Thursday, August 21, 2014

Move Along, No Health Care Corruption to See Here

Health care corruption, remains a largely taboo topic, especially when it occurs in developed countries like the US.  Searching PubMed or major medical and health care journals at best will reveal a few articles on health care corruption, nearly all about corruption somewhere else than the authors' countries, usually in someplace much poorer.  While the media may publish stories about issues related to health care corruption, they are almost never so labelled.

Yet Transparency International's report on global health care corruption suggested it occurs in all countries.  A recent TI survey showed that 43% of US citizens believe the country has a health care corruption problem (look here).  

In the last few weeks, there have been two major US news stories that seem to clearly involve  allegations of health care corruption, but not in so many words.   Both were big because the indicted were sitting governors of big US states.

Governor Rick Perry (Republican - Texas) Indicted for Abuse of Power

The biggest story seems to be the indictment of Rick Perry, the Republican Governor of Texas.   Here is a summary from the Washington Post,

A grand jury indicted Texas Gov. Rick Perry (R) on two felony counts  Friday, alleging that he abused his office and used a veto threat to coerce an elected district attorney to resign.

The grand jury began considering charges against Perry earlier this year following an ethics complaint alleging that he abused his veto power when he cut funding for the state’s anti-corruption unit, which is part of the Travis County district attorney’s office.

He had called on Rosemary Lehmberg (D), the district attorney for Travis County, which includes Austin, the state capital, to step down after she was arrested in April 2013 for drunken driving. Lehmberg pleaded guilty to driving while intoxicated — an open bottle of vodka was found in her car — and was sentenced to 45 days in jail.

Perry threatened to veto $7.5 million in state funding for her office unless Lehmberg resigned. She refused, and Perry followed through on his veto threat, saying that he could not provide the money 'when the person charged with ultimate responsibility of that unit has lost the public’s confidence.'

There has been a big kerfuffle over this indictment, with the majority seeming to think it is some sort of political stunt that will have little effect on Mr Perry.  For example, the Washington Post later ran an editorial calling the indictment "wrong-headed." 

However, articles in some less prominent outlets suggested that the indictment actually raised questions about possible corruption, actually health care corruption.  For example, James Moore writing in the Huffington Post,

 Some of the media appear to have adopted the Perry narrative that he wanted to get rid of an irresponsible Travis County District Attorney Rosemary Lehmberg because she had been arrested for driving under the influence of alcohol.


The PIU had been investigating the Cancer Research and Prevention Institute (CPRIT), a $3 billion dollar taxpayer funded project that awarded research and investment grants to startups targeting cancer cures. The entire scientific review team, including Nobel Laureate scientists, resigned because they said millions were handed out through political favoritism. Investigations by Texas newspapers indicated much of the money was ending up in projects proposed by campaign donors and supporters of Governor Perry. In fact, one of the executives of CPRIT was indicted in the PIU investigation for awarding an $11 million dollar grant to a company without the proposal undergoing any type of review. 

As documented by the Cancer Letter, the scientific reviewers at CRPIT quit because of perceptions that the scientific review process was being manipulated, possibly for private gain,

The scientists submitted blistering letters explaining their decisions to leave.
'This past spring, the peer review system of CPRIT was dishonored by actions of CPRIT’s  administration when a set of grants were delayed in funding because of suspicion of favoritism,' writes Phillip Sharp, chair of the council. 'Further, a proposal based on science similar to that previously reviewed by the CPRIT council was selected for funding using other criteria. These events ultimately led to the resignation of Dr. Gilman. The same events motivate my decision to resign now.'
Both Gilman and Sharp are Nobel laureates.
The walkout—and, perhaps more so, the letters—send a powerful signal that CPRIT is now outside mainstream cancer science. The controversy—and the instance of 'favoritism' alleged by Sharp—began when the state agency funded an $18 million project spearheaded by Lynda Chin, an MD Anderson scientist and the wife of that institution’s president.

Also see stories in the Nature news blog, and in the Science news blog.  Similar connections to the Public Integrity Unit's response to the CRPIT scandal and its indictment of a CPRIT official appeared in the Texas Observer.

In addition, the New Republic published an article suggesting the involvement of Mr Perry and his administration in other cases of alleged health care corruption.  These included trying to use state government to mandate a vaccine made by a company for who his former chief of staff was a lobbyist,

His attempt to mandate that Texas girls receive a vaccine for HPV, seemingly at odds with Perry’s social conservatism, looked more explicable when one considered that his former chief of staff was lobbying for Merck, the vaccine’s manufacturer. And yes, Merck contributed $30,000 to Perry over his first decade as governor.  

Also, he put appointed to the state board of health top employees of a medical supply company owned by a big campaign contributor, and in which Mr Perry himself also invested, 

Perry expressed his gratitude to James Leininger, a staunch conservative whose last-minute loan to Perry helped him narrowly win his 1998 race for lieutenant governor and who gave him $239,000 more over the next decade, by appointing former top employees of Leininger’s hospital-bed companyin which Perry’s personal investment during the ’90s resulted in a $38,000 gainto the Texas Board of Health,...

Finally, the state Emerging Technology Fund gave considerable money to another friend  of and big campaign donor to Mr Perry,

A year earlier, the A&M system had entered into an agreement to develop vaccines with a therapeutics manufacturing firm called Introgen; this put the firm in a position to benefit from the new center. Introgen’s founder, David Nance, is a close friend of Perry’s. He contributed $100,000 to Perry over the decade, he had previously served on the advisory committee of the tech fund awarding the $50 million, and Perry’s son, Griffin, owned Introgen stock between 2001 and 2004.

Introgen had its main drug rejected by the FDA and declared bankruptcy shortly before the $50 million award, but Nance continued to do well by the state. In 2010, the tech fund awarded $4.5 million to his next venture, Convergen, even after a review panel rejected the application. The fund paid Nance’s daughter $70,000 for promotional work, and several fund employees went to work with Nance. Perry also provided $1.9 million in federal funds to a separate Nance venture, Innovate Texas, founded in 2008 as a sort of clearinghouse for Texas tech firms. The outfit paid Nance a six-figure salary. It is now defunct.

Corruption as defined by Transparency International is abuse of entrusted power for private gain.  Thus TI does not limit the term to cases involving politicians or government.  But surely the indictment of Governor Perry raises multiple questions about political and government corruption by this definition, and this corruption involving health care. The definition used by TI is ethical, not legal, and it is impossible to predict whether Governor Perry will be convicted.

Still, while Texas Governor Rick Perry's indictment was big news, and fodder for a lot of discussion about politicization of the criminal justice system, the multiple issues the case raises about possible health care corruption have been ignored by most major news outlets, and no one so far has labeled the case as having anything to do with "health care corruption," or words to that effect.

Former Governor Robert F McDonnell (Republican - Virginia) on Trial for Bribery and Corruption

Meanwhile, the press has been fascinated with testimony in the bribery and corruption trial of former Virginia Governor Robert McDonnell.  In 2013, the Washington Post published a long investigative report about how the Governor and his wife seemed to be promoting a dietary supplement called Anatabloc as an anti-inflammatory agent while accepting various favors from the CEO of the company that made it.  The background on the company is

[Johnnie R] Williams’s company, Star Scientific, was introducing a dietary supplement called Anatabloc, whose key ingredient is found in tobacco and other plants.

Anatabloc was crucial to the future of the company, which has been losing money for years. But the science behind the product — an anti-inflammatory the company hopes might be helpful to people with such ailments as Alzheimer’s and multiple sclerosis — was unproven.

The article described how Mr Williams paid $15,000 for the food at the Governor's daughter's wedding, and provided "rides on Williams' corporate jet, personal gifts for the first family...."   In fact,

 Over eight months during the 2009 gubernatorial election, Star Scientific donated more than $28,500 worth of air travel to McDonnell’s campaign. That commitment increased after McDonnell took office; Star reported donating nearly $80,000 in flights to Opportunity Virginia, the governor’s PAC.

Apparently in return,

Three days before her daughter’s June wedding, Maureen McDonnell flew to Florida, where she spoke at a seminar for scientists and investors interested in anatabine, the key chemical in Anatabloc, according to people who attended the conference.

The governor’s wife told the group that she supported the product and touted the pill, which is not regulated by the Food and Drug Administration, as a way to lower health-care costs in Virginia, the attendees said.

