Friday, May 25, 2018

The March of Legal Settlements Made by Pharmaceutical Companies is Diminishing - Presaging Even Less Accountablity for Top Health Care Organizational Leaders?


We have long been discussing the legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks.  Despite the unsavory nature of the behaviors revealed by most settlements, which often appeared to risk patient harms, the companies involved usually have had to pay fines that were tiny relative to their multi-billion dollar revenues.  They companies only seldom have had to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

So these settlements also provided a window onto the impunity of top leaders of health care organizations.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations.

However, at least these settlements seemed to be useful markers of the such bad behavior apparently sanctioned by the leadership of these organizations.  But now even these markers seem to be fading away. 

We had an ongoing enterprise trying to discuss what appeared to be the most interesting and significant legal settlements by major health organizations.  This year, however, things have seemed slow. Our last major wrap-up of recent legal settlements appeared on October 1, 2017.  On December 3, 2017, we did comment on a significant but barely noticed settlement by Pfizer of allegations of fraud done to prevent generic competition.  But since then it has seemed very quiet.

A new settlement by Pfizer was just announced yesterday.  This inspired me to review the files I had lying around, which did include a few US settlements by pharmaceutical companies from 2017 which I had not discussed.  However, I found nothing from 2018.  Fortuitously while I considered all this, I found a new article that corroborates my perception that things are changing, probably not for the better.  That I will discuss below. 

But first I will review the latest single entry in the march of legal settlements,   (Note that the missed 2017 cases appear at the end of this post in an Appendix.)

Pfizer Settled Charges of Giving Kickbacks to Patients Through Disease Advocacy Organization to Mask the Prices of Its Drugs

On May 24, 2018, Bloomberg reported a rather unusual case involving a company that has often provided grist for our mill,

Pfizer Inc. used a 'purportedly independent' charity to help it sharply raise the price of a heart drug, shielding patients from the increase while Medicare picked up the higher costs, the U.S. Justice Department said Thursday in a civil settlement announcement.

Pfizer will pay about $24 million in the anti-kickback settlement, the government said in a statement. It’s the latest agreement in a long-running U.S. investigation into drugmaker ties to patient charities. Pfizer will also enter into a five-year monitoring agreement with the Department of Health and Human Services Office of Inspector General.

In particular,

The Pfizer settlement is focused on three drugs: Sutent and Inlyta for kidney cancer, and the heart-rhythm drug Tikosyn. Sutent had U.S. sales of $374 million last year, while Inlyta sold $126 million. Tikosyn sold $153 million in 2016, according to the company.

In the case of the heart rhythm drug, Pfizer worked with the Patient Access Network Foundation to finance a fund for heart patients at the same time it was taking a huge price increase. The drugmaker raised the price of Tikosyn -- by 44 percent during the last three months of 2015, according to the government.

'Pfizer coordinated the timing of the opening of the fund for these patients with the implementation of a Tikosyn price increase,' the government said. For the next nine months, patients on the drug accounted for virtually all the beneficiaries of the charitable fund, the Justice Department said.

In 2015, Pfizer gave more than $10 million to the Patient Access Network Foundation, according to a summary by the drugmaker. It doesn’t specify how much of that went to the heart drug fund.

In the case of the kidney cancer drugs, the New York-based drugmaker worked with a third-party pharmacy company to steer patients to the foundation for financial help, instead of giving out free drug. It tracked data from the pharmacy to confirm that some that Pfizer’s donations were going to patients on its products, according to the Justice Department.

As is usual in legal settlements made by big health care organizations,

Pfizer said the settlement isn’t an admission of liability. None of the company’s executives were charged or fined.

So the company got to say

This resolution reflects the company’s desire to put this legal matter behind it and focus on the needs of patients,...

And the impunity of managers of big health organizations continues.

Also, the amount of money involved in the settlement, $24 million, seems to be a drop in the bucket compared to the money Pfizer was making from the drugs involved, thus making it unlikely to deter future bad behavior by Pfizer or other organizations.  

The settlement doesn’t mention price increases for the cancer drugs, which can cost tens of thousands of dollars a year. Inlyta currently costs about $239 per 5-milligram tablet, or more $14,000 a month, according to data compiled by Bloomberg Intelligence. Sutent costs more than $600 for a 50-milligram capsule, or more than $17,000 for a six-week treatment cycle that includes four weeks on the drug and two off.

It also is an even tinier drop in the bucket compared to Pfizer's revenues,which were $52.5 billion in 2017, according to Pfizer.

Finally, the settlement did not seem informed by Pfizer's long track record of bad behavior, including settlements almost too numerous to count, and involving billions in fines.  For our most recent summary of this, look here.   

But the settlement at least provided some insight into the clever, if likely unethical ways pharmaceutical companies are now using to maintain the extremely high prices of drugs, an important reason US health care is the most expensive, if not the best in the world.

But why have there been so few settlements in 2018 besides this one?  

Drop in Law Enforcement Targeting White Collar Crime Under the Trump Administration

Today, I also noticed the report of a study that provides a bit of evidence that my perception of recent diminution of the march of legal settlements was not far off.  It suggests that there has been a recent drop-off not just in settlements, but in law enforcement efforts targeting white-collar crime in general.

As reported by Bloomberg, with the headline, "White-Collar Prosecutions Fall to 20-Year Low Under Trump," on May 25, 2018,

The number of white-collar prosecutions is on track to hit a 20-year low under President Donald Trump, after reaching a high in 2011 during the Barack Obama administration, according to a nonprofit research center that analyzes government data.

A total of 3,249 cases were brought during the first seven months of the U.S. government’s 2018 fiscal year, which runs from October 2017 to April 2018, according to a case-by-case analysis of government data by Syracuse University’s Transactional Records Access Clearinghouse, or TRAC.

That’s a 4.4 percent drop from the same period in 2017, a decline of 33.5 percent from five years ago, and 40.8 percent fewer cases than in 1998, according to the report. The analysis is of data obtained by TRAC under the Freedom of Information Act.


So my perceptions that the number of the sorts of legal settlements of interest to us has likely been diminishing was accurate.  Unfortunately, rather than the decrease being due to better behavior, decresed reporting, or my laxity in case-finding, it now looks that US government efforts to combat bad behavior by big health care corporations and to hold top leaders of these organizations accountable is getting even more lax.

So once again, with feeling...  

We seem to be sliding backwards in efforts to make the leaders of large health care organizations accountable, and particularly to combat the worse manifestation of their lack of accountability, impunity. 

The system appears to be rigged to favor of leadership and management of large companies, as opposed to health professionals, and particularly as opposed to patients.  For years now we have discussed stories like this, which include allegations of severe misbehavior by large health care companies affirmed by legal settlements, but which only involve paltry financial penalties to the companies, and almost never any negative consequences to any humans. Furthermore, as in this case, these stories are often relatively anechoic, noted often only briefly in the media, and have inspired no real action by the US government. 

