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For the first time in her criminal-fraud trial, Elizabeth Holmes on Tuesday took aim at the most serious allegations made against her by prosecutors, offering a narrative of herself as a well-intentioned if inexperienced entrepreneur who had some success in her effort to transform healthcare, the Wall Street Journal reported. Holmes’s full day of testimony was her longest yet in her defense against 11 charges of fraud and conspiracy relating to her time running defunct startup Theranos Inc., which collapsed in 2018. It followed 11 weeks of testimony supporting the prosecution’s case that Ms. Holmes ran into trouble trying to build her blood-testing company and knowingly misled investors and patients about her technology’s capabilities. Her testimony on Tuesday, her third day on the witness stand, sought to pick apart what lawyers following the trial have deemed the prosecution’s strongest evidence. Holmes told the jury that she added the logos of major pharmaceutical companies to Theranos documents with honest intentions; that she didn’t try to avert regulatory oversight but was transparent with the Food and Drug Administration; and that Theranos turned to using commercial blood analyzers to deal with higher blood-sample volumes caused by a retail partner’s decision, not because it was trying to mislead anyone about what its own devices could do. (Subscription required.)

A creditor group claiming bankrupt drugmaker Mallinckrodt PLC took actions that resulted in price-gouging lost its bid to have an examiner appointed to investigate certain chapter 11 claims and votes related to asbestos exposure, WSJ Pro Bankruptcy reported. Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del., at a hearing on Monday declined to appoint an examiner to look into ballots cast on Mallinckrodt’s plan to exit chapter 11 bankruptcy on behalf of thousands of asbestos-injury victims represented by personal injury lawyer Thomas Bevan and other law firms. Mallinckrodt turned to bankruptcy in 2020 to resolve a rising number of lawsuits over the sale of opioid products along with antitrust claims over pricing for its H.P. Acthar Gel drug, used to treat infantile spasms, multiple sclerosis and other conditions. Dublin-based Mallinckrodt also faced more than 11,700 asbestos-related lawsuits, mostly related to legacy operations of predecessor companies. Judge Dorsey ruled against a request made last month by employers and others alleging they overpaid for Acthar treatments. The city of Rockford, Ill., for example, has alleged that beginning in 2007 Mallinckrodt entered into several contracts designed to limit distribution of Acthar and raise its prices more than 1,300%.

CVS, Walgreens and Walmart pharmacies recklessly distributed massive amounts of pain pills in two Ohio counties, a federal jury said yesterday in a verdict that could set the tone for U.S. city and county governments that want to hold pharmacies accountable for their roles in the opioid crisis, the Associated Press reported. Lake and Trumbull counties blamed the three chain pharmacies for not stopping the flood of pills that caused hundreds of overdose deaths and cost each of the two counties about $1 billion, their attorney said. How much the pharmacies must pay in damages will be decided in the spring by a federal judge. It was the first time pharmacy companies had completed a trial to defend themselves in a drug crisis that has killed a half-million Americans over the past two decades. The counties were able to convince the jury that the pharmacies played an outsized role in creating a public nuisance in the way they dispensed pain medication into their communities. “The law requires pharmacies to be diligent in dealing drugs. This case should be a wake-up call that failure will not be accepted,” said Mark Lanier, an attorney for the counties.