About three months after the wedding, the McDonnells and Star Scientific were together again, this time at the governor’s mansion for the official launch party for Anatabloc.

Although much of the interaction appeared to be between CEO Williams and Mr McDonnell's wife, the Post reported later in 2013,

A prominent political donor purchased a Rolex watch for Virginia Gov. Robert F. McDonnell, according to two people with knowledge of the gift, and the governor did not disclose it in his annual financial filings.

The $6,500 luxury watch was provided by wealthy businessman Jonnie R. Williams Sr., the people said. He is the chief executive of dietary supplement manufacturer Star Scientific

 Also, now that the trial is ongoing, there was sworn testimony that Governor McDonnell seemed to be helping to market Anatabloc, as per Reuters,

Virginia Governor Robert McDonnell gave a personal pitch to a state healthcare official for the dietary supplement at the heart of the former governor’s trial on corruption and bribery charges, the official testified on Monday.

Sara Wilson, director of the Virginia Department of Human Resource Management, said McDonnell pulled out a bottle of the product, Anatabloc, at a meeting she and her boss had with him in March 2012 to discuss healthcare.

McDonnell, a Republican, 'said how much it had helped him and his wife,' Wilson said under prosecution questioning on the 11th day of the federal trial.

There was also testimony that Mrs McDonnell tried to market the supplement to 2012 Republican presidential candidate Mitt Romney, as stated in a Washington Post article,

 After Virginia Gov. Robert F. McDonnell (R) endorsed Mitt Romney for president in 2012, McDonnell’s wife sought out the candidate to promote the dietary supplement now at the heart of the former first couple’s corruption trial, a onetime aide testified Monday.
Maureen McDonnell and then-Star Scientific chief executive Jonnie R. Williams Sr. showed up together at a news media session in South Carolina hoping to pitch Anatabloc to the prominent Republican, said Phil Cox, Robert McDonnell’s chief political adviser at the time.

Cox, also executive director of the Republican Governors Association, said that he put a stop to that plan but that Maureen McDonnell went on to talk up the supplement to Romney’s wife on a campaign bus. He said she told Ann Romney that the anti-­inflammatory supplement, Anatabloc, could 'potentially cure MS.'

Now this case is clearly all about allegations of health care corruption.  The allegations are that the CEO of a health supplement company provided extensive favors to a politician and his wife, who then made several attempts to market one of his products as treating and possibly curing disease.  Yet while these allegations are pretty clear, no one so far has called this a case of possible health care corruption.

By the way, in the last few weeks I also found relatively obscure mentions of two other cases involving allegations of health care corruption.  One was a case in which an Ohio state representative took actions on behalf of a health care real estate investment trust that he, his family members own in part, and whose board includes one major political donor (see the AP story via the Providence Journal).  The other was a case in which the West Virginia Attorney General had inherited a case from the former office holder involving a drug and medical supply company for which his wife is a lobbyist (see the Charleston Gazette story). 


As we have said before, when health care corruption is actually discussed in polite circles, including the scholarly literature about medicine and health care, the discussion usually refers to corruption elsewhere.  In particular, in developed countries, discussion of health care corruption usually focuses on less developed countries.  

Now we see that when the issue clearly is the possibility of health care corruption, even the news media will avoid using such a term.  Articles may describe what amount to health care corruption.  They may refer to it as corruption.  But they will not pair that term with health care (or medicine, or anything similar).  The subject of health care corruption remains taboo.  As long as we do not discuss it, some can preserve the illusion that it does not exist.  Thus the anechoic effect continues.

So to repeat an ending to one of my previous posts on health care corruption....  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.

Tuesday, August 19, 2014

Yet another health IT "glitch", that warm, fuzzy euphemism for life-threatening malfunctions: Internet outage left doctors without records for hours

Up to 112,000, in fact.

Nobody seemed to be listening when I and other "Health IT iconoclasts" warned years ago of issues like this regarding the blind-faith abandonment of paper and lack of truly robust local computing redundancy. When you're a patient, especially one in extremis, you do NOT want this to happen:

Internet outage left doctors without records for hours
Huffington Post

For several hours last week, doctors at PIM Associates, a primary care practice in Philadelphia, couldn’t see patients' lab results or what medications they were taking.

Those digital records are stored in the cloud by a company called Practice Fusion, which makes software to help doctors track patients.

But Practice Fusion's service was disrupted over two days last week because its data center provider suffered an outage. That prevented many of the 112,000 health care providers who rely on the company's software from accessing patient records.

“If you’re in an office that's completely electronic and the system goes down, you're flying blind,” Kelly Gallagher, a medical assistant at PIM Associates, told HuffPost. “It could be potentially dangerous.”

Potentially?  I'd say dangerous, period.

The episode offered an example of the potential drawbacks of electronic health records. It also highlighted how technology glitches can have serious human consequences. In this case, some out-of-date Internet equipment created confusion for many doctors.

Injured or dead patients really don't care.   They just want their records available.  Paper seems not to suffer mass outages...

... the ability to view electronic health records online depends on the reliability of technology companies -- which can experience glitches and outages. Last August, an electronic health record system made by Epic Systems went dark for a day, preventing nurses and staff at clinics in Northern California from accessing patient information. Last March, an outage involving a digital health record system in Boulder, Colorado, made by Meditech prevented some people from scheduling surgeries, getting test results or making appointments, according to the Boulder Daily Camera.

I covered those stories on this blog, and many others accessible under the query link

Health care providers face similar risks as other industries that store data in the cloud, but the stakes for doctors are often higher. One New York doctor who uses Practice Fusion's software said the outage could have been "a disaster if you’re dealing with life and death situations."

 I think the stakes are the highest for the patients.

The doctor requested that his name not be used because he said he worried that Practice Fusion might further disrupt his service. “My whole practice is in their hands,” he added.

Physicians are now beholden to and supplicated to IT companies.   That is not a pleasant thought.

Practice Fusion said the outage affected about one-third of its users, but didn't compromise data security. The outage "was out of our and our data center partner’s control," a company spokesperson told HuffPost.

"We worked closely with our partner to minimize the outage’s impact to our broader user base,” the spokesperson said. “We are monitoring the situation closely with our data center partner to address any other issues that may arise.”

I urge anyone reading this, if they know of injuries that resulted, to contact me.  I will pass the information along to plaintiff trial lawyers.

Practice Fusion attributed the outage to what experts are calling a rare Internet "brownout." Internet traffic is carried by a series of routers and switches, but the Web is now becoming too big and complicated for some of the old equipment. Last week, for the first time, the number of pathways for carrying Internet traffic crossed the critical threshold of 512,000. Many old Internet routers and switches can’t remember that many pathways, creating disruptions or outages across some parts of the Internet where that equipment needs to be replaced.

Again, injured and dead patients don't care, some of whom were in extremis when these outages occurred.  In medicine, there is no room for miscalculation and excuses.  My message to IT companies is if you can't provide reliable service, for whatever reason, then get the hell out of the medical clinic.

... Jim Cowie, chief scientist at Dyn, a company that tracks network management, said such disruptions will only continue in the coming months as the Internet keeps growing and its aging equipment is not replaced.

“We’re going to see more of these small, localized outages wherever there are vulnerable pieces of equipment,” Cowie said.

Well, then, perhaps paper is needed.

... In a blog post, the company recommended that affected customers print out any patient records they need. 

They agree.

For doctors, some of whom have complained about converting to electronic records, the Internet outage last week gave them justification for still keeping old-fashioned paper records.

“Sobering not to have had access to my practice for the last two days. Thank god for paper charts,” Meenakshi Budhraja, a gastroenterologist in Little Rock, Arkansas, tweeted.

Health IT extremists who believe in the abolishment of paper need to heed case examples like this.

But they won't, and that's almost guaranteed, at least until a cybernetic Libby Zion case occurs.

-- SS

Merging Finance and Health Care Leadership - Robert Rubin Proteges Running DHHS, Spouse of Hedge Fund Magnate Running the FDA

Hidden between the lines of some not very prominent news stories were reminders of how close health care and financial leadership have become in these times of continuing economic unrest after the global financial collapse/ great recession.

