AMS (American Medical Systems,now Endo and J&J (Johnson & Johnson/JNJ) HARM Women FOR PROFIT in AU

Australian Medical Association president confirms AMA WA(Western Australia)’s role in pelvic mesh scandal

• Joanne McCarthy  AUGUST 22 2017 - 12:11PM

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The Australian Medical Association acted as exclusive distributor of an Australian-invented pelvic mesh device for women that helped spark a global pelvic mesh scandal after it was sold and registered for use in America in 2001.

The AMA's marketing of the Intravaginal Sling (IVS) Tunneller device as an "Australian medical design breakthrough" to treat incontinence and prolapse, despite women's reports of complications in Western Australian public hospital trials from as early as 1989, was "a long way from our proudest hour", said current AMA president Dr Michael Gannon.

Australian Medical Association national president Dr Michael Gannon confirmed the AMA promoted and distributed a pelvic mesh device for women that helped spark a global pelvic mesh scandal. 

"It is unfortunately the case that many women have been injured by these kinds of operations. To call this a tragedy is not overstating it at all," he said, after confirming a wholly-owned subsidiary of the AMA's Western Australian branch promoted and exclusively distributed the IVS device.

It was a controversial decision that "I'm sure they now regret", and which some Perth gynaecologists continued to be unhappy about more than 15 years later, he said.

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"I can only answer that in good faith the AMA WA thought it was a good product. History will not judge that decision kindly. It already has not judged that decision kindly," Dr Gannon said.

His comments come only months after the Royal Australian and New Zealand College of Obstetricians and Gynaecologists conceded there was "very little robust information" of the long term safety of some prolapse mesh devices, despite estimates more than 30,000 Australian women received them.

The IVS Tunneller's sale to Tyco Health and registration in America in April, 2001 was used by pharmaceutical giants, including Johnson & Johnson, to register their own prolapse devices by arguing they were "substantially the same" as IVS and subsequent devices, without producing independent evidence of safety. They were then cleared for use in Australia.

More than 700 Australian women alleging serious and permanent injuries after pelvic mesh surgery for incontinence and prolapse are suing Johnson & Johnson in a Federal Court case in Sydney.

An Australian Medical Association document describing the IVS Tunneller device as an "Australian medical design breakthrough" to treat incontinence and prolapse in women.

Another 300 Australian women are registered for a second class action against American Medical Systems (AMS), which developed pelvic mesh devices including Perigee and Apogee. Apogee was cleared for use in America in 2004, after AMS argued it was "substantially the same" as the Australian-invented IVS Tunneller.

Dr Gannon, a Western Australian obstetrician and gynaecologist, said he was aware of "hundreds of operations" by Perth specialists trying to "remedy the damage" caused by mesh devices including the IVS.

Australian Pelvic Mesh Support Group members fought for a Senate inquiry into how pelvic mesh devices were cleared for use in Australia. 

"I have been personally involved in the care of women who have suffered greatly from bladder dysfunction, bowel dysfunction and sexual dysfunction because of some of these devices," he said.

It was a "regulatory failure that so many individual women were damaged".

"The TGA (Therapeutic Goods Administration) takes great care when it looks at new medicines entering the market, but I don't think they are resourced to take the same care with devices. We would like to see them use the same blowtorch on devices as applies to medicines," he said.

Perth woman Jeanette McKinnon, who said she "wanted to vomit" several weeks ago when a specialist confirmed she was implanted with at least two mesh devices at the Bentley public hospital in 2004 and 2005, allegedly without her knowledge or consent, was outraged when told of the AMA's involvement.

"I'm absolutely horrified. I'm so angry I'm shaking. That this has been allowed to go on, and the AMA's been involved. How dare they? We're human beings," Mrs McKinnon said.

The IVS Tunneller device was developed during experiments on 13 large dogs in 1987 by inventor Dr Peter Petros and other Royal Perth Hospital doctors.

A WA East Metropolitan Health Service spokesperson confirmed Royal Perth Hospital approved a research study in 1989 into the IVS device and procedure. It was granted standard clinical practice status by the hospital's ethics committee in 1993.

A Medical Journal of Australia report in July, 1994 acknowledged many doctors were critical of the procedure.

In February 2001, only two months before the IVS Tunneller was cleared for use in America as an incontinence and prolapse device, the Royal Australasian College of Surgeons found there was "no peer-reviewed, good quality evidence available to determine the safety and efficacy of the IVS procedure to treat women's incontinence". There was no assessment of its use to treat prolapse.

