Bio-Tech U, Version 2 - Current Board Member of Four Biotechnology Companies, Fomer Pfizer Director, Former Genentech Executive to be President of Stanford

Stanford University will soon have a new president.  According to the New York Times,

Stanford University’s incoming president, Marc Tessier-Lavigne, has developed a career that successfully melds science, business and academia.

Although he is now coming off a stint as president of Rockefeller University in New York starting in 2011,  his business connections are extensive.

A Genentech Executive

The NYT noted,

He may be best known, though, for his work at Genentech. As the No. 2 executive in research, he oversaw 1,400 scientists in one of the most innovative and successful companies in the biotech industry, known for the groundbreaking cancer drugs Avastin, Rituxan and Herceptin.

To expand that, his brief CV on the Rockefeller University website included,

1991 - 2001  increasingly senior faculty positions at UCSF
2001 - 2003  professor at Stanford

2003 - 2008  senior vice president, research drug discovery, Genentech Inc

2008 - 2009  exectuive vice president, research drug discovery, Genentech

2009 - 2011  chief scientific officer, Genentech

Member of Multiple Biotechnology Corporate Boards of Directors, Chairman of One

However, his involvement with the pharmaceutical and biotechnology industries hardly ends there.  He currently is on four biotechnology corporate boards of directors.  These include:

Agios 

For which he received compensation of $374,926 in 2014, according to the 2015 proxy statement.  His holdings in the company were then 130,122 shares.

Juno Therapeutics Inc

For which he received compensation of $30,000 in 2014, according to the 2015 proxy statement.  His holdings in this company were then 175,000 shares Series A2 convertible preferred.

Regeneron Pharmaceutical

For which he received compensation of $1,764,032  in 2014, according to the 2015 proxy statement.  His holdings in this compary were then 34,716 shares.

Pfizer, then Denali Therapeutics

Also, in 2011, he became a member of the board of directors of Pfizer, Inc.  He left in 2015 when he co-founded, and became chairman of the board of a new biotechnology company, Denali Therapeutics.  In 2014, according to the Pfizer 2015 proxy statement, he received compensation of $300,000.  His holdings in the company then were 104 shares of stock, and 24,307 stock units. 

He remains as chairman of the board of Denali, according to the company website.  Since this company is privately held, I could not find any information about the compensation or holdings of board members.

Discussion

To summarize, the incoming president of Stanford, on of the most prestigious American universities, one of the foremost US sites for biomedical research, and home to an equally prestigious medical school and academic health center, spent most of the last 15 years heavily involved with the pharmaceutical and biotechnology industries.  He was a top Genentech executive for eight of those years, served as a director of the then biggest US pharmaceutical company, and currently is a member of the boards of directors of four biotechnology companies, and is chairman of one of them.  He earned nearly $2.5 million dollars from these directorships in 2014, the last year for which such data is public, and owned hundreds of thousands of shares of stock in these companies.

How he had the time to executive all his fiduciary responsibilities as a director of four health care corporations while being the president of Rockefeller University, and apparently continuing to do his own research boggles the mind.  

However, Stanford's incoming president is a perfect example of how health care is now run by an interlocking group of insiders who have personally profited massively from their situated influence.   

So in whose interests will he act as president of Stanford?  The New York Times cited those who hailed his scientific prowess.

According to Susan K. McConnell, a professor of biology at Stanford, Dr. Tessier-Lavigne was responsible for a 'long list of amazing discoveries' involving identifying molecules that guide the growth of nerve connections in the developing brain.

On the other hand, he had important affiliations with two biotechnology companies that were known for leading the charge for stratospheric drug prices as much as they were known for developing innovative drugs.  By coincidence, or not, he was a top executive for the same company, Genentech, as was Dr Susan Desmond-Hellman, who later became the leader of the University of California - San Francisco.  As we noted here, Dr Desmond-Hellman was a public defender of such pricing, in particular, of the then (2007) stratospheric $55,000 a year price of bevacizumab (Avastin).

Prof Tessier-Lavigne also is currently on the board of Regeneron, which became known for charging $1850 per montly dose of Eylea, a drug for macular degeneration, while paying its board members and executives proportionately large amounts.  As we noted above, Professor Tessier-Lavigne got over $1.75 million in 2014 for his board service, and in 2014, the company's CEO received over $36 million.

In an interview with the NY Times, professor Tessier-Lavigne said,

We do have to ensure access [to Stanford], broadly, both in terms of access for people who are disadvantaged socioeconomically and, of course, diversity

But how easy would it be for a man with his biotechnology corporate connections and the riches they produced for him to step into the shoes of disadvantaged, diverse students (or patients)? 


When asked about his corporate background, he told the NY Times,

that before taking the reins at Stanford in September, he will review all his corporate relationships with the board to determine whether any conflicts of interest exist.

That suggests doubt about the existence of such conflicts. But as we first wrote in 2006,

Medical schools and their academic medical centers and teaching hospitals must deal with all sorts of health care companies, drug and device manufacturers, information technology venders, managed care organizations and health insurers, etc, in the course of fulfilling their patient care, teaching, and research missions. Thus, it seems that service on the board of directors of a such public for-profit health care company would generate a severe conflict for an academic health care leader, because such service entails a fiduciary duty to uphold the interests of the company and its stockholders. Such a duty ought on its face to have a much more important effect on thinking and decision making than receiving a gift, or even being paid for research or consulting services. Furthermore, the financial rewards for service on a company board, which usually include directors' fees and stock options, are comparable to the most highly paid consulting positions. What supports the interests of the company, however, may not always be good for the medical school, academic medical center or teaching hospital.

Last year, Anderson et al documented the prevalence of such board level conflicts of interests, and wrote,(1)

previous guidelines have emphasized the relationships of clinicians and researchers with industry, but institutional conflicts of interest, which arise when administrators, including executive officers, trustees, and clinical leaders have a financial relationship with industry, are increasingly recognized and pose a unique set of risks to academic missions.

