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Ethicon Media Monitoring 5/21/2018
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Private equity’s latest investment? Lawsuits
May 18, 2018 | Houston Chronicle
By L.M. Sixel
Private equity and hedge funds have found a new way to get richer: Financing lawsuits in exchange for a cut of the winnings. -
Boston Scientific in the spotlight over counterfeit plastic allegations
May 18, 2018 | Med-Tech Innovation
By Reece Armstrong
The report uncovered emails suggesting that Boston Scientific bought counterfeit polypropylene from a supplier in China, so it could continue to produce its devices. -
Plastic cups have more protective additives to stop them degrading than surgical mesh, expert warns
May 19, 2018 | Cambs Times
By Kath Sansom
There are growing concerns that the polypropylene plastic implants are unstable and can break down in the body, yet earlier this year health secretary Jeremy Hunt said he would not look at the research when he launched a review into three women’s health scandals - primodos, valproate and mesh. -
Weekend Doctor
May 20, 2018 | The Courier
By Erica Hermiller
Do you leak urine when you laugh, cough or sneeze? Do you have an uncontrollable urge to void and leak urine on the way to the restroom? These are symptoms of urinary incontinence that many women experience.
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Private equity’s latest investment? Lawsuits
May 18, 2018 | Houston Chronicle
By L.M. Sixel
Private equity and hedge funds have found a new way to get richer: Financing lawsuits in exchange for a cut of the winnings.
The investment funds, which have raised billions of dollars to funnel into promising cases, have become a rich source of cash for lawyers to acquire cases, buy advertising, recruit clients and underwrite litigation expenses. If the lawyers win, private equity backers can pocket up to six times their initial investments, amounting to as much as 50 percent of a settlement or trial verdict.
This large and growing pool of money has opened the door for lawyers to gamble on big cases against big companies involving thousands of victims and millions of dollars in damages, but it also raises questions of whether lawyers will act in the best interest of clients or their financiers, who might prefer a quick settlement over a lengthy trial. In addition, the cuts taken by private equity and hedge funds can be so high that clients who win big awards on paper may end up with as little as 10 cents on dollar, legal experts say.
"It’s like the white-collar version of payday loans," said Houston lawyer John Zavitsanos.
Litigation finance has been around for more than a decade, but only in recent years has it taken off as private equity and hedge funds seek better returns beyond stock, bond and commodity markets, according to legal and finance specialists. By some estimates, more than one-third of U.S. law firms used litigation financing in 2017, up from 7 percent four years earlier, while private equity and hedge fund investments in lawsuits have surged to about $30 billion from $1 billion in 2011.
Burford Capital, a publicly traded litigation funder listed on the London Stock Exchange, provides a window into this mostly private world. Burford, like most litigation financiers, raises the money it plows into lawsuits from institutional investors such as pension funds and university endowments. In a recent presentation to investors, Burford estimated that it earned a 37 percent return in 2017 — compared about 22 percent for the S&P 500 stock index — and more than tripled its investments in lawsuits to $1.3 billion from $378 million.
Another publicly traded litigation finance firm, Bentham IMF of Australia, opened an office in Houston last year, just days after the firm announced it raised $200 million to fund lawsuits, with most of the money coming from a large, but unidentified hedge fund. At the time, Bentham reported its investments in U.S. lawsuits returned an average of 83 percent.
Bentham’s terms vary from case to case, but lawyers who win typically pay up to three times the original investment to Bentham, plus a percentage of the award or settlement. “We share in the recovery” of damages, said Eric Chenoweth, investment manager for Bentham in Houston.
Bentham does not require lawyers who lose cases to repay the money, so the firm is choosy about which cases it funds, said Chenoweth, a long-time Houston lawyer who uses his knowledge of judges, courts and lawyers to evaluate lawsuit risk. Ninety-five percent of the firms seeking funding from Bentham are rejected, he said.
Legalist, a San Francisco litigation finance firm uses a computer algorithm to predict the likelihood of winning by weighing the type of claim, outcome of similar cases, previous rulings by the judge and the financial strength of the defendant. The company, which more than $10 million in seed capital last year, is backing a Boston-area ice cream sandwich maker suing one of its suppliers over allegations of inferior ice cream.
Software engineers make up half the staff at Legalist, said CEO Eva Shang, who started her company after receiving a $100,000 fellowship from the foundation started by Peter Thiel, the co-founder of PayPal who footed the bill for Hulk Hogan's sex tape lawsuit against Gawker Media.
Investment funds solve cash flow problems for trial lawyers, who often need lots of money upfront to pursue cases. Some lawyers use private equity and hedge fund money to cover the cost of bringing complex cases such as intellectual property or anti-trust disputes that can require high-priced experts, deep research and extensive travel.
