The Big Spin Out: 2020 Revolving Door Update

In  2020, cases of the revolving door accumulated quickly. 

The Old School Outgoing Revolving Door

Let us begin with cases of the old fashioned outgoing revolving door, that is, of people leaving leadership positions in governmental bodies which regulate health care or make health care policy, then soon obtaining jobs in the health care industry, particularly organizations which they previously regulated or were affected by the policies they made.

Dr Vindell Washington from National Coordinator for Health Care Information Technology to Alphabet

Per FierceHealthCare, January 7, 2020:

Alphabet, the parent company of Google and Verily Life Sciences, continues to bolster its ranks of healthcare experts with the latest hiring of Vindell Washington, M.D.

Verily Life Sciences hired Washington as its new chief clinical officer as part of its health platforms team, Verily Life Sciences representative Kathleen Parkes confirmed to FierceHealthcare Tuesday.

Washington served as the national coordinator for health IT from August 2016 to January 2017.

As one of the highest health IT policy leaders, Washington brings to Verily a deep understanding of the industry. He is an emergency medicine physician by training.

So he moved from a position with significant influence over government health IT policy to a big IT company involved in health care.  Admittedly though, this moves comes three years after he left the ONC.

Dr Kate Goodrich from Chief Medical Officer of the Center for Medicare and Medicaid Services (CMS) to Humana Inc

Per Louisville Business First, January 17, 2020:

Humana Inc. has hired away a key regulatory insider from the federal government.

Dr. Kate Goodrich will leave the chief medical officer role at Centers for Medicare & Medicaid Services in February. Politico reported Thursday Goodrich will become a senior vice president for the company.

CMS is the agency that oversees both Medicare and Medicaid, the government-backed health plans. Goodrich was also director of the Center for Clinical Standards and Quality, the CMS website states.

Note that Humana's business is heavily influenced by the actions of CMS.

Humana's core business is providing Medicare Advantage plans, a private version of the federal health plan for seniors. It has about 4.1 million members in Medicare Advantage plans, according to its latest financial disclosure.

The Medicare Advantage segment brought in about $37.1 billion of revenue in the nine months ended Sept. 30, 2019.

Mary Sumpter Lapinski from Government Affairs at Bristol-Myers-Squibb to Counselor to the Secretary of the Department of Health and Human Services (DHHS) for Public Health and Science, then to Vice President of Global Governance Affairs for Greenwich Biosciences


Note that in this case, someone recently reported as transiting the outgoing revolving door has also had in the past transited the incoming revolving door.

Per a Buzzfeed News article, January 24, 2020 (which also discussed the larger revolving door problems involving the pharmaceutical industry and the Trump administration):

Mary-Sumpter Lapinski, who worked in government affairs for Bristol-Myers Squibb from 2002–2007, served as a counselor to the health and human services secretary for public health and science. As of April 2019, Lapinski is the vice president of global government affairs for biopharmaceutical company Greenwich Biosciences.

Again, most recently she moved from a senior position in DHHS affecting public health and science to a biotech company.

Roxana Weil, Lead Toxicologist from the Center for Tobacco Products at the Food and Drug Administration (FDA) and Gabriel Muniz who inspected tobacco manufacturers for the FDA to Juul Labs Inc

Per Bloomberg (via the Detroit News, February 5, 2020):

Juul Labs Inc. has hired former Food and Drug Administration employees and is recruiting more researchers as it prepares for a crucial regulatory hurdle that will determine the future of the top U.S. e-cigarette maker.

So

Roxana Weil, formerly a lead toxicologist at the agency’s Center for Tobacco Products, joined Juul as principal scientific adviser in September. Gabriel Muniz, who worked in an FDA division that inspects tobacco manufacturers, joined Juul last month as a director of regulatory compliance.

Note that

The company and its peers must submit applications to the FDA by May 12 in order to continue selling their products. The deadline is a defining moment for the e-cigarette industry, which has been under fire following a surge in teen vaping and a lung-injury outbreak that sickened thousands and was later tied to THC.

For Juul, securing a swift clearance is critical. The company has seen its once-rich valuation drop since the broader vaping backlash began. Failing to win the FDA’s blessing could shut it out of a market it has dominated.

So they moved from regulating tobacco to a company essentially involved in selling tobacco analogues.  Note that the tobacco company Altria made a major investment in Juul (look here.)

The Au Courant Incoming Revolving Door

In the Trump era, many people have come through the incoming revolving door, that is, people with significant leadership positions in health care corporations or related groups have attained leadership positions in government agencies whose regulations or policies could affect their former employers.

There are two recent examples

Brad Smith, Chief Operating Officer of Anthem's Diversified Business Group to be Director, Center for Medicare and Medicaid Innovation (CMMI) at the DHHS

Per FierceHealthcare, January 6, 2020:

The Trump administration has selected Brad Smith to serve as the director of the Center for Medicare and Medicaid Innovation (CMMI), where he will oversee the creation and stewardship of value-based payment models.

Smith most recently was the chief operating officer of Anthem’s Diversified Business Group, a division of the insurance giant that includes provider services. He was also the co-founder and CEO of palliative care services company Aspire Health.

Anthem is a health insurer which provides Medicare supplements and Medicare Advantage programs, so its business is greatly affected by any changes in how Medicare or Medicaid makes payments.

Amanda Adkins, Executive for Cerner Corp, Now Running for the House of Representatives as a Republican

This could be called a running start that will likely lead through the incoming revolving door.

Per the  Kansas City Star, January 23, 2020:

Cerner executive Amanda Adkins has taken a leave of absence from the company to focus on her campaign to unseat Democratic Rep. Sharice Davids.