If Professor Tessier-Lavigne has doubts whether his current service on four biotechnology boards of directors, as chairman of one of these companies, as former board member of Pfizer, and as former executive of Genentech could create any conflicts of interest, the students, faculty, patients and alumni of Stanford should be very wary of what direction he will take their university.

As we have said again and again, the web of conflicts of interest that is pervasive in medicine and health care is now threatening to strangle medicine and health care.  Furthermore, this web is now strong enough to have effectively transformed US health care into an oligarchy or plutocracy.  Health care is effectively run by a relatively small group of people, mainly professional managers plus a few (lapsed?) health care professionals, who simultaneously run or influence multiple corporations and organizations.

For patients and the public to trust health care professionals and health care organizations, they need to know that these individuals and organizations are putting patients' and the public's health ahead of private gain. Health care professionals who care for patients, those who teach about medicine and health care, clinical researchers, and those who make medical and health care policy should do so free from conflicts of interest that might inhibit their abilities to put patients and the public's health first.

Health care professionals ought to make it their highest priority to ensure that the organizations for which they work, or with which they interact also put patients' and the public's health ahead of private gain, especially the private gain of the organizations' leaders and their cronies.

Reference
1.  Anderson TS, Good CB, Gellad WF.  Prevalence and compensation of academic leaders, professors and trustees on publicly trade US healthcare company boards of directors: cross sectional study.  Brit Med J 2015; 351:h4826.  Link here. 

Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your Data is Secure

Case 1. Tumult

October 5, 2011
New York Times
Patient Data Landed Online After a Series of Missteps

By KEVIN SACK

Private medical data for nearly 20,000 emergency room patients at California’s prestigious Stanford Hospital were exposed to public view for nearly a year because a billing contractor’s marketing agent sent the electronic spreadsheet to a job prospect as part of a skills test, the hospital and contractors confirmed this week. The applicant then sought help by unwittingly posting the confidential data on a tutoring Web site. [Got all that? - ed.]

In an e-mail sent to a victim of the breach, the billing contractor, Joe Anthony Reyna, president of Multi-Specialty Collection Services in Los Angeles, explained that his marketing vendor, Frank Corcino, had received the data directly from Stanford Hospital, converted it to a new spreadsheet and then forwarded it to a woman he was considering for a short-term job.

The position was with Mr. Corcino’s one-man shop, Corcino & Associates, Mr. Reyna wrote in the e-mail, which was authenticated by his lawyer, Ellyn L. Sternfield. The job applicant apparently was challenged to convert the spreadsheet — which included names, admission dates, diagnosis codes and billing charges — into a bar graph and charts, Stanford Hospital officials said.

Not knowing that she had been given real patient data, the applicant posted it as an attachment to a request for help on studentoffortune.com [I wrote about that earlier here - ed.], which allows students to solicit paid assistance with their work. First posted on Sept. 9, 2010, the spreadsheet remained on the site until a patient discovered it on Aug. 22 and notified Stanford.

My, how electronic data can travel when mishandled. Try that trick with 20,000 paper charts ...

The hospital, located on the campus of Stanford University in Palo Alto, demanded that the spreadsheet be removed, and the Web site quickly complied. Pressed for time, the job prospect wound up completing the assignment herself and, in the end, did not get hired, Ms. Sternfield said.

Ironically, this was all for naught.

Mr. Corcino, in his first public statement, attributed the breach to “a chain of mistakes which are far too easy to make when handling electronic data.”

Far too easy to make - especially by the dyscompetent.

... Breaches of private medical data have become distressingly commonplace, with two substantial ones disclosed in the last week alone. [We don't know the details of those yet; that's for next week - ed.]

Case 2: Pandemonium (from same NYT article)

In Orlando, officials with Florida Hospital reported that three employees had improperly combed through emergency department records of 2,252 patients, apparently to forward information about accident victims to lawyers. The employees were fired, and law enforcement officials are investigating.

Trolling for Torts - is this a new EMR TV game contestant show? Perhaps it could be followed by "Trolling for Tarts?"


Case 3: Bedlam (from the same NYT article)

Meanwhile, Science Applications International Corporation disclosed that computer backup tapes containing medical data for 4.9 million military patients [that number also amounts to almost 2% of the total U.S. population - ed.] had been stolen from an employee’s car in San Antonio. The data included Social Security numbers, clinical notes, laboratory test results and prescriptions. The company said the risk of harm was low because retrieving data from the tapes would require specialized knowledge, software and hardware. [Who's to say the theft was not by someone with that specialization, or someone paid by same to steal the tapes? - ed.]

The Texas breach is by far the largest since September 2009, when a new federal law began requiring disclosures of medical privacy violations involving at least 500 people. Some 330 such episodes have been tallied, including four others that affected more than one million people each.

We'd all be buried in stray clinical paper by now if it weren't for computers. Thank god for them!

Officials at the Department of Health and Human Services said the new reporting requirements had exposed deep vulnerabilities and encouraged renewed vigilance.

Exposed to whom? The blind, deaf and dumb?

“We’re moving in the right direction in terms of a culture of compliance,” said Leon Rodriguez, director of the department’s Office for Civil Rights, which investigates medical privacy cases. “Are there still a lot of problems out there? Yeah, my sense is there are still a lot of problems.”

The Titanic was moving in the right direction - towards New York Harbor, in fact, when it met a little unexpected obstacle. Perhaps a culture of brains would be better than a culture of compliance...

The Stanford breach was notable for the duration of public exposure, and for spotlighting the vulnerability created by a medical provider’s business relationships with outside parties.

Last week, lawyers filed suit in state court in Los Angeles, seeking certification as a class action and $20 million in damages from Stanford Hospital & Clinics and Multi-Specialty Collection Services, which is known as MSCS.

$20 million might hurt a bit, and might help motivate the organization to hire better and/or more appropriate clinical information management expertise - in house where it belongs (see below).

The threat of liability set off a predictable round of finger-pointing.

In written responses to questions, Lisa Lapin, Stanford University’s assistant vice president for university communications, said, “MSCS bears the complete and sole responsibility for the breach.”

