Pfizer's Umpteenth Settlement (for $491 Million Plus a Guilty Plea), but No Person Held Responsible

The world's largest research based pharmaceutical company was in court again, as reported by the New York Times,

 The drug maker Pfizer agreed to pay $491 million to settle criminal and civil charges over the illegal marketing of the kidney-transplant drug Rapamune, the Justice Department announced on Tuesday. 

In particular,

 The recent case centers on the practices of Wyeth Pharmaceuticals, which Pfizer acquired in 2009.

Rapamune, which prevents the body’s immune system from rejecting a transplanted organ, was approved by the Food and Drug Administration in 1999 for use in patients receiving a kidney transplant. However, federal officials said Wyeth aggressively promoted the drug for use in patients receiving other organ transplants, even offering financial incentives to its sales force to do so.

Accusations of Wyeth’s practices became public in 2010 after a whistle-blower lawsuit filed by two former employees was unsealed.

After lawmakers announced a Congressional inquiry, the Justice Department opted to join the lawsuit. The settlement announced Tuesday, which also resolves a second, similar whistle-blower suit, includes a criminal fine and forfeiture of $233.5 million, and a civil settlement of $257.4 million with the federal government, all 50 states and the District of Columbia. 

The case did not get much media coverage.  So far, the only other somewhat detailed article on it was put out by Bloomberg.   In fact, the lawyer for two of the whistle-blowers who alerted federal authorities to what Wyeth was doing had to say

the spate of pharmaceutical settlements in recent years had blunted reaction to what he said were shameful practices. 'Everybody’s been asking me why this case is different than any other,' he said. 'We used to trust these companies. You can’t trust these companies anymore.'

However, we should not be too blase.  This case was not only about money.  The over-promotion of a potentially dangerous drug likely lead to patients being harmed in the absence of any benefits.  Rapamune suppresses the immune system and increases risks of serious infections and malignancy.  Specific serious adverse events have been reported when it is used in transplants of organs other than the kidney (e.g., lung and liver transplants).  (See full prescribing information here.)  Bloomberg reported that 90% of Wyeth's revenues from Rapamune came from off-label uses, suggesting that quite a few people may have been adversely affected by its excess use. 

As in most other members of the march of legal settlements by big health care organizations, this case involved no negative consequences for anybody who authorized, directed, or implemented the improper marketing practices.  While such people must have existed, they were not even named in the press coverage.  At least this settlement involved a guilty plea to a crime, albeit a misdemeanor (misbranding as reported by Bloomberg), so the company did have to admit some wrongdoing.  

A Pfizer manager, however, tried to disavow responsibility, as noted by Bloomberg,

'Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009,' Chris Loder, a Pfizer spokesman,...

But Pfizer had purchased Wyeth, and in doing so got not only assets and profits, but responsibility for actions.

Also, neither the settlement nor the criminal plea seemed to take into account Pfizer's amazingly sorry recent track record.  I am losing count of all of Pfizer's settlements and/or guilty plea or convictions since 2000.  (The updated list of previous legal results is in the Appendix.)  

People found guilty of small-time Medicaid or Medicare fraud often forfeit all their assets and go to jail.  Yet actions by large pharmaceutical companies that may harm patients and cost many millions of dollars almost never result in any individual facing any negative consequences, or even being named and shamed.  Meanwhile, the managers of these companies may make gargantuan amounts of money partially rationalized by the revenues produced by such recurrent misbehavior.  In 2012, according to the company's 2013 proxy filing, Pfizer CEO Ian Reed's total compensation was  $25,634,136, and the four next most highly paid executives all made more than $5,000,000. 

So the Kabuki play that is regulation of and law enforcement for large health care organizations goes on.  As our society is being increasingly divided into a huge majority in increasingly difficult economic circumstances and a small and  increasingly rich minority, it also seems to be increasingly divided into little people who may be ruined by lawsuits, and imprisoned for even minor infractions, and big people who have impunity.  

True health care reform would need to start by making leaders of big health care organizations accountable for their organizations' misbehavior. 

APPENDIX - Pfizer's Settlements

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here). 

 Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  

The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  

Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   

In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  

In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post). 

In August, 2012, Pfizer settled allegations that its subsidiaries bribed foreign (that is, with respect to the US) government officials, including government-employed doctors (see this post).

In December, 2012, Pfizer settled federal charges that its Wyeth subsidiary deceptively marketed the proton pump inhibitor drug Protonix, using systematic efforts to deceive approved by top management, and settled charges by multiple states' Attorneys' General that it deceptively marketed Zyvox and Lyrica (see this post).  

 In January, 2013, Pfizer settled Texas charges that it had misreported information to and over-billed Medicaid (see this post). 

"The Scent ... of a Casino" - Clinical Research Results as Fodder for Insider Trading

"The scent and smoke and sweat of a casino are nauseating at three in the morning. Then the soul-erosion produced by high gambling - a compost of greed and fear and nervous tension - becomes unbearable and the senses awake and revolt from it." - Ian Fleming.  Casino Royale.  1953

A major theme of this blog has been threats to the integrity of clinical research.  When I started out as a young naive academician in medicine, I viewed clinical research through the lens of evidence-based medicine, as primarily a means to develop better evidence to aid in the care of patients, and secondarily a way to advance science and public health.  Yet in the past 20 to 30 years, clinical research has become commercialized.  Now most randomized controlled clinical trials are done to support the licensing of drugs and devices for particular indications.  Furthermore, clinical research has become de facto a primary avenue of marketing of drugs and devices.  So we have discussed endlessly how clinical research has been manipulated by those with vested interests in selling drugs and devices, and may be suppressed when even such manipulation fails to produce results desired by commercial sponsors.

If that was not bad enough - and it is - now there is evidence that clinical research has become the roulette wheel in an investment casino.  This is the lesson provided by new US government charges that giant hedge fund SAC Capital used insider knowledge to trade drug company stocks.


Let me try to provide a narrative of the key elements of the case.

The Key Players

Matthew Martoma was a " former student at Harvard Law School, ... [who] co-wrote papers on medical ethics before seeking a business degree at Stanford University and joining a little-known Boston hedge fund."  Then, "in 2006, at age 32, Martoma made it to SAC Capital Advisors LP and gained the attention of the firm’s billionaire owner Steven A. Cohen."(1)

Dr Sidney Gilman is

an 80-year-old neurologist with expertise in neurodegenerative disorders, including Alzheimer’s disease. According to his biography on the University of Michigan website, Gilman first served on the faculty at Harvard and Columbia and then had a long and distinguished career at the University of Michigan, where he was the chair of the department of neurology for many years. He is a member of the Institute of Medicine of the National Academy of Sciences and a past president of the American Neurological Association. In other words, he’s a bigshot.

