As US Attorney, Labor Secretary Nominee Enabled Drug and Biotechnology Executives' Impunity

The new Trump administration nominee for US Secretary of Labor is a former US Attorney for the southern district of Florida.  In that role, he seemed to uphold the ideas that certain big corporations, particularly big pharmaceutical and biotechnology corporations, are too big to jail, and that top executives of big corporations should not be held accountable for their corporations' actions.

He had central involvement in three big settlements of charges of corporate misbehavior which held no individuals accountable for enabling, authorizing, directing or implementing the bad behavior.  The settlements imposed only monetary penalties on the corporations as a whole, accompanied at times by corporate integrity agreements.  In some cases, the failure to charge any individuals at the corporation occurred despite the corporations' history of previous bad behavior.  In each case, the penalties seemed unable to deter more bad behavior by the corporations going forward.  It was not obvious that any of the corporate integrity agreements were enforced. Thus, he enabled the continuing impunity enjoyed by the leadership of large health care organizations. 

The three cases, all discussed on Health Care Renewal, were, in approximate chronologic order:

2005 - GlaxoSmithKline Settled Charges of Overbilling Medicare and Medicaid for Zofran and Kytril

As we discussed in 2005, GlaxoSmithKline has settled for $150.8 million US Department of Justice charges that the company fraudulently overbilled Medicare and Medicaid. The alleged scheme involved inflating average wholesale prices for Zofran and Kytril used to set reimbursement rates.  According to the 2005 Department of Justice news release, "GlaxoSmithKline has agreed to enter into an addendum to its existing Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services that, among other things, will require the company to report accurate average sales prices and average manufacturer's prices for its drugs covered by Medicare and other federal healthcare programs."

No individual who authorized, directed, enabled or implemented these alleged actions suffered any penalty.  The decision not to prosecute any individuals was made after the first (2004) famous Paxil case.  Paxil is the anti-depressant whose marketing lead GlaxoSmithKline (GSK) to settle allegations of fraud brought by then New York Attorney General Elliott Spitzer.  That case included allegations of suppression and manipulation of clinical research, and was discussed in great detail in the book Side Effects by Alison Bass.  We posted about various aspects of this case, e.g., here, here, and here. 

Since 2005, we have discussed myriad examples of misbehavior by GSK.  Notably the company made a $3 billion settlement in 2012 for all sorts of allegations involving multiple drugs, (see this post).  Its most recent settlement was in 2016 for bribing Chinese doctors (see this post).  Other cases included the manipulation of Study 329 (see this post), the manipulation and suppression of evidence about Avandia (see this post).  So the 2005 settlement seemed to have little deterrent effect.

The 2005 DOJ press release included this quote

'As our nation struggles to contain healthcare costs, we must ensure that drug manufacturers do not take advantage of the poor, the elderly or the sick by illegally inflating the price of prescription drugs. That a manufacturer would fraudulently inflate the cost of a drug used primarily to reduce the side effects of cancer treatments is unconscionable,' said U.S. Attorney R. Alexander Acosta of the Southern District of Florida.      

2007 - Bristol Myers Squibb Settled Charges of Kickbacks to Physicians and Fraudulent Marketing of Abilify 

As we discussed in 2007, BMS was charged by the US government for promoting the atypical anti-psychotic drug Abilify for use by children and the elderly absent any good evidence that it provided benefits that outweighed harms for these group. So such patients who received these drugs due to the overpromotion might have been harmed, and probably did not benefit.   One means used to promote the drug was giving kickbacks to physicians.  The settlement included monetary penalties to the company totaling $515 million, and a five-year corporate integrity agreement to ensure its compliance with the law.

Note that the corporate integrity agreement did not appear to have improved subsequent BMS behavior.  Since 2007, we have noted that:
 - In 2014, BMS settled allegations its subsidiary Lantheus Medical Imaging Inc evaded state taxes (per the Corporate Crime Reporter)
 - In 2015, BMS settled allegations by the US Securities and Exchange Commission (SEC) that it bribed physicians in China to induce them to prescribe its drugs.  (Look at our post here).

No individual who authorized, directed, enabled or implemented the actions alleged in the 2007 settlement suffered any negative consequences. The decision not to charge any individuals seemed to be made despite the company's history of previous bad behavior, which included:
 - In 2003, for $617 million, BMS settled suits alleging it tried to prevent competition from low cost generic versions of its products Taxol and Buspar (per the NY Times).
- In 2004, for $150 million, BMS settled suits by the SEC alleging accounting fraud (per the NY Times here).
- In 2007, BMS paid a $1 million dollar penalty while pleading guilty to lying to federal agents about a deal with the Canadian drug company Apotex (per Law360).   In 2009, it paid additional financial penalties in response to a US Federal Trade Commission charge about this case (per the FTC).

According to the 2007 Department of Justice news release,  one of the two US Attorneys involved in the 2007 BMS settlement was R Alexander Acosta of Florida.

