Big Door Keep Revolving - Our Latest Roundup About the Blurred Lines Between the Health Care Industry and the Government Bodies that are Supposed to Regulate and Make Policy Affecting It

The revolving door continues to turn connecting US government bodies that make health policy or regulate health care and the health care industry.  Sometimes these transitions are obvious, sometimes they are obscure.  The press sometimes makes the revolving door the subject, but more often it is just an aside.<br /><br />The latest roundup of transitions through the door includes, in chronological order of media attention...<br /><br /><b>Former White House Press Secretary to Consultancy Serving Health Care Corporations </b><br /><br />As <a href="http://www.washingtonpost.com/blogs/post-politics/wp/2014/04/06/pelosi-suggests-gibbss-obamacare-comments-due-to-business-ties/">reported</a> by the Washington Post in April, 2014, Robert Gibbs was White House Press Secretary until he departed for the private sector,<br /><br /><blockquote class="tr_bq">Since departing the White House in 2011, Gibbs has taken a path familiar to other former White House officials who use their ties to a president to enrich themselves and establish a new career. </blockquote><br />In particular, he<br /><br /><blockquote class="tr_bq">co-founded <a href="http://www.theinciteagency.com/">The Incite Agency</a>, a consulting and media relations firm that advises Fortune 500 companies, <i>including health-care firms</i>.</blockquote><br />The story was apparently generated after the Democratic House Minority Leader openly criticized someone who served in the Democratic President's White House, so the thrust of the story was about how Mr Gibbs has apparently changed his ideas on Obamacare since his White House days,<br /><br /><br /><blockquote class="tr_bq">House Minority Leader Nancy Pelosi (D-Calif.) suggested Sunday that former top Obama aide Robert Gibbs's <a href="http://www.washingtonpost.com/blogs/post-politics/wp/2014/04/03/top-former-obama-aide-obamacares-employer-mandate-wont-survive/">comment that the employer mandate portion of the Affordable Care Act won't survive</a> <i>might be related to Gibbs's business interests.</i><br /><br />'I don't know who his clients are or what his perspective is,' Pelosi told CNN's '<a href="http://sotu.blogs.cnn.com/">State of the Union</a>.' 'But we are celebrating the fact that we have over seven million who have signed up.'</blockquote><br />The Post also noted,<br /><br /><blockquote class="tr_bq">The speech Gibbs gave this past week in Colorado is consistent with how the Harry Walker Agency bills Gibbs as a potential paid speaker. <a href="http://www.harrywalker.com/speaker/Robert-Gibbs.cfm?Spea_ID=1474">On its Web site</a>, pitches Gibbs by noting that he '<i>played a major role in the daily White House policy debates over the shape of healthcare reform</i>.' It suggests that during such speeches, Gibbs 'articulates the future for the Patient Protection and Affordable Care Act.'<br /><br />The pitch concludes by stating that 'The future of Obamacare -- and how it will affect your business -- is yet to be seen, and <i>few are better prepared than Gibbs to guide you through that conversation</i>.'</blockquote>Again, note that this article seemed to be inspired by Rep Pelosi's direct criticism of a fellow Democrat, not by the revolving door transition per se.   <br /><br /><b>President of Global Government and Scientific Affairs at Natural Products Association to Director of the Division of Dietary Supplements at the FDA then Back to Natural Products Association as CEO</b><br /><br />This round trip through the door was noted rather obliquely in a New York Times <a href="http://well.blogs.nytimes.com/2014/04/30/why-dangerous-supplements-linger-on-shelves/">article</a> in late April, 2014, focused on how slowly the FDA has reacted to apparently dangerous "dietary supplements,"<br /><br /><blockquote class="tr_bq">Before joining the F.D.A. in 2011, Dr. [Daniel] Fabricant was a top executive at an industry trade group, the Natural Products Association.</blockquote><br />The article had previously identified Dr Fabricant as<br /><br /><blockquote class="tr_bq">the director of the division of dietary supplement programs in the agency’s Center for Food Safety and Applied Nutrition.</blockquote><br />But,<br /><br /><blockquote class="tr_bq">The F.D.A. <a href="http://www.nutraingredients-usa.com/Regulation/Fabricant-leaves-FDA-replaces-Shaw-as-head-of-NPA">recently announced</a> that Dr. Fabricant is leaving the agency this month to return to the trade group as its chief executive.</blockquote>While the NY Times article thus mentioned as an aside that a government official with major responsibility for regulating dietary supplements had these relationships with the dietary supplement industry, it did not question whether that relationship had anything to do with slow responses by the FDA to reports of toxic dietary supplements.  <br /><br /><b>Spokesman for the Speaker of the House of Representatives to Spokesman for America's Health Insurance Plans</b><br /><br />USA Today briefly but directly <a href="http://onpolitics.usatoday.com/2014/05/12/brendan-buck-health-insurance-lobby-ahip/">noted</a> this in mid-May, 2014,<br /><br /><blockquote class="tr_bq">House Speaker <i>John Boehner’s spokesman, Brendan Buck, has spent a lot of time over the years helping his boss and congressional Republicans criticize President Obama’s health care law</i>.<br /><br /><i>Now Buck is leaving Capitol Hill to be spokesman for America’s Health Insurance Plans</i>, the trade association that represents thousands of health insurance companies.<br /><br />'Brendan’s experience and skill set will allow him to hit the ground running on Day One,' said Karen Ignagni, president and CEO of AHIP. 