After the events of 2008, it became more apparent that the dysfunction in academics and health care  paralleled that seen in finance.  One reason may have been the overlapping leadership of finance and health care.  For example, in 2008 we first posted about how Robert Rubin, who was then a Fellow of the Harvard Corporation, the top group responsible for the governance of that great academic and medical institution, bore responsibility for the global financial collapse/ great recession.  Mr Rubin as Treasury Secretary was a proponent of financial deregulation in the Clinton administration.  Later, he became a top leader of Citigroup, whose near collapse helped usher in the crisis of 2008 (look at our 2008 post here and our 2010 post here.  Rubin just stepped down from his Harvard position this year,)  Since 2008 we found many other links among the leadership of Wall Street and of academic medicine and of big health care corporations.  These links, if anything, seem to be getting stronger. 

From the Department of Health and Human Services to Citigroup and then back to the Department of HHS

A tiny, four sentence Reuters story noted an apparently routine appointment to upper management at the US Department of Health and Human Services.  The first three sentences were:

U.S. Health Secretary Sylvia Burwell named Citigroup Inc executive Kevin Thurm as senior counselor of the U.S. Department of Health and Human Services (HHS), which is implementing the controversial U.S. Affordable Care Act.

Thurm has served in a number of roles at Citi since joining the bank in 2001, including senior adviser for compliance and regulatory affairs and deputy general counsel.

Before joining Citi, Thurm, a former Rhodes scholar, was the deputy secretary of the U.S. Department of Health and Human Services.

Why is that significant?  First, the near bankruptcy of the huge, badly led Citigroup was widely acknowledged to be a cause of the global financial collapse.  A 2011 New Yorker article on the role of the revolving door between Washington and Wall Street ("Revolver," by Gabriel Sherman) summarized the plight of Citigroup and the role of Robert Rubin in it,

Citigroup was the most high-profile of Wall Street’s basket cases, the definitionally too-big-to-fail institution. With massive exposure to the housing crash and abysmal risk management, the firm cratered, surviving as a virtual ward of the state after the government injected billions and took a 36 percent ownership position. Along with AIG and Fannie and Freddie, Citi came to be seen as a pariah institution, felled by management dysfunction and heedless greed in pursuit of profits. Complicating matters for Citi, the wounded bank found itself tangled in the populist vortex that swirled in the crash’s wake. On the left, there were calls that Citi should be outright nationalized, stripped down, and sold off for parts. Pandit was called before irate congressional-committee members to answer for Citi’s sins, an ignominious inquisition captured on live television. In January 2009, under pressure, Citi canceled an order for a new $50 million corporate jet.

There was plenty of blame to go around at Citi. Chuck Prince, a lawyer by training who succeeded Citi’s outsize former CEO Sandy Weill, had little grasp of the complex mortgage securities Citi’s traders were gambling on. As late as the summer of 2007, when the housing market was in free fall, Prince infamously told the Financial Times that 'as long as the music is playing, you’ve got to get up and dance.'

Bob Rubin himself pushed the bank to take on more risk in order to increase its profitability, a move that Citi’s dismal risk management was ill-equipped to handle. Pandit, whom Rubin had helped to recruit in 2007 just as the economy began to unravel, was tasked with cleaning up the mess when he became CEO in December of that year, and his early tenure had a deer-in-headlights character. Eventually, he realized that the asset class Citi lacked most was human capital, of the blue-chip variety.  

The article also summarized Rubin's role in the fervor of deregulation in service of market triumphalism that lead to the financial collapse,

In tapping Rubin to run Treasury, Clinton was sanctioning a revolution in the Democratic Party, one that fundamentally redefined the party’s relationship with Wall Street. Rubin, along with Alan Greenspan and Larry Summers, believed in an enlightened capitalism, which would spread prosperity widely. This enchantment with the beneficence of markets became the dominant view in Democratic Washington, hard to argue with when the economy was booming, as it was in the second half of the nineties. Rubin recognized that derivatives posed a risk but effectively blocked efforts to regulate them and pushed for the repeal of the Glass-Steagall Act, the Depression-era legislation that prevented commercial banks from merging with investment and insurance firms (the new law essentially legalized the $70 billion merger in 1998 of Citicorp and Travelers Group that created Citigroup).

Circling back to recent events, Once he got to Citigroup, Rubin assembled a team, partially from his old associates in the Clinton administration,

He also recruited several former Clinton aides to Citi, including former Health and Human Services deputy secretary Kevin Thurm....

So Kevin Thurm became something of a Robert Rubin protege at Citigroup. In fact, he rose to an important leadership position at the same time Citigroup was getting ready to become a "basket case," in part apparently because of the advice of Robert Rubin.  According to a 2013 version of Mr Thurm's official Citigroup bio,

Kevin L. Thurm is Senior Advisor for Compliance and Regulatory Affairs at Citigroup.

Previously, Thurm served as the Chief Compliance Officer of Citi. In that role, Thurm led Global Compliance which protects Citi by helping the Firm comply with applicable laws, regulations, and other standards of conduct, and is responsible for identifying, evaluating, mitigating and reporting on compliance and reputational risks and driving a strong culture of compliance and control. Since joining Citi in 2001, Thurm has also served as Deputy General Counsel of Citi, where he led the Corporate Legal group, overseeing a number of Company-wide Legal functions and providing support on day to day matters, including issues involving the Board, senior executives, and regulators; Chief  Administrative Officer of Consumer Banking North America, where he helped lead the business group and was responsible for a variety of functions including Community Relations, Compliance, Legal and Public Affairs; Director for Administration in the Corporate Center; Chief of Staff to the President and Chief Operating Officer of Citigroup; and as the Director of Consumer Planning in the Global  Consumer Group.

To recap, Mr Kevin Thurm was a top compliance executive of Citigroup while the company was imploding, and being a protege of Robert Rubin, an architect of the financial deregulation that led to the global financial collapse, and a leader of Citigroup responsible for the risky behavior of that company that led to its near collapse, which was another precipitant of the global financial collapse or great recession.  It is not obvious that these are great qualifications to be Senior Counselor at DHHS.

Moreover, Mr Thurm's responsibilities at DHHS would not be limited to compliance or financial leadership.  According to the official DHHS press release announcing his appointment,

As a Senior Counselor, Thurm will work closely with the Department’s senior staff on a wide range of cross-cutting strategic initiatives, key policy challenges, and engagement with external partners.

Yet, there is nothing in Mr Thurm's public record to indicate that he has any actual experience in health care, medicine, public health, or biologic science.  So it is not obvious why he should be entrusted with leading "cross-cutting strategic initiatives, [and] key policy challenges."

On the other hand, Mr Thurm might be simpatico with the new Secretary of DHHS, Ms Sylvia Burwell.  According to a Washington Post article at the time of the hearings about her nomination,

despite her Washington experience, ... is not well known in health-policy circles, and, during her confirmation hearings, she gave little concrete sense of the direction in which she will take the complex department she will inherit.
This seems to be a polite way to see she also has no actual experience in health care, medicine, public health, or biologic science.   Her official biography lists no such experience.  However, she was also a Robert Rubin associate, and perhaps protege, during the Clinton administration,

During the Clinton administration, Burwell held several economic roles — as staff director of the White House National Economic Council, as chief of staff under then-Treasury Secretary Robert Rubin,...

To summarize so far, the new Secretary of the Department of Health and Human Services, and now her new Senior Counselor, were both closely associated with Robert Rubin, who seems to bear major responsibility for the global financial collapse, and the new Senior Counselor worked with Rubin at Citigroup, whose near bankruptcy helped accelerate that collapse.  On the other hand, neither of these leaders has any experience in health care, public health, medicine, or biological science. 

Hedge Funds, Tax Avoidance, and the US Food and Drug Administration

This story is even less obvious.  A July, 2014, report in Bloomberg recounted plans for a Senate hearing on tax avoidance by huge, lucrative hedge funds.  The basics were,

A Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6 billion in U.S. income taxes over 14 years through transactions with Barclays Plc and Deutsche Bank AG, a Senate committee said.

The hedge fund used contracts with the banks to establish the 'fiction' that it wasn’t the owner of thousands of stocks traded each day, said Senator Carl Levin, a Michigan Democrat and chairman of the Permanent Subcommittee on Investigations. The maneuver sought to transform profits from rapid trading into long-term capital gains taxed at a lower rate, he said.

