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 Miami Herald:

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.

The details of the allegations were:

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.'

Of course, the company's statement had all the expected elements:

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.

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, the Sorin Group.

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:

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.'

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:

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.'

As we just noted, 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 legal settlements 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. 

GlaxoSmithKline Subsidiary Pleads Guilty to Manufacturing Adulterated Drugs: Three Strikes and ...?

Paxil

First there was Paxil (Seroxat in the UK, or paroxetine), the anti-depressant whose marketing lead GlaxoSmithKline (GSK) to settle allegations of fraud brought by then New York Attorney General Elliott Spitzer in 2004.  That case included allegations of suppression and manipulation of clinical research, and was discussed in great detail in the book Side Effects by Alison Bass.  We posted about various aspects of this case, e.g., more recently here, here, and here. 

Avandia

Then there was Avandia (rosiglitazone), the anti-diabetic drug whose use was just restricted by the US Food and Drug Administration.  This GlaxoSmithKline product inspired a "spin cycle" which provided us with endless grist for the Health Care Renewal mill.  A good summary of the case appeared in September in the British Medical Journal (Cohen D. Rosiglitazone: what went wrong: Brit Med J 2010; 341: 530-534.  Link here)  Once again, it appears that research was suppressed and manipulated (e.g., see here), Avandia critics were attacked by "experts" whose financial relationships with GSK were not always obvious (e.g., see here), and there were allegations that GSK executives tried to intimidate those who disagreed with them (e.g., see here and here). 

Adulterated Drugs

And now it is adulterated drugs.  Here is the version from Bloomberg:

GlaxoSmithKline Plc, the U.K.’s largest drugmaker, will pay $750 million to settle a U.S. whistleblower lawsuit over the sale of defective drugs.

Glaxo and the U.S. Justice Department announced the agreement yesterday, resolving a false-claims lawsuit first filed in 2004 by Cheryl D. Eckard, a former global quality assurance manager for the London-based company.

'This is not something I wanted to do, but because of patient safety it was necessary,' Eckard, 51, told reporters following a Justice Department press conference in Boston. As a whistleblower, she will receive $96 million from the settlement money.

Glaxo was accused in court papers of selling tainted drugs under false pretenses. The medicines, made at a Glaxo plant in Cidra, Puerto Rico, were misidentified as a result of product mix-ups, according to papers filed in federal court in Boston. The affected drugs included the antidepressant Paxil CR and the diabetes treatment Avandamet. [Note that this is a combination drug that includes Avandia - ed]

The settlement includes a criminal fine and forfeiture totaling $150 million and a $600 million civil settlement under the False Claims Act and related state claims, the Justice Department said in a statement.

'We will not tolerate corporate attempts to profit at the expense of the ill and needy in our society -- or those who cut corners that result in potentially dangerous consequences to consumers,' Carmen M. Ortiz, the U.S. Attorney in Boston, said at yesterday’s news conference.

SB Pharmco Puerto Rico Inc., a Glaxo unit, agreed to plead guilty to charges relating to the manufacture and distribution of adulterated drugs made at the now-shuttered plant, the Justice Department said. Glaxo said in July it had agreed in principle with the U.S. to pay 500 million pounds ($791 million) to resolve the investigation.

'We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice requirements and with GSK’s commitment to manufacturing quality,' PD Villarreal, a Glaxo senior vice president, said in an e-mailed statement.

Eckard’s take is the largest ever for a single whistleblower, said Patrick Burns, spokesman for Taxpayers Against Fraud, a nonprofit Washington group that publicizes the use of legal means to combat fraud against the U.S. The federal government will receive $436.4 million from the settlement and participating states will split as much as $163.6 million, the Justice Department said.

Other drugs made at the plant include Kytril, an anti- nausea medication, and Bactroban, an ointment used to treat skin infections, the Justice Department said.

'The false claims arose out of chronic, serious deficiencies in the quality assurance function at the Cidra plant and the defendants’ ongoing serious violations of the laws and regulations designed to ensure the fitness of drug products for use,' the government said in court papers.

The U.S. Food and Drug Administration in 2005 seized some Paxil CR lots after it was discovered that the pills sometimes split inappropriately, according to court papers. Some of the pills lacked an active ingredient.

It seems that not only questions about GSK sponsored clinical research about and GSK marketing of Paxil and Avandia, but the company has problems even supplying tablets that contain the pure drugs at the right dose.
Summary and Discussion

First, this is another dreary marcher in the parade of legal settlements that we have now been chronicling for years. This case has some particular features. It included a guilty plea to a crime. Although the allegations included fraud, the fundamental problem seemed to be the selling of adulterated, impure drugs.

So my first comment is that this is the latest instance of a major pharmaceutical company not being able to fulfill its most basic responsibility and reason for being, the manufacture of pure, unadulterated drugs. We previously discussed problems with adulterated drugs made by Baxter International and Johnson and Johnson. We have discussed, seemingly endlessly, how big health care corporations, including but certainly not limited to pharmaceutical companies, have engaged in various sophisticated deceptions involving marketing and clinical research to sell more products at higher prices. Now it seems that while these companies have put so much of their resources into marketing and public relations, not necessarily in honest ways, they have neglected to put the necessary expertise and resources into their most basic manufacturing functions.

So while drug industry sycophants prattle on endless about life-saving innovations, not only have industry marketing and research become less trustworthy, but now we cannot even trust the companies to supply the drug that is on the label in a pure form at the labelled dose.

