Follow the Money: Nominee for Secretary of Health and Human Services Traded Health Care Stocks and Owned Tobacco Stocks While in Congress

At least the US president-elect seems to be making the problems of conflict of interests and health care corruption less anechoic.

Dr Price's Stock Portfolio

The latest relevant big story was first picked up by Sheila Kaplan writing in Stat. It seems that Dr Tom Price, once a practicing orthopedic surgeon, then a Congressman, and now Mr Trump's pick for Secretary of DHHS, owned and owns lots of health care related stocks:

his stock portfolio includes investments in pharmaceutical, medical device, and health insurance companies, the heart of the industries he would be overseeing as secretary.

In particular,

Among Price’s holdings are some in Innate Immunotherapeutics, Ltd., a biomedical company in which another lawmaker is a major shareholder. According to his financial disclosure statements, on Aug. 31 he bought between $50,001 and $100,000 worth of stock the firm.

Representative Chris Collins, a New York Republican, is a director of the company, which develops drugs to treat multiple sclerosis. He lists assets in the firm worth between $5,000,001 and $25 million. Price also purchased a smaller amount of stock in Innate Immunotherapeutics in 2015.

Collins is also a member of Trump’s transition team.

In March, Price invested between $1,001 and $15,000 in Amgen; Eli Lilly and Co.; Pfizer; Biogen; Bristol-Myers Squibb; Zimmer Biomet, a medical device company; Aetna; and Athenahealth. Also that month, Price sold the same amounts in Gilead, Abbott Laboratories, and Thermo Fisher Scientific.

So for readers of Health Care Renewal, this is very familiar.  We have discussed ad infinitum the conflicts of interest that may affect physicians, particularly due to financial relationships with big health care corporations.  The issue is that physicians swear oathes to put the health of their individual patients first, and to support the public health in general.  Yet the interests of, for example, drug, biotechnology, device companies may be at odds with this primary mission.  Such companies in this age of promoting "stock holder value" may primarily be about increasing revenue by selling as much of their products as they can, and let the Devil take the hindmost.  Yet physicians ought to use drugs and devices judiciously, and only when their benefits for individual patients outweigh their harms.  The concern is that physicians who have financial interests in such and other health care related companies may consciously or unconsciously allow their professional decisions to be influenced by their personal financial advantage.


Dr Price appears to be a member of the US House of Representatives full time, and no longer a practicing physician.  But he has not relinquished is Georgia medical license (look here).  So he should still be bound by his oath as a physician.

Dr Price's Active Stock Trading

But wait, there's more.  Last week, the Wall Street Journal noted that Dr Price was not simply a long-term owner of stocks, he was an active trader.   

President-elect Donald Trump’s pick to run the Health and Human Services Department traded more than $300,000 in shares of health-related companies over the past four years while sponsoring and advocating legislation that potentially could affect those companies’ stocks.

Rep. Tom Price, a Georgia Republican, bought and sold stock in about 40 health-care, pharmaceutical and biomedical companies since 2012, including a dozen in the current congressional session, according to a Wall Street Journal review of hundreds of pages of stock trades he filed with Congress.

In the same two-year period, he has sponsored nine and co-sponsored 35 health-related bills in the House.

His stock trades included Amgen Inc., Bristol Myers Squibb Co., Eli Lilly & Co., Pfizer Inc. and Aetna Inc.

This raises more issues.  First, that Dr Price was actively trading these stocks suggests that his financial holdings might have been more salient to him than, say, a long-term investor who just buys stocks and puts them away in a retirement portfolio.  This increases the likelihood that his stock holdings, and their recent performance, may well have influenced his decision making.

Moreover, this emphasizes that we should be concerned not so much about the effect of financial relationships on Dr Price's clinical decisions - in fact, it appears that he is a full time Congressman, and hence is not practicing - but on his decision making as a national legislator with considerable influence on health policy and the public health.  As a congressman, Dr Price also took an oath to "support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion, and that I will well and faithfully discharge the duties of the office on which I am about to enter."  So the concern is that the immediate profitablity of his actively traded stock portfolio might influence how Dr Price legislates.


As the WSJ article noted,

Mr. Price, an orthopedic surgeon who chairs the House Budget Committee, has played an influential role in shaping health legislation. He sits on the Ways and Means Committee’s health panel, which oversees Medicare. He also is a member of the Republicans’ Congressional Health Care Caucus that has called for repeal of the Obama administration’s landmark health overhaul.

