

Employees with work-related questions or complaints may call the toll-free California Workers’ Information Line at (866) 924-9757 for recorded information in Spanish and English on a variety of work-related topics. Read More...

Study Says Stem Cells Effectively Repair Cartilage
Thu, 5 Mar 2015 12:02:53 - Pacific Time
The day that patients with osteoarthritis can ease their painful joints by using stem cell therapy to regenerate damaged cartilage took a step closer recently when researchers reported successfully producing cartilage in rats using embryonic stem cells. The success is attributed to a new procedure or protocol for using human embryonic stem cells, developed under strict laboratory conditions, by the researchers at the University of Manchester in the UK.

Osteoarthritis mainly affects people over the age of 60, and is a major cause of disability. It is a degenerative disease caused by wearing away of cartilage in joints that have been continually stressed during a person's lifetime, including the knees, hips, fingers and lower spine region. The World Health Organization estimates that around 9.6% of men and 18.0% of women aged over 60 years have symptomatic osteoarthritis.

Cartilage cells - also known as chondrocytes - are formed from precursor cells called chondroprogenitors. In their study, the team describes how they used the new protocol to generate chondroprogenitors from human embryonic stem cells. They implanted the precursor cartilage cells into damaged cartilage in the knee joints of rats. After 4 weeks the cartilage was partially repaired. After 12 weeks, the cartilage surface was smooth and similar in appearance to normal cartilage. Later examination of the regenerated cartilage showed that cartilage cells from the embryonic stem cells were still present and active in the tissue.

According to the article in Medical News Today, the study is promising because not only did the new protocol lead to regenerated, healthy-looking cartilage, but there were none of the adverse side-effects that have since dashed the high hopes raised in the early days of stem cell research - the growth of abnormal or disorganized tissue or tumors.

Testing the new protocol in rats is the first step toward running trials in people with arthritis. But before this can happen a lot more needs to be done to show the protocol works and is safe. The team is already planning their next step to build on their findings.

Another approach to using human embryonic stem cells to generate new cartilage cells is using adult stem cells. Adult stem cells are found in certain "niches" in the body and are not as controversial as embryonic stem cells but their potential is not so great. Also, note the authors, they cannot currently be produced in large amounts and the procedure is expensive.

Dr. Stephen Simpson, director of research at Arthritis Research UK, says he is encouraged by the new study because: "Embryonic stem cells offer an alternative source of cartilage cells to adult stem cells, and we're excited about the immense potential of Professor Kimber's work and the impact it could have for people with osteoarthritis." He explains that current treatments for osteoarthritis can only relieve painful symptoms, and there are no effective therapies that delay or reverse cartilage degeneration. Joint replacements are successful in older people, but these options are not effective in younger people or athletes with sports injuries. Read More...

Proposed Law Targets Gender Based Apportionment
Wed, 4 Mar 2015 07:37:26 - Pacific Time
A Bay Area mechanical designer suffering from carpal tunnel syndrome said she had her workers’ compensation reduced for a reason that has caught the attention of women’s groups and lawmakers: She was postmenopausal. And she says she is not alone in having her permanent disability claim reduced for factors that Sue Borg, her San Mateo attorney, said are clear examples of gender bias in the handling of workers’ compensation claims. Borg said she frequently sees cases where women injured in the workplace are "penalized" for gender-related factors like pregnancies and menopause.

According to the story published in SF Gate, Assemblywoman Lorena Gonzalez, D-San Diego, will introduce a bill she said would ensure that being female is not treated as a pre-existing condition by prohibiting a woman’s workers’ compensation from being reduced based on pregnancies, breast cancer, menopause, osteoporosis or sexual harassment. "It seems like it should be obvious that we shouldn't see this, but it happens in insidious ways all the time," Borg said.

The state workers’ compensation system of apportioning responsibility for an injury underwent major reforms under Gov. Arnold Schwarzenegger in 2004 in order to reduce the soaring costs of insurance premiums paid by employers across the state. "Before that, an employer was on the hook for the entire disability no matter the cause or whether it was successive injuries at different employers," says Jerry Azevedo, spokesman for the California-based Workers Compensation Action Network, which works to reduce job-related injury costs to employers. "The concept of apportionment is the employer pays their fair share for the injury."