My next comment is that this is the third big case involving GlaxoSmithKline reported in the last few years. (Although, like the previous cases, the events that lead to recent relevations actually occurred over the last 10+ years.) This would suggest that there is a serious problem with the culture, leadership, and governance at this corporation.

Maybe one reason such problems are allowed to fester is that in the current case, like the last two involving GSK, and as is typical for the legal settlements and crimes we have discussed before, no individuals who authorized, directed, or implemented the problematic behavior seem to have suffered any negative consequences or paid any penalty. In fact, the Guardian just pointed out:

Five of the six senior GlaxoSmithKline executives cited by a whistleblower as part of a cover-up of contamination problems at the group's Puerto Rico factory are understood to still be employed by the pharmaceuticals company.

Cheryl Eckard, who was sacked by the company as a quality control manager in 2003 after repeatedly raising her concerns with a series of GSK executives, received a $96m (£61m) reward this week as part of a $750m criminal and civil settlement between US regulators and the company.

Her evidence stated that she believed company executives refused to acknowledge the gravity of the production violations – which included the wrong strength of pills being shipped – because it would delay the approval of two new drugs by the US Food and Drug Administration.

The court documents allege that Eckard, who had recommended the factory be shut until the issues were resolved, communicated the quality violations at the plant in Cidra to David Pulman, president of global manufacturing and supply; Janice Whitaker, senior vice president of global quality; Peter Savin, vice president of global quality assurance; Diane Sevigny, director of global quality assurance, risk management and compliance; and Jonathan Box, vice president of manufacturing and supply for North America.

All five executives are believed to be still working for the London-listed company, while Pulman is also a member of the company's 18-strong corporate executive team, which includes chief executive Andrew Witty.

As we have said endlessly, 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. 

When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.  Further, expect organizations that did not uphold high standards in one instance to fail to uphold them in other instances.

See also comments on the Postscript blog.

Interface Problems, Ill-Informed Leadership, Suppression of Whistle Blowing: A New Look at a Historic Case

Three issues that come up frequently on Health Care Renewal are problems with man-machine interfaces in health care information technology (IT), as in this post by Dr Scot Silverstein; ill-informed and mission-ignorant or hostile leaders, sometimes in a position to overrule health care professionals, as in this post; and whistle-blowers, and their silencing.

A truly amazing story just surfaced that deals with all these issues, albeit not in health care.  If it is true, and if it had been revealed earlier, maybe society would have become more concerned earlier with these issues, and maybe they would have not ended up plaguing health care so.

Let me first just go through the basic structure of the story to underline the parallels with health care issues.  Then I will quote the specifics.

(If you do not instantly recognize the story, I suggest going through this post sequentially, not jumping to the end, to make its impact more clear.)

The Structure of the Story

Introduction
A large corporation had just put on-line, with much publicity, a high-technology system that was advertised as bigger, faster, better than the competition. 

Confusing Interface and Terminology, Wrong Control Input 

A few days after becoming operational, those in charge suddenly noticed a looming and severe problem.  A technician was ordered to make an extreme control input to avoid the problem.  However, there was confusion about the terminology of the input.  While the system he was controlling was new, and had a new interface, it was operating in an area in which the old terminology, from a time in which the interface for the particular control worked in the opposite direction, was still in use.  So his extreme input was in exactly the wrong direction.  By the time the mistake was clear, and the control was reversed, it was too late, and the first stage of the catastrophe ensued. 

Ill-Informed Management Overrules the Professionals

It is possible that the catastrophe could have been ameliorated if a crucial part of the system were then to have been quickly shut down.  The highest ranking professional on duty ordered it shut down.  However, soon after the events above, a top executive in the corporation, who was nearby only because of all the hoopla surrounding the system's roll out, came on the scene.  He countermanded the order for the shutdown, possibly thinking continuing operation would cost less money and result in less bad publicity.  True disaster then ensued.

Whistle Blowing Suppressed

After the disaster, there were several government hearings.  The top executive denied any knowledge of the decision making that lead to the disaster.  A professional who had not been present when the decisions were made, but was told about them by those who were present, avoided mention of the events above, because the top executive had told him that if he were to have told the truth, the company would have been found negligent, its insurance would not have covered the disaster, and it would have gone bankrupt, and everyone would lose their jobs.  So he never told anyone except first-degree relatives.  The other people who were present for the events above did not testify, for reasons to be discussed below.

So this story has all the familiar elements.  But so have many others.  Why was the suppression of this version of the story (assuming its true, which is not proven) so important?

The Real Story

Let us go through the elements again, this time with quotes from the article in the London, UK, Telegraph:

Introduction and Context

All families have their secrets, but usually about things that don’t matter to anybody else. Not in the case of Louise Patten, though – or The Lady Patten to give her her full title, the wife of former Tory Education minister, Lord (John) Patten, though her own career as one of the first women board directors of a FTSE 100 company, and as a successful author of financial thrillers, means that she has plenty of achievements in her own right.

As a teenager in the 1960s, Patten was let in on a secret by her beloved grandmother, which, if revealed, she was warned, would result in two things. The first was awful – it would destroy the good name of her dead grandfather, Charles Lightoller, awarded the DSC with Bar in the First World War, and a hero again for his part in the evacuation of Dunkirk in 1940. But the second would change history, overturning the authorised version of one of the world’s greatest disasters, the sinking of the Titanic with the loss of 1517 lives in April 1912.

