Egypt recalls envoy to Israel after Gaza strike

CAIRO (AP) — Egypt has recalled its ambassador to Israel after an Israeli airstrike killed the military commander of Gaza‘s ruling Hamas.

In a statement read on state TV late Wednesday, spokesman Yasser Ali said that President Mohammed Morsi recalled the ambassador and asked the Arab League‘s Secretary General to convene an emergency ministerial meeting in the wake of the Gaza violence.

Morsi also called for an immediate cease fire between Israel and Hamas, an offshoot of Morsi’s Muslim Brotherhood. Israel says it struck in response to rocket attacks from Gaza.

Hours earlier, Morsi’s Muslim Brotherhood group denounced the Israeli airstrike as a “crime that requires a quick Arab and international response to stem these massacres.”

Relations between Israel and Egypt have deteriorated since longtime President Hosni Mubarak was ousted last year.

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Egypt recalls envoy to Israel after Gaza strike

CAIRO (AP) — Egypt has recalled its ambassador to Israel after an Israeli airstrike killed the military commander of Gaza‘s ruling Hamas.

In a statement read on state TV late Wednesday, spokesman Yasser Ali said that President Mohammed Morsi recalled the ambassador and asked the Arab League‘s Secretary General to convene an emergency ministerial meeting in the wake of the Gaza violence.

Morsi also called for an immediate cease fire between Israel and Hamas, an offshoot of Morsi’s Muslim Brotherhood. Israel says it struck in response to rocket attacks from Gaza.

Hours earlier, Morsi’s Muslim Brotherhood group denounced the Israeli airstrike as a “crime that requires a quick Arab and international response to stem these massacres.”

Relations between Israel and Egypt have deteriorated since longtime President Hosni Mubarak was ousted last year.

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RIM CEO sees new BlackBerry powering growth

WATERLOO, Ontario (Reuters) – A new line of BlackBerry 10 devices will provide Research In Motion with a framework for growth over the next decade, offering long-term value for unhappy shareholders, Chief Executive Thorsten Heins said on Wednesday.

In an interview with Reuters, Heins said RIM had identified $ 800 million of the $ 1 billion of savings it promised for the financial year ending in early March, and was confident of finding the rest as it gets ready to launch the new phones.

RIM is betting that the new smartphones will help it claw back the market share it has lost to the likes of Apple Inc’s iPhone and devices powered by Google’s Android operating system.

Both consumers and corporate customers have abandoned the BlackBerry in droves, even though the devices offer security features that rivals have been unable to match.

“There’s this high-level security that you cannot walk away from, and then there’s ‘good enough’ security,” Heins said in an interview at RIM’s Waterloo, Ontario, campus, a sprawl of low-rise buildings.

But analysts remain skeptical, especially after the botched 2011 launch of RIM’s PlayBook tablet computer, which the company had hoped would compete with Apple’s wildly popular iPad. The PlayBook had top-of-the-line hardware, but its software was far from complete at the launch and needed multiple updates.

RIM delayed the roll-out of the BlackBerry 10 phones to the first quarter of 2013 so as not to repeat the errors that surrounded the PlayBook launch.

Heins said the delay was the correct decision – the way to ensure the BB10 phones are a high-quality product rather than a rushed one that would not meet customer expectations.

“I think it’s all lining up. Sometimes you get the feeling that the universe is in disarray, and with BlackBerry 10 coming, I see the stars lining up,” Heins said.

SLEEK DEMO MODELS

Sleek demo models of the new phones look much like the high-end smartphones in the market today, and company executives proudly showed off a touch-screen version and a version with the miniature QWERTY keyboard popular with many BlackBerry users.

Users flick a thumb or finger to maneuver from one program to another and can sneak a look at an incoming email while browsing the Internet or using other applications, a multi-tasking ability that RIM says rival devices lack.

Personal and business profiles can be kept separately, something RIM calls BlackBerry Balance. Corporations can erase only their share of the data on a device if they need to do so for security reasons, leaving personal photos, contacts and emails untouched.

The app library available at launch will not match the vast number available on other devices. Heins said RIM had chosen to focus on providing those apps needed in different regional markets. It expects some 100,000 apps to be ready at launch.

The developer community has been broadly enthusiastic about the devices. But financial analysts have mixed views on their likely reception in an ultra-competitive market.

Pacific Crest analyst James Faucette warned last week that BlackBerry 10 is likely to be dead on arrival – with an operating system that gets “a lukewarm response at best,” due to the unfamiliar user interface and a shortage of apps.

