healthy4u

"This is Really Going to Set People's Hair on Fire" - the Justice Department Indicts a Pharmaceutical Company Vice President and Associate General Counsel

We have been posting nearly every week about the parade of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, sometimes including guilty pleas to criminal charges, made by health care organizations.  The settlements have involved charges of kickbacks, fraud, conspiracy, and other colorful offenses. Most of these settlements entailed fines or other payments by the organizations that may seem huge, but were fractions of the amounts made by the practices that lead to the charges that were settled.  Almost never have the cases involved penalties for any individuals who authorized, directed, or implemented the misbehavior.  We have also been saying (seemingly <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">endlessly</a>, but most recently <a href="http://hcrenewal.blogspot.com/2010/11/ela-medical-now-sorin-group-settles.html">here</a>) that such settlements may be viewed by organizations as merely the costs of doing business, and so until the actual people who were involved in the bad behavior suffer some negative incentive or penalty, expect the behavior to continue.  Maybe things are changing.  In the New York Times, Duff Wilson <a href="http://www.nytimes.com/2010/11/10/health/10glaxo.html">wrote</a>: <blockquote>In a rare move, the Justice Department on Tuesday announced that it had charged a former vice president and top lawyer for the British drug giant GlaxoSmithKline with making false statements and obstructing a federal investigation into illegal marketing of the antidepressant Wellbutrin for weight loss. </blockquote> Specifically, <blockquote>The indictment accuses the Glaxo official, Lauren C. Stevens of Durham, N.C., of lying to the Food and Drug Administration in 2003, by writing letters, as associate general counsel, denying that doctors speaking at company events had promoted Wellbutrin for uses not approved by the agency. Ms. Stevens 'made false statements and withheld documents she recognized as incriminating,' including slides the F.D.A. had sought during its investigation, the indictment stated. </blockquote> An Associated Press <a href="http://www.google.com/hostednews/ap/article/ALeqM5j811xbptN9aTOdN53moz5SDRm7cA?docId=71bc37f9be2d4afe8c7ec7f4e0639242">story</a> provided more detail about the allegedly false statements: <blockquote>The Department of Justice alleges that in 2002, Lauren Stevens of Durham, N.C., signed several letters to the Food and Drug Administration denying that her company had promoted an antidepressant drug for unapproved uses. But Stevens knew that the company had paid numerous physicians to give talks touting unapproved uses of the drug, including weight loss,.... </blockquote> Also, <blockquote>In one instance, prosecutors say Stevens withheld slides used by physicians promoting the company's drug, even though the FDA had asked specifically for the materials. Stevens claimed that the company's response to the FDA was 'final' and 'complete,' according to the indictment. Stevens also falsely denied that Glaxo had paid doctors to attend special sessions where medical experts discussed unapproved uses of Wellbutrin, according to the Department of Justice. 'Attendees were not paid, reimbursed or otherwise compensated to attend these events,' Stevens wrote in a 2003 letter to the FDA. But prosecutors say attendees received gifts, entertainment and other compensation in return for attending the events. During 2001 and 2002, Glaxo paid two expert physicians to speak about 500 times each about Wellbutrin, including how to use the drug to treat obesity.</blockquote> In addition, a CBS News <a href="http://www.cbsnews.com/8301-31727_162-20022282-10391695.html">story</a> suggested that Ms Stevens was made aware of the nature of the information withheld: <blockquote>In March of 2003, the indictment alleges, Stevens received a memo from other lawyers at GlaxoSmithKline analyzing the pros and cons of turning over the slides to the FDA. One of the cons listed in that memo was that turning over the slides would provide 'incriminating evidence about potential off-label promotion of [the drug] that may be used against [the corporation] in this or in a future investigation.' </blockquote> An indictment of an individual, particularly a high-ranking corporate executive, seems to have gotten people's attention, e.g., as Duff Wilson wrote in the Times: <blockquote> The indictment grabbed the attention of pharmaceutical executives who have been bracing for a long-promised government crackdown on company officials — rather than the corporations themselves — in drug-fraud cases that have resulted in billions of dollars in fines and payments. 'This is absolutely precedent-setting — this is really going to set people’s hair on fire,' said Douglas B. Farquhar, a Washington lawyer who recently presided at a panel on law enforcement during a drug industry conference where federal officials warned they were focusing on individuals. 'This is indicative of the F.D.A. and Justice strategy to go after the very top-ranking managing officials at regulated companies.' </blockquote> My response is, of course, that the threat of this sort of action is absolutely what is needed to deter future bad behavior by health care organizations. As long as health care leaders could act with impunity, the fraud, kickbacks, conspiracy etc were continuing. Worse, given their impunity, why would anyone but an idealistic fool attempt to swim against the tide of rising sleaze in health care?  How could skeptics and critics of the status quo in health care gain any traction? Now maybe this sort of action may finally lead self-satisfied, unreflective health care executives to think about what they are doing and its ethical and moral aspects. The NY Times article included this statement in defense of Ms Stevens: <blockquote>Brien T. O’Connor, a lawyer with Ropes & Gray, said in a statement, 'Lauren Stevens is an utterly decent and honorable woman. She is not guilty of obstruction or of making false statements. Everything she did in this case was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with F.D.A.' </blockquote> I actually would guess that Ms Stevens believes she did nothing wrong. I would guess that most of the numerous health care leaders who have been caught up in bad behavior also thought they did nothing wrong. After all, they were all very well paid, lived in nice houses in nice neighborhoods, drove fancy cars (when they did not have a paid car and driver), were respected in their communities, did charitable works, etc. How can fine people who look so respectable do anything wrong? But, of course, the veneer of respectability does not prevent unethical or immoral behavior. Making one's numbers, getting one's bonuses, all from doing the big boss' wishes do not certify one's actions as ethical or moral. Perhaps making corporate health care leaders actually accountable for their actions will lead them to think about whether their actions are really as upstanding as their accoutrements of social status make them feel. My final comment is that it may be significant that this case involved a lawyer. On one hand, attorneys have been at the forefront of what little movement there is to improve the accountability, integrity, and transparency of health care organizations. On the other hand, the leadership of many health care organizations have lawyered up to defend their actions. Organizational lawyers have been known to sweet-talk, obfuscate or intimidate those who dare to criticize the organizational leaders' actions. Anyone who is a vocal skeptic of the powers that be in health care must know there is a constant risk of some corporate counsel or hired firm threatening a libel, slander, or tortious interference action. Any individual who dares to be skeptical must be worried that the leaders of large health care organizations can use a lot of other peoples' money to pay for lawyers to push such actions, while individual skeptics facing threats of suits for huge amounts of damages are not likely to have enough money of their own to keep fighting. So I hope that the current case will also push attorneys who make a lot of money protecting the status quo in health care to reflect on the ethics and morality of what they are doing. ADDENDUM (10 November) - Also see comments by Prof Margaret Soltan <a href="http://www.margaretsoltan.com/?p=27401">on the University Diaries blog.</a>

