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Current Events in February 2004

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    Pfizer Cuts Off Two Canadian Drug Wholesalers

    Canada Won't Be "Held Hostage" - Pharmacy Association

    Pfizer has upped the ante in the drug reimportation battle -- cutting off shipments to two of the 15 prescription drug wholesalers in Canada. It's the first drug maker to escalate the drug embargo to the wholesale level.

    Canadians reacted angrily and said the black-listing of Canadian pharmacies and, now, distributors threatens to cause a crisis in Canadian health care, already struggling with budget problems.

    "If this shutdown spreads, we could be in real trouble," said David McKay, president of the Canadian International Pharmacy Association. MacKay said Pfizer is "literally dictating the terms by which these products can be sold by Canadian pharmacies."

    If Pfizer ends supplies to other wholesalers in Canada, the nation "will be held hostage and the government will be on Pfizer like a pit bull on a poodle," McKay said.

    Pfizer accused Prairie Supply Co-operative in Calgary and ProCurity Pharmacy Services in Calgary of selling to pharmacies that Pfizer had earlier black-listed for allegedly shipping drugs to Americans.

    Earlier this month, Pfizer informed seven Canadian mail-order pharmacies that it would no longer supply them with Pfizer products. Officials of Pfizer Canada said the company took action against the two wholesalers "to protect the integrity of the pharmaceutical supply system." Company spokesman Jack Cox did not identify the pharmacies to which the two wholesalers allegedly distributed Pfizer products but said the company was "confident" its accusations were accurate.

    Officials of the two wholesalers denied that they distributed Pfizer products to pharmacies that sell medications to U.S. residents, although they said they have distributed non-Pfizer products to such pharmacies, the Minneapolis Star Tribune reported.

    "The problem is, as a wholesaler, people buy from you because you're one-stop shopping. If you don't carry Pfizer products, you will basically disappear from the roadmap of pharmaceutical wholesalers." Prairie Supply general manager Laurie Gauthier said.

    Gauthier said her firm is considering legal action against Pfizer.

    Pfizer Cuts Off Two Canadian Drug Wholesalers...

    Illinois Couple Sues U.S. Over Drug Reimportation

    February 26, 2004
    An elderly Illinois couple is filing suit against the federal government, arguing it is unconstitutional to prevent them from buying life-saving drugs from lower-priced Canadian pharmacies.

    Illinois Gov. Rod Blagojevich, a Democrat, encouraged Ray and Gaylee Andrews to take the action, which seeks class-action status. He is one of several governors and mayors seeking to import Canadian drugs for use in state and municipal health and retirement plans.

    Both 74 and still working -- Ray as a clerk at Wal-Mart and Gaylee as a telemarketer -- the Elk Grove Village couple spends about $800 per month on prescriptions.

    The complaint, expected to be filed in U.S. District Court in Washington today, asserts that the U.S. Food and Drug Administration violates the equal protection clause of the Constitution by "winking at people who drive across the bridge from Detroit to Windsor, Canada" for medicine while threatening to prosecute people who buy the same drugs through the mail, the Andrews' attorney said.

    Blagojevich, who is in Washington this week, has said Illinois could save nearly $91 million a year on its employee and retiree health plan if it could buy Canadian drugs. Peter Pitts, the FDA's associate commissioner for external relations, scoffed at the lawsuit. "Clearly, he understands how to get a headline," he said.

    Meanwhile, Health and Human Services Secretary Tommy G. Thompson announced plans for a year-long study of the issue. But his selection of Food and Drug Administration Commissioner Mark McClellan, an outspoken critic of importation, to chair the study brought immediate howls of protests.

    "It gives new meaning to putting the fox in charge of the chicken house," said Sen. Byron L. Dorgan (D-N.D.). Dorgan and Sen. John McCain (R-Ariz.) have has threatened to stall McClellan's nomination to head the federal Medicare program because of his campaign against drug importation.

    The Bush Administration faces a growing rebellion against the drug reimportation restrictions in the new Medicare law. Initially the uprising was limited to handfuls of senior citizens but it has now enlisted mayors and governors desperate to reduce state spending on health.

    In Wisconsin, Gov. Jim Doyle, a Democrat, unveiled a new Web site -- www.drugsavings.wi.gov -- that claims to help residents find safe but cheaper drugs at Canadian pharmacies that have been checked and approved by the state.

    FDA associate commissioner Peter Pitts called the site "well put-together snake oil."

    Minnesota Gov. Tim Pawlenty, a Republican, also endorsed two Canadian mail-order pharmacies after state regulators inspected them.

    "The high cost of prescription medicines in the United States is unsustainable, plain and simple," said Pawlenty.

    Illinois Couple Sues U.S. Over Drug Reimportation...

    Legacy Cribs Recalled

    February 24, 2004
    Child Craft Industries is recalling about 3,500 Legacy cribs. The slats on the drop side rail can loosen and detach. When this happens, the space created by the gaps can allow a baby to become entangled, strangle or fall.

    There have been 12 reports of the slats completely detaching. No injuries have been reported.