Gilman moonlighted as a consultant, working for an expert networking firm, where he provided advice to the financial industry (and which eventually led to the insider trading case), and for Elan Pharmaceuticals. In addition to his consulting for Elan, he also served as the chair of the Safety Monitoring Committee for a phase II clinical trial of a highly promising (at the time) Alzheimer’s drug, bapineuzumab, under development by Elan and Wyeth.(2)

The owner of SAC Capital, a hedge fund worth $14 billion, is Steven A Cohen, "a prodigious art collector, an investor in the New York Mets, a supporter of Mitt Romney’s presidential campaign."  His "career ... has reached mythic status on Wall Street. Over the last 20 years, Mr. Cohen has amassed a multibillion-dollar fortune by posting returns averaging 30 percent a year. SAC has grown into a firm with about 1,000 employees around the world."(3)

The Maneuver


Per the NY Times(4), 

The doctor met Martoma as a consultant for an expert- networking firm based in Manhattan and had sessions with Martoma from mid-2006 to July 2008, according to the government.

Gilman worked for Gerson Lehrman Group’s Scientific Advisory Board starting in 2002,... 

Also according to the NY Times(5)
 

Dr. Gilman’s consulting work for Mr. Martoma earned him about $108,000, according to court filings. Based in part on Dr. Gilman’s leaks about positive developments related to the clinical trials of a new Alzheimer’s drug, SAC accumulated a roughly $700 million position in the stocks of Wyeth and Elan, according to the government.

The S.E.C. said that the fund’s owner, Mr. Cohen, took a large position in Wyeth and Elan in his personal portfolio based on Mr. Martoma’s recommendation. Mr. Cohen maintained his holdings even though there was significant internal debate about the wisdom of such a large position in the drug makers, the government said.

Furthermore, per Larry Husten writing in Cardiobrief(2),

 While serving on the Safety Monitoring Committee of the trial, from the summer of 2006 through mid-July 2008, Gilman had access to the safety (but not the efficacy) data from the trial. Throughout this period he leaked the positive safety information to his contact at SAC (the enormous hedge fund), which then began to accumulate a large position in both Elan and Wyeth.

So, allegedly based on information from Dr Gilman, the high-ranking academic physician doubling as a data monitoring committee chair for a drug trial, paid for these services by Elan, SAC Capital and Mr Cohen made a large investment in Elan and Wyeth, the companies sponsoring the trial.

But then, again per Husten(2),

 Later in June, Elan chose Gilman to present the full trial data at ICAD. Gilman did not become privy to this data until the middle of July when Elan gave him the full results of the trial. The results, in sharp contrast to the earlier view in the press release, were decidedly negative, offering little hope that the drug would be considered effective. Gilman apparently understood this, because he immediately gave the results to the hedge fund, which then rapidly and dramatically reversed its long position on Wyeth and Elan.

Specifically, per the New York Times(5), after

Dr. Gilman told Mr. Martoma that patients were experiencing serious side effects, prosecutors say. Afterward, Mr. Martoma e-mailed Mr. Cohen, telling him 'it’s important' that they speak. They spoke on the phone for nearly 20 minutes, the government says, and Mr. Martoma told his boss that he was no longer 'comfortable' with the investments.

The following day, SAC reversed course. Mr. Cohen’s head trader sold the firm’s entire inventory of roughly 10.5 million shares of Elan and about seven million shares of Wyeth, the government said. Once it had dumped the shares, SAC built a short position in the two stocks, betting their value would drop.

According to the S.E.C., the trader, Mr. Cohen and Mr. Martoma kept the sales confidential. The trade, wrote the head trader in an e-mail to Mr. Cohen, 'was executed quietly and efficiently over a four-day period through algos and darkpools' — referring to trades using algorithms and to trading platforms that do not have the same reporting requirements as the stock exchanges — 'and booked into two firm accounts that have very limited viewing access.'

After the companies announced the results of the trials, Elan’s stock fell about 42 percent and Wyeth’s about 12 percent.

The trading allowed SAC to avoid about $194 million in losses and earn about $83 million in profits on Elan and Wyeth, according to prosecutors.

At the end of 2008, Mr. Martoma received a bonus of about $9.3 million, the S.E.C. said.

So, having bet heavily on Elan and Wyeth based on Dr Gilman's initial information that the trial was showing positive results, SAC Capital and Mr Cohen then bet heavily against these companies based on Dr Gilman's new information that the trial would end up not showing such results.  Because they had this information allegedly before it was made public, these bets yielded huge profits.  Mr Martoma, the conduit between SAC Capital and allegedly Mr Cohen, made millions.  Dr Gilman made over a hundred thousand.

The Charges

Per Bloomberg(4),

Martoma, 38, was accused by prosecutors in Manhattan federal court with playing a lead role in what they called the most lucrative insider-trading scheme in history, given the $276 million profit he allegedly helped the hedge fund achieve.

The government started off taking a tough approach, per the NY Times(5),

FBI agents arrested Mr. Martoma, 38, early Tuesday morning at his home in Boca Raton, Fla. He was released on bail after making an appearance in Federal District Court in West Palm Beach. Mr. Martoma, who has been unemployed since leaving SAC in 2010, is expected to appear in federal court in Manhattan on Monday and enter a plea.

 In addition, Dr Gilman, per Bloomberg(1), "has entered into a non- prosecution agreement with prosecutors in which he agreed to testify before a federal grand jury and to forfeit $186,761, money which he was paid by Elan for his consulting work."

Mr Cohen has not been charged.  However, according to John Cassidy writing in the New Yorker(6),

the complaints do assert that Cohen, identified as 'Portfolio Manager A,' personally authorized many of Martoma's trades, and pocketed the bulk of the profits they generated.  In a statement accompanying the indictment [US Attorney Preet] Bharara was careful to state that S.AC., and by extension Cohen, reaped enormous rewards from the criminal wrongdoing, even though they weren't being charged.

the complaints do assert that Cohen, identified as “Portfolio Manager A,” personally authorized many of Martoma’s trades, and pocketed the bulk of the profits they generated. In a statement accompanying the indictment, Bharara was careful to state that S.A.C., and by extension Cohen, reaped enormous rewards from the criminal wrongdoing, even though they weren’t being charged.

Read more: http://www.newyorker.com/online/blogs/johncassidy/2012/11/sharks-circle-around-hedge-fund-big.html#ixzz2DdLAchwv

Read more: http://www.newyorker.com/online/blogs/johncassidy/2012/11/sharks-circle-around-hedge-fund-big.html#ixzz2DdKdZcAY

In addition, there is now some likelihood that there will be legal actions against SAC Capital.  The company has reportedly received a "Wells notice" that the SEC is considering pursuing such action.  In addition, according to the New York Times(7), "an additional action against SAC, or even Mr. Cohen, could involve accusations of fraud based on the so-called control-person liability theory, meaning that it was in 'control' of Mr. Martoma when he engaged in insider trading."

the complaints do assert that Cohen, identified as “Portfolio Manager A,” personally authorized many of Martoma’s trades, and pocketed the bulk of the profits they generated. In a statement accompanying the indictment, Bharara was careful to state that S.A.C., and by extension Cohen, reaped enormous rewards from the criminal wrongdoing, even though they weren’t being charged.

