To Defeat Baby Powder Lawsuits, J&J Tries Bankruptcy Tactic Again
Johnson & Johnson is trying a "Texas two-step" maneuver to resolve a billion-dollar case over the alleged health effects of baby powder. News from the trial of Theranos CEO Elizabeth Holmes, Anthem's investment in kidney care and Abbott's inclusive clinical trials push is also reported.
Bloomberg:
J&J Takes Second Shot at Halting Baby Powder Suits in Bankruptcy
Johnson & Johnson is seeking to revive its strategy for resolving tens of thousands of lawsuits alleging its baby powder caused ovarian cancer and other health problems in women. A federal judge opened a two-day trial in Charlotte, North Carolina, on Thursday to decide whether to temporarily halt 38,000 lawsuits aimed at J&J and about 250 retailers and insurance companies. Stopping the suits is a key part of J&J’s strategy to pay at least $2 billion to end all current and future claims related to baby powder and other talc-based products. To do so, J&J executed a legal strategy known as the Texas Two Step, creating a unit in Texas to hold all of the lawsuits, then transferring that unit to North Carolina and placing it in bankruptcy. (Church, 11/4)
In other pharmaceutical and biotech news —
The New York Times:
Elizabeth Holmes Trial Exposes Investors' Lack Of Due Diligence
In 2014, Dan Mosley, a lawyer and power broker among wealthy families, asked the entrepreneur Elizabeth Holmes for audited financial statements of Theranos, her blood testing start-up. Theranos never produced any, but Mr. Mosley invested $6 million in the company anyway — and wrote Ms. Holmes a gushing thank-you email for the opportunity. Bryan Tolbert, an investor at Hall Group, said his firm invested $5 million in Theranos in 2013, even though it did not have a detailed grasp of the start-up’s technologies or its work with pharmaceutical companies and the military. (Griffith, 11/4)
Modern Healthcare:
Anthem Invests In Kidney-Care Startup Somatus
Anthem is making a "strategic investment" in kidney care startup Somatus and embarking on a multi-year value-based care partnership with the company, the health insurance giant announced Wednesday. Somatus will provide clinical services to Anthem's Medicare Advantage enrollees with chronic kidney disease and end-stage kidney disease beginning this month. The startup also develops technology that analyzes data and flags patients at risk for developing kidney disease and identifies possible next steps for care teams. (Kim Cohen, 11/4)
Axios:
Abbott Kickstarts Solutions For More Inclusive Clinical Trials
Abbott on Wednesday said it will spend $5 million over the next five years for about 300 scholarships for medical schools at historically black colleges and universities and minority nursing associations to better support future generations of diverse clinical investigators. A historic lack of inclusion in clinical trials and dismal numbers of diverse people running them has contributed to the huge trust problem Latinos often have with medicine manufacturers and institutions. (Fernandez, 11/4)