2007 - Sanofi-Aventis Settled Charges of Overcharging Medicare for Anzemat

Per a 2007 post, Sanofi-Aventis settled allegations that it overcharged the US government for the drug Anzemet.  Of course, no individual who authorized, directed, enabled or implemented these alleged actions suffered any negative consequences.

As described by a Law360 post in 2007, he settlement also included yet another corporate integrity agreement.  This did not deter further misbehavior by Sanofi-Aventis.  It  settled charges of overcharging the US Medicaid system in 2009 for over $90 million  (see post here), and charges that it gave doctors kickbacks to induce them to prescribe the drug Hyalgan in 2012 (see post here).  In 2014, Sanofi's Genzyme subsidiary settled charges it promoted a surgical film product for unproven uses (see post here), and settled further charges from this case in 2015 (see post here).

Law360 also reported,

 U.S. Attorney for the Southern District of Florida R. Alexander Acosta said the lawsuit proved that corporations could not get away with misleading the government by exploiting a health care system based on honesty.

'Again, a corporation has been caught fraudulently inflating the cost of a drug used primarily to reduce the side effects of cancer treatments without regard to the increased costs borne by government health care programs or elderly and indigent patients,' Acosta said. 

Summary

President Trump promised time and again that he would stand up for the forgotten working people and families of the US, and would reduce the power of big corporate interests.  Now, his nominee to be Labor Secretary is an attorney who seemed unwilling to personally challenge top management of big drug and biotechnology companies when their companies misbehaved.  He did not hold management accountable even when their companies had previously and repeatedly misbehaved.  His failure to hold individuals accountable apparently failed to deter future bad behavior by the same companies.

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 we have a President 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. Now he has just nominated someone who failed to hold wealthy, well-connected corporate executives accountable for their corporations bad behavior.  So, 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. 

A Voice for Reason - Dr Mickey Nardo

We mourn the loss of Dr Mickey Nardo, chief blogger at 1BoringOldMan, a voice of reason, a defender of truth in health care.  Dr Nardo was one of the principles in the famous re-analysis of Study 329, and has campaigned for rational use of clinical evidence in psychiatry.

For further details, see the apparently final post on 1BoringOldMan. We look forward to the prospect of the blog being transformed into a book.

Please consider signing this petition that Dr Nardo supported:

Stop False Reporting of Drug Benefits & Harms by Making FDA & NIH Work Together

Making Health Care Conflicts of Interest Great Again: A Consultant to Medicaid and Simultaneously to Medicaid Vendors for CMS?

President Trump campaigned on behalf of the neglected middle class, but at least in the health care sphere, those he has chosen for their advice or considered for nomination seemed to be more the corporate class.

Tomorrow, Ms Seema Verma, nominated by the Trump administration to be director of the Center for Medicare and Medicaid Services (CMS), one of the most powerful US government health care positions, will have an opportunity to appear before a Senate committee.  Ms Verma, unlike some other people President Trump has considered for health care leadership or advisory positions,  does seem to have a background in health care policy, if not actual on the ground health care.  But like many of those people, she has been accused of having important conflicts of interest.

Working as a Indiana State Consultant on Medicaid While Consulting for a Prominent Medicaid Vendor


Back in 2014, the Indianapolis Star reported on conflicts of interest affecting Ms Verma, then a consultant to Indiana state government on Medicaid services, while her company simultaneously worked for a Hewlett-Packard subsidiary that was a vendor to the Indiana Medicaid program.

The Star described Ms Verma's work for the state thus:

Verma enjoys a tremendous amount of sway for a private contractor. She has her own office at the state government center. Earlier this year, Pence turned to her to broker a deal with the state's hospital industry to help finance his plan to expand the Healthy Indiana Plan. And when Verma and one of Pence's Cabinet members — Family and Social Services Administration Secretary Debra Minott — butted heads over how soon to roll out the program, it was Minott who lost her job.

Verma's influence reaches back at least a decade and across the administrations of four governors, two from each party. During his first term, Gov. Mitch Daniels tapped Verma to help create a new health-care plan to address the state's uninsured population. Her solution: the Healthy Indiana Plan, a new low-income health insurance program that features high deductibles and requires participants to contribute a portion of their income to a health savings account.

Furthermore, in 2014,

Now, Pence wants to expand the plan to an additional 350,000 low-income Hoosiers through what he's calling HIP 2.0. And like Daniels, he turned to Verma for help in developing the plan and negotiating a financing agreement with the state's hospital industry. If approved by the federal government, billions of new Medicaid funds would flow to the state.

However, at the same time Verma and her company had this powerful role for the state, she also worked for HP.

HP's claims management and information system contracts show it has agreed since 2007 to pay Verma's company $1.2 million as a subcontractor for 'health consulting services.'

Yet Verma's work for the state clearly affected HP.

her duties involve crafting requirements for contractors, negotiating with contractors and supervising vendors. Her company's website also says she provided 'requirements for the state's three technology vendors to support HIP.' That would include Hewlett-Packard. One contract gives her the authority to 'initiate and/or track' a contract or contract amendments with the state's fiscal intermediary, which is HP. Another puts her in charge of technical changes to the state's medical management information system, which is operated by HP.