'He’s an effective communicator who knows how to tackle complex policy issues and skillfully navigate an ever-changing health care and media environment.'</blockquote><br />What made this interesting seems to be how it represented a change of tune on Mr Buck's part.  Note that many people believe that commercial health insurers will benefit from all the new policy holders that Obamacare sends them, so<br /><br /><blockquote class="tr_bq">As the health insurance  industry’s trade group, AHIP supports the law’s mandate that individuals obtain health insurance. The trade group has praised the Affordable Care Act’s ability to expand insurance coverage.</blockquote><br />But never mind that the man in the government for whom Mr Buck previously worked, <br /><br /><blockquote class="tr_bq">Boehner likes to call Obamacare a 'train wreck.'</blockquote><br /><b>FDA Director of the Office of Medical Policy for the Center for Drug Evaluation and Research to Greenleaf Health Consultancy</b><br /><br />This so far has appeared only in a mid-May, 2014,  <a href="http://www.businesswire.com/news/home/20140519006244/en/FDA-Senior-Official---Dr.-Rachel-Sherman#.U30IqXaGee0">press release</a>.   It describe Dr Sherman's career at the FDA,<br /><br /><blockquote class="tr_bq">During her FDA tenure, Sherman was a driving force for innovation, new programs and policy. Sherman was responsible for spearheading and implementing the Sentinel Initiative, the Critical Path Initiative, biosimilars policy and the new Breakthrough Therapy Designation.<br /><br />As <i>Director of CDER’s Office of Medical Policy and Associate Center Director for Medical Policy Sherman was responsible for developing, coordinating, and implementing medical policy programs and strategic initiatives as well as establishing and chairing CDER's Medical Policy Counsel</i> [sic]. This included overseeing the regulation of prescription drug promotion and advertising. <br /><br />Sherman began her career with FDA in the Division of Antiviral Drug Products at CDER in 1989—first as a medical reviewer and then as a clinical team leader. In 1998, she was appointed Deputy Office Director for the Office of Drug Evaluation I. In 1999, she assumed the duties of Deputy Office Director for the newly established Office of Medical Policy in CDER. </blockquote><br />But now she will be "Principal, Drug and Biological Drug Products" for Greenleaf, described as,<br /><br /><blockquote class="tr_bq">Greenleaf Health is a<i> full service regulatory consulting firm that provides strategic guidance to companies regulated by the FDA</i> and those developing innovative solutions to pressing public health challenges around the globe</blockquote><br />Note that Greenleaf was already well populated with FDA officials who had previously transited the big revolving door,<br /><br /><blockquote class="tr_bq">Patrick Ronan, former FDA Chief of Staff and currently president of Greenleaf; Dr. Daniel Schultz, former Director of the Center for Devices ('CDRH') and Radiological Health and currently Greenleaf's Principal for Medical Devices and Combination Products; Michael Chappell, former Associate Commissioner for Regulatory Affairs, and currently Greenleaf's Principal for Regulatory Compliance; Heather Rosecrans, former Director of CDRH's 510(k) staff and currently Senior Vice President for Medical Devices and Combination Products; Linda Carter, formerly Associate Director of CDER's Office of Evaluation I and currently Vice President of Drug and Biological Drugs; and Taryn Fritz Walpole, former FDA Deputy Chief of Staff, and currently Chief Operating Officer and Senior Vice President for Regulatory Affairs</blockquote><br />So maybe it has become so routine for middle and upper level FDA managers to go to work for consultancies that help industry to deal with the FDA that no journalist found this revolving door transition interesting.<br /><br /><b>Summary</b><br /><br />Again, there appears to be constant traffic among health care corporations and the government bodies that regulate them and make policy that affects them.  The traffic may be so heavy and routine that it no longer appears to be news, unless accompanied by an ironic detail or two.<br /><br />However, as we have said many times before, the constant interchange of health care insiders among government, large health care corporations, and the consultancies, marketing, public relations, lobbying and legal firms which represent them certainly suggests that health care, like many other sectors, seems to be run by an amorphous group of insiders who owe allegiance neither to government nor industry.<br /><br />However, those who work in government are supposed to be working for the people, and those who work on health care within government are supposed to be working for patients' and the public health.  If they are constantly looking over their shoulders at potential private employers who might offer big checks, who indeed are they working for?<br /><br /><br /><div itemprop="articleBody"></div>Attempts to turn government toward private gain and away from being of the people, by the people, and for the people have no doubt been going on since the beginning of government (and since the Constitution was signed, in the case of the US).  However, true health care reform  would require curtailing the severe sorts of conflicts of interest created by the revolving door.<br /><br />Real heath care reform would require multi-year cooling off periods before someone who worked in the commercial world can get a job in a government whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in government whose work had direct effect on a particular economic sector can accept a job for a company in that sector.    <br /><br />