Azevedo said that despite those reforms, a study last year found that California employers pay the highest workers’ compensation costs in the nation. "Most states have seen their workers’ compensation claims go down," Azevedo said. "California has been going up. We get more claims, more complicated claims and more permanent disability claims. This bill is a decade-old attack on apportionment."

The bill's supporters say the issue of gender bias in workers’ compensation is real, despite laws prohibiting gender discrimination. The issue is especially evident in the way breast cancer is treated among firefighters and police officers, supporters say.

The California Applicants’ Attorneys Association, a lawyers’ group that is sponsoring the legislation, said a police officer who undergoes a double mastectomy for breast cancer linked to hazardous materials she encounters on the job would be considered zero to 5 percent disabled depending on her age, while a male officer with prostate cancer linked to hazardous materials exposure would be considered 16 percent disabled and would be paid for the injury. That was the case for one San Francisco firefighter, who was denied any permanent disability compensation after undergoing a double mastectomy, according to a list of several examples provided by the attorneys association.

In another case outlined by the attorneys association, an Orange County hotel housekeeper who was injured moving a bed was told that although she was 100 percent disabled, her employer was liable for 2 percent of the injury based on health conditions "related to childbirth, obesity, age and naturally occurring events."

"I’ve had a child, and if now being a mother is a pre-existing condition in California, I find that unacceptable," said Christine Pelosi, chair of the California Democratic Party’s women’s caucus and daughter of House Minority Leader Nancy Pelosi.

Deborah Berger, co-president of the California Nurses Association, said she regularly hears of nurses injured - including while lifting patients - having their workers’ compensation reduced due to osteopenia or osteoporosis, diseases found mostly in women that weaken the bones. "That’s extremely troubling to us," Berger said. Read More...

More NFL Champions Donate Brains to Research
Wed, 4 Mar 2015 07:37:18 - Pacific Time
The leading national evangelist for a cause and effect relationship between professional football and dementia is Anne McKee M.D. a neuropathologist and expert in neurodegenerative disease at Boston University School of Medicine. McKee is a leading authority on chronic traumatic encephalopathy, (CTE), a degenerative brain disease that has been found in some athletes participating in boxing, American football, ice hockey, other contact sports, and military service. McKee has presented her findings to National Football League officials and testified before the United States House Judiciary Committee, claiming that there is a cause and effect relationship. Her post mortem findings form the basis for the thousands of civil and workers' compensation cases that have been filed by former professional athletes for CTE.

Yet, despite the public and media perception to the contrary. her findings have not passed the scrutiny and received the support of her peers. The British Journal of Sports Medicine published the Consensus Statement on concussion in sport following the 4th International Conference on Concussion in Sport held in Zurich back in November 2012. The leading medical experts in the world concluded in the Consensus Statement that "It was agreed that CTE represents a distinct tauopathy with an unknown incidence in athletic populations. It was further agreed that CTE was not related to concussions alone or simply exposure to contact sports. At present, there are no published epidemiological, cohort or prospective studies relating to modern CTE. Owing to the nature of the case reports and pathological case series that have been published, it is not possible to determine the causality or risk factors with any certainty. As such, the speculation that repeated concussion or subconcussive impacts cause CTE remains unproven."

One of the named co-authors of this Consensus Statement was Robert Cantu, M.D. Currently Dr. Cantu’s professional responsibilities place him side by side with Anne McKee. These include Clinical Professor Department of Neurosurgery and Co-Director Center for the Study of Traumatic Encephalopathy, Boston University School of Medicine, Boston, MA. He is also Senior Advisor to the NFL Head, Neck and Spine Committee; Section Co-Chair Mackey-White National Football League Players Association Traumatic Brain Injury Committee; Co-Founder and Chairman Medical Advisory Board Sports Legacy Institute, Waltham, MA; Adjunct Professor Exercise and Sport Science and Medical Director National Center for Catastrophic Sports Injury Research, University of North Carolina, Chapel Hill, NC; Co-Director, Neurologic Sports Injury Center, Brigham and Women’s Hospital, Boston, Chief of Neurosurgery Service, Chairman Department of Surgery, and Director of Sports Medicine at Emerson Hospital in Concord, Massachusetts,

Thus, despite the pubic and media assumption of cause and effect, the science does not quite support the assumption. The International Conference will again convene next year for the 5th time to study the issue.