"This is Really Going to Set People's Hair on Fire" - the Justice Department Indicts a Pharmaceutical Company Vice President and Associate General Counsel

We have been posting nearly every week about the parade of legal settlements , sometimes including guilty pleas to criminal charges, made by...

Đọc thêm »

What a Conflicted Web We Weave: More About Leaders of Financial Firms Influencing Policy in the Guise of Independent Academics

The issue of <a href="http://hcrenewal.blogspot.com/2010/10/what-conflicted-web-we-weave-academic.html">conflicted academic economists providing public policy recommendations</a> just got bigger.  As discussed <a href="http://blogs.reuters.com/felix-salmon/2010/11/08/disclosing-economists-conflicts/">by Felix Salmon</a> in his blog for Reuters, and <a href="http://economix.blogs.nytimes.com/2010/11/08/ethics-for-economists">by Nancy Folbre</a> in the Economix blog for the New York Times,  a <a href="http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_201-250/WP239.pdf">new study</a> by Epstein and Carrick-Hagenbarth showed that some very prominent economists who frequently make pronouncements about financial policy often failed to disclose some major conflicts of interest.  In summary, they identified "two groups of economists that were prominent in the field of financial economics and which had taken a public stance on financial regulation."  Some of these economists also had prominent advisory roles for government economic agencies, including the US Federal Reserve, the US Council of Economic Advisers, the Indian Finance Ministry, the Bank of Finland, the World Bank, and the International Monetary Fund. The authors did an extensive search for the economists' financial ties to financial corporations, which probably detected most relationships such as membership on the boards of directors of public companies, but may have missed consulting arrangements.  They found that 12 of 19 had such relationships, mostly positions on boards of directors or ownership interests.  They found that all but one of the economists with such relationships failed to identify these relationships in the majority of their academic papers and writings in the media.  The one economist who always disclosed his relationships in the media only wrote articles for the private financial firm for which he worked. So major financial conflicts of interest were prevalent among "prominent economists who write op-eds for newspapers, they testify on public panels, they take positions as advisers for politicians and they are interviewed by the media. Academic economists often convey the impression that they occupy these positions as independent objective experts."  The authors concluded: <blockquote>Academic economists serve as experts in the media, molding public opinion. They are also important players in government policy. If those that are creating the culture around financial regulation as well as influencing policy at the government level for financial reform also have a significant, if hidden, conflict of interest, our public is not likely to be well-served.</blockquote> They also noted that economics as a profession does not even have a formal code of ethics, and in particular has never embraced any necessity for disclosing, managing, or restricting conflicts of interest. We had previously <a href="http://hcrenewal.blogspot.com/2010/10/what-conflicted-web-we-weave-academic.html">discussed</a> anecdotal but striking evidence that some of the most prominent economists who influenced public policy up to and after the great recession/ global financial crisis also had major but undisclosed financial ties to financial institutions. It now looks like conflicts of interest could be as prevalent among those who are influential in economics as they may be among those who are influential in medicine, health care, and health care policy. This further corroborates the hypothesis that academic medical institutions are so comfortable with their faculty and leaders' conflicts of interest because they exist in a larger academic culture in which such conflicts are standard operating procedure.  Academic institutions may be particularly happy with economists' conflicts of interest because they involve such large amounts of money. <a href="http://blogs.reuters.com/felix-salmon/2010/11/08/disclosing-economists-conflicts/">Felix Salmon</a> gave the example of  Paul Krugman who when he worked as an economist could command a $40-50,000 fee per speech, easily more than an order of magnitude more than the going rate for medical talks.  Furthermore, as we have noted before, (e.g., <a href="http://hcrenewal.blogspot.com/2010/05/stewards-of-elite-university-or.html">here</a>, <a href="http://hcrenewal.blogspot.com/2010/04/very-well-paid-boob-on-harvard.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/02/university-president-but-no-longer.html">here</a>) many prominent academic institutions that incorporate medical schools and academic medical centers have boards of directors dominated by leaders of finance.  Now it appears that these leaders' economic interests may lead them to encourage conflicts of interest among their faculty and administration. So not only do conflicts of interest appear to be a fundamental problem for medicine and health care, they may pose a fundamental problem for society as a whole. Clearly, as Epstein and Carrick-Hagenbarth wrote, economists, like all professionals who can influence public policy, ought to have a code of ethics, and that code, at a minimum, ought to require full disclosure of all conflicts of interest.  Economists who write about policy in the media, write policy-relevant academic articles, and/or who advise non-profit organizations and government agencies should at a minimum reveal all such conflicts.  Similarly, of course, physicians and health policy/ care/ services researchers who write about or otherwise may influence health care policy should at a minimum reveal all such conflicts. Meanwhile, extreme skepticism about policy advice by apparently independent academics and experts is warranted.  We risk sliding into the cynical position that all major policy is now being made by imperial CEOs and their cronies and paid agents.

