"I'm Not Here to Sell Drugs" - Then Why Use Company Provided "Correct" Slides?

In October, 2010, we discussed a series of reports by Pro Publica and multiple other respected news organizations about payments by seven pharmaceutical companies to thousands of doctors.  Industry often claims that they only pay the best and the brightest physicians and academics to provide education relevant to their products.  However, the ProPublica et al report suggested that they mainly recruited physicians who already showed their favor to their products by prescribing them often, but soothed their consciences by dubbing them "thought leaders" or "key opinion leaders."  While some of the physicians were well-known academics, others had notably blemished records. 

Since then, news media around the US have looked into interactions among local physicians and academic medical institutions and the seven pharmaceutical companies.  In November, 2010, here we discussed cases that suggested that pharmaceutical companies like physician speakers because they are more "believable" than pharmaceutical representatives, and choose physicians who already are prolific prescribers of the drug to be promoted, and that suggested that some physicians realized that speaking for pharmaceutical companies influenced their own prescribing.

Since then, more investigations of local physicians' interactions with pharmaceutical companies have appeared that reinforced contrasts between rationalizations that physicians and drug companies use to support continued payments for "drug talks," and what these talks are really about.

"Leaders in Their Field" vs Sanctions and Crimes

 Many pharmaceutical (and other health care corporations) have repeated the mantra that the physicians they hire to give talks are the best and the brightest.  The physicians who give the talks sometimes get to believe this.  For example, a ProPublica follow-up report[1] on discrepancies between data the pharmaceutical companies put on the web and gave to state regulators noted:

Pfizer, for example, told the state it paid Dr. Randy Schapiro $1,770 last year. But on the firm’s website, it reported spending $43,827 on him in the second half of 2009 alone.

It then quoted Dr Schapiro:

Schapiro said the doctors paid by pharmaceutical companies are 'leaders in their fields,' and patients should want to see their physician among them. 'If their doctor is not on the list,' he said, 'maybe they should look for a different doctor.'

On the other hand, several of the local news articles focused on physicians who were paid drug company speakers despite having chequered backgrounds, shall we say. In the Elmira Star Gazette[2]:

Tulio Ortega, a Rochester psychiatrist who made $144,548 from Eli Lilly and AstraZeneca for speaking to groups of peers during the last two years - was put of [sic] probation for two years in 2008 and ordered to pay a $7,500 fine after being sanctioned for negligence and incompetence.

Also,

Lilly also paid Yonkers physician Ali Sherzoy $4,334 in the first two quarter of this year, even though he had his license suspended in New York and New Jersey earlier this year after pleading guilty to a count of criminal sexual contact in 2008.

Sherzoy told ProPublica the incident involted his family's nanny and had nothing to do with his ability to practice medicine.

Other New York doctors were sanctioned for incidents ranging from deficiencies in handling controlled substances to being convicted of tax evasion.

Another article by the same author[3] noted two more cases:

In 1991, Johnson City doctor Louis Mateya was charged with professional misconduct after a 22-year-old woman accused him of unzipping his pants and fondling himself during an examination.

Mateya admitted guilt to the charge. The State Board for Professional Medical Conduct suspended his license for two months, followed by a 58-month probationary period, during which he was monitored by a psychiatrist and a health professional selected by the board.

During the last nine months of 2009, GlaxoSmithKline paid Mateya, an internist at United Health Services, $1,750 to speak on behalf of Lovaza, Glaxo's prescription omega 3 fish oil, according to an e-mail from a United Health Services spokeswoman.

Also,

A second Southern Tier physician, Robert Douenias, of Corning, was also paid by Glaxo: $20,000 during the same time frame to deliver speeches, even though he received sanctions in 1992.

According to the Office for Professional Medical Conduct (OPMC) records, Douenias lied about a previous criminal conviction on his application for a New York medical license. He received a censure and reprimand from the OPMC, was ordered to perform 200 hours of public service and was placed on probation for two years. Douenias said on his application he had never been convicted of a crime in any state or country, even though he had a previous conviction, according to OPMC records.

Note that the original ProPublica reporting from their database emphasized cases of physicians paid to speak by pharmaceutical companies who also had been sanctioned by medical boards or the criminal justice system (see post here).

Although drug marketers like to tell physicians they are selected as "thought leaders" because of their brilliance, it appears that the selection of such "key opinion leaders" is not necessarily based on sterling character.

"I'm Not There to Sell a Drug," But Then Why Use the Company's Slides?

A number of the reports featured physicians who asserted their independence, at least from marketing goals. 

For example, as reported by the Duluth (MN) News Tribune[4],

A Duluth psychiatrist has received more than $525,000 since 2002 in payments from pharmaceutical companies, far more than any other Northland doctor, an analysis by the News Tribune shows.

Dr. Tracy Tomac of St. Luke’s hospital was paid by the companies to give presentations on health and drug issues.

Furthermore,

'I’m there as an educator and resource,' she said. 'I’m not in business to do a sales pitch. I’m not a salesperson.'

Also,

In 2007, [Dr] Tomac said her presentations included content that was screened and approved by the FDA,....

However, other reporting suggested that content "screened and approved by the FDA" was content provided by the pharmaceutical companies.

For example, The Tennessean noted[5]:

Dr. Jan Brandes heads the Nashville Neuroscience Group, a clinic that's now part of Nashville-based Saint Thomas Health Services. She made $111,150 in outside income over the past two years, largely in speaker fees paid by drug company GlaxoSmithKline, which markets a wide array of brand-name drugs, literally from A to Z.

Dr Brandes also asserted,

'The real point is I'm not there to sell a drug,' Brandes said. 'I'm there to interpret trial results, talk about disease states and help physicians understand where this research might fit in the context of their practice.'

However,

Most drug companies now require physicians to use the company's slides and presentations if they pay them to speak at an event. The industry says that is to ensure that all U.S. Food and Drug Administration rules are met and that physicians don't wander off into discussing uses for a particular product that haven't been approved by regulators.

Also, an article in the Alexandria (VA) Gazette Packet[6] noted:

Whistleblower lawsuits filed in recent years have accused firms of using doctors to push pills for unapproved uses during dinnertime talks, prompting at least 10 firms to settle cases for nearly $7 billion in the last three years. Since that time, pharmaceutical companies have tightened control over what happens during presentations given on their dime. Last year, for example, GlaxoSmithKline instituted a new policy prohibiting doctors from using their own slides during presentations. Starting in 2010, all doctors giving speeches sponsored by GlaxoSmithKline must use slides presented by the pharmaceutical company in the order specified.

'We want to make sure that everything is correct,' said Mary Anne Rhyne, a spokeswoman for GlaxoSmithKline. 'The best way to do that is to have our team prepare the slide.'

Note that Dr Brandes above was paid mainly by GlaxoSmithKline, who presumably also provided all her slides and made sure that everything she said was "correct," at least in terms of what GlaxoSmithKline thought was correct.

And one more example per MyFoxAtlanta[7]:

Some of Georgia's highest paid physicians? .... and Roswell psychiatrist Dr. Michael Banov: over $68,000, also from Lilly.

Dr Banov asserted:

We don't sell medications. We simply educate physicians about data, and they make their own mind up.

However,

Banov says, the drug company - not him - creates the materials used in his speeches, and he says there's a reason for that.

'We are only able to present the data. We're not able to present our personal opinions. Our personal preferences, how we use the medication off label. any of that. So we're held to a very tight standard by the FDA,' said Banov.

Drug companies may say they make their paid physician speakers use slides provided by the company to prevent them from talking about "off-label" uses.  However, there is no reason for a physician-educator not to talk about "off-label" uses, and physicians can prescribe any legal drug for whatever purpose they see fit, whether or not the drug is on or "off label." 

But drug companies are prohibited by law from promoting off-label uses.  Requiring physicians to use drug companies' slides and preventing them from talking about "off-label" uses demonstrates that the physicians are functioning as marketers, not educators. 