HP clearly had a major relationship with the state.

During that time, HP received more than $500 million in state contracts, including millions of dollars in contract changes to accommodate the Healthy Indiana Plan that Verma helped create and other new programs.

In 2014, the Star made a strong argument that Verma had a major conflict of interest, yet she appeared not to have made it explicit, or perhaps disclose it at all. 

'Certainly on the face of it, there is the appearance of a conflict,' said Trevor Brown, an expert on government purchasing and director of Ohio State University's John Glenn School of Public Affairs.

If Verma was a federal contractor, her dual roles 'would certainly raise tremendous concern for regulators and purchasing officials,' he said. 'This is exactly the kind of thing that would land an agency in a hearing before a legislative oversight committee.'

Lawmakers in Indiana, however, were unaware of Verma's work for HP.

'I was only aware she was working for the state,' said Sen. Patricia Miller, R-Indianapolis, chairwoman of the Senate Health Committee.

'There certainly appears to be the potential for conflict, and appearances matter,' said Ed Clere, R-New Albany, chairman of the House Health Committee

Verma's arrangement with HP also came as a surprise to former FSSA Secretary Debra Minott, who said she learned about it sometime in 2013.

'We had delayed paying an HP invoice because of an issue we were trying to resolve, and HP sent Seema to our CFO to resolve the issue on their behalf,' Minott said. 'I was troubled because I thought Seema was our consultant.'

At the time, though, all of this was legal, since Indiana had very weak regulations on conflicts of interest affecting state government operations.

Minott said when she brought her concerns to FSSA's ethics officer, she was told Indiana's ethics rules didn't apply to conflicts of interests among state contractors.

The lack of any such rule is just the latest in a litany of loopholes that good government advocates say Indiana needs to address.

A 2017 Update: Still Working for Hewlett-Packard, While Advising Nine State Governments

Apparently there were no changes in Ms Verma's relationships with the state of Indiana, and in her conflicts of interest since 2014. In fact, on February 14, 2017, the Associated Press published an updated description of her conflicts (via WKRN). Apparently, her conflicts of interest actually affected eight states other than Indiana.

A review by The Associated Press found Seema Verma and her small Indianapolis-based firm made millions through consulting agreements with at least nine states while also working under contract for Hewlett Packard. The company holds a financial stake in the health care policies Verma's consulting work helped shape in Indiana and elsewhere.

Her business activities continued to be very lucrative.

Since 2011, her firm, SVC Inc., collected more than $6.6 million in consulting fees from the state of Indiana, records show. At the same time, records indicate she also received more than $1 million through a contract with Hewlett, the nation's largest operator of state Medicaid claims processing systems.

Last year, her firm collected an additional $316,000 for work done for the state of Kentucky as a subcontractor for HP Enterprises, according to documents obtained by AP through public records requests.

Also,

Verma reported her salary with SVC is $480,000 and her business income from the company as nearly $2.2 million.

The AP found more experts to state that Ms Verma has serious conflicts of interest,

However, legal and ethics experts contacted by AP say Verma's work for Hewlett, and offshoot HP Enterprises, raised questions about where her loyalties lay — to the company, or to state taxpayers.

Richard Painter, former President George W. Bush's chief ethics lawyer, called Verma's arrangement a 'conflict of interest' that 'clearly should not happen and is definitely improper.'

Such arrangements are typically prohibited for rank-and-file state employees under Indiana's ethics rules and laws, but they're murkier when it comes to consulting work. Contractors have often replaced state employees in a GOP bid to drive down the number of public employees and distinctions between the two can be hard to discern.

'She was cloaked with so much responsibility and so much authority, people thought she was a state employee,' said Debra Minot, a former head of Indiana's Family and Social Services Agency under Pence who worked with Verma.

Indiana University law professor David Orentlicher compared Verma's dual employment to an attorney who represents both the plaintiff and the defense in a lawsuit. It's also similar to federal contract negotiator with a side job for a company they regularly negotiate with, he said.

'If you have one person on both sides of the negotiating, they can't negotiate hard for both sides,' said Orentlicher, a former Indiana Democratic state lawmaker.

Ms Verma's conflicts got little notice at the time of her nomination, but the 2014 Indianapolis Star was first noticed by PRWatch in January.

Summary


Revelations about these ongoing conflicts of interest have not apparently caused the Trump administration to rethink her nomination to be head of CMS.

Ms Verma happily went along working as an authoritative consultant for multiple states' Medicaid programs while also working as a consultant for a prominent vendor to these programs.  The 2014 report about these conflicts did not deter her from continuing her lucrative work for parties on both sides of the table.  Apparently, she continued to have similarly conflicted relationships with multiple other states, without anyone being the wiser.

If Ms Verma saw no problem with acting while subject to these conflicts, does anyone seriously expect that as head of the Medicare and Medicaid programs for the whole country she will put theinterests of the forgotten middle, working, and lower class patients who get health care insurance from these programs ahead of the interests of her corporate buddies?