And now more notable professional athletes are supporting the cause. New York Giants punter Steve Weatherford and former National Football League receiver Sidney Rice have announced they will donate their brains to medical research after their deaths.The two NFL champions want to help brain disease research, especially on the debilitating effects of concussion.

Rice estimated he had incurred between 15 and 20 concussions since starting to play football at the age of eight. "I had my fair share of fun in the NFL," said Rice, a Super Bowl-winning receiver with the Seattle Seahawks last year. "Unfortunately, I wasn't educated enough on (what) concussions can lead to. The brain studies by the doctors will be huge to help, maybe prevent."

The two stars hope their commitment might mobilize others to do the same. "It's helpful to get a professional athlete behind something," said Weatherford. "This is something that has affected Sidney and affected me in the form of one of my dear friends, Junior Seau, committing suicide." Seau, a 12-time Pro Bowl linebacker, died after shooting himself in the chest in 2012 at the age of 43. A study of Seau's brain revealed that he suffered from chronic traumatic encephalopathy, or CTE, a debilitating brain condition caused by repeated jolts to the head that can lead to aggression and dementia.

Both Rice and Weatherford said they thought the NFL had taken positive steps to address the dangers of repetitive blows to the head but that more needed to be done. Read More...

California Considering Drug Formularies
Tue, 3 Mar 2015 12:08:19 - Pacific Time
While workers’ compensation pharmacy benefit managers have been utilizing drug formularies for a long time, only Washington, Texas, Ohio and Oklahoma have state-regulated drug formularies in place. Several more states are considering their use as a way to reduce drug costs and curtail inappropriate treatment that may hinder an injured worker’s ability to return to work

According to the report in the Claims Journal, the way drug formularies work varies by state. Mark Pew, senior vice president of Prium, a workers’ compensation medical intervention company, says that 'we’ve got 50 different systems. Every state has different political realities, has different ways of addressing treatment guidelines, ways of addressing dispute resolution processes. All of that contributes to what kind of formulary is implemented,' said Pew. According to Jennifer Kaburick, senior vice president of Workers’ Compensation Product Management and Strategic Initiatives for Express Scripts, state formularies are intended to be a guide and have different objectives than a standard health plan formulary. The primary goal in workers’ compensation, she said, is to make sure that a person’s treatment is related to their work-related injury.

California, Montana, Tennessee and Maine, are currently considering drug formularies, said Kaburick. Louisiana is researching the idea and Arkansas’ drug formulary is set to launch in July 2015, Pew said.

Besides being more cost effective, state-regulated drug formularies have other benefits, experts said. "I think the biggest benefit is really enforcing or forcing, if you will, prescribing behavior changes. If you think about it in terms of what’s best for the injured worker in returning to function and returning to work as quickly, and efficaciously as possible," said Pew. Kaburick said in addition to cost savings, there is the likelihood of better utilization. "It does appear that they’re saving money for payors....controlling prescription costs in the system for that particular state, but also while ensuring injured workers maintain access to the medications that they need for their effective recovery," said Kaburick.

Pew also noted better utilization as a benefit too. "By changing prescribing behavior, and what I call the hassle factor they make it more difficult for doctors to automatically write a script for a drug," Pew said. He cited Texas as an example, where for all new claims on or after September 1st, 2011, the state requires compliance with the formulary. "The use of Soma (a muscle relaxant) dropped by 90 percent on day one, because there are other muscle relaxants," Pew said. "There were other options besides Soma, but doctors had gotten used to writing a script for Soma along with a cocktail of the other drugs. By incorporating a hassle factor and forcing them to go through a preauthorization process before they can write and dispense the Soma, doctors figured out another way to handle it."

A potential indirect effect is less addiction to prescription drugs. "Certainly, what we’ve seen, with the advent of all the opioids, the benzodiazepines, like Xanax and Valium, people can get highly dependent. We use the term ‘addiction’ a lot, and sometimes it’s not appropriate," Pew said. "The vast majority of people that are on these drugs are dependent, which means they don’t necessarily move heaven and earth to get their drugs, but if you withhold the drugs from them, they’re going to go through some significant withdrawal symptoms. Chances are, they’re going to continue the drugs because they don’t want to go through the withdrawal. What we have done by creating this is we’ve created a lot of people that are highly dependent, and/or addicted on these drugs." Ohio reported a 27 percent reduction in the use of opioids, and a 73 percent reduction in the use of skeletal muscle relaxants, he said.

