Friday, November 18, 2016

Trumping En Masse Through the Revolving Door - the Trump Advisory and Transition Teams

We have frequently posted on the revolving door as a type of severe conflict of interest, if not corruption, affecting health care.  Our posts have covered various cases of people going from influential positions in or related to health care and some anti-health corporations, and government positions that make health care policy or regulate health care. 

Donald J Trump, the president elect, has pledged to "drain the swamp," that is, to generally reduce crony capitalism, conflicts of interest, the revolving door, and government corruption (e.g., look here.)  However, it appears that his campaign advisory/ transition team has been full of people who had just traversed the revolving door.  Examples I have found so far follow, in alphabetical order.

Rich Bagger

Back in July, 2016, per BioCentury Extra

EVP of Consumer Affairs and Market Access Rich Bagger has taken a leave of absence from Celgene Corp to work on the transition team for presidential candidate Donald Trump....

Mr Bagger recently left the transition team, apparently as part of the purge of Chris Christie associates.  Celgene is a pharmaceutical company that was one of the leaders in pushing the envelope in drug pricing (upward that is, e.g., see this post). 

Stephen Feinberg

the co-founder of Cerberus Capital Management LP ... was relieved by Mr. Trump’s victory, a person familiar with the matter said. Mr. Feinberg came on board as an economic adviser [per the Wall Street Journal, November 10, 2016]

As we have discussed here, Cerberus Capital Management bought the former Caritas Christi Health system in Massachusetts, which it renamed Steward Health Care, and subsequently managed, or some would say mismanaged so that Cerberus could extract as much money as possible from Steward.

Mike Ferguson

Reported by Stat News, November 15, 2016,

Not long after Trump’s victory, the law firm where he works, BakerHostetler, circulated an email touting former Representative Mike Ferguson’s 'genuine connection' to Trump, Vice President-elect Mike Pence, and others on the transition team.

The message noted the firm’s 'in-depth relationships' with 'many people who are positioned for senior roles in the incoming administration' at the Department of Health and Human Services, Food and Drug Administration, and the Centers for Medicare and Medicaid Services.

Ferguson, a Republican who represented New Jersey for eight years, 'is in close contact with members of the Trump transition team during this critical time,' said the note. The law firm lobbies for Celgene (see above), Advaxis, and the Children’s Hospital Association — and is ready for more customers. 
 Newt Gingrich

Former House Speaker Gingrich early on was chosen as a Trump insider. Not so well known are his previous health care activities, including financial ties to big health care corporations. As we posted in 2011, Mr Gingrich set up a for-profit consulting group, the Center for Health Transformation, which

brought in dues of as much as $200,000 per year from insurers and other health-care firms, offering some of them 'access to Newt Gingrich' and 'direct Newt interaction,' according to promotional materials. [per the Washington Post]

As we noted then,  The Center for Health Transformation was largely funded by big health care corporations. The Post first noted,

The biggest funders, ... [included] firms such as AstraZeneca, Blue Cross Blue Shield and Novo Nordisk,...

The center has listed scores of firms and industry groups as members over the years, amounting to a Who’s Who of the medical field, from GE Healthcare to the American Hospital Association to Wellpoint, [now Anthem] the nation’s largest health insurer.

Other clients were listed in a Bloomberg article,
Among the member companies were drugmaker Johnson & Johnson (JNJ) and health insurer Blue Cross and Blue Shield Association....

Pfizer Inc. (PFE), the world’s largest drugmaker, had consulting contracts with Gingrich, according to two people familiar with the arrangements. Pfizer spokesman Ray Kerins didn’t respond to requests for comment.

The Pharmaceutical Research and Manufacturers of America, the industry’s trade group, was also a client. His firm 'was retained by the PhRMA general counsel’s office at one time to provide advice on a positioning project,' the group said.
In addition, clients included important firms in the health care information technology (IT) sector, including GE, IBM, Microsoft, Allscripts, and Siemens.

We also then wrote about several cases in which Mr Gingrich apparently intervened on behalf of his clients to promote their business interests in the guise of promoting his views on health policy solutions.  In some cases, the views he promoted did not fit with what is generally regarded as his political philosophy, suggesting that the interests of his paying clients overrode his political views.[again, see this post]

Note that we have discussed the managerial, ethical and sometimes criminal misadventures of many of the companies listed above (see the links above for specific firms).  