Adkins, a former Kansas Republican chair, launched her bid for Kansas’ 3rd congressional district in September, but initially planned to remain as Cerner’s vice president of strategic growth through the campaign.

But as of last week, according to a company spokeswoman, Adkins went on unpaid leave after from her role after 15 years with the health care IT giant.

Note that the Star article, unlike the others quoted above, provided at least a slightly detailed discussion of why this (potential) move poses a conflict of interest:

The Kansas City-based company is a major federal contractor with a $10 billion contract to design a new health care records system for the U.S. Department of Veterans Affairs. The new system is expected launch later this year.

Federal election rules prohibit federal contractors from giving directly to federal candidates. Craig Holman, a lobbyist for Public Citizen, a national group which advocates for tougher ethics standards, said Adkins’ unpaid leave protects Cerner from violating this rule.

But Holman said the fact that she can return from leave after the election still raises questions about a conflict of interest since she could end up on committees with oversight of the company’s contracts if elected to Congress.

'The conflict still persists,' Holman said in a phone call. 'The fact that she has not resigned and remains an employee of Cerner means that conflict of interest remains front and center.'

Summary

Sigh.  So while there is much discussion of corruption in high places, and its potential link to high crimes and misdemeanors, the revolving door quietly spins on well-oiled hinges, as it has for years, including many years before the current administration.  

So as we have repeatedly said,  most recently in October, 2019, ...

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door once again suggests how the revolving door may enable certain of those with private vested interests to have disproportionate influence on how the government works.  The country is increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

Remember to ask: cui bono? Who benefits? The net results are that big health care corporations increasingly control the governmental regulatory and policy apparatus.  This will doubtless first benefit the top leadership and owners/ stockholders (when applicable) of these organizations, who are sometimes the same people, due to detriment of patients' and the public's health, the pocketbooks of tax-payers, and the values and ideals of health care professionals.  

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

Despite Public Protestations of of Bipartisanship, Many CEOs of the Largest US Health Care Corporations Appear Partisan, and Mainly Republican

Leaders of big health care organizations clearly are interested in influencing public policy and government regulation in ways that favor their organizations, and often indirectly themselves. On the other hand, big health care organizations have traditionally been non-partisan.  While their leaders certainly may have political views, they used to keep them very quiet.

In this sense, the leaders of big health care organizations have seemed similar to the leaders of large businesses in general.  For example, a recent New York Times article noted,

The Business Roundtable, the top lobbying organization for industry in Washington, is often characterized as a nonpartisan or bipartisan organization.

Yet,  recently, especially in the US, we have seen evidence that some health care organizations have become partisan, albeit stealthily, throwing their support behind political candidates, parties and organizations that may support their policy and regulatory goals, even while they may also support positions that go against the health care and public health mission, or even may be frankly anti-democratic.  In the US, organizations and their leaders now may support partisan aims with dark money, funds whose origin is disguised.

The recent NYT article noted above summarized some newly released research showing how corporate leaders in general have become more partisan, and more partisan in a particular sense. 

Based on Disclosed Personal Contributions, Since 2000 Most Top Corporate Executives Became Very Republican

The NYT article summarized a study of disclosed personal political contributions made by S&P 1500 executives from 2000 to 2017.

To be counted a supporter of Republicans or Democrats, executives had to direct at least two-thirds of their donations to candidates affiliated with one party.

They only released aggregate data, not data on particular industries, much less particular companies.  The main findings were:

More than a quarter of the executives studied gave enough to both parties to be classified as 'neutral.'

But,

just 18.4 percent of the executives studied were designated as Democrats. The clear majority — 57.7 percent — demonstrated their affiliation through donations to the Republican Party. Indeed, 75 percent of donations from the median chief executive were directed to Republicans.

That strongly contrasts with the notion that big business and its leaders are non-partisan, although perhaps eager to be popular with people, particularly customers and politicians, with all sorts of political affiliations.

The study disclosed no information on any particular executive or company other than Tim Cook of Apple, one of the minority of apparently studiously bipartisan corporate leaders.


However, another article from October, 2018 in MarketWatch provided some particular information on how partisan leaders of health care corporations have become.


Many CEOs of Big Health Care Corporations are Very Republican

The MarketWatch article, which reported the journalists' own study, also opened with the notion that corporate executives have been known for being non- or bi-partisan,

Company executives often steer clear of any appearance of partisanship, in large part because they don’t want to alienate customers and investors who back the other side.

Their study focused on disclosed political contributions from CEOs of S&P 500 companies, the largest publicly traded companies in the US, from 2017 through August 31, 2018, that is, those relevant to the most recent US national election, the 2018 mid-term election.

They also found that many executives were heavily partisan based on their personal political donations.

MarketWatch’s analysis found that among the CEOs who did contribute to party-affiliated committees, nearly all leaned heavily blue or red, with few donating equally to the two main parties. More than 84% of the 261 CEOs who contributed to partisan committees donated 70% or more of their money to one party or the other. And about 100 of the CEOs spent above the median amount and contributed 75% of their money to one party.

Overall,

The chief executives contributed a total of $7.4 million to Republican groups, almost triple the $2.6 million contributed to Democratic committees.

The article presented a graphic showing the CEOs who were most partisan and contributed the most money.  It included several CEOs of big health care corporations.