Lawyers who represent consumers hurt by car wrecks and prescription drugs often use private equity money to buy television ads to recruit potential clients, operating call centers to handle the inquiries. One of the nation’s biggest legal advertisers is the Pulaski Law Firm of Houston —owner of the toll free number 1-800-BAD-DRUG —which spent $25 million in 2016 running 98,000 television ads, according to X Ante, a firm that forecasts litigation risk.
Pulaski declined to comment.
A 2015 lawsuit brought by Amir Shenaq, the former chief business development officer of the Houston law firm AkinMears, sheds some light on the workings of litigation financing. Shenaq, a former Wells Fargo banker hired to raise the capital the firm needed to increase its revenues, sued when he didn’t get the commissions he said he was promised.
AkinMears built its business through television ads that alerted viewers to health problems related to medical devices, prescription drugs and occupational diseases, such as asbestos-related cancer, and the possibility they could collect from the companies responsible. The firm acted as a kind of legal broker, operating a phone bank to sign up clients, bundling the claims and sending them to other lawyers to handle, according to the lawsuit.
AkinMears signed up tens of thousands of clients, charging each a 40 percent contingency fee — meaning it was only collected if the clients won verdicts or settlements. The fee was divided with the lawyers contracted to handle the cases.
But AkinMears wanted to grow faster and came up with a plan to acquire easy-to-settle medical device cases from other lawyers, according to Shenaq’s lawsuit. Gerchen Keller Capital, a Chicago litigation finance firm since acquired by Burford Capital — agreed to provide nearly $100 million to AkinMears.
About $46 million went to buy 14,000 transvaginal mesh cases and another 900 non-mesh cases from a group of four law firms — a deal that AkinMears estimated could earn as much as $200 million in legal fees, according to court documents.
Thousands of women received mesh implants to treat pelvic conditions including urinary incontinence, and sued the manufacturers after suffering from infections, bleeding and organ damage. Several won multi-million dollar verdicts, which drove mesh makers to settle thousands of additional claims for millions of dollars. AkinMears, according to court documents, estimated that each settlement of a transvaginal mesh case would bring $14,000 to $16,000 in legal fees.
Shenaq’s lawsuit was settled two years ago, but terms were not disclosed. AkinMears’s lawyer, Allan Huddleston Neighbors IV, declined to comment. Shenaq also declined to comment.
Litigation finance first came into the public eye about three years ago in a case against Chevron Corp. which was sued in federal court in California after a natural gas rig exploded off the coast of Nigeria. Chevron discovered the financial backer of the case brought by Nigerians hurt in the blast was Therium Capital Management, a litigation investment firm based in the Channel Islands off the coast of France.
Therium invested $1.5 million into the case, under the terms that it would be paid $9 million, or six times what it initially invested, plus 2 percent of the total recovery if the lawsuit succeeded, according to court records. Therium’s contract with the Nigerians’ lawyers also prohibited them from spending money on additional lawyers, forensic accountants or other experts without the written permission of the investment firm, raising questions of whether the lawyers were representing the interests of their clients or their financial backer.
Therium did not respond to a request for comment.
In Texas, lawyers have to get clients’ consent before they can share contingency fees with other lawyers. But lawyers don’t have to tell clients if they bring outside investors aboard to fund their case, a fine line that leaves some lawyers squeamish.
Mike Doyle, a Houston personal injury lawyer, said he considered doing a deal with a private equity fund, but the financing would have cost him 20 to 25 percent a year. In the end, he didn’t do it, worried that the financial pressures would influence the decisions he needed to make in the best interest of his clients.
"I didn’t think the juice was worth the squeeze," he said.
https://www.houstonchronicle.com/business/article/Private-equity-s-latest-investment-Lawsuits-12924091.php
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Boston Scientific in the spotlight over counterfeit plastic allegations
May 18, 2018 | Med-Tech Innovation
By Reece Armstrong
The report uncovered emails suggesting that Boston Scientific bought counterfeit polypropylene from a supplier in China, so it could continue to produce its devices.
Boston Scientific was previously using a Texas-based subsidiary of Chevron Phillips to buy a brand of polypropylene called Marlex. However, the report indicates that Chevron Phillips cancelled its supply partnership with Boston Scientific, after it became concerned about the use of Marlex within the human body. Chevron Phillips even issued a warning stating Marlex must not be used for permanent implant within the human body.
With its deal with Chevron Phillips cancelled, Boston Scientific estimated that its current supply of Marlex would run out by 2012. The company was worried as the FDA had approved its vaginal mesh products on the basis that it was using Marlex to manufacture the devices.