Read more: http://www.newyorker.com/online/blogs/johncassidy/2012/11/sharks-circle-around-hedge-fund-big.html#ixzz2DdKdZcAY

Summary

At one point, I would have simply regarded the trial of bapineuzumab as a clinical scientific experiment meant to determine if a promising new therapy would work for the important clinical problem of Alzheimer's disease, and incidentally as means to learn more about the biology of that disease.  More recently, I would have regarded the trial as primarily a means for Elan and Wyeth to persuade the US Food and Drug Administration to approve this drug as a treatment for this disease, and then if so, a means for these companies to market it.  I would have been skeptical about the value of the clinical evidence supplied by the trial to support use of this drug, but would not have dismissed this evidence out of hand.

Now it appears that a major role of this trial was to be a roulette wheel in a Wall Street casino.  Big bettors on this wheel included people who may have had advance knowledge about the slot in which the ball would land.

Ideally, clinical research ought to be done by people who have no particular interest in the results turning out one way or the other.  Obviously, clinical investigators as humans may have opinions about how studies might turn out.  However, they should not be in positions to gain or lose money according to the results, or to be intimidated by those with interests in having the studies obtain particular results. Our current system in which many clinical studies are funded by organizations with interests in how the results turn out has lead to numerous cases of manipulation of study results, and sometimes suppression of studies whose results could not be manipulated successfully in the desired direction.  Such threats to study integrity make it difficult to make the best clinical decisions for individual patients, distort health policy, and break the trust of patients who volunteered to participate in the studies.

Now it appears that short-term stock trading that bets on the results of clinical research, sometimes informed by insider information about these results, could be another powerful external influence on clinical research that could additionally threaten its integrity.  Furthermore, as we speculated seven years ago (see this post and links backward), fear of insider trading may be making clinical research more opaque, and this opacity may allow even more control of research by sponsors (companies funding it) rather than investigators.

We have previously suggested that real consideration ought to be given to taking clinical research out of the hands of organizations, particularly health care corporations, that have vested interests in the direction of the results.  Knowledge that clinical research is increasingly becoming a casino for stock traders and hedge funds, and that research results are becoming the stuff of insider trading should further prompt this consideration. 


References
1.  Burton K, Kishan S, Van Voris B. Cohen's 'Elan Guy' Martoma dropped ethics for hedge fund.  Bloomberg, Nov 23, 2012.  Link here.  
2.  Husten L. The doctor and the center of the insider trading scandal.  Cardiobrief, Nov 27, 2012.  Link here.
3.  Lattman P. S.E.C. weighs suit against SAC Capital.  New York Times, Nov 28, 2012.  Link here.
4.  Van Voris B, Hurtado P. Insider crackdown uses SAC manager in health-care pivot.  Bloomberg, Nov 21, 2012.  Link here.
5.  Lattman P. Insider inquiry inching closer to a billionaire.  New York Times, Nov 20, 2012.  Link here.
6.  Cassidy J. It's time for Obama to bite the hedge-fund sharks.  New Yorker, Nov 21, 2012.  Link here.
7.  Lattman P. S.E.C. weighs suit against SAC Capital.  New York Times, Nov 28, 2012.  Link here. 

Wyeth, Ghostwriting, Dr. Joseph Camardo and a Big Liquor Store With a Little Grocery Department

Ghostwriting is a topic covered extensively at Healthcare Renewal, including at my post "Wyeth: Ghostwritten Papers Fake, But Accurate" here, Roy Poses' "Wyeth's Industrial Scale Ghost-Writing" here, and many others about Wyeth and other pharmas that can be viewed via this link: http://hcrenewal.blogspot.com/search/label/ghost writing.

A story in the Philadelphia Inquirer yesterday about Wyeth and ghostwriting brought to mind my medical school days at Boston University, in a metaphorical and rather negative way, regarding an oddity reflecting today's pharma industry.

In those years I lived next to Boston City Hospital on the top floor of a 29-story high rise at 35 Northampton Street, at that time one of the toughest and highest crime neighborhoods in the region if not the country (I was careful and lucky, and only got mugged at gunpoint once.) I had an excellent bird's-eye view of the urban decay in the area, reflective of ethical decay in the community.

35 Northampton St., next to Boston Medical Center (formerly Boston City Hospital)

Across the street from the high rise was an oddity - a very large liquor store named Blanchard's. Inside Blanchard's was a very small grocery department of all things. Have a snack with your booze! (I went in only twice; once to see what it was all about, and again during the Blizzard of '78 to get some needed food when all transit in the city was shut down and several feet of snow -- and neighborhood guns -- inhibited foot travel.)

The area has much improved in the past three decades, but according to Google street view the liquor store is still there:

In the 1970's "Liquor Land" was a large liquor store with a small grocery department named "Blanchard's." Click to enlarge.

Why does this odd store remind me of Wyeth, and more generally today's pharmaceutical industry?

Because that industry has turned from what used to be a biomedical research & development industry with decent ethics and a small marketing arm, to large marketing industry with poor ethics and a small R&D arm.

(Or, perhaps more accurately, a large marketing industry with poor ethics and a busywork section disguised to look like R&D. As a colleague noted in my post "Pfizer/Wyeth Merger And Sacrificing The Future: Laying Off Scientific Staff All Over The Place" here, a small fraction of prime scientist intellectual horsepower and time is actually spent on true R&D today, the rest wasted on feeding the bureaucratic corpulence that is the modern pharma research lab. He observed that "what we today call pharmaceutical R&D is in reality busywork disguised to look like R&D, in effect a well engineered, well managed, massively expensive failure.")

Here is what led to my "pharmas have become large marketing firms with a small R&D effort" metaphor. It was a story in the local newspaper on ghostwriting.

The glib quotes from Dr. Joseph Camardo, Wyeth's senior vice president of global medical affairs, on the practice of ghostwriting are simply stunning:

Philadelphia Inquirer

Ghosts in the medical machine

Was drug research infected by ghostwriters? With Paxil suit in court, a Chadds Ford firm says it was ethical.

Sun, Sep. 20, 2009

By Miriam Hill

Inquirer Staff Writer

When GlaxoSmithKline P.L.C. marketers looked for doctors to promote the antidepressant Paxil, they called the project CASPPER. The name was more than just an offbeat tribute to the friendly cartoon ghost. It was a wink and a nod to "ghostwriting," a questionable practice in which scientists put their names on research written by someone else, usually a writer paid by a drugmaker.

Ghostwriting critics say it disguises marketing material as scientific research.

Charges of ghostwriting have been lobbed against many companies in recent years, including Glaxo, Wyeth, AstraZeneca P.L.C., and Merck & Co. Inc., often arising in lawsuits from consumers claiming a drug hurt them.

... Documents released in connection with 8,000 lawsuits filed against Wyeth over Premarin and Prempro show that the company, which employs several thousand people in Collegeville, paid a medical-writing firm to produce articles from 1998 to 2005 that allegedly downplayed the risks of hormone treatment and emphasized benefits.

In 2002, researchers stopped a landmark federal study after finding that menopausal women who took certain hormones had an increased risk of breast cancer, heart disease, and stroke.

"Ghostwriting was used to sway physician opinions to favor hormone use as disease prevention long after that was a scientifically defensible position," Fugh-Berman [writer Adriane Fugh-Berman - ed.] said.