A study released last year by the Workers Compensation Research Institute (WCRI) examined how a Texas-like drug formulary might affect the use and costs of drugs in 23 other state workers’ compensation systems that don’t currently have a drug formulary in place. According to the study, Impact of a Texas-Like Formulary in Other States, if physicians in the 23 other study states were to change their prescribing patterns like physicians in Texas, they could reduce total prescription costs by to 29 percent.

The California Workers’ Compensation Institute issued a report in October 2014 discussing whether formularies could sufficiently control inappropriate utilization and costs.The research looked at formularies used in both Texas and Washington and found that drug costs could be reduced between 12 and 42 percent - that’s $124 to $420 million in savings annually, the report’s authors concluded. The report also found that a formulary could reduce administrative costs related to medical dispute resolution. Read More...

Cal/OSHA Says 75% of Roofers Violate Safety Regulations
Tue, 3 Mar 2015 12:08:11 - Pacific Time
Cal/OSHA today launched a safety awareness campaign for roofers, where the workplace incidence of serious injuries and fatalities is higher compared to other industries. "Roofing operations are inherently risky and worker safety is paramount. Employers must have strong safety programs in place that include appropriate equipment and training to prevent injuries on the job," said Christine Baker, Director of the Department of Industrial Relations, which oversees Cal/OSHA.

Between 2012 and 2014, Cal/OSHA conducted 126 investigations of roofing operations where an accident occurred. A full three out of four of those accidents occurred at roofing operations that were found to be in violation of state safety regulations.

Falls are the leading cause of death and serious injury for roofing workers. Most falls can be avoided by following safety regulations. For example, on December 27, 2013, West Coast Roofing employee Leopoldo Retana fell 36 feet to his death at a job site in Ventura. Investigators found Mr. Retana had not been wearing fall protection equipment or a positioning system. West Coast Roofing was cited $22,360 for 10 violations, including two serious in nature. Serious violations are those where death or serious physical harm could result from a hazard created by the violation.

Another tragic and preventable case occurred earlier that year on June 13, 2013, when Midwest Roofing and Solar employee Ernesto Rosales fell approximately 17 feet from the unprotected edge of an apartment building roof in Pico Rivera. Mr. Rosales died five days after the accident. Cal/OSHA cited Midwest Roofing and Solar $39,600 for five serious violations. Cal/OSHA’s "Roofing Maximum Enforcement Program," taking place from March 1 through November 1, calls for targeted inspections of roofing operations across the state. This program will help ensure employers provide the necessary training and safety equipment to protect their workers on the job.

"Cal/OSHA inspectors will carefully review safety measures at roofing operations and address safety issues they encounter," said Cal/OSHA Chief Juliann Sum. "Our goal is to raise awareness for on-the-job safety in the roofing industry so that hazards are identified and corrected." Fall protection is among the items Cal/OSHA inspectors will be reviewing at the site visits, from railings on buildings to personal devices such as hooks that attach to vests. Inspectors will verify that workers have safe access to rooftops and are protected from electrocution hazards posed by overhead power lines. Also, inspectors will review employers’ heat illness prevention program at roofing operations where reflected surfaces can increase the heat factor of the climate.

If inspectors find a lack of protection or a serious hazard, they can issue a stop order at the site until the hazards are corrected. Employers who fail to comply with Cal/OSHA safety regulations will be cited and ordered to correct the violations.

Cal/OSHA offers online resources for workers and employers, with a fact sheet on preventing slips and falls for roofers and other safety publications. Hazardous conditions at roofing operations and other worksites can be reported to Cal/OSHA’s enforcement offices. Enforcement officers respond immediately to such reports.

Cal/OSHA, an active partner in the Labor Enforcement Task Force (LETF), also works collaboratively on the Roofing Compliance Working Group. The multi-agency coalition includes LETF enforcement agencies, local district attorneys’ offices, roofing contractors and labor groups. It helps to hold accountable those employers who fail to comply with safety regulations, cheat workers on earnings, fail to carry workers’ compensation insurance, or fail to pay state payroll taxes.