Previously, the Trump administration nominated another heavily conflicted individual to be Secretary of Health and Human Services (look here and here).  He has gotten health advice from a silicon valley magnate who declared corruption was needed to prevent boredom (look here).  Several people he has reportedly considered to run the US Food and Drug Administration had their own substantial conflicts.  One was a  and one was a former pharmaceutical and biotechnology executive (look here and here).  One of the first people he sent to oversee FDA operations was a former pharmaceutical company lobbyist (look here).  A person proposed as "health care czar" is a billionaire biotechnology CEO (look here). 

Are these the sort of people who will first think of the welfare of the forgotten multitudes, or how much wealth they and their cronies can attain?

Finally, the Medicaid program is meant to be part of the safety net for the poorest Americans who cannot afford health insurance.  It seems bitterly ironic that the person proposed to become its leader has become rich as a consultant to state Medicaid programs (note above that Ms Verma made a salary of $480,000 a year, and received "business income" of $2.2 million presumably also a year from her consulting firm).  It is also bitterly ironic that many states have turned much of the operations of their Medicaid programs over to vendors who similarly have made a lot of money from a program for the poor.  

True health care reform requires leadership that puts patients' and the public health ahead of corporate health and managers' enrichment.

NOTE - Post revised on 16 February, 2017, to update links and add discussion of Ms Verma's salary and income.  

More Health Care Professionals and Trainees Provoked to Resist - Dana-Farber Cancer Institute Protest of Leaders' Acquiescence to Trump's Muslim Travel Ban

The executive order by President Trump that temporarily banned immigration from seven predominantly Muslim countries provoked health care professionals and trainees to challenge another health care leader whom had not been so challenged previously.

We recently described how professionals and trainees protested the decision by Cleveland Clinic CEO Toby Cosgrove not to cancel a fund raising event a Mar a Lago, the resort owned by President Trump, even though Mr Trump's ban had resulted in the deportation (since reversed) of a Cleveland Clinic physician trainee, and Cleveland Clinic health care professionals and trainees had challenged the decision to continue with the event (look here).  Stories about major conflicts of interest affecting Dr Cosgrove had failed to inspire any protests, or even any real public discussion.

The Dana -Farber Cancer Institute and the Immigration Ban

Now a similar story is playing out at the Dana-Farber Cancer Institute, a major academic medical institution and a prominent affiliate of Harvard Medical School.

Here is a summary from the Boston Globe, January 31, 2017:

Hundreds of medical students, doctors, and other medical personnel opposed to President Trump’s immigration order are urging the Dana-Farber Cancer Institute to cancel a lavish fund-raiser at Trump’s Mar-a-Lago Club in Florida.

But even as the number of signatures on a circulating petition grew — rising to 1,206 caregivers in Boston and across the United States by 9:20 a.m. Wednesday — Dana-Farber said it would not risk losing money earmarked for cancer research and treatment by canceling the fund-raiser.

Donors are paying as much as $100,000 to attend the fund-raiser on Feb. 18 at the 20-acre seaside resort in Palm Beach. Dana-Farber raised $2.2 million at last year’s Mar-a-Lago gala, which featured a concert by James Taylor, according to a video on the hospital’s website.

The objections to the fund-raiser are an example of the fallout over Trump’s order restricting travel from seven Muslim-majority countries — restrictions that have prompted protests across the country.

Six medical students and one doctor e-mailed a letter Sunday to Dana-Farber president Dr. Laurie Glimcher and development head Susan Paresky. They said Trump’s immigration order threatens the medical school’s research program, poses a risk to overseas patients who need cancer treatment at Dana-Farber, and 'is a direct threat to the health and well-being of thousands of refugees worldwide who are fleeing violence and persecution.'

Two Iranian medical researchers headed for Brigham and Women’s Hospital were barred from entering the country after the ban went into effect. And the medical school’s teaching hospitals are scrambling to determine whether patients from the seven targeted countries will be able to keep appointments for medical care. When the group did not get a reply to their letter, they began circulating a petition on social media at 6 p.m. Monday, said organizer George Karandinos, a Harvard medical and doctoral student.

'Given the events of recent days,' he said, 'we are asking Dana-Farber to take some moral leadership on this.'

The response was that it was too late to cancel the event. Although CEO Glimcher and Josh Beckstein, the Chair of the Dana-Farber board of trustees, said they sympathized with the petitioners' concerns, they asserted:

contracts have been signed, and a large number of people have committed to attend. Cancelling the event outright would only deny much-needed resources for research and care

An article in the Atlantic posted on February 9, cited questions about Dr Glimcher's and Mr Beckstein's response

It noted that Dana-Farber leadership used a logical fallacy, an appeal to common practice to justify their decision:

Dana-Farber, which brands itself as a pioneering, trailblazing institution, closed its public statement with the argument that 'Other organizations find themselves in a similar position this year and have made a similar decision.'

Meanwhile, the protesters thought the Institute could have done better:

'This was covered in the press as an issue in September,' said George Karandinos, a Harvard medical student among those leading the backlash. 'Partially because this has been brought up before, we're less sympathetic to the argument that the fundraiser is so close' In light of the fact that President Trump has 'sent out a message of exclusion, discrimination, and hate,' Karandinos said, this response 'felt very weak.'

