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With Valeant’s management assuring investors that the company is well on its way to a turnaround, the drugmaker’s problems aren’t supposed to be growing larger. But now, Valeant is facing what could be its most serious investigation yet...Federal prosecutors are probing the...drugmaker’s relationship with specialty pharmacy Philidor...while that relationship has already garnered plenty of attention from investigators...this particular set of allegations...claim Valeant defrauded insurers by hiding its close Philidor ties--is new....The new probe could also be a bigger threat. Philidor managers and Valeant itself might face criminal charges...Prosecutors are looking into whether the specialty pharmacy made false statements to insurers about its link to the drugmaker. They’re trying to figure out whether insurers thought Philidor--which helped patients snag insurance coverage for pricey Valeant meds--was neutral, rather than in Valeant’s service...

As a rule, principal investigators for clinical trials should not be trading in the stocks of companies whose drugs they are testing. But the feds allege that Dr. Edward Kosinski ignored this dictum and now faces charges of insider trading...Kosinski sold his shares in Regado Biosciences after receiving bad news about a clinical trial in which he was the principal investigator, according to...Securities and Exchange Commission. In the first stock trade, he avoided $160,000 in losses, and in the second transaction he made more than $3,000 by exercising options...He faces a maximum term of imprisonment of 20 years...alleged episode of insider trading is only the latest instance involving the pharmaceutical industry or those working with drug makers. The issue has increasingly raised concerns in connection with clinical trial work, as well as deal-making and the drug approval process, which some fear can be distorted by such activities.

When EU regulators last year came down on China’s Jinan Jinda Pharmaceutical for slipshod manufacturing work, the company brought in a U.S. consultant to get its Zhangqiu, Shandong, plant in order. But a recent follow-up found that Jinan Jinda continues to ship its antibiotic to some European customers even though its improvement efforts fall short of what they need to be...the European Directorate for the Quality of Medicines said it has been recommended that Jinan Jinda's nitrofurantoin antibiotic be banned from the EU and that the plant's certificate of compliance be suspended, or even "voided."...The investigators reported that there were critical deficiencies in the way the plant handled raw data safety, control and out-of-specification reviews. There were major deficiencies in training, change control, quality assessment, process and cleaning validations.

In the waning days of summer in 2008, a convicted felon and his business partner leased office space on a seedy block near MacArthur Park. They set up a waiting room, hired an elderly physician and gave the place a name that sounded like an ordinary clinic: Lake Medical...The doctor began prescribing the opioid painkiller OxyContin – in extraordinary quantities. In a single week in September, she issued orders for 1,500 pills, more than entire pharmacies sold in a month. In October, it was 11,000 pills. By December, she had prescribed more than 73,000, with a street value of nearly $6 million...Purdue Pharma, the maker of OxyContin, tracked the surge in prescriptions. A sales manager went to check out the clinic and the company launched an investigation. It eventually concluded that Lake Medical was working with a corrupt pharmacy in Huntington Park to obtain large quantities of OxyContin.

• Sounding the alarm
• What Purdue knew
• Pills prescribed by Santiago
• Following the pills
• The skid row connection
• Pharmacist complaints
• Reports of concern
• ‘I was sitting on a gold mine.’
• ‘It really takes the ‘G’ a long time to catch up with these jokers’

For the fourth consecutive time, the Drug Enforcement Administration has denied a petition to lessen federal restrictions on the use of marijuana...While recreational marijuana use is legal in four states and D.C., and medical applications of the drug have been approved in many more, under federal law, it remains a Schedule 1 controlled substance, which means it's considered to have "no currently accepted medical use" and a "high potential for abuse."...Just this week, the National Conference of State Legislatures, a group representing state lawmakers, called on the federal government to move marijuana from Schedule 1 to Schedule 2. The group criticized federal law for imposing "substantial administrative and operational burdens, compliance risk and regulatory risk that serve as a barrier to banks and credit unions providing banking services to businesses and individuals involved in the cannabis industry."...Despite this, the DEA says it cannot change the legal status of marijuana unless the FDA determines it has a medical use. The FDA cannot determine it has a medical use in part because of the highly restrictive legal status of the drug. It's a classic bureaucratic Catch-22...The only body that can truly resolve this conflict, now, is Congress — by amending the Controlled Substances Act to treat marijuana differently. Most federal lawmakers seem to agree that this needs to happen, but there's disagreement on how to do it...