What a Conflicted Web We Weave: More About Leaders of Financial Firms Influencing Policy in the Guise of Independent Academics

The issue of conflicted academic economists providing public policy recommendations just got bigger. As discussed by Felix Salmon in his ...

Đọc thêm »

Ela Medical (Now the Sorin Group) Settles

And we return to the parade of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, which is still marching along.  The next entrant to the parade was <a href="http://www.miamiherald.com/2010/11/01/1903266/ela-medical-settles-miami-whistle.html">described</a> by the Miami Herald: <blockquote>In a four-year-old case with nationwide implications, Ela Medical has agreed to pay $9.2 million to settle a whistle-blower case brought by a former Miami technician who charged the company used several schemes to pay kickbacks to South Florida doctors.</blockquote> The details of the allegations were: <blockquote>In the Miami case, brought by May and Ben Kuehne, Lee alleged that Ela gave money to doctors for questionable studies, had Ela techs do work on patients that doctors later billed Medicare for, gave doctors free trips and helped doctors get monitoring equipment that to led to more Medicare billing. The moves were made by the company to boost sales in the multibillion-dollar field of cardiac devices, where pacemakers can cost up to $7,000 and defibrillators up to $18,000. These devices have batteries that run down in about three years, the lawsuit said, and patients need to be monitored to see how much battery life their devices have left. An Ela tech performed the tests in doctors' office. 'Although Medicare required a physician to be present during the battery test, physicians never attended these battery check appointments,' the lawsuit alleged. Doctors then billed Medicare for the techs' work. Other times, doctors were paid $2,500 to $4,000 for each Ela patient enrolled in a study, even though patients were never informed and never gave the required permission, the lawsuit said. 'The physicians had no role and in fact did nothing in furtherance of the study,' the lawsuit stated. 'However, Medicare was billed each time the study was conducted, as if the physician had participated.'</blockquote> Of course, the company's statement had all the expected elements: <blockquote>Closure of this investigation places this legacy issue firmly behind us and clearly enhances our ability to execute on our plans for CRM [cardiac rhythm management] in the United States. Our commitment to provide patients and healthcare providers with life-saving and life-enhancing innovation, and to conduct our business in a highly ethical manner is stronger than ever.</blockquote> I leave it to my dear readers to decide on how ethically the company's previous business operations were, based on the above. I would note that not only did the company want to put this case behind it, it seemed to want to put its old name behind it too. Ela Medical is now apparently known only by the name of its Italian parent company, <a href="http://www.sorin.com/">the Sorin Group</a>. To add a final disturbing note, this case illustrates why people who see what appears to be unethical, or even illegal behavior are not rushing to report it: <blockquote>On Monday, May, the attorney, said Lee 'is not talking to anybody. This has been a difficult experience.' She quit Ela when, after complaining about the company's questionable practices, she was told to transfer to California. She took a job with a competitor, but was dropped when the industry learned she had filed the lawsuit. 'She was blackballed,' May said. 'She's basically gone from $100,000 a year to minimum wage.'</blockquote> One would hardly have expected Ms Lee to have kept her job at Ela once she reported what was going on there. However, it was worse than that. Being known as a whistle-blower may make one radioactive enough to preclude any employment in a segment of health care that is at all related to the one in which one blew the whistle. The Herald article did note that Ms Lee stands to get part of the settlement. Yet this will come at least four years after the case began, as her lawyer said: <blockquote>the 'money will allow her basically to start over.' If she had kept her mouth shut, 'she would have made far more money in her lifetime than she will get as a percentage of the settlement.'</blockquote> As we just <a href="http://hcrenewal.blogspot.com/2010/11/blogscan-corporate-characteristics-that.html">noted</a>, in health care, the incentives are strongly tilted to favor financial productivity , or "making the numbers," and to disfavor ethical conduct, especially when it requires dissenting with top managers. If we really want accessible, affordable, high-quality health care, we will have to get rid of these sorts of perverse incentives. So the march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> continues.  As in many previous cases, note that the monetary cost of the above settlement, while it seems large to normal humans, would be just slightly more than round-up error for a large multi-national company.  As I have said repeatedly,  penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.