And the number of signatures on the petition continues to rise. It is now greater than 2000. It is likely the protests will get stronger:

Because Dana-Farber has opted to proceed with the Mar-a-Lago gala—has not committed to distancing itself from the Trump Organization in the future—the Harvard students, doctors, and patients are elevating the stakes. This coming Saturday, they plan to rally on the quad of Harvard Medical School, in the shadow of the cancer institute. In the spirit of evidence-based effective protest, their request is clear and concrete: 'We call on the Dana-Farber to relocate its fundraiser away from President Trump’s Mar-a-Lago this year and in all subsequent years.'

Maybe it should have been no surprise that Dr Glimcher was not sympathetic to arguments that the Mar a Lago fund raising event posed a conflict of interest for the Dana-Farber, notwithstanding the conflicts of interest created for President Trump by his continuing business ownership.  Dr Glimcher actually has a long history of her own conflicts of interest.

Dr Glimcher's Conflicts of Interest

As in the case of the Cleveland Clinic, the strong response to Dr Glimcher's refusal to cancel the Mar a Lago fundraiser could be contrasted with the lack of response to what could have been considered questionable actions by Dr Glimcher in the past.  Dr Glimcher accepted leadership positions at the Dana -Farber, and before then at Weill Cornell Medical School, despite severe conflicts of interest.

As we noted in 2011, at the time Dr Glimcher left Harvard to become Dean of the Weill Cornell Medical School, she was already the longest serving member of the board of directors of pharmaceutical giant Bristol-Myers-Squibb.  At that time, she was paid over $240,000 a year for her services on the board, and owned more than $1.4 million of BMS stock units. 

At that time, Dr Glimcher was also on the board of directors of the Waters Corporation, which makes laboratory equipment used in pharmaceutical research.

A long time ago, in 2006, we first blogged about a "new species of conflict of interest" which we thought
might prove to be even more important than other conflicts of interest afflicting health care that were then starting to be discussed.  This new species  involved health care organizational leaders who were simultaneously members of the boards of directors of for-profit health care corporations.  We posited these conflicts would be particularly important because being on the board of directors entails not just a financial incentive.  It ostensibly requires board members to "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]   Thus, for example, the conflict posed by the president of a university, to whom a medical school and academic medical center report, who also is the director of a pharmaceutical company, would be extreme.

Furthermore, even in 2011, BMS had a track record that included settling allegations that the company gave kickbacks to physicians to promote its products.  These actions would have been taken place while Dr Glimcher was responsible for the governance of the company.

At that time, appointing a member of the boards of Bristol Myers Squibb and Waters Corporation to be dean of  Weill Cornell Medical School incited no public discussion, much less protest.  I know of no more public discussion or protest ensuing after Dr Glimcher became CEO of Dana-Farber. 

She is still on the boards of these two corporations.  The most recent (2016) BMS proxy statement  noted that Dr Glimcher's yearly compensation is now $300,000 and she now owns 88,190 share equivalents, worth more than $4.5 million at today's price.

Furthermore, Bristol-Myers-Squibb has continued its ethical misadventures under Dr Glimcher's watch.  Last year we discussed yet another settlement it made of allegations of giving kickbacks to doctors to induce them to prescribe its medication.  Prior to that, but still on Dr Glimcher's watch, we noted the following:

- In 2003, for $617 million, BMS settled suits alleging it tried to prevent competition from low cost generic versions of its products Taxol and Buspar (per the NY Times).
- In 2004, for $150 million, BMS settled suits by the SEC alleging accounting fraud (per the NY Times here).
- In 2007, BMS paid a $1 million dollar penalty while pleading guilty to lying to federal agents about a deal with the Canadian drug company Apotex (per Law360).   In 2009, it paid additional financial penalties in response to a US Federal Trade Commission charge about this case (per the FTC).
 - In 2007, for $515 million, BMS settled a suit alleging it used kickbacks to induce use of Abilify for dementia and by childeren, despite evidence that the drug was not suitable for either.  The settlement included a five year corporate integrity agreement.  (Look at our post here).
 - In 2014, BMS settled allegations its subsidiary Lantheus Medical Imaging Inc evaded state taxes (per the Corporate Crime Reporter)
 - In 2015, Bristol-Myers-Squibb settled allegations by the US Securities and Exchange Commission (SEC) that it bribed physicians in China to induce them to prescribe its drugs.  (Look at our post here).

Maybe those who protest Dr Glimcher's current actions will note that these actions were presaged by her publicly known but largely ignored past actions.

Summary

Donald Trump's campaign, his election, and the beginnings of his administration have evoked tremendous controversy.  Of many questions raised, those about his voluminous conflicts of interest, and whether has background as a corporate leader is suitable for leadership in other spheres, particularly the political, have been salient.  One unanticipated effect of his early decisions as president seems to be to raise questions about his relationships with leaders in other spheres with their own conflicts, and own doubtful qualifications for their leadership roles. 