    The recalled Legacy cribs include model numbers 16741, 21021, 23111 and 28721. The model numbers are printed on the bottom rail of the head or foot board. The full-size cribs were made from ash and maple woods, and sold in a variety of colors. All carry the Legacy Brand label.

    The cribs were sold at juvenile furniture stores nationwide from March 2002 through January 2004 for between $399 and $549.

    Consumers should stop using the cribs and contact Child Craft to receive a replacement drop side rail.

    Consumer Contact: Call Child Craft toll-free at (888) 844-2674 between 8 a.m. and 5 p.m. ET or visit the firms Web site at www.childcraftindustries.com

    The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

    Legacy Cribs Recalled...

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      Another AT&T Rate Hike

      Lots of new and higher charges from the phone company

      As AT&T slashes jobs to trim expenses, it continues increasing fees paid by consumers. In March the nation's largest long-distance company is hitting customers with sharp increases in minimum usage charges, a co-billing fee and calling card charges.

      Traditionally, long-distance billing had been included on consumers' local bills. Starting three years ago, the big carriers added "co-billing fees" for customers whose local service is provided by another company. AT&T's "Bill Statement Fee" goes up 66 percent next month, to $2.49 from $1.50 per bill. The fee is waived for users who accept a separate bill from AT&T.;

      Consumer advocate Rich Sayers notes, "MCI also charges $2.50 and Sprint or Qwest customers pay $1.50 for co-billing. But smart shoppers who want the convenience of one bill can find discount carriers offering lower rates and no billing fee." Sayers is the founder of consumer rate tracking sites including 10-10PhoneRates.com and Phone-bill-alert.com.

      In addition to the co-billing rate hike, 15 different AT&T long-distance plans will have higher minimum usage charges beginning in March. Twelve plans that currently require between $2.95 and $5 minimum monthly usage will now require $7 minimum billing before taxes and fees. Three other AT&T services will have new $5 minimums.

      "These changes, combined with other AT&T fees added over the last 12 months can really hit consumers hard," says Sayers. "There is the 99-cent regulatory assessment fee. Plus in seven states AT&T added new monthly connection fees of up to $1.95. "

      Beginning March 7, consumers who use AT&T calling cards to make international phone calls may be subject to new "International Mobile Termination Charges. The charges apply to both prepaid calling cards sold in stores as well as subscriber calling cards.

      When users call someone's land-line phone, they will continue to pay the regular card plan rates. However, if they call someone's mobile phone or other wireless device an additional rate per minute will apply. This can add as much as 27 cents more per minute.

      "Mobile termination charges can be a big surprise to U.S. consumers who are used to a system where cell phone users pay for incoming calls," says Sayers. "In many other countries, the incoming caller pays a higher rate to connect to a mobile phone. Most U.S. phone companies are now recovering these costs from their customers."

      Another AT&T Rate Hike...

      Bank of America Loses Class Action Suit

      Bank illegally raided the Social Security benefits of a million customers, court finds

      A San Francisco jury found that Bank of America illegally raided the Social Security benefits of a million customers and awarded damages that could exceed $1 billion.

      The case revolves around a California law that prohibits banks from taking customers' Social Security benefits to recover debts owed to the bank. The jury verdict, which followed a six-week trial, requires Bank of America to pay $75 million to the plaintiffs, plus $1,000 in special damages to each customer who proves the bank's actions caused substantial emotional or economic harm.

      The case was filed six years ago by Paul Miller, a disabled photojournalist, whose income of roughly $640 per month came from Social Security and Supplemental Security Income, according to his attorneys Mark Johnson and Thomas Brandi. They said a mix-up that started when the bank improperly credited their client with $1,800, then deducted it later, threw Miller's life into turmoil.

      Miller was awarded $275,000.

      The suit, which eventually became a class action suit on behalf of more than a million others who depend on the government checks and said their accounts were tapped for bank charges, alleged that government-issued funds are protected from such deductions.

      The bank's attorney, Joseph Genshlea, argued that the bank's policy was intended to protect its customers from problems such as bouncing a check.

      San Francisco Superior Court Judge Anne Bouliane will decide which customers qualify for the special damages.

      Just a week ago, Bank of America agreed to pay $33 million to settle a nearly 10-year-old case alleging that 2,500 trust accounts were overcharged dating back to 1974. Bank of America uncovered the trust account problems after it inherited the customers in a 1992 acquisition of Security Pacific Bank.

      A San Francisco jury found that Bank of America illegally raided the Social Security benefits of a million customers and awarded damages that could exceed...

      GM Truck Probe Widened

      Probe into tailgate failures

      Federal safety regulators have upgraded a probe into tailgate failures on full-size pickup trucks built by General Motors Corp. The National Highway Traffic Safety Administration (NHTSA) upgraded the probe to an "engineering analysis," a step that can precede a recall.

      A recall would involve nearly 4.5 million of the pickups. The trucks involved are 1999-2003 Chevrolet Silverados and GMC Sierras, as well as Chevrolet Avalanche and Cadillac EXT trucks from the 2002 and 2003 model years.