The article included a database of CEOs ranked by amount contributed.  The amounts and proportions spent by the health care CEOs among the top 100 spenders were:

9. Timothy Wentworth, Express Scripts Holding: total contributions: $262,594, to Democrats, $10,000; to Republicans, $244,722

10. Robert A Bradway, Amgen: $235,800; D $41,000; R $194,800

13. Kenneth C Frazier, Merck: $196,961; D $48,500; R $140,000

14. Mark J Alles, Celgene; $195,682; D $15,000; R $173,600

16 Ian C Read, Pfizer; $181,833; D $25,800; R $145,400

23. David A Ricks, Eli Lilly; $128,020; D $23,300; R $89,500

25. Leonard S Schliefer, Regeneron Pharmaceuticals; $125,000; D $120,000; R $ 0

28. Marc N Casper, Thermo Scientific; $118,100; D $2,700; R $105,400

29. Brenton L Saunders, Allergan; $115,100; D $ 0; R $105,100

32 Michael F Nieidorff, Centene; $105,994; D $60,794; R $35,200

38 Miles D White, Abbott Laboratories; $90,400; D $ 0; R $90,400

39. Kent J Thiry, DaVita; $86,500; D $ 29,300; R $42,200

57. Clifford W Illig, Cerner; $47,000; D $0; R $42,100

70. Steven H Collis, Amerisource Bergen; $39,784; D $2,800; R $28, 100

85. Dow R Wilson, Varian Medical Systems; $30,800; D $0; R $15,800

88. Giovanni Caforio MD, Bristol-Myers Squib; $30,184; D $5,000 ; R $17,300

90. John F Milligan, Gilead Sciences; $30,000; D $0; R $20,000

92. Larry J Merlo, CVS;  $28, 733; D $0; R $15,400

93. Vincent A Forlenz, Becton-Dickinson; $28,700; D $11,500; R $0

100. George S Barrett, Cardinal Health; $27,168; D $13,900; R $5,000

So, there were 19 health care corporate CEOs among the top 100 of those giving disclosed political donations for the 2018 election.  Of those, 15 gave most of their donations to Republicans, 4 to Democrats.  Furthermore, note that many of the companies represented on the list have been Health Care Renewal "frequent fliers," often discussed because of problems with leadership, governance and/or ethics.  

Discussion

While publicly often non--partisan, it appears that the top leaders of the biggest US health care corporations (and other corporations) have become increasingly partisan, and and increasingly supporters of one US political party, the Republican.  This is important since, as the NYT article noted:

The opinions held by executives have always resonated beyond their own industries, but their importance is more pronounced today. Mr. Trump, for example, has not hesitated to equate economic policy with foreign policy.

Also, the authors of the research paper summarized by the article wrote:

Especially since the Supreme Court’s decision in Citizens United, which allowed corporations to make unlimited independent political expenditures, corporate political spending can substantially affect politics and policymaking

In particular,

These executives wield enormous influence over not just policy, but the inclinations of their own employees. One of the most fascinating revelations of the study was that it also looked at the conduct of the businesses themselves, and in the process discovered that disclosures of political donations were highly correlated with the political leaning of its chief executive.

Political contributions by public companies do not have to be disclosed to shareholders, although some of companies do it. So the researchers looked instead at the which companies disclosed the donations to shareholders. Using an index developed by the Center for Political Accountability, the professors found that there was'“a statistically significant association between having a Republican C.E.O. and a lower' disclosure score.

Also, in the era of Trump, the heavily Republican partisanship of top corporate CEOs seems at variance with how their corporations' claim to be socially responsible, and

given the outspoken positions a number of executives have taken in recent years on social issues like climate change, guns and immigration policies.

Furthermore, the heavily Republican partisanship of  CEOs of big health care corporations seems at particular variance with the health care missions espoused by these corporations. 

For example, in 2018 we discussed the case of CVS, which boasts a code of ethics including respecting the covenantal relationship between pharmacists and patients, promoting "the good of every patient," acting with "honesty and integrity," and serving "individual, community and social needs." It also has a social responsibility policy including "keeping the planet in balance," and making "quality health care more affordable, more accessible and more sustainable."  However, CVS was revealed to have been contributing to a "dark money" organization called America First Policies, ostensibly a "social welfare" charity, but actually an organization devoted to promoting the Trump agenda.  While CVS said its support for AFP was related to the organization's tax reform agenda, it also promoted various policies that seemed to contradict the CVS ethics and social responsibility policies.  In addition, the relationship between CVS and AFP only came to light after some AFP leaders were found to have made racist and pro-Nazi proclamations.  Whether CVS made is making contributions to other such groups was unknown.  At the time, we speculated whether the contributions to AFP reflected the self-interest of CVS leadership.

Now we find out that CVS CEO Larry Merlo gave $15,400 to Republicans in the run-up to the 2018 election, but nothing to Democrats.  This increases suspicion that CVS corporate political action is more about its CEO's ideology than its professed mission. 

This anecdote, coupled with recent findings that big health care corporations' policies about political activities are lax at best (look here), and the evidence above, should prompt concern about the political actions of other big health care corporations, and their intent. 

Thus not only is more investigation needed, at the very least, "public" corporations ought to fully disclose all donations made to outside groups with political agendas.  This should be demanded by at least the corporations' employees and shareholders, but also by patients, health care professionals, and the public at large.

Meanwhile we are left with the suspicion that top health care corporate management is increasingly merging with the current administration in one giant corporatist entity which is not in the interests of health care, much less government by the people, of the people, and for the people.

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. 

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.

Law and Order? - Bristol-Myers-Squibb Settles Case Alleging Fraud and Kickbacks, No Admissions of Guilt, No Individuals Charged

Introduction 

Donald Trump, Republican candidate for the US presidency last week announced he is the "law and order" candidate, accompanied by then vice presidential contender and New Jersey Governor Chris Christie.



I wonder if all this interest in law and order will lead to increasing the effectiveness of enforcing laws when large US health care corporations are accused?

For years, we have been watching a parade of legal settlements made by big US health care organizations.  These have included the biggest drug companies, biotechnology companies, device companies, insurance companies, etc, etc.  Many involved accusations of fraud, kickbacks, and other seeming crimes.