SHAREHOLDER VALUE

Heins insisted morale was high at the company, despite 5,000 job cuts and a rapidly sliding market share ahead of the launch of the new phones.

RIM’s share price is down more than 90 percent from a 2008 peak of about $ 148. It has fallen even after Heins, a former Siemens AG executive, took over in January. The shares on Wednesday closed at $ 8.49 on Nasdaq.

“The message to our shareholders is that we understand this is and has been a difficult time for them and for us,” the tall, bespectacled CEO said. “But with the development of the BlackBerry 10 platform we are truly convinced that we will create long-term value for RIM’s shareholders and investors.”

RIM has already given the demo phones to developers and to carriers, and its new BlackBerry Enterprise Server 10, which runs the devices on corporate networks, is in beta testing with 20 key customers — both government agencies and corporates.

Next month, the company will give more than 50 top enterprise customers technical previews of both BES 10 and the devices.

Heins said the feedback he is getting from the customer base “is very encouraging.”

With the erosion of RIM’s base particularly strong in North America, there has been speculation the company could choose to launch the new phones in a region where the phones remain popular. Heins said that would not be the case.

“We cannot launch every carrier and every country on the same day, but what we have defined is a set of waves in the various regions,” he said. “It is going to be a global launch. There isn’t one preferred region. We are managing and planning it as we speak.”

(Reporting by Euan Rocha and Janet Guttsman; Editing by Frank McGurty and Leslie Adler)

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Judge throws out Justin Bieber paparazzo chase case

LOS ANGELES (Reuters) – Criminal charges filed against a photographer who pursued teen pop star Justin Bieber at high speeds on a Los Angeles freeway in July were thrown out on Wednesday, striking a blow to California’s crackdown on overly aggressive paparazzi.

Celebrity photographer Paul Raef was the first person to be prosecuted under the state’s 2010 law that criminalizes dangerous driving when taking photos commercially.

Raef was charged in July with two counts of violating the law stemming from a July 6 incident on a freeway in Los Angeles‘ San Fernando Valley.

Dismissing the charges, Los Angeles Superior Court Judge Thomas Robinson called the state’s anti-paparazzi law “problematic” and “overly inclusive.”

The law “sweeps very widely and would increase the penalties for reckless driving” in unintended cases, Robinson said.

Robinson faulted the law’s vague definition of commercial photography, saying that it could also apply to a photographer who was speeding to reach an arranged photo shoot with Bieber.

Raef could have faced up to a year in prison and $ 3,500 in fines, if convicted. His attorney, Brad Kaiserman, said the law is “about protecting celebrities.”

A message left with Bieber’s publicist requesting comment was not immediately returned.

Raef still faces lesser charges of misdemeanor reckless driving and failing to obey police orders after he allegedly pursued Bieber, 18, at high speeds. He will be tried on those charges at a later date.

Bieber, who was pulled over by police for driving 80 miles per hour in a 65 mph zone, told officers at the time that he was being hounded by paparazzi, and police said they noticed Raef’s car following the “Boyfriend” singer.

About 30 minutes after the traffic stop, Bieber called police to report that Raef continued to follow him. Police later found Raef and other paparazzi together in downtown Los Angeles.

The Canadian singer received a speeding ticket at the time.

(Reporting By Eric Kelsey, editing by Jill Serjeant and Sandra Maler)

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Public Health Service Aids Hurricane Sandy Relief

The U.S. Public Health Service has begun its third week assisting with Hurricane Sandy relief in New York City. Rapid Deployment Force 1 (RDF-1) assumed command of the medical special needs shelter at Brookdale University Hospital and Medical Center late yesterday afternoon from RDF-2. RDF-2 arrived in New York City on Oct. 31 and immediately set up a medical shelter at York College in Queens. Within two days they were moved to Brookdale Hospital to establish a new shelter.

Captain Dan Beck, director of the USPHS Commissioned Corps Readiness and Response Program, discussed the Public Health Service’s response to Hurricane Sandy in a telephone interview yesterday afternoon. The Public Health Service is currently operating two medical special needs shelters, one in Edison, N.J., and the one at Brookdale Hospital in Brooklyn. The shelters are for storm evacuees with medical needs that cannot be met at a standard shelter. The Brookdale shelter has about 100 evacuees from nursing homes that were in the path of the hurricane.

The U.S. Public Health Service has five Rapid Deployment Forces, Beck said. RDF-3 is at the New Jersey shelter. RDF-2 has just completed its two week deployment in Brooklyn and its role has been assumed by RDF-1. Both shelters have received assistance from other USPHS teams , such as mental health teams and services access teams. Of the 41 total teams in the response program, including the five RDF teams, 14 (three RDFs) have had some or all of their members deployed to this emergency.