It's their fault, not ours.

Ms. Lapin said the hospital had sent the data in encrypted form to Mr. Corcino, who requested it on behalf of MSCS to analyze a strategy for improving billing collections. She said Mr. Corcino had regularly represented himself as MSCS’s executive vice president and had been Stanford’s “primary contact” during a seven-year relationship. MSCS, a five-person firm that audits hospital accounts to maximize reimbursement, possessed the passwords to unencrypt the data, she said.

It was all about money and outsourcing.

“This mishandling of private patient information was in complete contravention of the law and of the requirements of MSCS’s contract and is shockingly irresponsible,” the hospital said in a statement.

It is foolish to believe that someone else can run critical aspects of your business, and it is even more foolish to believe that it is OK for someone else to run critical aspects of your business.

Ms. Sternfield, Mr. Reyna’s lawyer, said Mr. Corcino had never been an MSCS employee, but rather was paid a monthly fee to drum up business, typically in face-to-face meetings with health care executives. Mr. Reyna, she said, had no knowledge that the Stanford data had been sent to Mr. Corcino, or that he had passed it on.

Mr. Corcino was not authorized to use an MSCS title, Ms. Sternfield said, but she declined to say whether Mr. Reyna was aware of the practice. She acknowledged that Mr. Corcino sometimes used an MSCS e-mail account.

In his e-mail to the breach victim, who shared it with The Times, Mr. Reyna wrote that Stanford had sent the file to Mr. Corcino “for a potential MSCS project that would audit paid accounts to verify that the reimbursement was correct.”

For his part, Mr. Corcino said in a statement that he was an independent contractor but was “the marketing face of the company,” and that MSCS “allowed me to use the title of executive vice president.” He wrote: “Stanford sent the file to me at MSCS, and I imported the data into a spreadsheet that was forwarded to the job applicant as part of a skills test. I did not intend to provide any personal health information in the file. This was a marketing project.”

Without explaining how or why he sent the data to the applicant, Mr. Corcino said MSCS had not trained him properly and faulted Stanford for sending him private information that he did not need. That, he said, was the “first link in a chain of mistakes.”

“I regret that Stanford released a file containing unnecessary information,” Mr. Corcino said, “that MSCS did not have an appropriate training and audit system for the handling of electronic data and that I was not more careful with the file. While Stanford and MSCS left the information in the file I received, it was my mistake to not catch its inclusion and remove the data.” ... The hospital has terminated its relationship with MSCS, and Mr. Reyna has done the same with Mr. Corcino.

Even I can't follow all that. This will be one convoluted court case...

Stanford Hospital has reassured affected patients that the posted spreadsheet did not contain Social Security numbers, birthdates or credit card numbers, and has offered free identity theft protection services. The hospital said it had not uncovered any misuse of the exposed data.

Yet, that is. (Is it no wonder that sedatives are among the most highly-prescribed medications?)

Moving from the NYT article:

Case 4: Tumult (I'm running out of descriptors)

A large class action lawsuit again Health Net and IBM:

California Legal
Westlaw Journal Insurance Coverage

Health Net’s, IBM’s negligence compromised medical data, suit says

June 7 (Westlaw Journals) - Health Net Inc. and IBM face a class-action lawsuit seeking $5 million in damages over the loss of computer storage devices that held the medical histories, financial data and Social Security numbers of 2 million people.

Health Net Policyholder Alana Bournas’ class-action complaint in the U.S. District Court for the Eastern District of California alleges that the insurer and IBM breached their duty of confidentiality and negligently allowed the release of highly personal and confidential information of millions of Health Net employees and policyholders.

The complaint alleges violation of California’s Confidentiality of Medical Information Act, Cal. Civ. Code § 56; Cal. Civ. Code § 1798.2, which concerns the unauthorized disclosure of customer records; Cal. Bus. & Prof. Code § 17200, the state’s unfair-competition law; and public disclosure of private facts.

Companies will either pay the going price for competent employees, or pay for the mistakes of incompetent ones. It would probably be better for society, however, to do the former habitually.

The suit says IBM agreed to manage Health Net’s information technology database for five years beginning in 2008.

IBM informed Health Net Jan. 21 that it had lost nine disk drives containing the confidential information of 2 million people, including Health Net policyholders and employees.

Health Net failed to alert the victims of the breach until March 14, the complaint says.

IBM allegedly also failed to encrypt the data, thereby enabling anyone who possesses the hard drives to easily access the confidential information. This puts the victims at an increased risk of identity theft and “other unauthorized uses of plaintiff and class members’ personal information” the suit says.

Encryption, a feature now built into mainstream OS's by Microsoft and Apple? (Oh wait...IBM...)

Health Net’s attempt to compensate the victims by providing two years of free credit monitoring services through TransUnion is an inadequate remedy for the defendant’s conduct, Bournas says. This “remedy” fails to address unauthorized disclosures of medical information, and the monitoring services only protect against new account fraud but do not address fraudulent activity with existing accounts, the suit says.

These executives apparently can't even get the fix straight.

Moreover, the complaint says, Health Net has previously been accused of a similar breach of confidential information. In 2009 it lost the same types of records of nearly 1.5 million people and waited six months before notifying the victims. In settling the state of Connecticut’s lawsuit stemming from that security breach, the company promised “to enhance security procedures and training,” the suit says.

What can I say?

The current breach could have been avoided had Health Net and IBM taken proper precautions and implemented security policies to maintain consumers’ confidential data, according to Bournas. Therefore, the protections granted under California law require that Health Net be penalized for its negligence, she says.

The plaintiff notes that millions of people entrusted Health Net with their private data.

“At best, defendants’ actions allowed this private information to go astray. At worst, the private information is being viewed, sold, resold, and used for illegitimate and illegal purposes,” the complaint says.

The suit is seeking injunctive relief, compensatory damages, declaratory relief, and attorney fees and costs.

Bournas v. Health Net Inc., No. 2_11-CV-01262, complaint filed (E.D. Cal. May 11, 2011).