It is ironic that Mr Trump has pledged to stand up for working people and the middle class, while his affinities seem to be almost entirely for the rich and conflicted.

Dr Toby Cosgrove of the Cleveland Clinic and Dr Laurie Glimcher of the Dana-Farber Cancer Institute seem relatively untroubled about their institutions' financial arrangements with Mr Trump's ongoing businesses, despite the conflicts that these businesses pose for a sitting president.  Furthermore, both Dr Cosgrove and Dr Glimcher have had and continue to have major conflicts of interest affecting their own leadership positions, conflicts which have been largely anechoic up until now.

The protests of President' Trump's dubious actions may shed needed light on the large, complicated network of insiders which has disproportionate influence on health care, public policy, and politics.

So here goes again, for the umpteenth time...

 I now believe that the most important cause of US health care dysfunction, and likely of global health care dysfunction, are the problems in leadership and governance we have often summarized (leadership that is ill-informed, ignorant or hostile to the health care mission and professional values, incompetent, self-interested, conflicted or outright criminal or corrupt, and governance that lacks accountability, transparency, honesty, and ethics.)  In turn, it appears that these problems have been generated by the twin plagues of managerialism (generic management, the manager's coup d'etat) and neoliberalism (market fundamentalism, economism) as applied to health care.  It may be the many of the larger problems in US and global society also can be traced back to these sources.

We now see our problems in health care as part of a much larger whole, which partly explains why efforts to address specific health care problems country by country have been near futile.  We are up against something much larger than what we thought when we started Health Care Renewal in 2005.  But at least we should now be able join our efforts to those in other countries and in other sectors.  

 True health care reform would restore health care leadership that understands health care and medicine, upholds the health care mission, is accountable for its actions, and is transparent, ethical and honest.

Health Care Professionals and Trainees Finally Provoked to Resist - Cleveland Clinic Protest of CEO's Acquiescence to Trump's Muslim Travel Ban

We frequently discuss the anechoic effect, the failure of cases illustrating problems with concentration and abuse of power, unethical and corrupt behavior, and faulty leadership and governance in health care to generate much public discussion, much less outrage.  In particular, physicians and other health care professionals seem very reluctant to discuss such cases, perhaps fearing disapproval or retaliation by colleagues or bosses.  But they times they are a changin'.

Dr Delos (Toby) Cosgrove had been accused of multiple conflicts of interest the first decade of the century.  These charges seemingly generated no local expressions of concern.  Yet in recent days, a considerable number of physicians, nurses, house-staff and students at the prestigious Cleveland Clinic have loudly and publicly challenged the actions of their CEO, and these challenges have received national attention.

Background - Cleveland Clinic CEO Toby Cosgrove's Conflicts of Interest

CEO Cosgrove's Conflicts of Interest

Cleveland Clinic CEO Dr Delos (Toby) Cosgrove first graced the pages of Health Care Renewal in 2005.  The story back then was a complicated one of conflicts of interest.

Dr Cosgrove had been a well-paid general partner of the Clinic's private venture capital fund, Foundation Medical Partners (FMP), while he was Chairman of Cardiovascular and Thoracic Surgery.  FMP invested in a device company called AtriCure, and Dr Cosgrove became a director of the company.  Dr Cosgrove used the company's devices in his work, and wrote a paper about the device which did not disclose his conflicts of interest in the company.  The conflicts of interest committee at the Clinic began looking into these financial relationships.  Soon after, Dr Cosgrove  stepped down from his directorship at Atricure and his role at FMP.  Then Dr Cosgrove, who by then was CEO, announced that prominent cardiologist Dr Eric Topol, who was on the committee investigating his conflict of interest, was leaving his post as chief academic officer of the Foundation and provost of the medical school, supposedly for "streamlining" purposes, raising questions that Dr Topol was punished for being a whistle-blower.

Questions about Dr Cosgrove's conflicts of interest did not end there, per a post written in 2007. At that time, allegations were made that Dr Cosgrove's conflicts of interest received preferential treatment at the Clinic. In 2008, the Cleveland Clinic revealed that Dr Cosgrove had other conflicts of interest, including royalty payments from several biotechnology and device companies (see this post). In 2010, AtriCure, the company with which Dr Cosgrove had been so prominently involved, settled charges that it marketed a device for unapproved indications (see this post).


Those old stories with their suggestions of scandals did not apparently derail Dr Cosgrove's continued success at the Cleveland Clinic.  By 2015, per Cleveland.com, Dr Cosgrove was the best compensated non-profit CEO in the Cleveland area, receiving $4.8 million. 

Neither the stories of conflicts of interest nor Dr Cosgrove's multi-million dollar remuneration inspire any sort of protests by Clinic health care professionals or trainees.

Dr Cosgrove Joins President Trump's Strategic and Policy Forum

Dr Cosgrove had become so prominent in 2016 that again per Cleveland.com:

President-elect Donald Trump tapped Cleveland Clinic CEO Dr. Toby Cosgrove to join a newly established panel of 16 business leaders that will advise Trump on how government affects job and economic growth, according to the Cleveland Clinic.