Joseph Camardo, Wyeth's senior vice president of global medical affairs, called Fugh-Berman's view "baseless." Medical opinion evolves, he said, and the papers in question reflected scientific understanding then. He also said the authors alone controlled the content and writing of the papers, though some did have outside help paid for by Wyeth.

"It's really being misrepresented as something we wrote and paid for that said what we thought it should say," Camardo said. "But the authors were not paid, and the authors had the final say."

... Studies on ghostwriting have suggested that anywhere from 8 percent to 75 percent of articles in medical journals may involve the practice.

Aside from the point I raised in my post "Has Ghostwriting Infected The Experts With Tainted Knowledge, Creating Vectors for Further Spread and Mutation of the Scientific Knowledge Base?" here regarding possible severe contamination of the literature and therefore of "expert knowledge" as it exists today, Camardo's response raises a cornucopia of questions.

Regarding "Medical opinion evolves, he said, and the papers in question reflected scientific understanding then":

• Whose scientific opinion do they reflect, exactly?
• Does Camardo believe these ghostwritten papers, usually written by party "A" but with authorship claimed by party "B" (usually prominent academic physicians often nurtured by the industry into the role of "key opinion leaders", KOL's) are objective?
• Does Camardo actually believe most of the content comes from party "B" rather than party "A" in these papers?
  
• Does Camardo understand that paying a MECC (Medical education & communications company) or other firm to write scientific papers puts the author(s) of those papers in a conflict of interest position relative to the paying sponsor, injurious to objectivity?
• Is Camardo that naive to believe a paid writer would "diss" the holder of his or her paycheck?

Regarding "the authors alone controlled the content and writing of the papers, though some did have outside help paid for by Wyeth":

• Which authors is he referring to?
  
• The ghostwriters?
• Wyeth scientists?
• Academics claiming authorship?
  
• Was the "outside help" from Wyeth "authors" to the ghosts, or from the ghosts to Wyeth "authors", or from Wyeth to the academics claiming authorship, or what?
• Can Camardo produce statistics on what % of article content on ghostwritten articles Wyeth sponsored were written by the ghost vs. written by Wyeth scientists and/or the claimed academic author? If not, why not? And if not, why should any intelligent person not assume the papers are, say, 99% the product of the hired guns?

Regarding "the authors were not paid, and the authors had the final say":

• Again, which author(s) is he referring to?
• In terms of the ghosts, I assume they were not working for the MECC's for free.
• In terms of the academics and KOL's claiming authorship, they (maybe!) were not paid in money, but instead in the valuable academic currency of a publication in a major biomedical journal.
  

To claim the KOL's were "not paid" is disingenuous. In fact, I find his entire argument disingenuous, a play on words, PR "spin" completely callous to the needs for scientific objectivity, the advancement of science, and ultimately to patient's lives.

This is marketing, with poor ethics, in the extreme.

Being somewhat familiar with authorship issues as former Director of Published Scientific Information Resources and The Merck Index (of Chemicals, Drugs & Biologicals), 13th ed. at Merck Research Labs, I further pointed out in my post "Wyeth: Ghostwritten Papers Fake, But Accurate" here, that:

... in addition to the violation of accepted practices of authorship, such as specified by NIH and the International Committee of Medical Journal Editors, among others, such lucky authors [i.e., those who claim authorship of ghostwritten papers] get to "count" such papers in their academic portfolios, presumably also in violation of their own institutional policies and guidelines for fair attribution and intellectual honesty, e.g., here [Harvard - ed.]

These industry practices and Camardo's position may be based on:

• Ignorance of accepted practices of authorship of the NIH, the International Committee of Medical Journal Editors, and most academic institutions, or perhaps:
  
• Cavalier dismissal of these practices for pecuniary reasons.

Is Camardo informed and upfront? Inept? Disingenuous and dishonest? That is up to the reader to decide.

In my aforementioned post "Wyeth: Fake but Accurate" I'd also noted Wyeth attorney Stephen Urbanczyk acknowledging that the ghostwritten articles were part of a marketing effort. But he said that they were also "fair, balanced, and scientific." More spin.

This raises the following observation. It is said that you can judge people by the company they keep. I also believe that:

You can judge companies by the people they keep.

This raises the following very serious questions:

• Is the presence of a senior vice president of global medical affairs and a lawyer with such views on ghostwriting representative of the senior executive leadership's views on dissemination of biomedical scientific information?
  
• Is their presence reflective of the views of Wyeth's Board of Directors?

If so, then the objectivity of any article about Wyeth drugs is called into question, and physicians and patients should utilize Wyeth drugs (and literature on them) with great caution.

-- SS

Addendum: this from the Medical Ethics blog:

Recently released court documents in a lawsuit against drug giant Wyeth, thanks to a court action by the New York Times and PLoS Medicine, are now searchable at a University of California, San Francisco web site.

The Wyeth documents are the latest made searchable at the Drug Industry Document Archive, or DIDA, which archives the documents from several high-profile cases.

... The documents were first made available last month on the PLoS web site, but were not searchable and difficult to sort through. The DIDA site now make it possible to search for documents by name, type or content.

Also see "Ghostwriting: Why they do it" at that blog.

-- SS

Has Ghostwriting Infected The "Experts" With Tainted Knowledge, Creating Vectors for Further Spread and Mutation of the Scientific Knowledge Base?

I could have titled this piece "have the deceivers been themselves deceived?"

Recent revelations have shown that biomedical ghostwriting is a scourge that some physicians and scientists -- who are clearly lacking ethics, insight and perhaps an understanding of psychiatric defense mechanisms such as rationalization -- engage in all too often, as it taints the corpus of worldwide scientific literature.

(I covered the issues related to ethical and justified claims of provenance for scientific writing in my post "Wyeth: Ghostwritten Papers Fake, But Accurate" here along with a discussion of why lay leadership of biomedical R&D organizations was not a good idea. Such leaders cannot vouch for the scientific fairness and accuracy emanating from their own organizations.)

One should examine the evidence in a first-person manner. The New York Times has made available secret documents and emails secured by Senator Grassley on Wyeth's ghostwriting practices. These documents were unsealed by a judge in a personal injury lawsuit and chronicle Wyeth's use of a medical writing company to prepare articles for publication in medical journals.

Wyeth said all the articles are "scientifically accurate" and that "it is a common practice in the pharmaceutical industry to work with such firms" (and, by implication, to falsify claimed authorship). As justification for clearly unethical practices, this is a rather poor argument, being a classic logical fallacy known as the Appeal to Common Practice:

Description of Appeal to Common Practice
The Appeal to Common Practice is a fallacy with the following structure:

1. X is a common action.
2. Therefore X is correct/moral/justified/reasonable, etc.

That said, these documents raise an important question of a systemic nature:

Have the scientific ghostwriting deceivers themselves been deceived regarding biomedical reality by these practices?

Might they genuinely believe they are contributing to the scientific literature based on their own erroneous notions, the latter based upon a scientific literature contaminated by other ghostwriters?