Employers can receive free and voluntary assistance to help them improve their health and safety compliance with Cal/OSHA’s Consultation Program. Employers can learn more about this program by calling (800) 963-9424.

Cal/OSHA helps protect workers from health and safety hazards on the job in almost every workplace in California. Employees with work-related questions or complaints may call the California Workers’ Information Hotline at (866) 924-9757 for recorded information in English and Spanish on a variety of work-related topics. Read More...

Employer Not Required to Advanced Payment For Oral Surgery
Mon, 2 Mar 2015 10:29:23 - Pacific Time
In 1996 Kathleen Murphy, while employed as a cashier for Petsmart in 1992, sustained industrial injury to her right fool and psyche causing the need for further medical treatment. The case was resolved in 2001 by a Compromise and Release for $20.000 with the exception that the defendant remained liable for reasonable medical care related to the industrial injury.

In May and June of 2012, applicant's treating physician, oral surgeon William W. Evans, D.M.D., M.D.,filed a request for authorization for treatment, including notice that payment was expected at the time of surgery and implant placement. He went on to explain that because of the amount of implants he will need a payment before he can proceed completely with patient's treatment. Dr. Evans sought an advanced payment of $25,600.00. The treatment plan submitted to UR stated, "Surgical Fee and Payment: Payment is expected at the time of surgery."

Dr. Evans' s request for oral surgery and implant placement was forwarded to the utilization review process. On July 19, 2012, defendant issued a utilization review decision authorizing the requested care. The utilization review approval letter did not expressly approve payment of any particular sum of money to Dr. Evans, nor did it expressly mention any agreement to pay Dr. Evans in advance for his services.

Later, the defendant agreed to authorize the surgery but declined to make an advanced payment as requested stating "that advanced payment is not usual and customary for treatment provided in workers' compensation matters." In addition, the doctor was advised that payment would be made according to a fee schedule. The physician replied "As stated in your letter it is not usual and customary to collect up front for workers comp cases. It is however usual and customary to collect up front for Implant cases due to the overhead involved. For the extractions the payment within 60 days is acceptable. We are not agreeable to except [sic] fee schedule amounts without those amounts being disclosed. As of yet we have not received any information regarding the allowed fees. Once this information is received we will he able to inform you a to whether we are in agreement."

Ultimately on February 4, 2013, defendant issued a check in the amount of $25,510.00 to Dr. Evans as pre-payment for the dental services originally requested in June of 2012. Despite the payment, the parties went to trial on the issue of a Labor Code section 5814 penalty. The WCJ found defendant liable for a penalty, stating that: "This Judge finds no medical or legal basis for said delay and on that basis finds that defendant did unreasonably delay payment to Dr. Evans." The WCJ thus assessed a Labor Code section 5814 penalty in the amount of$6,377.50, which was calculated as 25% of the dental treatment unreasonably delayed by the defendant.."

The defendant Petitioned for Reconsideration which was granted, and the penalty was reversed in the split panel decision of Murphy v Petsmart.

In reversing, the majority concluded that "defendant did not act unreasonably because it had no obligation to pay for applicant's dental treatment in advance. Labor Code section 4603.2 makes clear that a defendant has no obligation to provide payment for medical services until 45 days after medical services have been "provided."

"Although we do not wish to belabor the point, "provided" in this context is the past participle of "provide," and thus indicates an action which has already been completed. Despite Dr. Evans's office insistence that defendant pay for treatment in advance, there is thus no obligation for the defendant to pay for medical or dental services before they have been provided."

Commissioner Sweeny dissented from the Opinion noting that the defendant was "clearly notified that payment in advance was required for treatment due to the high up-front cost required for this type of treatment. Defendant approved the treatment even in the face of the requirement for pre-payment, and after authorization did nothing to retract or clarify this authorization for months, until after applicant filed a Declaration of Readiness to Proceed (DOR) seeking WCAB intervention on the issue of medical treatment." Any "confusion in this case was engendered by defendant's approval of the suggested treatment without communicating that it did not agree to payment in advance until almost five months later. Under the specific factual scenario of this case, I would affirm the WCJ's decision that defendant in effect agreed to the treatment and billing terms. and that failure to promptly clarify the matter deprived the applicant of necessary medical treatment for many months." Read More...