      GM has reported 96 injuries linked to the tailgate problem. The company has received 430 complaints about one or both of the tailgate support cables breaking on the trucks that are being studied.

      It happened to Dale of Walton, Ken. "While working in the back of my 2001 Chevrolet Silverado I stepped from the bed onto the tailgate. Both support straps on the tailgate broke and I fell onto the crank of my landscape trailer," Dale said in a complaint to ConsumerAffairs.com.

      "I found that I severely bruised my ribs and whatever other muscles are in the area. I have incurred doctor and hospital charges as well as 2 days off work for myself and one day for my wife," he said.

      NHTSA says GM has also reported more than 61,000 warranty claims due to the problem.

      GM has recalled more than 2.4 million vehicles due to other potential safety problems this month. The recalls, though not uncommon for a mass market automaker, follow GM's recent assertions that its quality has rebounded from the dark days of the early 1990s when it almost went bankrupt.

      GM Truck Probe Widened...

      Kirby Vacuum Cleaner Salesman Arrested

      Charged with financial exploitation of an elderly person

      A Kirby vacuum cleaner salesman was arrested and charged with financial exploitation of an elderly person, theft by deception, harassment through electronic communications, and violation of the Transient Merchant Act in Canton, Ill.

      Thomas Schierer, 37, of East Peoria, obtained money and a vacuum cleaner from a Canton couple in exchange for a Kirby vacuum cleaner he falsely represented to be "new."

      Schierer appeared in court Feb. 10, and bond was set at $25,000. He posted bond. His next court date is at 2 p.m. March 24 for a preliminary hearing.

      Following an investigation by the Canton Police Department, Assistant State's Attorney William Loeffel obtained a warrant for violation of the Transient Merchant Act, a class B misdemeanor. The information alleges Schierer conducted business as a transient merchant, selling Kirby "vacuum cleaners and cleaning services ... without first obtaining a license from the City of Canton."

      On Feb. 5, felony charges were filed alleging financial exploitation of an elderly person, a class 3 felony; and theft by deception, also a class 3 felony. In addition, a charge was filed of harassment through electronic communications, a class B misdemeanor.

      Loeffel also wrote the Consumer Fraud Division of the Illinois Attorney General's Office on Dec. 19, requesting that "Schierer's Sweeper's" and "Carpet Cleaning for Seniors" be enjoined from advertising, soliciting or doing business with senior citizens in Fulton County. The Attorney General's Office is currently investigating alleged similar conduct on the part of Schierer in Woodford County and the Peoria area.

      The investigation is being conducted in conjunction with state and local agencies in Fulton, Woodford, Tazewell and Peoria counties, with assistance from Senior Strength/Center for Prevention of Abuse in Peoria.

      Fulton County incidents in Ipava, Dunfermline and Lewistown, as well as Canton are currently being reviewed. Loeffel cautions local residents not to do business with transient merchants who do not have a license to sell door to door.

      A Kirby vacuum cleaner salesman was arrested and charged with financial exploitation of an elderly person, theft by deception, harassment through electroni...

      Gas Grills Recalled to Fix Temp Gauges

      February 19, 2004
      Grand Hall Enterprises of Taiwan is recalling 162,000 gas grills sold in the U.S. under the Bakers & Chefs, Members Mark and Kenmore brand names.

      If moisture gets inside the temperature gauge, the glass cover on the gauge can break, posing a risk of injury to people nearby. There have been eight reports of such incidents, two of which resulted in minor injuries.

      The recall includes Bakers & Chefs grills with model numbers Y0655 and Y0656; Members Mark grills with model number Y0660; and Kenmore grills with model numbers 15221 and 15223. The model number can be located on a silver ID tag on the back or side of the grill head.

      The recalled grills are stainless steel construction or painted steel and have the brand name on the front control panel or on the grill lid. The Bakers & Chefs grills have two casters, two wheels and two side shelves. The Members Mark grill has four casters, two side shelves and a side burner. The Kenmore grills have four casters.

      The grills were sold at Sam's Club and Sears stores nationwide from April 2001 through December 2002. The Members Mark grills sold for about $1,500. The other grills sold for between $249 and $299.

      Kenmore Model # 15221 & 15223, sold at Sears

      Bakers & Chefs Model # Y0655 & Y0656, Sold at Sam's Club

      Members Mark Model # Y0660

      Owners of the recalled grills will receive a free repair kit or replacement temperature gauge directly from the company. The repair kit will consist of a Glass-Gard protective film and instructions on how to place the film on the glass covering of the gauge. Testing confirms that the glass does not explode when the Glass-Gard is in place. Consumers should not use the grill until the Glass-Gard has been installed in accordance with the instructions.

      Consumers who have not received a repair kit or need assistance performing the repair should call Grand Hall at (888) 735- 5709 between 8 a.m. and 4:30 p.m. CT Monday through Friday or log on the Grand Hall Web site at www.grandhall.com.

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      Gas Grills Recalled to Fix Temp Gauges...

      Pfizer Cuts Off Selected Canadian Pharmacies

      February 19, 2004
      Pfizer has joined GlaxoSmithKline in cutting off shipments to selected Canadian pharmacies, as major drug companies try to shut off the flow of discount drugs from Canada to the U.S.