This adds to the evidence suggesting that US health care, at least, is rigged to benefit its top insiders and cronies, and as such, is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, and allowed increasing concentration of power by large corporations. Managerialism allowed the top leaders of these corporations and their insider cronies to amass increasing power and money. Everyone else, other employees, stockholders of public corporations, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results for patients and the public.  
We have called for years for what we sometimes term "true health care reform" to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can enable the rise of demagogues and would be dictators who promise only they can solve the problem.  Donald Trump cried out that only he could fix our problems and drain our swamps.  However, at least in terms of policing white-collar crime, particularly in health care, he seems to be letting the swamp waters rise.

While we thus have bigger problems to solve than the impunity of health care leaders, let us remember the need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.

Appendix - For the Record, Previously Missed US Settlements from 2017 

(January) Shire paid $350 million to settle allegations that it gave kick-backs to physicians and clinics to promote Dermagraft, and promoted it for unapproved uses (per the Wall Street Journal) .  One unusual aspect of this case was that three executives of a Shire subsidiary which sold this product were also convicted.

(April) Sanofi agreed to pay $19.8 million to settle allegations it overcharged the US Department of Veterans Affairs (per Modern Healthcare).

(May) Merck and Upsher-Smith Laboratories agreed to pay $60.2 million to settle an anti-trust class action lawsuit alleging they conspired  to delay a generic version of a potassium product.  Note that the FTC had sued the companies over this matter, but lost their case. (per Reuters).

(June) Allergan agreed to pay $13 million to settle allegations that it paid kick-backs to promote sales of various opthalmic preparations (per the Philadelphia Inquirer).

Sunday, May 20, 2018

A Higher Impunity - How Can we Reduce Health Care Leadership's Impunity When the President Claims His Own Impunity?

Impunity: an Introduction

We believe that unaccountable leadership is a major cause of health care dysfunction.  Impunity is an extreme form of unaccountable leadership.

We have noted that despite numerous legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks, almost never do top leaders who presided over these actions face any negative consequences.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations. How executives got to the point of having such impunity has never been clear.

Timidity and lenience by regulatory agencies and law enforcement seem to be factors. For example, in 2014, we noted  that Attorney  General Eric Holder had previously been reluctant to go after big organizations because of the economic consequences of their failure:

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.
In general we have seen much tougher enforcement directed against relatively small health care players than against bigger ones.  For example, we noted in 2014 that settlements by  Merck, Eli Lilly, Takeda, and Teva, all large pharmaceutical companies, allowed the companies to pay fines to settle allegations that they pushed dangerous products, while none of the executives who authorized, enabled, or directed these actions faced negative consequences.  In contrast, at that time, the CEO of a relatively tiny Sheffield Pharmaceuticals was convicted of a felonious wastewater discharge (see this post).

However, this rationale does not address the failure to pursue enforcement actions against organizational leaders who who enabled, authorized, directed or implemented misbehavior.  It is not that there are no good legal tools available to do so.  We wrote in 2012,
As we noted here, a Supreme Court case from 1943 empowered the government to seek penalties against responsible corporate officers (the "responsible corporate officer doctrine") who were in a position to stop a fraud that resulted in a guilty plea or conviction, particularly for the selling of misbranded or adulterated drugs into interstate commerce under the US Food and Drug Act.    Despite a threat made in 2010 by the chief counsel of the Inspector General's office of the US Department of Health and Human Services to use such legal authority to "get high level executives out of companies," nothing of the sort has happened.

Later, in 2015, under the previous administration, there was a tiny sign of progress against impunity.  Then, Attorney General Holder authorized the creation of a Corporate Strike Force to take strong actions in response to health care corporate fraud.  However, last year the Trump administration gutted even that small effort  (look here).

Why are efforts to reduce the impunity of health care corporate leaders going backward?  It may be because the very top leadership of the current administration, that is, the President himself, has long personally enjoyed his own impunity.

Examples of Donald Trump and Family's Apparent Impunity Before He Became President

As a wealthy businessman, Donald Trump and his family were often linked to apparently illegal activities, but seemed to avoid any intensive investigation, much less negative consequences.

A 2016 Politico article cataloged Trump's ties to organized crime, and found "Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t." Also,
Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.
We have found numerous examples, whic are below listed chronologically according to the time of occurrence of relevant events.

Trump Accused of Lying to Federal Investigators about his Mafia Connections in the 1980s

A WNYC piece from October, 2016, was based on an interview with a federal prosecutor who had investigated organized crime in the 1980s,

Attorney Kenneth McCallion was one of the federal prosecutors involved in that investigation. He says there appeared to be a sweetheart deal between the Teamsters Local 282 and Trump, where Trump would get a promise of cooperation from organized labor—including breaking up any strikes by minority workers—in exchange for no-show jobs, a lucrative concrete contract and a luxury apartment for the union president's girlfriend.

'After we indicted them, the Teamster leaders called a citywide strike, but there were two job sites they exempted from that. One was Trump Tower and the other was Trump Plaza,' McCallion said.

Yet despite this, Trump was never prosecuted.

'Even though Donald Trump lied to law enforcement about his relationship and lying to federal agents is a federal crime, he basically got a pass at that point,' he said.

Trump Accused in Legal Papers of Accepting Kickbacks, but the Charges were not Investigated

The 2016 Politico article also noted:

[An associate of a convicted racketeer] in court papers accused Trump of taking kickbacks from contractors, asserting this could 'be the basis of a criminal proceeding requiring an attorney general’s investigation' into Trump. Trump then quickly settled, paying the woman a half-million dollars.

No further investigation ensued.

After a Judge Found that he Conspired to Violate Fiduciary Duty and Committed Fraud, Trump was able to Settle with Details Sealed

Again in Politico,

In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the 'breach involved fraud and the Trump defendants knowingly participated in his breach.' The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.

It is not clear that Trump was personally responsible for paying whatever the settlement entailed.  No criminal charges apparently followed.  

Applying for a Casino License, Trump Failed to Disclose he was Under Grand Jury Investigation, but Later Kept his License

As also reported by Politico, when Trump was trying to obtain a license for a New Jersey gambling casino,

Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.

But it didn,'t. And despite the fact that

Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.