Ela Medical (Now the Sorin Group) Settles

And we return to the parade of legal settlements , which is still marching along. The next entrant to the parade was described by the Miam...

Đọc thêm »

On AMIA's Jan. 2009 Letter to The Office of President Elect Barack Obama: Something is Missing

<div style="text-align: center;">------------------------------------------ Nov. 11, 2010 note: see the new post on an AMIA Board Position Paper released this day (Nov. 11) entitled "Report of an AMIA special task force on challenges in ethics, safety, best practices, and oversight regarding HIT" at <a href="http://hcrenewal.blogspot.com/2010/11/report-of-amia-special-task-force-on.html">this link</a>. ------------------------------------------ </div> I was somewhat taken aback by the appearance of the article by Karsh et al. entitled "Health information technology: fallacies and sober realities" (covered at Healthcare Renewal <a href="http://hcrenewal.blogspot.com/2010/10/jamia-health-information-technology.html">here</a>) in the Oct. 2010 Journal of the American Medical Informatics Association (<a href="http://jamia.bmj.com/">JAMIA</a>). I was taken aback since the article rains heavily on the academic memes of healthcare IT as a benign and deterministic solution to healthcare's ills, and of health IT-related adverse outcomes being mere "anecdotes." (It is ironic that my own relative recently fell victim to healthcare IT's supposed beneficence. They were harmed via health IT-related disruptions in care continuity.) My blog posting on that Karsh article brought a letter to my attention, authored by AMIA's leadership and sent on Jan. 7, 2009 to the Office of President Elect Barack Obama. The full PDF of the letter is <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/ObamaLetter_January2009.pdf">here</a>. Here are relevant excerpts about which I will make only a single comment: <blockquote>January 7, 2009 Dear Mr. President-Elect, On behalf of the more than 4,000 physicians, nurses and other members of the American Medical Informatics Association (AMIA) who use health information and communications technology (HIT) to improve the quality, efficiency and safety of healthcare, I am writing to applaud and encourage your commitment to investing in a genuine transformation of our nation’s healthcare system. Properly deployed and supported, HIT can be part of broad health care reform and, importantly in this time of economic challenge, a significant economic multiplier that will encourage the creation of new jobs and real improvements in patient care, public health and life sciences research. ... If we are to develop a national infrastructure for the use of health information to benefit individuals and our entire population, the United States must – <ul><li>Develop mechanisms, including grants, loans and financial incentives for physicians, nurses, and healthcare organizations to deploy, implement successfully, and widely disseminate electronic health records (EHRs);</li><li>Develop and support local, regional and national health information exchange to ensure that accurate, secure health information is available whenever and wherever needed by those authorized to access such information;</li><li>Develop and support programs to address the need for a prepared health information technology workforce, with training and continuing education of physicians, nurses, health information managers and others;</li><li>Develop more effective ways to address the health needs of underserved populations, including providing equitable access to health information and communications technology;</li><li>Develop and assure compliance with standards, policies and practices that support effective sharing of health information, while fostering security, confidentiality and transparency, and building trust with the public;</li><li>Develop and maintain health terminologies and classifications that will allow health data to be not only useful, but uniform and consistent, and enable interoperability across myriad information systems;</li><li>Develop proper means to link information related to individuals in order to ensure the validity and integrity of health data used to inform care and research;</li><li>Develop proper means for authentication of the identity of individuals and caregivers and any others authorized to access identifiable health information;</li><li>Support the development of decision-making and other knowledge-management tools in order to permit the delivery of individualized, evidence-based care;</li><li>Develop and support secure web-portals to link individuals to their caregivers and ensure genuinely patient-centered care;</li><li>Develop appropriate and secure linkages between EHRs and the public health system to ensure safety from bioterrorism, rapidly spreading infectious diseases, and other threats;</li><li>And provide appropriate funding for the development of a robust national health information strategy, with support for continued HIT and informatics research and innovation.</li></ul>During the Presidential campaign, you demonstrated your boldness and vision by pledging to allocate $10 billion annually for five years to promote the adoption and use of health IT. Such an investment will pay dividends not only in improving health care, but in creating jobs...</blockquote> These are all laudable and interesting goals for an experimental technology, as tacitly admitted in the above goals (although it would have been more ethical, I believe, to have waited for the technology to have "needed" fewer of these goals as a result of research in constrained settings before boldly promoting expensive national rollouts on live patients). In any case, however, something very, very important is missing... There is no mention of healthcare IT safety. At $10 billion annually, surely the AMIA leadership could have specifically and explicitly recommended that some fraction, even a token % (even a small percentage of $10,000,000,000 is not chicken feed), should have been dedicated to help ensure the disruptions and unintended consequences caused by any new/developing/expanding information and communications technology (ICT) didn't kill or maim patients. Perhaps through the publication of the aforementioned Karsh study on HIT fallacies and sober realities, the AMIA leadership is subconsciously seeking absolution. -- SS Addendum: my own Dec. 7, 2008 "<a href="http://hcrenewal.blogspot.com/2008/12/open-letter-to-president-barack-obama.html">Open letter to President Obama</a>" on healthcare IT took a decidedly different approach, namely, I attempted to make the President-elect aware of numerous HIT "fallacies and sober realities": <blockquote>... our government has been seduced by the promise, the potential, the Siren Song if you will of HIT, and shielded from information on its true challenges, difficulties, downsides and failures. An "irrational exuberance", a Syndrome of Inappropriate and Uninformed Overconfidence in Computers prevails in healthcare. ... [If HIT itself is not reformed,] billions of precious healthcare dollars that might be spent on “IT misadventure” in a time of unprecedented national financial challenges and hardships might simply be better spent on delivery of needed medical services, health insurance and other "safety net" interventions. ... healthcare’s defects cannot be effectively changed or reformed via healthcare IT, if that healthcare IT itself is defective.</blockquote> AMIA leadership and I also differed on the issue of health IT regulation, as I posted in July 2009 at "<a href="http://hcrenewal.blogspot.com/2009/07/health-care-information-technology.html">JAMA letter: Health Care Information Technology, Hospital Responsibilities, and Joint Commission Standards</a>." On that issue, JAMA published my commentary, not theirs. -- SS