      The drug embargo is likely to cause serious problems for Americans and Canadians alike and could cause serious shortages of some life-saving drugs in Canada.

      "The export of pharmaceuticals from Canada represents a violation of our long-standing business terms," said Pfizer spokesman Andy McCormick. "We want to ensure that in Canada, medicines developed by Pfizer are in sufficient supply for Canadians."

      In a letter to Winnipeg's Universal Drug Store and several others, Pfizer informed them that "effective immediately, your pharmacy is no longer approved to purchase Pfizer products from Pfizer Canada's authorized distributors." The pharmacies said they had been stockpiling Pfizer drugs and were hopeful of finding other distributors who would sell to them.

      "The U.S. pharmaceutical industry is threatening the Canadian people. If you allow this to continue, it will create shortages in Canada," said Andy Troszok, vice president of the Canadian International Pharmacy Association and an executive at Crossborderpharmacy.com.

      The Medicare prescription drug package enacted last year does not begin to provide meaningful benefits until 2006 and many U.S. seniors say they can't wait that long, especially when they can easily save 30 to 75 percent by buying drugs from Canada.

      The Food and Drug Administration maintains that drug importation is illegal, but it has not prosecuted individual customers and has taken only sporadic action against larger importers.

      The drug companies' hard line is likely to have consequences. A bipartisan group of senators, including Edward M. Kennedy (D-Mass.), Charles Grassley (R-Iowa) and John McCain (R-Ariz.) is considering legislation that would legalize drug importation. A similar bill easily passed the House last year.

      State governments are also incensed. Many states and cities have purchased Canadian drugs for use by their employee and retirement health programs. Minnesota has filed an antitrust suit against GlaxoSmithKline and the governors of Minnesota, illinois and Iowa will convene a "summit" in Washington next week to plot their next move.

      "Drug companies are far more concerned with protecting their U.S. profits than making sure consumers have access to the life-saving drugs they need," Illinois Gov. Rod Blagojevich (D) said.

      AARP supports legalizing imports from Canada, said Mike Naylor, director of advocacy.

      Pfizer Cuts Off Selected Canadian Pharmacies...

      Cingular "Wins" AT&T; Wireless

      And the benefits for consumers are ...

      Cingular Wireless, a creature of BellSouth and SBC, plopped down $41 billion to win the bidding for for AT&T Wireless. Whether it can win the loyalty of AT&T Wireless' restless customer base is another question.

      AT&T Wireless has a long history of network problems and has turned in a particularly dismal performance since the advent of number portability, losing more customers to other companies than it signed. On the other hand, Cingular also has a singularly mediocre reputation for customer service.

      By dining on AT&T Wireless, Cingular will be reducing consumers' menu selections from six to five while supersizing its own customer base. The addition of AT&T Wireless' 22 million customers to Cingular's 24 million will create the nation's biggest cellular company with 46 million customers, assuming there's no major spillage.

      What does this mean for consumers? Opinions vary but most observers speculated that the decrease in major competitors would not spur any immediate price hikes. Some held out hope that service would improve for AT&T Wireless and Cingular customers after the delicate process of combining their networks was completed.

      Cell phone rates have been holding steady for the last few years as companies jockeyed fiercely for market share. That's likely to continue, at least for a while. In fact, Verizon, Sprint, T-Mobile and Nextel are likely to step up their competition for AT&T customers over the next several months, possibly offering hard-to-resist come-ons.

      Longterm, some consumer advocates say, the picture is not so bright.

      For customers in the South and Southwest, where SBC and BellSouth hold sway, it's possible Cingular and its parent companies will take advantage of their increased concentration to coerce customers into consolidating all of their landline and wireless service if they want the best rates.

      On the other hand, Internet telephony shows signs of becoming a force in the market, which might make it difficult for any of the incumbent companies to play too fast and loose with customers.

      Cingular Wins AT&T Wireless...

      How to Change Your Cell Phone Carrier

      Want to change cell phone companies and keep your number? It's now possible, though glitches have plagued the system since late last year, when federal rules requiring so-called "number portability" went into effect.

      Besides switching your cell phone and keeping the number, you can also turn off your home phone and move that number to a cell phone.

      For now, portability applies only in the 100 most-populous U.S. markets. It will be extended to the rest of the country next May 24. Not sure if you're in the top 100? The FCC has a list on its Web site.

      Whatever else you do, remember this: the FCC rules don't mean you can dump your existing cell phone carrier before your contract expires without paying a hefty penalty. So be sure your contract is just about up before you jump ship.

      If you've decided to dump your wireline phone and transfer your number to your cell phone, it's not likely you'll encounter any contracts since service is generally month-to-month.

      How To Do It
      Set up your new service first. Whether you're switching cell phone carriers or moving your home number to your cell phone, start with the new carrier, the one you want to switch to. Don't cancel your existing service until you have the new service set up and working.

      Have a recent bill handy. You will have to provide your name, address and account number exactly as they appear on your bill. This reduces the chance of error.