I would revise that to say "The current breach could have been avoided had Health Net and IBM hired personnel in adequate numbers with the qualifications and true gravitas (and not laid them off, of course) to maintain consumers’ confidential data."

Case 5: Maelstrom (I am reaching to the bottom of the barrel for such descriptors).

Wellpoint recently settled class-action suit in CA.

AMA news
By Pamela Lewis Dolan, amednews staff.
Posted Aug. 1, 2011.

WellPoint reaches tentative accord in data breach suit

It is the second settlement to come from lawsuits claiming that the company failed to protect the privacy of individual insurance applicants online.

WellPoint has reached a preliminary settlement that will, if approved, bring an end to a class-action lawsuit filed more than a year ago.

The lawsuit, filed in the Superior Court of the State of California, involves the potential exposure of data belonging to more than 600,000 individual health insurance applicants on a company-run website that allowed insurance applicants to track their applications.

The situation came to light when an applicant to WellPoint-owned Anthem Blue Cross of California sued the company in March 2010. The applicant was able to manipulate the web address within the site to gain access to other applicants' information, including names, addresses, dates of birth, Social Security numbers and health and financial information.

In other words, probably changing a simple number in the URL brought up someone else's records. Good going there, Wellpoint. What were the programmers thinking? (Were they thinking?)

When the suit was filed, the company said an upgrade to the system caused the information to become exposed. The company said a third-party vendor validated that all security measures were in place when, in fact, they were not. Changes were made to the system soon after the situation was discovered.

Blame someone else, yet again.

In addition to the class-action suit, the company was sued by Indiana Attorney General Greg Zoeller in July 2010. The suit, filed in Marion County Civil Superior Court, alleged that the company violated the Indiana Disclosure of Security Breach Act by failing to notify Zoeller, and the 32,051 Indiana residents affected by the incident, in a timely manner. That suit was settled in early July, when WellPoint agreed to pay a $100,000 fine. As part of the settlement, WellPoint admitted it had a security breach and failed to properly notify the attorney general's office as required by law.

Gevalt.

Under the preliminary settlement in the California class-action matter, WellPoint agreed to offer credit monitoring for two years to all affected individuals. Class members are eligible to receive reimbursement for identity theft losses of up to $50,000 per incident, as well as additional time to file identity theft claims until May 31, 2016. Those making identity theft claims are eligible for an additional five years of credit monitoring. The company also will donate a total of $250,000 to two nonprofit organizations whose efforts are directed at protecting consumers' privacy on the Internet.

It might have been cheaper and better for goodwill not to outsource a vital function...those third-party vendors can really hurt you. (I'd really like to know - was this "third party vendor" domestic, or overseas?)

WellPoint did not admit wrongdoing in the case, nor was it found guilty. A fairness hearing is scheduled for November, and the courts then will decide whether to approve the settlement.

Large corporations are immune from such formalities as admitting wrongdoing or being found guilty.

-----------------------

But don't worry. Your medical data's safe.

Sort of. See also:

• "Networked EMR's and Healthcare Information Security: Practical When Massive IT Security Breaches Continue?",

• "Networked, Interoperable, Secure National Medical Records a Castle in the Sky?",

• "Operation Aurora And a Widespread Reluctance to Discuss IT Flaws: Is Universal Healthcare IT Really a Good Idea in 2010?",

• "Medical data breach of the week - but your EMR data is secure, trust us, we're IT experts",

• "Insurers Test Data Profiles to Identify Risky Clients",

• and others

-- SS

BLOGSCAN - Stanford's CME Money Goes Into a Pool

On the Carlat Psychiatry Blog, Dr Daniel Carlat analyzed the new Stanford policy that would direct all commercial funds supporting continuing medical education (CME) into a single pool. As Dr Carlat pointed out, the devil may be in the details of this policy, which still allows connection of funding to some (admittedly broad) particular clinical categories. Furthermore, although the policy would apparently sever direct connections between funding from particular companies and particular CME courses, I do not see how it could prevent informal communications between commercial sponsors and academics that could shape the subject matter and content of these courses. Such communication is now easy since so many medical faculty already have financial relationships with specific drug, device, biotechnology or other health care corporations.

MANAGING CONFLICTS of INTEREST at STANFORD

MANAGING CONFLICTS OF INTEREST AT STANFORD

The case of Stanford University and Dr. Alan Schatzberg, chairman of Stanford’s department of psychiatry, continues to raise questions. You can see previous discussions here. The questions concern transparency at the academic-corporate boundary, reporting conflicts of interest to NIH, and Stanford’s “management” of a faculty member known to have a significant conflict. The conflict involves a company Dr. Schatzberg founded (Corcept Therapeutics), a drug called mifepristone that Corcept has in clinical trials for depression, and NIH-supported studies of the same drug at Stanford.

Stanford’s position is that Dr. Schatzberg “has not been involved in managing or conducting any human subjects research involving Mifepristone …” Dr. Schatzberg’s 2006 published disclaimer stated “…Dr Schatzberg played no direct role in the recruitment, assessment, or follow-up of subjects enrolled in this study. Dr Schatzberg was not directly involved in the analysis of data stemming from this research.” Stanford represented that this disclaimer applies also to earlier publications with Dr. Schatzberg as co-author.

This disclaimer is hardly credible, considering the responsibilities of NIH-funded Principal Investigators. I pointed out many of the inconsistencies before. Now there is new evidence that Dr. Schatzberg failed to maintain an arm’s-length relationship to the projects at Stanford.