On AMIA's Jan. 2009 Letter to The Office of President Elect Barack Obama: Something is Missing

------------------------------------------ Nov. 11, 2010 note: see the new post on an AMIA Board Position Paper released this day (Nov. 11)...

Đọc thêm »

There You Go Again: Richard Epstein Says "Conflict-of-Interest Rules Thwart Medical Progress"

Richard Epstein, a professor at the New York University and University of Chicago law schools, just authored a report on the perils of conflict of interest rules.  <a href="http://blogs.forbes.com/richardepstein/2010/10/26/causing-more-harm-than-good-conflict-of-interest-rules-thwart-medical-progress/">In his blog</a>, "The Libertarian," he summarized his beliefs that strict conflict of interest (COI) rules and restrictions on pharmaceutical marketing "spell lower rates of innovation and slower dissemination of new products."  Prof Epstein is extremely prominent.  The Manhattan Institute, of which he is a fellow, <a href="http://www.manhattan-institute.org/html/epstein.htm">claimed</a>, "Professor Epstein's influence is profound: he is one of the three most cited law professors in the United States and the most cited professor writing largely in private law." Thus, it is disturbing that it appears that his objections are based on a series of logical fallacies.  (Note that we critiqued a defense of certain conflicts of interest he made in 2007<a href="http://hcrenewal.blogspot.com/2007/03/drug-crazy.html"> here</a> on similar grounds.) Ad Hominem: Enemies of Capitalism Prof Epstein implied that the people who advocate strong conflict of interest rules are enemies of capitalism and free markets.  For example, he wrote, "most of the modern critics of the drug and medical device industries start with the assumption that the profit-motive alone is sufficient to distort the behavior of all scientists and researchers."  Later, "the people who line up most strongly against drug and device companies often treat the phrase 'market forces' as though it embodies the worst things in life."  How he was able to read the minds of those who disagree with him is unclear.  Attacking proponents of strict COI regulation as anti-capitalists (and by implication, socialists or communists) appears to be an <a href="http://www.nizkor.org/features/fallacies/ad-hominem.html">ad hominem</a> fallacy. Burden of Proof: Ignoring Evidence of Harms of COI, Asserting Evidence of Benefits Prof Epstein argued that COIs rarely if ever leads to bad effects: "the number of instances of serious abuses of power in the drug and device industry, like in medical research itself, is small, relative to the huge number of interactions that have taken place." Thus, he ignored evidence that commercially funded research may be biased in favor of the sponsors' products.(1-4) On the other hand, he implied that financial relationships  among physicians and researchers and commercial firms that sell health care products and services are necessary for "rapid development and deployment of new pharmaceuticals and medical devices," and for "innovation" in the field, but provided no evidence for these points.  Thus, while ignoring evidence of the possible harms of COIs, he failed to provide evidence for their benefits.  By placing the burden of proof on those who disagree with him, while avoiding it himself, he invoked the <a href="http://www.nizkor.org/features/fallacies/burden-of-proof.html">burden of proof (or appeal to ignorance) fallacy</a>. Appeal to Common Practice: Scientists Wearing Multiple Hats Prof Epstein asserted that strict COI rules would disturb what is now common practice.  They would threaten how "the best research scientists in universities ... wear multiple hats.  In addition to researching within the academy, they also offer consulting services to drug companies, or start businesses of  their own."  Academics may currently behave in this way, but that does not mean this behavior is optimal in any sense.  Thus, Epstein employed the fallacy of the <a href="http://www.nizkor.org/features/fallacies/appeal-to-common-practice.html">appeal to common practice</a>.  Slippery Slope: Silencing Communication and Collaboration Prof Epstein asserted that strict rules on COI would "prohibit the collaborative efforts that have long characterized standard practices [in research]."  Specifically, he asserted the rules could stipulate that "no scientist who sits on any Food and Drug Administration (“FDA”) review committee, or any hospital conflict of interest committee, should be allowed to have connections with the pharmaceutical industry."  Also, "collaborations between government and industry scientists on research projects of common interests should either be totally eliminated or heavily regulated."  