Captain Beck noted that the hurricane has required the deployment of a significant portion of the Public Health Service’s RDF personnel and assets. RDF-4 and RDF-5 are being held in reserve, in the event of another disaster. If New York or New Jersey need the USPHS to continue to operate either shelter, “tiger teams” of qualified PHS officers currently on other assignments will be used.

The shelter at Brookdale has had a fairly steady patient population of around 100 since it opened, according to Beck. The majority of the patients are from skilled nursing homes and cannot be discharged to a regular shelter. Some of the LPNs and nursing aides from the homes that were evacuated accompanied their patients and are working alongside the Public Health staff in the shelter, which comprises the sixth and 11th floors of the hospital.

The U.S. Public Health Service has deployed rapid deployment force teams for many recent hurricanes. RDF-3 was stationed in Connecticut after Hurricane Irene. RDF’s also were used with Hurricane Gustav and Hurricane Katrina. The role of an RDF in a disaster response, as Captain Beck described it, is to set up and operate a medical special needs shelter, using the cache of supplies from a Federal Medical Station. Patients in such shelters can be nursing home patients, or evacuees who have medical needs such as diabetics or those on home oxygen.

The U.S. Public Health Service is one of seven uniformed services in the United States government. Those consist of the four branches of the military, the Coast Guard, the uniformed members of the National Oceanic and Atmospheric Administration and the Public Health Service. The 6,500 members of the commissioned corps of the USPHS are all officers, and the corps uses the ranks of the U.S. Navy. The corps consists of medical professionals in fifteen different areas, including physicians, nurses, pharmacists and dentists. Their normal assignments include work in the Bureau of Prisons, the Indian Health Service, the National Institutes of Health and other venues where the medical needs of disadvantaged citizens can be met.

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French CEOs: ‘Help!’

When some German politicians called on French President François Hollande recently to step up the pace of economic reform in France, Finance Minister Wolfgang Schäuble sprang to Hollande’s defense in Berlin, saying it was wrong to call Europe’s second-largest economy the “sick man” of the region.

The heads of France’s biggest companies do not agree. Over the past few weeks, an extraordinary cry of alarm has risen from chief executives who warn that the French economy has gone dangerously off track. In an interview to be published on Nov. 15 in the magazine l’Express, Chief Executive Officer Henri de Castries of financial-services group Axa (CS:FP) warns that France is rapidly losing ground, not only against Germany but against nearly all its European neighbors. “There’s a strong risk that in 2013 and 2014, we will fall behind economies such as Spain, Italy, and Britain,” de Castries says.

On Nov. 5, veteran corporate chieftain Louis Gallois released a government-commissioned report calling for “shock treatment” to restore French competitiveness. And on Oct. 28, a group of 98 CEOs published an open letter to Hollande that said public-sector spending, which at 56 percent of gross domestic product is the highest in Europe, “is no longer supportable.” The letter was signed by the CEOs of virtually every major French company. (The few exceptions included utility Electricité de France, which is government controlled.)

The outcry is unusual for France Inc., which has tended to lobby behind the scenes and avoid public criticism of the government. That’s perhaps not surprising, since many CEOs attended the same schools as the country’s top politicians and often worked in government before going into business. De Castries was a classmate of Hollande’s at the elite Ecole Nationale d’Administration; Serge Weinberg, chairman of pharmaceutical giant Sanofi (SAN:FP) and a signatory of the Oct. 28 letter, used to work for Socialist Foreign Minister Laurent Fabius.

The problems they’re complaining about aren’t new. Heavy taxes and social charges required to support high government spending have eroded corporate profitability. In the l’Express interview, de Castries says that on average, the government charges incurred by his company for each employee are more than double the employee’s take-home pay. French labor costs are the second-highest in Europe, after Belgium, as companies are burdened with rigid and devilishly complicated work rules. No surprise, then, that operating margins at French companies have shrunk almost 40 percent over the past decade, while those of companies in Germany—where painful labor-market reforms were carried out—have risen about 40 percent.

With Europe mired in economic crisis, the French citizenry is now reaping the bitter results. Companies are shedding workers, pushing unemployment to a 13-year high of more than 10 percent, almost twice Germany’s rate. After three quarters of flat growth, the economy looks to be tipping into recession.

At the same time, the crisis has pushed other European governments—Italy’s, for example—to carry out long-overdue reforms. As Gallois put it in his report, France has become “unhooked” from the broader economic realities. Gallois listed 22 recommendations, including a €30 billion ($ 38 billion) reduction in payroll taxes, loosening of labor laws, and the lifting of a ban on shale-gas exploration.