The tension between these two outcomes goes some way to explaining why, for 40 years, Patten kept quiet....

'After the collision,’ Patten goes on, 'my grandfather went down with the Captain and [First Officer] Murdoch to Murdoch’s cabin to get the firearms in case there were riots when loading the lifeboats. That is when they told him what had happened.'

Confusing Terminology and Interface

'Instead of steering Titanic safely round to the left of the iceberg, once it had been spotted dead ahead, the steersman, Robert Hitchins, had panicked and turned it the wrong way.’

At first glance it sounds extraordinary that anyone – much less the man put in charge of the wheel on the maiden voyage of what was then the world’s most expensive ocean liner – could have made such a schoolboy error.

'Titanic was launched at a time when the world was moving from sailing ships to steam ships. My grandfather, like the other senior officers on Titanic, had started out on sailing ships. And on sailing ships, they steered by what is known as “Tiller Orders” which means that if you want to go one way, you push the tiller the other way. [So if you want to go left, you push right.] It sounds counter-intuitive now, but that is what Tiller Orders were. Whereas with “Rudder Orders’ which is what steam ships used, it is like driving a car. You steer the way you want to go. It gets more confusing because, even though Titanic was a steam ship, at that time on the North Atlantic they were still using Tiller Orders. Therefore Murdoch gave the command in Tiller Orders but Hitchins, in a panic, reverted to the Rudder Orders he had been trained in. They only had four minutes to change course and by the time Murdoch spotted Hitchins’ mistake and then tried to rectify it, it was too late.

A Manager Countermanding the Professional

If the steersman Hitchins had made a human error, Bruce Ismay, chairman of the White Star Line, owners of the Titanic, and another survivor of the sinking, gave a lethal order.

'Titanic had hit the iceberg at her most vulnerable point,’ explains Patten, 'but she could probably, my grandfather estimated, have gone on floating for a long time. But Ismay went up on the bridge and didn’t want his massive investment to sit in the middle of the Atlantic either sinking slowly, or being tugged in to port. Not great publicity! So he told the Captain to go Slow Ahead. Titanic was meant to be unsinkable.’

However,

'If Titanic had stood still,’ she demonstrates, 'she would have survived at least until the rescue ship came and no one need have died, but when they drove her 'Slow Ahead’, the pressure of the sea coming through her damaged hull forced the water over the bulkheads and flooded sequentially one watertight compartment after another – and that was why she sank so fast.’

Whistle Blower Suppressed, the Cover Up

Why, though, I puzzle, would Patten’s grandfather, who sounds like a thoroughly honest and brave man, have lied and carried on lying? 'Because,’ she explains, 'when he was on the rescue ship, Bruce Ismay pointed out to my grandfather that if he told the truth, the White Star Line would be judged negligent and its limited liability insurance would be invalid. Ismay pretty much said that the whole company would go bust and everyone would lose their jobs. There was a code of honour among men like my grandfather in those days. So he lied to protect others’ jobs.’

But why didn’t her grandmother speak up after her husband’s death in 1952? 'She was worried about showing this heroic figure to be a liar. And my mother, who also knew the secret and was even uncomfortable with Granny having told me, felt even more strongly about it. She hero-worshipped my grandfather.’

So there this secret sat, locked in a family circle from which Patten is now the only survivor.

Conclusion

The story does seem amazing. I am hardly an expert on the sinking of the Titanic, so should not try to comment on its truth. It does have some plausibility, and provides an explanation for one of the most important and influential disasters of the 20th century that is still poorly understood and a cause for controversy.

In my humble opinion, if it were true, and had it come out earlier, this amazing story would have focused society's concerns on issues that have instead become scourges of our current era, and particularly important, if not frequently enough discussed causes of our health care dysfunction.

The Titanic disaster lead to major changes in numerous safety practices, leading to rules about the adequacy of lifeboats and radio communication, and even swimming proficiency requirements in higher education. (I had to pass a swimming test as a Brown University freshman that was a legacy of the sinking of the Titanic, I was told.) Most of these practices increased the survivability of accidents.

What if the focus was also on the causes of accidents? What if there was a groundswell of advocacy, starting in 1912, against pressure from business and financial leaders on professionals sworn to protect the public's health and safety, and against intimidation of whistle-blowers whose revelations could protect public health and safety? Maybe health care, and many other parts of life, would have turned out better?

Stifling Whistle-Blowers: Old and New Approaches

We have frequently discussed the anechoic effect, how it is just not done to discuss certain topics, particularly those related to the adverse effects of bad (ill-informed, incompetent, self-interested, conflicted, or corrupt) leadership and bad (opaque, unaccountable, mission-hostile, unethical) governance of health care organizations.  We have discussed many possible causes of the anechoic effect, but one particularly obvious cause is the silencing of dissenters and whistle-blowers.

Three recent stories illustrate old and new tactics to reinforce the anechoic effect.

A Classic Case - ValleyCare Medical System Nurse Fired

From the San Francisco Chronicle,

An Alameda County jury awarded more than $344,000 in damages this week against ValleyCare Medical System for refusing to rehire a Castro Valley operating nurse who claimed the hospital was retaliating against her for complaints she made about patient safety issues, including concerns about surgical equipment left inside patients.