Summary

As local reporters look into more cases, it becomes increasingly clear that up to now, pharmaceutical companies have been none too fussy about which physicians they pay to speak about their products. It is self-serving, but inaccurate for both sets of parties to assert that the companies choose only the "best and the brightest." 

Furthermore, it has now become glaringly obvious that the purpose of "drug talks" is, well, to sell drugs.  Some physicians paid by drug companies to speak may bluster about their independence, but if they are using company provided slides, who can deny they are influenced  by the company.  Furthermore, when companies insist not merely on providing slides, but on ensuring that "everything is correct," then it is clear that it is the companies' talks that the physicians are giving.  Physicians giving company talks cannot be speaking independently, and hence must be regarded as company sales personnel, whose disguises as independent doctors or medical academics are now in tatters.

Doctors who still choose to go to "drug talks" should have no illusions that they are being exposed to anything other than marketing.  Thus, I urge my colleagues to forgo the nice meals and the company prepared "correct" slides, and spend the time trying to more critically assess the clinical evidence. 

References


1.  Ornstein C, Weber T. In Minnesota, drug company reports of payments to doctors arrive riddled with mistakes.  ProPublica, Dec 10, 2010.  Link here.
2. Hunter J. Rochester psychiatrist, sanctioned for incompetence, made $144K from drug companies. Elmira Star-Gazette, Dec 4, 2010.
3. Hunter J. Despite sanctions, physicians hired as drug company pitchmen. PressConnects.com, Dec 4, 2010. Link here.
4. Stahl B. Duluth doctor denies payments from drug companies sway decisions.  Duluth News Tribune, Dec 20, 2010.  Link here.
5. Ward G. They say they prescribe based on patients, not Big Pharma. Tennessean, Dec 19, 2010. Link here.
6. Pope ML. Conflict of interest? - Alexandria doctors receive thousands of dollars from Big Pharma.  Alexandia Gazette Packet, Jan 13, 2010.  Link here.
7. Galvin B. Health watch: doctors and drug companies. MyFoxAtlanta, Dec 29, 2010. Link here.

"I'm Not Here to Sell Drugs" - Then Why Use Company Provided "Correct" Slides?

In October, 2010, we discussed a series of reports by Pro Publica and multiple other respected news organizations about payments by seven pharmaceutical companies to thousands of doctors.  Industry often claims that they only pay the best and the brightest physicians and academics to provide education relevant to their products.  However, the ProPublica et al report suggested that they mainly recruited physicians who already showed their favor to their products by prescribing them often, but soothed their consciences by dubbing them "thought leaders" or "key opinion leaders."  While some of the physicians were well-known academics, others had notably blemished records. 

Since then, news media around the US have looked into interactions among local physicians and academic medical institutions and the seven pharmaceutical companies.  In November, 2010, here we discussed cases that suggested that pharmaceutical companies like physician speakers because they are more "believable" than pharmaceutical representatives, and choose physicians who already are prolific prescribers of the drug to be promoted, and that suggested that some physicians realized that speaking for pharmaceutical companies influenced their own prescribing.

Since then, more investigations of local physicians' interactions with pharmaceutical companies have appeared that reinforced contrasts between rationalizations that physicians and drug companies use to support continued payments for "drug talks," and what these talks are really about.

"Leaders in Their Field" vs Sanctions and Crimes

 Many pharmaceutical (and other health care corporations) have repeated the mantra that the physicians they hire to give talks are the best and the brightest.  The physicians who give the talks sometimes get to believe this.  For example, a ProPublica follow-up report[1] on discrepancies between data the pharmaceutical companies put on the web and gave to state regulators noted:

Pfizer, for example, told the state it paid Dr. Randy Schapiro $1,770 last year. But on the firm’s website, it reported spending $43,827 on him in the second half of 2009 alone.

It then quoted Dr Schapiro:

Schapiro said the doctors paid by pharmaceutical companies are 'leaders in their fields,' and patients should want to see their physician among them. 'If their doctor is not on the list,' he said, 'maybe they should look for a different doctor.'

On the other hand, several of the local news articles focused on physicians who were paid drug company speakers despite having chequered backgrounds, shall we say. In the Elmira Star Gazette[2]:

Tulio Ortega, a Rochester psychiatrist who made $144,548 from Eli Lilly and AstraZeneca for speaking to groups of peers during the last two years - was put of [sic] probation for two years in 2008 and ordered to pay a $7,500 fine after being sanctioned for negligence and incompetence.

Also,

Lilly also paid Yonkers physician Ali Sherzoy $4,334 in the first two quarter of this year, even though he had his license suspended in New York and New Jersey earlier this year after pleading guilty to a count of criminal sexual contact in 2008.

Sherzoy told ProPublica the incident involted his family's nanny and had nothing to do with his ability to practice medicine.

Other New York doctors were sanctioned for incidents ranging from deficiencies in handling controlled substances to being convicted of tax evasion.

Another article by the same author[3] noted two more cases:

In 1991, Johnson City doctor Louis Mateya was charged with professional misconduct after a 22-year-old woman accused him of unzipping his pants and fondling himself during an examination.

Mateya admitted guilt to the charge. The State Board for Professional Medical Conduct suspended his license for two months, followed by a 58-month probationary period, during which he was monitored by a psychiatrist and a health professional selected by the board.

During the last nine months of 2009, GlaxoSmithKline paid Mateya, an internist at United Health Services, $1,750 to speak on behalf of Lovaza, Glaxo's prescription omega 3 fish oil, according to an e-mail from a United Health Services spokeswoman.

Also,

A second Southern Tier physician, Robert Douenias, of Corning, was also paid by Glaxo: $20,000 during the same time frame to deliver speeches, even though he received sanctions in 1992.

According to the Office for Professional Medical Conduct (OPMC) records, Douenias lied about a previous criminal conviction on his application for a New York medical license. He received a censure and reprimand from the OPMC, was ordered to perform 200 hours of public service and was placed on probation for two years. Douenias said on his application he had never been convicted of a crime in any state or country, even though he had a previous conviction, according to OPMC records.

Note that the original ProPublica reporting from their database emphasized cases of physicians paid to speak by pharmaceutical companies who also had been sanctioned by medical boards or the criminal justice system (see post here).

Although drug marketers like to tell physicians they are selected as "thought leaders" because of their brilliance, it appears that the selection of such "key opinion leaders" is not necessarily based on sterling character.

"I'm Not There to Sell a Drug," But Then Why Use the Company's Slides?

A number of the reports featured physicians who asserted their independence, at least from marketing goals. 

For example, as reported by the Duluth (MN) News Tribune[4],

A Duluth psychiatrist has received more than $525,000 since 2002 in payments from pharmaceutical companies, far more than any other Northland doctor, an analysis by the News Tribune shows.

Dr. Tracy Tomac of St. Luke’s hospital was paid by the companies to give presentations on health and drug issues.

Furthermore,

'I’m there as an educator and resource,' she said. 'I’m not in business to do a sales pitch. I’m not a salesperson.'

Also,

In 2007, [Dr] Tomac said her presentations included content that was screened and approved by the FDA,....

However, other reporting suggested that content "screened and approved by the FDA" was content provided by the pharmaceutical companies.

For example, The Tennessean noted[5]:

Dr. Jan Brandes heads the Nashville Neuroscience Group, a clinic that's now part of Nashville-based Saint Thomas Health Services. She made $111,150 in outside income over the past two years, largely in speaker fees paid by drug company GlaxoSmithKline, which markets a wide array of brand-name drugs, literally from A to Z.

Dr Brandes also asserted,

'The real point is I'm not there to sell a drug,' Brandes said. 'I'm there to interpret trial results, talk about disease states and help physicians understand where this research might fit in the context of their practice.'