To illustrate this point, in the New York Times online document pool, we discover that Dr. Gloria Bachmann, Associate Dean for Women's Health and Professor of OB/GYN and Medicine at UNDNJ-Robert Wood Johnson Medical School was presented with a tidy ghostwritten article entitled "The Importance of Treating Vasomotor Symptoms" (in peri- and post-menopausal women) by authors "TBD" (to be decided):

(Original ghostwritten draft. Authors "TBD." Click to enlarge)

about which Bachmann wrote the following in an email to the true authors' organization:

"Outline is excellent as written. I would like to try for publication as a review article in Obstetrics and Gynecology. We would have to change the title to "Vasomotor Symptoms: Evidence Based Treatment Options" or a title that emphasizes the data driven writing style."

Here is an image of the email:

(Approval email. Click to enlarge)

She found the content OK and agreed to review it.

Apparently, only minor changes were made. (Bachmann should have received accreditation in the acknowledgments section for reviewing the article, and/or a position far down the authorship hierarchy if she actually added some material).

Instead, the reverse occured.

The published document appeared with Bachmann as first (and only) author after Bachmann submitted it to a medical journal under her name, itself unethical. See what "Authors TBD" morphed into in the image below:

(Article submission cover page. Click to enlarge)

Here is how the true authors, medical writers for DesignWrite, the medical writing and communications company retained by Wyeth to write the article, received credit:

(How the "ghosts" received credit for writing the paper. Click to enlarge)

Unbelievable.

Bachmann has since stated that she believed she was adding to science by engaging in this deceit. From the New York Times:

The article, a nearly verbatim copy of the DesignWrite draft, appeared in 2005 in The Journal of Reproductive Medicine, with Dr. Bachmann listed as the primary author. It described hormone drugs as the “gold standard” for treating hot flashes and was less enthusiastic about other therapies.

The acknowledgments thanked several medical writers for their “editorial assistance,” not disclosing that those writers worked for DesignWrite, which charged Wyeth $25,000 to generate the article.

Dr. Bachmann, who has 30 years of research and clinical experience in menopause, said she played a major role in the publication by lending her expertise. Her e-mail messages do not reflect contributions she may have made during phone calls and in-person meetings, she said. ["May have made?" This gossamer excuse is embarrassing to me, as an academic myself - ed.]

“There was a need for a review article and I said ‘Yes, I will review the draft and make sure it is accurate,’ ” Dr. Bachmann said in an interview Tuesday. “This is my work, this is what I believe, this is reflective of my view.”…

She is quite off base regarding scientific authorship and "this being her work", but what also needs examination is her "lending her expertise" and her agreeing with the paper as "reflective of her view."

The paper itself lists many references, for example these:

(References: click to enlarge)

Here is, then, the dilemma, another major problem posed by ghostwriting:

How many of the cited references, which contributed to Bachmann's beliefs regarding these drugs, were themselves ghostwritten and potentially biased, or otherwise influenced by drug companies?

For that matter, how many studies with different ("negative") conclusions on these subjects were suppressed from publication by industry pressure? 

Bachmann's own "expert opinions" about these matters may be based upon false or misleading information she's read in other journals, the percentage of which are genuine vs. ghostwritten or industry-influenced being an unknown at this point in time.

While I believe Bachmann is most likely rationalizing away the unethical nature of attribution without fair and justifying contribution, perhaps fueled by additional motives of academic portfolio building and perhaps present and future potential pecuniary gain, it is possible she is being genuine about agreeing with the "science" in the paper.

However, her agreement may be predicated upon her own tainted expertise -- tainted by reading ghostwritten or industry-influenced articles in her area of specialty.

Will we ever be able to peel back all the layers of the ghostwriting onion to get to the core of impartial and objective scientific articles related to drugs and medical devices? Perhaps not, but the practice must stop going forward.

Tainted literature creates tainted scientific knowledge, the carriers of which may then further taint the knowledge base (with the best of intentions and with firm belief in the fairness and accuracy of their activities, of course).

Practitioners of evidence-based medicine may be unwittingly practicing "evidence-tainted medicine", or "pseudo-evidence based medicine" as described by others on this blog.

Such are the systemic risks of the scourge of ghostwriting.

-- SS

Aug. 31, 2012 Addendum:

I was made aware of the following 2011 paper thanks to a post by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog:  "Why Does Academic Medicine Allow Ghostwriting?  A Prescription for Reform" by Jonathan Leo, Jeffrey R. Lacasse, and Andrea N. Cimino

The paper also observes:

Due to its secretive nature, it is difficult to quantify how many invisible corporate authors haunt the medical literature.

The paper is worth reading in its entirety and as of this writing is available free at the link above.

-- SS

Guest Blog - On the Need to Get Ethical

Guest blog by Dr William Tierney -

This is old news. I'm the Co-Editor-in-Chief of the Journal of General Internal Medicine, and in our June 2005 issues we reported in detail a case of medical ghostwriting that had the particular target of showing the hazards of the oral anticoagulant drug warfarin, supporting a drug company's new oral anticoagulant. This article was accompanied by an editorial by me any my Co-Editor and a position statement by the World Association of Medical Editors decrying such practices.

I am a practicing general internist who prescribes drugs regularly that help my patients. I want and need new drugs to be developed, and I believe that users of those drugs should pay for the necessary research and development through both drug pricing and funding of NIH. I am also a patient and similarly want there to be effective drugs to prolong my life and healthy living. But they should be described in an evidence-based manner, and the evidence must be unbiased. The drugs should be priced so the drug company recoups its costs and makes a profit. I have no problems with any of that. But when they try to enhance their profits through illegitimate means -- by essentially lying through advertisements masquerading as scientific articles sneaked into peer-reviewed journals -- then these drug companies are behaving unethically and need to be punished.

I also am a clinical epidemiologist, and as such I do research investigating the positive and adverse outcomes of drugs. I have worked with and been funded by drug companies to do this work, collaborating with company scientists. To a person, I have found them to be honest, careful, and caring people who truly want to positively impact people's lives. It is the marketing divisions of these drug companies that operate in an atmosphere of "anything goes that helps the bottom line."

My father was a purchasing agent for a factory that made automobile parts. We used to get "presents" every Christmas, tickets to Broadway, etc. from suppliers, blatant attempts to influence his decision-making. I can't say whether it ever did, but in the end he had to live with his decisions and so did the company for which he worked. But as a physician, I don't receive the benefits of the drugs I prescribe for my patients, nor do I pay the costs. I act as an agent of my patients, and as such I need to balance benefits, adverse effects, and costs of everything I order. If I have bad information, or if I succumb to company bribes in the form of honoraria, meals, or gifts, my patients pay the price both directly (through my ordering an expensive drug they might not need) and indirectly (through inflated drug prices in general).

It is time for the drug companies to get ethical. Cut out the ghostwriting. Cut out the bribes. Cut out the marketing to patients that inflate drug benefits and minimize their costs and risks. Charge prices that recoup their drug development costs and stop paying billions to "push" drugs on physicians and patients, adding those costs to their drug prices. And we physicians likewise need to get ethical, stop taking bribes, stop reading propaganda or listening to drug detailmen, and base our decisions solely on what is best for our patients, without ignoring costs. (Nobody benefits if we bankrupt our system -- but that's another story...)