Arizona-based health services operator Banner Health said...that it was the victim of a cyberattack potentially affecting about 3.7 million patients, physicians, health plan members and others across seven states...The organization, which operates a community hospital in Fallon and facilities in Fernley, did not confirm whether any Nevada patients’ information was compromised in the attack...Jennifer Ruble said she didn’t yet have data on the number of people affected in each of the seven states in which the health system operates...The nonprofit system is mailing letters to possibly affected individuals, has contacted law enforcement and has taken actions to block cyberattackers, according to a statement...

Last September, U.S. regulators faced a dilemma: whether to allow importation of drug ingredients from a Chinese factory (Zhejiang Hisun Pharmaceutical Co.) with a history of poor quality controls, or face shortages of treatments for American cancer patients...Food and Drug Administration inspectors had uncovered what the agency later called “broad data manipulation” at the factory, located in Taizhou....Information about the potency and purity of some product batches had been deleted, making it difficult to investigate a significant increase in customer complaints...The agency issued an indefinite ban on the factory...one of China’s leading exporters of pharmaceuticals products. Yet to avoid possible shortages of drugs, the FDA allowed the plant continue exporting about 15 ingredients for use in finished drugs in the U.S., including nine key cancer medicine components. Hisun says that it takes quality seriously and has complied with requirements.

Denying a petition to loosen marijuana restrictions, U.S. officials said regulations on the drug’s use will remain in place, although more of it may be available for research into potential medical therapies...The Drug Enforcement Administration will maintain marijuana’s status as a schedule 1 drug, the most restrictive of five agency classifications, which means it’s considered highly addictive and without medical benefit. However, the agency will permit new suppliers to boost the quantity of marijuana available for study. Currently, researchers can only study marijuana overseen by the National Institute on Drug Abuse, which contracts with the University of Mississippi to grow supplies..."Not everyone agrees marijuana should be legal, but few will deny that it is less harmful than alcohol and many prescription drugs," Mason Tvert, a spokesman for the Marijuana Policy Project, said in a statement. "Removing barriers to research is a step forward, but the decision does not go nearly far enough. Marijuana should be completely removed from the CSA drug schedules and regulated similarly to alcohol."

The next time that employees at Xiamen Origin Biotech want to lie to regulators about what they are doing, they may want to make sure that the doors to nearby rooms are closed...During an inspection last January of its facilities in the southeastern Chinese province of Fujian, an employee told a US Food and Drug Administration inspector that the company did not keep any drugs on location. But while they reviewed company operations in a conference room, the inspector happened to notice that an adjacent room was being used to warehouse relabeled medicines...The same Xiamen employee also thought nothing of telling the inspector that the company had stopped relabeling drugs in January 2015. But during the inspection, the FDA staffer reviewed a list of exported drugs that showed Xiamen had distributed them until January 2016...Pharmaceutical and ingredients manufacturers in China and India have come under intense scrutiny in recent years due to a series of disturbing events...the flow of FDA warning letters about companies based in these countries receives added attention, sometimes deservedly so. Xiamen, for instance, also lied to its customers, according to the FDA...The company falsified and omitted information on certificates of analysis...which are supposed to verify the veracity of its products...

...federal prosecutors unsealed an indictment against three Miami-area residents, charging the suspects with conspiracy, obstruction, money laundering and healthcare fraud estimated at $1 billion...This is the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice...Philip Esformes...operated a network of more than 30 skilled nursing and assisted living facilities in South Florida...He is charged with Medicaid and Medicare fraud for providing "medically unnecessary" services to perhaps thousands of beneficiaries who did not qualify for federal reimbursement...In order to hide the kickbacks...(they)...were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments...