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What is the "Worst Biotech CEO" Worth?

Recently, we <a href="http://hcrenewal.blogspot.com/2009/11/genzymes-remarkable-businessstrategy.html">posted</a> about misadventures of the leadership of biotechnology giant Genzyme.  Although the company has long priced its drug Cerezyme for the rare Gaucher's disease at a stratospheric level, it did not sufficiently reinvest money in its manufacturing facility for the drug.  Deferred maintenance at a production facility running at maximum capacity has apparently lead to two different kinds of contamination problems, forcing a shut-down of the plant, and now a shortage of the drug.  For this, Genzyme CEO Henri Termeer was just labeled the "Worst Biotech CEO of '09" <a href="http://www.thestreet.com/story/10627877/genzymes-termeer-worst-biotech-ceo-of-09.html">by TheStreet.com</a>. It was not always thus.  A 2008 <a href="http://www.bostonmagazine.com/articles/so_this_is_what_a_biotech_tycoon_looks_like/">profile</a> of Mr Termeer in Boston Magazine chronicled the rise of Genzyme from a "startup [which] operated 15 stories above the Combat Zone in an old garment building on a dodgy stretch of Kneeland Street."  Termeer pushed the company to develop a practical way to manufacture Cerezyme, and had the vision that the company could make money selling the drug to a relatively small number of patients.   Of course, his solution was to price the drug so high as to "drop jaws."  However, perhaps that was what was needed to get a innovative drug to a small number of patients. Furthermore, Termeer posited that the revenues derived from drugs such as Cerezyme would lead to innovations that would help many more people. <blockquote>The biotech tycoon's immodest goal is to change healthcare. That is what he's trying to do, after all. That's part of why he doesn't sweat the bad press, which he regards as the penance of the innovator. His therapies for ultrarare diseases, he says, point the way forward, toward a day when very targeted drugs cure ailments perfectly, precisely. Don't think of his niche therapies as being used by tiny, statistically inconsequential groups; think of them as being deployed in ways that get results every time. Now contrast this with the trial-and-error approach that dominates medicine as it's practiced today, in which doctors pick and choose from the menu of drugs available and calibrate dosages until finally, hopefully, they land on what works best for that particular person. What if instead every condition had a drug that was the smart bomb that Cerezyme is for Gaucher's? </blockquote> While we wait for these marvelous new innovations, however, patients with Gaucher's disease must wait for their effective but amazingly expensive drug apparently because Mr Termeer presided over the failure to pay enough attention to mundane issues like manufacturing plant maintenance while he touted his vision of the future. Whether that vision is realistic depends on one's view of Mr Termeer's predictive abilities. The Boston Magazine article suggested he is not a good fortune teller.  In 1994, Mr Termeer "suggested to the [New York] Times that the cost [of Cerezyme] would soon drop. 'Once we have the new plant running and approved, we will start to see some economies of scale,' Termeer told the paper in 1994. 'We can start to pass on some of these economies to the marketplace while at the same time improving the financial results of the company.' Fourteen years later, the price of Cerezyme has never come down. In my humble opinion, the tale of Henri Termeer's and Genzyme's current woes tells a lot about the culture of leadership now prevalent in health care. On one hand, it seems that some of the business-people who took over leadership of health care organizations had administrative skills that turned innovative ideas into reality. This success may have derived from real vision about the possibilities of high-technology medicine and health care. On the other hand, as their administrative abilities and vision lead to success, their judgment was liable to become over-confident, if not arrogant. This may have been fueled by the a business ethos that celebrates executives and managers, and their administrative skills and vision, beyond all else. However, Mr Termeer's success was dependent on the painstaking and often thankless work of physicians and scientists, particularly those who first developed the drug that became Cerezyme, the initial funding of this work by the US National Institutes of Health, and the work by scientists and engineers to develop a practical way to manufacture this drug. Termeer also benefited from the Orphan Drug Act which "allowed companies that brought drugs to market seven years of monopoly sales." Without federal research money, favorable laws, and multiple dedicated scientists, physicians, and engineers, Mr Termeer's administrative skills and vision would have yielded nothing. Nonetheless, it was Mr Termeer who was so richly rewarded. In 2006, Boston Magazine <a href="http://www.bostonmagazine.com/articles/the_50_wealthiest_bostonians/">listed</a> him as among the 50 wealthiest Bostonians, with an estimate worth of $342 million.  The 2008 profile noted "Over the past three years, Termeer has earned more than $50 million in total compensation, and thanks to the performance of Genzyme's stock, his stake in the company is now worth about $260 million."  He was interviewed at his waterfront home in tony Marblehead, Massachusetts.  He skippers his (only) "36-foot Hickley Pilot" which is "docked near the new home he's built outside Kennebunkport [Maine]..." the town in which former US President George HW Bush keeps a summer home.  The US (and global) health care business culture disproportionately rewards managers and executives for "innovation," as opposed to the scientists and professionals who actually developed the innovation, or the other people whose money funded these efforts.  These leaders are rewarded them sufficiently to make them into a sort of pseudo-aristocracy.  I hypothesize that such rewards make them believe that they have actually done things worthy of them, breeding over-confidence, arrogance, and a sense of entitlement that puts them beyond the usual rules of society.  The result is leadership that may be ignorant of physicians' values, self-interested, and even corrupt, and health care that is too expensive, inaccessible, and that fails to deliver quality and value commensurate with its cost.  To truly reform health care, we need to reform how health care oganizations' culture and leadership.

What is the "Worst Biotech CEO" Worth?

Recently, we posted about misadventures of the leadership of biotechnology giant Genzyme. Although the company has long priced its drug Ce...

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No Free Speech for Comparative Effectiveness Researchers?

We have repeatedly argued why comparative effectiveness research, under ideal circumstances, would be a good idea.  As I <a href="http://hcrenewal.blogspot.com/2007/09/comparative-effectiveness-kerfuffle.html">said before</a>: <blockquote>Physicians spend a lot of time trying to figure out the best treatments for particular patients' problems. Doing so is often hard. In many situations, there are many plausible treatments, but the trick is picking the one most likely to do the most good and least harm for a particular patient. Ideally, this is where evidence based medicine comes in. But the biggest problem with using the EBM approach is that often the best available evidence does not help much. In particular, for many clinical problems, and for many sorts of patients, no one has ever done a good quality study that compares the plausible treatments for those problems and those patients. When the only studies done compared individual treatments to placebos, and when even those were restricted to narrow patient populations unlike those patient usually seen in daily practice, physicians are left juggling oranges, tomatoes, and carburetors. Comparative effectiveness studies are simply studies that compare plausible treatments that could be used for patients with particular problems, and which are designed to be generalizable to the sorts of patients usually seen in practice. As a physician, I welcome such studies, because they may provide very useful information that could help me select the optimal treatments for individual patients. Because I believe that comparative effectiveness studies could be very useful to improve patient care, it upsets me to see this particular kind of clinical study get caught in political, ideological, and economic battles. </blockquote>However, when comparative effectiveness research was proposed as an element of US health care reform, it was attacked as a vehicle for the dreaded rationing of health care (even though in the US health care is already rationed, especially to those without generous insurance or the means to pay for expensive tests and treatments), using arguments based more on emotions, or outright fallacies than on logic and evidence. For example, see our blog posts <a href="http://hcrenewal.blogspot.com/2007/09/over-top-denunciation-of-comparative.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/09/comparative-effectiveness-kerfuffle.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/10/whose-opinions-did-new-york-times.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2009/02/attack-on-government-funded-comparative.html">here</a>. Those opposed to the sort of comparative effectiveness research I described above then seemingly decided, "if you can't beat 'em, join 'em."  Thus, a provision appeared in a recent version of health care reform legislation proposed in the US Senate for comparative effectiveness research to be sponsored by an "independent" institute whose board of directors would have to include a substantial minority of representatives of industry (that is, drug, biotechnology, device, health insurance corporations, and other corporations as "payers.")  This would seems to be a fairly shameless form of "regulatory capture," that is, an instance in which a government agency whose mission seems to be to improve health care is "captured" by those with vested interests in promoting certain health care products and services.  (See post <a href="http://hcrenewal.blogspot.com/2009/10/who-should-sponsor-comparative.html">here</a>.) My concern has now seemingly gone mainstream, in that it was addressed in a commentary published on-line in the prestigious New England Journal of Medicine.  [Selker HP, Wood AJJ.  Industry influence on comparative-effectiveness research funded through health care reform.  N Engl J Med 2009.  Link <a href="http://healthcarereform.nejm.org/?p=2364&query=home">here</a>.] Selker and Wood addressed the issue of regulatory capture thus. <blockquote>Although most observers agree on the value of funding CER, many are unaware that embedded in the legislation are provisions ceding substantial influence to the medical products industries that have a major interest in the outcomes of such research. The Senate Finance Committee bill mandates the creation of an entirely new private–public research entity and, owing to industry lobbying, guarantees industry three seats on this entity’s 15-member governing board, as well as representation on its methodology committee </blockquote> Note that the situation is worse considering that the insurance industry and other "payers" also have seats on the board. However, Selker and Wood discovered an even more outrageous provision: <blockquote>The Finance Committee bill also includes language requested by industry lobbyists (pages 1138–1139) that threatens to withdraw federal funding for 5 years from any investigator who publishes a report on research funded by the proposed institute that is not within the bounds of and entirely consistent with the evidence.' Determinations regarding such consistency would be made by the newly created research entity, which would have industry involvement both in its governance and in study design. To allow scientists — and their institutions, which receive the support for the conduct of research — to be punished for the publication of work that is not approved by this entity is essentially to cede authority over the dissemination of government-funded research to a body that is at least partially controlled by persons with a potential commercial interest in its outcome. </blockquote> As Selker and Wood noted, it is unprecedented for a US government agency that is meant to sponsor science to be empowered to punish researchers for conclusions or opinions with which the agency disagrees. This suggests that the new agency would be meant to produce only results that support the vested interests of its leadership, that is, that favor the latest, and most expensive drugs and devices. The research sponsored by such an agency would not only be biased, it would likely be of poor quality, because researchers of integrity would likely avoid sponsorship by an agency that would be so threatening to their scientific independence. This part of the bill does not promote health reform, but blatantly attempts to serve health care corporations while sacrificing the interests of patients and doctors. As Selker and Wood politely put it: <blockquote>If health care reform legislation does not promote CER that is free of the potential taint of commercial and political meddling, the public will have little confidence in the results of such research. This outcome would be extremely unfortunate, since such research has the potential to improve patients’ lives by leading to more effective medical care. The U.S. biomedical research enterprise has a long and storied history that has made it a model for other countries. It would be a tragedy if we were to squander its achievements for political expediency, in the service of short-term commercial interests. The current proposals for controlling CER in a manner unlike anything we have seen in federally sponsored biomedical research therefore should be rejected. </blockquote> It seems to be almost gilding the lilly to note that the provision cited above seems to violate the free speech and free press provisions of the 1st amendment of the US Constitution, since they threaten government punishment of private citizens (e.g., by withdrawal of existing funding) purely for speech that the government does not like. So I ask the anonymous Senate aide who drafted this provision, and the anonymous lobbyist(s) who influenced him or her, have they no shame?  Finally, I have yet to see coverage of the Selker and Wood article in the mainstream media.  I hope they will eventually conclude that this attempt to co-opt clinical science and mock the 1st amendment is actually news and comment worthy.

No Free Speech for Comparative Effectiveness Researchers?

We have repeatedly argued why comparative effectiveness research, under ideal circumstances, would be a good idea. As I said before : Physi...