Big Door Keep Revolving - Our Latest Roundup About the Blurred Lines Between the Health Care Industry and the Government Bodies that are Supposed to Regulate and Make Policy Affecting It

The revolving door continues to turn connecting US government bodies that make health policy or regulate health care and the health care industry.  Sometimes these transitions are obvious, sometimes t…

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As the Door Turns - The Ongoing Interchange of Leaders Among Large Health Care Corporations, Those who Represent Them, and Government

The revolving door is the two-way conduit between leadership positions in government and industry that helps to enable health care, and maybe all of society, to be run by a group of insiders who can move easily between large or influential health care organizations and the government bodies that are supposed to regulate, oversee, and enforce laws relevant to them.<br /><br />It has been three months since our last <a href="http://hcrenewal.blogspot.com/2013/12/for-whom-door-revolves-from-for-profit.html">update</a> on the <a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving door</a> as it applies to health care, so here is our latest effort, according to the chronological order of the initial media coverage.  <br /><br /><b>Foundation Leader with Ties to Eli Lilly and to Former Synthes CEO to the White House</b><br /><br />As <a href="http://www.nytimes.com/2013/12/13/us/politics/new-obama-adviser-brings-corporate-ties.html">reported </a>by the New York Times in December, 2013, new White House senior adviser John D Podesta, who founded and ran the nominally non-profit organization Center for American Progress, had multiple ties to health care corporations and their leaders, e.g., to pharmaceutical maker Eli Lilly,<br /><br /><blockquote class="tr_bq"><i>The pharmaceutical giant Eli Lilly was also a donor because of what it said was the Center for American Progress’s advocacy for patients’ rights</i> — and just as the debate heated up in Washington over potential cuts to the Medicare program that covers Lilly’s most profitable drugs.</blockquote><br />Although, for the record,<br /><br /><blockquote class="tr_bq">Neera Tanden, the president of the Center for American Progress, said in an interview that the group frequently takes positions that conflict with the corporate agendas of its donors, including companies like <i>Eli Lilly</i>. </blockquote><br />Also an important but somewhat less obvious linkage was described thus by the Times,  <br /><br /><blockquote class="tr_bq"> In addition, he earned $90,000 as a <i>consultant to the HJW Foundation of West Chester, Pa,</i> according to an aide working with him on the disclosure report he is preparing. HJW is a nonprofit group <i>run by Hansjörg Wyss, a billionaire businessman</i> and major contributor to the Center for American Progress.</blockquote><br />What the Times did not say about Mr Wyss was that he is the former CEO of Synthes, a Swiss based medical device company, since merged into Johnson and Johnson   As we <a href="http://hcrenewal.blogspot.com/2011/12/it-was-best-of-times-it-was-worst-of.html">wrote</a> in 2011,<br /><br /><blockquote class="tr_bq"> Synthes USA, the American branch of a Swiss based device company, first <i>settled charges that it had been paying surgeons with company stock to use its products </i>in its clinical trials in 2009 (see <a href="http://hcrenewal.blogspot.com/2009/05/synthes-settles-agrees-to-stop-giving.html">this post</a>).  Then prosecutors alleged that these were not really rigorous trials. Instead, for marketing purposes, executives of Synthes subsidiary Norian persuaded surgeons to use its Norian XR product in a case series of spine surgery patients and then publish the results.  <i>Three patients who received the product for this 'off-label' use died</i>.  This scheme was <i>alleged to have been directed by "person no. 7," whom journalists identified as the company CEO, Hansjorg Wyss </i>(see post <a href="http://hcrenewal.blogspot.com/2009/06/synthes-indicted.html">here</a>.)   In an unusual move, the prosecutors indicted four company executives, who then pleaded guilty.  They did not take any further action against Wyss, who turns out to be one of the world's richest men (see post <a href="http://hcrenewal.blogspot.com/2009/12/person-no-7-also-known-as-83rd-richest.html">here</a>).</blockquote><br /><br />However, at the time the former executives were sentenced, one of the executive's attorney's claimed,<br /><br /><br /><blockquote class="tr_bq"><i>Wyss was the undisputed leader of the company. 'He made some of the very critical decisions that put the trials on the ultimate pathway,' Gurney said. 'The culture of an organization is set at the top.'</i></blockquote><br /><b>Former Deputy White House Press Secretary to Global Strategy Group, Whose Clients Include Pfizer, Purdue Pharma, and WellPoint</b><br /><br />As reported by the National Journal in December, 2013,<br /><br /><blockquote class="tr_bq"><b>Bill Burton</b><br />Old gig: Deputy White House press secretary<br />New gig: Formed and ran Priorities USA Action, a super PAC that raked in more than $75 million during the 2012 campaign; recently joined the public affairs firm Global Strategy Group as a managing director. Clients <a href="http://globalstrategygroup.com/about/#our-clients">include</a> GE, Cisco, American Express, Comcast, and Pfizer.</blockquote><br />Other health care clients include health insurance company Empire BCBS, pharmaceutical company Purdue Pharma, and for-profit health insurance company WellPoint <br /><br /><b>Former National Health Information Technology Coordinator to Get Real Health</b><br /><br />As <a href="http://www.govhealthit.com/news/former-national-coordinator-lends-credo-vision-patient-engagement-company">reported</a> by Government HealthIT in February, 2014,<br /><br /><br /><blockquote class="tr_bq">Three months after leaving the federal government, [former National Coordinator for Health Information Technology] Farzad Mostashari, MD, is joining the <i>board of directors at the patient engagement company Get Real Health.