Wednesday, August 10, 2016

How the System is Rigged - Johnson and Johnson Board Member Pretends to be Independent Brookings Institution Scholar

Fears that "the system is rigged" may cause the lack of trust marring this year's political season. These fears are not baseless.

Dr McClellan of the Brookings Institution on Drug Prices

A recent series in the New York Times focused on the biases of the think tank "independent scholars" whose work is used to justify much policy making.  An article entitled "Think Tank Scholar or Corporate Consultant? - It Depends on the Day" actually provided a health care example that was much worse than what the title implied.

It noted that

Dr. McClellan, a former commissioner at the Food and Drug Administration who until January was a senior fellow at Brookings, has been a go-to expert for the federal government as it debates how to cope with surging costs of prescription drugs.

In particular, Dr McClellan has opined on the increasingly recognized problem of ever-rising drug prices, and on one class of drugs that we have discussed on Health Care Renewal.

At public events, Dr. McClellan emphasized the extraordinary progress by the pharmaceutical industry in coming up with treatments for diseases like diabetes, H.I.V. and hepatitis C.

'Lots of diseases have been transformed,' Dr. McClellan said at a hearing in November sponsored by the Department of Health and Human Services. He ran through a series of slides prominently stamped with Brookings’s name. He also argued that even though these drugs were very expensive, they were worth it given the improvement in a patient’s quality of life.

'They are, over all, a pretty good deal,' Dr. McClellan said, referring to treatments for hepatitis C. One such drug, manufactured by Johnson & Johnson, generated $2.3 billion in sales in its first full year, representing about 7 percent of the company’s overall drug sales in 2014. The pills cost $66,000 for a standard 12-week regimen.

Little Evidence that New Drugs for Hepatitis C Represent "Extraordinary Progress?"

Note that despite Dr McClellan's enthusiasm, there is no good data from clinical trials that show that the new drugs for hepatitis C have long-term clinical benefits.  As we wrote here last month....

In fact, starting in March, 2014, we have posted about the lack of good evidence from clinical research suggesting these drugs are in fact so wondrous.  The drugs are now touted as "cures," at least by the drug companies, (look here), and physicians are urged to do widespread screening to find patients with asymptomatic hepatitis C so they can benefit from early, albeit expensive treatment.

However, as we pointed out (e.g., here and here)
-  The best evidence available suggests that most patients with hepatitis C will not go on to have severe complications of the disease (cirrhosis, liver failure, liver cancer), and hence could not benefit much from treatment.
-  There is no evidence from randomized controlled trials that treatment prevents most of these severe complications
-  There is no clear evidence that "sustained virologic response," (SVR), the surrogate outcome measure promoted by the pharmaceutical industry, means cure. 
-  While the new drugs are advertised as having fewer adverse effects than older drugs, it is not clear that their benefits, whatever they may be, outweigh their harms.

Furthermore, health care professionals and researchers with heftier credentials in clinical epidemiology and evidence based medicine than mine have since published similar concerns.  These included
- a report from the German Institute for Quality and Efficiency in Health Care (the English summary is here)
- an article in JAMA Internal Medicine from the Institute for Clinical and Economic Review (1)
- a report from the Center for Evidence-Based Policy (link here)
- an article in Prescrire International (2)

These publications and your humble scribe noted that the clinical trials or other types of clinical research about new hepatitis C treatment published in the most prominent journals had numerous methodologic problems that all seemed likely to make the new drugs look better, perhaps intentionally.  (See posts herehere, and here.)

In July, 2016 we had written about the enthusiasm for these drugs expressed by Mr Bill Gates, chairman of the Gates Foundation.  Maybe one can somewhat excuse Mr Gates, who is hardly a clinical research expert, for this unjustified enthusiasm.  (Although maybe someone at his foundation, given its emphasis on global health, should have briefed him to the contrary.)

Why Was Dr McClellan So Unjustifiably Enthused?

Give Dr McClellan's background, why was he not more skeptical about the the supposed miraculous properties of hepatitis C drugs?.  His biography, provided for the US Department of Health and Human Services Pharmaceutical Forum, suggested he ought to know something about clinical research.  It stated,  

Mark McClellan, MD, PhD, is a senior fellow and director of the Health Care Innovation and Value Initiative at the Brookings Institution. Within Brookings, his work focuses on promoting quality and value in patient centered health care, and he leads the Richard Merkin Initiative for Payment Reform and Clinical Leadership.