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Former McKesson CEO and Board Chairman Convicted of Fraud

Continuing with our annals of health care crime, Bloomberg.com <a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=aU0Sd1_0uEjk">reported</a> a new verdict on a very old case: <blockquote>Former McKesson Corp. Chairman Charles McCall was convicted in a second trial of participating in a fraud 10 years ago that cost investors $8.6 billion, one of the largest white-collar crimes at the time. A federal jury in San Francisco yesterday found McCall guilty of five of six counts of securities fraud and circumventing accounting rules. He was acquitted of falsifying records. Sentencing is set for March 2. Ex-McKesson General Counsel Jay Lapine was found not guilty of three charges. McCall and Lapine were accused of hiding backdated sales contracts from auditors and other conduct that improperly inflated revenue figures at San Francisco-based McKesson, the biggest U.S. drug distributor, and HBO & Co., a software maker led by McCall that was acquired by McKesson in 1999. The McCall verdict was a victory for prosecutors who lost a 2006 trial of the ex-chairman. Assistant U.S. Attorney David Anderson told jurors in the three-week trial that McCall learned of the practices a few months before HBO was to be acquired. Instead of blowing the whistle, McCall covered up the fraud and was named chairman of the merged company, Anderson said. When McKesson disclosed in April 1999 that sales had been prematurely booked, leading to a restatement, the shares lost 47 percent of their value. McCall and Lapine were fired that year. A federal investigation followed, and five former McKesson executives pleaded guilty. McCall and Lapine were indicted in 2003. McKesson, which wasn’t named in the U.S. criminal cases, agreed to pay $960 million in 2005 to settle investor lawsuits. </blockquote> On Health Care Renewal, we often seem to get caught up in the details of the moment. This case is a reminder that the problems we have been discussing have been going on for a long time, certainly long before we started to use the new-fangled medium of a blog to write about them. The case also is a rare example of health care leaders actually suffering negative consequences for bad behavior.  We have noted many examples (see some <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">here</a>) in which bad behavior by health care organizations results only in a penalty for the organization as a whole, whose impact may be diffused among employees, stock-holders, and customers or clients.  Those who authorized, directed, or implemented the behavior often suffer no negative consequences.  In the current case, some of the responsible leaders have already paid a penalty, and now the most senior responsible leader also appears to be on the verge of also paying a penalty.  On the other hand, it took 10 years from the time the bad behavior was recognized for the penalty to be decided.  Meanwhile, Mr McCall likely continued to enjoy the wealth he had amassed in his position of leadership.  The <a href="http://www.sec.gov/Archives/edgar/data/927653/0000929624-99-001275.txt">1999 McKesson HBOC proxy statement</a>, which included a statement that McCall was forced to resign his positions as Chairman of the Board and employee, noted that Mr McCall had already received a salary and bonus of greater than $2 million (in 1999 dollars) that year, and was the proud possessor of 2,879,677 shares of common stock, more than 1% of shares outstanding, after his resignation.  I say again, meaningful health care reform is unlikely unless we deal with the problem of conflicted, unethical, and sometimes corrupt leadership of health care organizations.

Former McKesson CEO and Board Chairman Convicted of Fraud

Continuing with our annals of health care crime, Bloomberg.com reported a new verdict on a very old case: Former McKesson Corp. Chairman Ch...

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Aetna Government Contract Discredited

Last week, the Sacramento Business Journal <a href="http://sacramento.bizjournals.com/sacramento/stories/2009/11/16/daily37.html">reported</a> on irregularities in how health insurance/ managed care giant Aetna obtained a contract with the US military health plan Tricare: <blockquote>Aetna Inc. hired a former high-level Tricare employee with access to proprietary information about Health Net Inc.’s performance that could have given Aetna a competitive edge in its bid for a lucrative military health care contract, the U.S. Government Accountability Office has concluded. The GAO details six flaws in the procurement process in new documents posted online Tuesday and recommends that Aetna should be excluded from the competition, leaving Health Net 'as the only viable awardee.' The agency recommends Tricare officials perform a thorough review of what sensitive information the former Tricare employee had access to and decide what action to take to address the problem. The GAO also recommends that Health Net be reimbursed the cost of filing the protest, including attorneys fees. </blockquote> The Business Journal described the details of the irregularities: <blockquote>The GAO decision pointed to six flaws in the in the bid evaluation process, including: * The agency credited Aetna with past performance of its parent and corporate affiliates but did not record which entities were involved or establish the roles they would play in the contract * The evaluation gave Aetna the highest past performance rating without considering that its past performance was small compared with the size of the Tricare contract * The price evaluation did not consider whether Aetna’s proposed staffing reflected a lack of understanding of the technical requirements of the contract — or showed a willingness to take a risk on the business * The agency failed to consider the risk involved with Aetna’s proposed plan to hire large percentages of Health Net’s work force at lower pay rates * The agency did not consider Health Net’s network provider discounts when assessing its pricing information for the program and * The agency failed to protest Aetna’s hiring a former Tricare official with inside knowledge of Health Net’s performance on the previous contract. 'The contracting officer never considered the matter — because the awardee did not bring it to his attention— and the record shows that the individual had access to non-public proprietary information,' the decision states. </blockquote> The Montgomery Advertiser <a href="http://www.montgomeryadvertiser.com/article/20091122/NEWS02/91122011/1009/Errors-ethics-issues-surface-in-Aetna-TRICARE-contract">added</a>: <blockquote>Though it doesn’t allege that procurement integrity law was broken, the GAO said contracting agencies like TMA have an obligation 'to avoid even the appearance of impropriety' in government procurement. This time it failed. </blockquote> It's been only about nine months since we discussed legal or regulatory issues for Aetna.  In February, 2009 we <a href="http://hcrenewal.blogspot.com/2009/02/aetna-settles.html">discussed</a> its settlement of accusations it underpaid claims in part through its use of a now discredited database marketed by Ingenix, a subsidiary of its supposed competitor, UnitedHealth Group. Aetna <a href="http://www.aetna.com/about-aetna-insurance/index.html">boasts</a> that it is <blockquote>Helping to manage health care, one of the most important things in life We believe we can help create a better health care system. This belief drives our daily decisions as one of the nation's leading health care benefits companies. We work hard to provide our members with information and resources to help them make informed decisions about their health. </blockquote> Furthemore, it boasts of its mission <blockquote>We help people achieve health and financial security by providing easy access to cost-effective, high-quality health care. And we continue to be a leader in building a stronger, more effective health care system by working with doctors, hospitals, employers, patients, public officials and others. </blockquote> It seems one way in which Aetna works with public officials is to hire those that might have some inside knowledge of specific government contracting processes, and then take advantage of that to boost their chances of obtaining lucrative contracts, if I am reading the summary of the GAO findings correctly.  Maybe most people have grown cynical about health care organizations', especially commercial health care insurance companies' mission statements, and may dismiss them as marketing fluff, if not complete balderdash.  However, to improve health care quality while controlling costs, facilitating access, and restoring professionalism, would be health care reformers need to make health care organizational leaders live up to their noble-sounding proclamations of corporate social responsibility.