Trump's Casino Company Paid Multiple Fines for Violating Regulations, but Trump was not Personally Sanctioned 

An Atlantic article from January, 2017, stated,

Trump has been repeatedly fined for breaking rules related to his operation of casinos. In 1990, with Trump Taj Mahal in trouble, Trump’s father Fred strolled in and bought 700 chips worth a total of $3.5 million. The purchase helped the casino pay debt that was due, but because Fred Trump had no plans to gamble, the New Jersey gaming commission ruled that it was a loan that violated operating rules. Trump paid a $30,000 fine; in the end, the loan didn’t prevent a bankruptcy the following year. As noted above, New Jersey also fined Trump $200,000 for arranging to keep black employees away from mafioso Robert LiButti’s gambling table. In 1991, the Casino Control Commission fined Trump’s company another $450,000 for buying LiButti nine luxury cars. And in 2000, Trump was fined $250,000 for breaking New York state law in lobbying to prevent an Indian casino from opening in the Catskills, for fear it would compete against his Atlantic City casinos.

Also, while Trump was attempting a hostile take-over of a rival casino,

the Federal Trade Commission fined him $750,000 for failing to disclose his purchases of stock in the two companies, which exceeded minimum disclosure levels.

Trump and Family were Accused of Self-Dealing and Accepting Illegal Donations while Operating the Trump Foundation, but were not Individually Penalized

Also reported by the Atlantic,

The [Trump] foundation appears to have broken IRS rules on 'self-dealing” by paying to resolve the legal disputes as well as buying a portrait of Trump and a Tim Tebow helmet that went back to the Trump family. In November, in tax filings posted online, the Trump Foundation said it had violated self-dealing rules in 2015 and in previous, indeterminate, years. On the donation, Trump and Bondi both say there was no quid-pro-quo, but the donation was an illegal one for a charitable nonprofit, and the foundation had to pay a $2,500 fine. Liberal watchdog group Citizens for Responsibility and Ethics in Washington charges other laws may have been broken as well. New York Attorney General Eric Schneiderman has reportedly launched an investigation into the foundation. Schneiderman has also informed the foundation that it is in violation of rules on fundraising and ordered it to quit. Trump has announced plans to shutter his foundation, but reportedly cannot do so while it is under investigation.

Yet so far no person has been charged with any related violations. Note that it appears that Trump may have had leverage on Mr Schneiderman, who has now resigned (see below).  Although there were reports in 2017 that the Foundation was going to shut down, as of March, 2018, according to an article in The Hill, the ranking Democratic member of the House Oversight and Government Reform Committee was still trying to get records related to the self-dealing described above from the leadership of the apparently still existing foundation (look here). 

Trump's Taj Mahal Casino Was Fined for Breaking Rules about Money Laundering, but Trump Paid no Penalties

A May, 2017, CNN story stated,

The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.

It's a bit of forgotten history that's buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump's ties to Russia have obtained access to, CNN has learned.

The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.

Trump's casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.

There is no record suggesting anyone looked into Trump's involvement with these violations. Note that

The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.


But key details of the casino's cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions.

Then, in 2015, FINCEN publicly announced:

The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.

Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.

'Trump Taj Mahal received many warnings about its deficiencies,' said FinCEN Director Jennifer Shasky Calvery. 'Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed.'

Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.

Again, there is no record of any negative consequences for Mr Trump

Trump Made False Statements Under Oath, but was not Charged with Perjury

A Mother Jones article published February, 2016, recounted that in connection with a libel suit Mr Trump filed against journalist Timothy O'Brien alleging O'Brien under-reported Mr Trump's wealth,

In 2007—two years before a New Jersey judge tossed out the case—Trump was questioned during a deposition. Over the course of the two-day-long interrogation, Trump was forced repeatedly to acknowledge having made false statements. And at one point, a lawyer for O’Brien and his publisher asked Trump a straightforward question: Have you ever before associated with individuals you knew were associated with organized crime?'

Trump, who was testifying under oath, answered, 'Not that I know of.'

That was a clear and unequivocal response. But it was not true. Two years earlier, O’Brien had interviewed Trump and specifically asked him about Sullivan and Shapiro. O’Brien, now an editor and writer at Bloomberg, has provided Mother Jones with a transcript of the interview, and it conclusively shows that Trump believed that these two men were associated with organized crime....

Trump: They were tough guys. In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa. I don’t know if you ever heard that.

O’Brien: I have heard that. And that he was, you know…


Trump: I just was able to handle them. And I, really, I was able to handle them. I found Sullivan to be the tougher of the two. I started hearing reports about Sullivan, that he killed Jimmy Hoffa….


O’Brien: What was Shapiro like?

Trump: He was like a third-rate, local, real estate mob guy. Nothing spectacular. And I, you know, I got lucky. I heard a rumor that Sullivan, because Sullivan was a great con man, I heard a rumor that Sullivan killed Jimmy Hoffa. And because I heard that rumor I kept my guard up. You know, I said, 'Hey, I don’t want to be friends with this guy.'

So here was Trump connecting Sullivan to the Hoffa murder and calling Shapiro a 'mob guy.'

The same article also asserted that Trump lied in a deposition about knowing and working with Felix Sater, who who "had once been involved in a Mafia-linked stock swindle," and who "had worked with the Trump Organization."

Ivanka Trump and Donald Trump Jr Escaped Indictment for Fraud

As reported by the New Yorker in October, 2017, despite considerable evidence that the two children of Donald Trump had misled potential buyers of Trump SoHo condominiums, Cyrus Vance, the Manhattan District Attorney overruled his staff by halting an investigation of them in 2010.  Later, the Trumps' attorney, Marc Kasowitz, made a large donation to Mr Vance's campaign.   

Trump University Settled Fraud Allegations, Trump Not Charged

As reported by the New York Times in 2017, "the final settlement of allegations that 'Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn" was approved by a judge. Litigation about these allegations had gone on for years, but after his election in November, Mr. Trump reversed course and agreed to pay $25 million to resolve the litigation. He did not admit fault, and he maintained in posts on Twitter after the settlement announcement that he "did not have the time to go through a long but winning trial on Trump U."

The settlement resolved lawsuits brought by the Attorney General of New York, Eric Schneiderman, among others.  However, Mr Trump was never charged with a crime by Mr Schneiderman among others.  There is some reason to think Mr Trump took actions to ensure his impunity.

According to Bloomberg on May 11, 2018,
Back in 2013, Donald Trump was exploring a presidential run. His Trump University was in the crosshairs of New York’s crusading attorney general. Around the same time, Trump and his personal lawyer got an interesting piece of information: Eric Schneiderman, the AG, was accused of sexually abusing two women.

The details of the accusations were not made public at that time, but later,
Trump took aim at Schneiderman in a tweet on Sept. 11, 2013, that also referred to New York politicians who’d resigned over allegations of sexual misconduct, Anthony Weiner and Eliot Spitzer.

'Weiner is gone, Spitzer is gone -- next will be lightweight A.G. Eric Schneiderman. Is he a crook? Wait and see, worse than Spitzer or Weiner,' Trump tweeted.

Mr Schneiderman never brought criminal charges against Mr Trump.  Could it be that he was made aware that Trump had information about Schneiderman's sexual behavior that he could use against him? This month, the allegations of his sexual misconduct were finally made public and he then resigned.  The settlement, again absent any charges against Mr Trump, was approved in March, 2017.

Summary of Trump's Pre-Presidency Impunity

While Trump's firms have had to pay multiple fines for breaking rules and laws, and Trump and the immediate family members who work with him in the Trump Organization were credibly accused of multiple types of wrong-doing, including various apparent crimes, neither Trump nor his family members were ever indicted, or apparently investigated for crimes. 

President Trump's Arguments That He Has De Jure Impunity

Since he was elected, President Trump and his proxies have asserted he now has de jure impunity that seems to go well beyond the sort of de facto impunity he enjoyed as a wealthy and powerful businessman and celebrity.  Note that none of these statements attempted to deny that he had or would violate laws.  They were all assertions that President Trump is not subject to the rule of law.

Examples appear again in order of apparent occurrence.

Trump Said He is Not Subject to Laws on Conflicts of Interest.

 As reported by CNN in November, 2016:

Donald Trump said on Tuesday that he faces no legal obligation to cut ties with his businesses, even as he described how winning the presidency has made his brand 'hotter' and acknowledged advancing his business interests during a conversation with a British politician.

'The law's totally on my side, the president can't have a conflict of interest,' Trump said in an interview with New York Times editors and writers.

Trump said he was surprised by how little was legally required of him. 'In theory I could run my business perfectly and then run the country perfectly. There's never been a case like this,' he said. 'I'd assumed that you'd have to set up some type of trust or whatever and you don’t.'


It’s true that federal conflict-of-interest laws exempt the president, and he’ll have the power to change White House ethics rules. But there remains a constitutional ban on accepting payments from foreign governments, as well as anti-corruption laws against bribery and fraud.

Trump Stated His Personal or Family Finances Cannot be Subjects of Investigation

In an interview with the New York Times in July, 2017, he responded to a question:

SCHMIDT: Last thing, if Mueller was looking at your finances and your family finances, unrelated to Russia — is that a red line?

HABERMAN: Would that be a breach of what his actual charge is?

TRUMP: I would say yeah. I would say yes. By the way, I would say, I don’t — I don’t — I mean, it’s possible there’s a condo or something, so, you know, I sell a lot of condo units, and somebody from Russia buys a condo, who knows? I don’t make money from Russia. In fact, I put out a letter saying that I don’t make — from one of the most highly respected law firms, accounting firms. I don’t have buildings in Russia. They said I own buildings in Russia. I don’t. They said I made money from Russia. I don’t. It’s not my thing. I don’t, I don’t do that. Over the years, I’ve looked at maybe doing a deal in Russia, but I never did one. Other than I held the Miss Universe pageant there eight, nine years [crosstalk].

SCHMIDT: But if he was outside that lane, would that mean he’d have to go?


HABERMAN: Would you consider——

TRUMP: No, I think that’s a violation.

A typical interpretation of this rather incoherent response was in The Hill,

President Trump warned special counsel Robert Mueller from investigating his family’s finances beyond the scope of the probe into ties between his administration and Russia in an interview with The New York Times on Wednesday.

'I think that’s a violation. Look, this is about Russia,' Trump told the Times.

Trump during the interview said he wasn’t ruling out firing Mueller as special counsel on the probe into Russian meddling in the presidential election.

He did not say that he would order the Justice Department to fire Mueller or under what circumstances he would fire him, but he indicated Mueller investigating his family's finances would cross a line.

Trump's Attorney Argued that a President Cannot be Charged with Obstructing Justice

An article in Axios from December, 2017, strated

John Dowd, President Trump's outside lawyer, outlined to me a new and highly controversial defense/theory in the Russia probe: A president cannot be guilty of obstruction of justice.

The 'President cannot obstruct justice because he is the chief law enforcement officer under [the Constitution's Article II] and has every right to express his view of any case,' Dowd claims.

However, a Washington Post article published on May 18, 2018, stated that Mr Trump's current attorney is not so sure about that,

But apparently [current Trump laywer Rudy] Giuliani disagrees. Trump's own lawyer said Friday that his client is not immune from charges of obstructing justice — which is clearly the most troubling part of special counsel Robert S. Mueller III's investigation for Trump personally. While Trump hasn't been directly linked to potential collusion with Russia, he has taken many actions as president that have caught Mueller's attention and could feasibly be seen as trying to influence the course of the investigation. So whether Trump can technically obstruct justice at all is a key point, and it's one Giuliani just conceded.

Trump's Attorneys Argued He Is Immune from Civil Court Proceedings while President

They had argued that he has immunity from lawsuits as President, but as Reuters reported this month,

A New York state judge on Tuesday said U.S. President Donald Trump must face a defamation lawsuit by a woman who accused him of sexually harassing her after she appeared on his former reality TV show.

The decision by Justice Jennifer Schecter of the New York state court in Manhattan in favor of California restaurateur Summer Zervos, a former contestant on NBC’s 'The Apprentice,' raises the prospect that Trump might have to answer embarrassing questions in court about his behavior toward women.

She rejected Trump’s claim that he was immune from being sued, finding 'absolutely no authority' to dismiss litigation related 'purely to unofficial conduct' solely because he occupied the White House.

'No one is above the law,' the judge wrote.

Trump's Attorney Asserted He Cannot be Forced to Testify in Court

As reported by Reuters two days ago, on May 17, 2018, President Trump's current lawyer Rudolf Giuliani:

told Fox News Thursday morning not just that the special counsel cannot indict President Trump but that Mueller’s team cannot even subpoena the president to appear before a grand jury. Giuliani’s theory is that if the president cannot be prosecuted, he cannot be called to testify in an investigation of his conduct.

'We’re pretty comfortable, in the circumstances of this case, they wouldn’t be able to subpoena him personally,' Giuliani said. 'They could probably require documents to be produced. That’s what was required of Nixon. We’ve provided 1.4 million documents. They probably could require you to testify in a civil case, possibly even as a witness in a criminal case, but they can’t require you to testify in what would be your own case.'


I talked Thursday to eight lawyers who’ve been involved in previous probes of U.S. presidents. Every one of them said Giuliani’s theory is incorrect.

Some of them had quite strong words.

George Conway wrote the Supreme Court briefs for Bill Clinton accuser Paula Jones in the case that led to a unanimous ruling from the justices that the Constitution does not shield presidents from testifying in certain civil suits. He said Giuliani’s assertion that President Trump cannot be subpoenaed is 'drivel.'

Lawrence Robbins, who represented White House officials in the Whitewater investigation, said Giuliani’s theory is 'facially preposterous.'

Solomon Wisenberg, who worked on the Whitewater probe of Clinton, called the theory 'delusional.'