Kristeen Klaas, a 15-year veteran at ValleyCare and a registered nurse for more than 30 years, sued the hospital system, which has services in Pleasanton and Livermore, after she quit in distress in May 2008 and hospital managers failed to respond to her request to be rehired days later.

The 54-year-old Klaas, who now works at Alta Bates Summit Medical Center in Oakland and San Leandro Hospital, had brought numerous safety complaints about the Pleasanton hospital to the attention of ValleyCare's management over the two years prior to her resignation.

Klaas complained about a fellow nurse who brought a dog into the operating team's break room and jumped rope with an electrical cord in the operating room, as well as a surgical technician who brought a rifle into the operating room office to sell. She also complained that a tip of a surgical instrument went missing during a surgery and was never found, and that an instrument was left in a patient because the hospital did not have a formal policy of counting instruments after surgery.

She also accused a supervisor of forging her signature on a performance evaluation after she refused to sign an evaluation that was backdated to comply with state regulations.

Here is the tactic allegedly used to silence the whistle-blowing nurse:

On her last day on the job, Klaas got permission from her supervising nurse to leave work because she was in distress after a colleague, the subject of three of her complaints, screamed at her.

'She realized, for the patient's safety, she couldn't continue to go forward that day in the operating room because she was so upset,' he said.

But then a supervisor called her at home and accused her of leaving without permission, prompting Klaas to resign, he said.

This is the classic, rather blunt way to do it: just make the would-be truth-teller's job experience so miserable that she quits.

Now we will present two examples of a more subtle approach, one directly from health care, one at least from a sphere with major health care implications.

A New Approach: A Contract Preventing Communication "Inimical" to a Pharmaceutical Company's Business

This case was documented by a personal narrative by Marc Lipsitch, a Professor of Epidemiology and the Harvard School of Public Health, published in the Chronicle of Higher Education,

I received a request from a large pharmaceutical company to assist in the design of a clinical trial, and the proposed terms seemed to require that I sign away my right to criticize the product. One provision would prohibit me from entering into 'any agreement or relationship to render services as ... adviser or consultant to, any other individual, firm, or corporation that would be inimical to or in conflict with' the aspects of the company's business covered by the agreement. Another would forbid me to engage, in any capacity, directly or indirectly, in "any business," with or without compensation, relating to the class of products under discussion—not just for the term of the contract, but for the year after as well. Those provisions could restrain me from providing candid advice to a regulator, a government official, or the editor of a peer-reviewed journal about the class of products on which I was consulting, even if the advice were based on publicly available information. I objected to those terms, as did a colleague who was offered the same arrangement.

Prof Lipsitch also noted that government research funding agencies and universities may not provide any protections to their faculty against such agreements. He also noted that the contract he was asked to sign was not one of a kind:

Discussions with my colleagues suggest that the problem is not limited to one pharmaceutical company ....

We and many others have frequently discussed the conflicts of interest that may be generated by physicians or health care academics having financial relationships with industry. The Institute of Medicine's definition of conflict of interest (in a health care context) found in its report, Conflict of Interest in Medical Research, Education, and Practice, is:

Conflicts of interest are defined as circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interests include promoting and protecting the integrity of research, the quality of medical education, and the welfare of patients. Secondary interests include not only financial interests....

Thus the concern is that a faculty member,for example, who is paid to consult for a drug company might tend to favor the company, its products, or policies to its advantage in his or her clinical teaching, scholarly talks and writing, or public policy opinions. That might happen even if the consulting work is technical or scientific and not directly related to the particular topic about which communication might be influenced.

However, the situation described by Prof Lipsitch is much worse. Were he to have signed the contract, he would have been constrained by this legal agreement from writing or saying anything "inimical to or in conflict with" the company's business.

Last week, a similar, but more wide-spread example surfaced (pardon the pun) in a domain that is at least related to health care.

Another Version of the New Approach: the BP Consulting Contracts Making Any Communication Between the Company and the Consultant Confidential

Originally reported by the BBC,

The head of the American Association of Professors has accused BP of trying to 'buy' the best scientists and academics to help its defence against litigation after the Gulf of Mexico oil spill.

'This is really one huge corporation trying to buy faculty silence in a comprehensive way,' said Cary Nelson.

The BBC has obtained a copy of a contract offered to scientists by BP. It says that scientists cannot publish the research they do for BP or speak about the data for at least three years, or until the government gives the final approval to the company's restoration plan for the whole of the Gulf.

It also states scientists may perform research for other agencies as long as it does not conflict with the work they are doing for BP.

And it adds that scientists must take instructions from lawyers offering the contracts and other in-house counsel at BP.

Here are some examples of the wording of the contract as obtained by the BBC about confidentiality.

Confidentiality. All communications (including non-public information disclosed in such communications) between you (and your agents), BP Attorneys and/or other BP representatives in the course of your performance of the BP NRDA Services are deemed to be incidental to the rendering of legal services and are to be privileged and confidential. You shall maintain a strict confidentiality of such non-public communications and information unless or until a person from whom you are authorized to take instructions informs you in writing that this restriction is no longer applicable to any particular non-public communications and information. In the event you are required to disclose such privileged and confidential non-public communication and information by an order entered by a court or by similar judicial process, or by a judicial or administrative subpoena, you shall notify a person from whom you are authorized to take instructions as soon as practicable, and you are required to cooperate with BP if BP decides to seek relief from such required disclosure, including commencement of a legal or administrative proceeding to prevent or limit disclosure of such privileged or confidential information.