However,

Most drug companies now require physicians to use the company's slides and presentations if they pay them to speak at an event. The industry says that is to ensure that all U.S. Food and Drug Administration rules are met and that physicians don't wander off into discussing uses for a particular product that haven't been approved by regulators.

Also, an article in the Alexandria (VA) Gazette Packet[6] noted:

Whistleblower lawsuits filed in recent years have accused firms of using doctors to push pills for unapproved uses during dinnertime talks, prompting at least 10 firms to settle cases for nearly $7 billion in the last three years. Since that time, pharmaceutical companies have tightened control over what happens during presentations given on their dime. Last year, for example, GlaxoSmithKline instituted a new policy prohibiting doctors from using their own slides during presentations. Starting in 2010, all doctors giving speeches sponsored by GlaxoSmithKline must use slides presented by the pharmaceutical company in the order specified.

'We want to make sure that everything is correct,' said Mary Anne Rhyne, a spokeswoman for GlaxoSmithKline. 'The best way to do that is to have our team prepare the slide.'

Note that Dr Brandes above was paid mainly by GlaxoSmithKline, who presumably also provided all her slides and made sure that everything she said was "correct," at least in terms of what GlaxoSmithKline thought was correct.

And one more example per MyFoxAtlanta[7]:

Some of Georgia's highest paid physicians? .... and Roswell psychiatrist Dr. Michael Banov: over $68,000, also from Lilly.

Dr Banov asserted:

We don't sell medications. We simply educate physicians about data, and they make their own mind up.

However,

Banov says, the drug company - not him - creates the materials used in his speeches, and he says there's a reason for that.

'We are only able to present the data. We're not able to present our personal opinions. Our personal preferences, how we use the medication off label. any of that. So we're held to a very tight standard by the FDA,' said Banov.

Drug companies may say they make their paid physician speakers use slides provided by the company to prevent them from talking about "off-label" uses.  However, there is no reason for a physician-educator not to talk about "off-label" uses, and physicians can prescribe any legal drug for whatever purpose they see fit, whether or not the drug is on or "off label." 

But drug companies are prohibited by law from promoting off-label uses.  Requiring physicians to use drug companies' slides and preventing them from talking about "off-label" uses demonstrates that the physicians are functioning as marketers, not educators. 

Summary

As local reporters look into more cases, it becomes increasingly clear that up to now, pharmaceutical companies have been none too fussy about which physicians they pay to speak about their products. It is self-serving, but inaccurate for both sets of parties to assert that the companies choose only the "best and the brightest." 

Furthermore, it has now become glaringly obvious that the purpose of "drug talks" is, well, to sell drugs.  Some physicians paid by drug companies to speak may bluster about their independence, but if they are using company provided slides, who can deny they are influenced  by the company.  Furthermore, when companies insist not merely on providing slides, but on ensuring that "everything is correct," then it is clear that it is the companies' talks that the physicians are giving.  Physicians giving company talks cannot be speaking independently, and hence must be regarded as company sales personnel, whose disguises as independent doctors or medical academics are now in tatters.

Doctors who still choose to go to "drug talks" should have no illusions that they are being exposed to anything other than marketing.  Thus, I urge my colleagues to forgo the nice meals and the company prepared "correct" slides, and spend the time trying to more critically assess the clinical evidence. 

References


1.  Ornstein C, Weber T. In Minnesota, drug company reports of payments to doctors arrive riddled with mistakes.  ProPublica, Dec 10, 2010.  Link here.
2. Hunter J. Rochester psychiatrist, sanctioned for incompetence, made $144K from drug companies. Elmira Star-Gazette, Dec 4, 2010.
3. Hunter J. Despite sanctions, physicians hired as drug company pitchmen. PressConnects.com, Dec 4, 2010. Link here.
4. Stahl B. Duluth doctor denies payments from drug companies sway decisions.  Duluth News Tribune, Dec 20, 2010.  Link here.
5. Ward G. They say they prescribe based on patients, not Big Pharma. Tennessean, Dec 19, 2010. Link here.
6. Pope ML. Conflict of interest? - Alexandria doctors receive thousands of dollars from Big Pharma.  Alexandia Gazette Packet, Jan 13, 2010.  Link here.
7. Galvin B. Health watch: doctors and drug companies. MyFoxAtlanta, Dec 29, 2010. Link here.

Eli Lilly CEO on “America’s Growing Innovation Gap”

In “America’s Growing Innovation Gap”, WSJ, July 9, 2010, Eli Lilly CEO John C. Lechleiter, Ph.D. writes that:

“…the most important elements are the seeds of innovation, which equate to talented people and their ideas.”

He then suggests these people are “highly skilled immigrants” abroad.

In my own circle of friends, I know American pharma industry cast-offs who are both brilliant and talented. One with dual MS degrees in mathematics and computer science from a major university, one a skilled bioinformaticist I've had teach my healthcare informatics students as guest lecturer, one a brilliant programmer who could be considered the grandfather of computer image manipulation, another with years of expertise in pharma knowledge discovery.

Then there's me – former Director of a Merck R&D support group and of The Merck Index - with degrees in medicine and post-doctoral specialization in biomedical informatics and information science, plus I'm an extra-class amateur radio licensee who understands complex technology at a level far beyond that of the usual pharmaceutical company worker.

Yet no donuts for us. In recent years the pharmaceutical industry won’t grant any of us the courtesy even of an interview.

However, in Mar. 2009 as I documented here, I did receive an email solicitation from Lilly that read as follows ("sic's" are mine):

“Your Help Is Requested for a Eli Lilly Career Opportunity! (sic) I am a member of the Staffing Team at Eli Lilly. I were referred to me (sic) as person who specializes in pharmaceutical based informatics. I wanted to reach out to me (sic), to see if you maybe able (sic) to recommend anyone that could qualify for the below position (sic)."

I was not exactly inspired by this solicitation, perhaps written by one of the "highly skilled immigrants" Lechleiter covets.

Nor was I inspired by the earlier solicitation I documented at my Jan. 2009 post "What, Me Worry? Lilly Fined Over Zyprexa, Should Be Fined For eRecruitment Inanity As Well?"

I suggest if Mr. Lechleiter wishes to close America’s purported "innovation gap", he spend some time away from the executive castle and perhaps review some resumes – and the job solicitations his company proffers – in his HR department.

A cause of the "innovation gap" may be leadership xenophilia, at the expense of the American born-and-raised scientists the pharma industry is so fond of discarding.

-- SS

Eli Lilly CEO on “America’s Growing Innovation Gap”

In “America’s Growing Innovation Gap”, WSJ, July 9, 2010, Eli Lilly CEO John C. Lechleiter, Ph.D. writes that:

“…the most important elements are the seeds of innovation, which equate to talented people and their ideas.”

He then suggests these people are “highly skilled immigrants” abroad.

In my own circle of friends, I know American pharma industry cast-offs who are both brilliant and talented. One with dual MS degrees in mathematics and computer science from a major university, one a skilled bioinformaticist I've had teach my healthcare informatics students as guest lecturer, one a brilliant programmer who could be considered the grandfather of computer image manipulation, another with years of expertise in pharma knowledge discovery.

Then there's me – former Director of a Merck R&D support group and of The Merck Index - with degrees in medicine and post-doctoral specialization in biomedical informatics and information science, plus I'm an extra-class amateur radio licensee who understands complex technology at a level far beyond that of the usual pharmaceutical company worker.

Yet no donuts for us. In recent years the pharmaceutical industry won’t grant any of us the courtesy even of an interview.

However, in Mar. 2009 as I documented here, I did receive an email solicitation from Lilly that read as follows ("sic's" are mine):

“Your Help Is Requested for a Eli Lilly Career Opportunity! (sic) I am a member of the Staffing Team at Eli Lilly. I were referred to me (sic) as person who specializes in pharmaceutical based informatics. I wanted to reach out to me (sic), to see if you maybe able (sic) to recommend anyone that could qualify for the below position (sic)."

I was not exactly inspired by this solicitation, perhaps written by one of the "highly skilled immigrants" Lechleiter covets.

Nor was I inspired by the earlier solicitation I documented at my Jan. 2009 post "What, Me Worry? Lilly Fined Over Zyprexa, Should Be Fined For eRecruitment Inanity As Well?"

I suggest if Mr. Lechleiter wishes to close America’s purported "innovation gap", he spend some time away from the executive castle and perhaps review some resumes – and the job solicitations his company proffers – in his HR department.

A cause of the "innovation gap" may be leadership xenophilia, at the expense of the American born-and-raised scientists the pharma industry is so fond of discarding.

-- SS

Leaders of Discredited Financial Rating Agencies as Leaders of Health Care

This is the latest in our informal series on the cross-linkages between the thinking and leadership that lead to the global financial collapse/ great recession and that current in health care.  Last month, a US Senate sub-committee held hearings on the role of the rating agencies, actually for-profit corporations that evaluated securities, including derivatives, in the collapse. 

The Fundamentally Conflicted Rating Agencies

To briefly provide some background, these agencies were hired by the firms that created these securities to evaluate them.  Because the securities were complex, they were hard for investors to evaluate.  Investors had become used to using the rating agencies' evaluations as benchmarks for the quality and riskiness of complex securities.  Many did not seem to realize that the agencies themselves were for-profit corporations, or subsidiaries thereof, which made more money the more securities they rated.  The rating agencies gave many of their highest ratings (AAA) to securities that later failed.  (See an informal video discussion by corporate governance expert Robert A G Monks here.)

Some key quotes from the news coverage follow.

Former credit rating agency officials said on Friday that the quest for market share fueled a drive for short-term profits, sacrificing credit quality in the process.

Eric Kolchinsky, who was in charge of the Moody's (MCO.N) unit that rated subprime CDOs, or collateralized debt obligations, said that people 'across the financial food chain, from the mortgage broker to the CDO banker, were compensated based on quantity rather than quality,' according to testimony prepared for a Senate panel.

'The situation was no different at the rating agencies.'

from Reuters

Former Moody’s Investors Service and Standard & Poor’s employees said they were excluded from assessing mortgage bonds if they questioned Wall Street’s conclusions and that credit-rating companies focused on protecting business at the expense of accurate grading.

Richard Michalek, a former managing director in Moody’s structured products derivatives group, told the Senate Permanent Subcommittee on Investigations at a hearing today that managers said he was 'not welcome on deals' involving certain banks.

Eric Kolchinsky, who led the Moody’s group that rated collateralized debt obligations made up of mortgage bonds, said he was berated by his boss when the company lost business after implementing more conservative ratings.

S&P wrongly concluded that its increasing profits amid an inflated U.S. housing market was based on 'superior management skill and insight,' said Frank Raiter, a former managing director at the company. In reality, regulators had made the firm part of 'an oligopoly' by requiring investors to hold assets it rated, Raiter said.

per Bloomberg

The documents show, sometimes in excruciating detail, the conflicts of interest that many claim lie at the heart of the ratings business model and the concerns of employees about what was happening inside the companies well before the crisis broke.

One employee at Standard & Poor's, the world's largest rating agency, said its handling of awkward questions in the summer of 2007 made it 'sound like the Nixon White House'.

And,

As one Moody's managing director wrote to his superiors in 2007, the company's errors, made it look 'either incompetent at credit analysis, or like we sold our soul to the devil for revenue, or a little bit of both'.

per the Financial Times

The two companies targeted by these hearings were Moodys, and Standard & Poors (a subsidiary of McGraw-Hill Inc).

Overlaps with Health Care Leadership: Moody's Corporation

Perusal of the roster of the Moody's board of directors in 2008, per that year's proxy statement, reveals the following overlaps with health care leadership, of its 8 directors.

Connie Mack - is also on the boards of EXACT Sciences Corporation (a biotechnology company), and Genzyme.  He is the chair of the H. Lee Moffitt Cancer Center.

Henry A McKinnell Jr - was chairman of the board and CEO from 2001-06 of Pfizer Inc.

Basil L Anderson - is a member of the board of directors of Becton Dickinson.

Overlaps with Health Care Leadership: McGraw-Hill Inc

Via the company's 2008 proxy statement, of 12 directors:

Sir Winfried Bischoff - is a director of Eli Lilly and Company.

Linda Koch Lorimer - is Vice President and Secretary of Yale University, and a Director of Yale-New Haven Hospital.

Kurt L Schmoke - is a Trustee of the Howard Hughes Medical Institute

Sidney Taurel - was chairman and CEO of Eli Lilly and Company.

Summary

So, in summary, the 20 board members of one for-profit "ratings agency," and of the corporation of which the other major "ratings agency" was a subsidiary, served on the boards of 2 biotechnology corporations (EXACT Sciences Corporation and Genzyme), one medical device company (Becton-Dickinson), one pharmaceutical company (Eli Lilly) , 2 major academic medical centers (Moffitt Cancer Center and Yale-New Haven), and one medical research institution (Howard Hughes).  Two were recent former CEOs and chairmen of the boards of 2 of the world's largest pharmaceutical companies (Pfizer and Eli Lilly). 

Most of these health care organizations have been involved with cases we have discussed on Health Care Renewal (see links above).

Given the serious concerns about the conflicts of interest that became the core of these corporations' business models, and their central role in the global financial collapse, one has to wonder why so many of the directors who presided over them still have such influential positions in health care organizations?

As we have pointed out, as the world economy was driven to near ruin by "masters of the universe," some of the same also became leaders of academia and academic medicine in their spare time. Maybe this made sense 10 or 20 years ago, but why does it still make sense? On the other hand, now that we understand how bad the leadership of finance really was, it is a little easier to understand why the leadership of health care has become so bad. It seems reasonable to hypothesize that some of the problems of academia, and particularly the problems of medical academia, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. The failures of the leadership and governance of finance thus suggest we need to re-examine the leadership of health care.

Leaders of Discredited Financial Rating Agencies as Leaders of Health Care

This is the latest in our informal series on the cross-linkages between the thinking and leadership that lead to the global financial collapse/ great recession and that current in health care.  Last month, a US Senate sub-committee held hearings on the role of the rating agencies, actually for-profit corporations that evaluated securities, including derivatives, in the collapse. 

The Fundamentally Conflicted Rating Agencies

To briefly provide some background, these agencies were hired by the firms that created these securities to evaluate them.  Because the securities were complex, they were hard for investors to evaluate.  Investors had become used to using the rating agencies' evaluations as benchmarks for the quality and riskiness of complex securities.  Many did not seem to realize that the agencies themselves were for-profit corporations, or subsidiaries thereof, which made more money the more securities they rated.  The rating agencies gave many of their highest ratings (AAA) to securities that later failed.  (See an informal video discussion by corporate governance expert Robert A G Monks here.)

Some key quotes from the news coverage follow.

Former credit rating agency officials said on Friday that the quest for market share fueled a drive for short-term profits, sacrificing credit quality in the process.

Eric Kolchinsky, who was in charge of the Moody's (MCO.N) unit that rated subprime CDOs, or collateralized debt obligations, said that people 'across the financial food chain, from the mortgage broker to the CDO banker, were compensated based on quantity rather than quality,' according to testimony prepared for a Senate panel.

'The situation was no different at the rating agencies.'

from Reuters

Former Moody’s Investors Service and Standard & Poor’s employees said they were excluded from assessing mortgage bonds if they questioned Wall Street’s conclusions and that credit-rating companies focused on protecting business at the expense of accurate grading.

Richard Michalek, a former managing director in Moody’s structured products derivatives group, told the Senate Permanent Subcommittee on Investigations at a hearing today that managers said he was 'not welcome on deals' involving certain banks.