Aetna Government Contract Discredited

Last week, the Sacramento Business Journal reported on irregularities in how health insurance/ managed care giant Aetna obtained a contract...

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Genzyme's "Remarkable Business'Strategy" and Contaminated Drugs

In June, 2009, <a href="http://www.boston.com/news/world/latinamerica/articles/2009/06/14/one_girls_hope_a_nations_dilemma/">an article</a> in the Boston Globe described how the Boston area based biotechnology company Genzyme sold some astonishlingly expensive drugs, using <blockquote>a remarkable business strategy: In countries from Colombia to Taiwan to Libya, the Cambridge firm has compiled an extraordinary track record of searching out patients like Tania, providing desperately needed treatment, and then successfully pressing their governments, even poor ones, to pay full price for the most expensive drugs in the world. </blockquote> The article focused on how Genzyme marketed Cerezyme for Gaucher's disease. <blockquote>When Genzyme Corp. first introduced a bioengineered drug for Gaucher (pronounced GO-shay) disease in the 1990s, the very idea seemed almost absurd to most people in the pharmaceutical industry. It was expensive to manufacture, there were vanishingly few known patients, and it wasn't clear how you could sell enough of it to recoup research costs, never mind make a profit. Genzyme's solution, elegant in its way, was to set a price high enough to earn a substantial profit no matter how small its pool of patients. Then the company surprised the medical world - and its investors on Wall Street - by showing that American health insurers could be persuaded to pay the six-figure price tag. And with the only effective treatment for Gaucher disease, Genzyme never needed to lower the price, even as production efficiencies raised profit margins on the drug to as much as 90 percent. The drug started to bring in tens of millions of dollars a year, then hundreds of millions. Today this one drug, prescribed for about 5,000 patients, has transformed Genzyme and its chief executive, Henri Termeer, into one of the great success stories of biotechnology, fueling its expansion into a $16 billion company with offices and factories worldwide. By the early 2000s, Genzyme had reached most of the known Gaucher patients in the United States, so it had begun pushing outward to new markets. Genzyme created divisions within the company to find overseas patients; it hired experts to cajole balky governments into paying for the patients' Cerezyme doses. Some of the company's successes were extraordinary: hundreds of patients in Brazil. Patients in Taiwan, Kuwait, and Bulgaria. The government of Libya's Colonel Moammar Khadafy pays for Cerezyme for a handful of patients. As it notched these successes, the company stayed largely under the radar of public health activists who were pushing drugmakers to discount AIDS drugs and other lifesaving medications whose retail prices were financially out of reach to many governments. Biotechnology drugs like Genzyme's, though crushingly expensive for each patient, were so rarely prescribed that they did not attract the same attention, and Genzyme followed an extremely disciplined 'one price' strategy: find patients; donate the drug at first if necessary, but press constantly to be paid full retail price. </blockquote> The "one price" for Cerezyme in Costa Rica was $160,000 per year of therapy. I thought about posting about this story when it came out, focusing, of course, on the amazing price of Cerezyme. However, then I wondered: while the price of Cerezyme seemed extremely high, could anyone say that it was outrageously and unfairly high? After all, the drug was expensive to develop and produce, could not be sold in volume, and provided apparently very effective treatment for an otherwise untreatable disease. So I put the article in a file, and did not post about it. Then a few days later, <a href="http://www.boston.com/business/healthcare/articles/2009/06/17/genzyme_temporarily_halts_production_on_2_key_drugs/">another story</a> ran in the Globe, this time about problems in the Genzyme plant that produces Cerezyme: <blockquote>n an unprecedented move for Genzyme Corp., the state’s largest biotechnology company has halted production of two drugs for rare genetic disorders after a virus was discovered in production equipment at its Allston plant. The drugs are used by 8,000 people worldwide and cost about $200,000 per patient annually. While the virus has the ability to taint the drugs, it is not considered harmful to humans, officials said. The manufacturing plant will remain shut through July while it is decontaminated as a precaution. Shipments of the drugs, Cerezyme and Fabrazyme, have been put on hold while the US Food and Drug Administration seeks assurance from the company that none of its inventory is compromised. Genzyme officials believe the inventory was not affected. The current supply will need to be rationed, Genzyme said. </blockquote> My first thought was that if Genzyme can charge so much for Cerezyme, at least it ought to be able to afford a pristine production process. On the other hand, I also realized that manufacturing processes in biotechnology are complex and difficult, perfection is not always possible, and the contamination in question did not appear harmful. So I put this article in the file too, and did not post about it either. Four days ago, the Boston Globe <a href="http://www.boston.com/yourtown/framingham/articles/2009/11/14/more_contamination_troubles_for_genzyme/">published yet again</a> about troubles in same manufacturing plant. <blockquote>Genzyme Corp., the Cambridge biotechnology giant that has spent five months scrambling to regain its footing after detecting a virus at its Allston plant, is facing a new contamination problem: bits of steel, rubber, and fiber found in drugs made by the company and shipped from the same site. Federal regulators yesterday warned doctors to look for foreign particles in five Genzyme drugs used to treat rare genetic disorders, including two - Cerezyme and Fabrazyme - that have been rationed because of the viral contamination detected in the Allston Landing plant last summer. The five drugs represent roughly half of Genzyme’s $4.6 billion in annual sales. Particles are believed to have been found in less than 1 percent of the Genzyme drugs based on product lots examined, according to a statement from the Food and Drug Administration. The FDA warned physicians, however, to carefully examine vials of the products and filter them before they are given to patients - steps that are considered standard procedure within the industry. If they find particles, the FDA asked for the vials to be returned to the manufacturer. The agency warned that ingesting the particles could have effects that include allergic reactions and blood