</i><br /><br />The big-thinking, bow-tied public health veteran is currently studying accountable care policies full-time at the Brookings Institution, and said he’s joining the Get Real Health board to help it '‘stay’ real as it innovates and serves patients and providers.'<br /><br />The Rockville, Maryland-based company was founded in 2000, starting out as a connected health consulting outfit and then, after working with Microsoft’s HealthVault in 2007, launching its own health technology in 2012, the InstantPHR patient engagement platform.</blockquote><br /><b>From CareScience Inc to National Coordinator for Health Information Technology to Health Evolution Partners</b><br /><br />The <a href="http://www.govhealthit.com/news/former-national-coordinator-lends-credo-vision-patient-engagement-company">article</a> about Dr Mostashari also mentioned in passing a more complicated set of transitions involving an earlier national coordinator for health care information technology.    <br /><br /><blockquote class="tr_bq">Mostashari is not the only former national coordinators to step into the health IT private sector after federal service. <i>David Brailer, MD, the first appointee to the role of the national coordinator for health IT, is now running the San Francisco private equity firm Health Evolution Partners.</i></blockquote><br />But in fact, according to his rather glowing Wikipedia <a href="http://en.wikipedia.org/wiki/David_Brailer">entry</a>, Dr Brailer also came from the commercial health care IT industry,<br /><br /><blockquote class="tr_bq"> In 1992, Brailer left academia and <i>founded a company</i> spun out of his Ph.D. thesis, inventing ways to measure health-care quality. This became <i>CareScience Inc., a Philadelphia software firm</i> that helped hospitals improve efficiency and prevent errors. Under Brailer, CareScience established the nation's first health care Application Service Provider (ASP). Brailer led the company through several financings, strategic partnerships, an initial public offering in 2000, and sale to global software firm Quovadx in 2003.</blockquote><br /><a href="http://en.wikipedia.org/wiki/David_Brailer#cite_note-11"></a><br /><br />Then, in 2004,<br /><br /><blockquote class="tr_bq">Brailer was appointed as the <i>first National Health Information Technology Coordinator,</i> pursuant to an executive order by President George W. Bush on April 27, 2004, which called for widespread deployment of health information technology within 10 years.</blockquote><br />According to his Health Evolution Partners <a href="http://www.healthevolutionpartners.com/david-j-brailer-md-phd/">biography</a>, Dr Brailer is also now a member of the boards of directors of American Optical Services, CenseoHealth, Optimal Radiology, and Walgreen Co.<br /><br /><b>From Aide to Congressman Young to a Lobbying Firm with Health Care Clients Then to Congress</b><br /><br />According to the <a href="http://www.tampabay.com/news/politics/elections/david-jolly-elected-to-represent-pinellas-county-in-congress/2169727">Tampa Bay Times</a>, yesterday Republican David Jolly won a special election to a congressional seat for Florida.  The article noted that Mr Jolly was "once an obscure aide to the late Republican U.S. Rep. C.W. Bill Young and then a Washington lobbyist,..."<br /><br />His past work was described in more detail in a <a href="http://www.republicreport.org/2014/jolly/">post</a> on the Republic Report blog,<br /><br /><blockquote class="tr_bq">David Jolly, the Republican congressional candidate vying for the special election in Florida next week, has not only <i>made a career out of lobbying.</i> Records reviewed by Republic Report show that <i>Jolly’s clients won millions of dollars in taxpayer earmarks from his old boss, the late Rep. C.W. 'Bill' Young (R-FL),</i> an appropriator known for his lavish use of the earmarking process. </blockquote><br />Futhermore,<br /><br /><blockquote class="tr_bq">Two of the firms that hired Jolly as a lobbyist - <i>BayCare Health Systems</i> and Alakai Defense Systmes - won lucrative earmarks from Young while paying Jolly to influence the committee where Young was a senior member.<br /><br />In 2009, BayCare Health Sytems retained Jolly and another former Young staffer named Douglas Gregory.  Later that year, Young <i>secured a $1 million earmark for BayCare Health Systems</i> for 'facilities and improvements.'</blockquote><br /><b>Summary </b><br /><br />Note that the revolving door does not seem to discriminate according to political party or ideology.  The cases above involved both Republicans and Democrats. But the revolving door does discriminate against the not well connected, because it seems to provided preferred posts in the upper echelons of government for industry insiders, and preferred posts in the upper echelons of industry for government insiders. <br /><br />As we have said many times before, the constant interchange of health care insiders among government, large health care corporations, and the lobbying and legal firms which represent them certainly suggests that health care, like many other sectors, seems to be run by an amorphous group of insiders who owe allegiance neither to government nor industry.<br /><br />However, those who work in government are supposed to be working for the people, and those who work on health care within government are supposed to be working for patients' and the public health.  If they are constantly looking over their shoulders at potential private employers who might offer big checks, who indeed are they working for? <br /><div itemprop="articleBody"></div>Attempts to turn government toward private gain and away from being of the people, by the people, and for the people have no doubt been going on since the beginning of government (and since the Constitution was signed, in the case of the US).  However, true health care reform  would require curtailing the severe sorts of conflicts of interest created by the revolving door.<br /><br />Real heath care reform would require  multiyear cooling off periods before someone who worked in the commercial world can get a job in a government whose work has direct effect on his or her previous employer or industry sector, and before someone who worked in government whose work had direct effect on a particular economic sector can accept a job for a company in that sector.    <br />