Hollande’s government didn’t respond to most of the recommendations but said it would enact temporary tax credits for business totaling €20 billion over three years. Corporate bosses are not impressed. A temporary credit will not “structurally diminish the cost of labor” or reduce administrative burdens on business, Michel Landel, CEO of food-service group Sodexo (SW:FP), said in a Nov. 10 radio interview.

Businesses also fret that the process of applying for tax credits will add to already burdensome paperwork. “The first thing they do is to complicate the mechanism for lowering the social charges,” de Castries laments in the l’Express interview.

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General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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She’s got the voice, now Christina Aguilera looks for hits

LOS ANGELES (Reuters) – Christina Aguilera has the vocal chops, the look, the strut and millions of new fans thanks to her stint as a judge on TV singing contest “The Voice.”

But can she still sell records?

The singer, who had global hits with “Genie in a Bottle” and the female empowerment ballad “Beautiful” more than 10 years ago, bids to reclaim her status as one of the world’s biggest pop stars with her new album, “Lotus,” released on Tuesday.

Aguilera, 31, says the title and the mixture of dance-pop, ballads and rock-tinged tracks reflect the hopes and disappointments of recent years that saw her 2010 tour for album “Bionic” canceled, a divorce and the box-office flop of her debut feature film, the musical “Burlesque.”

“Lotus represents the unbreakable flower that stands the test of time. No matter the roughest of weather conditions, it remains strong and continues to thrive. (The album) is a nod to my fans who have been here with me the whole journey, and a nod to myself,” she said.

“It is a record of freedom and embracing that…It is very artistic at times, it is very fun at times, it is very free. I think that’s how music and life should be, away from all the negativity,” the four-time Grammy winner said in an appearance at a Billboard Film and TV Music conference in Los Angeles last month.

Aguilera will perform one of the tracks – “Make the World Move” – with her fellow judge Cee Lo Green live on “The Voice” this week for the show’s more than 10 million viewers.

But music industry experts say Aguilera’s popularity on “The Voice” – where her powerhouse performances leave aspiring pop stars in the dust – may not guarantee huge album sales and won’t give the singer a No. 1 hit.

This week also sees new releases from British boy band One Direction and singer Susan Boyle as well as the new “Twilight” film soundtrack.

NOT A BLOCKBUSTER

“I think ‘Lotus’ will certainly debut in the top 10 on the Billboard 200 album chart. But we don’t see it as being a blockbuster out of the gate,” said Keith Caulfield, associate director of charts at Billboard.

“It is a long road to rebuilding Christina as a brand and as a musician, after the last album didn’t so very well,” said Caulfield. “But it’s not always about first week sales.”

Much like Jennifer Lopez on “American Idol,” Aguilera has seen her star rocket in her 18 months on “The Voice.” Just a few months before the TV show made its debut in spring 2011, Aguilera was arrested for being drunk in public in West Hollywood, and her 2010 album “Bionic” had sold a disappointing 312,000 copies.

“‘The Voice’ has reinvigorated her entire career. A lot of people think she is the star of ‘The Voice’ – the judge you tune in for,” said Lyndsey Parker, managing editor at Yahoo! Music.

Yet the first single – “Your Body” – from the new album failed to make a big impact when it was released in September. It peaked at No. 34 on the Billboard Hot 100 chart and never really caught fire on radio.

“It came and went, which surprised me because I think it is a very strong song. And pretty much everything I have heard on this album is strong. I think it’s a real return to form,” said Parker.

“There are very few people in pop who can sing like her. I do think there is a renewed appreciation for great singing that can be done live and that isn’t just about flash. And Christina is coming back to prove that. I think some people are looking at her to take back her crown,” Parker added.

“Lotus” includes duets with both Green and Aguilera’s fellow “Voice” judge, country singer Blake Shelton. It also features the piano-driven ballad “Blank Page,” which is reminiscent of her 2002 hit “Beautiful” and rock-tinged tracks like “Army of Me.”

Aguilera says she hopes to inspire a new generation of singers who were not around in 1999 for her first big hit “Genie in a Bottle.”

“It’s so exciting for me to show them what I do as an artist,” she said. “I’ve been through a lot over the past few years, going through ‘Burlesque,’ a divorce…having a few setbacks….Stuff happens! This is the business. It’s not going to be all cute and pretty and tied up in a bow.

“All of that combined is in ‘Lotus.’ It embraces the woman that I’ve become, and embracing myself coming full circle as a pop star,” she said.