Unaccountable leadership, particularly leadership with impunity, has been a major feature of modern US health care, and probably explains the continuing bad behavior, including criminally bad behavior and outright corrupt behavior ongoing in US health care organizations. While the US government began to address impunity in the last few years, those efforts have apparently halted during the current Trump regime.  Given President Trump's long record of personal impunity during his career as a wealthy and prominent businessman, and his assertions that as President he is above the law, that should be no surprise.

Yet, true health care reform requires well-informed leaders who uphold health care professionals' values, put patient's and the public's health ahead of all other considerations, avoid self-interest and conflicts of interest, are honest and ethical, and surely are not corrupt.  They need to work in the context of a government that is of, by and for the people, not of, by and for a demagogic leader.

In these times, true health reform is not possible under the current president. We will watch health care dysfunction continue to grow, and patients' and the public's health continue to decline until someone new takes the oath of office.   

Friday, May 11, 2018

Novartis' Latest Ethical Misadventure: Did it Pay to Play ... with the US President?

Amidst the news deluge, a story that stood out in the last few days was that of the strange relationships between a consulting firm set up by President Donald Trump's former lawyer and Trump Organization counsel Michael Cohen, and several large corporations.  As reported on May 8, 2018 by the New York Times, the focus was on the payments made to the firm, Essential Consultants LLC, by a financial firm, Columbus Nova, associated with a Russian oligarch, Viktor Vekselberg, who has been described as "Kremlin-linked."

 Did Novartis Pay Michael Cohen's Essential Consultants LLC for Access to the White House?

However, Essential Consultants LLC also had a poorly described business relationship with Swiss-based multinational pharmaceutical manufacturer Novartis.  Per the NYT,

Among the other payments to Mr. Cohen’s company described in the financial records were four for $99,980 each between October and January by Novartis Investments S.A.R.L., a subsidiary of Novartis, the multinational pharmaceutical giant based in Switzerland. Novartis — whose chief executive was among 15 business leaders invited to dinner with Mr. Trump at the World Economic Forum in January — spent more than $10 million on lobbying in Washington last year and frequently seeks approvals from federal drug regulators.

Additional reporting on this relationship suggests that Novartis may have been trying to buy access to or influence on the Trump administration. More details on the arrangements between the firms came from Ed Silverman in Stat News ,

A Novartis unit called Novartis Investment SARL made four payments, each one totaling $99,980, to the consulting firm, according to documents released by Michael Avenatti, the lawyer for Stormy Daniels, the adult film star whose real name is Stephanie Clifford and who was paid $130,000 by Essential Consultants to keep quiet about her alleged affair with Trump.

In a statement, Novartis says it entered into a one-year agreement with Essential Consultants in February 2017, 'shortly after the election of President Trump focused on U.S. healthcare policy matters. The terms were consistent with the market. The agreement expired in February 2018.'

The first Novartis payment was purportedly made on Oct. 5, 2017, while the subsequent payments followed in successive months — Nov. 3, 2017, Dec. 1, 2017, and Jan. 5, 2018, according to the documents.

A Novartis spokesman said that 'any contracts were done prior to (chief executive officer Vasant Narasimhan) taking over' and that he 'had no involvement whatsoever with this arrangement.' He did not provide any further details concerning the payments, but indicated the agreement had expired.

Narasimhan succeeded Joe Jimenez as Novartis chief executive on Feb. 1 this year, although he attended a dinner with Trump at the World Economic Forum in Davos, Switzerland, on Jan. 25, which Avenatti noted in the documents that he released. A Novartis spokesman later added that Jimenez last met with Trump at a meeting with executives from several drug makers last spring.

Another article by Mr Silverman in Stat gave some further rationale for this agreement.

Michael Cohen, a longtime fixer for the president, reached out to Novartis’s then-chief executive officer Joe Jimenez, promising help gaining access to Trump and influential officials in the new administration, according to an employee inside Novartis familiar with the matter.

Jimenez took the call and then instructed his team to reach a deal with Cohen.

Furthermore, a Novartis empoyee said,

'With a new administration coming in, basically, all the traditional contacts disappeared and they were all new players. We were trying to find an inroad into the administration. Cohen promised access to not just Trump, but also the circle around him. It was almost as if we were hiring him as a lobbyist.'

A Huffington Post article found

an official with one of those companies [Novartis, At&T, or Korea Aerospace], who requested anonymity to speak openly, was more blunt. The official said Cohen 'was promising access to Trump and members of the administration, positioning himself as a lobbyist.'

So there seemed to be a confluence of reporting suggesting that Novartis paid Michael Cohen via the perhaps ironically named Essential Consultans LLC for access to or influence over the Trump administration, and possibly specifically President Trump himself.  Chummy relationships between large health care organizations, particularly large for-profit health care corporations, and US government agencies that regulate health care, or set health policy are old news.  We have frequently discussed the revolving door through which people travel going to and from leadership positions in health care corporations and in health related government agencies.  While we have discussed many examples of health care corporations being accused of, settling allegations of, or even pleading guilty to charges of bribery or kickbacks, I cannot recall any case of a health care corporation paying for access to and possibly raising suspicions about the bribery of the President of the US. That would be a new low in the annals of health care corruption.

Nothing New for Novartis

Thus it should be no surprise that pundits on the business of health care were back on their heels.  John LaMattina, wrote for Forbes,

The most recent revelation involving Novartis is both shocking and depressing.


One wonders what Novartis was thinking in entering such an agreement. Clearly, any sensible person would look at such an agreement cynically and come away with the view that Novartis was attempting to buy access to the President through his lawyer. Furthermore, the one year contract that Novartis had with Cohen - $100,000/month – is a lot of money for a lawyer with no background in healthcare. Didn’t anyone at Novartis think about how badly this would look if such a deal was made public?

But Mr LaMattina is a former President of Global Research and Development for Pfizer, a company with a long history of ethical misadventures (look here), so may be a bit biased about the integrity of the pharmaceutical industry.

In fact, Mr Silverman's first article suggested that Novartis is not so innocent.

Throughout much of last year, Novartis was embroiled in a bribery scandal in Greece, where the government was probing allegations that the drug maker made payments to numerous politicians to boost sales of its medicines through public agencies.


In the U.S., the drug maker is defending a long-running lawsuit that is being pressed by the federal government over allegations it provided doctors with paid speaking engagements, fancy meals, and alcohol in exchange for writing prescriptions for its drugs.

The case is being closely watched because the company has been accused of being a repeat offender. How so? In 2010, Novartis paid $422.5 million in penalties and pleaded guilty to a misdemeanor to resolve criminal allegations that it improperly promoted several medicines.

At the time, the company was already operating under a Corporate Integrity Agreement, which required establishing an internal compliance program and reporting violations, among other things. That agreement was signed in September 2010, yet the lawsuit alleged the infractions occurred afterward, suggesting Novartis might face a stiff penalty should it attempt a settlement with the government.