The President's Strategic and Policy Forum will offer non-partisan advice to the president as he assumes office, according to a Trump team news release obtained through the Clinic.

'I am truly honored and privileged to take part in President-elect Donald Trump's Strategic and Policy Forum designed to grow and strengthen the United States' economy,' Cosgrove said in a statement Friday. 'I applaud his efforts to bring together leaders across industries to gain insight that will assist the new President in making important decisions that will impact every American. I am deeply committed and take this role very seriously.

Note that nearly all the members of the Forum were CEOs of huge for-profit corporations, the Forum's purview was economic, not on health care, medicine, or biomedical research, and Dr Cosgrove acknowledged all that, but was pleased to serve.  This suggests that despite his medical degree, Dr Cosgrove saw himself more of a big business leader than a physician or academic leader.

This, along with his huge compensation package, puts him into the center of the pack of managerialist leaders of health care organizations, despite his medical degree.  We have frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management. Managerialism wraps these concepts up into a single package.  The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation.  Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts.  Furthermore, all organizations ought to be run according to the same basic principles of business management.  These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

The Cleveland Clinic and the Ban on Muslim Immigration


A House-Staff Physician Deported Due to Trump's Travel Ban

Dr Cosgrove's role in the Trump administration did not prevent the Clinic from getting caught up in President Trump's executive order that stopped immigrants from seven predominantly Muslim countries from entering the US.  Per Cleveland.com (Jan 28, 2017),

An internal medicine resident at the Cleveland Clinic who is a citizen of Sudan said Saturday that she was detained in New York when she was trying to return to Ohio after a trip to Saudi Arabia and was put on a plane back to the Middle East.

Dr. Suha Abushamma, who has worked at the Clinic since July on a work visa, left the U.S. one day after an executive order issued by President Donald Trump. The executive order included a crackdown on immigration from refugees and citizens of seven majority-Muslim countries.

Abushamma, 26, of Cleveland Heights, lived in Saudi Arabia before being hired at the Clinic. She is a Muslim woman and a citizen of Sudan.

Cleveland Clinic Leadership Barely Responds

The official Cleveland Clinic reaction to the deportation of one of its house-staff was muted, and certainly did not directly challenge the executive order.  Becker's Hospital review quoted its statement,

Recent immigration action taken by the White House has caused a great deal of uncertainty and has impacted some of our employees who are traveling overseas. We deeply care about all of our employees and are fully committed to the safe return of those who have been affected by this action.

Health Care Professionals and Trainees Learn to Resist

Cleveland Clinic health care professionals and trainees were not satisfied with that bland official response, especially when they were reminded of the Clinic's ties to the Trump administration.  Per Cleveland.com, (Jan 30, 2017),

The Cleveland Clinic is receiving unwelcome attention for moving forward with plans to hold a fundraiser next month at President Donald Trump's flagship resort.

The Clinic's website says the 'Reflections of Versailles: The Hall of Mirrors' fundraiser is scheduled for 7 p.m. on Feb. 25 at Trump's Mar-a-Lago resort in Palm Beach, Fla. The fundraiser, which will benefit the Cleveland Clinic Florida, first was reported on Sunday by STAT News. The news outlet juxtaposed the swanky event with the Clinic's public statements that it was working to help Dr. Suha Abushamma, a Cleveland Clinic physician who was prevented from re-entering the country on Saturday following an executive order from Trump that blocked citizens of seven Muslim-majority countries from entering the United States.

A Cleveland Clinic resident joined several faculty at other medical schools in calls on the Clinic to cancel the fundraiser.

So CEO Cosgrove serves on President Trump's business council, while CEO Cosgrove's Cleveland Clinic will personally profit President Trump by paying for a fundraiser at the resort he owns, while the Clinic fails to challenge the deportation of one of its own trainees at the behest of President Trump's executive order.  The web of conflicts of interest is dizzying to behold.

Resistance Grows  

On Feb 2, 2017, StatNews reported the protests at the Clinic were becoming more widespread:

Hundreds of medical students and doctors have signed an open letter urging Cleveland Clinic to cancel a February fundraiser at the Florida resort owned by President Trump, after his executive order on immigration blocked one of the clinic’s doctors from reentering the US.

The letter, with more than 400 signatures, also calls on the clinic to publicly condemn Trump’s order, protect the clinic’s employees from deportation, and reaffirm its commitment to diversity. Dozens of the signers are medical students at Case Western Reserve University, which operates the Lerner College of Medicine in partnership with the clinic.

'Your willingness to hold your fundraiser at a Trump resort is an unconscionable prioritization of profit over people,' the letter states. 'It is impossible for the Cleveland Clinic to reconcile supporting its employees and patients while simultaneously financially and publicly aiding an individual who directly harms them.'

Note that this letter suggests that CEO Cosgrove puts the Clinic's, and possibly his own personal business interests ahead of the interests of its health care professionals and trainees, their values, and/or their patients.  This suggests that CEO Cosgrove is exerting mission-hostile management, perhaps due to his conflicts of interest.  Managerialist leaders frequently seem to lead in ways that undermine the missions of their organizations.  Yet again, up to now there has been very little organized protest of managerialist leadership, mission hostile leadership, conflicted leadership, etc of big health care organizations by health care professionals.