      Be prepared to buy a new cell phone. Chances are you will have to get a new phone. Depending on the plan you choose, the new carrier may throw one in.

      Allow for some slippage. Cell phone numbers are supposed to be switched in less than three hours but that's just a guideline. It may take longer. You will be able to make outgoing calls on your old cell phone during the transition but when the switchover happens, incoming calls will go only to your new phone.

      Listen to all your voice mail messages. They will not be transferred to your new phone. Same goes for the numbers stored in your phone.

      How to Change Your Cell Phone Carrier...

      Apple iPod Lawsuits Multiply

      February 13, 2004
      Apple is facing a growing wave of consumer lawsuits over the iPod battery. At least five class-action lawsuits have been filed, charging the company misrepresented how long the batteries would last.

      The rechargeable lithium-ion battery in the iPod is good for only about 500 recharges. That's something very few customers knew until it was too late. Apple recently began offering a $99 mail-in batery replacement for iPod owners, but only after two New Yorkers took to the Web to trumpet their dissatisfaction.

      Until then, Apple's position was that when the battery breathed its last, iPod owners should shell out several hundred dollars for a new iPod, since the battery is not easily replaced by the user.

      The lawsuits came to light i Apple's quarterly report, filed with the Securities and Exchange Commission.

      Apple stated that five separate plaintiffs known only by their last names, Craft, Chin, Hughes, Westley, and Keegan, have filed class-action lawsuits alleging misrepresentations relating to iPod battery life. The complaints point towards the California Civil Code Section 17200 for unfair competition and violation of the Consumer Legal Remedies Act. The cases also allege false advertising, fraudulent concealment and breach of warranty.

      Apple was also named the defendant in a class-action suit filed by the plaintiff known as Cagney on January 9th in California that alleges unfair competition and improper collection of sales tax in transactions involving mail-in rebates.

      Apple iPod Lawsuits Multiply...

      Mobsters Charged in Cramming Scam

      Gambino Family Netted Millions, FBI Charges

      The FBI and federal prosecutors say organized crime was behind a telephone "cramming" racket that bilked consumers out of more than $200 million over the last five years by piggybacking bogus charges onto local phone bills.

      Two alleged Gambino crime-family members are among those charged with racketeering, conspiracy, money laundering and other crimes, which prosecutors say generated $50,000 to $600,000 per day from 1997 to 2001, netting more than $100 million in profits.

      The scam victimized consumers who responded to television, Internet and newspaper ads for free samples of dating services, adult chat lines and psychic consultants. Once the Mob got their number, consumers were charged as much as $40 a month on their phone bills for services they didn't order and never used, prosecutors said. The phony services were described as "voice mail" and other innocuous terms that most consumers never noticed.

      The practice of billing consumers through their phone bills for services they didn't order is called "cramming." It's a common problem but this is the first time prosecutors have linked it to the Mob.

      "These defendants conspired to defraud consumers by using a sophisticated web of shell companies to generate one of the largest consumer-fraud schemes in United States history," Roslynn R. Mauskopf, the U.S. attorney in Brooklyn, said in a prepared statement. Prosecutors say the scam was the Gambino family's biggest single source of revenue.

      The number of people victimized by the scheme isn't known but authorities said it numbers in the millions. A few consumers complained and got their money back, but most did not.

      The indictment also names an Overland Park, Kan., company, USP&C, which processed the charges through its agreements with local telephone companies such as PacBell, Southwestern Bell and Verizon (formerly Bell Atlantic), which entitled the company to insert a page into victims' monthly bills to collect for service providers, officials said.

      Many of those named in the 20-count indictment are also facing charges ini a $230 million Internet pornography scheme.

      The lead defendant in both cases, Salvatore "Tore" Locascio, 44, known as Tore, is identified in the indictment as a Gambino family captain. Also charged is Zef Mustapha, 42, allegedly a high-level associate.

      Mobsters Charged in Cramming Scam - Gambino Family Netted Millions, FBI Charges...

      Consumers Blame Drug Companies for High Costs

      A survey finds 42 percent of consumers blame pharmaceutical companies excessive profits for high prescription drug costs

      A survey finds 42 percent of consumers blame pharmaceutical companies excessive profits for high prescription drug costs. Another 23.3 percent cited expensive marketing, bringing the total number of respondents holding drug companies responsible for soaring prescription drug costs to nearly two-thirds.

      Consumers continue to feel as though they are being taken advantage of by the pharmaceutical industry, which has obviously failed to adequately present its case for the high costs of prescription drugs, said Melissa Gannon, vice president of Weiss Ratings, Inc., an independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

      The results of the online survey were based on voluntary responses from 1,834 individuals visiting the Weiss Ratings website. Presented with the question, What do you feel is the primary reason behind high U.S. prescription drug costs?, respondents were asked to vote once for one of six choices. The following is a summary of all responses received:

      Drug companies padding their profits


      Expensive marketing by drug companies


      Expensive research and development costs


      High cost of lawsuits for defective drugs




      High demand due to consumer resistance against generics


      Weiss Ratings issues safety ratings on more than 15,000 financial institutions, including life and health insurers, property and casualty insurers, HMOs, and banks. Weiss also rates the risk-adjusted performance of more than 12,000 mutual funds and more than 8,000 stocks.