Eric Kolchinsky, who led the Moody’s group that rated collateralized debt obligations made up of mortgage bonds, said he was berated by his boss when the company lost business after implementing more conservative ratings.

S&P wrongly concluded that its increasing profits amid an inflated U.S. housing market was based on 'superior management skill and insight,' said Frank Raiter, a former managing director at the company. In reality, regulators had made the firm part of 'an oligopoly' by requiring investors to hold assets it rated, Raiter said.

per Bloomberg

The documents show, sometimes in excruciating detail, the conflicts of interest that many claim lie at the heart of the ratings business model and the concerns of employees about what was happening inside the companies well before the crisis broke.

One employee at Standard & Poor's, the world's largest rating agency, said its handling of awkward questions in the summer of 2007 made it 'sound like the Nixon White House'.

And,

As one Moody's managing director wrote to his superiors in 2007, the company's errors, made it look 'either incompetent at credit analysis, or like we sold our soul to the devil for revenue, or a little bit of both'.

per the Financial Times

The two companies targeted by these hearings were Moodys, and Standard & Poors (a subsidiary of McGraw-Hill Inc).

Overlaps with Health Care Leadership: Moody's Corporation

Perusal of the roster of the Moody's board of directors in 2008, per that year's proxy statement, reveals the following overlaps with health care leadership, of its 8 directors.

Connie Mack - is also on the boards of EXACT Sciences Corporation (a biotechnology company), and Genzyme.  He is the chair of the H. Lee Moffitt Cancer Center.

Henry A McKinnell Jr - was chairman of the board and CEO from 2001-06 of Pfizer Inc.

Basil L Anderson - is a member of the board of directors of Becton Dickinson.

Overlaps with Health Care Leadership: McGraw-Hill Inc

Via the company's 2008 proxy statement, of 12 directors:

Sir Winfried Bischoff - is a director of Eli Lilly and Company.

Linda Koch Lorimer - is Vice President and Secretary of Yale University, and a Director of Yale-New Haven Hospital.

Kurt L Schmoke - is a Trustee of the Howard Hughes Medical Institute

Sidney Taurel - was chairman and CEO of Eli Lilly and Company.

Summary

So, in summary, the 20 board members of one for-profit "ratings agency," and of the corporation of which the other major "ratings agency" was a subsidiary, served on the boards of 2 biotechnology corporations (EXACT Sciences Corporation and Genzyme), one medical device company (Becton-Dickinson), one pharmaceutical company (Eli Lilly) , 2 major academic medical centers (Moffitt Cancer Center and Yale-New Haven), and one medical research institution (Howard Hughes).  Two were recent former CEOs and chairmen of the boards of 2 of the world's largest pharmaceutical companies (Pfizer and Eli Lilly). 

Most of these health care organizations have been involved with cases we have discussed on Health Care Renewal (see links above).

Given the serious concerns about the conflicts of interest that became the core of these corporations' business models, and their central role in the global financial collapse, one has to wonder why so many of the directors who presided over them still have such influential positions in health care organizations?

As we have pointed out, as the world economy was driven to near ruin by "masters of the universe," some of the same also became leaders of academia and academic medicine in their spare time. Maybe this made sense 10 or 20 years ago, but why does it still make sense? On the other hand, now that we understand how bad the leadership of finance really was, it is a little easier to understand why the leadership of health care has become so bad. It seems reasonable to hypothesize that some of the problems of academia, and particularly the problems of medical academia, may have been at least enabled by leadership more used to working in an increasingly amoral marketplace than to upholding the academic mission. The failures of the leadership and governance of finance thus suggest we need to re-examine the leadership of health care.

Quintiles to More Heavily Directly Invest in the Drugs Which it Evaluates - But Not to Worry, Says an Expert?

The Associated Press just reported on the latest trend in commercially sponsored clinical research, direct investment by contract research organizations (CROs) in the development of specific drugs by particular pharmaceutical or biotechnology companies. Here is the background in the article:

Pharmaceutical companies previously did all their own research and testing and submitted the results to the Food and Drug Administration for approval to put a medication on the market.

Since the 1990s or so, Big Pharma has farmed out more and more of that testing to companies like Quintiles Transnational Corp., which grew quickly to meet the demand.

Now Quintiles is branching out...

Now Durham, N.C.-based Quintiles is the world's biggest contract research organization, and more than ever, it's using its deep pockets to entwine itself with the pharmaceutical companies, fronting them cash and services for a piece of the profits once a drug is approved.

Quintiles, which was created in 1982, upped the ante last month, saying it wants to invest even more in potential drugs as pharmaceutical companies grapple with the down economy. Quintiles is hoping its new investments will produce enormous payoffs in the future,....

Quintiles' decision to become more aggressive in taking investment risks comes at a time it's betting drug makers can use the resources it can offer, both cash and services.

'They're both currency for managing risk and having skin in the game,' said Ron Wooten, a Quintiles executive vice president who heads the company's capital investment group.

Controversy over creating the drug investment unit in 2000 was key in pushing Quintiles founder Dennis Gilling and several private-equity firms to buy out shareholders for $1.75 billion and take the company private again in 2003. Wall Street analysts complained they couldn't estimate what the drug investments were worth, prompting Gilling and others to decide the company's stock was undervalued.

The private company no longer publishes its profits. It claims revenues of about $3 billion a year. That's also about what Quintiles has invested in other drug companies.

Furthermore,

Quintiles appears to be uniquely positioned to both invest in and test potential medications. None of the half-dozen major shareholder-owned contract research organizations will have a drug-investment division after Wilmington, N.C.-based Pharmaceutical Product Development Inc. spins off its unit in a few months, Coldwell said.

The payoffs for the risk of developing a drug can be huge.

In 2002, Quintiles took a chance on Eli Lilly and Co.'s antidepressant Cymbalta. Quintiles said it invested $125 million in cash, then spent another $400 million on a sales force of more than 550 after the product launch. Cymbalta is now Lilly's second-biggest drug. Quintiles said it's brought in more than $700 million so far for a stream of royalties lasting to 2012.

Japan's Eisai Co. is hoping Quintiles' money and experience helps it double the number of potential treatments it can put through testing simultaneously

The article raised a concern that "the buffer between drug makers and testers are again blurred."

But not to worry.... Here is the response from Quintiles,

Wooten, the Quintiles executive, doesn't see his company's increased interest in bringing drugs to the market affecting its testing objectivity. Instead Quintiles is the outsider turning a hard eye on which pharmaceuticals will become profitable.

'It allows you to really get to the essence of the data that you're looking at instead of what you hope it says,' he said. There isn't 'the natural bias that you would have with your own babies.'

Furthermore, the AP reporter got reassurances from a noted academic expert in the area,

The FDA preserves the integrity of testing in a landscape already pockmarked with potential conflicts of interest that include company-sponsored academic research and investigators testing drugs while owning shares in companies that own the drug, said Kenneth Getz, a senior fellow at Tufts University's Center for the Study of Drug Development.

The FDA's view is that any company with a financial stake in a potential drug will face similar scrutiny from the agency.

'It's assumed,' FDA spokeswoman Karen Riley wrote in an e-mail, 'that drug/device/biologic companies who sponsor trials of pending products have a conflict because they will gain if the product is approved.'

Besides, pharmaceutical companies have navigated the tricky territory that comes with testing, Getz said. So have the companies like Quintiles that have taken on the outsourced work, he said.

'These potential conflicts of interest are ever-present, and the real question is how do companies manage these potential conflicts effectively,' he said. 'These are massive, massive companies that have thousands of staff that are not generally aware of a conflict of interest at a corporate level. They are paid to do a quality job that meets internal and regulatory guidelines or they are not going to keep their jobs.'