An accompanying Bloomberg/ Businessweek story described testimony at a Senate hearing by the Renaissance co-Chief Executive Officer Peter F Brown,

Renaissance was founded by the mathematician James H. Simons, whose fortune is now estimated by Bloomberg Billionaires Index at about $15.5 billion.

Brown became co-CEO with Robert L. Mercer in 2010 after Simons retired and became non-executive chairman. Before joining the firm in 1993, he was a language-recognition specialist at International Business Machines Corp.

Mr Brown testified that the company was not so much trying to avoid taxes by the complex strategy but simply to make even more money.    But, per the New York Times, Senator Levin

focused on the lucrative nature of the transactions, most of which took place using Renaissance employees’ money. Between 1999 and 2010, the fund used basket options to produce profits of more than $30 billion, Mr. Levin said. Barclays and Deutsche Bank together made more than $1 billion in revenue.

Mr Brown's firm seems, unlike Citigroup, to have a record of financial success, and no one is accusing Mr Brown or his firm of being responsible for the global financial collapse.  However, Mr Brown is certainly a very rich Wall Street insider.  Also, as we noted in 2009, his firm clearly has had major involvement in health care investments.   And the current hearings emphasize concerns that his firm has been executing questionable tax avoidance strategies.

Mr Brown has one other very major tie to health care.  As  noted in 2009 on Health Care Renewal, but apparently only parenthetically by one recent news article, (again from Bloomberg, written before the Senate hearing),

Brown lives in Washington with his wife, Margaret Hamburg, the commissioner of the U.S. Food and Drug Administration. She was appointed by President Barack Obama in 2009.

In 2009, we noted that as a condition of Dr Hamburg's leadership of the US FDA, her husband, Mr Brown, would have to divest his shares of four Renaissance funds.  However, it is obvious that he remained at and became the co-CEO of Renaissance since. 

While the current leader of the FDA clearly has medical and health care experience, she is also steeped in the culture of finance and Wall Street.


Thus we have two recent stories of how top health care leadership positions in the US government are held by people with strong ties to the world of finance, but not always with any direct health care or public health experience.  Why was the wife of a hedge fund magnate the best person to run the FDA?  Why was a person not known in "health policy [or health care] circles" the best person to run the Department of Health and Human Services?  Why was a Robert Rubin protege from Citigroup the best person to be a Senior Counselor at DHHS?  Presumably there were many plausible candidates for these government positions.  Why was it not possible to find people to fill them who were not tied to Wall Street?  Why was it not possible to find people with profound understanding of and sympathy for the values of health care and public health to fill all of them?   

The leadership of health care and finance continue to merge.  This seems to be one broad explanation for why both fields continue to be notably dysfunctional.  While Wall Street has spread around plenty of money to influence public opinion and political leaders, many still remember how its foolish and greedy leadership nearly caused another great depression.  It is likely that the influence of Wall Street culture on the leadership of health care organizations, be they governmental, academic, other non-profit, or commercial, has fostered the continuing financialization of health care, with its focus on "shareholder value," that is, putting short-term revenue ahead of patients' and the public's health.

I strongly believe health care would be better served by leadership that puts patients' and the public's health first.  Occasionally people with such values may come from a finance or economics background.  However, in an era where many people continue to believe "greed is good," we at least ought to confirm that health care leaders really are about health care first, and money a distant second.

ADDENDUM (20 August, 2014) - This was re-posted on the Naked Capitalism blog.

Monday, August 18, 2014

Don't worry, your information's safe. Community Health Systems says data stolen in cyber attack: just a mere 4.5 million people affected this time.

I have often written about my observations of the generally unimpressive qualifications and capabilities of IT personnel, up to and including the CIO's, in healthcare settings (e.g., baccalaureate-level education in a doctoral and post-doctoral setting, usually no clinical or biomedical experience, no computer science background, no medical informatics background, and sometimes not even a formal management information systems education) compared to other sectors such as pharma and academia.  I've written about this as an impediment to health IT progress and to healthcare IT safety.

Now, I increasingly believe the healthcare IT backwater is becoming a downright societal threat, for another reason.  Yet another in my "don't worry, your information's safe" series (

Community Health Systems says data stolen in cyber attack
Published August 18, 2014

U.S. hospital operator Community Health Systems Inc said on Monday personal data, including patient names and addresses, of about 4.5 million people were stolen by hackers from its computer network, likely in April and June.

The company said the data, considered protected under the Health Insurance Portability and Accountability Act, included patient names, addresses, birth dates, telephone numbers and Social Security numbers. It did not include patient credit card or medical information, Community Health Systems said in a regulatory filing.

It said the security breach had affected about 4.5 million people who were referred for or received services from doctors affiliated with the hospital group in the last five years.

If you're a department store, or a McDonald's, such breaches might be more understandable.  When you're a life-critical industry such as healthcare, and under HIPAA regulations regarding privacy and confidentiality, these incidents are increasingly unforgivable.

The FBI warned healthcare providers in April that their cybersecurity systems were lax compared to other sectors, making them vulnerable to hackers looking for details that could be used to access bank accounts or obtain prescriptions, Reuters previously reported.

Again, inexcusable.  Health IT amateurs (and, of course, the Management Recruiting Firms that hospital retain to find them, who are equally clueless about what it takes to be a health IT expert) don't just endanger your health; they endanger your economic well being, even when you're not ill.
The company said it and its security contractor, FireEye Inc unit Mandiant, believed the attackers originated from China. They did not provide further information about why they believed this was the case. They said they used malware and other technology to copy and transfer this data and information from its system.

Just great.

Community Health, which is one of the largest hospital operators in the country with 206 hospitals in 29 states, said it was working with federal law enforcement authorities in connection with their investigation into the attack. It said federal authorities said these attacks are typically aimed at gathering intellectual property, such as medical device and equipment development data.

Oh. that's reassuring - our data's being stolen by honest thieves who would never, EVER think of selling the data to dishonest thieves who steal people's identities, and then money...

It said that prior to filing the regulatory document, it had eradicated the malware from its systems and finalized the implementation of remediation efforts. It is notifying patients and regulatory agencies as required by law, it said.

It also said it is insured against such losses and does not at this time expect a material adverse effect on financial results.

Oh, that's very nice.  Millions of people potentially put at risk, but insurance will cover for incompetence.

Perhaps the insurers should more critically evaluate the quality of work of the people they're insuring.

-- SS

Wednesday, August 13, 2014

Desperate, Vulnerable Research Subjects, Cost-Cutting Contract Research Organizations and Threats to the Integrity of Clinical Research

Introduction - Clinical Research Done by Contract Research Organizations

Dr Carl Elliott seems to be one of the few people willing to investigate how modern medical research may threaten vulnerable research subjects.  His book, White Coat, Black Hat, opened with a chapter on vulnerable "guinea pigs," people willing to be clinical research subjects for money.  Such people may be desperate for money, and further may be homeless, and have psychiatric problems, including psychosis or drug or alcohol problems.  Dr Elliott just wrote another important article on the plight of vulnerable research subjects. As Dr Elliott wrote,

Most people think of pharmaceutical research as a highly technical activity that takes place in world-class medical centers. The reality is somewhat different.

This is apparent in a grainy video that I watched a few years ago. It had apparently been recorded on a cell phone, and the camerawork started off wobbly. A tanned man wearing sunglasses and a necklace appeared and was introduced as Dr. Johnny Edrozo, a psychiatric researcher. His shirt was unbuttoned partway down his chest. 'The latest stimulant coming out of the market is Vyvanse, which is a Dexedrine preparation,' Edrozo told the interviewer, pausing occasionally to chew gum. For reasons that were not explained, the interview took place in a parked car.

This was my introduction to South Coast Clinical Trials, a chain of private research sites in Southern California that specializes in testing psychiatric drugs. Pharmaceutical companies now typically outsource clinical studies to contract research organizations like South Coast, which run trials faster and at lower cost than universities do. Their job is simply to follow the instructions of their sponsors.

This formula is working: The contract research industry has grown steadily since the early 1990s and may now generate over $100 billion in annual income, according to the Tufts Center for the Study of Drug Development. At the top of the heap are corporations like Quintiles, which has 28,000 employees and operates in about 100 countries. At the other end are private physicians and small companies like South Coast, which are often based in strip malls or suburban office parks.
We first wrote about contract research organizations in 2005 based on a Bloomberg report that noted research conducted in a crumbling physical plant, on poor, often drug-addicted patients who "barely read" informed consent documents, bad record keeping, supervision by poorly trained or unlicensed clinicians.  It appears the problems have only gotten worse.