In many cases, the alleged white collar crimes could have resulted in harms to patients.  For example giving physicians kickbacks to promote particular drugs or devices could have led them to prescribe treatments that could have been useless for particular patients, yet subjected those patients to risks of adverse effects.

Yet few of these cases were resolved with findings of guilt.  Many resulted in financial penalties for the accused organization, but which were tiny compared to that organization's revenue.  Almost none resulted in any consequences for the people in the organization who might have individually profited from the alleged actions, particularly the top executives who were making millions of bonuses, suggesting their apparent impunity.

This parade of settlements does not look like instantiation of law and order to me, in my humble opinion.

Bristol-Myers-Squibb Settles Allegations of Kickbacks

And the parade continues.  The latest case, which barely was noticed in the media, involved huge pharmaceutical company Bristol-Myers-Squibb.  It was best documented by Ed Silverman in Stat,

After nearly a decade of litigation, Bristol-Myers Squibb on Monday agreed to pay $30 million to settle charges by California officials of paying kickbacks to induce doctors to prescribe several of its medicines.

The settlement with the California Department of Insurance stemmed from a whistleblower lawsuit that was filed in 2007 by three former Bristol-Myers employees. They alleged that from 1997 through 2003, the drug maker used a wide variety of inducements to generate revenue. The state later joined the lawsuit in 2011 and, last year, the former employees were dismissed from the case by a state court.

The kickbacks included box seats at sporting events where doctors were given food, drinks, and parking; enrollment in a Los Angeles Lakers basketball camp for doctors and their children; prepaid golf outings at luxury courses; tickets for doctors and their families to see Broadway shows in California cities; and lavish dinners, resort hotel trips, and concert tickets for doctors who were especially big prescribers.

Among the many medicines for which doctors were persuaded to write more prescriptions were the Pravachol cholesterol pill; the Plavix blood thinner; the Abilify antipsychotic; the Glucophage diabetes treatment; and the BuSpar antianxiety drug.

A Bristol-Myers spokesman wrote us that the company denied any wrongdoing, but also noted that the firm began adhering to a voluntary industry marketing code in 2002. 'We are pleased to put this matter behind us so that we can focus on making transformational medicines for patients battling serious diseases,' he wrote.

Note that in this case, as is typical for such cases, the financial penalty seems to be minimal compared to the company's total revenues (more than $16.5 billion according to Google finance.)  The company was allowed to deny wrongdoing (although in absence of same, why should it pay a fine?)  No individuals who might have personally profited from the actions in question suffered any negative consequences.

Why Not More Severe Penalties for a Repeat Offender?

Furthermore, the outcome seems to have nothing to do with the accused's track record.  Anyone who follows the news knows that in general, penalties in criminal cases are likely to be different for first offenders and habitual criminals.  Penalties in civil cases also may depend on the defendant's track record.

However, this case, like most other cases involving big health care organizations, seems to have occurred in a vacuum, separate from the company's track record.  Yet a bit of searching reveals that BMS, like many other big health care corporations, seems to have a pretty bad record.


- 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).

(Parenthetically, I apologize that many of these previous cases have not been previously mentioned on Health Care Renewal.  For that I apologize.  Yet some simple Google searches were all that were required to find them.)

Why did none of the law enforcers involved in the later cases do similar searches, and why did the company's track record not figure into how the current case was resolved?

Chris Christie and the Rise of the Deferred Prosecution or Corporate Integrity Agreement for Too Big to Jail Organizations

The answer to that will not be easy.  At best, it now seems to be standard operating procedure for law enforcement to treat big health care organizations very gently.  However, there is one clue in BMS track record that it might be helpful to discuss in this political season.


Note that in one of the biggest settlements listed above, BMS agreed to a corporate integrity agreement.  According to a 2015 article in Time, the use of such agreements, coupled with apparently large fines but no other penalties, for corporate offenders was pioneered by none other than then US Attorney Chris Christie, (who spoke in the video above).

Christie was apparently horrifed by the criminal prosecution of Arthur Andersen, a big accounting firm, in the wake of the Enron scandal.  At that time, federal prosecutors acted so that

The company itself—not its employees who might have been responsible—was indicted and found guilty. The trial put the company out of business. The conviction was overturned on appeal, but not before the company’s reputation was destroyed and its employees forever branded with a Scarlet Letter, representing Andersen, not Adultery.

The article described Mr Christie's response:

Christie had watched wall-to-wall coverage of the case, and it made him uncomfortable. He decided he did not want to run his office in that way. Instead of bulldozing New Jersey companies facing smaller-scale fraud cases and leaving their employees out of work, Christie preferred to build a case against the firms and then bring their leaders in for a take-it-or-leave-it chat. Ultimately, seven New Jersey corporations accepted deferred prosecution agreements, or deals with the government that let them avoid trial in exchange for the companies hiring independent monitors to oversee operations and put in place guards against future wrongdoing.

Christie often was relieved they were open to the deals. 'Put the company itself out of business? Lose all the jobs?' Christie asked when asked about the alternatives. He pointed to a corruption case he built against St. Barnabas Health Care System, the state’s largest, for double- and over-billing Medicare and Medicaid services. St. Barnabas paid $265 million to settle the case. 'What are you going to do?' Christie asks. 'Close the hospital, the largest hospital that serves the poor?'

Neither Time, nor Mr Christie seemed to notice that this reasoning involved a logical fallacy, a false dilemma.  True, there are two options:
1) criminally prosecute the whole company
2) allow the company to operate under a deferred prosecution or corporate integrity agreement.
But there is a third option:
3) Criminally prosecute the individuals in the company who were most involved in and most benefited from the bad behavior.