Here is the description of those from whom the signer of the contract must take orders.

Instructions. You agree to take your instructions only from me, from other lawyers in my firm, from Brian Israel or other lawyers in the Arnold & Porter law firm, and from Donna Ward or other in-house counsel at BP (collectively 'BP Attorneys').

Note that the contract defines privileged, confidential information as any communication between BP and its representatives and the contract signer. Thus, to make something confidential, all BP would have to do is mention it in a communication. It appears that this would allow BP to render off-limits any topic it chose. Also, since by the same mechanism, it appears that the contract itself, once signed, would also become privileged and confidential.

Summary

I submit that ideally medicine and health care ought to be a very transparent calling.  Physicians are obliged to keep confidential the information disclosed to them by patients, enabling the patients to trust physicians sufficiently to provide them the accurate information needed for optimal care.  However, it is hard to think of much other information or communication in health care that ought to be kept secret, (other than the processes used by commercial firms to manufacture drugs or devices.) 

Yet as health care becomes more of a business and less of a calling, businesspeople's proclivity to keep as much as possible secret to avoid giving any advantage to a competitor has become more influential.  Furthermore, those leading big organizations have realized that it is easier to maintain their power if they can keep their mistakes, if not misconduct secret.  So businesspeople's proclivity to mount overwhelming legal defenses of their interests may lead to persuading or fooling people who might be inclined to delve into such mistakes and misconduct to sign contracts to keep them silent through confidentiality clauses, requirements to protect privileged or proprietary information, non-disparagement clauses and the like.  The result will be better coddled self-interests, but more opacity that is inimical to good patient care, teaching, research, and public policy discussion.

To truly reform health care, we need more transparency.  To produce more transparency, we need constraints on contracts that inhibit needed clinical, teaching, research and public policy communication.

Meanwhile, as my father, who was an attorney, done told me: "don't sign a contract you don't understand, and don't sign a contract giving away any right you need to keep." 

Wellcare Settles Again, but Wait, There is More...

We posted several times, most recently in 2009 (here and here), about misbehavior by the health insurance company/ managed care organization Wellcare.  That year, the company settled criminal charges that it defrauded the Florida state Medicaid program by paying a fine and accepting a deferred prosecution agreement.  Previously, the state of Connecticut had canceled its arrangement with Wellcare to run a Medicaid program in that state after the company refused to provide the state with requested data.  Then the company signed a consent order with the Florida Elections Commission in which it admitted making "questionable" political contributions.

Then this year, it was announced that the company would settle additional civil charges, as per the St. Petersburg (FL) Times,

Tampa-based WellCare Health Plans Inc. has agreed to pay $137.5 million to the U.S. Department of Justice and other federal agencies to settle civil lawsuits accusing the company of overcharging for its Medicaid and Medicare programs.

Also,

Under the tentative deal, which must be approved in court, WellCare would have three years to make payments to the Justice Department's civil division, the U.S. Attorney's Office for the Middle District of Florida and the U.S. Attorney's Office for Connecticut.

WellCare said the payments will include the approximately $23 million owed to the Florida Agency for Health Care Administration for overpayments received by the company in 2005.

The civil settlement is separate from a deal struck last year on the criminal front. In that case, WellCare agreed to pay $80 million to settle a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp.

It also previously agreed to a $10 million civil penalty settling an informal inquiry by the Securities and Exchange Commission that regulatory filings reflected more than $40 million in profits that WellCare failed to return to the Florida agencies from 2003 to 2007.

WellCare, which is Florida's largest Medicaid plan operator, has acknowledged that it overcharged Florida and Illinois health programs by about $46.5 million.

But wait, there is more. No sooner than this settlement been announced than it was challenged. While considering the settlement, the judge involved unsealed a set of complaints by whistle-blowers about Wellcare. First, as reported by the Miami Herald,

The complaint, filed by former WellCare financial analyst Sean J. Hellein, portrays a company so ethically challenged that it rewarded employees who dumped hundreds of sick newborns and terminally ill patients from the membership rolls, thereby pumping up profits by millions of dollars.

It describes a company that embraced fraudulent accounting as a business model, eventually stealing between $400 million and $600 million from Medicare and Medicaid programs in several states, perhaps most of it from Florida.

See these specifics:

Hellein, who wore a wire for more than a year to gather evidence for federal agents, says in the complaint that:

- WellCare moved money between accounts to make it appear that patients' treatment cost much more than it actually did. In some cases, the company made payments years in advance to jack up the apparent cost of care to fool states into increasing Medicaid premiums. It worked, he said.

- When states made overpayment errors, WellCare didn't pay the money back, as its contract requires. Florida Medicaid made a series of overpayment blunders that fattened WellCare's bottom line by many millions; those who made the errors included both state officials and contractors.

- Sometimes hospitals and physician groups helped WellCare hide its true spending from Medicaid programs by accepting payments through one account for expenses incurred by another. Sometimes they allowed WellCare to pay for future years' expenses to make it appear spending for the current year was higher than it actually was.

Hellein named two hospital systems - one in Illinois and one in Florida - that he said participated in the sham arrangement, but he said it was common.

WellCare pushed expenses into certain programs - behavioral health programs in Florida and Illinois and the Healthy Kids program in Florida, a program for uninsured children of families with modest incomes - because they required repayment if the cost of treatment fell below a certain threshold.