clotting. FDA inspectors arrived at the Allston plant last month to begin an investigation into Genzyme’s production operations. </blockquote> In addition, a New York Times <a href="http://www.nytimes.com/2009/11/14/business/14drug.html">article</a> noted: <blockquote>'Biological manufacturing is extremely complex and prone to problems,' including contamination, said Jean-Jacques Bienaime, chief executive of BioMarin Pharmaceuticals, a biotech company that also makes drugs for rare diseases, including one it co-developed with Genzyme. Mr. Bienaime said his company always maintained at least a year’s worth of inventory in case of a production outage. But Genzyme did not have such an inventory of Cerezyme and Fabrazyme. </blockquote> Finally, today the In Vivo blog <a href="http://invivoblog.blogspot.com/2009/11/genzyme-contents-under-pressure.html">posted </a>a discussion of Genzyme's production woes which suggested that the two different types of contamination at the plant, and the failure of the company to reliably ship pure, unadulterated drug to patients were not simply the results of bad luck or failure to attain unattainable perfection. <blockquote>Friday's announcement that bits of rubber and other detritus were found in vials of five different drugs manufactured at Genzyme's beleaguered Allston Landing plant was worthy of the satirical publication "The Onion"--except that it was true. The picture grew murkier over the weekend, with the arrival of another Form 483 missive from FDA about ongoing manufacturing issues and a complete response for Lumizyme, Genzyme's enzyme replacement therapy for Pompe disease has been subject of more regulatory twists and turns than the plot of a Dan Brown novel. The origin of the problem goes back three years, to the original approval of Myozyme, basically the same drug as Lumizyme only manufactured on a much smaller scale, at a 160-liter scale facility in Framingham. Genzyme underestimated the demand for the drug, and plans to shore up capacity with a 4000-liter facility in Belgium were put in place. Only as a stop gap, the company also decided to devote 1/6th of its manufacturing capacity at Allston to the making of the drug. And that decision has proved problematic. The stress of running an aging plant full tilt meant there was no time for necessary facility upgrades that might threaten the inventory of drugs manufactured at Allston, among them Cerezyme for Gaucher disease and Fabrazyme for Fabry disease. Genzyme CEO Henri Termeer admitted as much in the Nov. 16 investor call, noting '"the introduction of the production of Myozyme in Allston was a very significant factor in the complications we have experienced there.' Too bad that realization didn't happen one year ago. That's when regulators started sending warning letters outlining concerns related to what sound like bread-and-butter manufacturing issues: microbial monitoring, equipment maintenance, and process controls. What's most amazing is that problems are ongoing. Recall that six-week interlude this summer when the firm took the entire plant offline to sterilize it after discovering yet another unrelated problem--several bioreactors contaminated with a non-lethal to humans but problematic Vesivirus. On the company's Nov. 16 call to investors, management confirmed that the latest 483 letter relates not to a new problem created by Genzyme's decontamination efforts but arising because of 'an older piece of equipment'. As Genzyme's EVP of Therapeutics, Biosurgery, and Corporate Operations said during a Q&Asession with analysts, '"There was a number of issues there that they [regulators] highlighted and many of which we were very aware of and working to address.' Management's solution? Take the plant off line again for a few weeks to, as Meeker puts it, 'allow us to move more quickly to address those issues.' Does everyone feel better now? In some strange way, the very minor nature of these gaffes is the most damning element of the story. It throws management's judgment into question and again casts doubt on the ability of the current team to resolve a situation that should never have escalated to this level. </blockquote> So now it is time to discuss Genzyme's production woes on Health Care Renewal.  For $160,000 a year, it seems reasonable to expect that patients could expect a reasonably well-thought out, conservatively planned production process that would be able to reliably produce sufficient quantities of pure, unadulterated drug.  Instead, Genzyme's "remarkable business strategy" did not seem to include adequate maintenance of production facilities with adequate capacities, or even keeping an adequate reserve supply of product in anticipation that over-working a single aging facility with aging equipment might lead to something breaking down.  By the way, for overseeing this "remarkable business strategy," Genzyme paid its CEO, Henri A Termeer, $13,773,782 in total compensation last year (per the <a href="http://www.sec.gov/Archives/edgar/data/732485/000104746909004080/a2192147zdef14a.htm">2009 proxy statement</a>).  Presumably mainly from the stock and option awards he has accumulated over the year, Mr Termeer now owns 4,080,387 shares of Genzyme stock, 1.5% of total outstanding shares.  For that money, patients, share-holders, and line employees ought to expect "remarkable business strategies" that include attention to such basics as good maintenance of production facilities.  Maybe the company's well compensated (more than $400,000 a year) directors should have been more vigilant about overseeing the management's "remarkable business strategy."  The board  included Gail K Boudreaux, an Executive Vice President of UnitedHealth Group, Charles L Cooney PhD, the Haslam Professor of Chemical and Biochemical Engineering at the Massachusetts Institute of Technology, and Dr Victor J Dzau, Chancellor of Health Affairs at Duke University and CEO of Duke University Health Systems, who seemingly have some relevant expertise, although the board also included Richard F Syron PhD, the former CEO of the Federal Home Loan Mortgage Corporation, (Freddie Mac), who resigned in 2008 after the failure of the company which was later bailed out by the US government.    So once again we see how leaders of health care organizations, in this case perhaps blinded by the prodigious amounts of money they were making, failed to exercise rigorous oversight over how their company produced its product.  The actual production part of biotechnology may seem far less glamorous than other aspects of the company.  Yet, if a drug company cannot reliably produce pure, unadulterated drugs, all its advanced research, cutting edge finance, and glitzy marketing may be for nought.  This case is another argument for finding health care corporate leaders who remember that long term success comes from putting patients, not dollars, not glitz,  first.