So in the St Barnabas example, what he could have done was prosecute the people at St Barnabas who were most responsible for the over-billing, and let the hospital itself go with a fine. Mr Christie for some reason never seemed to think about that option.  Neither have most other US law enforcers who have dealt with large organizations since.

Ironically, Mr Christie has got himself into some ethical hot water because of how he managed corporate integrity or deferred prosecution agreements involving BMS and other health care organizations.  Some have alleged that Mr Christie found some other advantages to using such agreements, advantages that accrued mainly to Mr Christie and his cronies.  As the Time article noted, re BMS

As part of its penance, the company also proposed paying for a professor of business ethics at a law school. The company initially offered to pick up the tab at a school in New York. No way, Christie said. 'This is a New Jersey case. Pick a New Jersey school,' Christie replied. Rutgers already had such a program, and there was only one other law school in New Jersey. It just happened to be Christie’s alma mater, Seton Hall. 'It couldn’t have mattered less to me,' Christie says. 'I didn’t get anything out of it. I was long graduated from Seton Hall.' (The Justice Department signed off on the agreement, but would later limit U.S. Attorneys’ ability to negotiate such deals.)

Christie’s critics pounced on the $5 million payment to Seton Hall, and to this day are trying to use it as a way to suggest he is another pay-to-play New Jersey politician.

And in two other health care cases:

Christie hired former Attorney General John Ashcroft, his one-time boss, to monitor Zimmer Inc., one of the firms that settled with the government. In turn, Ashcroft’s company charged between $1.5 million and $2.9 million a month to monitor the medical device company. By the time Christie arrived in Washington to answer lawmakers’ questions, The Ashcroft Group had earned $52 million on that case. 'To me, that is outrageous,' Rep. Steve Cohen chided Christie. 'I don’t care what you did. It is not worth $52 million,' the Tennessee Democrat continued. 'Even if you took steroids and hit 70 home runs, it is not worth $52 million.'

Lawmakers also wanted to know why he named David Kelley to a post to oversee the Bristol-Myers Squibb settlement. Kelley two years earlier, as a former prosecutor, declined to bring securities fraud charges against Todd Christie, the future-Governor’s brother. Was this payback for sparing a Christie Family?

Mr Christie defended his conduct in the BMS case:

Christie to this day says he has no regrets about the deferred prosecution agreements, including the professor position. To him, it matters less about whether there was a conviction than whether the illegal behavior ended. 'The goal as the U.S. Attorney is to stop the conduct,' Christie says. 'If you’ve stopped the conduct, you’ve won.'

But of course the current case, and those involving BMS from 2014 and 2015, shows that Mr Christie's corporate integrity agreement did not "stop the conduct" at least in the case of BMS.  That rationale was fallacious too.


Summary

Now that political campaigners are once again shouting about law and order, maybe this is the time to call for effective and equal enforcement of the laws regarding white collar crime in health care.  For years, we have watched perpetrators of small scale Medicaid and Medicare fraud go to jail.  Yet when big companies are accused of big scale crime, almost no one ever goes to jail.

It is time for equal justice for all in health care.

Let me end with a quote from a report by Senator Elizabeth Warren (D - Massachusetts) published in January, 2016, entitled "Rigged Justice: 2016 - How Weak Enforcement Lets Corporate Offenders Off Easy."

 Laws are effective only to the extent they are enforced. A law on the books has little impact if prosecution is highly unlikely.

This country devotes substantial resources to the prosecution of crimes such as murder, assault, kidnapping, burglary and theft, both in an effort to deter future criminal activity and to provide victims with some degree of justice. Strong enforcement of corporate criminal laws serves similar goals: to deter future criminal activity by making would-be lawbreakers think twice before breaking the law and, sometimes, by helping victims recover from their injuries.

When government regulators and prosecutors fail to pursue big corporations or their executives who violate the law, or when the government lets them off with a slap on the wrist, corporate criminals have free rein to operate outside the law. They can game the system, cheat families, rip off taxpayers, and even take actions that result in the death of innocent victims—all with no serious consequences.

The failure to punish big corporations or their executives when they break the law undermines the foundations of this great country: If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, then the promise of equal justice under the law has turned into a lie. The failure to prosecute big, visible crimes has a corrosive effect on the fabric of democracy and our shared belief that we are all equal in the eyes of the law.

Under the current approach to enforcement, corporate criminals routinely escape meaningful prosecution for their misconduct. This is so despite the fact that the law is unambiguous: if a corporation has violated the law, individuals within the corporation must also have violated the law. If the corporation is subject to charges of wrongdoing, so are those in the corporation who planned, authorized or took the actions. But even in cases of flagrant corporate law breaking, federal law enforcement agencies – and particularly the Department of Justice (DOJ) – rarely seek prosecution of individuals. In fact, federal agencies rarely pursue convictions of either large corporations or their executives in a court of law. Instead, they agree to criminal and civil settlements with corporations that rarely require any admission of wrongdoing and they let the executives go free without any individual accountability.

And end with a video of her speaking on the subject.

Phooled Again - More Settlements Suggesting Bad Behavior by Big Pharma/ Biotech

Once again, here is a roundup of cases showing big multi-national pharmaceutical and biotechnology companies are up to their usual tricks.

Presented in alphabetical order...

Bristol-Myers Squibb Settles Charges of Bribery of Chinese Hospitals.

The best version of this I could find was in USA Today, in early October, 2015,

Pharmaceutical manufacturer Bristol-Myers Squibb has agreed to pay more than $14 million in fines to settle charges that its joint venture in China paid cash and other benefits to state-owned hospitals in exchange for prescription sales, the Securities and Exchange Commission announced Monday.