      Weiss Ratings is the only major rating agency that receives no direct or indirect compensation from the companies it rates for issuing its ratings. Revenues are derived strictly from sales of its products to consumers, institutions, businesses, libraries, and governmental agencies.

      A survey finds 42 percent of consumers blame pharmaceutical companies excessive profits for high prescription drug costs. Another 23.3 percent cited expens...

      Sprint Long Distance Rates Jump 33%

      Sprint is hitting consumers with another round of long-distance cost hikes

      Sprint is hitting consumers with another round of long-distance cost hikes, following the pattern set by AT&T. Increases ranging from 10% on international rates to as much as 33% on interstate rates take effect March 1st.

      Rich Sayers, founder of Phone-Bill-Alert.com, says he is appalled at how much the Big three (AT&T, MCI and Sprint) charge for state-to-state calls. "Sprint wants up to 44 cents a minute, when you can get the exact same commodity for less than 5 cents a minute," says Sayers.

      "Primus and Everdial are reselling Sprint for 4.9 cents per minute with no monthly fee," Sayers notes.

      Analysts say that industry trends have pressured major carriers and smaller players to once again increase rates or fees. Based on revenue, Sprint is the third largest US long-distance carrier. Sprint has tried to rely on cost-cutting to improve the bottom line, most recently planning to outsource customer service operations to IBM.

      But shifting consumer preferences have siphoned much revenue away from traditional long-distance service. Wireless, Internet phone service, email and instant messaging are all substitutes. So Sprint is asking its customers to pay more.

      In percentage terms, the largest rate increase will be a Sprint Sense Day interstate rate going from $0.15 up to $0.20 a minute -- a 33% boost. Sprint Standard Weekends rate for Saturday calls will go from $0.20 to $0.25. The Sprint Sense and Sprint Sense II services peak rate jumps from $0.25 to $0.30 each minute.

      Customers on the Sprint Sense Anytime plan will get a monthly fee increase of 20% to $5.95. Sprint users who have not selected a discounted plan will see very high rates get even higher. The Sprint Basic Dial-1 interstate rates will increase by $0.02 a minute, to as much as $0.44 at peak times.

      Basic instate rates will increase by $0.04 a minute in 37 states as well.

      Sayers believes MCI will soon join Sprint and AT&T in the 2004 rate and fee spree.

      Small phone companies have been adding or hiking fees too. The latest is ZoneLD, which this month increased its Carrier International/Interstate Network Access (CINA) from $1 to $2 per month.

      Sprint Long Distance Rates Jump 33%...

      Ford Sport Trac Flunks Rollover Test

      February 5, 2004
      The Ford Explorer Sport Trac finished dead last in the federal government's new "fishhook" driving test. It earned a dismal two stars, meaning it is likely to roll over in 30 to 40 percent of single-vehicle accidents.

      While none of the vehicles tested achieved the highest five-star rating, several earned four-star designations, including the Chevrolet Trailblazer 4x4, Chevrolet Silverado extended cab (4x4 and 4x2), Ford Focus wagon, Subaru Outback wagon, Toyota Echo and Volvo XC90 4x4.

      The Sport Trac -- basically an Explorer with a pickup bed -- went up on two wheels during the fishhook test, in which vehicles are driven through a series of sharp turns. It's meant to simulate panic maneuvers a driver might make to avoid a collision.

      The four-wheel-drive model of the Sport Trac and several versions of the Explorer were also tested but the results were inconclusive and the National Highway Traffic Safety Administration (NHTSA) wants to repeat them.

      A five-star rating means the likelihood of rollover during a single vehicle crash is less than 10 percent; four-star, between 10 and 20 percent; three-star, between 20 and 30 percent; two-star, between 30 and 40 percent; and one-star, greater than 40 percent.

      Rollover Resistance Test Scores
      (Includes Corporate Twins of Vehicles Tested)

      Make and Model

      Size Class

      Curb Weight (lbs.)

      Rollover Star Rating

      Buick Ranier 4x2 (1)




      Buick Ranier 4x4 (2)




      Chevrolet Trailblazer 4x2




      Chevrolet Trailblazer 4x4




      Chevrolet Silverado 4x2 xcab




      Chevrolet Silverado 4x4 xcab




      Ford Explorer 4 dr. 4x2


      under review

      Ford Explorer 4 dr. 4x4


      under review

      Ford Explorer Sport Trac 4x2




      Ford Explorer Sport Trac 4x4


      under review

      Ford Focus Wagon




      GMC Envoy 4x2 (1)




      GMC Envoy 4x4 (2)




      GMC Sierra 4x2 pu/ec (3)




      GMC Sierra 4x4 pu/ec (4)




      Jeep Liberty 4x2




      Jeep Liberty 4x4




      Mercury Mountaineer 4 dr. 4x2 (5)


      under review

      Mercury Mountaineer 4 dr. 4x4 (6)


      under review

      Olds Bravada 4x2 (1)