Vulnerable, Desperate Research Subjects

Dr Elliott made it clear that many of the research subjects enrolled by companies like South Coast are vulnerable. He noted that the companies purposefully recruit subjects from rooming houses and homeless shelters. Here is a description of the sorts of pitches they use.

'I was tired, I was hungry, and half an hour earlier the police had treated us like crap,' Burns said. 'And this woman is saying, ‘Imagine, in 40 days you’ll have $4,000!The recruiter made testing drugs sound like a vacation in a five-star hotel, Burns said. 'It’s like a resort selling time shares. They talk about all the benefits first, and it sounds great, but then you start to ask: What do I have to do?' 

Dr Elliott emphasized that such research studies can endanger subjects, but that poor, homeless, drug or alcohol addicted, or psychotic people offered thousands of dollars for participation are not likely to worry about the danger. He also suggested that monitoring and protection of such subjects may not be the most intense.

Obviously, this may be very bad for such research subjects. This is why it has long been considered unethical to recruit such vulnerable subjects in such dubious circumstances. But in this day and age of "greed is good," it may be all to easy to dismiss the risks as contingent on life styles that were already full of "bad choices."

Threats to the Validity of Clinical Research

Recruiting vulnerable patients, especially the poor, homeless, drug or alcohol addicted, or psychotic, into clinical research has dangers for patients not in those trials, and for health care professionals.

Remember that the principles of evidence-based medicine suggest that health care professionals should base decisions for patients on the best clinical research evidence. The quality of these decisions determine the quality of patient care and strongly affect patient outcomes. .

Yet if an increasing proportion of clinical research is being done on vulnerable, that is poor, homeless, drug or alcohol addicted or psychotic people, the validity of that research may be badly compromised.

Consider this narrative from Dr Elliott's article,

I walked round the corner to a shelter, where I talked to an elderly white man. 'I’d say the majority of guys here take advantage of that,' he told me, 'because they get a lot of money and they’re broke as hell.'

So, for example, to qualify for a study of drug addiction treatment,

I mentioned a recruitment flyer I’d seen outside the shelter asking for subjects with 'cocaine dependency.' George nodded. He told me that a lot of people start taking drugs just so they can qualify for those studies.

'You take that s*** two days before to get it into your blood.' He mentioned that he had recently screened for a trial at a research site running addiction studies. 'There were people in the waiting room high as a kite,' he said. 'They were incoherent.'


The main ethical issues here, of course, are the competence and judgment of the prospective subjects. 'When you say ‘money,’ everything else goes out the window,' said Hanif Jackson, a former program supervisor at the Ridge Avenue shelter in Philadelphia, which recently closed down. I heard the same thing from Harvey Bass, a chaplain who has worked at the Sunday Breakfast Rescue Mission shelter for 15 years. He said drug study recruiters often park outside the shelter and approach residents on the sidewalk. Although Bass didn’t think it was his place to warn residents away from the studies, it was clear that he was not exactly a fan. 'These guys have no job, no home, and a habit, he said. 'You have people at their lowest state, and they’ll say yes to anything.' 

As someone who has reviewed innumerable reports of clinical trials and other clinical research studies for journal clubs, journals, and grant review committees, I know that on paper clinical research studies have elaborate and specific criteria to include and exclude patients, and require patients to undergo detailed study protocols. However, can one really expect patients who are so desperate for money that "they'll say yes to anything" to admit to conditions which would exclude them from a trial? Can one really expect that they will faithfully adhere to research protocols that might require, for example, complete abstinence from alcohol? Can one really expect accurate answers on surveys meant to define their clinical outcomes?  There are numerous threats to the validity of trails conducted on poor, vulnerable, often psychotic or drug or alcohol addicted patients.

Cost-Cutting CROs and Shoddy Research

However, it is unlikely that contract research organizations who recruit such patients and run such studies are really up to implementing these complex, detailed, exacting protocols. Consider this narrative by Dr Elliott,

I visited a research unit at Lourdes Medical Center of Burlington County in Willingboro, New Jersey. The unit was operated by CRI Worldwide, the same company that Burns told me he had spoken with. (The company is now known as CRI Lifetree.) Its focus was on inpatient Phase I trials, which often involve gradually increasing the dose of a drug until subjects begin to feel toxic side effects. Some Phase I studies also require painful or unpleasant invasive procedures. For these reasons, the payment to subjects in Phase I trials is usually much higher than it would be for an outpatient study.

My first thought about the CRI unit: Its appearance did not exactly suggest clinical excellence. Most of the furniture looked as if it had been rescued from a Salvation Army store. Homemade notices with titles such as 'Smoke breaks' and 'Money requests' hung on the walls. No studies seemed to be going on, but a few people were wandering around or watching television, presumably waiting to be screened or assessed.. 

It was in this unit that a patient named Walter Jorden died. Dr Elliott narrated the events that took place before his death. Note that,

according to Jeffrey Fierstein, a cardiologist retained as an expert witness by Jorden’s family, the physicians involved deviated from expected standards of care by not more seriously considering the possibility that Jorden was having a heart attack. In Fierstein’s opinion, they not only ignored classic signs of a heart attack, but also neglected to perform an EKG and missed the opportunity to give Jorden the clot-busting drugs that might have saved his life. As Fierstein points out, 'My understanding is that it [the emergency department] was around the corner; it was right there.'

In addition, a companion article by Peter Aldhous  suggested that CROs and the drug, device and biotechnology companies that employ them are willing to allow physicians with questionable backgrounds to run clinical research. He found that a not insignificant minority of physicians listed as in charge of trials in a US Food and Drug Administration (FDA) database had records of dubious conduct, including various sanctions by state medical boards. He focused on one physician who had run trials since the 1980s, starting with Lovelace Scientific Resources. His record included one-year probation for drug issues, a diagnostic omission described by the medical board as "grossly negligent," then a three-year probation for that and other clinical care problems, then a license suspension, then finally license cancellation. Throughout all the years involved he continued to run clinical trials. In general, Mr Aldhous wrote,

My trawl netted dozens of doctors selected to work on clinical trials over the past five years who had previously been censured by state medical boards. Thousands of doctors are hired each year to test experimental drugs, making this a small minority. But most doctors have clean records, so companies should have few problems finding recruits without red flags against their name. 

His conclusion was,

After spending months in the world of clinical trials, I’m left with an impression of a system that has evolved beyond the FDA’s ability to manage it. I’ve also been struck by the profound disconnect between the disciplinary system that governs everyday medicine, and the separate regulations meant to protect clinical trial volunteers.

Speed and efficiency seem to be what matters to industry, and at times these factors appear to trump concerns about the doctors who run trials. 'The whole thing is profit driven,' says Michael Carome at Public Citizen, a consumer advocacy organization in Washington, D.C. 'You can see where corners might be cut, looking the other way when there might be concerns about an investigator.'

Some experts argue that the FDA’s entire rulebook for clinical trials, with its talk of things like 'institutional' review boards, reflects the academic past of clinical research—not today’s industrial juggernaut of for-profit clinical trials firms and for-hire review boards, which oversee a workforce of doctors drawn from regular medical practice. 'They are regulations for a world that doesn’t exist anymore,' says Elizabeth Woeckner, president of Citizens for Responsible Care and Research, which campaigns for the safety of medical research volunteers.
Again, this is similar to results of previous journalistic investigations of contract research organizations (some examples are here), going back to the Bloomberg article we discussed in 2005, and what Dr Elliott wrote in White Coat, Black Hat.  Thus we need to be extremely skeptical of the validity of clinical research implemented by contract research organizations, especially when the research subjects are vulnerable. 

Summary - Another Set of Threats to the Integrity of the Clinical Research Base

So given the push to do research rapidly at the lowest cost, the lack of supervision and regulation by the FDA, the hiring of physicians with problematic backgrounds, the willingness to take vulnerable patients desperately motivated by money, can we trust that the nice, clean, detailed descriptions of clinical trials implemented by contract research organizations presented in research articles and trial registries have anything to do with the reality of what went on? If not, what then should we make of the validity of the results of such trials?

