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Monthly Archives: October 2007

Health panel votes to ban child cold medicines

Federal heath advisers voted Friday to halt the sale of over-the-counter cold and cough medicines for children under the age of 6. Click here to read the FDA patient safety news on the topic.

The Food and Drug Administration panel based its ruling on findings that the medicines were ineffective for children in the age group. In rare cases, the medicines may be harmful to children, advisers concluded. Last week manufacturers of the medicines withdrew more than a dozen products labeled for toddlers and babies.

To view the full New York Times report, click here.

Kentucky jury finds in favor of Allstate

Allstate Insurance Co., under siege by trial lawyers who say it drags out insurance claims, won a major legal victory yesterday after a Fayette County jury in Kentucky unanimously found it was not responsible for a two-year delay in settling a Richmond woman’s claim.

Trial lawyer J. Dale Golden had alleged that Geneva Hager, 60, was the victim of an illegal, systematic scheme by Allstate to bully car accident victims into accepting lowball offers for their pain and suffering. In the trial, he had relied upon the soc-called McKinsey documents, the topic of a previous blog on this site (see Auto insurers play hardball). These documents outline the strategy which was developed in the mid-1990s with the assistance of consulting giant McKinsey & Co. Looking for a way to boost profits, McKinsey focused on soft-tissue injuries incurred in minor crashes. Playing off Allstate’s signature slogan, one document recommends the insurer put boxing gloves on its “good hands” for those who insist on going to court.

The McKinsey work was the subject of a May 2006 BusinessWeek article. Entitled In Tough Hands at Allstate, the article highlights a new book by plaintiff’s lawyer David Berardinelli of Sante Fe, New Mexico. In the book, From Good Hands to Boxing Gloves, Berardinelli tells the story of the key role played by management consultant McKinsey & Co. in reengineering auto insurance claims operations at Allstate Corp. — and it’s a story Allstate doesn’t want told.

In the Kentucky case, plaintiff had sought $1.425 billion in the seven-day trial in Fayette Circuit Court because, as her lawyer said, it was the only way of ending a corporate culture of greed. But two jurors said plaintiff’s arguments rang hollow with jurors, who voted 11-1 just minutes after beginning their deliberations. After only 35 minutes of discussion, another juror changed her mind and the verdict became unanimous, juror Betty Sherwood said.

For a newspaper report on the case from Kentucky’s Herald-Leader, click here.

Consumer protection agency not what it seems

Most consumers still believe that if a product is on the shelf of a reliable store like Home Depot, somebody has tested it and proved it safe. At the least, they assume they would have heard about any dangers, the way they know about toxic substances in Chinese toys and toothpaste. But as Eric Lipton reported in The New York Times Times this week, that can be a dangerous assumption to make. Lipton reported on a dangerous sealer that sat on store shelves even after a recall. To view that article, click here.

In an editorial in The Times, it is pointed out that the agency charged with monitoring products – the Consumer Product Safety Commission (CPSC) – has been severely hampered. As the piece noted: “Under the Bush administration’s ideological drive to weaken agencies that regulate business, the commission has been “hollowed out,” in the favorite Washington phrase, to less than half its former strength. Its staff, which was 978 strong in its heyday, now numbers only 401. It has outdated laboratory equipment, and in another sign of neglect, the Bush administration has failed for months to appoint one of the commissioners.”

The Times calls for a stronger CPSC and better protection for consumers. To read the full editorial, click here.