We are seeing changes. Eli Lilly now lists all payments they make to physicians (honoraria for speaking, meals, trips, etc.). Many medical schools and large practice organizations have outlawed meals and gifts by drug companies. Journals are more vigilant for ghostwriting and other conflicts of interest among authors. We are seeing a change, and hopefully the abuses by Wyeth, DesignWrite, and other companies involved in ghostwriting will become a thing of our (sordid) past. We can only hope and maintain our diligence as caring health care providers.

Dr Tierney is Co-Editor-in-Chief, the Journal of General Internal Medicine, and Professor of Medicine, Indiana University School of Medicine. This was also posted as a comment here on the NY Times article about Wyeth's sponsoring of ghost-writing of articles on hormone replacement therapy. See our most recent post on this topic here.

Wyeth's Industrial Scale Ghost-Writing

MedInformaticsMD noted the impending release of documents about how Wyeth engineered ghost-writing of articles about hormone replacement therapy (HRT) here. Now the NY Times has had a chance to review the documents, with fascinating results.

The scope of the ghost-writing campaign was on an impressively industrial scale: 26 articles published over 7 years in 18 medical journals.

The details were ably covered by at least three other blogs. Dr Adriane Fugh-Berman, guest- (not ghost-) blogging on PharmaGossip discussed how the documents reached the public domain. Dr Daniel Carlat on the Carlat Psychiatry Blog, Prof Margaret Soltan on the University Diaries offered some choice comments -

By Dr Carlat

As with baseball players on steroids, when companies pour marketing money into ghostwriting campaigns, they change the rules of the academic game. The playing field is no longer level; the drug company's version of the truth gains the upper hand. Sometimes, their truth really is the truth, but sometimes it's a carefully crafted lie. Sorting it out is difficult even for physicians who specialize in the area being written about. It's essentially impossible for the average generalist physician, to say nothing of patients who did not have the advantage of attending medical school.

By Prof Soltan

This filthy practice incorporates just about everything people rightly revile about some precincts of academia: Plagiarism. Fakery. Arrogance. Laziness. Cynicism (Wyeth was promoting drugs that turned out to be dangerous.).

People make fun of postmodernists by talking about the Postmodern Generator, a program that automatically generates articles full of obscurantist rhetoric. But that’s only generating words. Ghosting whores among our medical faculties are generating real sickness.

These are hard acts to follow, so my comment is: ghost writing is also corrupt. Transparency International defines corruption as abuse of entrusted power for private gain. Medical academics are entrusted to discover and disseminate the truth. Practicing physicians, patients and the public entrust medical academics to provide honest, informed, unbiased information and opinions.

When academics allow marketing hacks to write supposed scholarly articles in their name, they abuse this entrusted power (and privately gain by padding their CV, and often by direct payment as "consultants.") Of course, as noted above, this sort of corruption deceives the public, patients, and physicians into thinking that drugs and devices are better and more valuable than they actually are, denying patients preferable treatments, increasing the risk of needless adverse effects, and driving up the costs of health care.

Those who are pushing for meaningful health care reform ought to put fighting health care corruption at the top of their agendas, starting with the blatant corruption of academic medicine and medical research of which ghost-writing is but one species.

Wyeth: Ghostwritten Papers Fake, But Accurate

It looks like Wyeth has lost its battle to keep secret its practices regarding ghostwriting of scientific papers. The issue in question is whether ghostwriting contributed to excessive prescription of post-menopausal hormones and increased the incidence of breast cancer:

Posted on Sun, Jul. 26, 2009
Philadelphia Inquirer

Wyeth told to release documents on ghostwriting

Associated Press

LITTLE ROCK, Ark. - A federal judge has ordered the unsealing of thousands of pages of documents pertaining to the ghostwriting practices of Wyeth Pharmaceuticals, which is being sued over hormone-replacement drugs.

U.S. District Judge Bill Wilson ordered the papers unsealed Friday at the request of a medical journal and the New York Times. Plaintiffs' attorneys presented the papers earlier at trial to show that Wyeth routinely hired medical-writing firms to ghostwrite articles that appeared in seemingly objective medical journals but included only the name of a scientific researcher as the author.

Of course, in addition to the violation of accepted practices of authorship, such as specified by NIH and the International Committee of Medical Journal Editors, among others, such lucky authors get to "count" such papers in their academic portfolios, presumably also in violation of their own institutional policies and guidelines for fair attribution and intellectual honesty, e.g., here. Ghostwriting may also skew the tenure process, providing advantages to the unscrupulous academic over the ethical scientist or scholar. (One wonders about the true percentage of the massive number of papers claimed by some medical academics actually written by the putative first author.)

The ruling came in a case that involves about 8,000 lawsuits that have been combined before Wilson. The lawsuits focus on whether Wyeth hormone-therapy drugs Prempro and Premarin, used to treat symptoms of menopause, have caused breast cancer in some women.

The New Jersey drugmaker, which has major operations in the Philadelphia area, had already turned over the documents, which it says concern about 40 articles in medical journals and other publications, to Sen. Charles Grassley (R., Iowa).

How is evidence based medicine possible if just one drug company has sponsored ghostwritten articles in 40 medical journals and other publications? What is the "total mass" of questionable articles now infecting the literature?

Grassley sought them last year without a subpoena as part of a congressional investigation into drug-industry influence on doctors.

The documents were shown to jurors at trial but have otherwise been unavailable publicly.

Plaintiffs say ghostwriting is when a drug company conjures up the concept for an article that will counteract criticism of a drug or embellish its benefits, hires a professional writing company to draft a manuscript conveying the company's message, retains a physician to sign off as the author, and finds a publisher to unwittingly publish the work.

There are several layers of dishonesty in this activity, including foreknowledge of scientific deception through fraudulent misrepresentation of authorship by the pharma, dishonesty of the physician who "signs off" as first author, and misrepresentation by the pharma, the writing company and the physician about provenance of the article to scientific publishers.

Drug firms disseminate their ghostwritten articles to their sales representatives, who present the articles to physicians as independent proof that the companies' drugs are safe and effective.

Wyeth attorney Stephen Urbanczyk acknowledged that the articles were part of a marketing effort. But he said that they were also fair, balanced, and scientific.

What business does a lawyer have lecturing the public that the articles were a dishonest marketing effort masquerading as legitimate science, but were "fair and scientific?" How does he know? In addition, the "fake but accurate" excuse is getting quite shopworn. Hopefully, Sen. Grassley will approach ending this ghostwriting practice with vigor.

In fact, this raises another issue. I have written that management of pharma by those lacking biomedical bona fides is, by definition, mismanagement. This is a case in point. Wyeth's President, Board Chair and CEO Bernard Poussot lacks biomedical credentials. Harry Truman said "the buck stops here", but a in the case of scientific ghostwriting, CEO's such as Poussot cannot vouch firsthand for the accuracy and fairness of their company's science. He lacks the expertise. The buck does not stop at his desk; he is dependent on scientific underlings in such matters.

This affair is another instantiation of my belief that pharma is best led by those with relevant scientific expertise such as Merck under clinician-scientist Dr. Roy Vagelos. (It is perhaps not coincidental that Merck became a shadow of its former self under non-scientist Raymond Gilmartin.)