A doctor and economist by training, he also has a highly distinguished record in public service and in academic research. Dr. McClellan is a former administrator of the Centers for Medicare & Medicaid Services (CMS) and former commissioner of the U.S. Food and Drug Administration (FDA), where he developed and implemented major reforms in health policy. These include the Medicare prescription drug benefit, the FDA’s Critical Path Initiative, and public-private initiatives to develop better information on the quality and cost of care. Dr. McClellan chairs the FDA’s Reagan-Udall Foundation, is co-chair of the Quality Alliance Steering Committee, sits on the National Quality Forum’s Board of Directors, is a member of the Institute of Medicine, and is a research associate at the National Bureau of Economic Research. He previously served as a member of the President’s Council of Economic Advisers and senior director for health care policy at the White House, and was an associate professor of economics and medicine at Stanford University.

From time to time, McClellan advises U.S. government officials on health care policy issues. In his capacity as a health policy expert, he is the co-director of the Bipartisan Policy Center’s Leaders’ Project on the State of American Health Care; co-chair of the Robert Wood Johnson Foundation Commission to Build a Healthier America; and chair of the FDA’s Reagan-Udall Foundation. McClellan is also co-chair of the Quality Alliance Steering Committee, sits on the National Quality Forum’s Board of Directors, is a member of the Institute of Medicine of the National Academy of Sciences, and is a research associate at the National Bureau of Economic Research.

McClellan holds an MD from the Harvard University–Massachusetts Institute of Technology (MIT) Division of Health Sciences and Technology, a PhD in economics from MIT, an MPA from Harvard University, and a BA from the University of Texas at Austin. He completed his residency training in internal medicine at Boston’s Brigham and Women's Hospital, is board-certified in Internal Medicine, and has been a practicing internist during his career.

However, that biography left out one important item.  Per the NY Times article,

There was no mention in a video of the event that Dr. McClellan joined Johnson & Johnson’s board of directors in October 2013, or that he earned nearly $530,000 over the past two years in overall compensation from the company. That is in addition to his salary at Brookings, where he is one of the top-paid scholars, with $353,145 in wages and other compensation from the think tank in 2014, tax records show.

I suspect that most attendees at the conference had not read our 2013 post on Health Care Renewal that noted Dr McClellan's transit through the revolving door that ended up with his position on the Johnson & Johnson board.

Dr McClellan's Chronic Failure to Disclose His Johnson and Johnson Board Membership

Despite the fact that Dr McClellan's position on the Johnson & Johnson board of directors is public, as are the identities of all the members of US publicly held corporations, Dr McClellan has seemingly made a point of avoiding its mention when he assumes the persona of health care policy expert.

For example, he did not disclose it in some recent publications on aspects of health policy that likely would relate to Johnson & Johnson's interests.  These included:
- a 2014 Brookings report entitled "Improving Health Care While Reducing Cost Growth: What is Possible?"(3) in which he is only described as "Director, Health Care Innovation and Value Initiative, Senior Fellow, Economic Studies; The Brookings Institution."
- a 2014 article on "Health Reform and Physician-Led Accountable Care" in JAMA(4) which simply noted Dr McClellan came from the Brooking Institution, and which contained the assurance that all authors completed "the ICMJE Forum for Disclosure of Potential Conflicts of Interest and none were reported."
- a 2015 article on increasing "pharmaceutical innovation" in Health Affairs(5) which similarly only described Dr McClellan as "senior fellow and director of the Health Care Innovation and Value Initiative at the Engelberg Center for Health Care Reform at Brookings."

Furthermore, Dr McClellan's new employer, Duke University, currently provides a biography which also omits any mention of his position on the Johnson & Johnson board.

Dr McClellan Denies any Conflict of Interest

The NY Times article suggested that Dr McClellan may think his position at Johnson & Johnson is irrelevant to his day job as health policy expert.

Dr. McClellan, in a statement, disputed any suggestion that he might have had a conflict.

'My entire career in academics, government and public policy has focused on evidence-based ways to improve health and restrain costs for consumers, and my extensive track record speaks for itself,' he said.

I suppose that Dr McClellan might have justified his failure to disclose his membership on the Johnson & Johnson board of directors by his perception that this membership caused no conflict of interest.

How Board Membership May Cause Severe Conflicts of Interest

I will omit detailed discussion of all the evidence that even receiving small gifts may affect thinking and actions through the social obligation to reciprocate.  Yet Dr McClellan did not just receive small gifts.  He is a member of a corporate board of directors.

 In 2006, we first noticed that leaders of academic medicine also were serving as board members of large for-profit health care corporations.  The first example we discussed was that of Marye Anne Fox, Chancellor (equivalent to president) of the University of California - San Diego, and hence the person to whom the University of California, San Diego School of Medicine and its academic medical center report. The conflict was between this position, and her service as a member of the board of directors of Boston Scientific, a medical device manufacture, and the board of directors of Pharmaceutical Product Development Inc., a contract research organization.