Beyond just the issue of conflict of interest is that of Dr Price's apparent comfort with the ethical and sometimes criminal track records of the companies from whose stocks he appears to have profited.  We on Health Care Renewal have been documenting the ethical misadventures, and sometimes crimes committed by large health care organizations which claim they operate for the good of patients and the public, but seem more to operate for the benefit of their insiders, particularly top management.  Many of the companies held by Dr Price have lengthy lists of such bad behavior.  See the links above to some  individual companues for many more, sometimes sordid details.

If Dr Price, who is not only a physician but a legislator with significant influence on health policy, is unaware of these companies' track records shame on him.  If he owned these stocks with full knowledge of the companies' track records, more shame on him.

Dr Price's Tobacco Stocks

But wait, there's more. 

The WSJ article also noted:

Mr. Price also has traded in shares of ... tobacco stocks, including Altria Group Inc., whose products are regulated under the Food and Drug Administration, a part of HHS.

An article in Wired implied that Dr Price's tobacco holdings may have affected his legislative decision making.  Price voted against

a law that now requires the FDA to regulate tobacco as a drug.

That now goes beyond just a relatively simple set of conflict of interest issues. At least drug, biotechnology, and device companies make products meant to benefit patients and the public's health, if used properly and judiciously.  For that matter, insurance companies, like Aetna, are supposed to help patients afford needed medical care.

But tobacco companies are different.  Although they are legal in the US, there is overwhelming evidence that their products are harmful to health, and this harm is not outweighed by any health benefits, nor any benefits to society other than the money tobacco companies can make from them.  Most doctors now would recommend their patients stop smoking and, if they are not smoking, never start to smoke.  It is extremely hard to reconcile Dr Price's professional status and his ownership of tobacco stocks.

A physician legislator with a powerful role in health policy owning tobacco stocks may appear to be abusing his entrusted power for private gain.  That is the ethical definition of corruption used by Transparency International (although it is not a legal definition.)  No wonder that in a commentary in New York Magazine on Dr Price's stock holdings suggested that they mean in Dr Price's eyes

The appearance of corruption is totally fine.

Conclusions


Mr Trump's ongoing behavior does have some silver linings.  It is making the public more aware of the dangers of conflicts of interest and corruption, not just in health policy or health care. And it is also making the public aware how we have to follow the money, all the money that flows around our new plutocrat-in-chief to be, and his rich and well connected cronies.

If we cannot restrain the increasing pile of conflicted and possibly corrupt political appointments, we will be in for much worse than the health care dysfunction Health Care Renewal has been lamenting for more than 10 years.  

DeVry Education Group, Owner of American University of the Carrbbean and Ross University Schools of Medicine, Settles Allegations of Deceptive Marketing

The parade of legal settlements made by large health care organizations just keeps stepping along.  The latest entry in it was DeVry Education Group, which owns two for-profit offshore (from the US and Canada) medical schools: American University of the Caribbean School of Medicine, and Ross University School  of Medicine.

The Case

In early 2016, we first discussed the deceptive marketing charges against DeVry University and DeVry Education Group here.  The charges have now been settled. The lede of the AP story about the settlement (via ABC News) was:

DeVry University and its parent company are paying $100 million to settle a federal lawsuit alleging the school misled students through deceptive ads.

The allegations that led to the settlement were:

The lawsuit focused on two marquee ad claims that DeVry used for years but dropped in October in a settlement with the U.S. Education Department.

Since at least 2008, the chain had advertised that 90 percent of its graduates who actively sought employment landed jobs in their field within six months of graduation.

But federal investigators found that DeVry was counting students who found jobs outside the fields they studied, and who already had jobs before they enrolled.

Included in the statistic was a graduate who studied in the health care field but found work as a restaurant server and another who worked as a car salesman, according to the FTC lawsuit.

The commission also challenged a claim that DeVry graduates earn 15 percent more than alumni at other schools a year after graduation.

So these were relatively straightforward allegations of deceptive marketing. The penalties included fines for the company as a whole.

Under the settlement, DeVry agreed to pay more than $49 million to the FTC, which says it will distribute the money to students 'harmed by DeVry's conduct.'

The chain also agreed to forgive more than $30 million in loans issued before September 2015, and $20 million in debt owed by former students.

Also,

Going forward, DeVry has promised not to misrepresent job and income prospects of potential students, and not to count jobs that students found more than six months before graduation.

That seems a bit strange, because

officials for Devry, which is based in Downers Grove, Illinois, denied all wrongdoing but said they are 'pleased this matter is reaching resolution.'

If there was no wrongdoing, why did they need to pledge no further wrongdoing? In fact, if there was no wrongdoing, why did company management agree to pay $100 million? It seems to me that if there was no good evidence supporting the charges, the company could have defended the suit for a lot less than that.