As the Door Turns - The Ongoing Interchange of Leaders Among Large Health Care Corporations, Those who Represent Them, and Government

The revolving door is the two-way conduit between leadership positions in government and industry that helps to enable health care, and maybe all of society, to be run by a group of insiders who can m…

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Another Revolving Door Variant: From Academia with Millions in Medtronic Royalties, to the White House, to the Health Care Service Corp

The revolving door spins, and where it will stop, nobody knows... <br /><br />In October, 2010, we noted questions about how Dr Stephen Ondra got to be a <a href="https://www.va.gov/opa/bios/docs/ondra.pdf">Senior Policy Adviser for the US Department of Veterans Affairs</a>. A veteran who was a neurosurgery professor at Northwestern University, Dr Ondra had received millions of dollars in royalties from device manufacturer Medtronic, whose CEO supported his appointment to the government position  (see this <a href="http://hcrenewal.blogspot.com/2010/10/toxic-and-dangerous-watchdog-vs.html">post</a>).  As soon as he was appointed, he publicly opposed a nominee for US Surgeon General who had been critical of the medical device industry, and its financial ties to doctors. <br /><br />After going to Washington, Dr Ondra apparently also served in the Executive Office of the President, in the White House, but <a href="http://triblocal.com/lake-forest/community/stories/2012/04/northwestern-memorial-hospital-names-stephen-l-ondra-chief-medical-officer/">returned</a> to Northwestern University in 2012.  However, he did not stay there for long.<br /><br />This month, a <a href="http://www.forbes.com/sites/brucejapsen/2013/02/07/obama-advisor-ondra-hired-as-top-doc-at-blue-cross-plan/">post</a> on Forbes indicated he is moving on again, and back to the corporate side of health care. <br /><br /><blockquote class="tr_bq"><i>the nation’s fourth-largest health insurance company is naming a key former health advisor to President Obama as its top doctor.</i><br /><br /><i>Dr. Stephen Ondra, will become senior vice president and chief medical officer at Health Care Service Corp</i>., the Chicago-based parent company of Blue Cross plans in Illinois, Texas, Oklahoma and New Mexico. The plan has more than 13 million health plan members and is looking to grow even more, announcing last year a proposed partnership with the Blue Cross plan in Montana.</blockquote><br />Health Care Service Corp is a mutual insurance company, that is, a company owned by its policy-holders rather than stock holders.  However, that does apparently not make it any more ascetic than a typical for-profit insurance company, at least in terms of generosity towards its top hired executives.  As Crain's Chicago Business <a href="http://www.chicagobusiness.com/article/20120515/NEWS03/120519922/blue-cross-parents-ceo-pay-climbs-to-12-9-million">reported</a> in 2012, <br /><br /><blockquote class="tr_bq">New federal regulations intended to force health insurers to spend less on administration didn't keep the parent of Blue Cross & Blue Shield of Illinois from <i>paying CEO Patricia Hemingway Hall more than <b>$12.9 million</b> in 2011, a 61 percent raise.</i><br /><br />The Health Care Service Corp. chief executive's total compensation last year dwarfed the $8 million she received in 2010, according to a filing with the Illinois Department of Insurance. <i>The 2011 increase was fueled by an $11.8 million bonus, which was 69 percent above her 2010 bonus of $7 million.</i><br /><br />Ms. Hall wasn't alone in getting a big raise at Health Care Service, whose insurance business booked net income of more than $1 billion in 2011, for the second straight year.<br /><br />The 10 highest-paid executives at the Chicago-based mutual company — which operates Blue Cross plans in Illinois and three other states — <i>earned a collective $41.7 million, 65 percent more than the $25.3 million they were paid in 2010.</i></blockquote><br /> If Dr Ondra's new position puts him among the latter group of executives, he too stands to make millions a year.  <br /><br />So to recap Dr Ondra's career so far, in 2010 he was a medical school professor who had earned millions in royalties from Medtronic.  He then went to top leadership positions in the US Veterans Department and Executive Office of the President.  He returned briefly to Northwestern University, only to leave again for a top executive position in for-profit insurance company Health Care Service Corp, where he is likely to make millions more.<br /><br />Thus Dr Ondra is our latest interesting example of the "<a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving door</a>" phenomenon in health care.  He started as an erstwhile academic physician but with a very major financial relationship with a medical device company.  He then went through the door the first time into the US government, and then a second time from the government to a for-profit insurance company, with just a brief stop-over in academia.<br /><br />By the way, it appears that all of this is quite legal.  It does again raise questions about whether health care leaders in government with previous relationships with industry might still feel undue sympathy to the interests of industry, as might government leaders who can expect future jobs in industry. <br /><br />Moreover, this case, like previous cases we have discussed,  indicates how leadership in academic health care, corporate health care, and the government tend to blend together.  Leaders of one type of organization have more and more in common with leaders of the other types of organizations than they do with their lesser ranked colleagues, and certainly than with other health care constituencies.  So the more the revolving door revolves, the more we wonder about the <a href="http://hcrenewal.blogspot.com/search/label/corporatism">corporatism</a> of health care, about how health care seems to be increasingly run by an amorphous group of academic/ corporate/ government leaders whose loyalties may be more to each other than to academic and professional values, patients' and the public's health, and government of, by and for the people.<br /><br /><br />