Later that year, we discussed a "new species of conflict of interest."  At that time we wrote:

Medical schools and their academic medical centers and teaching hospitals must deal with all sorts of health care companies, drug and device manufacturers, information technology venders, managed care organizations and health insurers, etc, in the course of fulfilling their patient care, teaching, and research missions. Thus, it seems that service on the board of directors of a such public for-profit health care company would generate a severe conflict for an academic health care leader, because such service entails a fiduciary duty to uphold the interests of the company and its stockholders. Such a duty ought on its face to have a much more important effect on thinking and decision making than receiving a gift, or even being paid for research or consulting services. Furthermore, the financial rewards for service on a company board, which usually include directors' fees and stock options, are comparable to the most highly paid consulting positions. What supports the interests of the company, however, may not always be good for the medical school, academic medical center or teaching hospital.

As Robert AG Monks put it, board members must "demonstrate unyielding loyalty to the company's shareholders" [Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]  (Of course, after the global financial collapse of 2008 made us sadder and a little wiser, we realized that many board members actually seem to have unyielding loyalty to their cronies among top management.)  However, in any case, the stated or actual interests of a member of the board of a health care corporation, like a pharmaceutical company or medical device company, could be very different and at odds with the mission of not only academic medical institutions, but of think-tanks professing to provide unbiased policy relevant research.

Presumably, were Dr McClellan in a situation in which he had an opportunity to promote Johnson & Johnson's interests, such as speaking at an influential conference about drug prices, and failed to uphold the company's interests, stockholders could consider legal action against him for failing in his fiduciary responsibilities.  Thus the mind boggles at how Dr McClellan could believe that his role as a corporate director does not pose a conflict of interest for him in his better publicized role as think tank and now academic health care policy expert.


It is hardly news that US health care is broadly dysfunctional, that it suffers from ever rising costs, and questionable quality, while access has only somewhat improved after the 2009 Affordable Care Act.  The big question is why these problems seem so intractable.

Our latest case illustrates that the problem may be that health policy making is dominated by people with conflicts of interest.  In the current case, one of the more influential voices on health care policy turns out not to have just a garden variety conflict of interest.  He actually has a duty to uphold the corporate interests of one of the biggest US drug, biotechnology and device companies.  Could one really expect such a man would have a serious interest in controlling health care costs, especially those driven by the prices charged by drug, biotechnology, and device makers?

A system in which the top "independent" health policy experts may have conflicts of interest, may even be members of boards of directors of health care corporations, certainly suggests a system that has been rigged. 

As we have said again and again, the web of conflicts of interest that is pervasive in medicine and health care is now threatening to strangle medicine and health care.  Furthermore, this web is now strong enough to have effectively transformed US health care into an oligarchy or plutocracy.  Health care is effectively run by a relatively small group of people, mainly professional managers plus a few (lapsed?) health care professionals, who simultaneously run or influence multiple corporations and organizations.

For patients and the public to trust health care professionals and health care organizations, they need to know that these individuals and organizations are putting patients' and the public's health ahead of private gain. Health care professionals who care for patients, those who teach about medicine and health care, clinical researchers, and those who make medical and health care policy should do so free from conflicts of interest that might inhibit their abilities to put patients and the public's health first.

Health care professionals ought to make it their highest priority to ensure that the organizations for which they work, or with which they interact also put patients' and the public's health ahead of private gain, especially the private gain of the organizations' leaders and their cronies.


1. Ollendorf DA, Tice JA et al. The comparative clinical effectiveness and value of simeprevir and sofosbuvir in chronic hepatitis C viral infection. JAMA Intern Med 2014;174(7):1170-1171. Link here.
2. Sofosbuvir (Sovaldi), active against hepatitis C virus, but evaluation is incomplete. Prescrire Int 2015; 24: 5- 10. Link here.
3.  McClellan M, Rivlin AM. Improving Health Care While Reducing Cost Growth: What is Possible?
Engelberg Center for Health Care Reform at Brooking; 2015.  Link here.
4.  Mostashari F, Sanghavi D, McClellan M. Health reform and physician-led accountable care: the paradox of primary care physician leadership. JAMA 2015; 311: 1855-56.  Link here.
 4.  Daniel GW, Caze A, Romine MH, Audibert C, Leff JS, McClellan M. Improving pharmaceutical innovation by building a more comprehensive database on drug development and use.  Health Aff 2015; 34: 319-327.  Link here.

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