In a 2008 review article, Dr. Schatzberg discussed the Stanford projects in ways that contradict the claim of an arm’s-length relationship. This article acknowledged Dr. Schatzberg’s NIH grant support at Stanford. Corcept Therapeutics was not acknowledged as a source of funding. The first concern is that, if Dr. Schatzberg’s relationship to the Stanford studies is as Stanford claimed, then he has no business publishing a NIH-supported review article that portrays his drug’s prospects in a favorable light. Hello! Is there a conflict of interest here? Review articles that assess a field and synthesize data form a crucial part of science that has to be off-limits to Dr. Schatzberg just as much as assessing patients in one of his clinical trials would be. His many favorable, even exaggerated, articles, reviews and commentaries since he founded Corcept should have come under this proscription. So much for Stanford’s “management” of the conflict. Dr. Schatzberg certainly had a role in managing the research supported by NIH at Stanford – he managed the climate of scientific opinion for his drug and he managed the tone of the NIH-supported publications from Stanford.

Second, Dr. Schatzberg made a claim of efficacy for his drug that differed from what was originally reported in an NIH-supported Stanford study. He claimed a 31% decrease of symptom ratings with a scale called the BPRS. The original report does not confirm that claim. From the published data tabulated in the report, the reduction of symptom severity was 20%. Readers can easily check that for themselves. So, in a current scientific review article Dr. Schatzberg deviated from the published record. He also inflated by half the efficacy estimate for his drug. Hello! Is there a conflict of interest here?

Third, this false claim indicates that Dr. Schatzberg performed and published his own reanalysis of the primary data from an NIH-funded Stanford study. He didn’t get the number 31% from the published article. Yet Stanford says he had no part in managing or conducting the research or in analyzing any data. So here we have an NIH-funded Principal Investigator, with a clear conflict of interest, who supposedly remains at arm’s length from the project, accessing the primary data files, running a new analysis himself, and publishing an exaggerated new efficacy result for his drug that does not match what he published previously as a co-author. That is inconsistent with Stanford’s defense of Dr. Schatzberg. Hello! Is there a conflict of interest here?

Fourth, in this review article Dr. Schatzberg presented the first data on mifepristone blood levels in a peer reviewed journal, along with an elaborate scientific argument for the importance of the blood level as a moderator of response. These blood level data came from Corcept’s clinical trials, but the target blood level stated by Dr. Schatzberg did not correspond to SEC filings and press releases from Corcept. The administrative issue here is how Stanford justifies the presentation and discussion of original scientific data by a Principal Investigator who is supposedly insulated from the scientific work of the project in order to avoid bias. Dr. Schatzberg’s discussion of the new data and his scientific arguments about blood levels form a crucial part of the scientific platform for his drug’s current prospects, and as such must be off limits, just as assessing patients in one of his clinical trials would be off limits under Stanford’s policy. Hello! Is there a conflict of interest here?

This current example undercuts the assertions by Stanford and Dr. Schatzberg that his conflicts of interest have been “managed” by the University. Dr. Schatzberg may not have assessed any patients in Stanford’s trials of mifepristone, but he has had the lead role in responding to scientific critiques, where he clearly was the manager. He also has had the lead role in selling the mifepristone story to the scientific community and in shaping the tone of the NIH-supported Stanford publications that Corcept relied on to raise capital. Hello! Is there a conflict of interest here? How does Stanford justify these academic-commercial boundary violations, and why does NIH not act on the known conflicts of interest? That was Senator Grassley’s question to Dr. Zerhouni today.

The American Medical News Reports Stanford's New Conflict of Interest Policy in a Vacuum

This week's American Medical News print edition featured a front-page article on Stanford's new conflict of interest policies (available here, requires subscription.) As we noted earlier, this policy bans all "personal gifts" to physicians, even as small as pens or coffee mugs, from pharmaceutical or device companies; all funding to attend CME events; all direct funding to students and trainees; and sales representatives in patient-care areas or visiting physicians without prior appointments.

The American Medical News article suggested that the only concerns raised at the school about the new policy were related to loss of funding for educational events, and the need for students to learn how to deal with drug representatives.

It contained not a hint that there had recently been other issues raised about conflicts of interest at Stanford.

However, we have previously noted the irony of Stanford's new policy in light of the San Jose Mercury News investigation, written by Paul Jacobs and published in July, which showed that many Stanford faculty and leaders are affected by conflicts of interest that are much more intense than those created by accepting free pens, mugs, and lunches (see posts about this investigation here, here, and here).

Some of the data and cases reported by Jacobs in the series were:

• "The school's 700-plus faculty members last year disclosed 299 potential conflicts of interest related to their research, according to figures provided by Stanford."
• "Potential conflicts occur throughout the school's ranks. More than a third of the school's administrators, department heads and other leaders -- at least 26 out of 67 reviewed by the Mercury News -- have reported outside financial interests related to their research within the last four years. "
• "One researcher has founded six companies, most based on research that came out of his own lab. He is a managing partner of a venture capital firm focused on medical research and sits on the boards of several other companies. "
• "And the physician who until January chaired the department of gynecology and obstetrics is a longtime director of Wyeth, which manufactures controversial hormone replacement therapy for women -- therapy she defended in 2002 when potentially serious health risks were emerging."
• The Associate Dean for Research "holds stock options in and is a consultant to MedImmune, which makes an influenza vaccine he is studying under a federal grant." He also "a paid member of MedImmune's scientific advisory board and holds stock options...."
• The Chair of Psychiatry is currently running a federal grant on mifepristone as a treatment of depression, and has previously been the senior author of two related articles. Although he acknowledged that he helped found and still has a "financial interest" in Corcept Therapeutics, he did not fully disclose that he "took a seat on the board of directors and a part-time post as chairman of the company's scientific advisory board, a job that now pays him $60,000 a year. He and his family were granted 3 million Corcept shares for $1,000 -- today worth nearly $12 million." He had been accused of making exaggerated claims about Corcept's products in scholarly articles which did not reveal the extent of his involvement with the company.

So at Stanford, a junior faculty member will not be able to accept a coffee mug with the Wyeth logo, while a senior faculty member can serve on the board of directors of Wyeth.
I would have hoped that the American Medical News reporter might have dug around a little to determine the background of Stanford's new policy. Juxtaposing it to the results of Paul Jacobs' previous investigative reporting produces a very different impression than simply reporting the new policy in a vacuum.
In my humble opinion, the problem is not that the Stanford policy is too strict. Instead, I submit that the policy is much too tough on students, interns and residents, and junior faculty, given how leniently it treats senior faculty and academic leaders. If the conflict causes by accepting a mug with a company logo is so grievous that it cannot be tolerated, why is it acceptable to serve on the board of the same company?
But maybe the operative slogan was "do as I say, not as I do."
It's a pity that the American Medical News reporter failed to dig up the facts needed to appreciate these ironies.