After a second supplier refused to sell Marlex to Boston Scientific in 2010, the company found a broker in China who could supply it with Marlex. The supplier, Emai Plastic Raw Materials, apparently told Boston Scientific that if had a large supply of Marlex that it had imported from Chevron Phillips.
The 60 Minutes report cites court documents revealing that Boston Scientific management told an employee in China not to tell Emai where the material would be used as “it could scare them away”.
More so, Emai did not have the correct documentation to prove that its material was in fact Marlex. After a number of checks on the bags it had purchased from Emai, alongside confirmation with Chevron Phillips, Boston Scientific found that the bags were fraudulent and that the packaging was fake.
Boston Scientific then tested 11 parameters of the material it had obtained from Emai in comparison to Chevron Phillips’ Marlex. The company found that only two parameters were the same and that four of those were classed as 'very different'. However, the company went on to conclude that the two materials were the same and bought 30 years’ worth of supply from Emai, 60 Minutes state.
The 60 Minutes report features commentary from a number of plastics experts and surgeons who have been involved in the removal of mesh in women.
Plastics engineer, Chris DeArmitt, who researched Boston Scientific for one of the women suing the company, said: “I would say the material they're buying maybe is fine for making a park bench. Maybe it's fine for making a disposable cup. But that's a totally different situation when you're looking at something that will be in the body for 40 or 50 or 60 years. There's a whole different level of analysis and confidence that you need. And I don't see that here".
Boston Scientific responded to the 60 Minutes report, issuing a statement on its website, signed off by chairman and CEO Mike Mahoney and executive vice president Urology and Pelvic Health, Dave Pierce.
“The broadcast resurfaced outdated and previously disproven allegations first made by attorneys in 2016. Our rigorous testing and investigation have shown that the resin currently used in our products matches a formulation from the original U.S. produced resin. This information was also reviewed by the U.S. Food and Drug Administration (FDA) and was part of the basis of its conclusions.
“The show offered a one-sided view and commentary from clinicians and plastic experts involved with litigious actions. It is important to keep in mind that polypropylene-based (plastic) devices have been a mainstay in many medical procedures for more than 50 years, including hernia and tendon repair, sutures, and wound closure. Furthermore, our products meet rigorous internal safety standards, international standards, as well the standards of the FDA and other regulatory bodies.”, the company states.
https://www.med-technews.com/news/boston-scientific-comes-under-pressure-over-allegations-it-u/
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Plastic cups have more protective additives to stop them degrading than surgical mesh, expert warns
May 19, 2018 | Cambs Times
By Kath Sansom
There are growing concerns that the polypropylene plastic implants are unstable and can break down in the body, yet earlier this year health secretary Jeremy Hunt said he would not look at the research when he launched a review into three women’s health scandals - primodos, valproate and mesh.
Campaigners say this is a major failing of the Government review, led by Baroness Julia Cumberlege and a team at King’s College Hospital in London.
The Cambs Times, which this week won the prestigious Making A Difference award for Sling The Mesh, approached a leading plastics expert for his views on the polypropylene implants, used to treat incontinence in women and men, pelvic and rectal prolapses and hernia repairs.
Chris DeArmitt, a consultant to the Fortune 100, is a chartered chemist, a fellow of the Royal Society of Chemistry and author of the book Innovation Abyss. We asked for his expert opinion:
1. Question: What can happen to polypropylene (PP) mesh once implanted?
Answer: PP can cause an inflammatory reaction because it is not biocompatible. Truly biocompatible materials are known and they cause no such reaction. Improperly stabilised PP will degrade, lose its strength and eventually break apart. The PP mesh I have looked at so far was dramatically under-stabilised for its intended use. I checked with other world-class experts and they all share that view. For example, there is more antioxidant (stabiliser) in a Delta Airlines disposable water cup than there is in some mesh products on the market.
2. Question: Can you explain why PP is unsuitable for a medical implant?
Answer: Firstly, it is well-known that it can cause chronic inflammation leading to discomfort and pain. I have heard manufacturers claim that this is not the case, however, when you look at their own brochures you will see them advertising new coated PP mesh to overcome the problems with their older uncoated mesh. I have attached a clip from such a brochure. How can they claim there is no problem when their own brochure says otherwise?
The second main reason is that PP is one of the most unstable commercial plastics on the market. It is so sensitive to oxygen that stabiliser is added immediately as it is produced at the factory to prevent instant attack by oxygen. PP gives the illusion of stability as long as there is enough stabiliser left to protect it. Once the stabiliser is used up protecting the PP, or washed out by contact with water, the PP will start to degrade rapidly. These are very well established facts published in countless peer reviewed journal articles.