Out of $140 billion in past-due medical bills reported on U.S. credit files, much of it disproportionately falls on Black Americans, Bloomberg News reported. Census data show that 28% of Black households have medical debt, compared with 17% of White households. The gap is even wider in certain parts of the country. In St. Louis County, where Walker lives, people living in communities of color are almost four times as likely to have medical debt in collections than people living in predominantly White communities, according to data compiled by the Urban Institute. Hospitals have performed heroic work to save lives amid the immense challenges of the Covid-19 pandemic. Through it all, many institutions continued to pursue collection of medical debt. After George Floyd’s murder last year and the protests that followed, hospital groups and medical societies pledged to advance racial equity. The American Hospital Association called for “the hard but necessary work to make fundamental changes and address our society’s inequity,” and “real solutions that make a genuine difference.” Health-care companies can’t fix the root causes of the country’s systemic inequality, but doctors and hospitals can ensure their services don’t inflict financial harm on patients. For instance, they can determine how to screen patients for financial assistance and how to respond when a bill goes unpaid. But patient advocates say the medical industry perpetuates such harsh billing practices as garnishing wages, charging high interest rates, placing liens on homes, and suing patients. Those tactics often land harder on communities of color. Meanwhile, these aggressive billing practices bring in little revenue for hospitals—less than 1% of the total by some estimates, patient advocates say. “These are already people who’ve been struggling to pay,” says Jenifer Bosco, a staff attorney at the National Consumer Law Center who co-wrote proposed legislation to strengthen protections for patients. “It’s not the way the hospitals are balancing their budgets.”

Johnson & Johnson will likely have to wait until next year before it can restart negotiations to resolve 38,000 lawsuits filed by people who claim one of its oldest products, baby powder, causes cancer and other diseases, Bloomberg News reported. A federal judge questioned whether spending money on formal settlement talks makes sense while victim advocates oppose mediation. “I can order it tomorrow, but I don’t have any great anticipation there will be” progress, U.S. Bankruptcy Judge Michael B. Kaplan said yesterday during a court hearing in Trenton, N.J. “I’d rather have their hearts and souls in it.” Last month, J&J created a unit to hold its talc liabilities and then put that company, which has no operations, into bankruptcy. The goal is to negotiate with victims to create a trust with at least $2 billion to pay all current and future baby-powder claims. The bankrupt unit, LTL Management, wants to get mediation started immediately, Greg Gordon, the lawyer leading the chapter 11 case, said in court. Before LTL filed bankruptcy, the groups made “good progress” in settlement talks as part of a separate bankruptcy case filed in Delaware by the former J&J talc supplier, Imerys Talc America, Gordon said. Tens of thousands of women claim the talc in baby powder causes cancer, a charge J&J denies. For years, the company focused on fighting lawsuits one at a time in courts around the country until the consumer giant switched tactics and decided to try to resolve all current and future claims in bankruptcy.

A group representing people alleging that Johnson & Johnson’s talc-based products cause cancer said on Friday that the planned spinoff of the pharmaceutical giant’s consumer health division will create new problems for talc claimants, Reuters reported. The group, known as the talc claimants’ committee, filed a statement with the U.S. Bankruptcy Court for the District of New Jersey, where the chapter 11 case of J&J’s subsidiary that holds its talc liabilities was transferred this month. The subsidiary, LTL Management LLC, filed for bankruptcy protection in October with the goal of settling 38,000 talc cases. J&J maintains that its talc products are safe. In Friday’s statement, the committee said that J&J’s plan to split its consumer division from its pharmaceuticals business “would create further barriers between tort claimants and assets that should be available to satisfy claims.” It contends that if J&J becomes two separately traded entities, disputes will arise over which one will be on the hook for a funding agreement in the LTL bankruptcy. The committee also accused J&J of using the bankruptcy process as a litigation advantage. J&J said when it announced the split that the move had nothing to do with the talc litigation or the bankruptcy. A status conference is scheduled on Monday before U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey.

The billions of dollars of aid the U.S. government distributed to hospitals during the pandemic — including advances in Medicare payments — kept struggling facilities afloat, but papered over longstanding problems, Bloomberg News reported. The elective procedures that generate the most revenue haven’t returned to pre-Covid levels. Now, a staffing crisis has emerged as a new challenge just as the final government disbursements are paid out — putting potentially thousands of hospitals at risk. These risks aren’t yet reflected in the financial markets — an indication of the extent of the federal support. Junk-rated municipal hospital bonds are underperforming the overall high-yield muni index only slightly this year, with a 6.91% return, compared with 7.11% for the overall index. Still, concerns are growing about the added stress of rising labor, supply and interest costs on a system already rife with problems. Even before the coronavirus, many American hospitals were struggling to adapt to changing models of care, including the shift of even some complex procedures to outpatient settings. Weaker operators are still grappling with the same issues as before the virus, including poorer, sicker and often shrinking populations.