Of course, the managers knew that the settlement would be paid by other peoples' money. As is usually the case nowadays, it did not include any negative consequences for any company managers who might have enabled, authorized, directed or implemented any deceptive marketing.

The Implications

So once again we have an example of a legal settlement involving a large, US based health care related - at least in part - organization.  The settlement involved allegations of unethical behavior that likely harmed students.  Yet the amount of the settlement amounted to a slap on the wrist for a corporation with over $1.8 billion in revenue (2015-2016, per Yahoo).  Furtheremore, the nature of the settlement demonstrated the continued impunity of managers of large health care organizations, none of whom in this case had to suffer any negative consequences, yet some must have enabled, authorized, directed or implemented the deceptive marketing. 

This case also raises even more questions about the American (and to some extent Canadian) reliance on offshore, for-profit medical schools to train many of their physicians.  As we have frequently discussed, (most recently here),...

 Admission to US medical schools is increasingly difficult.  So many who seek medical careers may be tempted to apply to schools outside the US.  In the last 30 years, American entrepreneurs have opened offshore medical schools, mostly in the Caribbean, that cater to US students.  They teach in English, and do not require immersion in an unfamiliar culture, so may be more attractive than medical schools in other countries whose mission is to educate physicians to practice in those countries. In 2010, Eckhert documented that the number of offshore medical schools, "for-profit institutions whose purpose is to train U.S. and Canadian students who intend to return home to practice," but not to train physicians to practice in the countries in which these schools are located, was rapidly growing.(1)  By 2010, there were 33 such schools, 20 of which were new since 2000.

Such offshore medical schools exist in a grey area.  The small countries or colonies in which they are located usually do not seek to regulate them, since the physicians they produce are going to practice elsewhere. There is no requirement that these offshore medical schools be accredited in the US.  Such  accreditation is currently not required for individual graduates of such schools to be admitted to US house-staff programs or for US licensure.  So perhaps it is not surprising that little is known about these schools.

How they choose students, the qualifications or even names of their faculty, their curriculum, how they supervise clinical training (which is mostly done by affiliated North American hospitals), and what happens to their graduates are obscure.  Eckhert attempted to describe what is known, but noted "variability exists in the availability of information on faculty; where data exists, it is noted that most of the permanent on-site basic science faculty are internationally trained, many have no documented medical education experience in the United States, and it is not uncommon for them to be OMS [offshore medical school] alumni."

Concerns about how offshore medical schools are run, and how well they educate their students can only be heightened by the settlement of the latest DeVry case.

The DeVry statement about the settlement included the assertion that "at no time has the academic quality of DeVry University education been questioned."  This is a bit disingenuous.  The case was brought by the Federal Trade Commission, which has no particular role overseeing educational quality, and was specifically about deceptive marketing.

One wonders, however, what sort of education might be provided by a large corporation whose corporate culture did not recoil from what appeared to be grossly deceptive marketing.

That statement also specifically only mentioned DeVry University, which is one of many for-profit "educational" organizations under the Devry umbrella (look here).  It said nothing about how such a corporate culture might affect educational quality at the other subsidiaries. 

It certainly did nothing to help answer questions that were previously raised about the two DeVry owned and operated for-profit medical schools.  In 2013, we posted about a Bloomberg investigative article about the two DeVry owned medical schools, at the American University of the Caribbean and Ross University.  The article focused on multiple issues:
-  high attrition rates of students compared to those in US based schools
-  inability of many students to complete clinical training in the customary two years
-  low rates of students matching to US residencies compared to US graduates
-  high costs for students, presumably a cause of their high levels of debt

Keep in mind that some of these concerns were based on statistics supplied by DeVry.  Yet now there is a new reason to be doubtful about their statistics, and any other information coming out of DeVry about its medical education offerings.  Furthermore, while Eckhert wrote in 2010 that the increasing presence of offshore medical graduates in the US "obligates U.S. medicine to take a closer look at these educational programs," no such scrutiny has occurred since then.

So, we see another aspect of the US health care system in which money seems to trump mission, facilitated by an unseemly alliance between wealthy corporate executives and bad US government policy.  We need to reexamine our fascination for "market based" approaches to health care, when almost nothing about any part of health care resembles, or could resemble a free market.  We need to make health care more transparent, and shine more sunshine on the nooks and crannies, like off-shore but US corporate owned medical schools.  We need to facilitate health care leadership and governance that puts patients' and the public's health first, way ahead of the personal enrichment of the participants.