Here on Health Care Renewal, we have discussed how the conflicts of interest that are now pervasive in health care can adversely affect clinical care, teaching, and research.  We have looked at how clinical research sponsors, who have a vested interest in having the results favor the products and services they sell, may manipulate the design, implementation, analysis, and dissemination of research, and when all else fails, suppress unfavorable results.  We have also looked at problems with the ethics and quality of research done by contract research organizations, who are, after all, paid by companies again with vested interests in selling particular products or services.

Given all that, one may argue that having contract research organizations invest in particular drugs or devices which they are also evaluating through clinical research may not make things much worse.  However, at the least, it seems to me that it further obfuscates conflicts of interest that may lead to biased research results, dishonoring the patients who volunteered for the trials, and biasing the information on which patients and physicians make decisions.

Finally, I should note how Quintiles new investments in specific drugs was defended in the article.  The article quoted Quintiles executive vice president Ron Wooten suggesting that Quintiles might be able to be objective in making the original decision to invest in a drug. He conveniently did not address what might happen after the investment was made, when Quintiles was performing, analyzing, and reporting clinical research on a drug or device in which it had invested.

The article also quoted Kenneth Getz, the Senior Fellow at Tufts, who seemed unconcerned about the issue.  What the article did not mention is that the Tufts Center for the Study of Drug Development, at which Mr Getz is based,

receives unrestricted grants from pharmaceutical and biotechnology firms, as well as companies that provide related services to the research-based industry (e.g., contract research, consulting, and technology firms). These grants represent approximately 40% of Tufts CSDD’s operating expenses.

per the Center's web-site. Another page on the web-site lists Mr Getz's qualifications,

Kenneth A. Getz is a senior research fellow at the Tufts CSDD. Considered an expert on the investigative site and CRO markets, R& D management, ECT solutions adoption and clinical research volunteerism,....

Mr. Getz is the founder and chairman of CISCRP ....

He holds an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University and a bachelor's degree, Phi Beta Kappa, from Brandeis University. Mr. Getz worked for over seven years in management consulting, where he assisted biopharmaceutical companies in planning and implementing drug development strategies. He is also the founder and former CEO of CenterWatch.

Note that Mr Getz seems to have no training in biomedical science, medicine, or health care.  Furthermore, CISCRP (the Center for Information and Study on Clinical Research Participation), has an advisory board (see their web-site here) that includes representatives of pharmaceutical companies (Vertex Pharmaceuticals, Biogen Idec, and Roche), and contract research organizations, (PPD Inc, and particularly, in this case, Quintiles). The vast list of the Center's "supporters" include a catalog of drug and biotechnology companies (including Abbott Vascular, Amgen, AstraZeneca, Biogen Idec, Daiichi Sankyo Pharmaceutical Development, Eli Lilly, Forest Laboratories, Genentech, Genzyme, GlaxoSmithKline, Janssen, Johnson and Johnson, Merck, Novo Nordisk, Novartis, Ortho-McNeil, Pfizer, Roche, Sankyo, Sanofi-Aventis, Serono, Shire, Takeda, and Wyeth), and contract research organizations, (including Covance, Parexel, PPDI, and notably again, Quintiles.)

So the other lesson from this bit of news is how the information the public, health care professionals, and policy makers  receive about health care policy is frequently shaped by people with horses in the race, but that such influences are rarely disclosed.  This article included an interview with a single apparently academic expert who provided reassurance that the conflicts of interest discussed in the article were not really so worrisome.  This expert, however, failed to disclose his own extensive, albeit somewhat indirect ties to a variety of corporations that might benefit from the conflicts discussed as the main topic of the article, including corporations that were directly involved in them (Quintiles and Eli Lilly).  Maybe because the reporter thought that the expert was unbiased, there was no attempt to find a contrasting opinion.

So I say again, again, again, health care professionals, policy  makers, and people in general need to be extremely skeptical of most of the apparently unbiased pronouncements made about medical and health care policy issues in the media.  It would be a small step toward a more transparent discussion if those who expressed opinions would also fully disclose in detail their relevant conflicts of interest.

Quintiles to More Heavily Directly Invest in the Drugs Which it Evaluates - But Not to Worry, Says an Expert?

The Associated Press just reported on the latest trend in commercially sponsored clinical research, direct investment by contract research organizations (CROs) in the development of specific drugs by particular pharmaceutical or biotechnology companies. Here is the background in the article:

Pharmaceutical companies previously did all their own research and testing and submitted the results to the Food and Drug Administration for approval to put a medication on the market.

Since the 1990s or so, Big Pharma has farmed out more and more of that testing to companies like Quintiles Transnational Corp., which grew quickly to meet the demand.

Now Quintiles is branching out...

Now Durham, N.C.-based Quintiles is the world's biggest contract research organization, and more than ever, it's using its deep pockets to entwine itself with the pharmaceutical companies, fronting them cash and services for a piece of the profits once a drug is approved.

Quintiles, which was created in 1982, upped the ante last month, saying it wants to invest even more in potential drugs as pharmaceutical companies grapple with the down economy. Quintiles is hoping its new investments will produce enormous payoffs in the future,....

Quintiles' decision to become more aggressive in taking investment risks comes at a time it's betting drug makers can use the resources it can offer, both cash and services.

'They're both currency for managing risk and having skin in the game,' said Ron Wooten, a Quintiles executive vice president who heads the company's capital investment group.

Controversy over creating the drug investment unit in 2000 was key in pushing Quintiles founder Dennis Gilling and several private-equity firms to buy out shareholders for $1.75 billion and take the company private again in 2003. Wall Street analysts complained they couldn't estimate what the drug investments were worth, prompting Gilling and others to decide the company's stock was undervalued.

The private company no longer publishes its profits. It claims revenues of about $3 billion a year. That's also about what Quintiles has invested in other drug companies.

Furthermore,

Quintiles appears to be uniquely positioned to both invest in and test potential medications. None of the half-dozen major shareholder-owned contract research organizations will have a drug-investment division after Wilmington, N.C.-based Pharmaceutical Product Development Inc. spins off its unit in a few months, Coldwell said.

The payoffs for the risk of developing a drug can be huge.

In 2002, Quintiles took a chance on Eli Lilly and Co.'s antidepressant Cymbalta. Quintiles said it invested $125 million in cash, then spent another $400 million on a sales force of more than 550 after the product launch. Cymbalta is now Lilly's second-biggest drug. Quintiles said it's brought in more than $700 million so far for a stream of royalties lasting to 2012.

Japan's Eisai Co. is hoping Quintiles' money and experience helps it double the number of potential treatments it can put through testing simultaneously

The article raised a concern that "the buffer between drug makers and testers are again blurred."

But not to worry.... Here is the response from Quintiles,

Wooten, the Quintiles executive, doesn't see his company's increased interest in bringing drugs to the market affecting its testing objectivity. Instead Quintiles is the outsider turning a hard eye on which pharmaceuticals will become profitable.

'It allows you to really get to the essence of the data that you're looking at instead of what you hope it says,' he said. There isn't 'the natural bias that you would have with your own babies.'

Furthermore, the AP reporter got reassurances from a noted academic expert in the area,

The FDA preserves the integrity of testing in a landscape already pockmarked with potential conflicts of interest that include company-sponsored academic research and investigators testing drugs while owning shares in companies that own the drug, said Kenneth Getz, a senior fellow at Tufts University's Center for the Study of Drug Development.

The FDA's view is that any company with a financial stake in a potential drug will face similar scrutiny from the agency.

'It's assumed,' FDA spokeswoman Karen Riley wrote in an e-mail, 'that drug/device/biologic companies who sponsor trials of pending products have a conflict because they will gain if the product is approved.'

Besides, pharmaceutical companies have navigated the tricky territory that comes with testing, Getz said. So have the companies like Quintiles that have taken on the outsourced work, he said.

'These potential conflicts of interest are ever-present, and the real question is how do companies manage these potential conflicts effectively,' he said. 'These are massive, massive companies that have thousands of staff that are not generally aware of a conflict of interest at a corporate level. They are paid to do a quality job that meets internal and regulatory guidelines or they are not going to keep their jobs.'