This is compounded by our inability to tell who actually implemented any given trial.  While articles in most major clinical journals will list what companies sponsored trials, and whether the official paper authors had financial relationships with these companies, the articles do not describe who actually implemented the trials, or disclose whether contract research organizations were involved.

So the first obvious reform would be to require trial reports to disclose involvement of contract research organizations, and perhaps to list the personnel who actually were most responsible for implementing studies in addition to listed authors.

We already have discussed repeatedly how clinical research sponsored by organizations with interests in the outcomes favoring their products and service may be manipulated, and may be suppressed if even such manipulation fails to produce desired results.  We usually have assumed, however, that the published trial reports are generally accurate in their descriptions of trial implementation.  If they are not accurate, particularly because vulnerable subjects may say or do anything to stay in trials that pay them, and sometimes because of poorly qualified or impaired physicians running trials, this adds another layer of questions about the validity of commercially sponsored research.  This is yet another reason to ask whether we need to take research on human subjects meant to evaluate commercial products or services out of the hands of the companies that make those products and provide those services. 

Friday, August 08, 2014

Retrospective on the Blumsohn - Procter and Gamble -Sheffield University Affair: the Unhappy Lives of Whistleblowers and the Anechoic Effect

Introduction - the Unhappy Lives of Whistleblowers

The UK Times Higher Education Supplement just published a feature on the unhappy fate of academic, including academic medical whistleblowers.

Whistleblowers in universities can hit the national headlines for shining light on issues of public interest, only for their careers to end up in very dark places.

Some of higher education’s most prominent whistleblowers paint a bleak picture about the impact on their subsequent careers. They talk about being persecuted by colleagues after coming forward. But even after leaving their jobs, some believe they still suffer a legacy. One talks about being 'effectively blackballed' from ever working again in higher education.

For other whistleblowers, exile is self-enforced.

It is noteworthy that the graphic for the article showed a whistleblower with a ball and chain, but the ball is in the shape of a whistle.

Summary - The Blumsohn - Actonel - Procter and Gamble - Sheffield University Case

The article focused on the case of Dr Aubrey Blumsohn, which we discussed recently, and have posted about since 2005 (here).  For all relevant posts, look here.

The Times provided a good summary.  It is worth quoting it here, as a reminder of a very important case which has had far too few echoes.

[The] case began in 2002, when he was working in the research unit led by Richard Eastell, professor of bone metabolism at Sheffield. The unit was researching the effects on patients of Procter & Gamble’s anti-osteoporosis drug Actonel.

Blumsohn raised concerns about abstracts for conference papers submitted by P&G, under his primary authorship, but without the firm having granted him full access to the drug trial data.

His concerns were first raised with senior colleagues and then reported in Times Higher Education in 2005.

The data analysis for the research was carried out by P&G, which paid for the research and which did not release key data to Eastell and Blumsohn. According to Blumsohn, this prevented honest publication of research.

After coming forward, Blumsohn has previously said, his other research work was used as the basis for a series of research grant applications that Eastell sponsored and signed off for a PhD student, without acknowledging Blumsohn’s input and despite his objections.

In 2005, he told the university that he was speaking to the media after losing faith in its internal systems for dealing with such allegations. He was subsequently suspended and told by Sheffield that he could lose his job over alleged 'conduct incompatible with the duties of office', including 'briefing journalists' and 'distributing information, including a Times Higher article, to third parties with apparent intent to cause embarrassment'.

He later reached a settlement with the university and it dropped all disciplinary charges. However, he left the university in 2006.

Blumsohn says of what happened afterwards: 'I withdrew from medicine completely, I withdrew from academia and ultimately withdrew my medical registration as well.'

Given the impact on his career, does Blumsohn regret coming forward with his concerns? 'I had to do that,' he says. 'As a scientist, I couldn’t just go along with having my name attached to manipulated publications, based on secret data ghost-analysed by pharmaceutical companies.'

Could Sheffield have dealt with his concerns more effectively? 'I don’t know how Sheffield could have done better, or indeed how any medical school could have done,' Blumsohn replies.

He clarifies: 'The problem these days is that some parts of universities – most notably medical schools but some other parts as well – have so many conflicts of interest and financial imperatives guiding what they do, I’m not sure other universities would necessarily have behaved differently from Sheffield. When millions of pounds are at stake both in private fees for academics and university funding, and a pharmaceutical company is wanting you to dance, the pressure to go along and to get staff to remain quiet is overwhelming.'

A few comments are in order.  While universities appear to be places of free speech and open discussion, note that Sheffield apparently could punish Dr Blumsohn simply for talking to journalists, but particularly for simply saying things that might embarrass university leaders.  So university leaders wish not to be embarrassed seems to trump free speech and academic freedom.

Second, Dr Blumsohn rightly pointed out that the issue was really scientific integrity, not embarrassment.  He tried to stop what he perceived as manipulation of clinical research by a pharmaceutical company to support its vested interests in selling a particular drug.  Such manipulation threatened scientific integrity, and ultimately threatened patients' health.

Third, Dr Blumsohn also rightly pointed out in retrospect that what university managers really seemed to fear was not just personal embarrassment, but curtailment of money flows from industry to their institution that made them look good, and presumably become more wealthy.

Few Echoes in the Discussion of Whether the Former Procter and Gamble Executive on Whose Watch the Affair Occurred Should be US Veterans Affairs Secretary

As we discussed here, a top executive at Procter and Gamble whose remit at the time the affair occurred seemed to include Actonel and research related to it was nominated to run the US Department of Veterans Affairs, and hence the whole VA health system.  Only two blogs, including this one, raised the issue of the Blumsohn - Actonel - Procter and Gamble - Sheffield University affair as relevant.  There was no other public discussion of this connection.  The former Procter and Gamble executive was confirmed, and now runs the Department of Veterans Affairs.


This is another example of how leaders of big health care organizations remain unaccountable for their organizations' misdeeds.  The lack of any mainstream discussion of the Blumsohn - Actonel - Procter and Gamble - Sheffield University affair in connection to the VA nomination demonstrate the anechoic effect.  Even the most determined whistleblowers often do not get the public notice they deserve, and their revelations do not have the effects they ought to have, even after the whistleblowers have paid a very high price to try to spark public discussion.

So anyone thinking about trying to get public notice for some fact or issue that threatens the powers that be will think twice, both about the potential downsides to the whistleblower, and the potential ineffectiveness of these attempts.    

In the past two weeks, I have heard in confidence about three stories in which discussion of issues that might offend the powers that be, specifically, the leaders of big health care organizations, has been suppressed.  I am convinced that for every Dr Aubrey Blumsohn, there are dozens who are aware of deception, other unethical conduct, even crime and corruption that could harm patients and patient care, but are afraid to speak out.

Of course, as long as these issues remain hidden, the damage to patients and the public's health continues to be done.

We clearly need changes in public policy to protect whistleblowers and foster free speech about important issues in academics and health care.  We need health care professionals, health care researchers, health care policy makers, and those among the public who care about health care and health care need to organize to support free speech and academic freedom.  Otherwise, the anechoic effect will continue to befog all of health care.

Hat tip to Dr Carl Elliott writing for the Fear and Loathing in Bioethics blog.

Tuesday, August 05, 2014

Medicare Pays $220 Million a Year for Acthar Without Any Controlled Trials that Prove it Works - While We Have No Money to Develop Ebola Vaccines or Treatment?

Introduction - No Money for Ebola Vaccine Development

While a new Ebola epidemic continues in Africa, people in developed countries are getting worried. Even the 0.1%, who may have rarely worried about our dysfunctional health care system before, are getting nervous. For example, this week, the Donald seemed panic stricken that Ebola infected American health workers might be allowed to return to the US, no matter what the precautions.  As reported by Politico,

Donald Trump has a message for the Ebola patient coming to the United States for treatment: Stay out.

'Ebola patient will be brought to the U.S. in a few days — now I know for sure that our leaders are incompetent,' Trump tweeted Thursday night. “KEEP THEM OUT OF HERE!”