Moreover, those who follow Health Care Renewal would realize that Novartis' record of ethical misadventures is much more extensive than that.

In October, 2016, Novartis settled charges that from 2002-2009 it promoted use a skin cream for pediatric patients for unapproved indications and in ways that could have endangered patients (look here).  

In March, 2016, Novartis settled charges by the US Securities and Exchange Commission (SEC) under the Foreign Corrupt Practics Act (FCPA) thatfrom 2009-2013 it bribed Chinese health care professionals to increase sales (look here).  

In November, 2015 we discussed what were then the latest misadventures by Novartis and its leadership.  At that time, our post included these section headings covering 2014-15:

-  Japanese Health, Labor and Welfare Ministry Found that Novartis Concealed Serious Adverse Effects
- Novartis Executive Pleads Guilty to Bribing Polish Official
- Novartis Subsidiary Sandoz Settles Allegations that it Misrepresented Pricing Data to US Medicaid
- Express Scripts Settles Allegations that it Accepted Kickbacks from Novartis
- Novartis Settles US Allegations of Kickbacks to Enhance Sales of Multiple Drugs

Furthermore, in that post we also documented Novartis' previous record.   In March, 2014, we had noted:
- Italian authorities had fined Novartis and Roche for colluding to promote the use of an expensive opthamologic treatment
- the NY Times published interviews with physicians ostensibly showing how Novartis turned them into marketers for the drug Starlix
- Japanese investigators charged Novartis with manipulating clinical research
- Indian regulators canceled a Novartis import license, charging the company with fraud.

Also,  in 2013, Novartis was fined for anti-competitive practices in its marketing of Fentanyl by the European Commission (look here), and in 2011 its Sandoz subsidiary settled allegations of misreporting prices in the US for $150 million (look here)   Other Novartis misadventures from 2010 and earlier, including the two described in the Stat News article, appear here.  So Novartis has quite an impressive, if not infamous record of ethical failures.

Note that through all these cases, Novartis leadership enjoyed impunity.  No Novartis top manager suffered any negative consequences from any of them (although one apparent mid-level company manager at the Polish subsidiary did plead guilty), and all these previous episodes apparently did not suggest a pattern of recidivism to US authorities this time sufficient to attempt to impose any negative consequences on higher level managers.

So is it at all surprising that the previous Novartis CEO did not see a big problem paying Donald Trump's lawyer and former corporate counsel to a little access to The Donald?


Most corrupt actions require two parties.  While it is understandable that there has been tremendous recent interest in evidence that the Trump regime is corrupt (look here), any such corruption had to have been enabled by unethical actions on the parts of others.  Those others likely included large numbers of leaders of large corporations, including health care corporations.  We have shown repeatedly that top leaders of US health care organizations have enjoyed impunity that has allowed them to foster a host of unethical actions, including crimes such as bribery, fraud, and kickbacks, and true health care corruption.

Our societal tolerance of health care (and other forms of) corruption probably enabled the currently breathtaking scope of executive branch corruption.  For a long time we have argued that health care corruption is a major cause of health care dysfunction.  As we wrote in August, 2017, 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.

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 got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,
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.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects somewhere else, mainly  presumably benighted less developed countries.  At best, the corruption in developed countries that gets discussed is at low levels.  In the US, frequent examples are the "pill mills"  and various cheating of government and private insurance programs by practitioners and patients.  Lately these have gotten even more attention as they are decried as a cause of the narcotics (opioids) crisis (e.g., look here).  In contrast, the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics (e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," or the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

The continuing festering of widespeard amorality and corruption at the top of US business has fostered a situation in which now corruption appears to have spread to the top of the US government.
 The only way we can now address health care corruption is to excise the corruption at the heart of our government.

Tuesday, May 08, 2018

More Dander Rising: Ditto to Dr. Poses

Let me second the emotion now recently and repeatedly voiced by Dr. Poses in these pages. It's getting real hard to separate the health policy and malfeasance fecaliths from the general Washington Scheißsturm raining down on all of us. We feel pretty much buffeted non-stop, like (whomp!) badminton shuttlecocks in the corruption game the prevaricator-in-chief seems happily to carry on forever. Or at least until some better angels out there in America rise up to put an end to it. Because it's pretty obvious the party hacks clearly aren't going to. They're way too busy (padre you're fired! padre you're unfired!) doing other important stuff. And avoiding the wrath (why invite trouble?) of the prevaricator-in-chief.

Maybe tweets are effective covering fire. Maybe it's not a kakistocracy we live in so much as a tweetocracy.

In fact it's also getting pretty easy to find the links between the micro- and the macro-misdeeds in today's kakistocracy. I want to talk about two of those today. Both stem from recent months' events in the game of musical chairs at two of the most cost- and problem-ridden departments overseen by our executive branch. Of course, as the reader likely already surmised, these are the two health-related departments: HHS and veterans' affairs. Dr. Poses has in fact just posted on the latter, given the zany events in the previously barely-known White House Medical Unit.

(In fact, in discussing what happens with the current administration Dr. P has hit upon an essential mechanism linking the macro- and the micro-elements: the posse of inbound revolving door plants whom the White House directs to these departments. In situations where some guy with expertise for a job may show questionable judgment in comporting himself--yes we're always talking about men these days--all too soon, as a result of these inbound hacks, he's offed by those appointed to "help" him. Which makes for great press (?) but poor government. But since when is anything like good government even the point? Hacks make hay while the sun shines. They're out to satisfy their rich donors like the Kochs and Mercers. Some get to stay in place if they're somnolent enough. I mean you, Carson. Others, including folks who're not hacks, for example Dr. David Shulkin at the VA, are out on their tushies before press or good-government critics get to prove much of anything.)

Let's take these two agencies in turn.

The VA. First there was David Shulkin. I've written about him before (e.g. here and here), as has Dr. Poses. Not much more to say here about the guy who came in with good intentions, inaugurated some important positive changes in information technology and elsewhere in a badly-battered organization, then made what might at worst be characterized as some slightly sloppy mistakes in his record-keeping and travel-planning while on official business.

Then the jackals swooped. Out he went. Next up: Ronny Jackson, ER doctor, erstwhile head of the White House Medical Unit and Navy frat-boy par excellence. Ronny was to be Shulkin's replacement, until his boss rewarded his sucking up with a now-standard distancing maneuver. Which might be described as "stir up a fuss, you go under the bus." Jackson, AKA "Dr. Feelgood" (ibid. and here), will never be VA Secretary now, or get his second admiral's star. (Or whatever it is that admirals get.) His unit's curiously isolated place in the hierarchy allowed him allegedly to abuse his reports, but at the same time seemingly left him, his boss, and anyone who's supposed to vet cabinet-level appointees, blind-sided about what it takes to run a large health care organization. Oh, wait, they actually started with someone who had what it takes. But none of this is any longer about good government or effectiveness or expertise. It's about ideology, or ideology as refracted through donors' eyes.