Genzyme's "Remarkable Business'Strategy" and Contaminated Drugs

In June, 2009, an article in the Boston Globe described how the Boston area based biotechnology company Genzyme sold some astonishlingly ex...

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Seeking NIH to fund studies on medical ethics, conflicts of interest in medicine and research, and prescribing behavior

Adriane Fugh-Berman MD is principal investigator (PI) of the <a href="http://pharmedout.org/">PharmedOut</a> project. PharmedOut is an independent, <a href="http://pharmedout.org/aboutus.htm">publicly funded</a> Georgetown University Medical Center project that educates physicians about industry influence on prescribing. project that empowers physicians to identify and counter inappropriate pharmaceutical promotion practices. PharmedOut promotes evidence-based medicine by providing news, resources, and links to pharma-free CME courses. PharmedOut is requesting that the U.S. NIH (National Institutes of Health) fund more research into ethics, conflicts of interest, and prescribing behavior. One hundred researchers, clinicians, and ethicists have signed a letter sponsored by PharmedOut asking NIH to fund research on medical ethics, conflicts of interest, and industry influence on prescribing behavior. Stimulus funds have increased the NIH budget by ten billion dollars, but NIH has no mechanism for funding research on how commercial interests affect the choice of medical therapeutics. Signers include Virginia Barbour MD, Chief Editor of PLoS Medicine, Jerome Kassirer, MD, former editor in chief of the New England Journal of Medicine, Jerry Avorn MD, the Harvard physician who invented academic detailing, Kay Dickersin PhD, Director of the U.S. Cochrane Center, and Susan Wood, PhD, former head of the FDA Office of Women’s Health Research, who resigned over political influence regarding FDA decisions on the emergency contraceptive Plan B. Institutional signers include the Public Library of Science, the American Medical Student Association, the National Physicians Alliance, Consumers Union, the Center for Science in the Public Interest, and the National Women’s Health Network. The letter, sent to NIH today, is available at <a href="http://www.pharmedout.org/NIHLetter.pdf">http://www.pharmedout.org/NIHLetter.pdf</a> (PDF) and below: <blockquote>Nov. 17, 2009 From: Adriane Fugh-Berman MD Department of Physiology and Biophysics Georgetown University Medical Center Box 571460 Washington DC 20057-1460 Phone: (202) 687-7845 Fax: (202) 687-7407 ajf29 AT georgetown DOT edu To: Francis S. Collins, MD, PhD Director National Institutes of Health 9000 Rockville Pike Bethesda, MD 20892 Dear Dr. Collins, We are writing to ask NIH to fund studies on medical ethics, conflicts of interest in medicine and research, and prescribing behavior. NIH funds a substantial portion of the generation and dissemination of evidence, but the uptake of that evidence and its translation into clinical practice is strongly affected by the complex web of relationships that exists among industry, academicians, medical educators and clinicians. There is growing evidence that each strand of this web is compromised by ethical lapses and financial conflicts of interest. The recent disclosure of ghostwritten articles, physician payoffs, and the use of academic opinion leaders to increase markets for FDA-regulated products indicate that ethical lapses may permeate biomedical research. A PLoS Medicine editorial in September called ghostwriting “The dirty little secret of medical publishing” and notes “the systematic manipulation and abuse of scholarly publishing by the pharmaceutical industry and its commercial partners in their attempt to influence the health care decisions of physicians and the general public.” [1] An October 1 editorial in the Boston Globe called for a ban on industry speaker fees to physicians. [2] Last month, a commentary in JAMA called for physicians to pay for continuing medical education (CME), [3] citing a recent Institute of Medicine report [4] that criticized physicians’ reliance on industry-funded education. A stated goal of the NIH is to “exemplify and promote the highest level of scientific integrity, public accountability, and social responsibility in the conduct of science.” Could the muted effect that large, definitive NIH studies, including the WHI, ALLHAT, and CATIE, have had on clinical practice be due to commercial influences? To what extent have ghostwritten articles corrupted the medical and scientific literature? The extent to which industry influences the interpretation of science is unknown. Dr. Elias Zerhouni, in the September 17th issue of Nature, commenting on Senator Grassley’s investigation of academic medical centers, said “People flouted the rules, didn’t disclose, and did it for years on end, repeatedly.” [5] In your role as the director of “the steward of medical and behavioral research for the Nation,” we ask that you acknowledge the research gap on the effect of conflicts of interest and commercial influence on medical decisionmaking and set in motion a process that leads to recognition of the importance of funding studies on research ethics, the beliefs and behaviors of researchers and clinicians, and the effects of industry-academic relationships on the generation and dissemination of medical knowledge. Between bench and bedside lies a path treacherous with ethical quandaries. NIH is the best place to launch and support a scientifically rigorous inquiry into the state of research ethics, industry-academic relationships, and the effect of these relationships on human health. There is currently no identifiable mechanism through which NIH would fund this research. Your leadership regarding the importance of this issue as one the NIH needs to direct resources towards is essential. We hope to discuss these issues in a face-to-face meeting. Sincerely, Adriane Fugh-Berman, MD Associate Professor, Georgetown University Medical Center Director, PharmedOut ajf29 AT georgetown DOT edu http://pharmedout.org [and others whose signatures can be seen at the PDF - ed.] [1] Ghostwriting: The Dirty Little Secret of Medical Publishing That Just Got Bigger. PLoS Medicine, September 8, 2009. <a href="http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1000156">http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1000156</a> [2] Keep Doctors Independent; Ban Fees From Drug Makers. Boston Globe, October 1, 2009. <a href="http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2009/10/01/keep_doctors_independent_ban_fees_from_drug_makers/">http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2009/10/01/keep_doctors_independent_ban_fees_from_drug_makers/</a> [3] Campbell EG, Rosenthal M. Reform of Continuing Medical Education: Investments in Physician Human Capital. JAMA. 2009;302(16):1807-1808. <a href="http://jama.ama-assn.org/cgi/content/full/302/16/1807?home">http://jama.ama-assn.org/cgi/content/full/302/16/1807?home</a> [4] Institute of Medicine. Conflict of Interest in Medical Research, Education, and Practice. Washington, DC: National Academies Press; April 28, 2009. <a href="http://www.iom.edu/CMS/3740/47464/65721.aspx">http://www.iom.edu/CMS/3740/47464/65721.aspx</a> [5] Wadman M. The Senator’s sleuth. Nature. 2009 Sept;461(17):330-4. </blockquote>This letter caught my eye, and I expressed support as follows, adding an additional angle to Dr. Fugh-Berman's letter: <blockquote>Dear Dr. Fugh-Berman, As a blogger at Healthcare Renewal, I will enthusiastically sign on to and endorse your letter calling on NIH to fund more research into ethics, conflicts of interest, and prescribing. I also wish to add an extended point: The issues of ethics and conflict of interest also affect healthcare information technology (HIT), and ultimately physician practice. HIT applications are experimental medical devices now being pushed upon physicians via the Office of the National Coordinator and HHS. These medical devices are soon to undergo regulation as such in the EU (pdf report from the Swedish Medical Products Agency <a href="http://www.lakemedelsverket.se/upload/foretag/medicinteknik/en/Medical-Information-Systems-Report_2009-06-18.pdf">here</a>), <a href="http://www.hc-sc.gc.ca/dhp-mps/md-im/activit/announce-annonce/md_notice_software_im_avis_logicels-eng.php">Canada</a>, the <a href="http://www.genomeweb.com/dxpgx/electronic-health-record-systems-will-require-some-form-oversight-government-adv">U.S.</a> and other countries as well. They are used in patient care without patient consent. Their use holds significant potential to monitor and enforce practices deemed appropriate by whomever has the most influence on the bodies controlling the use of these technologies and the data they generate. From that perspective, and from the perspective of the 2009 National Research Council report that calls for accelerating interdisciplinary research in biomedical informatics, computer science, social science [i.e., the social and ethical implications of health IT], and health care engineering as a sine qua non of health IT success, I believe it is time for NIH to take a leadership role in regulating these devices, conflicts of interest in the health IT industry, and the ethics of their use.</blockquote> I perhaps should have written "I believe it is time for NIH to take a leadership role in sponsoring research on regulating these devices, conflicts of interest in the health IT industry, and the ethics of their use", rather than calling on NIH to be a regulator. However, until the regulatory affairs concerning health IT are in order, I felt the stronger statement appropriate. -- SS