Another Revolving Door Variant: From Academia with Millions in Medtronic Royalties, to the White House, to the Health Care Service Corp

The revolving door spins, and where it will stop, nobody knows... In October, 2010, we noted questions about how Dr Stephen Ondra got to be a Senior Policy Adviser for the US Department of Veterans Af…

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Pfizer Settles One Lawsuit, Loses Another, Pays its CEO $13.7 Million

It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company.<br /><br /><strong>Settlement of Suit Alleging Neurontin Risks Concealed</strong><br /><br />Pfizer has kept busy in court defending against charges that a company it acquired promoted Neurontin (gabapentin) for uses not approved by the US Food and Drug Administration (FDA), and not well supported by the evidence.  Most recently, it was convicted by a jury in California of being a racketeering influenced and corrupt organization (RICO) because of a long-term "racketeering conspiracy" involving Neurontin marketing (see post <a href="http://hcrenewal.blogspot.com/2010/03/settlement-and-conviction-round-up.html">here</a>). Now additionally, <a href="http://online.wsj.com/article/SB10001424052702304017404575165992338949212.html">according to the Wall Street Journal</a>, <br /><blockquote>Pfizer Inc. said it reached a settlement agreement in a wrongful-death lawsuit brought by a woman who claimed her husband's use of the antiseizure drug Neurontin caused him to commit suicide in 2002. <br /><br />The suit was brought by Linda Shearer of Berkshire County, Mass., whose husband, Hartley Shearer, was prescribed Neurontin to control the effects of his paralysis. The suit alleged Pfizer promoted this use of the drug even though it wasn't approved by U.S. regulators. <em>The suit alleged Pfizer knew the drug was associated with a risk of suicide, but failed to properly warn of the risk. </em></blockquote>The new wrinkle here is that Pfizer did not defend a suit that alleged the company knew of a potentially fatal side-effect of the drug, but failed to disclose that risk.<br /><br /><strong>Jury Awarded Damages for Treatment of Whistle-Blower</strong><br /><br />Meanwhile, <a href="http://articles.courant.com/2010-04-01/business/hc-pfizer-verdict-0402apr02_1_pfizer-whistle-blower-stephen-j-fitzgerald">the Hartford Courant reported</a>:<br /><blockquote>A former Pfizer scientist who claims she has been paralyzed by a virus designed at the pharmaceutical company's laboratory in Groton was awarded $1.3 million by a federal jury in Hartford Thursday following a trial that raised questions about safety practices in the dynamic field of genetic engineering.<br /><br />The amount of the settlement awarded to molecular biologist Becky McClain of Deep River will likely increase in coming days. After about day of deliberation, the jury also awarded McClain punitive damages, to be determined by U.S. District Judge Vanessa L. Bryant, and awarded fees to McClain's two Connecticut lawyers, Bruce E. Newman and Stephen J. Fitzgerald.<br /><br /><em>McClain claimed in her suit that she was inadvertently exposed through work by a former Pfizer colleague in 2002 or 2003, to an engineered form of the lentivirus, a virus similar to the one that can lead to acquired immune deficiency syndrome, or AIDS. </em><br /><em><br /></em><br /><em>She further claimed that Pfizer wrongly fired her in 2005 for complaining about laboratory safety to the U.S. Occupational Safety and Health administration and to co-workers</em>.<br /><br />Ultimately, the jury was not permitted during the 12-day trial to hear argument supporting McClain's claim of a causal link between her disability and virus research done at her laboratory in Groton.<br /><br />The jury based its verdict on evidence concerning McClain's two remaining claims: that her dismissal violated Connecticut's whistle blower law and McClain's free speech right. Her lawyers contended her complaint to federal safety regulators amounted to a whistle blower complaint and that her discussion of safety issues with fellow workers was free speech.</blockquote>So, after being convicted by a jury of being a "racketeering influenced and corrupt organization," (RICO), and settling civil and criminal fraud charges for an unprecedented $2.3 billion (see post <a href="http://hcrenewal.blogspot.com/2009/09/pfour-legal-settlements-for-pfizer-why.html">here</a>), and after many other allegations, settlements, and convictions (look <a href="http://hcrenewal.blogspot.com/search/label/Pfizer">here</a>),  Pfizer failed to defend one action, and lost another that argued Pfizer tried to hide information which put the company and/or its products in an unfavorable light.<br /><br />In fact, Even Pfizer CEO Jeffrey Kindler could not put much of a spin on the company's recent record. As reported by Duff Wilson <a href="http://www.nytimes.com/2010/04/01/business/01pfizer.html">in the New York Times</a>, <br /><blockquote>The world’s largest drug company, Pfizer, has <em>handled mergers badly, invented too few drugs and left its reputation in disrepair after two criminal cases</em>.<br /><br />And that is the assessment of its own chief executive. </blockquote><br /><strong>CEO's Multi-Million Dollar Compensation</strong><br />But while all this was going on, the company did disclose (as mandated by the US Securities and Exchange Commission [SEC]) that CEO Kindler is continuing his acquisition of riches.  As reported by the AP (<a href="http://www.usatoday.com/news/health/2010-03-05-pfizer_N.htm">via USAToday</a>).<br /><blockquote>The chief executive of drug giant Pfizer Inc., Jeffrey Kindler,<em> received a 2009 compensation package valued by The Associated Press at <strong>$13.7 million</strong>,</em> down 7.6% from 2008, as the board reduced the stock awards he received, citing economic pressures.<br /><br />The world's biggest drugmaker paid Kindler, 54, a salary of $1.6 million, up just $25,000 from the year before. But his performance bonus was bumped up to $3.5 million from $3 million in 2008, according to a filing this week with the Securities and Exchange Commission.<br /><br />Most of Kindler's compensation comes from long-term awards of stock options and restricted shares. The total fell 17% to $8.1 million in 2009, from $9.8 million, even though they were granted in late February, a month after Kindler announced plans to buy Wyeth for $68 billion, a sound strategy to counter Pfizer's looming revenue plunge.<br /><br />Kindler's other compensation — a variety of perks — totaled $449,731. That included $190,725 for Kindler's use of corporate aircraft as required by Pfizer's board, $43,099 for use of a car, $7,690 for financial counseling and $1,217 for home security.</blockquote><br />Even admitting that Kindler's compensation last year was slightly decreased from last year's not so small fortune, there still seems to be a huge disconnect between the company's ethical woes, legal settlements, and guilty pleas and its CEO's rewards. Once again, it seems that leaders of large health care organizations never face real accountability for their company's bad behavior. It almost goes without saying that in the two cases summarized above, no one who authorized, directed, or implemented the actions leading to the settlements or damages seems to have had any negative consequences.<br /><br />So once more with feeling.... In the US, we have put much of our health care system in the hands of very large organizations, for-profit and not-for-profit, without holding these organizations and their leaders accountable for their actions. The results have been increasingly rich leaders who often behave like a new aristocracy, and repeated bad behavior by the organizations they lead. <br /><br />Our latest effort at health care "reform" has continued to rely on large private organizations, while so far not adding to their or their leaders' accountability. In my humble opinion, if we really want to reform health care so as to improve quality, increase access, control costs, and support professionalism, we will have to make our new health care oligarchs accountable. <br /><br /><strong>Postscript - Pay for Health Care Reform Lobbying?</strong><br /><br />By the way, a <a href="http://www.theday.com/article/20100312/NWS05/303129870">commentary</a> in The [New London, CT] Day suggested an explanation for why Kindler was so richly paid last year:<br /><blockquote>It takes pages and pages of a company securities filing to explain and justify all the bells and whistles of Kindler's 'annual incentive award,' a complicated stew of stock options and deferred payments and plain old salary.<br /><br />From all of this, Timothy P. Carney of the Washington Examiner found one juicy tidbit, which especially titillated industry bloggers.<br /><br />It turns out Kindler's salary increase, from $1.57 million to $1.6 million, was based in part, the compensation committee suggested, on <em>his success in making a deal with President Obama that protected the drug industry from some of the more onerous proposals of health care reform</em>.<br /><br />Praising Kindler as an effective lobbyist in, among other things, heading off legislation that would allow the importing of cheaper prescription drugs, the committee said: 'These efforts included constructive participation in the U.S. legislative process to advance Pfizer's goals of achieving a more rational operating environment.'<br /><br />Or, he kept a finger in the dike against health care reform.<br /><br />Indeed, a recent report by the Sunlight Foundation, a private nonprofit dedicated to more transparency in government, indicates <em>Kindler's extensive role in negotiating a deal for the drug companies with the Obama administration and Senate Finance Committee Chairman Max Baucus.</em><br /><br />It turns out <em>Kindler's name turns up four times on last year's White House visitor logs</em>.<br /><br />The final deal Kindler helped craft promised $80 billion in cost cutting by the drug companies but <em>blocked much more onerous reform measures for the industry, like lowering prescription drug prices through Medicare negotiations, re-importation of drugs from other countries with lower prices and quicker release of generics onto the market</em>.<br /><br />The cost-saving of such measures, if allowed to occur, could have been in the hundreds of billions of dollars, according to government analysis.<br /><br />Kindler, as the pay committee says, did good.</blockquote><br />Several of our fellow bloggers have suggested that an installment of the Public Broadcasting Service (PBS) program "Frontline" will show just how much of the recent US health care reform effort was the product of health care corporate CEOs (e.g., see <a href="http://www.gooznews.com/node/3319">this post </a>on GoozNews, and <a href="http://www.joepaduda.com/archives/001795.html">this post </a>on Managed Care Matters). We shall see once the program airs, but maybe Mr Kindler's salary was a good value for Pfizer, but a very bad one for the rest of the country.