      Olds Bravada 4x4 (2)




      Subaru Outback wagon




      Toyota Echo




      Toyota 4Runner 4x4




      Toyota 4Runner 4x2




      Toyota Tacoma 4x2 xcab


      under review

      Toyota Tacoma 4x4 xcab




      Volvo XC90 4x4




      *During test, the vehicle tipped up on two wheels.
      PU = Pickup
      SUV = Sport Utility Vehicle

      (1) Corporate twin of Chevrolet Trailblazer 4x2
      (2) Corporate twin of Chevrolet Trailblazer 4x4
      (3) Corporate twin of Chevrolet Silverado xcab 4x2
      (4) Corporate twin of Chevrolet Silverado xcab 4x4
      (5) Corporate twin of Ford Explorer 4 dr. 4x2
      (6) Corporate twin of Ford Explorer 4 dr. 4x4

      Safety advcoates pounced on the results.

      "Ford didn't learn the lesson ... and continues to produce rollover-prone vehicles," said Clarence Ditlow of the Center for Auto Safety.

      NHTSA in the past based its rollover ratings on a vehicle's static stability factor, which is an engineering calculation based on the track width and the height of the center of gravity. Beginning with the 2004 model year, the rollover risk predictions are based on the static stability factor scores and the vehicle's performance in a dynamic track test.

      Trucks are more prone to roll over than cars because they have a higher center of gravity. Nearly a quarter of all fatalities in 2002 -- 10,626 people -- died in rollovers, mosts of them involving SUVs or light trucks.

      The Sport Trac -- basically an Explorer with a pickup bed -- went up on two wheels during the fishhook test, in which vehicles are driven through a series ...

      Dorcy Xenon Flashlight's Fuji Batteries

      February 3, 2004
      Fuji batteries sold with Dorcy Xenon flashlights are being recalled. The batteries may overheat, leak, or rupture, presenting a potential for fire and injury.

      The recall affects Fuji Power and A&T Fuji Power CR123A 3-volt lithium batteries originally provided with the Dorcy Spyder Tactical Xenon Light (Product 41-4200), also sold in packages of two flashlights under the name Dorcy Xenon Tactical Light.

      Five reports have been received about batteries overheating and causing the flashlight to burst. Dorcy has received four reports of minor damage to clothing and personal items and burn injuries. In one case, the batteries allegedly caused or contributed to a house fire.

      Each of the 3-volt lithium batteries has a white label with the words "Fuji Power" or "A&T Fuji Power CR123A." The batteries were provided separately in pairs in packaging with the flashlights.

      The flashlights were sold by national retailers including BJ's Wholesale Club, Orchard Supply Hardware, Ace Hardware, Tru Value Hardware, Meijer Stores, Fred Meyer, Marvins, Sport Chalet, and Sportsman Guide.

      Call Dorcy International Inc. toll-free at (800) 837-8558 to receive free replacement batteries for each pair of batteries originally provided with the Spyder Tactical Xenon Light or the Xenon Tactical Light. Consumers also can return the flashlights to the store for a refund or replacement.

      Consumer Contact: Call Dorcy International Inc. toll-free at (800) 837- 8558 Monday through Friday, 8 a.m. to 5 p.m. ET. Dorcys web site is www.dorcy.com.

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      Dorcy Xenon Flashlight's Fuji Batteries...

      Cancer Drugs, Wheelchairs on Medicare's Cutback List

      February 2, 2004
      Medicare has been cracking down on claims for motorized wheelchairs in recent months and may soon refuse to pay for experimental cancer drugs.

      In the case of the motorized wheelchairs, officials of the Centers for Medicare and Medicaid Services (CMS) say the crackdown is a response to a growing incidence of abuse and does not represent a new policy.

      Providers of the wheelchairs and spokesmen for affected groups disagree. Long-term care providers say that denying the powered wheelchairs means that staff members or family caregivers will have to perform many functions that ill or disabled persons are able to do by themselves if they have the motorized chairs.

      "They are going to force people to impoverish themselves in institutional settings. People who have not committed fraud are penalized, and the punishment doesn't fit the crime," said Andrew Imparato, president of the American Association of People with Disabilities.

      The crackdown was ordered by Thomas A. Scully, who stepped down as CMS administrator to take a lobbying position last month. At the time Scully said the increased scrutiny was in response to increasing fraud.

      Demand for the motorized wheelchairs has nearly tripled in recent years, much of it sparked by shady companies who used high-pressure salespeople to sell the chairs and who took advantage of a relative loose Medicare approval process. More than 60 cases have been filed against alleged such perpetrators.

      Besides prosecuting fraudulent wheelchair salespeople, CMS instituted a new ten-point program that includes much tighter screenings of claims and narrows the outline of who is eligible for a power wheelchair.

      The cutback in payments for expensive cancer drugs would initially affect only four drugs, used to fight non-Hodgkin's lymphoma and colorectal cancer. But a decision on those four could set a precedent that would apply to many other costly drugs.