Stanford's New Conflict of Interest Policy: No Coffee Mugs and Pens, But Consulting Contracts, Directorships, and Stock Options are Fine

With much fanfare, as reported by the New York Times, Stanford University announced it will "prohibit its physicians from accepting even small gifts like pens and mugs from pharmaceutical sales representatives under a new policy intended to limit industry influence on patient care and doctor education." Also prohibited will be "accepting free drug samples and from publishing articles in medical journals that are ghost-written by industry contractors. The policy would also apply to sales representatives from makers of medical devices and other companies, not just pharmaceutical companies. Company representatives would be barred from areas where patient treatment and doctor education occur...."

Dr Philip A Pizzo, the medical school dean, proclaimed, “We want to secure the public trust to value what happens in academic medicine.” Interviewed by the Los Angeles Times, he said, "we were really seeking to do the right thing. We want to set a standard."

On the other hand, " The new policy does not cover consulting agreements between faculty members and companies aimed at developing drugs or medical devices. Those are governed by an existing conflict-of-interest policy. Such interactions are especially important at Stanford, where many professors have been involved in starting or advising companies in nearby Silicon Valley." However, "a Stanford spokeswoman said having a financial interest is not necessarily a conflict if the faculty member is not providing patient care. "

That seems like a curious point of view, because a faculty member could have great influence on patient care without providing it directly. Stanford faculty, of course, teach students and residents. And they write articles in respected medical journals and given talks at national and international venue.

In fact, only two months ago, Paul Jacobs authored an expose of conflicts of interest at the Stanford medical school and teaching hospitals in the San Jose Mercury News. Some of the anecdotes reported in the series (see posts here, here, and here) were:

• "The school's 700-plus faculty members last year disclosed 299 potential conflicts of interest related to their research, according to figures provided by Stanford."
• "Potential conflicts occur throughout the school's ranks. More than a third of the school's administrators, department heads and other leaders -- at least 26 out of 67 reviewed by the Mercury News -- have reported outside financial interests related to their research within the last four years. "
• "One researcher has founded six companies, most based on research that came out of his own lab. He is a managing partner of a venture capital firm focused on medical research and sits on the boards of several other companies. "
• "And the physician who until January chaired the department of gynecology and obstetrics is a longtime director of Wyeth, which manufactures controversial hormone replacement therapy for women -- therapy she defended in 2002 when potentially serious health risks were emerging."
• The Associate Dean for Research "holds stock options in and is a consultant to MedImmune, which makes an influenza vaccine he is studying under a federal grant." He also "a paid member of MedImmune's scientific advisory board and holds stock options...."
• The Chair of Psychiatry is currently running a federal grant on mifepristone as a treatment of depression, and has previously been the senior author of two related articles. Although he acknowledged that he helped found and still has a "financial interest" in Corcept Therapeutics, he did not fully disclose that he "took a seat on the board of directors and a part-time post as chairman of the company's scientific advisory board, a job that now pays him $60,000 a year. He and his family were granted 3 million Corcept shares for $1,000 -- today worth nearly $12 million." He had been accused of making exaggerated claims about Corcept's products in scholarly articles which did not reveal the extent of his involvement with the company.
• Dr Pizzo defended the continuing involvement of Stanford and its faculty with commercial firms "to bring the fruits of university research to the public. This process has resulted in many medical innovations and advances that have improved the lives of millions of Americans."

So at Stanford, a junior faculty member will not be able to accept a coffee mug with the Wyeth logo, while a senior faculty member can serve on the board of directors of Wyeth.
Is it "doing the right thing" to prohibit minor conflicts of interest affecting mainly trainees and junior faculty, while letting senior faculty and administrators preserve their large conflicts of interest? What sort of hypocritical "standard" does it set to prohibit junior faculty from being influenced by pens and coffee mugs when making clinical decisions, but allowing senior faculty to be influenced by five-figure consulting income, and seven-figure stock option holding when writing papers, speaking to national audiences, and teaching trainees?

Widespread Conflicts of Interest at Stanford: the Dean Responds

In an a commentary fo the San Jose Mercury News, Dr Philip A Pizzo, the Dean of the Stanford University School of Medicine responded to the series of articles in that newspaper documenting widespread conflicts of interest at the Medical School, which we posted about here and here. Some key quotes:

What would be the cost to the health of the American public if such ties between academia and industry were severed?

It should be noted that the federal government has explicitly promoted these ties since 1980, when Congress enacted the Bayh-Dole act, which authorized and encouraged universities to hold ownership of inventions made under federal funding. In fact this law mandates universities and private industry to work together to bring the fruits of university research to the public. This process has resulted in many medical innovations and advances that have improved the lives of millions of Americans.

There are now some 1,000 therapies and technologies that are based on university-licensed discoveries.

Of course, collaboration between university researchers and private companies carries with it the potential for conflicts of interest. The July 9 article describes one way Stanford addresses this: by requiring faculty members to disclose potential conflicts, regardless of the dollar amount of the financial interest.

But disclosure is far from the only strategy that the Stanford School of Medicine uses to protect the public's interest. When we identify a significant conflict, we take steps to eliminate, mitigate or manage it. These steps include modifying the research plan, disclosing the conflict to the public, disqualifying a faculty member from participating in all or a portion of a research project and in some cases requiring the faculty member to sever a relationship with industry.

As for the July 10 article, it is important to point out that Dr. Alan F. Schatzberg's research over the past 25 years has been consistently subject to rigorous peer review by scientific leaders at the National Institutes of Health and throughout the nation. His research findings have been published in highly respected peer-reviewed medical and scientific journals.