Wyeth, the world's No. 12 pharmaceutical company by sales, is being bought this fall by No. 1 drugmaker Pfizer.

How appropriate, as Pfizer is led by the former top lawyer for McDonald's and Boston Chicken, bringing to life my "If you've run McDonald's, you can run anything" metaphor. If a wise investor were to take a bearish position on a stock, this merged company would be an excellent candidate.

Finally, another ghostwriter of sorts recently died, Sandford Dody (1918-2009). Dody anonymously penned best selling autobiographies of actresses Bette Davis and Helen Hayes, among many other notables. Such ghostwriting is essentially victimless, as opposed to its counterpart in the scientific domain. However, Mr. Dody had an astute observation about the practice, even when there was no trail of diseased or dead bodies.

Per the WSJ article "A Ghostwriter Who Struggled to Accept Life in the Shadows":

... Mr. Dody, who died July 4 at the age of 90, found the work spiritually destructive. "After all," he wrote, "how does one become a ghost without dying a little?"

In the case of biomedical ghostwriting, the conspirators all "die a little" in purveying their intellectual dishonesty on a trusting public.

It's too bad some of that same public also dies, and not just a little, as wages of professorial ghostwriting sins.

The acknowledgements are where minor contributions and reviews get placed in an ethically-attributed scientific paper. Anyone who does not understand this, or rationalizes "honorary authorship" or similar workarounds to meaningful attribution does not belong in science.

Finally, scientific ghostwriting must stop. I also believe its conspirators should be excluded from receiving public money for research and excluded from the biomedical literature for a good, long period of time.

-- SS

Kindler's List: Pfizer-Wyeth Microsurgery, or Witch Doctor Medicine?

("Kindler's list" metaphorically representing the list of people at Pfizer/Wyeth who will lose their jobs in mass layoffs, and perhaps much more, the stress of losing a job being like the stress of a death in the family or a divorce. These layoffs come at a time of the most severe economic downturn since perhaps 1929, due to merger mania itself necessitated by mismanagement. This is as opposed to Schindler's list, a list of people who were saved by someone actually willing to give them jobs.)

At "Pfizer/Wyeth Merger And Sacrificing The Future: Laying Off Scientific Staff All Over The Place" I commented on the futility of a large pharma merger led by two pharma leaders lacking biomedical experience and credentials. My reasoning was on the basis of the merger being unlikely to repair the organic problem in the industry, mismanagement of R&D by generic managers. I opined that:

Management in the absence of domain expertise in this industry is, in fact, mismanagement.

In my local paper today I discover the former top lawyer for McDonald's has become a surgeon:

Posted on Sat, Feb. 7, 2009

Pfizer says the time is right for Wyeth deal

The CEO said his team had made changes for a careful integration. Still, analysts are split on its success.

By Linda A. Johnson
Associated Press

TRENTON - Eager to dispel doubts on executing Pfizer Inc.'s $68 billion tie-up with Wyeth, Pfizer's chief executive officer said it would be done more like microsurgery than just stitching two huge corporations together.

Jeffrey Kindler has spent two years transforming Pfizer into smaller, entrepreneurial research and marketing business units, making the companies easier to combine, he said in his first in-depth interview since the deal was unveiled Jan. 26.

"Microsurgery?"

And, just how does a fast food company lawyer with no biomedical domain expertise "transform" a multinational pharmaceutical organization into anything but ... ground meat?

With regard to "analysis", such a term sounds more like the rhetoric of a Bernard Madoff or other Wall Street Master of the Universe than from someone running an incredibly complex, intricate pharmaceutical company, one of the world's largest.

In a typically excellent post at Corante: In The Pipeline entitled "Opportunity Costs", medicinal chemist and blogger Derek Lowe points out just a few of the complexities of such a merger:

... I’d imagine that things have slowed down a great deal. No one knows what the future will be like, what parts of the company will stay, and which people will be asked to stay with them. How do you make plans under those conditions? For many people, the project they’re working on is now very much a secondary consideration.

Even outside the personal level, there are a lot of paralyzing influences. The same uncertainties about individual jobs apply to development projects. Some of what Wyeth is working on surely overlaps with what Pfizer’s already doing. So which project goes forward? Not both of a matched set, that’s for sure. There are some projects at both companies that are dead in the water, but no one can be sure which ones, and no one will know for some time to come.

That’s because you can’t really start ironing out these details until the deal goes through.

Legally, Pfizer and Wyeth are separate companies, and there are a lot of difficulties involved in sharing information in such depth. Even when that eventually happens, there are going to be plenty of other things to work out. Let’s say that Project Y from Wyeth looks to be in better shape than the corresponding Project Y-Prime from Pfizer, so it goes on through. Fine! But under whose rules does it proceed?

Every company has its own culture about these things – the criteria that are used to recommend a compound to the clinic, the ways those boxes are filled in, the sorts of people who have to sign off on them. A project caught in the middle can stall while all these details are cleared up, losing months (or even a year or two) in the process.

You can imagine the disconnects: you guys did check this compound for hERG activity, right? With what assay? And with what cutoff? That’s not the one we use, anyway; we’ll have to run it again, and get that signed off on by. . .hmm, well, by someone, we’ll figure out who’s in charge of that sort of thing soon, about the same time that we figure out who reports to them. Now, about your formulations work. . .you used what, again?

No, all this has a ferocious price, when you measure it in opportunity costs. The people caught up in all this could be doing something much more productive with their time, for sure. This sort of thing doesn’t show up on the books. And the longer the process drags on, the worse it’ll be.

I have been in an R&D support role in a large pharma and have seen what goes on in such an organization. Considering the credibility of many of today's Captains of Industry, believing all these details have been worked out seems to me to be more the belief of a fool than a rational being.

Coming from a former fast food company manager, I would say "Witch Doctor Medicine" sounds like the more appropriate term for the merger.

To be followed by massive indigestion.

I extend my sincere sympathies to the many fine people on Kindler's List who will lose their livelihoods and perhaps more as a result of the experiments of a non biomedical "micro surgeon."

-- SS

Pfizer/Wyeth Merger And Sacrificing The Future: "Laying Off Scientific Staff All Over The Place"

In yet another massive waste of money, Pfizer has been touting its merger with Wyeth via full page ads in major newspapers. I saw the ads yesterday in the Wall Street Journal and my local Philadelphia newspaper under this large self-aggrandizing banner in capitals:

CREATING THE WORLD'S PREMIER BIOPHARMACEUTICAL COMPANY

A website with the presumptuous name "www.premierbiopharma.com" has also been created.

What is pathetic is an apparent continuing belief that mergers of two companies in trouble for essentially the same reasons can produce a company that is successful.

Each individual company has not been doing well despite billions in expenditures. They will continue not doing well despite the merger because they suffer an organic problem, namely, they both mismanage R&D.

This "merger = miracle" belief persists, in part, because those in charge are unable to see the problems that impair R&D. The problems are "hiding in plain sight." The reason the problems hide in plain sight from the leadership is that the leaders are blind.

Those in charge cannot see that which the domain specialist sees.