Yet, as we posted here, money was the major barrier to developing treatments of vaccines that could have helped contain the epidemic in Africa, but whose availability in the US could also have reassured the Donald.  Dr John Ashton, a top public health physician in the UK, wrote in the Independent,
We must also tackle the scandal of the unwillingness of the pharmaceutical industry to invest in research to produce treatments and vaccines, something they refuse to do because the numbers involved are, in their terms, so small and don't justify the investment. This is the moral bankruptcy of capitalism acting in the absence of an ethical and social framework.
It seems that in the US and UK, our market based health care system can only cannot develop treatments for dangerous diseases when the treatments will produce huge returns on investment.   The irony is that even people (like Mr Trump) who preached market triumphalism and limiting government, presumably from doing things like developing drugs, may now fear diseases for which the market alone provides no remedy.  
Meanwhile, while there was no money to develop vaccines and drugs for Ebola, a story about how much money we are spending on questionable remedies has reappeared.  

But a Huge Increase in Money for Acthar

This week, writing in ProPublica and the New York Times, Charles Ornstein noted the huge amounts being paid by the US government for a previously obscure drug,

An obscure injectable medication made from pigs' pituitary glands has surged up the list of drugs that cost Medicare the most money, taking a growing bite out of the program's resources.

Medicare's tab for the medication, H.P. Acthar Gel, jumped twentyfold from 2008 to 2012, reaching $141.5 million, according to Medicare prescribing data requested by ProPublica. The bill for 2013 is likely to be even higher, exceeding $220 million.

Over approximately the same time course, commercial US health care insurers and the Tricare program for military dependents noted a surge in the amounts they were paying for this drug too,

 At a recent conference hosted by Sanford C. Bernstein, Dr. Ed Pazella, Aetna's national medical director for pharmacy policy and strategy, explained the shift on Acthar.

Questcor's 'combination of aggressive marketing and aggressive price increases finally caused it to become a line item that a finance guy looked at and said: 'What the hell are we paying for this? Why? What is it?' And that's when we started looking at what's our policy around this stuff,' Pazella said.

You Heard it Here First - a Huge Price Increase for an Old Unproven Drug

This problem's development took quite some time.  As we first discussed in 2007, some clever  maneuvering by corporate executives around loopholes in government rules benefited the executives, but maybe no one else.

The clinical background is that Acthar is a form of a hormone (ACTH) that stimulates the adrenal gland to produce more cortisol and other related hormones.  The formulation is made from pig pituitaries, and was developed in the 1940s.  It was approved by the US Food and Drug Administration at a time when this action did nor require proof of efficacy, that is, proof that the drug worked.  For years, the drug was only used for a rare form of infantile seizures, and occasionally for symptoms of multiple sclerosis in adults.  As noted in several reviews by the Cochrane Collaboration, there is little good evidence that the drug works for either condition, and no evidence that it is better than simpler, cheaper alternatives, like synthetic alternatives to cortisol, for the latter. (See this blog post).

The drug languished for years, but Questcor purchased the rights to it in 2001, apparently for a mere $100,000 (look here).  In 2007, the company jacked its price up in 2007 from $1650 a vial to $23,000 a vial.

A Further Price Increase, and a Big Marketing Push

As Mr Ornstein noted, its price is now $32,000 a vial.  One might expect that this huge price would quickly generate competition from generic drug manufacturers,  but, per Mr Ornstein,

Although it long ago lost patent protection, the drug is a complex biologic agent, and the manufacturing process is a trade secret. 

Furthermore, infantile spasms may be rare, but, 

Since Acthar came on the market in 1952, the rules about F.D.A. approval have changed. At the time, drug companies simply had to demonstrate that a drug was safe, rather than that it was effective. Acthar was initially authorized as a treatment for more than 50 diseases and conditions. (The list has since been cut to 19.)

Drug companies are barred by federal rules from marketing drugs for "off-label" indications, however, given the above, it was not obviously illegal when Questcor

 began marketing it for a broad menu of uses.

In addition, Medicare could not easily challenge the huge price Questcor was charging for this unproven remedy given to adults

Medicare cannot bar access to medications like Acthar, even in the face of rising expense and questions about efficacy, Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said in a written statement. The law mandates that Medicare's drug program, known as Part D, cover drugs for the uses authorized by the Food and Drug Administration, he said.

Questions about Questcor's Marketing

In fact, while it appears legal to promote Acthar for uses for which it has no proven efficacy, there are some questions about Questcor's marketing practices,

The company has disclosed in filings with the Securities and Exchange Commission that two United States attorney's offices and the S.E.C. are investigating its promotional practices.

A possible reason why was supplied by a companion ProPublica article, also by Charles Ornstein,

 Many of Medicare's top prescribers of the expensive specialty drug H.P. Acthar Gel have financial ties to the drug's maker.

Only 18 practitioners wrote 15 or more prescriptions for the drug in 2012. At least nine — and all of the top four — were promotional speakers, researchers or consultants for Questcor Pharmaceuticals, a ProPublica analysis shows.

Also, there are questions about whether Questcor has been concealing adverse events related to the increasing use of Acthar.  Until recently, as noted by Gretchen Morgenson in the NY Times in July, 2014,

For years, Questcor Pharmaceuticals has highlighted the potential benefits of Acthar, its immune-system drug, while saying little about its ill effects.

But as had been noted also by Gretchen Morgenson in the NY Times in June, 2014, more information about adverse events began coming out, not mainly for the benefit of patients, but apparently due to questions by investors about a pending takeover of Questcor by Mallinckrodt,

Since 2012, the events, as reported to the Food and Drug Administration’s Adverse Event Reporting System, or Faers (pronounced 'fares'), have included 20 deaths and six disabilities among patients reported to have been using Acthar and in which Acthar was recorded as 'suspect,' or the drug most likely to have been associated with the event. From January 2000 through 2011, by contrast, 13 deaths involving Acthar were reported to the F.D.A.’s system.

Although Questcor has reported some of these events to the F.D.A., as required, the company has not discussed the adverse outcomes in its financial filings. A Supreme Court ruling in 2011 concluded that reports of adverse events among patients using a drug, even if few in number, are of interest to investors weighing whether to buy or sell shares in the manufacturer.

The July, 2014 article by Gretchen Morgenson in the NY Times noted further,

according to a regulatory filing made by Questcor early Thursday, the number of patients reporting a so-called adverse event while using the drug last year represented almost 5 percent of prescriptions dispensed. The total number of events in 2013 reported by patients, who can experience multiple ill effects, was almost 14 percent of prescriptions, up from 9.1 percent in 2011.

 It was the first time Questcor, which has received a $5.6 billion takeover bid from Mallinckrodt Pharmaceuticals, had disclosed any problems experienced by Acthar patients, even though such information is of keen interest to investors.

That information might also be of interest to patients and doctors. 

Questions about Questcor's Executive Compensation

While Questcor brought in huge amounts of money from an old unproven drug using aggressive marketing that did not dwell on the drug's adverse effects, its executives have been making lots of money, sometimes in questionable ways.  For example, in February, 2014, Jesse Eisinger also reported for ProPublica that the timing of Questcor CEO Don M Bailey's stock sales has seemed unusually fortuitous,

Questcor Pharmaceuticals is a biotechnology company with a $4 billion market capitalization. Good things keep happening to Questcor in the middle of the month. Here’s what’s notable: The middle of the month just happens to be the time that the company’s chief executive, Don M. Bailey, sells stock through his regular selling plan.
The question is whether the company timed its favorable press releases to coincide with the times its CEO was known to be selling his shares?

Also, in May, a blog on The Street noted that the CEO's daughter also appears to have been quite fortunate, for no obvious reason,

As reported this morning by my colleague Herb Greenberg in his "Reality Check" newsletter (subscription required), Kirsten Fereday, a Questcor employee who also happens to be Bailey's daughter, received a huge salary bump in  in 2013, according to the compensation portion of its yet-to-be-filed proxy two days ago in an amended 10-K.

According to the filing:

Kirsten Fereday, the daughter of Don M. Bailey, our Chief Executive Officer, was employed by us during 2013 as our Senior Director, Business Analytics and Evaluation, and received total cash and equity compensation for the year ended December 31, 2013 equal to approximately $1,035,246 in cash compensation and $200,000 in restricted stock grants (value based on intrinsic value method). Ms. Fereday's employment was approved in accordance with the Related Party Transaction Policy and our Chief Executive Officer is not involved in the determination of Ms. Fereday's compensation. [Emphasis added.]
Why did her pay go up so much compared to that received in the previous year?