Seeking NIH to fund studies on medical ethics, conflicts of interest in medicine and research, and prescribing behavior

Adriane Fugh-Berman MD is principal investigator (PI) of the PharmedOut project. PharmedOut is an independent, publicly funded Georgetown...

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The Editorial that Wasn't: Evidence for Systematic Research Manipulation Undetectable by Critical Review

Woe to those of us who have been advocates for evidence-based medicine.  A short description of the evidence-based medicine is medicine whose practice is informed by critical, rigorous review of the best available evidence from clinical research as revealed by systematic search of the published research literature, as well as by the clinician's understanding of biology and the medical and biopsychosocial context, and by the patient's own values. Evidence-based medicine is based on some key assumptions.  One is that a systematic review will reveal all the results of research studies that are relevant to the issue at hand.  A second is that while the research studies may be flawed and imperfect, they are reported honestly. Unfortunately, as we have repeatedly discussed, there is more and more evidence that a systematic review will not reveal all relevant results, because research studies may be suppressed, perhaps often, when their results are unfavorable to vested interests.  (Look <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">here</a> for further discussion.)  There is also considerable anecdotal evidence that the design, implementation, and analysis of research studies may be manipulated to make the results more likely to favor vested interests.  (Look <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">here</a> for further discussion.) An article by Vedula et al just published in the renowned New England Journal of Medicine suggests that such manipulation might be systemic, and that the reporting of manipulated studies may not clearly show what manipulation was done. (1) To summarize, the authors got access through legal proceedings to internal study protocols and research reports from clinical trials sponsored by Parke-Davis (later merged into Pfizer Inc) of gabapentin (Neurontin) for a variety of clinical problems other than seizures.  Gabapentin was originally marketed as an anti-seizure drug, but Pfizer later "admitted guilt for off-label marketing."  (We discussed the stealth marketing campaign for Neurontin <a href="http://hcrenewal.blogspot.com/2006/08/stealth-marketing-of-neurontin.html">here</a>.)  Vedula et al compared the primary outcome variables specified in the original research protocols, internal research reports, and any publications of the trials' results.  They identified 21 trials, 13 of which were published.  For 12 of the 13, the authors had access to the internal protocol, report, or both.  The main results were: <blockquote>For 8 of the 12 published trials, there was a disagreement between the definition of the primary outcome in the protocol and that in the published report.... Sources of disagreement included the introduction of an entirely new primary outcome in the published report (in the case of 6 trials); failure to distinguish between primary and secondary outcomes in the published report, even though the protocol did distinguish between them (2 trials); relegation of a primary outcome in the protocol to a secondary outcome in the published report (2 trials); and failure to include in the published report one or more primary outcomes specified in the protocol (5 trials). </blockquote> Furthermore, it appeared that failure of published articles to clearly and fully report results in terms of the original, pre-specified primary outcome variables occurred when these comparisons were not favorable to gabapentin. As the authors summarized: <blockquote>Thus, trials with findings that were not statistically significant (P≥0.05) for the protocol-defined primary outcome, according to the internal documents, either were not published in full or were published with a changed primary outcome. As shown in Figure 3, all the changes that took place between what was specified in the protocol, what was known before publication (as presented in the internal company research reports), and what was reported to the public led to a more favorable presentation in the medical literature of gabapentin's efficacy for unapproved indications. </blockquote> They concluded: <blockquote>We are concerned that the reporting practices observed in our analysis do not meet the ethical standards for clinical research or maintain the integrity of scientific knowledge. Fair and honest treatment of patients enrolled in clinical trials of any kind requires full, open, and unbiased reporting. Journal publication, a formalized platform for scientific discourse and dissemination of knowledge, should not be used as a marketing tool for off-label drug use. Reporting biases such as those we describe here increase the likelihood that interventions will appear to be effective when they are not. Such biases can lead to the omission of negative findings in systematic reviews of intervention effectiveness and in evidence-based guidelines. For example, the 2005 Cochrane systematic review regarding the effectiveness of gabapentin for acute and chronic pain concluded that it is effective on the basis of published findings and should now be updated with the inclusion of unpublished information made available through litigation. </blockquote> I believe that the article by Vedula et al is particularly important because it shows what appears to be systematic manipulation of the analysis and reporting of multiple clinical trials of the same drug (but for different indications) that had the effect of making the drug appear efficacious when it likely was not. Furthermore, the manipulation was concealed. The published research articles did not completely describe what the intended primary efficacy outcome variables were, did not provide results in terms of these variables, and instead provided results only in terms of variables that were chosen post-hoc as new primary outcome variables. To address that latter point, I independently reviewed three of the research publications cited by Vedula et al.