Here on Health Care Renewal, we have discussed how the conflicts of interest that are now pervasive in health care can adversely affect clinical care, teaching, and research.  We have looked at how clinical research sponsors, who have a vested interest in having the results favor the products and services they sell, may manipulate the design, implementation, analysis, and dissemination of research, and when all else fails, suppress unfavorable results.  We have also looked at problems with the ethics and quality of research done by contract research organizations, who are, after all, paid by companies again with vested interests in selling particular products or services.

Given all that, one may argue that having contract research organizations invest in particular drugs or devices which they are also evaluating through clinical research may not make things much worse.  However, at the least, it seems to me that it further obfuscates conflicts of interest that may lead to biased research results, dishonoring the patients who volunteered for the trials, and biasing the information on which patients and physicians make decisions.

Finally, I should note how Quintiles new investments in specific drugs was defended in the article.  The article quoted Quintiles executive vice president Ron Wooten suggesting that Quintiles might be able to be objective in making the original decision to invest in a drug. He conveniently did not address what might happen after the investment was made, when Quintiles was performing, analyzing, and reporting clinical research on a drug or device in which it had invested.

The article also quoted Kenneth Getz, the Senior Fellow at Tufts, who seemed unconcerned about the issue.  What the article did not mention is that the Tufts Center for the Study of Drug Development, at which Mr Getz is based,

receives unrestricted grants from pharmaceutical and biotechnology firms, as well as companies that provide related services to the research-based industry (e.g., contract research, consulting, and technology firms). These grants represent approximately 40% of Tufts CSDD’s operating expenses.

per the Center's web-site. Another page on the web-site lists Mr Getz's qualifications,

Kenneth A. Getz is a senior research fellow at the Tufts CSDD. Considered an expert on the investigative site and CRO markets, R& D management, ECT solutions adoption and clinical research volunteerism,....

Mr. Getz is the founder and chairman of CISCRP ....

He holds an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University and a bachelor's degree, Phi Beta Kappa, from Brandeis University. Mr. Getz worked for over seven years in management consulting, where he assisted biopharmaceutical companies in planning and implementing drug development strategies. He is also the founder and former CEO of CenterWatch.

Note that Mr Getz seems to have no training in biomedical science, medicine, or health care.  Furthermore, CISCRP (the Center for Information and Study on Clinical Research Participation), has an advisory board (see their web-site here) that includes representatives of pharmaceutical companies (Vertex Pharmaceuticals, Biogen Idec, and Roche), and contract research organizations, (PPD Inc, and particularly, in this case, Quintiles). The vast list of the Center's "supporters" include a catalog of drug and biotechnology companies (including Abbott Vascular, Amgen, AstraZeneca, Biogen Idec, Daiichi Sankyo Pharmaceutical Development, Eli Lilly, Forest Laboratories, Genentech, Genzyme, GlaxoSmithKline, Janssen, Johnson and Johnson, Merck, Novo Nordisk, Novartis, Ortho-McNeil, Pfizer, Roche, Sankyo, Sanofi-Aventis, Serono, Shire, Takeda, and Wyeth), and contract research organizations, (including Covance, Parexel, PPDI, and notably again, Quintiles.)

So the other lesson from this bit of news is how the information the public, health care professionals, and policy makers  receive about health care policy is frequently shaped by people with horses in the race, but that such influences are rarely disclosed.  This article included an interview with a single apparently academic expert who provided reassurance that the conflicts of interest discussed in the article were not really so worrisome.  This expert, however, failed to disclose his own extensive, albeit somewhat indirect ties to a variety of corporations that might benefit from the conflicts discussed as the main topic of the article, including corporations that were directly involved in them (Quintiles and Eli Lilly).  Maybe because the reporter thought that the expert was unbiased, there was no attempt to find a contrasting opinion.

So I say again, again, again, health care professionals, policy  makers, and people in general need to be extremely skeptical of most of the apparently unbiased pronouncements made about medical and health care policy issues in the media.  It would be a small step toward a more transparent discussion if those who expressed opinions would also fully disclose in detail their relevant conflicts of interest.

Pharmacy Benefit Managers as Pharmaceutical Marketers

We posted a number of times about questionable practices Eli Lilly used to market its atypical anti-psychotic drug Zyprexa (olanzapine). A post from 2007, with links backward, is here, and our most recent post is here. The company remains entangled in litigation over its marketing of this drug. That litigation has lead to the release of numerous internal documents that provide quite a view of Lilly's marketing practices. Bloomberg continued its reporting on these documents, with its latest effort here via the Boston Globe, describing yet another surprising way this drug was sold:

A unit of CVS Caremark Corp. used its access to doctors to market Eli Lilly & Co.'s Zyprexa antipsychotic while it was under contract to bargain with the drug maker on behalf of health insurers, internal Lilly files disclosed in a multibillion-dollar lawsuit by insurers show.

The subsidiary of CVS, the largest US drugstore chain, touted Zyprexa starting in 2003, according to e-mails made public by lawyers suing Lilly for overpayment. CVS's AdvancePCS, a pharmacy benefit manager, or PBM, offered to send 120,000 letters to doctors promoting the drug, Lilly's top-seller with $4.7 billion in sales last year, according to a confidential 2004 proposal. The CVS unit said it would charge $5 per letter.

AdvancePCS, acquired by Woonsocket, R.I.-based CVS in 2007, said in the documents that the direct-mail campaign was 'designed to influence key prescribers' as part of a 'tactical plan for Zyprexa.'

Furthermore,

In AdvancePCS's 2004 pitch to Lilly offering to send out letters promoting Zyprexa, Kevin Aholt, the company's assistant vice president in charge of strategic alliances, said he could target physicians based 'on the most recent AdvancePCS claims data,' according to the unsealed documents.

Aholt also said that one of the 'key issues' in the market for antipsychotic drugs was finding ways to 'accelerate the growth of new patient starts,' according to the proposal.

Also,

Steven Fuchs, an official at the PBM, asked Lilly officials in an April 2004 e-mail whether he should include information about Zyprexa's ability to calm agitated patients in the next round of letters to doctors.

'Would a discussion of that be something you would want to include?' Fuchs asked, according to the document.

Lilly marketing executive Scott Dell responded in an e-mail that officials at the drug maker had discussed asking AdvancePCS to include material highlighting 'the new bipolar maintenance indication for Zyprexa.'

AdvancePCS was not the only pharmacy benefits manager (PBM) that offered to help sell Zyprexa.

CVS rival Express Scripts Inc. also sent out Zyprexa marketing letters, according to the unsealed documents and also isn't named as a defendant in the suits.

So here we have at least two pharmacy benefit managers (PBMs) offering to help market a particular drug, for money, of course. What is the problem here?

CVS's contracts with insurers and pensions meanwhile place it in an adversarial posture with Lilly, requiring it to use its buying power as leverage in drug-price negotiations.

'The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table,' said Gerry Purcell, a former PBM executive who advises companies on their drug plans. 'These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other.'

Also,

While PBMs negotiate on behalf of insurers, most states don't designate them as agents of the benefit plans, said Robert Garis, a pharmacy professor at Creighton University in Omaha who studies the industry. As a result, they aren't legally required to act only in the best interest of their clients, he said. Maine is one of a few states that have specified PBMs as fiduciaries, or agents, he noted.

'The companies have gotten around that by adding language to their contracts that exclude them from having to meet those fiduciary duties,' Garis said.

Apparently, in this case, one PBM said it disclosed its relationship to the drug company to physicians, but it is not clear whether it was disclosed to the health care insurers and managed care organizations which paid the PBM to reduce the costs of drugs:

CVS, which isn't a defendant in the Lilly suit, said that it tells doctors when it has 'financial relationships' with drug makers and that they are free to opt out of mailings.