They cannot see because they lack the training, experience, and what is described as 'meta-competence' (in this brilliant article on competence) essential to seeing that which is obvious. Obvious, that is, to those who do not lack these characteristics. In addition, I've also observed that some lack the fundamental analytical abilities essential to understanding and managing the complexities of biomedical R&D.

Why those without domain expertise are in charge of organizations whose long term viability depends entirely on the most advanced and creative pursuit of biomedical 'miracles' is another matter. I won't address this here, other than saying it reflects the adverse consequences of a bias that has evolved in management "science." That bias is the belief that all the world consists of faceless labor resources performing easily definable processes upon interchangeable widgets, and that management can therefore be done by generic managers, exclusively. Some of the world is like that, but some isn't, such as biomedical R&D.

Management in the absence of domain expertise in this industry is, in fact, mismanagement.

There is nothing here to spin, there is nothing to debate. There is nothing to discuss. This is a first principle. Failure to accept this reality results in corporate failure.

Under this mismanagement, pharmaceutical R&D has become R&D in name only.

My own observations from working in the industry in a direct R&D support role tend to validate that description:

• The budgets for informatics tools essential for R&D were controlled by non-scientists such as IT personnel with their own agendas, causing scientist to have to utilize extremely inefficient paper based information wasting much time, or avoid difficult and innovative research pursuits altogether.
• Research support staff were micromanaged by non scientific superiors.
  
• Scientist recruitment efforts were impaired by generic HR workers who served, in effect, as a barrier to creative talent not fitting the "judgment" of HR as a good fit (or whose defective eRecruiting systems rendered the CV of such people effectively invisible). Generic HR staff have no idea about who really is the best talent, as they (like many senior executives) lack the background to render such judgments. Talent often never gets seen by the hiring managers as a result.
  
• Scientists were burdened with meetings, inundated with needless emails calling for equally unneeded information, requests for ill conceived "metrics" on productivity, and other petty tasks distracting them from actual scientific and intellectual focus.
• Scientists were burdened with the time consuming bureaucratic insanity of developing yearly "management by objective" plans where they defined what they would accomplish for the year to then be evaluated upon (e.g., for bonuses), as if that were even possible and did not in effect create an atmosphere of "covertly lowered expectations." Scientists were also burdened by an increasing number of tedious and onerous HR processes for ongoing performance evaluation of themselves, their reports and their peers, again a distraction and disruption from scientific focus.
• Scientists were forced to play nasty politics due to the pressures of constant downsizing, distracting them from useful work. At one pharma, for example, at times of downsizing scientists were made to "bid on their own jobs" as well as others, or face layoffs if no "match" was found. It was as if the company involved did not know what its people did, could do, and what it needed them to do. Nor did it seem to care that such a degrading process was anathema to innovative discovery.
• Some VP or other executive comes up with some impractical if not crazy pet idea and puts scientists to work on it. The scientists know the idea is a bad one but are intimidated against speaking up lest they be "downsized" or otherwise penalized. Their time for more creative endeavors is thus wasted.
  

My colleagues in other pharmas describe similar circumstances.

A better description for what I describe above is perhaps the term coined by a correspondent, Felix Fulmer. He summarizes the situation as follows in this pithy and insightful statement:

What we today call pharmaceutical R&D is in reality busywork disguised to look like R&D, in effect a well engineered, well managed, massively expensive failure.

He opined that a small fraction of prime scientist intellectual horsepower and time is actually spent on true R&D, the rest wasted on feeding the bureaucratic corpulence that is the modern pharma research lab.

When you spend tens or hundreds of billions of dollars, you should have something to show for it if you are doing real research. The low hanging fruit haven't been that fully picked. That contention is supported by the accomplishments of the far less bureaucratic biotech and academic research sectors.

Today's Wall Street Journal editorial hit the nail on the head about the merger (my business-speak translations are in red italics):

The risk is that the cost savings [i.e., reduced personnel expenses gained by putting people out on the street -ed.] and bureaucratic mayhem from combining labs and streamlining R&D [cannibalizing good people -ed.] end up stifling research productivity [creativity - ed.]

Pfizer CEO Jeffrey Kindler is a lawyer [i.e., lacks biomedical and scientific education, experience and insight -ed.] who came to the drug giant from McDonald's [the hamburger joint - ed.] in 2006 and has been laying off scientific staff all over the place.

I had commented on Kindler's credentials in my July 2006 post "Pfizer brings life to my 'If you've run McDonald's, you can run anything' metaphor."

Merging with other companies and laying off scientific staff (instead of keeping them, hiring more of the best, and repairing the defective environment that distracts them from their work) is apparently the only "solution" that non biomedical business managers in this industry can proffer. They, like their impaired scientists, also suffer a lack of creativity in thought and application.

Through what magic is a merger between two companies that no longer know how to carry out effective R&D believed to work a miracle?

(Perhaps it is some form of ... management alchemy?)

Company growth depends on the new drug pipeline. Pipeline depends on R&D. R&D depends on leadership and research talent just as a good movie depends on both a good director and good acting. When both are lacking you cannot have growth, therefore why bother merging?

I simply do not see how shareholder value is created via this merger. I hold no stock nor financial interests nor relationships with either of these companies or any pharmas. I've chosen not to as a result of my observations from within the industry. It is also a fact that many if not most large mergers do not actually produce gains. I therefore suggest that individual and institutional investors and analysts take a bearish view of this merger.

Finally, the full page ad touting the merger mentioned at the beginning of this post ends as follows:

"The talented people we have the privilege of working with have a tireless commitment to improving the health of the patients we all serve. We look forward to working together to meaningfully advance our shared mission of applying innovative science to improve world health in the years to come." - Jeff Kindler, Pfizer Chairman and CEO, and Bernard Poussot, Wyeth Chairman, President and CEO

I guess the "talented people" and the "we" in the above self-aggrandizing passage doesn't include those scientists and other people who will find themselves on the street during the worst economic downturn since 1929.

As I observed in my July 2007 post "Happy Accidents in pharma doubtful: Tax Break Used by Drug Makers Failed to Add Jobs", the people who actually write this copy must understand the shallowness of their words.

Further, employees who read this rhetoric fall into one of two groups: those who believe it or are comforted by it, and thus are deluded, and those who don’t believe it, but cannot speak up due to fear of retaliation or layoff, and thus may easily become demoralized and cynical.

Environments of the deluded, demoralized and cynical are not the best for leading-edge drug R&D.

-- SS

Addendum Feb. 5:

Based on a Feb. 2 interview in Financial Times entitled "An Acute Talent for Innovation", Nobel prize winner and drug inventor Sir James Black would probably agree with many of the assessments above. I particularly like his recollection that:

Max Perutz, director of one of the most successful postwar science institutions, Cambridge University's Molecular Biology Laboratory, had compelling ideas on how best to nurture research, says Sir James: "No politics, no committees, no reports, no referees, no interviews - just highly motivated people picked by a few men of good judgment."

and his observation that:

There is no shortage of scientific talent, he says. "But [I am] much less optimistic about the managerial vision [of the pharmaceutical industry] to catalyse these talents to deliver the results we all want."

-- SS