This may be a pipe dream in 2016, since the US at least just voted in what seems to be the most market fundamentalist, plutocratic administration yet.  As the AP article noted, "some for-profit colleges see President-elect Donald Trump as a champion of the private sector who could spur a rebound for the [for-profit education] industry.  In the weeks after Trump's election, sharing in DeVry's parent company surged 30 percent."
 
Thus, as long as the US continues its light touch regulation if, or even further deregulates the outsourced offshore system which now educates increasing numbers of US doctors(2), Americans who want to become doctors ought to be very skeptical about the futures they may face if they choose to go to such offshore schools.

References

1.  Eckhert NL.  Private schools of the Caribbean: outsourcing medical education.  Acad Med 2010; 85: 622-630.  Link here.
2.  Eckhert NL, van Zanten M.  U.S.-citizen international medical graduates - a boon for the workforce? N Engl J Med 2015; 372: 1686-7.  Link here.

Suppose the Pope Condemned Health Care Corruption - and Hardly Anyone Noticed?

Introduction - Health Care Corruption as a Taboo Topic

We have frequently discussed outright corruption in health care as one of the most important causes of health care dysfunction.  Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report did not get much attention.  Since then, health care corruption has been nearly a taboo topic in the US.  When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects benighted less developed countries.  On Health Care Renewal, we have repeatedly asserted that health care corruption is a big problem in all countries, including the US, but the topic remains anechoic.

Yet somehow, a substantial minority of US citizens, 43%, seemed to believe that corruption is an important problem in US health care, according to a TI survey published in 2013 (look here).  But that survey was largely ignored in the media and health care and medical scholarly literature in the developed world, and when it was discussed, it was again in terms of results in less developed countries.  Health Care Renewal was practically the only source of coverage in the US of the survey's results.

"Corruption is Cancer to Health Industry, Pope Tells Hospital Staffers"

Yesterday, this story appeared in the Catholic News Service. It opened with:

VATICAN CITY (CNS) -- Corrupt business practices that seek to profit from the sick and the dying are a cancer to hospitals entrusted with the care of the most vulnerable, especially children, Pope Francis said.

Doctors, nurses and those who work in the field of health care must be defined by their ability to help their patients and be on guard against falling down the slippery slope of corruption that begins with special favors, tips and bribes, the pope told staff and patients of Rome's 'Bambino Gesu' children's hospital Dec. 15.

'The worst cancer in a hospital like this is corruption,' he said. 'In this world where there is so much business involved in health care, so many people are tricked by the sickness industry, 'Bambino Gesu' hospital must learn to say no. Yes, we all are sinners. Corrupt, never.'

One might think that this condemnation of health care corruption by the leader of a huge Christian religious group would get considerable attention, but one would be wrong. The only other coverage of the Pope's message was an extremely brief (6 sentences) item by the AP (see here via Business Insider.)

Note that Pope Francis not only condemned corruption in the strongest terms, but he linked it the transformation of medicine and health care into a business, with the presumptive result in an era of the "shareholder value principle" that revenue has become more important than caring for patients.  He also implied that the road to corruption begins with conflicts of interests.

Note that Pope Francis' predecessor, Pope Benedict XVI, also decried the transformation of medicine and health care into a business.  As we noted here, he wrote

during the current economic crisis 'that is cutting resources for safeguarding health,'... Hospitals and other facilities 'must rethink their particular role in order to avoid having health become a simple 'commodity,' subordinate to the laws of the market, and, therefore, a good reserved to a few, rather than a universal good to be guaranteed and defended,'

Furthermore,

'Only when the wellbeing of the person, in its most fragile and defenseless condition and in search of meaning in the unfathomable mystery of pain, is very clearly at the center of medical and assisted care' can the hospital be seen as a place where healing isn't a job, but a mission,...

Pope Benedict's call for health care to be restored to being a calling, not a business, remained anechoic too.   

Discussion

Recently, I became just a bit more optimistic that health care corruption would start getting the attention it deserved.  That may have been premature.  The world seems to becoming ever more friendly to market fundamentalism or neoliberalism.  The notions that every human activity, including medicine and health care, should be conducted as a business, and that in business, revenue come first is likely to be helped by the election of an ostensibly billionaire businessman to the presidency of the US.  That said president-elect once called Pope Francis "disgraceful" after the Pople questioned how Trump's proposal to "build a wall" to keep out supposedly deplorable Mexican immigrants squared with Christian beliefs (look here).

Yet as suggested by the recent Transparency International report on corruption in the pharmaceutical industry,  there is so much money to be made through pharmaceutical (and by implication, other health care corruption) that the corrupt have the money, power, and resources to protect their wealth accumulation by keeping it obscure.  In the TI Report itself,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Keep in mind that the money made from corruption does not just go to innocent peoples' retirement funds that are invested in pharmaceutical stocks.  It predominantly goes to top corporate executives and managers, and their cronies who preside over the corrupt practices.