Furthermore, while Questcor derives a tremendous amount of revenue from the US government, a deal is in the works for it to be acquired by Mallinckrodt, now based in Ireland, which, if successful, will make top Questcor executives even richer, as Gretchen Morgenson wrote in the NY Times in June, 2014,

If the acquisition by Mallinckrodt goes through, Questcor’s top six executives could receive severance packages totaling $63.5 million under the terms of their contracts, the merger proxy shows.


During the time that adverse events involving Acthar have risen, Questcor’s top executives have been actively selling shares. So far this year, securities filings show, sales by the top five executives at the company, four of them under prearranged selling plans set up last year, have generated gains of $39 million.


As Andrew Pollack wrote in the first NY Times coverage of how Questcor used an old unproven drug to generate huge returns,

How the price of this drug rose so far, so fast is a story for these troubled times in American health care — a tale of aggressive marketing, questionable medicine and, not least, out-of-control costs.

 The sorry case of Questcor and Acthar reveal how crazy the costs of health care in the US have become, driven now by a system that itself now seems crazy.  Through clever use of regulatory loopholes, the company acquired rights to an old drug whose efficacy was unproven, hugely increased its price, began aggressive marketing even though the drug's efficacy was completely unproven, while remaining largely silent about the drug's substantial risks.  Fueled by hundreds of millions of dollars in revenue thus generated, mainly from the US government, the company richly rewarded its top hired executives, who then have decided to sell it to a company outside of the US in a deal that will make these executives millions more.  So patients received a drug whose benefits are unknown, and whose risks may be much higher than they were told, at a cost of hundreds of millions of dollars, much of it borne by US taxpayers, while company executives got rich.

Just coupling for now the story of how we spent hundreds of millions on Acthar to enrich company executives with the story that we have no money to develop vaccines or treatments for Ebola virus (look here) demonstrates the massive failure of our experiment to turn our health care system over to market triumphalists and laissez faire mercantilists.  As long as we let the health care system be run by people who put their own enrichment ahead of patients' and the public's health, things will only get crazier.  And even the rich may not be immune from the results of that craziness

So to repeat, true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.  So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.

Thursday, July 31, 2014

No Treatment or Vaccine for Ebola, but a $1000 Pill for Hepatitis C

The Ebola virus epidemic in West Africa continues to grow, and now appears to be the worst known epidemic of that disease to date.  In the US and Western Europe, press reports are now raising concerns that the disease could spread there.  For example, CNN, in an article entitled "Ebola Fears Hits Close to Home," was a section headed "Could Ebola spread to the US?" An ABC article was entitled, "How the US Government Could Evacuate Americans with Ebola."

Reasons for fear of spread are the increased mobility of people made possible by air travel, and the lack of specificity of early symptoms of Ebola, so infectious people may not realize the dangers their travel might pose.  A US citizen with Ebola was on his way back to the US via several connections, and made it as far as Lagos, Nigeria before becoming too ill to travel further (per CNN).  Making the fears worse are the high fatality rate of Ebola, the current epidemic included.  According to Vox, the current outbreak is the Zaire subtype of the virus, with an expected mortality rate of 68%.  Finally, there is no known effective treatment or vaccine for the Ebola virus.

Economics, not Science the Reason for Lack of Medical Options for Ebola

The reason there are no vaccines or treatments available for Ebola does not appear to be the scientific difficulty involved in developing them.  Vox also published a discussion for the economic genesis of the problem:

 Researchers have devoted lots of time to building a vaccine that could stop the disease altogether — and according to Daniel Bausch, a Tulane professor who researches Ebola and other infectious diseases, they're making really significant progress.

Bausch says that the obstacle to developing an Ebola vaccine isn't the science; researchers have actually made really great strides in figuring out how to fight back against Ebola and the Marburg virus, a similar disease.

'We now have a couple of different vaccine platforms that have shown to be protective with non-human primates,' says Bausch, who has received awards for his work containing disease outbreaks in Uganda. He is currently stationed in Lima, Peru, as the director of the emerging infections department of Naval Medical Research Unit 6.

The problem, instead, is the economics of drug development. Pharmaceutical companies have little incentive to pour research and development dollars into curing a disease that surfaces sporadically in low-income, African countries. They aren't likely to see a large pay-off at the end — and could stand to lose money.

Prof Bausch elaborated,

These outbreaks affect the poorest communities on the planet. Although they do create incredible upheaval, they are relatively rare events. So if you look at the interest of pharmaceutical companies, there is not huge enthusiasm to take an Ebola drug through phase one, two, and three of a trial and make an Ebola vaccine that maybe a few tens of thousands or hundreds of thousands of people will use.

Of course, that assumes that this outbreak, like previous ones, will remain relatively confined, at least to Africa.

The 10/90 Gap

So the implication is that had things been otherwise, those in developed countries now worried that Ebola could spread their way could have been reassured by the availability of a vaccine, or other treatment.

The irony, if that is the right word, is that we do not have an effective treatment or vaccine for a viral disease that is relatively easily spread, and could likely rapidly kill nearly 70% of those infected.  Yet in the last months, we have been arguing about how the use of an extremely expensive treatment for another viral disease that is difficult to spread, and may kill a few percent of its victims over up to 20 or 30 years after infection.

I am referring, of course, to Sovaldi, the recently announced $1000 pill for hepatitis C.  Hepatitis C does affect a lot of people, including relatively affluent people in developed countries.  As we noted previously, though, the majority of people infected with hepatitis C will never have serious medical repercussion from it.  Small proportions of patients will eventually develop severe liver disease, including cirrhosis, liver failure, and liver cancer, and may die from the disease.  (See the report by the Center for Evidence Based Policy). Yet the treatment is being promoted for all patients with hepatitis C, most of whom could not benefit from treatment.  Furthermore, the evidence that treatment will actually prevent bad clinical outcomes, cirrhosis, liver failure, liver cancer, and premature death, is weak (look here).   Yet considerable money was devoted to developing multiple hepatitis C treatments, with the expectation that huge amounts of money could be made from selling them.

This is an example of the 10/90 gap

A long time ago, in 1998, I was invited to Forum 2 of an organization called the Global Forum for Health Research  The GFHR was an organization dedicated to overcoming the "10/90 gap":

Less than 10% of the worldwide expenditure on health research and development is devoted to the major health problems of 90% of the population

Yet the 10/90 gap is probably getting worse.  In the US, our health care has now been heavily influenced by advocates of neoliberalism, or economism.  Health care is now largely run by generic managers trained in business schools, with no specific training or expertise in health care, and doubtful loyalty to its values.  Current business school dogma emphasizes the primacy of economic efficiency over all other goals (look here), to maximize "shareholder value," which usually practically means maximizing short term revenue, to the immediate advantage of shareholders sometimes, but nearly always to the great and immediate financial advantage of paid managers and executives.  The emphasis on short term revenue uber alles helps explain how we have multiple expensive hepatitis C drugs, and no Ebola drugs or vaccines.

The real irony is now that some very well paid managers may be worrying about the possibility of contracting Ebola whose transmission was facilitated by our increasingly global economy, globalized in part due to the advocacy of those advocating neoliberalism and economism.


Unfortunately, the fortunes of the Global Forum for Health Research seem to have faded.  It went into sudden decline in 2010, and was subsumed into COHRED, the Council on Health Research for Development.  The last Global Forum meeting was in 2012, although there seem to be plans for another next year.    Meanwhile, multiple international organizations. including Medicins Sans Frontieres, established a Drugs for Neglected Diseases initiative, although its progress seems to be slow (see Pedrique B, Strub-Wourgaft N, Some C et al.  The drug and vaccine landscape for neglected diseases (2000-11): a systematic assessment.  Lancet Glob Health 2013; 1: e371.  Link here.).

In my humble opinion, as long as much of the health care system is run so as to put short-term revenue ahead of all else, a manifestation of financialization encouraged by the generic managers who run so much of health, partly in their own self-interest, and by business schools promoting the shareholder value theory, we will not make much progress on the 10/90 gap.  Ironically, the realization that even rich generic managers may no longer be protected from some of the deadliest diseases that used to only afflict the poorest people in the world may have an effect on this problem.   

As I have said before,  true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.  So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.

ADDENDUM - This was re-posted on the Naked Capitalism blog