After its investigation, the SEC found that the New York-based company violated the Foreign Corrupt Practices Act in its dealings with Chinese hospitals and doctors and 'reaped more than $11 million in profits from its misconduct.'

Bristol-Myers Squibb neither admitted nor denied the findings, the SEC said.

The details, such as they were:

Chinese sales representatives at BMS China, the Chinese joint venture that is majority-owned by Bristol-Myers, paid bribes — including cash, jewelry, meals, travel, entertainment, sponsorships and other gifts — to health care providers between 2009 and 2014 to generate more sales. And Bristol-Myers Squibb 'failed to respond effectively to red flags' indicating such practices, the SEC said.

Apparently, some lower level Chinese employees were fired, although it is not clear whether they were involved in bribery, or in whistle-blowing about it, but top company management did not look too hard to see who might have authorized or directed the bad behavior,

Several BMS China employees who were fired by the company made claims that faked invoices, receipts and purchase orders were widely used to bribe health care providers. But Bristol-Myers Squibb did not investigate their claims, the SEC said.

Bristol-Myers Squibb was aware of improper payments as early as 2009, when an internal audit highlighted the problem. But the company was 'slow to remediate gaps in internal controls' over dealing with Chinese health care providers and monitor payments to them, the SEC said.

Needless to say, no one who might have authorized or directed the bad behavior, and who conceivably might have personally gotten bigger bonuses based on the revenue it brought it, suffered any negative consequences. Despite the settlement, of charges of bribery, no less, company public relations produced the usual,

We have resolved this matter with the United States Securities and Exchange Commission, and are committed to the highest standards of business integrity, vigilance and ethics across our organization.

Well then, that clears it up.

I cannot find any information about what BMS allegedly bribed the hospitals to do, and hence can draw no conclusions whether patients may have been harmed by receiving inappropriate medications.

UK Judge Found Pfizer Threatened Health Professionals

The most thorough coverage of this was, amazingly, in a medical journal, namely the British Medical Journal (Kmietowicz A. Pfizer loses UK patent for blockbuster pain drug after threats to doctors.  Brit Med J 2015; 351: h4918.  Link here.)  The background was,

The patent for the use of Lyrica for epilepsy and generalised anxiety disorder expired in July 2014, and manufacturers of generic versions already have licences for these two indications. But the manufacturer, Warner-Lambert (a subsidiary of Pfizer), holds a 'second medical use' patent for the use of pregabalin to treat peripheral and central neuropathic pain, which expires in July 2017. A second medical use patent is one that relates to a new medical use for a known compound.

Lyrica is one of Pfizer’s most successful products, with global sales in 2013 of some $4.6bn (£3bn; €4.1bn).

So apparently Pfizer set out to scare physicians away from prescribing generic pregabalin [generic Lyrica].

In his 174 page ruling Mr Justice Arnold said, 'Since late September 2014, Pfizer has taken extensive steps to try to ensure that generic pregabalin is neither prescribed nor dispensed for the treatment of pain.' This included sending a letter to the BMA and pharmacists stating that doctors and pharmacists risked infringing the patent if they supplied generic pregabalin for the pain indication and that this would be an unlawful act.

A letter sent to clinical commissioning groups in December 2014 was described by Arnold as 'calculated to have a chilling effect on the sales of Lecaent [the version of pregabalin made by Actavis].'

These letters would be seen by the recipients as a threat, said Mr Justice Arnold.

The Justice ultimately "overturned Pfizer's UK patent for pregabalin for pain control," in part because the "company made 'groundless claims' that its patent for Lyrica would be infringed if doctors did not specify Lyrica as opposed to a generic alternative when prescribing...."

This case was apparently only about the patent (and is subject to appeal), so it appears no one who apparently tried to authorize, direct or implement apparent intimidation of health care professionals with "groundless threats" will suffer any negative consequences.

This case does not seem to involve any obvious harms to patients.  However, "groundless threats" to health care professionals could have obviously demoralized them and clearly challenged their autonomy and professional values.

Sanofi Again Settles Charges of Misbranding Seprafilm

We discussed the first civil settlement the company made of this case in 2014 here.  A relatively clear summary of the new settlement was given by Reuters in September, 2015.

Genzyme Corp agreed to pay $32.59 million, admit wrongdoing and enter a deferred prosecution agreement to resolve U.S. criminal charges over its marketing of the surgical implant Seprafilm, the Department of Justice said on Thursday.

The biotechnology unit of French drug company Sanofi SA (SASY.PA) was accused of two misdemeanor counts of violating the federal Food, Drug and Cosmetic Act from 2005 to 2010 by allowing Seprafilm to be adulterated and misbranded while being sold. Sanofi bought Genzyme in 2011.

Seprafilm is a clear film used to reduce abnormal internal scarring that can cause organs and tissues to stick together following pelvic and abdominal surgeries known as laparotomies.

But the Justice Department said some sales representatives taught surgeons how to turn Seprafilm into a 'slurry' for use in increasingly popular laparoscopic surgery, even though U.S. regulators had never approved the film for that use.

According to papers filed with the federal court in Tampa, Florida, Genzyme admitted and accepted responsibility for the facts underlying the two criminal counts.

The two-year deferred prosecution agreement calls for improved oversight, and steps to halt Seprafilm sales for off-label uses. If Genzyme complies, the government will dismiss the charges.

Note that at least in this case, there was some admission by the company of the truth of the facts charged, and no protestation that "we adhere to the highest standards of integrity," or some such.

It seems possible that the use of the Seprafilm slurry in patients without clear evidence of its safety or effectiveness may have lead to patient harms, but I cannot find clear discussion of this.

Summary

So while big health care corporations, especially large drug and biotechnology companies, are always protesting how their main goal is to benefit patients, and how they support health care professionals, here are more cases in which it appears they at best set out to manipulate patients and health care professionals to maximize revenue.

