Wednesday, January 31, 2007

FDA Conflicts of Interest Update

Quite a few stories have appeared of late about conflicts of interest affecting the US Food and Drug Administration (FDA). Some are worth updating.

Former FDA Commissioner Crawford to be Sentenced

We posted about the guilty plea provided by former FDA Commissioner Lester Crawford for lying about his family's ownership of stocks in food, beverage, and medical device companies regulated by the FDA. According to the Associated Press (via AZCentral here), Crawford is now about to be sentenced.

Former FDA Commissioner Lester Crawford faces fines that exceed what the veterinarian and food safety expert earned from illegally held stocks he repeatedly lied about owning.

Under a deal worked out between his attorney and federal prosecutors, Crawford agreed to a $50,000 fine and probation.

Crawford pleaded guilty in October to charges of having a conflict of interest and false reporting of information about stocks that he and his wife owned. The stocks were in food, beverage and medical device companies that Crawford regulated while head of the Food and Drug Administration.

Crawford and his wife, Cathy, made roughly $39,000 from exercising options and in dividends from the stocks they held in the FDA-regulated companies.

In court, Crawford admitted to falsely reporting that he had sold or did not own stock when he continued holding shares in the firms governed by rules of the FDA, which is illegal. Beginning in 2002, Crawford filed seven incorrect financial reports with a government ethics office and Congress, leading to the misdemeanor charges.
Congress to Investigate Possible Conflicts Involving FDA Information Technology

We also posted about how the FDA awarded a big internal information technology contract to a company called Platinum Solutions, one of whose executives was married to the FDA official who was initially in charge of the data systems branch of the FDA under which the contract was let.

Last week the Los Angeles Times reported that the leaders from both parties of the US House Energy and Commerce Committee have opened an enquiry of the contract given to Platinum Solutions, and the FDA internal investigation of the contract that apparently found no fault with the process.

Coupled with recent stories about conflicts of interest affecting FDA expert panels (e.g., see this post), these exemplify how the web of conflicts of interest have affected the leadership of every kind of health care organization. Keep in mind that although the two cases above may involve negative incentives for those involved, such conflicts are not illegal, and may often proceed unimpeded in US for-profit and not-for-profit health care organizations.

If we want health care organizations to put health care first, ahead of the personal financial interests of their leaders, we will have to develop stronger negative incentives for this kind of behavior, inside or out of government.

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