Rudolph Giuliani

Mr Giuliani, like Mr Gingrich, early on became a close Trump adviser. Per the New York Times, November 15, 2016, Mr Giuliani's consulting firm's clients included Purdue Pharma,

Under contract with Purdue Pharma, the maker of the often-abused painkiller OxyContin, Mr. Giuliani used his clout with the Justice Department to press the federal authorities to offer a less onerous punishment to the company after allegations that security problems at its warehouses might have contributed to black market sales.
We have discussed, and others have discussed more extensively, the saga of Purdue Pharma, which aggressively and deceptively marketed the narcotic OxyContin, doubtless contributing to the deadly epidemic of prescription opioid abuse.

J Steven Hart

Hart, an attorney and accountant who perennially appears on lists of top D.C. lobbyists, is chairman of the law and lobbying firm Williams & Jensen [per the National Law Journal, November 10, 2016]

Hart joined Williams & Jensen in 1984 and became chairman in 1999. At the firm, he has lobbied for many Fortune 500 companies. In 2016 alone, according to filings from the U.S. Senate Lobbying Disclosure Act database, Hart’s clients have included General Electric Co., Coca-Cola Co., Pfizer Inc. and Visa Inc.

More clients of his firm include giant health insurance/ managed care company Anthem, and PhRMA, the association of pharmaceutical manufacturers, per Politico, November 11, 2016

Cindy Hayden

Trump's Homeland Security team ... is being led by Cindy Hayden, a director at the US tobacco giant Altria [per the Business Insider, November 11, 2016]

Given the well known health risks of smoking, Altria could just as well be called an anti-health care company.  As a member of its board of directors, Ms Hayden has a fiduciary responsibility to increase the company's revenue. 

Howard Lorber

Back in August, per the Washington Post, Mr Trump announced a list of core economic advisers that included Mr Lorber, "chief executive of the Vector Group." Per the company website, the Vector Group Ltd is a holding company that holds primarily tobacco companies:

Through our subsidiaries, Liggett Group LLC and Vector Tobacco Inc., we manufacture and market high quality cigarette products to adult smokers in the United States. Vector Group also owns New Valley LLC.

Vector Group’s tobacco subsidiaries have a proud history of charting an independent course in the tobacco industry, dating from Liggett’s founding in 1873.


We have also developed our e-cigarette brand, Zoom, which we believe is a superior disposable e-cigarette product.

As noted above, tobacco companies could easily be called anti-health care companies.  The more use of tobacco, the more the public health risk.  Yet Mr Lorber's job is to increase the company's revenue, and hence, presumably the use of tobacco. 

Betsy McCaughey

As reported by NPR in August, Mr Trump added a group of women to his economic advisory team. They included,

New York Lt. Gov. Betsy McCaughey, who wrote several influential but highly controversial articles criticizing Hillary Clinton's health care proposals in the 1990s, is also on the list. More recently, she has written books taking on the Affordable Care Act.

As we noted in a post in 2009, in an op-ed column for Bloomberg News that got wide attention, Betsy McCaughey, who is described as, "former lieutenant governor of New York and is an adjunct senior fellow at the Hudson Institute," attacked as "dangerous" provisions in the new Affordable Care Act (ACA, "Obamacare") which supported comparative effectiveness research.  However, not noted in Betsy McCaughey's op-ed article was that she ... [was] on the board of directors of Cantel Medical, a device company, and formerly on the board of Genta, a biotechnology company.

Furthermore, per an August article in the Huffington Post,

Betsy McCaughey built a career out of saying bombastic, completely false things about health care reform. She is reviled by actual health care policy analysts from the left, right and center for spreading frightening, but demonstrably false, misinformation while adopting the tone and posture of a serious expert.

In 1994, she claimed that Hillary Clinton’s health care reform plan would bar people from purchasing care outside the new Clinton system, which would cruelly ration treatments to curb costs. It wasn’t true. The magazine that published the article would later disavow it.

Here’s what she said about Obamacare in 2009:

'One of the most shocking things I found in this bill, and there were many, is on page 425, where the Congress would make it mandatory ― absolutely require ― that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner ... all to do what’s in society’s best interest or your family’s best interest and cut your life short. These are such sacred issues of life and death. Government should have nothing to do with this.'

Pretty scary! And totally untrue. Completely, 100 percent false. Zero correspondence with reality. But McCaughey’s nonsense took off. She made the same claim in op-eds for The Wall Street Journal and the New York Post. When Sarah Palin picked up the idea, the mandatory meetings morphed into “Obama’s death panel.” Conservative media and Republican politicians went wild.