Finally, he asserted, "free interchange of information within and across firm boundaries is best calculated to allow the sharing and coordination of vital information," but "strong conflict of interest regulation poses real threats to these dynamic interactions." Yet rules about conflicts of interest generally refer to those generated by financial relationships, most often payments by commercial firms to academics, researchers or physicians.  Payments are not necessary for collaboration.  Researchers can communicate, share information, even work together without one party paying the other.  Warning of such dire consequences of regulations that have nothing directly to do with communication or collaboration amount to the <a href="http://www.nizkor.org/features/fallacies/slippery-slope.html">slippery slope fallacy</a>. Appeal to Authority: the "Most Gifted Members of the Academy" Prof Epstein noted above that it was the best researchers who consult for commercial firms or start their own firms.  Later, he stated, "the ablest scientists often have the most extensive outside practices."  In complaining about rules that limit the pay of faculty members for services on boards of directors of for-profit health care companies, he asked, "why crimp the behavior of the most gifted members of the academy who can also make major contributions to industry?"  Thus he seemed to agree with the arguments made by representatives of pharmaceutical and device companies that the doctors who they pay to speak, consult, or do research are the best and the brightest.  However, there is considerable evidence (e.g., see posts <a href="http://hcrenewal.blogspot.com/2010/10/not-best-and-brightest-drug-marketers.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/06/key-opinion-leaders-were-sales-people.html">here</a>), that such "key opinion leaders" or "thought leaders" are chosen because of their sympathy to the companies and their products, and their malleability.  In addition, there is evidence that medical schools now put more emphasis on ability to attract external funding than any other faculty characteristic in decisions about payment, promotion, and retention (see post<a href="http://hcrenewal.blogspot.com/2007/04/medical-schools-to-faculty-show-me.html"> here</a>).  Prof Epstein's invocation of the need to honor the best and the brightest appears to be a variant on the <a href="http://www.nizkor.org/features/fallacies/appeal-to-authority.html">appeal to authority fallacy</a>.  Summary So here we have another example, by " one of the nation's most prolific legal thinkers, (<a href="http://www.manhattan-institute.org/html/epstein.htm">according to the Manhattan Institute</a>) of a defense of the prevalent conflicts of interest that affect academic physicians and clinical researchers.  Like many previous such defenses, it seemed to be mainly based on logical fallacies.  Also, like many previous such defenses, it was made by someone with a history of his own financial relationships with health care corporations.  To his credit, Prof Epstein did disclose, "over the years, I have worked extensively with various groups in the pharmaceutical industry, but have done no such work in the past few years."  On the other hand, he did not disclose his previous relationships with eSapience, a company which once claimed it "shapes the debate on issues that intersect law, economics, and policy."  (See post <a href="http://hcrenewal.blogspot.com/2007/04/defending-conflicts-of-interest-and-how.html">here</a>.) The currently prevalent relationships with health care corporations among academic physicians, researchers, and other decision makers and influencers in health care have been lucrative for them.  I have yet to see a coherent, logical argument that these relationships are good for patients, medical education, biomedical or clinical science, or public health made by anyone who does not have such relationships. By the way, Prof Epstein also complained about overly rigorous regulation of pharmaceutical marketing in the same blog post, but since this really seems to be a distinct topic, I will not discuss his arguments here.  References 1.  Bekelman JE et al. Scope and impact of financial conflicts of interest in biomedical research: a systematic review.  JAMA 2003; 289: 454-465.  Link <a href="http://jama.ama-assn.org/cgi/content/full/289/4/454">here</a>. 2.  Lexchin J et al.  Pharmaceutical industry sponsorship and research outcome and quality: systematic review.  Brit Med J 2003; 326:  1167.  Link <a href="http://www.bmj.com/content/326/7400/1167.abstract">here</a>. 3.  Jorgenson AW et al. Cochrane reviews compared with industry supported meta-analyses and other meta-analyses of the same drugs: systematic review. Brit Med J 2006; 333: 782.  Link <a href="http://www.bmj.com/content/333/7572/782.abstract">here</a>. 4.  McGauran N et al. Reporting bias in medical research - a narrative review.  Trials 2010; 11: 37.  Link <a href="http://www.ncbi.nlm.nih.gov/pubmed/20388211">here</a>.