Not only did the Clinic refuse to cancel the fundraiser, but CEO Cosgrove got into a tussle with a reporter over the dispute,

The controversy led to a dustup between Cosgrove and New Yorker writer Kathryn Schulz, who tweeted Cosgrove’s office number to her followers and urged them to call him directly to voice their concerns about the Mar-a-Lago event.

Schulz wrote Cosgrove a personal email criticizing Trump’s order and warning him that the clinic will 'lose the respect of millions of Americans' if it proceeds with the event. Schulz’s email, obtained by STAT, referenced that her late father received excellent care from doctors there, some of it delivered by a Syrian immigrant. 'Please don’t dishonor him or your heretofore outstanding reputation,' the email said.

Schulz later tweeted that she received an 'irate & dismissive' reply from Cosgrove. She has also signed the petition.

Follow up: got an irate & dismissive note back from Cleveland Clinic CEO blaming me—not the upcoming fundraiser—for the calls he's getting.

— Kathryn Schulz (@kathrynschulz) January 31, 2017

Cosgrove’s reply, also obtained by STAT says, in part: 'I also appreciate you expressing your concern about our forthcoming gala at Mar-a-Lago. I do not however appreciate you having your colleagues inundate my office with emails and phone calls which is very disruptive to our main activity of putting patient’s first. I would ask you to please refrain from this activity because it is counter-productive to that which we are all trying to accomplish.'

Note that in this exchange CEO Cosgrove alluded to the fundamental mission of his organization to put patients first, but did not explain how his relationships with the Trump administration, and his failure to challenge the travel ban and its direct effect on at least one of his house-staff furthered that mission.

As if to underline Dr Cosgrove's continued support of the Trump administration, on Feb 2, 2017, Cleveland.com reported that the CEO would be attending the President's Strategic and Policy Forum as planned.  However, Cleveland Clinic physicians were not mollified.  On that same day, Cleveland.com also reported,

About two dozen Cleveland Clinic doctors gathered this morning to show their support for colleague Dr. Suha Abushamma, a resident who was detained and unable to return to the United States over the weekend due to President Trump's executive order on immigration.

Holding photos of Abushamma and signs reading '#BringSuhaBack,' the group stood silently in the Clinic's Miller Pavilion at 7 a.m., only speaking to say the pledge of allegiance. 

By the next day, the case was being reported in the Washington Post, as the protest continued to grow.  The Post article stated that doctors, nurses and student had signed the letter, which by then at 1141 signatures.

At the time I write this, Dr Abushamma had not returned to the US, but had filed a lawsuit challenging the travel ban.

Summary

Over the last 30 years, many health care organizations have been taken over by managerialist leadership, often by generic managers.  Such leadership may have conflicts of interest, and may put their organizations' revenues, and sometimes their personal fortunes, ahead of patients' interest and health care professionals' values.  Yet while Health Care Renewal has repeatedly documented managerialism, generic management, mission-hostile management, conflicts of interest, and various threats to professional values, there have been little organized resistance by health care professionals to these aspects of health care dysfunction.

President Trump, however, has unwittingly inspired lots of resistance.  It seems that health care professionals now may be learning to resist their own leaders when resistance is due.

So maybe more people will be listening as I repeat this mantra....

I now believe that the most important cause of US health care dysfunction, and likely of global health care dysfunction, are the problems in leadership and governance we have often summarized (leadership that is ill-informed, ignorant or hostile to the health care mission and professional values, incompetent, self-interested, conflicted or outright criminal or corrupt, and governance that lacks accountability, transparency, honesty, and ethics.)  In turn, it appears that these problems have been generated by the twin plagues of managerialism (generic management, the manager's coup d'etat) and neoliberalism (market fundamentalism, economism) as applied to health care.  It may be the many of the larger problems in US and global society also can be traced back to these sources.

We now see our problems in health care as part of a much larger whole, which partly explains why efforts to address specific health care problems country by country have been near futile.  We are up against something much larger than what we thought when we started Health Care Renewal in 2005.  But at least we should now be able join our efforts to those in other countries and in other sectors.  

 True health care reform would restore health care leadership that understands health care and medicine, upholds the health care mission, is accountable for its actions, and is transparent, ethical and honest.

Health Care Renewal Bloggers to Lead Session on Conflicts of Interest and Health Care Corruption at Society for General Internal Medicine Meeting

Bloggers D r Wally Smith and Dr Roy Poses will be leading a sub-session on conflicts of interest and health care corruption in a late breaking session during the annual meeting of the Society for General Internal Medicine in Washington, DC. 

The session will be on advocacy related to important health policy issues that are now most salient in the current political context in the US.  The official session title is still pending.  The session will offer multiple sub-sessions on the most pertinent issues.  

The meeting goes from 19 - 22 April, 2017.  Our session will be on Thursday, 20 April, at 11:30 AM.  The meeting program is here but does not yet include this late breaking session.  It should appear in the registration options.