I might as well repeat myself once again.  As I wrote in 2015,

If we are not willing to even talk about health care corruption, how will we ever challenge it? 

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.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Despite Long Record of Misadventures, Johnson and Johnson to Receive Award for "Ethical Leadership?!"

What does it take for a big pharmaceutical/ device/ biotechnology company to get an ethics award?

Reported by Sheila Kaplan at Stat (but for subscribers only), and first noticed by Carl Elliott and just discussed on his Fear and Loathing in Bioethics blog, it appears that the giant Johnson and Johnson pharma/ device/ biotech company will get an award in "ethical leadership" from and "organization called Fellowships at Auschwitz for the Study of Professional Ethics, or FASPE."

The Stat report, quoted by Dr Elliott, stated:

FASPE Chairman David Goldman, an attorney in New York, said he was aware of the pharma giant’s various ethical tangles, but believes the company has moved beyond them. 'We do think they’ve acknowledged their failures and taken the apropriate steps to resolve them,' he said. 'They know what they’ve done; we talked to them about it and they’ve taken the right action.'

However,

Others disagree, noting that in 2013, J&J and its subsidiaries agreed to pay $2.2 billion to resolve criminal and civil allegations of improperly promoting several prescription drugs, including paying kickbacks to physicians. That was one of the largest health care fraud settlements in US history. The company has also lost recent product liability cases involving allegations of its talcum powder causing ovarian cancer.

If only it were just that.

In fact, we have been writing about the ethical misadventures of Johnson and Johnson for a long time.  Our collected posts are here.  An updated version of their legal record since 2010 is at the end of this post. Their misadventures go well beyond those listed in the Stat article, and new cases of them have been appearing regularly, most recently this year.

Perusing the list suggests that this giant company (with about $70 billion in yearly revenue) is a poster child for bad behavior by health care organizations.  Despite the multitude of allegations leading to settlements, and sometimes findings of guilt, the company has never faced a penalty of significant size, given its revenue.  Furthermore, almost no company leaders who enabled, authorized, directed or implemented the various misadventures have suffered any negative consequences, therefore appearing to enjoy impunity. 

There are many more examples on this blog of legal settlements, and even episodes involving bribery, fraud, kickbacks, and other crimes that demonstrate the continuing impunity of leaders of large health care organizations.  It is likely that such impunity has led to the general concerns that the system is "rigged" in favor of the wealthy, the well-connected, and the insiders. 

(And now we have a president-elect who has promised to act against the "rigged system," but seems to be bent on appointing wealthy, well-connected people to run his executive branch, but in any case, as we have said before...)

We once again see the perverse incentives at work that drive bad behavior by health care oragnizational leaders.  One can obviously become very rich by directing this bad behavior.  Up to now, the likelihood that one would eventually pay any penalty for doing so was tiny.  Now it is slightly higher.  Whether those up the ladder, who might have authorized the behavior, turned a blind eye to it, or avoided enquiring about anything that could be bad behavior, as long as the money came in, will suffer any negative consequences from these actions or inactions in the future is still unclear.

We will not make any progress reducing current health care dysfunction if we cannot have an honest conversation about what causes it and who profits from it.  True health care reform requires ending the anechoic effect, exposing the web of conflicts of interest that entangle health care, publicizing who benefits most from the current dysfunction, and how and why.  But it is painfully obvious that the people who have gotten so rich from the current status quo will use every tool at their disposal, paying for them with the money they have extracted from patients and taxpayers, to defend their position.  It will take grit, persistence, and courage to persevere in the cause of better health for patients and the public. 


 Appendix - Johnson and Johnson Legal Record since 2010
 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax
2011
- Guilty pleas to bribery in Europe  by Johnson and Johnson's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)
2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  Johnson & Johnson announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).
2013
-  Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
- Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
- Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).
2014 
- Johnson & Johnson DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).
2015
-  Johnson & Johnson found by jury to have concealed harms of Risperdal.
-  Johnson & Johnson Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  Johnson & Johnson McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)
2016
- Johnson & Johnson subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post) 

Our Holiday Appeal: Speaking Out on Conflicts of Interest, Corruption, and Attacks on Science Since 2003

In 1998, I learned of the plight of Dr David Kern, my colleague and friend at Brown.  Dr Kern ultimately lost his job because a local company took offense when he presented data about a new occupational disease that occurred at the company's factory (see summary here).  Thus I was alerted to the growing dysfunction of US health care. 