Paula Stannard

According to Stat News, November 15, 2016, Ms Stannard served

in the last Republican administration as deputy general counsel to the Department of Health and Human Services.

She was responsible for food and drug issues and other matters, including federal health insurance and public health preparedness. On the Trump transition, she will be working under Bremberg.

However, her firm

has earned more than $4.4 million lobbying so far this year for health care companies and trade groups including Novartis AG, Verax Biomedical, the American Hospital Association, St. Jude Children’s Research Hospital, and Aetna — plus an untold amount doing legal and regulatory work, which does not have to be reported. 

Re her position in the transition team, Stat News quoted Dr Michael Carome, who runs the Health Research Group for Public Citizen,

I think this reflects the fact that Trump’s pledge to drain the swamp is not going to take place. Individuals who have close ties to regulated industries such as pharmaceuticals is worrisome, because such individuals are likely to pursue an agenda that is very industry friendly and not consumer and patient friendly.... 

Tommy Thompson

Also according to Stat News, November 15, 2016, Mr Thompson, a former Secretary of Health and Human Services under President George W Bush, served

as a founding member of the Bush Alumni Coalition Supporting Trump, which launched in late September. (Very late.)

Thompson, who ran the group, served as governor of Wisconsin from 1987 to 2001. He was also a partner at Akin Gump Strauss Hauer & Feld, which lobbies for the American Medical Association, PharmAthene, and the Alliance for a Stronger FDA, among other health care concerns.

Thompson’s participation could also be good news for the health care companies whose boards he serves on: Centene, United Therapeutics, and TherapeuticsMD. He is a former director of Cytori Therapeutics.
Note again that we have previously discussed managerial, ethical, and sometimes criminal misadventures of some of the companies with which Mr Hart, Ms McCaughey, Ms Stannard, and Mr Thompson were affiliated (see the links to the companies noted in the discussions above.)


Donald Trump's candidacy seemingly was welcomed by many people who really thought he would be an economic reformer.  They thought he would address the plight of poor, working and middle class people, who saw their incomes stagnant or falling, had trouble finding decently paying jobs, may have lost their jobs and/or their housing, saw their communities hollowed out, and generally felt the system was rigged against them. Even some health care professionals saw Mr Trump as a reformer of a rigged health system. For example, in July, 2016, Stat News published an editorial by Dr Charles D Rosen:

As a physician, I believe that Trump is absolutely right about allowing cheaper pharmaceutical drugs manufactured abroad to be sold in the United States. He is right that the pharmaceutical companies essentially sell their products to the federal government via Medicare and Medicaid without competitive bidding. In other areas of the budget, such as defense, federal laws require competitive bidding. It is outrageous this doesn’t occur with drugs and devices, especially since the health care budget is right behind defense in terms of expense.

Trump is right when he says that drug companies control the landscape. He appears to be willing to call it as it is and not worry about repercussions from the powerful drug interests, and has moved in the right direction in saying he would let Medicare negotiate with pharmaceutical companies if he becomes president.

However, by November 15, 2016, as reported by the Los Angeles Times,

the president-elect appears to have downgraded plans to act aggressively to control rising drug prices, handing the pharmaceutical industry an early victory and providing another illustration of the influence of lobbyists on the new Trump administration, despite Trump’s promise to 'drain the swamp' of special interests in Washington.

Trump, who once made the cost of pharmaceuticals a central part of his campaign healthcare pitch and included the issue on his campaign website, hasn’t mentioned the subject since the election, even though the issue is consistently cited as the top healthcare problem Americans want to see fixed.

And Trump’s transition healthcare agenda makes no mention of drug prices, though it lists six other healthcare priorities, including restricting abortion, speeding federal approval of new drugs and restructuring Medicare and Medicaid.

So like Dr Phil used to say, how is it working for you now, Dr Rosen?

Mr Trump seemed to promise economic reform, and to "drain the swamp" or Washington crony capitalism, insider dealing, conflicts of interest, and corruption.  But at least in the health care sphere, many of his cronies on his advisory and transition teams seem to be rotators through the revolving door, having gone from being corporate insiders to being political advisers.  

And as we noted previously, the revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,
The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.
The case of the Trump transition once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry.

So, as we have said before.... The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

But did we really think the self-proclaimed billionaire and former star of The Apprentice was going to be a reformer?  After all, its theme song was "For the Love of Money"

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