In a paper in 2003 called "Intravaginal Sling Distress", three Australian specialists, including Newcastle gynaecologist Alan Hewson and Brisbane gynaecologist Chris Maher, reported "disconcerting complications" in women after IVS surgery, including infections, pain syndromes and "symptoms debilitating to the patient's and partner's quality of life".

"Until further data on the safety and efficacy of the IVS procedures is available they cannot be recommended," they concluded.

A 2010 Melbourne Mercy Hospital for Women review of 10 years of pelvic mesh surgery found the IVS device had significantly higher rates of pain, mesh erosion and infection complication rates than eight other devices reviewed.

Dr Petros did not respond to Newcastle Herald questions.

In a paper in 2012 Dr Petros said his "early experimental studies" had been "wrongly" used as "an intellectual cornerstone to justify the use of mesh in prolapse surgery".

In the paper he distanced himself from the global mesh scandal, saying complications were related to "large sheet" mesh adopted by some companies, and not the small tapes advocated by him which preserved "vaginal elasticity".

In a submission to a Senate inquiry into pelvic mesh devices, which will hold its second public hearing in Perth on Friday, Dr Petros referenced his 1990 paper produced after trialling the Intravaginal Sling procedure on "13 female mongrel dogs", in association with Royal Perth Hospital and the University of Western Australia.

-  Newcastle Herald

http://www.watoday.com.au/wa-news/australian-medical-association-president-confirms-ama-was-role-in-pelvic-mesh-scandal-20170822-gy1hzj.html

Douglas Kohrs, AMS (American Medical Systems), Endo: Criminals Go To Jail - Executives Pay 'Settlements'

Transvaginal Mesh Settlement News: Endo ENDP Agrees to Resolve “Virtually All” Remaining Pelvic Mesh Claims, Sets Aside Additional $775 Million

Published on August 8, 2017 by Laurie Villanueva  FiDA Highlight

Endo International PLC has announced new agreements to settle “virtually all known” U.S. transvaginal mesh lawsuits involving devices manufactured by its American Medical Systems unit.

In a statement issued yesterday, the company disclosed that it would reserve another $775 million to resolve the remaining U.S. claims. With the additional reserves, Endo will have now set aside more than $2.6 billion to cover costs associated with transvaginal mesh settlements.

“While it remains possible that additional claims will be filed, we believe today’s announcement will assist most mesh claimants to move forward with their lives and will permit Endo to move forward with an even greater focus on executing against our core strategic priorities,” said Paul Campanelli, Endo’s President and Chief Executive Officer.

Under the new agreements, Endo will begin making installment payments in the fourth quarter of 2017. The installments will continue through the fourth quarter of 2019.

Roughly 22,000 transvaginal mesh lawsuits remain pending in the American Medical Systems litigation, all of which were filed on behalf of women who allegedly suffered serious complications after the devices eroded into their vaginal wall. The majority of claims are pending in a federal multidistrict litigation now underway in the U.S. District Court, Southern District of West Virginia.

Nationwide Transvaginal Mesh Litigation

Transvaginal mesh products were once widely-used to treat women suffering from pelvic organ prolapse and stress urinary incontinence. However, the U.S. Food & Drug Administration (FDA) has issued several public health alerts since 2008 detailing life-changing complications potentially associated with the implants, including mesh erosion, chronic pain, organ perforation, incontinence, scarring and adhesions, chronic infections, and more.

In 2011, the FDA reversed its previous position regarding the frequency of transvaginal mesh complications in pelvic organ prolapse repair, stating it no longer considered these adverse events to be rare. The agency also expressed doubt that such procedures offered any additional benefits compared to traditional non-mesh prolapse repair.

Last year, the FDA finalized new regulations that, among other things, reclassified transvaginal mesh intended for use in prolapse repair as a high-risk medical device. The new rules also made the implants ineligible for the agency’s 510(k) clearance program, which had previously allowed such products to come to market without first undergoing human clinical trial.

While it appears that most cases involving American Medical Systems will soon be resolved, the litigation surrounding transvaginal mesh is far from over. Johnson & Johnson and its Ethicon, Inc. subsidiary still face roughly 55,000 pelvic mesh claims now pending in state and federal courts around the country.

Other device makers involved in the massive transvaginal mesh litigation include Boston Scientific Corp., C.R. Bard, Inc., Coloplast Corp., Cook Medical, Inc. and Neomedic.

Ethicon and the other defendants have settled some pelvic mesh lawsuits, but thousands of cases remain pending.