'To engage in a point/counterpoint in a media outlet rather than in court would not be productive,' said Lilly spokeswoman Marni Lemons.

Lemons declined to answer specific queries about the CVS or Express Scripts letters, whether Lilly paid for the practice, or other questions raised by the unsealed documents....

CVS said in its e-mailed statement that it has 'no active educational programs' related to Zyprexa.

'CVS Caremark discloses to its PBM clients that it may have financial relationships with pharmaceutical manufacturers in connection with these educational programs,' said Christine Cramer, a spokeswoman for the chain. 'CVS Caremark's PBM clients are aware of these programs and have the opportunity to opt out.'

Maria Palumbo, a spokeswoman for Express Scripts, didn't respond to eight telephone and e-mail requests seeking comment.

CVS covers 82 million people, with a market share of 12 percent, and is the largest pharmacy benefit manager, according to Atlantic Information Services. Express Scripts, which covers 55 million people, is the fifth largest. PBMs process about 75 percent of the retail prescriptions written annually in the United States, according to the insurance plans.

The insurance plans sued the drug maker in 2005, contending it used researchers, pharmacy benefit managers, advocacy groups, and public agencies to promote Zyprexa.

Whether or not the PBMs disclosed their relationships to the pharmaceutical company to everyone who might be interested, it does seem that having PBMs who are supposed to help insurers and managed care organizations control drug costs be paid by pharmaceutical companies to market drugs is yet another new species of institutional conflict of interest. Like the many other conflicts of interest, individual and institutional, we have discussed, this one appears to be mutually advantageous to the parties involved. However, it could have adverse consequences for physicians, patients, and the health care system. If the organizations that are supposed to be controlling drug costs are also promoting expensive drugs, the likely result would be excess prescription of expensive drugs to patients who may not derive benefits from the drugs outweighing their harms.

This is another reminder how much we need more sunshine shone on the multitudinous conflicts of interest affecting just about every type of actor within the current US health care system.

A Handbook for Ghost-Writing

We posted a number of times about questionable practices Eli Lilly used to market its atypical anti-psychotic drug Zyprexa (olanzapine). A post from 2007, with links backward, is here, and our most recent post is here. The company remains entangled in litigation over its marketing of this drug. That litigation has lead to the release of numerous internal documents that provide quite a view of Lilly's marketing practices. In particular, a Bloomberg news article discussed how the company used ghost-writers:

Ensuring that medical journal articles presented Zyprexa study results in a positive light was one way for Lilly to reach its sales goal, company officials said in its plan, according to the documents.

To do that, Lilly officials hired ghostwriters to prepare submissions to journals such as Progress in Neurology and Psychiatry, according to the unsealed documents.

The article then described how Lilly marketers set up a ghost-written article.

'The paper for the Progress in Neurology and Psychiatry supplement has been completed and sent to the journal for peer review,' Kerrie Mitchell, an employee of the public relations agency Cohn & Wolfe, wrote in a Feb. 23, 2001, e-mail to Michael Sale, a Lilly marketing official. The message was among the unsealed files.

'We ‘ghost’ wrote this article and then worked with author Dr. Haddad to work up the final copy,' Mitchell said in the e- mail. Eric Litchfield, a spokesman for Cohn & Wolfe, didn’t immediately return a call seeking comment.

Peter Haddad, a researcher at Greater Manchester West Mental Health NHS Foundation Trust in the U.K., was listed as the article’s lead author. Haddad didn’t respond to requests for comment.

The global Lilly team approved a draft of Haddad’s ghost- written paper in 2000, according to the unsealed documents.

Lilly marketers, rather than articles' putative authors, sometimes exerted pressure to get ghost-written articles published. For example,

Lilly officials e-mailed journal editors to complain about delays in publishing favorable Zyprexa articles, according to the unsealed documents.

In one instance, Lilly employees contacted the Journal of Clinical Epidemiology about delays of an article criticizing a previously published piece linking Zyprexa, as well as the class of atypical antipsychotics, to diabetes.

After Suraja Roychowdhury, Lilly’s senior scientific communications coordinator, wrote to the journal in November 2002, its editor, Andre Knottnerus, replied in an e-mail that it was 'a bit strange to be contacted via the Lilly product team. Dr. Buse and coauthors can contact us directly next time.'

Knottnerus was referring to the manuscript’s lead author, John Buse, a former president of the American Diabetes Association. A copy of the Nov. 22, 2002, e-mail was included in the unsealed documents.

Patrizia Cavazzoni, a Lilly staffer who co-wrote the article, e-mailed Buse on Jan. 9, 2003, seeking permission to send a separate e-mail asking to expedite publication. She also asked Buse if he would prefer 'to send it in your name?'

It isn’t clear from the e-mail chain whether the e-mail was sent by Buse or Cavazzoni.

Finally, Lilly developed a handbook for ghost-writers:

To ensure that ghostwritten Zyprexa articles met Lilly’s standards, company officials issued a guide to preparing them, according to the unsealed files.

The guide, 'Medical Press: Pre-Launch Feature Outline,' was undated. It’s unclear from the documents which teams in Lilly’s top 10 markets for the drug received it.

The primer provided a how-to for writing articles, such as instructing the author to use Zyprexa’s generic name, olanzapine, instead of its brand moniker, according to the documents. Scientists in medical research traditionally refer to a drug’s chemical name.

The guide also offered tips on how to find authors by identifying a 'key opinion leader' and providing them either an outline of the article or a finished copy. Authors could include a study investigator, an advisory board member or “Lilly-friendly” doctor, according to the documents.

A sample article laid out how a Lilly employee may find a doctor to ghostwrite a submission that would 'prepare the market' for the launch of an intramuscular injectable version of the drug. It also offered an outline for the contents of the article, beginning with background on another drug, droperidol, which had been withdrawn from several countries.

The article, with the suggested title 'Filling the Droperidol Gap,' noted that an anti-anxiety drug could be used, before going on to say, 'more advanced IM treatments may soon be available to provide a superior alternative.' The article explained that injectable Zyprexa had just received approval from the FDA, and recounted its clinical trial history.

'The anticipated forthcoming availability of atypical antipsychotics in an IM formulation could be a major step forward in the treatment of acute agitation associated with schizophrenia,' the sample article concluded.

We addressed ghost-writing frequently when we started Health Care Renewal, and have returned to the topic periodically (see these more recent links, from 2008, here and here). The most striking feature of this newest case is the use of a "ghost-writers' handbook" denoting how systematized the practice has become. With each new case, it becomes clearer how common the practice may be. Since the parties involved seem ashamed enough of the practice to try to keep it well hidden, it may be that ghost-writing is even more common than we now realize.

Nonetheless, while the practice may be common, and mutually advantageous for ghost-writers, the academics who front for them, and the marketers who hire them all, as we and others have said before, ghost-writing is dangerous to health. It deludes physicians and patients into thinking health care products are more beneficial and less risky than they really are. Ghost-writing also undermines science by shifting the agenda away from interesting and important questions to questions whose answers may mainly benefit vested interests. Finally, on a personal note, ghost-writing demoralizes honest academics who must run their own studies, write their own papers, and manage the logistics of paper submission in competition with fake authors backed by corporate money and corporate staff. Scientists and academics who allow and front for ghost-writers ought to be ashamed of themselves.

See also comments in the Clinical Psychology and Psychiatry blog, and discussion of some of the other recent revelations about Zyprexa marketing in the Hooked: Ethics, Medicine and Pharma blog.

ADDENDUM (14 June, 2009) - Also see comments by Prof Margaret Soltan on the University Diary blog on the "Stockholm Syndrome" as manifested by "key opinion leaders" in the pay of health care corporations.

ADDENDUM (15 June, 2009) - Furthermore, see comments by Dr Howard Brody in the Hooked: Ethics, Medicine and Pharma Blog.