(Additional reporting by Piya Sinha-Roy; Editing by Cynthia Osterman)

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Meningitis outbreak spurs calls to strengthen FDA

WASHINGTON (Reuters) – U.S. and state health regulators called on Congress on Tuesday to strengthen federal oversight of compounding pharmacies as lawmakers prepared for two days of hearings on a deadly fungal meningitis outbreak linked to a compounded steroid.

But the main federal regulator, the U.S. Food and Drug Administration, said in a statement to Reuters that it faces legal restrictions in regulating drug compounders such as the New England Compounding Center. The Massachusetts pharmacy was at the center of the outbreak that has infected 438 people, including 32 who have died, in 19 states.

The chief public health officer for Massachusetts also urged immediate congressional action to bolster federal oversight of the little-known, lightly regulated compounding industry, which is primarily overseen by state pharmacy boards.

“It is clear that the patchwork of disparate state regulations is not enough to keep the public safe,” Dr. Lauren Smith, interim commissioner of the Massachusetts Department of Public Health, said in written testimony filed with a U.S. House of Representatives oversight panel.

Lawmakers hope to shed light on why regulators failed to act against NECC despite multiple problems dating back to 1999. They also are focusing on whether new legislation may be needed to grant FDA clear authority to police the drug compounding industry.

“FDA’s authority over compounding pharmacies is more limited by law and needs to be strengthened,” said the federal agency’s statement to Reuters. “We look forward to working with Congress to prevent this from happening again.”

Those sentiments were echoed on Tuesday by a new report from the minority Democratic staff of the oversight and investigations panel.

“Legal authority over compounding has been complicated by court decisions that have cast doubt on FDA’s authority to regulate compounders,” the report said. “Compounders operate in a regulatory gap between state-regulated pharmacies and federally regulated drug manufacturers.”

Smith and FDA Commissioner Margaret Hamburg are scheduled to testify on Wednesday before the panel, the House Energy and Commerce subcommittee for oversight and investigations. A second congressional hearing is scheduled to take place before the Senate Health, Education, Labor and Pensions Committee on Thursday.

The Massachusetts health commissioner, who took office less than three weeks ago, said she is determined to find out why the Massachusetts Board of Registration in Pharmacy voted to sanction the company in September 2004 but ultimately agreed to a far weaker consent agreement with NECC in January 2006.

“I will not be satisfied until we know the full story behind this decision,” she said in her written testimony.

DEFRAUDING FDA

Smith said the Massachusetts pharmacy board’s executive director and staff attorney learned in April 2006 that executives from a company hired to ensure NECC’s compliance were convicted of federal crimes related to defrauding the FDA.

“However, we found no evidence to indicate that the executive director or staff attorney … provided this crucial information to the board. Nor did they see fit to send inspectors back to NECC in 2006 to determine if they were fulfilling the requirements of the corrective action plan,” Smith said.

But in May 2006, the board affirmed NECC to be in compliance with the consent agreement.

Smith also believes the board would have acted immediately against NECC last July — a month before it produced the final doses of steroid injections linked to the outbreak — if board staff had told board members about a complaint against NECC brought by Colorado authorities.

Earlier this month, the state fired board director James Coffey and board counsel Susan Manning for failing to act on the Colorado complaint.

The Massachusetts pharmacy board was left to oversee NECC’s operations in 2003 when state and FDA officials agreed that its activities did not constitute a manufacturing operation that would need to meet stringent federal standards for safety and efficacy, the FDA acknowledged on Tuesday.

The decision was originally disclosed on Monday by a House Republican staff report.

Where to draw the line between drug manufacturing and drug compounding is a central question for Congress as lawmakers debate the potential need for new legislation to expand the FDA’s authority.

Drug compounding is a little-known practice in which pharmacists traditionally alter or recombine drugs to meet the special needs of specific patients. It is overseen mainly by state authorities who are often ill-equipped for the job.

The activity has evolved in recent decades to include large-scale production that some experts view as drug manufacturing that should be subject to FDA regulation.

Not everyone agrees that the FDA needed new authority to stop New England Compounding Center from operating, however.

Advocacy group Public Citizen earlier this month called on the Obama administration to launch an independent probe of the FDA’s lack of action against NECC. The group alleges that the FDA already has the authority it needs, but that agency officials failed to take steps that could have prevented the current outbreak.

Smith’s written testimony also shows that NECC co-owner Barry Cadden was named to a state task force to study oversight of the compounding pharmacy industry in 2002. The task force met for two years and discussed potential regulatory changes.

But there is no record of formal recommendations and no changes were ever adopted.

(Editing by Lisa Von Ahn and Dan Grebler)

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