Florida public officials were repeatedly duped by WellCare. The director of the Florida Medicaid program from 2004 to 2007, while much of the alleged fraud was going on, was Tom Arnold. He currently is Secretary of the Agency for Health Care Administration.

Another agency that fell for WellCare's line was the Office of Insurance Regulation, where an actuary found nothing wrong with a WellCare subsidiary in the Cayman Islands acting as the company's reinsurer.

The reinsurance arrangement enabled WellCare to bank $5 for each insured while making it appear that the cost was just 11 cents, the complaint says.

After Wall Street analysts raised questions about the legality of the reinsurance arrangement in 2007, some thought it might be reviewed by Chief Financial Officer Alex Sink. But nothing ever came of it.

WellCare conducted a study to figure out which Medicaid recipients were profitable and which were not so that it could engage in "cherry-picking," a term for enrolling only the profitable members. The study found that disenrolling a baby born with health problems saved the company an average of $20,000; each terminally ill patient saved $11,500.

Those who were persuaded to resign from WellCare went into the general Medicaid or Medicare fee-for-service programs.

WellCare also restructured its benefit package to discourage the least-profitable Medicaid recipients from enrolling and encouraging those who were more profitable to sign up.

Low-income mothers and children yielded a net of only about 10 percent, while the physically and mentally disabled paid for by Medicare yielded a net of 30 percent, the complaint says.

The complaint names about 20 employees of WellCare who knew about the fraudulent activities. Only one, Gregory West, has been charged. He pleaded guilty in December 2007 but sentencing has been postponed several times.

No charges have been brought against three former executives of the company named in the complaint as orchestrating the fraud: President, CEO and Chairman Todd Farha, CFO Paul Behrens and General Counsel Thaddeus Bereday.

They all resigned in January of 2008, three months after the FBI and other law-enforcement agents raided the Tampa campus of WellCare and carted off computers and files.

The the St. Petersburg Times reported about two more complaints that were unsealed:

Clark J. Bolton, a former supervisor of special investigations at WellCare, said the insurer encouraged overbilling and refused to audit claims for fraud in order to curry favor with doctors and hospitals and build market share. The result was millions in excessive and illegal expenses passed through to federal Medicare and state Medicaid programs, Bolton said.

Eugene Gonzalez, a referral coordinator for seven years, claimed WellCare met government customer service standards only because it had employees create backdated documents and make bogus calls to the company's phone lines. Failure to meet these standards would have resulted in the loss of billions of dollars worth of Medicare and Medicaid contracts.

As we have before, we see a striking contrast between the scope of the allegations and the response by the government agencies that are supposed to regulate insurers, insure that public money is spent wisely, and investigate and seek punishment for illegal activities. As the latter St. Petersburg Times article noted,

U.S. Rep. Kathy Castor criticized the proposed settlement as wholly inadequate in a letter this week to Attorney General Eric Holder. 'Where is the penalty and punishment for such egregious actions?' she wrote. 'It appears that companies such as these simply build such payments into the 'cost of doing business.' We cannot allow this to continue.'

This notion should be familiar to readers of Health Care Renewal. The Wellcare case fits right into the parade of legal settlements we have discussed. As we have said again and again, the usual sorts of legal settlements we have described do not seem to be an effective way to deter future unethical behavior by health care organizations. Even large fines can be regarded just as a cost of doing business. Furthermore, the fine's impact may be diffused over the whole company, and ultimately comes out of the pockets of stockholders, employees, and customers alike. It provides no negative incentives for those who authorized, directed, or implemented the behavior in question. My refrain has been: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Also note that the case of Wellcare remains relatively anechoic. Despite the severity of allegations, and the national scope of the company, the case has only been mentioned in news stories, mainly in Florida where the company has its headquarters, and in a few health care trade publications. It, like many of the cases we discuss on Health Care Renewal, has not been mentioned in the medical/ health care research/ health care policy literature.

If we cannot even speak about the sort of very bad management that afflicted Wellcare as a cause of many of the ills of our health care system, how do we really expect to constructively reform that system?

Board Member Blows Whistle on Health Insurance Company's Accounting

We previously posted about some of the travails of for-profit health insurance company/ managed care organization Wellcare.  In August, 2009, we posted about Wellcare's "admission" that it had made numerous questionable campaign contributions.  In May, 2009 we posted about WellCare's submission to a deferred prosecution agreemeent based on charges that it defrauded state programs by inflating its expenses. In 2007, we posted about how the state of Connecticut stopped WellCare from running a plan for poor children after the company refused to reveal what it was paying physicians, and why it was failing to pay for particular services. So WellCare has been cited for three different kinds of unethical behavior in 2007-09.

Here's a story about Wellcare with a new twist in the Wall Street Journal:

A prominent director at WellCare Health Plans Inc. resigned Wednesday and raised questions about accounting practices at the Medicare and Medicaid company.

Regina Herzlinger, the head of the board's audit committee and a professor of business administration at Harvard Business School, said internal audits found WellCare overbilled the Illinois Medicaid program by $1 million in 2009 and potentially overcharged states for almost $500,000 worth of maternity care. Additionally, the Tampa, Fla., company ran afoul of Georgia's requirements that it account for each patient visit for which it paid providers, resulting in a $610,000 fine, she said.