The lawyer who oversaw payments to victims of the Sept. 11 terrorist attacks has agreed to mediate part of the fight between Johnson & Johnson and thousands of women who claim the company’s baby powder causes ovarian cancer, Bloomberg News reported. Kenneth R. Feinberg would share duties with another mediator as part of an effort to resolve nearly 14,000 lawsuits against J&J and its former supplier, Imerys Talc America. Imerys filed bankruptcy in Delaware in 2019 with plans to force J&J to help pay for a victim’s trust that would settle all current and future lawsuits. J&J claims it isn’t responsible for helping Imerys. During a virtual court hearing Monday, U.S. Bankruptcy Judge Laurie Selber Silverstein said she will likely sign an order setting up the mediation once lawyers submit a final version. The talks are unlikely to resolve all of the baby powder lawsuits that J&J faces because the mediation only covers liabilities faced by Imerys and another talc mining company. J&J is involved because it has previously promised to indemnify Imerys against all talc lawsuits. To try to end all current and future baby powder claims, J&J put a unit into bankruptcy with plans to pay at least $2 billion into a victims trust. J&J faces about 38,000 lawsuits claiming the talc in its baby powder was tainted and causes ovarian cancer and other health problems, mostly in women.

Washington state's attorney general on Monday argued that three large drug distributors' excessive shipments of pain pills helped create the U.S. opioid epidemic, calling it the "worst man-made public health crisis in history," at the start of a trial seeking $95 billion from the companies, Reuters reported. Washington Attorney General Bob Ferguson made that argument as a trial got underway in the state's bid to recover more money from the distributors McKesson Corp, Cardinal Health Inc. and AmerisourceBergen Corp than it would receive in a $26 billion nationwide settlement. He said the companies fell short of their legal obligations to operate systems to prevent the diversion of opioids from legitimate uses. They shipped 3.8 billion opioid doses into the state from 2006 to 2018, another lawyer for the state said. "Indeed, we know they were aware of the harms flowing from their conduct because in private correspondence company executives mocked individuals suffering the painful affects of opioid dependence," Ferguson said in his opening statement. As just one example, the state's lawyers displayed a 2011 email in which an AmerisourceBergen executive parodied the theme song to the TV show "The Beverly Hillbillies" while describing how people drove to obtain drugs at Florida pill mills. Don Migliori, another lawyer for Washington, said a systemic failure by the companies stop suspicious orders of opioids going to pharmacies "proved to be the most influential factor in the development of the opioid addiction crisis in this state."

A lawyer for two Ohio counties urged a federal jury on Monday to hold three major pharmacy chains responsible for fueling an opioid epidemic in their communities as the first trial the companies have faced over the drug crisis neared its end, Reuters reported. Mark Lanier, a lawyer for Lake and Trumbull counties, told a federal jury in Cleveland that a verdict in the case against CVS Health Corp, Walgreens Boots Alliance Inc. and Walmart Inc. would have ramifications all across the country. The counties accused the companies of creating a public nuisance in the form of the epidemic by failing to prevent excessive amounts of addictive pain pills from flooding their communities or identify "red flags" of misuse. Lanier said the pharmacies sometimes filled prescriptions for a year's worth of pain pills at a time and that their screening policies for a time were "porous beyond all description." Communities were "devastated" by their flood of opioids they failed to stop, he said. The companies have denied wrongdoing and said the blame falls on others, including doctors and government regulators. Their lawyers are expected to deliver closing arguments later on Monday.