It is misleading to air criticism of his pilot studies for lack of statistical significance when, in fact, the studies were exploratory and not designed to show statistical significance in the first place. More important, and above all, through his research and care of patients, Dr. Schatzberg is a man devoted to alleviating the pain and suffering of those who face the challenge of the most severe and chronic forms of depression.

Dr Pizzo's response did not seem to address the points made in our previous posts about the conflicts at Stanford. (Of course, he probably has not read our posts.)

It also seems important to note that criticizing conflicts of interests does not mean criticizing the general concept of industry-academic collaboration. However, there are many ways in which universities and corporations can interact that minimize such conflicts. For example, for-profits can sponsor research at universities, but need not control the design and implementation of studies, and the analysis and dissemination of their results.

However, the examples described in the San Jose Mercury News were not simply of academic researchers collaborating with industry. They included researchers and academic leaders who owned substantial numbers of company stock options, who had corporate administrative titles, or who sat on corporate boards while doing research on the companies' products, or as full-time academics expressing opinions on topics relevant to the companies' products. It is not clear why university researchers need to get stock options, administrative positions, or board memberships from corporations in order to work collaboratively with them.

Furthermore, how can an academic be "full-time" while working for industry in an administrative position, or getting the sort of incentives that corporations usually only give to top management and key employees? At a minimum, a person in such a situation should acknowledge being only a part-time academic.

Finally, an academic who also works for industry ought to make completely transparent what masters he or she serves when expressing opinions about topics relevant to the company's product or service. Such opinions may be regarded differently than those from true full-time academics. But that's life.

However, what sort of trust is inspired when an author of scientific articles about a drug turns out to be not just a full-time university professor with some "financial interest" in the company that makes the drug, but the Chairman of the Board of the company?

Widespread Conflicts of Interest at Stanford: Affecting the Board of Trustees

We recently posted about reports of widespread conflicts of interest at Stanford University School of Medicine found in an investigative series in the San Jose Mercury News (see links here and here).

Just before that series was published, the San Francisco Chronicle was looking into conflicts of interest affecting the Stanford University Board of Trustees.

The most glaring example was of Trustee Mary Cranston, who runs a law firm entitled Pillsbury Winthrop Shaw Pittman. But, "according to its 990 tax form, Stanford paid $2.18 million in legal fees during fiscal 2003-04 to Pillsbury Winthrop Shaw Pittman." Also, "Pillsbury Winthrop has consistently ranked among the five highest paid independent contractors the university used between 2001 and 2004. The firm earned between $937,000 and $2.7 million annually during that period."

Although "Stanford has done business with Pillsbury Winthrop since 1993, and Cranston began serving as trustee in 2000. Only in the most recent tax form filed with the IRS that has been made public -- for the year ending Aug. 31, 2004 -- did Stanford make clear it did significant business with one of its trustees' companies and give details."

The Chronicle interviewed governance experts who found the relationship between Stanford University, Ms Cranston, and her law firm "troubling." "Such relationships, they said, while not illegal, can be inherently problematic because they can make it difficult to avoid conflicts of interest or, at least, the appearance of conflicts of interest. As a trustee, she is a watchdog for the university at the same time her law firm is paid millions of dollars for legal advice and litigation services. 'It affects the perception of her ability to be independent,' said Charles Elson, chairman of the John L. Weinberg Center for Corporate Governance at the University of Delaware. 'If she voices opposition to the administration, the fear is the law firm loses legal fees -- that's the public perception.'

The Chronicle found that "Cranston declined to discuss the matter. In January, she announced plans to step down as chairwoman of Pillsbury Winthrop at year's end to become a senior partner. A spokesman for Stanford, which as a private institution does not open its business records to the public, said the university stands by the relationship. Jeff Wachtel, senior assistant to [University President John] Hennessy, said Cranston would recuse herself from any legal decisions. 'We're confident this is an appropriate relationship,' he added. Burton McMurtry, chairman of the Stanford board, agreed, saying people like Cranston are too valuable to exclude simply because there's a potential conflict of interest -- a conflict that can be managed. 'You would cut off your nose to spite your face if you eliminate all people who could have a potential conflict,' he said.

In my humble opinion, it is hard to believe that among the immense pool of talented Stanford alumni and donors one could not find capable potential board members whose firms do not do major business with the University.

The Chronicle also noted other potential conflicts of interest involving Stanford University's board:

-- University President John Hennessy, an ex officio member of Stanford's Board of Trustees, serves on the board of Google Inc. Stanford had $282 million invested in Google as of as of Aug. 31, 2004. According to the federal Security and Exchange Commission, Hennessy owns $2.5 million in Google stock and an additional 44,300 shares in stock options.

-- Former Stanford trustee William Landreth served as an advisory director for Goldman Sachs, an investment banking firm that underwrote $50 million in bonds for the university at the time Landreth was a board member.

-- Stanford trustee Jon Blum served as managing director for Morgan Stanley, an investment banking firm that underwrote $80 million in bonds.

I believe that the corporate culture of contemporary universities, which hardly operate as representative democracies, for better or worse is set at the top. Thus it should not be surprising that a university whose top leaders have conflicts of interest would also be susceptible to conflicts of interest affecting medical school leaders and faculty.

When leaders and faculty up and down the university and medical school hierarchy have financial arrangements with outside organizations whose interests may not always coincide with those of the university or the medical school, one wonders whom these leaders and faculty really speak for, what mission they really put first, and how well an academic institution with such leaders can fulfill its academic and clinical mission.

Widespread Conflicts of Interest at Stanford: Defining Deviance Down?

The San Joses Mercury News just published a major series of investigative reports about conflicts of interest at the Stanford University School of Medicine, written by Paul Jacobs. In three articles published Sunday (How Profits, Research Mix at Stanford; Federal Rules Often Go Unenforced; and How We Did This Series), Jacobs describes the scope of conflicts of interest at the Medical School.

First, for an overview:

• The school's 700-plus faculty members last year disclosed 299 potential conflicts of interest related to their research, according to figures provided by Stanford.