(2,3,4) All three were noted to have reported significant results favoring gabapentin in terms of a primary efficacy outcome variable that was not identified as such in the corresponding studies' original research protocols or reports (see the <a href="http://content.nejm.org/cgi/content/full/361/20/1963/DC1">supplementary data</a> provided with the New England Journal article.) Per my review, none of the three published articles offered any hint that what they reported as primary outcome variables were not the variables originally chosen in that capacity, nor did they identify what those original primary outcome variables were, or how comparisons made using them turned out. The implications of the article by Vedula et al are very important. Hence, I was surprised that the article appeared without an accompanying editorial to discuss these implications, and that its publication did not generate much media interest. So that gives me an opportunity to comment further. One could start with the implications for evidence-based medicine. As noted above, a short description of the evidence-based medicine is medicine whose practice is informed by critical, rigorous review of the best available evidence from clinical research as revealed by systematic search of the published research literature, as well as by the clinician's understanding of biology and the medical and biopsychosocial context, and by the patient's own values. Evidence-based medicine depends on critical, rigorous review, but the review process is generally done under the assumptions that research publications honestly describe what was done and what its results were. The review process was never designed to detect dishonest reporting or find information that was deliberately concealed. Manipulation of research (design, analysis, and implementation), concealment of that manipulation, and outright suppression of research threaten the foundations of evidence-based medicine. Yet the article by Vedula et al is part of a growing body of evidence that such manipulation, concealment and suppression are widespread, and done to serve vested interests, often commercial. That is a huge problem for proponents of evidence-based medicine, but also for physicians who want their practices to be based on science, for patients who want their care to be based on science, and for all those in society who see the advancement of medical science as a way to improve peoples' lives. As senior author Professor Kay Dickersin noted in an interview <a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=azEz6zlMyS0I&pos=7">with Bloomberg</a> "The trouble is, as a scientist, the publication has always been held up to me as the truth. It's the scientific record. What this study indicated is we can't believe that record." Furthermore, to be a bit more concrete, most physicians, patients, and policy makers depend on what appears to be honest clinical research to make decisions about individual care and health policy. Deliberate and deceitful manipulation of clinical research to favor sponsors' products has likely lead to excessive use of and payments for drugs and devices that are less effective than advertised, if not useless or dangerous. Thus, it is likely that such manipulation is partially responsible for ever increasing health costs and poor health outcomes. Finally, we need to start thinking about how we can detect and compensate for manipulation of clinical research in the past, and deter such manipulation in the future. One possible deterrent would be, as was noted by Vedula et al, detailed clinical trials registries that contain complete information about trial protocols.  For this to be effective, there need to be mechanisms to assure compliance, and penalties for non-compliance.  Moreover, since clinical research is now global, the registries must have global scope, and enforced assurance of compliance must also be global. Registries might decrease future manipulation and suppression of research.   No one has suggested, as far as I know, a systematic way to detect and correct for previous manipulation. It would require a major, global investigative effort to uncover manipulation, and it would be a major scientific and policy endeavor to reveal most suppressed research and correct most manipulations. However, before anything is done, patients, physicians and policy makers must acknowledge and understand the problem.  Yet it seems that even discussing these may be topics that are very uncomfortable for some of us. The longer we shrink from addressing them, however, the worse will be the results for patients, physicians, science and society. References 1. Vedula SS, Bero L, Scherer RW, Dickersin K. Outcome reporting in industry-sponsored tirals of gabapentin for off-label use. N Engl J Med 2009; 361: 1963-1971. Link <a href="http://content.nejm.org/cgi/content/short/361/20/1963">here</a>. 2. Mathew NT, Rapoport A, Saper J et al. Efficacy of gabapentin in migraine prophylaxis. Headache 2001; 41: 119-128. Link <a href="http://www3.interscience.wiley.com/cgi-bin/fulltext/119014515/PDFSTART">here</a>. 3. Vieta E, Goikolea JM, Martinea-Aran A et al. A double-blind, randomized, placebo-controlled, prophylaxis study of adjunctive gabapentin for bipolar disorder. J Clin Psychiatr 2006; 67: 473-477.  Link <a href="http://www.psychiatrist.com/privatepdf/2006/v67n03/v67n0320.pdf">here</a>. 4. Caraceni A, Zecca E, Bonezzi C et al. Gabapentin for neuropathic cancer pain: a randomized controlled trial from the gabapentin cancer pain study group. J Clin Oncol 2004; 22: 2909-2917. Link <a href="http://jco.ascopubs.org/cgi/reprint/22/14/2909">here</a>.

The Editorial that Wasn't: Evidence for Systematic Research Manipulation Undetectable by Critical Review

Woe to those of us who have been advocates for evidence-based medicine. A short description of the evidence-based medicine is medicine whos...

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