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https://seekingalpha.com/article/4096349-endo-international-plc-endp-q2-2017-results-earnings-call-transcript?page=2   

Earnings conference call today with global banks and investors

Paul V. Campanelli - Endo International Plc

Yesterday, the company announced that it reached agreements to resolve virtually all known U.S. mesh product liability claims. Beginning in the second quarter of 2017, we aggressively executed a settlement strategy in connection with Endo's mesh litigation. We believe that these efforts which include global resolution with all key plaintiff attorneys; case management orders issued by courts overseeing mesh cases, and our goal of having additional orders entered by other courts; our decision to stop selling mesh products in March of 2016; settlements recently entered into by other mesh manufacturers and the corresponding decrease in attorney advertising, as well as the continued running of statutes of limitations will collectively deter future filings.

Importantly, we believe these actions will assist most mesh claimants to move forward with their lives and permit Endo to move forward with an even greater focus on executing against our core strategic priorities. We increased our mesh liability accrual by $775 million in the second quarter, which is expected to cover approximately 22,000 U.S. mesh claims subject to a claims validation process for all resolved claims as well as all of the known international mesh claims and other mesh-related matters. I'll let Blaise address this more fully as he discusses our financial performance.

Blaise Coleman - Endo International Plc

Moving to slide 11, on the mesh litigation settlements, Paul already discussed we've reached agreements to resolve virtually all known U.S. product liability claims relating to the transvaginal mesh products sold by Endo's AMS subsidiary. As to the financials, in the second quarter 2017, Endo recorded a $775 million mesh product liability charge, reflecting an estimate for the expected future payments related to the resolved U.S. mesh product liability claims, the small portion of known unresolved U.S. claims and all of the known international mesh product liability claims and all other mesh related matters.

As of June 30, 2017 the mesh liability accrual was approximately $1,295 million, with $359 million in the qualified settlement funds, leaving approximately $935 million to be paid into qualified settlement funds. We expect to pay approximately $160 million to $185 million into the qualified settlement funds or directly to plaintiffs during the second half of 2017, with the remaining payments into the qualified settlement funds continuing through the fourth quarter of 2019.

Question-and-Answer Session

Operator

Yes, sir. First question comes from Liav Abraham of Citibank. Your line is now open.

Liav Abraham - Citigroup Global Markets, Inc.

Good morning. A couple of questions.  

And then secondly, on your settlement on mesh, congrats for closing this out. Just a couple of clarifications. The settlement amount that you announced, is this a post-tax amount or pre-tax? I assumed it was pre-tax, so what would the tax shield be on that? And I also noticed that the number of claims covered by the agreement that was announced yesterday of 22,000 was a lot higher than what was disclosed in Q1 of 10,500. So, was this just a significant step-up in the number of new claims in the recent past few months? Thank you.

Paul V. Campanelli - Endo International Plc

Thank you. So, I'll take the environment question, then I'll talk a little bit about the increase in claims to 22,000 and Blaise will talk a little bit about your financial question. 

Regarding the mesh update in terms of the increase from 10,000 to 10,500 to 22,000, the starting point was is when I was asked to take over as CEO in late September and early October, it took me a period of time to evaluate the current strategy that Endo was pursuing.

And then after careful consideration, looking at where we're heading in terms of looking at this for a series of years, looking at – opining with internal and external counsel, as you know, we made some disclosures early in the, I guess, mid to late second quarter would probably be better way that we disclosed at that period of time, that there was approximately 10,500 claims that had been filed or asserted or that we believed that were likely to be filed or asserted.

And that was our starting point. However, later in that period of time, we did change our strategy. I got closer involved and we had an opportunity to meet with private plaintiffs and we started to negotiate. At that point in time, we received more information that we did not have earlier in that period of time. And we learned a lot more about unfiled claims that totaled approximately 22,000 claims. So we had to make a business decision. We looked at where the company was headed, we were looking at distraction; we were looking at the amount of time that we were investing into resolving the mesh claims.

So at that point in time, we looked at the number of claims and we negotiated to $775 million accrual. And we view this as an inflection point for the company. So while it was a difficult negotiation, we are now moving forward as a company. We're focused on operational execution and we can focus on our business.

So with that, I'll pass it over to Blaise and can talk a little bit about the financial aspect.

Blaise Coleman - Endo International Plc

Yeah, sure. So, just in terms of the pre- and post-tax question, just as a remainder, as we've previously discussed, one really needs to model taxes at a total enterprise level. So as we said for 2017, we expect to be in a net tax cash receipt position of $15 million. And for modeling purposes for 2018 and 2019, we're providing a range that our cash taxes paid will be between $15 million and $30 million at a total company level. And that would obviously include everything including the mesh payments that are new here that we'll have in 2018 and 2019.