• Potential conflicts occur throughout the school's ranks. More than a third of the school's administrators, department heads and other leaders -- at least 26 out of 67 reviewed by the Mercury News -- have reported outside financial interests related to their research within the last four years. These are scientists who are role models for junior faculty members and graduate students.
• Perhaps most important, seven of the 10 members of the school's conflicts of interest committee, which is responsible for enforcing the rules, have financial relationships with medical companies. Unlike a comparable committee at the University of California-San Francisco, Stanford's panel includes no outside volunteers.

And here are some telling anecdotes:

One researcher has founded six companies, most based on research that came out of his own lab. He is a managing partner of a venture capital firm focused on medical research and sits on the boards of several other companies. His role at the venture company was approved by the dean several years ago because he has no day-to-day management responsibilities. The researcher is a member of the school's conflict of interest committee.

One senior associate dean started a biotech company based on her federally sponsored lab work.

And the physician who until January chaired the department of gynecology and obstetrics is a longtime director of Wyeth, which manufactures controversial hormone replacement therapy for women -- therapy she defended in 2002 when potentially serious health risks were emerging.

Note that this information was not easy to obtain. Jacobs wrote:

To get information for this series, the Mercury News:

• Obtained correspondence between the university and the National Institutes of Health for the past five years under the federal Freedom of Information Act.

• Searched medical journals, most of which require authors to disclose any conflicts when they publish an article, and disclosures accompanying speeches given at medical conferences.

• Reviewed corporate news releases and other documents filed with the Securities and Exchange Commission, which frequently list information about faculty members who are company founders, directors or scientific advisers.

Stanford's main response to conflicts of interest is to require disclosure, and if necessary, management.

Stanford medical school has a 10-member conflict of interest committee, created in 2001 to oversee how substantial conflicts that exceed certain thresholds are handled. All faculty members are required to disclose their financial relationships at least once a year. Those reports go to the school's conflicts manager, who determines which cases must go to the committee.

The committee does its work in secret.

Stanford admininstrators defended the University's approach to conflicts of interest. For example,

'I'm not really sure where this wild West idea came from,' said Dr. Harry B. Greenberg, a senior associate dean for research. 'Very early on, Stanford has been associated with a lot of entrepreneurial activity and people may have equated the ability to carry out entrepreneurial activity with lack of oversight and regulation. I really don't think that has been the case.'

[However,] Greenberg holds stock options in and is a consultant to MedImmune, which makes an influenza vaccine he is studying under a federal grant.

Also,

However, despite rules requiring prompt reporting of substantial conflicts, Stanford failed to report six grants to NIH until after the Mercury News asked NIH and Stanford earlier this year for documentation of conflicts. Med school spokesman Costello said the failure was an administrative error and that all the scientists followed Stanford's disclosure rules.

One of those six grants involves Greenberg, a senior associate dean for research and chairman of the school's conflict of interest committee.

Greenberg is an expert on vaccines. In late 2000, he took a two-year leave from Stanford to become vice president of research at Aviron, now MedImmune Vaccines, where he helped develop the Mountain View company's nasal flu vaccine, FluMist. While there, he made the case for FDA approval of FluMist to the agency's vaccine advisory committee, which he had chaired just nine months before.

Today, Greenberg remains a paid member of MedImmune's scientific advisory board and holds stock options issued while he was employed by Aviron. He said the options are ``still underwater,'' meaning that exercising them would cost him more than the stock is currently worth. ``I had a great time at Aviron, but becoming filthy rich was not part of it, unfortunately,'' he said.

He is also one of three Stanford scientists now working on a federal grant to compare MedImmune's FluMist vaccine and Fluzone, a more traditional, injectable vaccine from Aventis Pasteur. Both vaccines have been approved by the FDA and are commercially available.

The principal investigator on the NIH-funded grant, which was worth $3.1 million last year, is Dr. Ann Arvin, the Stanford-wide associate dean for research -- a position with responsibility for faculty conflict of interest issues across the university.

For the past several years, she, like Greenberg, has been a paid member of MedImmune's scientific advisory board and holds stock options in the company.

The husband of a third researcher, Dr. Elizabeth Mellins, was vice president for clinical research at MedImmune Vaccines and helped bring FluMist to market. Mellins says she has no direct involvement in the clinical trial.

I will let the reader be the judge of how convincing Greenberg's defense of how Standford handles conflicts of interest is. Some are skeptical, though.

'There is a focus on procedural solutions and this magical belief that disclosure is the answer as opposed to dealing with the fact that many of these things should not be allowed,' said Barbara A. Koenig, a bioethics researcher at the Mayo Clinic and former executive director of Stanford's Center for Biomedical Ethics.

Tufts University Professor Sheldon Krimsky, author of 'Science in the Private Interest,' argues that fields such as law have stricter conflict policies than universities. A judge, for instance, isn't allowed to have any financial relationship with a party that might benefit from a ruling.

But is disclosure enough? Being on a corporate board of directors, for example, carries a legal responsibility that can clash with the interests of students and patients, said Dr. Roy Poses, who runs the non-profit Foundation for Integrity and Responsibility in Medicine. [That's you - ed. I know.]

'I am quite surprised that there seem to be many leaders in academic medicine, who also simultaneously have clear responsibilities to protect the interests of corporations and stockholders,' he said.

As the man said, read the whole thing.

My comments, in addition to the one above, are that this is yet another demonstration about how pervasive conflicts of interest have become in health care in general, and in academic medicine in particular. While conflicts have become so pervasive, individuals with conflicts may seem to blithely disregard any possible downside to such relationships. Thus, this seems to be an example of defining down deviance.

In my humble opinion, however, such pervasive conflicts threaten the core mission of academic medicine. If substantial numbers of faculty and administrators have major financial entanglements with outside organizations whose goals are to sell products or services (or to promote ideologies or belief systems, for that matter), how can one trust the medical school or academic medical center to provide unbiased, disinterested teaching, research, and patient care?