Ms. Herzlinger said those problems, which the company corrected last year and this year after an internal auditor discovered them, are evidence of weak accounting practices. Ms. Herzlinger said she had hoped to provide oversight, as chairwoman of the audit committee, but that the board didn't renominate her for re-election at this year's annual meeting of shareholders. Ms. Herzlinger alleges that the board forced her out for asking questions about accounting problems and corporate-governance practices.

Wellcare offered the response one might expect:

WellCare said good corporate-governance practices require it to bring in new board members periodically to provide a fresh perspective. The company said the accounting errors Ms. Herzlinger identified were relatively small and the company's own internal controls identified them, indicating that its processes are working well. The company said the board chose not to renominate Ms. Herzlinger.

'At any company, you are always going to have these kinds of immaterial amounts pop up,' said Thomas Tran, WellCare's chief financial officer, who added that it is important to 'address them and document them and learn from them to change your processes.'

That might have been more convincing were Wellcare not to have the track-record discussed above.

Every now and then we have discussed cases of whistle-blowers from within health care organizations, but I cannot remember another instance in which the whistle-blower was on the board of directors.  In our post of August, 2009, we noted Prof Herzlinger's position on the Wellcare board, and urged her, as a main stream health policy expert, "to acknowledge that health care leadership may be unaccountable, opaque, dishonest, and sometimes flagrantly corrupt."  We also urged her to "pay a bit more attention to the mischief being committed by those who answer to her."  From this new story, it looked like she did just that, and hopefully made a contribution to more transparent and honest governance of health care organizations.  Good for her!

It is time for the often well-paid and not over-worked members of the board of directors of health care corporations to take some responsibility for the actions of the corporations over which they are supposed to exercise stewardship.

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

It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company.

Settlement of Suit Alleging Neurontin Risks Concealed

Pfizer has kept busy in court defending against charges that a company it acquired promoted Neurontin (gabapentin) for uses not approved by the US Food and Drug Administration (FDA), and not well supported by the evidence.  Most recently, it was convicted by a jury in California of being a racketeering influenced and corrupt organization (RICO) because of a long-term "racketeering conspiracy" involving Neurontin marketing (see post here). Now additionally, according to the Wall Street Journal,

Pfizer Inc. said it reached a settlement agreement in a wrongful-death lawsuit brought by a woman who claimed her husband's use of the antiseizure drug Neurontin caused him to commit suicide in 2002.

The suit was brought by Linda Shearer of Berkshire County, Mass., whose husband, Hartley Shearer, was prescribed Neurontin to control the effects of his paralysis. The suit alleged Pfizer promoted this use of the drug even though it wasn't approved by U.S. regulators. The suit alleged Pfizer knew the drug was associated with a risk of suicide, but failed to properly warn of the risk.

The new wrinkle here is that Pfizer did not defend a suit that alleged the company knew of a potentially fatal side-effect of the drug, but failed to disclose that risk.

Jury Awarded Damages for Treatment of Whistle-Blower

Meanwhile, the Hartford Courant reported:

A former Pfizer scientist who claims she has been paralyzed by a virus designed at the pharmaceutical company's laboratory in Groton was awarded $1.3 million by a federal jury in Hartford Thursday following a trial that raised questions about safety practices in the dynamic field of genetic engineering.

The amount of the settlement awarded to molecular biologist Becky McClain of Deep River will likely increase in coming days. After about day of deliberation, the jury also awarded McClain punitive damages, to be determined by U.S. District Judge Vanessa L. Bryant, and awarded fees to McClain's two Connecticut lawyers, Bruce E. Newman and Stephen J. Fitzgerald.

McClain claimed in her suit that she was inadvertently exposed through work by a former Pfizer colleague in 2002 or 2003, to an engineered form of the lentivirus, a virus similar to the one that can lead to acquired immune deficiency syndrome, or AIDS.


She further claimed that Pfizer wrongly fired her in 2005 for complaining about laboratory safety to the U.S. Occupational Safety and Health administration and to co-workers.

Ultimately, the jury was not permitted during the 12-day trial to hear argument supporting McClain's claim of a causal link between her disability and virus research done at her laboratory in Groton.

The jury based its verdict on evidence concerning McClain's two remaining claims: that her dismissal violated Connecticut's whistle blower law and McClain's free speech right. Her lawyers contended her complaint to federal safety regulators amounted to a whistle blower complaint and that her discussion of safety issues with fellow workers was free speech.

So, after being convicted by a jury of being a "racketeering influenced and corrupt organization," (RICO), and settling civil and criminal fraud charges for an unprecedented $2.3 billion (see post here), and after many other allegations, settlements, and convictions (look here),  Pfizer failed to defend one action, and lost another that argued Pfizer tried to hide information which put the company and/or its products in an unfavorable light.

In fact, Even Pfizer CEO Jeffrey Kindler could not put much of a spin on the company's recent record. As reported by Duff Wilson in the New York Times,

The world’s largest drug company, Pfizer, has handled mergers badly, invented too few drugs and left its reputation in disrepair after two criminal cases.

And that is the assessment of its own chief executive.

CEO's Multi-Million Dollar Compensation
But while all this was going on, the company did disclose (as mandated by the US Securities and Exchange Commission [SEC]) that CEO Kindler is continuing his acquisition of riches.  As reported by the AP (via USAToday).

The chief executive of drug giant Pfizer Inc., Jeffrey Kindler, received a 2009 compensation package valued by The Associated Press at $13.7 million, down 7.6% from 2008, as the board reduced the stock awards he received, citing economic pressures.