There You Go Again: Richard Epstein Says "Conflict-of-Interest Rules Thwart Medical Progress"

Richard Epstein, a professor at the New York University and University of Chicago law schools, just authored a report on the perils of confl...

Đọc thêm »

BLOGSCAN: Corporate Characteristics that Lead to Fraud

BLOGSCAN: Corporate Characteristics that Lead to Fraud

Kurt Eichenwald on the corporate characteristics that lead to fraud: 1) huge positive incentives for achieving financial targets, huge negat...

Đọc thêm »

A Great Investment Opportunity? - Biotechnology Company Run by an Ex-Convict

A sad commentary on the current morality of the health care "business," as <a href="http://www.nytimes.com/2010/11/01/business/01waksal.html">provided </a>by the New York Times. Sam Waksal is back in the biotechnology business: <blockquote>Mr. Waksal says his new venture, Kadmon Pharmaceuticals, will be 'a fully integrated biopharmaceutical company from the get-go,' replete with everything, including its own research and products on the market or in clinical trials that it acquires from others. 'You’ll see a company that next year will be doing significant revenues in a growth area, with earnings, probably five Phase 3 programs and a couple of Phase 2 products,' Mr. Waksal said Sunday in a telephone interview. Phase 3 and Phase 2 are the late and middle stages, respectively, of clinical trials. Several of Mr. Waksal’s former colleagues from ImClone have joined him at Kadmon, a name from kabbalah, the Jewish mystical movement. He even looked into leasing the Lower Manhattan headquarters ImClone is vacating. Kadmon, which will focus on cancer, infections and autoimmune diseases, has started to make deals. On Monday it is expected to announce it has licensed an experimental hepatitis C drug from Valeant Pharmaceuticals International, a person close to the transaction said. That follows the disclosure last week that it had acquired Three Rivers Pharmaceuticals, a Pennsylvania company specializing in hepatitis drugs. Kadmon circulated a private placement memorandum in February to raise $50 million to $175 million. As of July, it had raised $10.8 million from 26 investors, a filing with the Securities and Exchange Commission said. But David Pitts, a spokesman for Kadmon, said that other debt and equity offerings had raised more than $200 million, with the biggest investor being SBI Holdings of Japan. </blockquote> Is there a catch? It might be Mr Waksal's record, criminal record. Mr Waksal's previous company was ImClone: <blockquote>That started to come undone in December 2001, when Mr. Waksal got word that the Food and Drug Administration was not going to approve Erbitux. Before the company announced the news, Mr. Waksal alerted relatives to sell their ImClone stock and tried to sell some of his. Martha Stewart sold her ImClone shares and was given a five-month prison sentence and five months of home confinement for lying to federal investigators about it. Mr. Waksal pleaded guilty to securities fraud, bank fraud, perjury, obstruction of justice and conspiracy. He is prohibited by a settlement with the S.E.C. from serving as an officer or director in a publicly traded company. </blockquote> Presumably, Kadmon is not publicly traded, so the SEC ban does not apply to his leadership of that company. Yet despite the ban and his criminal record, investors seem to be ready to throw money at him.  Maybe it has more to do with emotion than reason, much less morality, <blockquote>One investor in Kadmon, who also sits on its board, said Mr. Waksal’s energy and his acumen in spotting promising drugs far outweigh his past problems. 'He is irrepressible,' said this investor, who spoke on the condition that she not be named because her company has a policy against being quoted in the media. 'I don’t think what happened to Sam in the past is going to have a negative effect on my investment in this business.'  [Being convicted of 'securities fraud, bank fraud, perjury, obstruction of justice, conspiracy' is a good background for a company CEO? - Ed]</blockquote> Furthermore, <blockquote>prospective investors say his trademark exuberance and penchant for hyperbole remains. 'He hadn’t changed,' said a prospective investor who met with Mr. Waksal and spoke on the condition of anonymity to retain relations with him. 'He was spinning big stories about big money, big deals' Another prospective investor said Mr. Waksal had told him that Carl C. Icahn, the billionaire who is a friend of Mr. Waksal and had invested in ImClone, had committed $30 million to Kadmon. Marc Weitzen, a lawyer for the investor, said Mr. Icahn had evaluated Kadmon but 'decided to pass.'  [It sounds like Mr Waksal has not developed any new affinity for the truth - Ed.] The private placement memorandum circulated in February said Kadmon had 'a simple yet revolutionary plan for creating the pre-eminent 21st century biopharmaceutical company.' </blockquote>To make it even more explicit: <blockquote>Mr. Waksal, who earned a doctorate in immunology, is charming to the point of being seductive. He was a fixture in New York social circles, befriending celebrities and dating many women, including Alexis Stewart, daughter of his friend Martha Stewart. He lived in a spacious SoHo loft with millions of dollars in art, where he hosted extravagant parties and intellectual salons attended by leading lights in literature, art and science. </blockquote> In my humble opinion, an investor who throws money at an ex-con, apparently because he seems exuberant, irrepressible, even seductive, needs a brain transplant.  (But maybe some investors should read Snakes in Suits, see post<a href="http://hcrenewal.blogspot.com/2006/06/snakes-in-suits-book.html"> here</a>.) But this blog is not about giving advice to investors. If Mr Waksal invested in basically harmless products that had nothing to do with patients' health and safety, the foolishness of investment decisions about his company would have nothing to do with me. However, Mr Waksal is proposing to develop drugs to be given to patients: <blockquote>In its first big deal, Kadmon announced last Monday that it had acquired privately held Three Rivers for more than $100 million. Three Rivers, whose main products are drugs for hepatitis C, is meant to be the commercial base of Kadmon, its revenues helping to defray the cost of developing new drugs. The deal, an investor familiar with the structure said, is highly leveraged, to the extent that Three Rivers’ earnings might not be sufficient to cover the debt. But Mr. Waksal is betting that sales will soar because new pills being developed by other companies will make treatment more effective, enticing more people with hepatitis C to be treated. 'The hep C market is going to undergo a real sea change next year,' Mr. Waksal said. Three Rivers has a proprietary form of the drug ribavirin that requires two pills a day, instead of the standard six to eight. Even with new drugs coming, ribavirin will remain a mainstay of treatment. In fact, Mr. Waksal is increasing that bet. On Monday, Kadmon is expected to announce that it has obtained exclusive worldwide rights to taribavirin, a form of ribavirin that may have fewer side effects. Kadmon is paying $5 million initially, with other payments possible later, to Valeant Pharmaceuticals, which has been testing the drug in clinical trials, according to the person close the transaction. Valeant will pay $7.5 million for rights to sell Kadmon’s ribavirin in Eastern Europe. Kadmon has bought a tiny company started by Princeton professors that has a way to measure cell metabolism. Influencing a cell’s use of nutrients is emerging as a novel way to treat cancer and infectious diseases. </blockquote> So, we are not talking about merely foolish investment decisions, but amoral ones. The amorality of this brave new business world becomes relevant. <blockquote>For many investors, 'there are few judgments beyond whether you made me money,' said Samuel D. Isaly, managing partner at OrbiMed Advisors, a big investor in biotech companies that was not asked to invest in Kadmon. 'Sam Waksal made a lot of people a lot of money with ImClone.' </blockquote> There, in a nutshell seems to be the problem with running health care organizations not just in a business-like manner, but as businesses, businesses in a completely laissez faire environment, businesses in a new world run by new robber barons. Would you trust a company run by an ex-convict to product safe, effective, and unadulterated drugs? (After all, some very respected companies run by people who are certainly not ex-cons have proven to be unable to keep all of their products pure and <a href="http://hcrenewal.blogspot.com/search/label/adulterated%20drugs">unadulterated</a>.) This case vividly illustrates the need for assuring that the leaders of all health care organizations, including but not limited to pharmaceutical and biotechnology companies, have some knowledge of the health care context, some sympathy for the values of health care professionals, including putting patients' health and welfare first, and are externally accountable. But at a minimum, health care organizations should not be run by former felons. However, in our extremely laissez faire environment, in a country now increasingly dominated by new robber barons, ex-convicts can run biotechnology companies.

A Great Investment Opportunity? - Biotechnology Company Run by an Ex-Convict

A sad commentary on the current morality of the health care "business," as provided by the New York Times. Sam Waksal is back in t...

Đọc thêm »