Liav Abraham - Citigroup Global Markets, Inc.

Great, thank you.

Young Min Lee - Raymond James

Good morning. This is Lucas Lee in for Elliot. Thank you for taking our questions. So, as a follow-up to the dialogue around resolution of mesh litigation claims, understand that this resolves the vast majority of known and potential cases. But assuming there could still be some emerging cases, could you help us frame what the cap on liability is, potential liability is? We're just trying to get a sense of how many patients ultimately used the mesh product and then how many of those have turned into claims. Thank you.

Paul V. Campanelli - Endo International Plc

Yeah. So no, Lucas, we're not going to be able to quantify that for you. What you have to understand is the 22,000 that we disclosed is virtually all known claims. Now, moving forward, what we've done is we've talked about things that have occurred and what we've put in place to deter, and I mentioned this in my opening comments, right? What's in place to deter the assertion of weak or meritless case, right? The sheer nature of having the CMO in place, the case management order at the MDL level and also having a case management order in the state of Minnesota, whereby that is the home state of AMS, that in itself is going to deter, again, weak or meritless cases, right? So, there is a process in order to move cases forward.

The CMO in itself is a deterrent of having mass tort cases coming forward. So, that's one component. You've got to recall that we stopped shipping and selling the product in Q1 of 2016, so you have a timing issue. You also have the statute of limitations. That ranges state by state in a range of two to three and up to six years, but the bottom line is is you have a statute of limitations.

When you look at all of these components, I think we have positioned ourselves in a good place to move forward and away from mesh. So I hope I answered your question, Lucas.

Young Min Lee - Raymond James

All right. Thank you.

Ann-Hunter Van Kirk - BMO Capital Markets (United States)

Good morning. This is Ann-Hunter Van Kirk on for Gary. Thanks for taking our questions. What are your expectations for leverage over the next couple years in light of the mesh payment and are you considering any additional cost cuts to help pay down debt?

Paul V. Campanelli - Endo International Plc

Thanks. So Blaise you'll take this?

Blaise Coleman - Endo International Plc

Yeah. So thanks, Ann, for the question. I think as we told you for 2017, we expect to be in the high 4 times range from a leverage perspective. And as we've previously communicated, we do continue to aspire to leverage down over time back into the 3 times to 4 times range. In terms of timing of when we'll be able to achieve that leverage goal, although today's announcement around mesh removes one of the near-term uncertainties we've been facing in terms of developing a path and timeframe in order to achieve that goal, we're just not going to able to provide any specific timeline today, as there continues to be a number of key uncertainties, both in the near-term and mid-term that could impact the timing of delevering. But again, we will, as we talked about when we come to 2018 guidance, we'll certainly provide what our expectations are, both from a cash flow perspective and from a leverage perspective for 2018.

Paul V. Campanelli - Endo International Plc

On the cost-cutting side, and I think you've seen that we've made some very difficult decisions over the last 10 months.

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https://www.bizjournals.com/philadelphia/morning_roundup/2016/02/endo-shutting-down-astora-womens-health-division.html

Endo shutting down its women's health division

Feb 29, 2016, 4:04pm EST Updated Feb 29, 2016, 4:33pm EST

John George

Senior Reporter

Philadelphia Business Journal

Endo International said Monday it is winding down its Astora Women’s Health division after failing to find a buyer for the business.

The company said it will cease business operations for Astora, based in Eden Prairie, Minn, by March 31 in part to “reduce the potential for product liability related to future mesh implants.”

Endo (NASDAQ: ENDP) and other medical manufacturers who make vaginal mesh products have been sued by patients allegedly injured by the makers of such products used to treat a variety of medical conditions including urinary incontinence and pelvic organ prolapse.

The company's stock closed down 21 percent to $41.81 per share Monday.

In August, Endo said it had set aide $1.53 billion for potential litigation and settlement costs, and the company said Monday it took an additional $834 million pre-tax charge during the fourth quarter related to vaginal mesh cases.

Endo, which is based in Dublin, Ireland, and has its U.S. headquarters in Malvern, said it will work with physicians to support their transition to alternative products.

The company, as part of its strategy to focus on global sales of its branded and generic pharmaceutical products, sold off its men’s and prostate health business last year to Boston Scientific in a deal valued at up to $1.65 billion.

Endo entered the urology device market in 2011 when it bought American Medical Systems Holding Inc. for $2.9 billion in 2011.

Last year, Endo bought rival generic drug manufacturer Par Pharmaceutical Holdings Inc. for $8 billion.

John George covers health care, biotech/pharmaceuticals and sports business.