Note that this is hardly the first time any of these companies have apparently misbehaved.  See our previous posts on BMS, on Genzyme (now a Sanofi subsidiary), and on Pfizer.  Note that our last discussion of the ever troubled Pfizer was only one month ago.

We have discussed endlessly how the march of legal settlements and other legal rulings affecting big health care corporations has raised questions about whether they are in it for patients and health care professionals, or just for the money.  That almost none of these legal actions has resulted in any real consequences for the individuals within the corporations who profited most from the misbehavior has allowed health care corporate managers' continued impunity, and has suggested how cozy health care corporate managers and goverment regulators and law enforcement officials have become, partially through the mechanism of the revolving door.

While these latest three cases have appeared, the mainstream media have begun to feature more discussion about how widespread managerial and corporate misbehavior is fueling the decline of the global economy, and perhaps of global society.  For example, as discussed in srticles in The Guardian, and more recently in the New York Times, Nobel Prize winners Robert Shiller and George Akerlof's new book, Phishing for Pfools: The Economics of Manipulation and Deception, suggests that widespread bad behavior in supposedly "free," and mainly unregulated markets can cause all sorts of evil.  In the Guardian, Shiller used the examples of how

 Most of us have suffered 'phishing': unwanted emails and phone calls designed to defraud us.  A 'phool' is anyone who does not fully comprehend the ubiquity of fishing.  A phool sees isolated examples of phishing, but does not appreciate the extent of professionalism devoted to it, nor how deeply this professionalism affects lives.  Sadly, a lot of us have been phools - including Akerlof and me, which is why we wrote this book

As Shiller wrote in the NYT, while he is a "free market advocate,"

we both believe that standard economic theory is typically overenthusiastic about unregulated free markets. It usually ignores the fact that, given normal human weaknesses, an unregulated competitive economy will inevitably spawn an immense amount of manipulation and deception.

Shiller and Akerlof believe that various kinds of manipulation and deception are enabled by technological advances, and that they are contagious,

When you realize that your competitor has used sophisticated and effective marketing tricks, then you will fall behind if you don’t follow suit.

This is really not a new idea,

In 1918, Irving Fisher, the Yale economist, argued that what people maximize in their actions is something that could better be described as 'wantability' rather than utility, for they are subject to temptation and mistakes in the vast array of purchases they make, leading profit-maximizing marketers to take advantage of them on a systematic basis.

In the first half of the 20th century, such critiques were of general interest. But they are little discussed today.

In the Guardian, Shiller warned that failure to address this problem in the financial sector could lead to "a new Dark Age." I fear that we are already close to a dark age for health care.

Similarly, in the Wall Street Journal, of all places, Charles Moore, the authorized biographer of Margaret Thatcher, and former editor of the conservative UK Daily Telegraph, wrote:

The relationship between money and morality, on which the middle-class order depends, has been seriously compromised over the past decade.  Which means that the mass bourgeoisie (a phrase that Marx and Engles would have thought a contradiction in terms) start to feel like the new proletariat.

Furthermore,

To the extent that people cheat in markets, they are not real markets, any more than antifreeze labeled 'wine' is real wine.  Too many advocates of markets have allowed themselves to be suborned into becoming apologists for business.  And too many businesses now operate as if their responsibilities are only to themselves and not to consumers.

See the above examples, and all we have written about bribery, kick-backs, fraud, other crime, and corruption to show how prevalent cheating is in health care.

Shiller concluded,

Marx did have an insight about the disproportionate power of the ownership of capital. The owner of capital decides where money goes, whereas the people who sell only their labor lack that power. This makes it hard for society to be shaped in their interests. In recent years, that disproportion has reached destructive levels, so if we don’t want to be a Marxist society, we need to put it right.

I would add that if we do not put these things right in health care, ending up with a Marxist system will be the least of our worries.

So as a start, to quote Shiller, we need more

heroic effortsw of campaigners for better values, both among private organizations and advocates of government regulation

Who will step up?

Our musical diversion, "Won't Get Fooled Again," the Who, 1978 live version:

You Say You Want Some Revolutions? - Famed Academic Physician Dr Milton Packer's Endless Alternating Turns as Drug Company Spokesperson and FDA Advisor

Last week, we noted  we again discussed the web of conflicts of interest that is draped over medicine and health care, and seems responsible for much of our current health care dysfunction.  We have discussed examples of conflicts of interest affecting clinical research, clinical teaching, clinical care, and health care policy.  Each time I think we must have cataloged all the useful examples, a striking new one appears.

Only a few days later, yet another new variant has in fact appeared.

A New Kind of Revolving Door

A new version of the "revolving door" apparently was first noted by Public Citizen, and then reported by Ed Silverman at Pharmalot. 

The usual version of the revolving door occurs when a person transitions from a full-time job in industry to a government position which has regulatory authority or other influence over that same industry, or vica versa.  We have discussed various health care manifestations of that revolving door here.

The new version, as described by Mr Silverman, in its manifestation at the US Food and Drug Administration (FDA) is:

the agency allows some experts who serve on its advisory panels to also make presentations at other meetings of these same panels on behalf of drug makers. By allowing some people to wear different hats within a short amount of time, the advocacy group charges the FDA creates the potential for bias to creep into the proceedings.

The Public Citizen letter to the FDA summarized the problem,

In particular, a sponsor’s use of an individual who serves, or has recently served, as a voting member of an FDA advisory committee to present its case before that member’s colleagues on the committee takes advantage of the special collegiality existing among members in order to improve a company’s chances of a favorable vote. Furthermore, such a revolving door raises concerns about the objectivity of committee members who accept such paid arrangements, with FDA’s approval, at future hearings involving the same or a rival company.