      The drugs in question include Bexxar and Zevalin, from GlaxoSmithKline and Gioden Idec respectively. They are sometimes used as first-line treatment for non-Hodgkin's lymphoma at a cost of more than $22,000 for a course of treatment. They are approved for use only as third-line treatment, after other drugs have failed.

      The other two drugs are Camptosar and Eloxatin, made by Pfizer and Sanofi-Synthelabo, used to treat colorectal cancer.

      Medicare administrators face the uneasy task of living within their budget as they prepare to initiate a costly new prescription drug benefit. Excessive spending in one area means spending in other areas must be cut back.

      In the case of "off-label" cancer drugs, Medicare would try to cut back on reimbursements for drugs that doctors prescribe to treat one type of cancer that may not be approved by the F.D.A. or recognize by medical texts as being effective. Such off-label use is commonly accepted and is a part of nearly every cancer specialist's arsenal.

      If Medicare stopped paying for off-label treatments, the government would save billions of dollars but elderly cancer patients would either have to pay the cost out of their own pockets or their doctors would have to prescribe other drugs that might not work as well.

      There might also be intense pressure on the drug companies to reduce the cost of the drugs, or to broaden their compassionate programs, under which expensive drugs are made available at little or no cost to those who cannot afford them.

      Currently, Medicare pays only for drugs administrated in a physician's office or hospital. But when the prescription drug plan goes into effect in 2006, Medicare will pay for all drugs. Thus a ban on drugs used for unapproved purposes would have enormous impact.

      Cancer Drugs, Wheelchairs on Medicare's Cutback List...

      "Privacy Protectors" Charged with Bilking Consumers

      Vector Direct Marketing sold services that supposedly protected privacy

      The Federal Trade Commission has filed a federal district court complaint against Vector Direct Marketing, LLC, accusing it of making misleading claims in selling services that supposedly protected consumers' privacy.

      Vector, based in Tempe, Ariz., is charged with violating the FTC Act and the Telemarketing Sales Rule during the phone sale of services that supposedly protected consumers personal information including their social security number, credit card numbers, and bank account numbers from fraud and identity theft.

      According to the Commission, consumers got little or nothing for their nearly $400 investment. The FTC also alleges that the company made threatening follow-up calls to customers who decided to cancel their payments.

      The FTC filed the complaint announced today against Vector Direct Marketing, LLC (Vector), doing business as National Solicitation Guard and Anti-Solicitation Company. The complaint also names Lisa Miller the registrant of Vector Directs Tempe, Arizona, mail drop and Mike Stafford, both of whom are Vectors members and mangers.

      False promises and scare tactics are not legitimate sales practices, said Howard Beales, Director of the FTCs Bureau of Consumer Protection. Telemarketers with business models built on intimidation should expect to hear from Federal Trade Commission attorneys.

      According to the FTC, since at least February 2003, Vector telemarketed services that it claimed would stop unwanted telemarketing calls and protect consumers personal information from fraud and identity theft. In calls to consumers, Vector allegedly told them that their personal information including social security number, credit card numbers, and bank account information could be found on various telemaketing lists. They also, in some cases, allegedly told consumers that Vector already had been able to buy this personal information from third-party list managers or brokers, and at times even repeated the consumers credit card number in an attempt to get them to buy Vectors services.

      In addition, the FTC alleges that the defendants often told consumers that they had been identified as a target for fraud or identity theft, and often made threatening statements about the risk of not buying their services.

      These purported services, which the defendants sold for between $380 and $399, allegedly included Vectors assurance that the consumers personal information and financial information would be deleted from the telemarketing lists and that some consumers would receive a call-screening device that could stop all or most telemarketing calls. The FTC alleges, however, that only some of the consumers who purchased a call-screening device ever received one.

      In addition, Vector told consumers that by signing up for their service, they would personally receive the $1,500 fine collected every time a telemarketer called them. The fine collection and distribution allegedly never occurred. Finally, when customers later decided they did not want to buy Vectors services, the defendants allegedly called and harassed them by threatening legal action or other serious consequences if they failed to pay, frightening some into resuming their payment. In some instances, the FTC alleges, Vector charged consumers for their services, even if they did not agree to buy them.

      According to the FTC, some consumers received written materials from Vector informing them that, [t]he process of removing your personal information [from telemarketing lists] has already begun. We have sent legal notice to the three major list compilers on your behalf . . . demanding that you (sic) information be added to there (sic) do not call list, and preventing your information from being added to any future sales lists.

      In fact, the list compilers mentioned, Equifax, Experian, and TransUnion, are credit reporting agencies that do not sell customer lists that contain personal and/or financial information. The FTC alleges that Vectors legal notice to these companies, therefore, did not afford consumers any protection. The companies do maintain opt-out and do-not-solicit lists, but there is no evidence that the names of Vector consumers were added to these lists.

      The complaint was filed under seal in the U.S. District Court for District of Arizona at Phoenix on January 15, 2004 and unsealed on January 30, 2004.

      The Federal Trade Commission has filed a federal district court complaint against Vector Direct Marketing, LLC, accusing it of making misleading claims in ...