Pfizer Settles One Lawsuit, Loses Another, Pays its CEO $13.7 Million

It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company.Settlement of Suit Alleging Neurontin Risks ConcealedPfizer has kept busy in court defending against charges that…

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US President Advocates for Research Integrity

US President Barack Obama announced a new emphasis on the integrity of science used to help make public policy decisions. As <a href="http://www.nytimes.com/2009/03/10/us/politics/10obama.html">summarized by the NY Times</a>,<br /><blockquote><br />President Obama’s directive on Monday to 'guarantee scientific integrity' in federal policy making could have a far-reaching impact....<br /><br />The document orders Mr. Obama’s top science adviser to help draft guidelines that will apply to every federal agency. Agencies will be expected to pick science advisers based on expertise, not political ideology, the memorandum said, and will offer whistle-blower protections to employees who expose the misuse or suppression of scientific information.<br /><br />The idea, the president said in remarks before an audience of lawmakers, scientists, patients advocates and patients in the East Room, is to ensure that 'we make scientific decisions based on facts, not ideology'....<br /></blockquote><br /><br />Here are some key parts of the <a href="http://www.whitehouse.gov/the_press_office/Memorandum-for-the-Heads-of-Executive-Departments-and-Agencies-3-9-09/">memorandum written by the President</a>:<br /><blockquote><br /><em>Science and the scientific process must inform and guide decisions of my Administration on a wide range of issues</em>, including improvement of public health, protection of the environment, increased efficiency in the use of energy and other resources, mitigation of the threat of climate change, and protection of national security.<br /><br /><em><strong>The public must be able to trust the science and scientific process informing public policy decisions. Political officials should not suppress or alter scientific or technological findings and conclusions. If scientific and technological information is developed and used by the Federal Government, it should ordinarily be made available to the public. To the extent permitted by law, there should be transparency in the preparation, identification, and use of scientific and technological information in policymaking. The selection of scientists and technology professionals for positions in the executive branch should be based on their scientific and technological knowledge, credentials, experience, and integrity.<br /></strong></em><br />By this memorandum, I assign to the Director of the Office of Science and Technology Policy (Director) the responsibility for ensuring the highest level of integrity in all aspects of the executive branch's involvement with scientific and technological processes.<br /><br />Specifically, I direct the following:<br /><br />1. Within 120 days from the date of this memorandum, the Director shall develop recommendations for Presidential action designed to guarantee scientific integrity throughout the executive branch, based on the following principles:<br /><br />(a) <em>The selection and retention of candidates for science and technology positions in the executive branch should be based on the candidate's knowledge, credentials, experience, and integrity</em>;<br /><br />(b) <em>Each agency should have appropriate rules and procedures to ensure the integrity of the scientific process within the agency</em>;<br /><br />(c) <em>When scientific or technological information is considered in policy decisions, the information should be subject to well-established scientific processes, including peer review where appropriate</em>, and each agency should appropriately and accurately reflect that information in complying with and applying relevant statutory standards;<br /><br />(d) Except for information that is properly restricted from disclosure under procedures established in accordance with statute, regulation, Executive Order, or Presidential Memorandum, <em>each agency should make available to the public the scientific or technological findings or conclusions considered or relied on in policy decisions</em>;<br /><br />(e) <em>Each agency should have in place procedures to identify and address instances in which the scientific process or the integrity of scientific and technological information may be compromised</em>; and<br /><br />(f) <em>Each agency should adopt such additional procedures, including any appropriate whistleblower protections, as are necessary to ensure the integrity of scientific and technological information and processes on which the agency relies in its decisionmaking or otherwise uses or prepares</em>.<br /></blockquote><br />Unfortunately, we rarely post about what could be called good news on Health Care Renewal. But I really think it is really good news when the President of the United States makes scientific integrity a headline issue; speaks for scientific integrity and specifically against suppression and manipulation of science; advocates specific standards for scientific integrity for every government branch and agency; advocates for the transparency of science and the scientific process used in policy decisions; and argues for the protection of whistle-blowers. <br /><br />We have again and again documented instances of threats to scientific integrity (specializing, of course, in the integrity of clinical and health services and policy research) including suppression of research, manipulation of research, and protection of whistle-blowers. It's nice to see these causes gain moral, and in this case legal support, especially from one of the most powerful political leaders in the world. Nice work, Mr President!

US President Advocates for Research Integrity

US President Barack Obama announced a new emphasis on the integrity of science used to help make public policy decisions. As summarized by the NY Times,President Obama’s directive on Monday to 'guaran…

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Meet the New Boss, Same as the Old Boss? - Health Care Reform to be Lead by a Director of Boston Scientific, Cerner, and Medco