To better understand health care dysfunction, I interviewed doctors and health professionals, and published the results in Poses RM.   A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14(2): 123-130. (link here).  In that article, I postulated that US physicians were demoralized because their core values were under threat, and identified 5 concerns: 1. domination of large organizations which do not honor these core values 2. conflicts between competing interests and demands 3.  perverse incentives 4. ill-informed, incompetent, self-interested, or even corrupt leadership 5.  attacks on the scientific basis of medicine


Since then, my colleagues, some of who were original interviewees, and I have tried to raise awareness of these and related issues, now mainly through the Health Care Renewal blog.   For a long time, many of these issues remained relatively anechoic, partly because discussion of them offended those with vested interests in keeping the system the way it was.  After the economic crash of 2008, we began to realize that related issues were causing wider dysfunction, in the political economy, in the US and globally.

Who would have thought, though, that such issues would be in headlines every day, mainly pertaining to a presidential campaign, and now the presumptive incoming US administration?  Conflicts of interest, corruption, attacks on science, and even attacks on just plain facts are the stories of the day.  But you heard it here first on Health Care Renewal.

Maybe this will lead to some progress now on health care dysfunction, if the world does not blow up.

On that happy note, in this holiday season, I once again ask for contributions to FIRM - the Foundation for Integrity and Responsibility in Medicine.  We set up FIRM,  a US non-profit organization, to try to provide some financial support for HCR.   Despite the grandiose name, FIRM does not have an endowment, and is almost exclusively dependent on individual contributions.  (In the US, charitable foundations interested in health care or ethics seem to also regard health care corruption as a taboo topic, and have not been exactly forthcoming.)  So please consider contributing to FIRM.  FIRM is a US 501(c)3 non-profit organization, and so if you are in the US, contributions may be tax deductible according to US law.  Please send contributions to FIRM at 16 Cutler St, Suite 104, Warren, RI, 02885, and any questions or comments to me by email, rposes at firmfound dot org.

Efficacy, We Don't Need No Stinking Proof of Efficacy - Says Apparent Trump Candidate to Lead FDA

Multiple media reports suggest that US president-elect Donald Trump is considering a most unusual candidate for commissioner of the Food and Drug Administration (FDA).  The basics, as reported by Bloomberg:

President-elect Donald Trump’s transition team is considering a Silicon Valley investor close to billionaire Peter Thiel to head the Food and Drug Administration, according to people familiar with the matter.

Jim O’Neill, the Thiel associate, hasn’t been officially selected, according to the people, who asked to remain anonymous because the decision process is private, and the Trump team could still go in another direction.

O’Neill is a managing director at Thiel’s Mithril Capital Management, and last served in government during the George W. Bush administration as principal associate deputy secretary at the Department of Health and Human Services. He’s also a board member of the Seasteading Institute, a Thiel-backed venture to create new societies at sea, away from existing governments.

Thiel’s spokesman Jeremiah Hall said O’Neill is a good candidate. 'Jim O’Neill has extensive experience in government and in Silicon Valley. He is a strong candidate for any of several key positions,' Hall said in an e-mail. Separately, Politico and CNBC reported that O’Neill could be under consideration for various positions.

Mr O'Neill would be a very unusual candidate to lead the FDA

Ill-Informed

Mr O'Neill has no medical, health care, or biomedical research background.  As Bloomberg noted, "the head of the FDA for the last five decades has either been a trained physician or a prominent scientific researcher."   However, Mr O'Neill's relevant track record is that he

did his undergraduate studies at Yale University, where he was a member of the concert band and played the horn, and has a masters degree from the University of Chicago, both in the humanities. He joined the Health and Human Services Department under Bush in 2002, first as a speechwriter, rising in the final years of the administration to head some policy functions,...

We have frequently discussed how current leaders of health-care organizations are often ill-informed about biomedical science, health care, medicine, public health and related issues.  Mr O'Neill would fit right in with them were he to run the FDA.  

About to Transit the Revolving Door

Mr O'Neill seemed to be on Mr Trump's radar since he was "a close associate of [Trump confidant Peter] Theil for nearly a decade." More recently, Mr O'Neill

served as a managing director at Clarium Capital -- Thiel’s hedge fund that made a mint by correctly predicting the housing bubble and then crumbled -- and since 2012 has worked at Mithril Capital, Thiel’s late-stage venture firm, where he is a managing director.