Ideology and narcissism.

And Jackson's boss, as his latest hapless subaltern edges closer to the undercarriage of the bus, says "[t]hey’re trying to destroy a man," Ronny's such a good guy--just look what he said about my health, my hands are clean, it's all fake fake fake. Fake news. Actually, classic gaslighting. Now the boss is going after Ronny's tormentor, Montana Sen. Jon Tester. But my friends in Montana tell me Tester's not got so much to worry about. Montanans are a cussedly independent lot. They don't take too kindly to these bad-mouthing bad boys from out of the swamp over there in Dee-Cee.

So who's next in the cavalcade of stars for the truly humongous VA bureaucracy and its leadership?

One name being bruited about is that of Jeff Miller, a lobbyist who once as a congressman chaired the House Committee on Veterans' Affairs. But according to Newsweek, Miller's real claim to fame is his work lobbying for insider trading hedge funder and Very Happy Guy Steven A. Cohen. Turns out Cohen is a major funder for the privatized health care that Shulkin quite rightly opposed. (See ibid. in Newsweek, and here.) Super-tight in with this crowd are also the Koch Brothers, the Daddies Warbuck for Concerned Veterans for America. CVA is another remarkable organization. It's lofty aims "to preserve the freedom & prosperity we & our families fought & sacrificed to defend" (where'd they find this copywriter?) include notable projects such as "VA Fail."  "VA Fail" is a "tracker" you can actually subscribe to so you can follow each and every one of this department's "missteps, mismanagement and misguidance." This is an obvious set-up to do away with an essential and in many ways still-vital branch of government. One that really needs help to change some dysfunctional internal systems, but still really helps people at reasonable cost compared to the fragmented private systems.

Right now I'm a long, long way from Washington. I'm in a place where government is equally corrupt and dufus-like. But at least the people are nice to each other and hip to their government's misdeeds. Still, it seems these democracies are having a really hard time right about now. Many citizens of the First World have lost faith in their voters' ability to impact the bizarre bull-in-china-shop behaviors of their leaders. Truth is, veterans want an effective and separate VA health system. I know, I worked there for a lot of years. The K-Stone Cops want to give them anything but.

Profit motive über alles. An awful lot of  members of "the Base" are veterans. Will they notice this scam?

Health and Human Services. First there was Tom Price, who was soon out of that job because a minor corruption scandal far eclipsed by his own entirely legal but misguided antics. Antics that while perfectly legal were perfectly dangerous, attempts to make good on campaign promises to sunder HHS and the Affordable Care Act. While Secretary, Georgia orthopedist and anti-Medicare activist Price approached the ACA the way he had most issues once arrived in Congress: undermine, undermine, undermine.

Look at him now. While Secretary, the Post tells us, he was all
"The individual mandate is one of those things that is actually driving up the cost for the American people in terms of coverage” ... on ABC’s “This Week” last summer. So, what we’re trying to do is make it so that Obamacare is no longer harming the patients of this land — no longer driving up costs, no longer making it so that they’ve got coverage but no care.”

But in a preternatural paroxysm of honesty just a week ago, on May Day, Price goes and tells a health conference just the opposite. It was the Congress that knew that the lack of the mandate would drive up the cost of insurance. But ideology and the donors said do it, so with his help they did it anyway. Along with any number of other measures to try and deep-six Obamacare. Of course they failed in spite of themselves--Obamacare is hanging in there. But it's no thanks to the guy whose job it was to make it work. He did everything he could to make it not work. (After his talk, of course, Price tried to walk back some of these views.)

Following Price, we now have a drug company executive, Alex Azar. He's actually done a few good things in his short time over at HHS. I've known a lot of drug company executives, as well as a lot of right wing doctors. The former are often a lot less ideological and a lot more practical than the latter. In a conversation this week with one of the most successful members of the former group, I find when it comes to activities questioned by the political left, e.g. lobbying, the response is remarkably forthright and lacking in hysterical right wing cant. "We need to sell our product" is the message. On which more in a minute.

Right wing doctors who go into politics have all sorts of extra axes to grind. So Azar sort of had a head start on Price.

Thus the focus now shifts at least for the moment from insurance to drug prices, one of the bugabears both of Azar and his boss Donald Trump. At this year's World Health Congress, Azar teed up the trial balloon that floated around the campaign and still bears watching. Azar stated that "President Trump wants to go 'much further' to attack high drug prices," according to many sources including CNBC's Angelica LaVito. But what does this mean? Drug companies have recently upped their spending on both lobbying and campaign giving. This has caused heavy breathing in health policy circles--see here for example--but in my opinion it's mostly chump change. A doubling from spending in the low six figures to the mid six figures for activities that impact government drug-price awareness is, to me, just budget dust for drug companies, and not the driver of change so much as keeping up with the Joneses.

The Big Nut is Medicare and active direct bargaining to get prices down. Will Azar be able to do the in-sell that gets his boss to come out swinging with the biggest weapon he has? The drug companies, when they spend the big bucks, are really playing a different game. There are so many players in the pharmaceutical sales-and-distribution space, most notably the separately powerful PBM (pharmacy benefits management) companies, that everyone's pushing on a wet noodle. The one really reliable weapon Azar and company have, if they're willing to use it, is Medicare spending. This one will be truly fascinating to watch. It will say a lot about whether the President wants truly to drain the swamp and hence really please those in his Base who need affordable meds. Or just refill that swamp in order to please the hacks with whom he's now surrounded himself.

Friday, May 04, 2018

The Two-Fold Intimidation of Dr Bornstein, as Orchestrated by Donald Trump, Apparently to Conceal Something About Trump's Medical History

Introduction: Pressures on Health Care Professionals to Violate Core Values and Ethical Standards

Our first discussions with health professionals about the causes of health care dysfunction(1) quickly revealed concerns about influences that push professionals towards unethical actions.  We first heard about cases in which physicians were influenced to suppress clinical research whose results threatened vested interests, and punished when they did not cooperate.  These included the cases of Dr David Kern in the US, Dr Nancy Olivieri in Canada, (look here for summary) and Dr Aubrey Blumsohn in the UK (look here).  We also heard about numerous cases of whistleblowers who also were punished after revealing research misconduct, quality problems, mismanagement, financial malfeasance, etc, etc, etc.