Today we learned that President Obama has announced his new picks for Secretary of Health and Human Services and for Director of the White House Office for Health Reform. The choice of Nancy-Ann DeParle for the latter position raises some issues. The NY Times <a href="http://www.nytimes.com/2009/03/03/us/politics/03health.html">provides some background</a>:<br /><br /><blockquote><br />He also named Nancy-Ann DeParle to coordinate health policy for the administration. Her position, counselor to the president and director of the White House Office for Health Reform, is not subject to Senate confirmation.<br /><br />Ms. DeParle was commissioner of the Tennessee Department of Human Services from 1987 to 1989. Under President Bill Clinton, from 1997 to 2000, she was administrator of the Health Care Financing Administration, now known as the Centers for Medicare and Medicaid Services.<br /><br />Since then, <em>she has gained extensive experience in the business world</em>. That experience, though seen as an asset by many, prompted questions from some of the people vetting personnel for Mr. Obama, supporters of Ms. DeParle said.<br /><br />Ms. DeParle has been <em>a director of large health care companies including Medco Health Solutions, a pharmacy benefit manager; Cerner, a supplier of health information technology, including electronic medical records; Boston Scientific, a medical device company; DaVita, which runs kidney dialysis centers; and Triad Hospitals.<br /></em></blockquote><br /><br />In addition, <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/03/02/AR2009030200371.html">according to the Washington Post</a>,<br /><br /><blockquote><br />DeParle, 52, was previously commissioner of the Department of Human Services in Tennessee. During the Clinton administration, she worked in the Office of Management and Budget and later oversaw Medicare and Medicaid as the administrator of the Health Care Financing Administration.<br /><br />DeParle currently is <em>managing director of CCMP Capital, a private equity firm. She also serves on the boards of several firms related to health care</em>. A White House spokesman said she is in the process of resigning all those positions.<br /></blockquote><br /><br />Administration spokespeople apparently brushed aside any questions about Ms DeParle's conflicts of interest. A <a href="http://www.nytimes.com/2009/03/03/us/politics/03czar.html">separate article in the NY Times </a>noted:<br /><br /><blockquote><br />In picking Nancy-Ann DeParle to champion an overhaul of the nation’s health system, President Obama selected someone with deep roots in the Washington bureaucracy, an intimate familiarity with health policy and respect on both sides of the political aisle — not to mention degrees from Harvard Law School and Oxford University.<br /><br />But in putting Ms. DeParle in charge of an issue that has bedeviled presidents for decades, <em>Mr. Obama also chose to overlook Ms. DeParle’s business ties to companies that have a direct stake in the health care debate</em>.<br /><br />In announcing her appointment Monday as the director of the White House Office of Health Reform, Mr. Obama expressed 'absolute confidence' in Ms. DeParle, who ran the agency that oversaw Medicare and Medicaid during the Clinton administration. But the White House instantly faced questions about whether her appointment was skirting the spirit, if not the letter, of the president’s tough conflict-of-interest policy.<br /><br />Since leaving the Clinton administration, Ms. DeParle has been managing director of a private equity firm, CCMP Capital, and a board member of companies like Boston Scientific, Cerner and Medco Health Solutions. <em>White House officials said Ms. DeParle was severing ties with those companies and would recuse herself from participating in any matter that was 'directly or substantially' related to former clients or employers.<br /></em><br /><em>'It is our view, and the view of counsel here, that the incidence of that will be very low,' an administration official said of the need for Ms. DeParle to recuse herself from decisions.</em> The official, who was not authorized to speak publicly, said Ms. DeParle would be working mostly with federal agencies and lawmakers, and not directly with companies.<br /></blockquote><br /><br />MedInformaticsMD just <a href="http://hcrenewal.blogspot.com/2009/03/cerner-board-member-as-healthcare-czar.html">posted</a> about his concerns specifically vis a vis Ms DeParle's current position as a leader of Cerner.<br /><br />My main concern here is that Ms DeParle's ties to multiple health care corporations are so strong as to jeopardize her ability to be the new leader of health care reform for the whole country. <br /><br />To review, Ms DeParle is currently a member of the boards of three health care corporations, Boston Scientific, Cerner, and Medco. As we have <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">discussed</a> many times previously, a corporate director has a legal obligation to advance the profits and financial fortunes of the corporation he or she serves. As Robert AG Monks put it, corporate directors are supposed to "demonstrate unyielding loyalty to the company's shareholders" [Per Monks RAG, Minow N. <a href="http://www.amazon.com/Corporate-Governance-Robert-G-Monks/dp/1405116986">Corporate Governance</a>, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.] As compensation for that loyalty, corporate directors are usually exceedingly well-paid for the nominal hours they spend in their meetings.<br /><br />In particular, per <a href="http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=5545615&format=PDF">the company's 2008 proxy statement</a>, in 2007, Ms DeParle received $160,338 in total compensation from Boston Scientific, and held 62,020 of its shares. Further, per <a href="http://library.corporate-ir.net/library/11/118/118401/items/287619/CERN_2008proxy.pdf">the Cerner 2008 proxy statement</a>, in 2007 she received $195,051 from that company, and held 27,000 of its shares. Ms DeParle was just elected to the Medco board in 2008, so her compensation and stock holdings were not listed in <a href="http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=5588519&format=PDF">that year's proxy statement</a>, but presumably her total compensation would mirror what other directors received in 2007: a retainer of $50,000, and an annual grant of shares and options worth $175,000 at the time it would be granted. <br /><br />Given her previous obligation of "unyielding loyalty"to and generous compensation from major health care corporations, it might be hard to suddenly be indifferent to their interests. <br /><br />Of course, a White House spokesperson pledged that Ms DeParle would "recuse herself from any matter that was 'directly or substantially' related to former clients or employers." The problem is that most of the issues that might come up in discussions of health care reform might be directly and substantially related to the interests of the companies Ms DeParle now leads. For example, one obvious way to control costs in a reformed health care system would be to reduce the current reimbursement system's bias in favor of procedures over cognition. Boston Scientific makes much of its money selling devices that are used during such procedures. Any general shifting of reimbursement more in favor of cognition rather than procedures could reduce Boston Scientific's profits, profits which Ms DeParle is currently sworn to protect. So would Ms DeParle recuse herself from all discussions of reimbursement? <br /><br />I submit that if Ms DeParle recused herself from discussion of all issues that might affect the interests of Boston Scientific, Cerner, and Medco, let alone the private corporations she directs whose interests might be less easy to define, and let alone the corporations which she used to direct, she would have very little to do in her new position. <br /><br />On the other hand, were Ms DeParle to be an active Director of the White House Office of Health Care Reform, would the reform be in the interests of all the US people, or in the interests from the large and powerful corporations whose interests she was so recently pledged to protect? Does this new appointment truly reflect President Obama's statement that he did not come to Washington "to work for the powerful and well-connected interests who have run this city for too long?"

Meet the New Boss, Same as the Old Boss? - Health Care Reform to be Lead by a Director of Boston Scientific, Cerner, and Medco

Today we learned that President Obama has announced his new picks for Secretary of Health and Human Services and for Director of the White House Office for Health Reform. The choice of Nancy-Ann DePar…

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