His recent work would imply that to become FDA commissioner would transit the revolving door.  As reported by the International Business Times,

'He brings strong ties to industry and would reflect a tremendous bias in their favor at the FDA,' Dr. Michael Carome, director of the public health research group at the consumer watchdog Public Citizen, told International Business Times. 'He’s senior executive in a hedge fund investing in medical healthcare products. That alone should be disqualifying.'

In particular,

In the private sector, O'Neill has a clear financial stake in the outcome the regulatory process — a process he could oversee as head of the FDA.

For example, in 2014, Mithril invested $15 million in the German medical device company MagForce — which manufactures cancer treatment technologies — in exchange for 23 percent ownership in its U.S. subsidiary. In June, the company announced it filed for an 'Investigational Device Exemption' with the FDA — basically a permit to use its unapproved product to gather evidence for clinical trials. MagForce’s profitability could very well hinge on how the FDA regulates its products: According to 2015 financial filings, MagForce is 'working with the FDA to update preclinical studies, which were conducted approximately ten years ago, to current US regulatory standards.'

Challenging Evidence-Based Medicine, with Dangerous Implications

Perhaps because of his lack of understanding of health care and medicine, and his financial interests, Mr O'Neill has advocated for radical changes at the FDA, particularly for allowing drugs and devices to be marketed without any good evidence of their efficacy, that is, that they provide any benefits to patients.

 In a 2014 speech, he said he supported reforming FDA approval rules so that drugs could hit the market after they’ve been proven safe, but without any proof that they worked, something he called 'progressive approval.'

'We should reform FDA so there is approving drugs after their sponsors have demonstrated safety -- and let people start using them, at their own risk, but not much risk of safety,' O’Neill said in a speech at an August 2014 conference called Rejuvenation Biotechnology. 'Let’s prove efficacy after they’ve been legalized.'

It might sound plausible, at least if you know nothing about medicine.

The big problem with it is, as I was taught in medical school, that all medical interventions, including drugs and devices, have their risks.  No intervention is free of all potential to cause harm.  So we advocates of evidence-based medicine suggest that no intervention should be given to patients without clear evidence that its benefits outweigh its harms.  You cannot show benefits outweigh harms without having some good evidence about benefits.

Even big pharma has become reconciled to this notion.  An article in the Hill quoted one Mr Peter Pitts thus,

'People need to understand that safety doesn’t exist without the balance of risk,' said Peter Pitts, president of the Center for Medicine in the Public Interest and a former FDA associate commissioner under President George W. Bush.

He said that 'every drug has risks,' so the important consideration is balancing the risks against how effective the drug will be. Side effects that would never be approved for Aspirin might be approved for a lung cancer drug, he noted.

And this from someone who did public relations for big pharma for a long time (look here).  Mr Pitts still works for CMPI, which historically obtained much of its money from the pharmaceutical industry (look here). 

Furthermore, the studies of treatments usually done prior to efficiacy trials are not designed to assure their safety, just that they do not have catastrophic adverse effects for a lot of patients.  Phase I and II trials do not enroll enough patients or follow them long enough to rule out rare but dangerous adverse effects occurring early, or any adverse effects occurring late.

So the International Business Times noted that

Dr. Aaron S. Kesselheim, associate professor of medicine at Harvard Medical School and the director of Brigham and Women’s Hospital program on regulation, therapeutics, and law, says O’Neill’s proposals could transform the drug market into an unregulated space that resembles the vitamin and supplement market. 'You’d have all these expensive products out there without being shown to work while presenting substantial safety risks — and being pushed on physicians and patients by overzealous marketing,' Kesselheim told IBT.

'He’s coming at things from an agenda-driven and non-evidence -based point of view,' Kesselheim said. 'That should be very scary for patients and physicians.'

By the way, this just underlines just how Mr O'Neill would be a prototypical ill-informed leader were he to be appointed to run the FDA.

Also, per the Hill article,

Dr. Michael Carome, director of Public Citizen’s health research group, said he was 'just stunned' when he heard O’Neill’s name reported to be in consideration for FDA.

He said O’Neill’s proposals would bring the country back to 19th century 'snake oil salesmen' being able to fool people into using ineffective products.

Just to ice the cake, O'Neill's bright idea would apparently violate the law.  As Matthew Herper wrote in Forbes,

the 1962 Kefauver amendment ... said drugs must be proved safe and effective before they can be sold. This law was put in place after an FDA reviewer kept a drug for morning sickness, thalidomide, from being sold in the U.S. The medicine caused birth defects in the rest of the world.

So not only would Mr O'Neill be an tremendously ill-informed leader of the FDA, he has the potential of being a prototypically mission-hostile leader were he to try to carry out his idea of eliminated prospective efficacy testing.  We have also frequently written about the havoc that can be wrecked on health care by such leaders.