Home Renovator Convicted for No Comp Insurance
Mon, 2 Mar 2015 10:29:15 - Pacific Time
Executives of a La Mesa-based firm that buys and renovates homes for resale pleaded guilty Thursday to a felony charge of unemployment tax evasion and a misdemeanor count of failure to have workers’ compensation insurance.

David Scott Wolfe, 48, and his company, Three Frogs Inc., along with Chief Financial Officer Jonathan D. Cox and Chief Operating Officer John Murphy, were charged last year with the tax and insurance fraud counts. Wolfe was also charged with a violation of OSHA safety standards in connection with a Nov. 12, 2013, tree-trimming accident that killed Joshua Pudsey, 42. He was trimming trees using a cherry picker outside a La Mesa home when a large branch from a 60-foot eucalyptus tree fell on him, crushing his head.

After a four-day preliminary hearing, Judge Leo Valentine ruled that Wolfe and two of his employees, Chief Financial Officer Jonathan D. Cox, 35, and Chief Operating Officer John Murphy, 36, should stand trial on felony and misdemeanor fraud charges. But the judge dismissed the felony safety standard charge against Wolfe, citing insufficient evidence.

Wolfe, Cox and Murphy are scheduled to be sentenced March 26.
Read More...

The Bacteria Are Winning!
Fri, 27 Feb 2015 06:51:42 - Pacific Time
According to Ezekiel J. Emanuel MD, an oncologist, a vice provost at the University of Pennsylvania and Obamacare architect, the bacteria are winning. His article in the New York Times points out that every year at least two million people are infected with bacteria that can’t be wiped out with antibiotics, and as a result, 23,000 people die. Direct health care costs from these illnesses are estimated to be as high as $20 billion annually. Should a health care worker or any injured worker become infected while undergoing treatment for an industrial injury, the claim cost would exponentially increase.

Just last week, the U.C.L.A. Health System announced that nearly 180 patients may have been exposed to the CRE superbug that was linked to two deaths in one of its hospitals. Today, 30 percent of severe strep pneumonia infections are resistant to multiple drugs and 30 percent of gonorrhea infections are resistant to all antibiotics. And drug-resistant enterobacteriaceae, enterococcus, acinetobacter and a slew of other unpronounceable bacteria pose serious threats.

Dr. Emanuel says "The development of antibiotics has been glacial. We need a completely new approach."

The number of F.D.A.-approved antibiotics has decreased steadily in the past two decades. The big pharmaceutical companies have largely stopped work on these drugs. Pfizer, long the leader in developing antibiotics, closed its antibiotic research operations in 2011. Smaller biotech companies now account for 80 percent of antibiotic development. There are now about 40 new antibiotics in development. That might sound promising - but not when compared with the 771 new drugs and vaccines in clinical trials or awaiting F.D.A. review for cancer. And most of these antibiotics are unlikely to come out of the testing process as F.D.A.-approved drugs.

There are ways, apart from developing new drugs, to combat the problem of superbugs and drug resistance. One is hand-washing, especially in hospitals. Another is reversing the overprescribing of antibiotics. It’s estimated that half of all antibiotics used are unnecessary. Animal feed accounts for 80 percent of the antibiotics used in the United States and contributes to antibiotic resistance. We could also fix our antiquated system for tracking drug-resistant bacteria.

But just as important, we need to develop new treatments. Bacteria figure out a way to become resistant to every new drug. We are in an endless life-or-death struggle with bacteria.

The big problem is profitability. Unlike drugs for cholesterol or high blood pressure, or insulin for diabetes, which are taken every day for life, antibiotics tend to be given for a short time, a week or at most a few months. So profits have to be made on brief usage. Furthermore, any new antibiotics that might be developed to fight these drug-resistant bacteria are likely to be used very sparingly under highly controlled circumstances, to slow the development of resistant bacteria and extend their usefulness. This also limits the amount that can be sold.

Even though antibiotics are lifesaving, they do not command a premium price in the marketplace. As a society we seem willing to pay $100,000 or more for cancer drugs that cure no one and at best add weeks or a few months to life. We are willing to pay tens of thousands of dollars for knee surgery that, at best, improves function but is not lifesaving. So why won’t we pay $10,000 for a lifesaving antibiotic?