3. Question: Research shows PP mesh can shrink and degrade once implanted, but this research is ignored by our Government. How can we make them take it seriously?
Answer: I have reviewed over 400 articles on PP mesh and the body response to it. It is very hard to get the message across and there are many reasons for that. Firstly, either side can find articles that seem to support their view. It is only when you have read hundreds of articles that you have a true understanding of where the truth lies. Few people have the time, training and dedication to do that. So, for example, how would a politician or regulatory person decide in light of so much data? A second problem lies with the fact that this is a big industry and that can give rise to its own problems. For example, when American documentary makers, 60 Minutes, wanted to have the mesh analysed, US labs refused to touch it once they learned it was Boston Scientific mesh. How can one present the facts when it’s hard to collect basic data?
4. Question: I’ve been told that adding blue dye makes plastic more unstable is this correct?
Answer: I wrote about this in one of my expert reports. It is well known that pigments and dyes can make polymers more unstable. It has been shown that the phthalocyanine blue pigment makes PP stiffer and more brittle. I have seen no detailed studies comparing uncolored PP mesh fibre to the blue fibres.
5. Question: If the product is so unstable then how do these surgical mesh implant manufacturers get their product approved so easily?
Answer: I am not an expert in the approval procedures so I could only give a layperson’s perspective on this. From what I understand, the “Marlex” type PP was approved decades ago before thorough testing was required. It has since been grandfathered in and assumed to be safe. It is very interesting that the manufacturers of Marlex stated that it could be used for short-term implants but cannot be used for permanent implants. Why did they state that? To me the reason is clearly that they know there is nowhere near enough stabiliser in the product for long-term use inside the body.
• Chris DeArmitt says his opinion is backed by other PP stabilisation leaders worldwide. He added: “I am not on anyone’s “side” which means my views are based on the evidence. My daily job is not expert witnessing but being a plastics expert who creates new and better plastic materials.” His comments are made free of charge and he is not affiliated to any law firms as a medical expert.
http://www.cambstimes.co.uk/news/plastic-cups-mesh-sling-chris-dearmitt-jeremy-hunt-1-5525524
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May 20, 2018 | The Courier
By Erica Hermiller
Do you leak urine when you laugh, cough or sneeze? Do you have an uncontrollable urge to void and leak urine on the way to the restroom? These are symptoms of urinary incontinence that many women experience.
Even though some women may believe these symptoms are a normal part of aging, the reality is that symptoms can be treated.
Urinary incontinence can impact an individual’s quality of life. It can be associated with depression and anxiety, work impairment and social isolation. Risk factors for urinary incontinence include age, obesity, parity with vaginal delivery and smoking.
Urinary incontinence increases with age; however, women in their younger years can also experience symptoms. Thirty-eight percent of women over the age of 60 experience incontinence symptoms. Women who are overweight have a nearly threefold increased risk of urinary incontinence. Women who have had vaginal births are at increased risk for urinary incontinence and pelvic organ prolapse. Smoking is also a risk factor for incontinence, as it causes increased coughing, bladder irritation and increased risk for bladder cancer.
Urinary incontinence is the involuntary leakage of urine. It can be provoked by increased abdominal pressure; coughing, sneezing and laughing, which is called stress incontinence; or it can be caused by a functional issue of the bladder that results in bladder overactivity, leading to urge incontinence. Some women may experience both.
It is a common issue among women that is undertreated. Nearly 50 percent of adult women experience urinary incontinence and less than half of symptomatic women seek care. Many women are reluctant to seek care due to embarrassment and/or lack of knowledge about treatment options.
Treatment options differ depending on the type of incontinence a woman is experiencing. Treatment options include pelvic floor therapy, lifestyle modifications, medical devices, medications or surgery.
Pelvic floor therapy aids in strengthening pelvic floor muscles to provide a backboard for the urethra to compress upon and to reflexively inhibit involuntary bladder contractions, preventing urine leakage. Physical therapists that have special training in pelvic floor therapy can assist in treatment for those women suffering from stress incontinence.
Lifestyle modifications include:
• Avoiding alcoholic or caffeinated beverages
• Weight loss if overweight
• Smoking cessation
In cases with women who have pelvic organ prolapse, surgery may be necessary in order to improve symptoms. The Burch procedure is a mesh-free technique that is done robotically. It returns support to the urethral vesical angle (bladder neck) which, in turn, prevents the involuntary leakage of urine. Complication rates are very low and recovery is relatively easy due to the robotic approach.
If you are experiencing urinary incontinence, whether it be stress related or urge related, there are treatment options that can aid in symptom improvement, leading to improvements in your quality of life.
http://thecourier.com/local-news/2018/05/20/weekend-doctor-223/
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