So Mr O'Neill's bright idea would effectively make all patients into guinea pigs.  What would happen if a large number of patients received treatments that might be useless, and whose harms doubtless exist, but are unknown?  Some, whether they were Democrats or Republicans, whether they supported Mr Trump, Secretary Clinton or someone else in the last election,  might end up here:

So add anyone who might be or ever become a patient to the long list of people who should be worried about a future Trump administration.

Discussion

We could do our usual rant about the revolving door here.   Obviously, the revolving door pheonomenon is a serious conflict of interest, if not form of corruption, that should have no place in our government, particularly in its agencies that are concerned with health care. Similarly, we could rant about how ill-informed and mission-hostile leaders have to take much responsibility for our currently dysfunctional health care system.

It should be no surprise that Mr Trump, a businessman who has no experience in government, and who often seems at ignorant , if not contemptuous of the US Constitution he may be sworn to uphold, would appoint similarly ill-informed and mission-hostile cabinet secretaries and agency leaders.  Ill-informed, mission-hostile leadership of the FDA could harm a lot of patients.  Such an FDA commissioner, acting in concert with other members of an equally ill-informed and mission-hostile Trump administration could do catastrophic damage to patients, citizens the country and the world. 

Maybe we would all be better off if Mr Tump finds something else to do for the next four years.  Maybe he should stick to being executive producer of the Apprentice. 

The Combating Corruption in Health Care and Pharmaceuticals Symposium

Health Care Corruption

Corruption is now a term that has become much more prevalent in the US media, particularly as a description of the actions of our new president elect, for example look here, here and here.  So it is fitting that health care corruption may become a less taboo topic.  

As we have discussed before, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report did not get much attention.  Since then, health care corruption has been nearly a taboo topic in the US.  When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects benighted less developed countries.  On Health Care Renewal, we have repeatedly asserted that health care corruption is a big problem in all countries, including the US, but the topic remains anechoic.

Yet somehow, a substantial minority of US citizens, 43%, seemed to believe that corruption is an important problem in US health care, according to a TI survey published in 2013 (look here).  But that survey was largely ignored in the media and health care and medical scholarly literature in the developed world, and when it was discussed, it was again in terms of results in less developed countries.  Health Care Renewal was practically the only source of coverage in the US of the survey's results.

But the message that health care corruption is an important problem is gradually leaking past the barriers meant to contain such uppity talk.  Earlier this year, Transparency International's new Pharmaceuticals and Healthcare Programme came out with two reports, one on corruption in the pharmaceutical sector, and one on diagnosing health care corruption.  

The Symposium on Combating Corruption in Health Care and Pharmaceuticals

This week, I was fortunate to be able to attend a symposium on Combating Corruption in Health Care and Pharmaceuticals (look here) put on by the WHO Collaborating Centre for Governance, Accountability and Transparency in the Pharmaceutical Sector.  That was the first meeting expressly and exclusively on health care corruption that I had ever heard about (although the center did put on an earlier meeting on Corruption in the Pharmaceutical and Healthcare Sector: Global Policy and Structural Issues, look here, which I missed.) 

The slides from the meeting presentations will hopefully soon be available online, but let me present a few important ideas from some of the speakers that relate to some things we have posted here, but enlarge upon them.

Jillian Clare Kohler, director of the WHO Collaborating Centre, provided a brief introduction to the field.  She noted, as we have, that health care corruption has largely been a taboo topic.  In fact, those at the WHO who are concerned about corruption found that public discussion of the solutions to corruption, particularly, the notions of good governance (a term used somewhat differently in global health circles than it is here in the US, look here), particularly including transparency and accountability may be allowable as long as corruption as the need for these solutions is just implied.

Marc-Andre Gagnon addressed "Tackling the Corruption of Pharmaceutical Markets," and made the following points:

-  Markets, which are systems (socially, politically) constructed rules may not align with the public good.

-  Markets are distorted by ghost management, which is meant to shape narratives to increase corporate revenue, even as it encourages the production of ignorance.

-  Pharmaceutical, and by implication, other health care corporations do better when they promote the "right" medical discourse rather than the (often minimal) effectiveness of their products.

-  Health care markets are subject to various kinds of "capture," not just regulatory capture, but scientific, professional, technological, market, media, and civil society capture.

Conclusions

As I have said before, and now once more with feeling... if we really want to reform health care, in the very little time we may have before our health care bubble bursts (which appears imminent in the US), 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.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

ADDENDUM (12 December, 2016) - the slides from most of the presentations are now available.  Specifically, the slides for the presentation by Prof Gagnon as discussed above are available here.