Congress has tried to address the problem. In 2012, it passed an act that expedited F.D.A. review and gave drug companies five more years of market exclusivity without generic competition. That has increased drug company interest in developing antibiotics, but not enough. Because it costs at least $1 billion to develop a new drug. Read More...

Global Fund Proposed for Antibiotic Development
Fri, 27 Feb 2015 06:51:35 - Pacific Time
A global fund to speed development of new antibiotics to counter the growing threat of drug-resistant superbugs is likely to need up to $2 billion, the head of a review backed by the British government said on Thursday.

The Science - Business website reports that former Goldman Sachs chief economist Jim O'Neill has urged the establishment of an innovation fund to support research, arguing that far too little is currently invested in hunting for new drugs against drug-resistant infections. "We've not yet come up with a number," O'Neill told an Economist pharmaceuticals conference when asked how big the fund would be. "My guess is probably no more than $2 billion."

O'Neill, who was asked last year by British Prime Minister David Cameron to take an economist's view of the issue, said earlier this month that philanthropists and governments should create a new fund to support drug research. In his first assessment of the threat, O'Neill estimated that so-called anti-microbial resistance (AMR) could kill an extra 10 million people a year and cost up to $100 trillion by 2050 if it was not brought under control.

The UK Review on Antimicrobial Resistance has published its second report, outlining specific steps for action to tackle the rise of drug-resistant infections worldwide. The report says that while mounting concern about the rise of antimicrobial resistance is prompting an increase in infectious disease research, a lack of funding means it is difficult to take ideas forward and companies are deterred from entering the field.

"I am calling on international funders, philanthropic or governmental, to allocate money to a fund that can support blue sky science and incubate ideas that are more mature," said Jim O’Neill, chair of the review, launching the report. Such a targeted fund would support research needed to pave the way for new drugs, for alternatives to antibiotics, and for new diagnostics to make sure the right drugs are used. It could reverse the brain drain to research areas that are currently better-paid and held in higher academic esteem, such as cancer, diabetes and dementia.

The UK government set up the review in July 2014. The first report, published in December, scoped the problem, concluding that unless action is taken to address this huge global problem, it could cost the world at least an additional 10 million lives a year by 2050, more than the number of people who currently die from cancer each year. The second report says much innovative thinking is happening in infectious disease research at the moment. But lack of funding means that while people, machines and laboratories are ready to tackle the next challenges, they are unable to do so. It also deters new entrants to the field. Without new doctors and scientists in academia, hospitals and drug companies, the ability to innovate will decrease just at the time it needs to reach its peak.

"In researching our latest report, we found no shortage of ideas and promising new technologies but progress is too slow due to lack of investment, and much of the workforce is edging towards retirement," said O’Neill. The review team is currently investigating market incentives in preparation for its next report in the Spring. Antibiotics generate low or even negative returns on investment meaning new mechanisms are needed to pull companies back into the field. Read More...

Past Week News Archive


Comp Firm Alleges Opponent Hacked Computers: Thu, 26 Feb 2015 07:50:19 - Pacific Time: Read More...


WCRI Reports on Fee Schedule Effectiveness: Thu, 26 Feb 2015 07:50:08 - Pacific Time: Read More...


DIR Reduces IMR/IBR Fees - Again!: Wed, 25 Feb 2015 07:00:36 - Pacific Time: Read More...


DWC Sets Public Hearing on Home Health Care Fee Schedule: Wed, 25 Feb 2015 07:00:27 - Pacific Time: Read More...


State Fund Declares $37 Million Dividend: Tue, 24 Feb 2015 09:03:18 - Pacific Time: Read More...


Contractor Faces 34 Charges: Tue, 24 Feb 2015 09:03:12 - Pacific Time: Read More...


Court of Appeal Affirms Fraud Conviction: Mon, 23 Feb 2015 10:33:39 - Pacific Time: Read More...


DWC Sets Claim Audit Compliance Standards for 2015: Mon, 23 Feb 2015 10:33:31 - Pacific Time: Read More...


Court of Appeal Reverses Psyche Award: Thu, 19 Feb 2015 13:33:29 - Pacific Time: Read More...


UCLA Patients Infected by Deadly CRE Bacteria: Thu, 19 Feb 2015 13:33:23 - Pacific Time: Read More...