We found evidence that many young medical faculty members felt pressured by leaders who put money ahead of professional core values.  Pololi and colleagues' qualitative interviews of young medical faculty included anecdotes of angst due to academic leaders who put revenues ahead of patient care, teaching, and research; and who allegedly used deception for personal gain.(2)   (Also, see our comments on this paper)(3)  Pololi and colleagues' large survey of US medical faculty showed that over half were being pressured to put revenue generation for the organization ahead of all else, including their professional values.(4)

Many attempts to influence health care professionals used financial incentives that generated conflicts of interests.  Some rose to the level of kickbacks or bribery.  On the other hand, some used threats, including intimidation and extortion.  In nearly all the cases the physicians were pushed towards behavior that would help out large organizations and those who lead them, including hospitals and hospital systems, insurance companies, and drug, device and biotechnology companies.

However this week we heard two instances involving attempts to influence one physician that seemed to come from an alternate universe.

Donald Trump Dictated the Content of a Letter His Physician Signed, Describing Trump's Health in Glowing Terms

First on May 1, 2018, NBC reported, and then CNN reported on May 2, 2018 that a well publicized letter Donald Trump's former private physician,  Dr Harold Bornstein, signed in 2015 about Trump's health was in fact written by Mr Trump.  To quote CNN,

When Dr. Harold Bornstein described in hyperbolic prose then-candidate Donald Trump's health in 2015, the language he used was eerily similar to the style preferred by his patient.

It turns out the patient himself wrote it, according to Bornstein.

'He dictated that whole letter. I didn't write that letter,' Bornstein told CNN on Tuesday. 'I just made it up as I went along.'

Bornstein's signature on a letter whose content was largely dictated by Trump was obviously  deceptive and unethical, and possibly illegal.  A brief article in RawStory quoted President Obama's former physician.

CNN anchor Erin Burnett asked. 'And is there any issue you have ethically with this, that Trump dictated it and the doctor would sign it?'

'Yeah, if the doctor signed it and it’s not his medical report, it’s fraudulent,' Dr. [David] Scheiner explained.

An article in Fortune quoted a physician who believes Dr Bornstein's actions were medical misconduct.

Dr. Anirban Maitra, an oncologist at the MD Anderson Cancer Center in Houston, pointed out on Twitter that Bornstein’s admission about the dictated doctor note could amount to misconduct under New York law. 'Permitting, aiding, or abetting an unlicensed person to perform activities requiring a license' is indeed listed under the state’s Office of the Professions definitions of professional misconduct by doctors.

This raises a big question.  Why did Dr Bornstein do something so patently dishonest?  Nothing published so far establishes an answer.  IMHO, it does not seem unreasonable to suppose that he was intimidated by Mr Trump, a billionaire known to use aggressive and well-funded legal tactics against anyone who opposed him.  The second part of Dr Bornstein's story corroborates the intimidation scenario.

Trump Organization Functionaries Confiscated All Copies of President Trump's Medical Records

NBC also reported on May 1, 2018, that President Trump sent minions, including two lawyers from the Trump Organization, and his former personal bodyguard, to Dr Bornstein's office to confiscate all the records Dr Bornstein had for Trump

In February 2017, a top White House aide who was Trump's longtime personal bodyguard, along with the top lawyer at the Trump Organization and a third man, showed up at the office of Trump's New York doctor without notice and took all the president's medical records.

The incident, which Dr. Harold Bornstein described as a 'raid,' took place two days after Bornstein told a newspaper that he had prescribed a hair growth medicine for the president for years.

In an exclusive interview in his Park Avenue office, Bornstein told NBC News that he felt 'raped, frightened and sad' when Keith Schiller and another 'large man' came to his office to collect the president's records on the morning of Feb. 3, 2017. At the time, Schiller, who had long worked as Trump's bodyguard, was serving as director of Oval Office operations at the White House.


Bornstein said he was not given a form authorizing the release of the records and signed by the president known as a HIPAA release — which is a violation of patient privacy law.


Bornstein said the original and only copy of Trump's charts, including lab reports under Trump's name as well as under the pseudonyms his office used for Trump, were taken.

Another man, Trump Organization chief legal officer Alan Garten, joined Schiller's team at Bornstein's office....

An AP story explained why it may have been unethical, or illegal, for Dr Bornstein to hand over the records in these circumstances.

Patients have a right to a copy of their medical records but the original physical record belongs to the doctor, said Dr. Matthew Wynia, director of the Center for Bioethics and Humanities at the University of Colorado.

'If a patient wants a copy, they can have a copy, but they don't get the original. Patients can also ask for their records to be transferred to a new doctor, but that also involves making copies (i.e., transferring the information), not literally packaging up the originals and sending them off,' Wynia said in an email.

Most states require doctors to keep and maintain records, Wynia said. Federal patient privacy law bars doctors from relinquishing records without a signed release from the patient or an authorized representative.

Nonetheless, per NBC

White House Press Secretary Sarah Huckabee Sanders said that taking possession of medical records was 'standard operating procedure for a new president' and that it was not accurate to characterize what happened as a "raid."

'Those records were being transferred over to the White House Medical Unit, as requested,' said Sanders.

In my humble opinion, third parties confiscating all copies of a patient's records from a physician's office, whether or not at the behest of the patient, is the opposite of standard operating procedure.

Again, in this case, Dr Bornstein appears to have violated HIPAA regulations, and probably New York State law on the integrity of medical records.  However, it also appears that he did so under duress from three men, two of which he described as "large," presumably meaning physically intimidating, and two of which were top lawyers for the Trump Organization.   

Why Mr then President Trump was so intent on covering up his medical records is yet another queston about which speculation seems fruitless at this point.


As noted above, we have seen many cases in which health care professionals were pressured to violate their core values and ethical norms by outside parties, most often large health care organizations seeking financial gain.

Now, in this new case, we see a single health care professional twice pressured to violate core values and ethical norms by a patient, a wealthy billionaire corporate CEO who became President of the United States.  Thus we are now in a situation in which the President of the US, to whom all federal health care regulatory and law enforcement agencies at least nominally report, has shown contempt for the core values and ethical standards of the medical profession.

This lowers whatever minimal expectations we might have had that the US government might help health care professionals defend their values and ethics.  However vulnerable health care professionals used to feel to outside pressure from large private organizations, they now must feel much more vulnerable.

We used to rant that health care professionals' values and ethics needed better defense, and that the government should be urged to take a greater role in providing it.  Now the government under Trump seems to be raising the threat level to health care professionals.  True health care reform now seems to require not just changes in government processes and attitudes, but a new person to sit at the head of government.


1. Poses MD. A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14: 123-130.  Link here

2.Pololi L, Kern DE, Carr P, et al. The culture of academic medicine: faculty perceptions of the lack of alignment between individual and institutional values. J Gen Intern Med 2009; 24: 1289-95. Link here.
3.  Poses RM, Smith WR. Faculty values. J Gen Intern Med 2010; 25: 646. Link .
4. Pololi L, Ash A, Krupat E. Faculty values in the culture of academic medicine: findings of a national faculty survey. Link here