Someone Familiar Going Round and Round

The Public Citizen letter used as an example one well-known academic physician who seemed to have made many revolutions in this sort of revolving door.  As summarized in the PharmaLot post,

As an example, Public Citizen cites a meeting this past March 27 of the FDA’s Cardiovascular and Renal Drugs Advisory Committee, which was held to review an application for a Novartis drug called serelaxin to treat acute heart failure. And Milton Packer, who chairs the department of clinical sciences at UT Southwestern, appeared as a paid speaker on behalf of Novartis.

In his opening remarks, Packer disclosed that Novartis paid for his time and travel, according to the advocacy group. But because he is also considered to be a ‘special government employee,’ which is how advisory panel members are classified, he obtained permission from the FDA to participate as a paid speaker for Novartis (see page 31 here).

However, Packer served as a temporary voting member of the same FDA advisory committee less than two months earlier. Moreover, Public Citizen says this was the sixth time, since Packer first presided as chair of this committee in 1997, that he had 'spoken on behalf of and/or served as a (presumably) paid consultant' to drug makers whose meds were being reviewed at those meetings.

The other occasions in which Packer appeared before the Cardiovascular and Renal Drugs Advisory committee involved speaking on behalf of Bristol-Myers Squibb in 2002; acting as a consultant and speaker for GlaxoSmithKline in 2003; appearing as a speaker for NitroMed in 2005; appearing as a speaker for Sanofi in 2009 and acting as a consultant on behalf of Pfizer in 2010.

In fact, the Public Citizen letter also asserted that

Dr. Packer’s presence as an FDA advisory committee member at hearings extends beyond the CRDAC, as he has also participated in at least three meetings of the Arthritis Advisory Committee and served at least once on the Endocrinologic and Metabolic Drugs Advisory Committee since 2005.

We note with concern that, as with his revolving-door tenure at CRDAC, Dr. Packer has similarly worked with industry in the following capacities at non-CRDAC advisory committees while intermittently serving as a recurring member of some of these same committees:

- As a consultant to Centocor for its presentation on infliximab (Remicade) to the March 4, 2003, meeting of the Arthritis Advisory Committee;
- As an 'external expert' cited by GlaxoSmithKline at the July 30, 2007, joint meeting of the Endocrinologic and Metabolic Drugs and Drug Safety and Risk Management Advisory Committees to discuss the cardiac ischemic risks of the thiazolidinedione diabetes drugs, with a focus on rosiglitazone (Avandia); and
- As a consultant to Boehringer Ingelheim for its presentation concerning the drug tiotropium (Spiriva HandiHaler), made before the November 19, 2009, meeting of the Pulmonary-Allergy Drugs Advisory Committee.

Summary

Dr Milton Packer served as a presumably paid spokesperson for six different pharmaceutical companies advocating for six different drugs at meetings of the FDA Cardiovascular and Renal Drugs Advisory Committee.  Over roughly the same time period he served as the chair, acting chair, or voting member of that same committee in numerous instances.  Also, Dr Packer served as a presumably paid spokesperson for one of the same drug companies, and for two additional drug companies advocating for another three drugs at meetings of three other FDA advisory committees.  On various occasions he had also served as a member of these three committees.  Parenthetically, one of the drugs for which Dr Packer, a cardiologist, advocated, Avandia, to a non-cardiologic committee was subsequently pulled from the market because of concerns about excess cardiologic complications (look here). 

Dr Packer repeatedly went back and forth between roles as a paid advocate for drug companies and as a member or chair of federal advisory committees which could influence FDA decisions about the drugs for which he advocated and which were made by the companies that employed him.


It certainly seems that Public Citizen was right in that the sorts of transitions Dr Packer made constituted multiple conflicts of interest, and that his work for multiple drug companies was likely to have distorted the recommendations of the committees on which he served.  Rapid transitions between temporary committee memberships and paid advocacy positions before such committees does seem to be a new version of the revolving door, and newly discovered type of conflict of interest.  It seems that conflicts of interest now pervade every aspect of health care, with huge cumulative effects on clinical and health policy decision making.

Note also that the person whose conflicts of interest were used as examples by Public Citizen just appeared in Health Care Renewal in another capacity.  Earlier this month we discussed a study (PARADIGM - HF) of a new drug for congestive heart failure (sacubitril) which received prominent media attention.  After various people, not limited to yours truly, pointed out that this study seemed to have multiple flaws which undercut claims that the new drug would be a "game changer," the principal investigator of the study delivered a written whupping to a critic whose writing appeared prominently on a cardiology web-site .  The scathing comeback, however, seemed based on a volley of logical fallacies, including repetitive ad hominem attacks on the critic (look here).  The PARADIGM - HF Principal Investigator was none other than the same Dr Milton Packer whose revolving door cycles were discussed above.  Note that the company that sponsored, and largely ran and designed PARADIGM - HF, and which paid Dr Packer to serve as Principal Investigator, was the same Novartis for whom Dr Packer was a spokesperson in the first example above. 

We wondered whether Dr Packer's conflicts of interest contributed to confused, illogical thinking and his apparently logically fallacious response to his critic.  Now it appears that Dr Packer has been immersed much more deeply in conflicts of interest than were apparent a few days ago.  So should he be regarded mainly as a heart failure "expert," or mainly as a paid marketer and public relations man for drug companies?  Obviously, he is both, but the mixture is not so clear.  The concern is all the more important because Dr Packer has become such a prominent medical academic.

So once again, again, again,...  we call for all conflicts to be disclosed in the interests of honesty.  Beyond that, as we have been saying for years, patients' and the public's health would benefit from an aggressive effort to reduce conflicts of interest affecting clinical and health policy decision making.