The world's biggest drugmaker paid Kindler, 54, a salary of $1.6 million, up just $25,000 from the year before. But his performance bonus was bumped up to $3.5 million from $3 million in 2008, according to a filing this week with the Securities and Exchange Commission.

Most of Kindler's compensation comes from long-term awards of stock options and restricted shares. The total fell 17% to $8.1 million in 2009, from $9.8 million, even though they were granted in late February, a month after Kindler announced plans to buy Wyeth for $68 billion, a sound strategy to counter Pfizer's looming revenue plunge.

Kindler's other compensation — a variety of perks — totaled $449,731. That included $190,725 for Kindler's use of corporate aircraft as required by Pfizer's board, $43,099 for use of a car, $7,690 for financial counseling and $1,217 for home security.

Even admitting that Kindler's compensation last year was slightly decreased from last year's not so small fortune, there still seems to be a huge disconnect between the company's ethical woes, legal settlements, and guilty pleas and its CEO's rewards. Once again, it seems that leaders of large health care organizations never face real accountability for their company's bad behavior. It almost goes without saying that in the two cases summarized above, no one who authorized, directed, or implemented the actions leading to the settlements or damages seems to have had any negative consequences.

So once more with feeling.... In the US, we have put much of our health care system in the hands of very large organizations, for-profit and not-for-profit, without holding these organizations and their leaders accountable for their actions. The results have been increasingly rich leaders who often behave like a new aristocracy, and repeated bad behavior by the organizations they lead.

Our latest effort at health care "reform" has continued to rely on large private organizations, while so far not adding to their or their leaders' accountability. In my humble opinion, if we really want to reform health care so as to improve quality, increase access, control costs, and support professionalism, we will have to make our new health care oligarchs accountable.

Postscript - Pay for Health Care Reform Lobbying?

By the way, a commentary in The [New London, CT] Day suggested an explanation for why Kindler was so richly paid last year:

It takes pages and pages of a company securities filing to explain and justify all the bells and whistles of Kindler's 'annual incentive award,' a complicated stew of stock options and deferred payments and plain old salary.

From all of this, Timothy P. Carney of the Washington Examiner found one juicy tidbit, which especially titillated industry bloggers.

It turns out Kindler's salary increase, from $1.57 million to $1.6 million, was based in part, the compensation committee suggested, on his success in making a deal with President Obama that protected the drug industry from some of the more onerous proposals of health care reform.

Praising Kindler as an effective lobbyist in, among other things, heading off legislation that would allow the importing of cheaper prescription drugs, the committee said: 'These efforts included constructive participation in the U.S. legislative process to advance Pfizer's goals of achieving a more rational operating environment.'

Or, he kept a finger in the dike against health care reform.

Indeed, a recent report by the Sunlight Foundation, a private nonprofit dedicated to more transparency in government, indicates Kindler's extensive role in negotiating a deal for the drug companies with the Obama administration and Senate Finance Committee Chairman Max Baucus.

It turns out Kindler's name turns up four times on last year's White House visitor logs.

The final deal Kindler helped craft promised $80 billion in cost cutting by the drug companies but blocked much more onerous reform measures for the industry, like lowering prescription drug prices through Medicare negotiations, re-importation of drugs from other countries with lower prices and quicker release of generics onto the market.

The cost-saving of such measures, if allowed to occur, could have been in the hundreds of billions of dollars, according to government analysis.

Kindler, as the pay committee says, did good.

Several of our fellow bloggers have suggested that an installment of the Public Broadcasting Service (PBS) program "Frontline" will show just how much of the recent US health care reform effort was the product of health care corporate CEOs (e.g., see this post on GoozNews, and this post on Managed Care Matters). We shall see once the program airs, but maybe Mr Kindler's salary was a good value for Pfizer, but a very bad one for the rest of the country.

Bring Back the DSI*? - the Avandia Case as Spy Novel

Starting in 2007, we posted quite a bit about the "Avandia case," which centered on whether Avandia (rosiglitazone, by GlaxoSmithKline), a glucose lowering drug for type 2 diabetes, presented excess cardiovascular risks, and how evidence about these risks was handled. 

Summary

The Nissen and Wolski meta-analysis [Nissen SE, Wolski K. Effects of rosiglitazone on the risk of myocardial infarction and death from cardiovascular causes. N Engl J Med 2007; 356, online here] was to be the first published article to combine data from all relevant clinical trials of rosiglitazone then available.  Although two major trials of Avandia had been published, its manufacturer, GlaxoSmithKline, had performed many other smaller trials of the drug which remained unpublished.  These results eventually appeared on a web-site run by GSK. However, this web-site was relatively obscure.  It had not been created voluntarily, but in response to a settlement of legal action that alleged GSK had suppressed clinical research about its antidepresant paroxetine (Paxil). (See Steinbrook R. Registration of clinical trials - voluntary of mandatory. N Engl J Med 2004; 351: 1820-1822, link here and our post here).

Nissen and Wolski found the site, compiled the results of trials on Avandia it contained, and combined their results with those of the few published trials in their meta-analysis. It is to the credit of Nissen and Wolski that they were able to figure out how to do this. It is not to the credit of GSK that they sat on the data from these trials, only put it on this web-site when compelled to do so, did not make any effort to publicize the web-site, and did not publish a meta-analysis done by company scientists that showed qualitatively similar results to that eventually done by Nissen and Wolski (see post here).
 
I originally thought the case raised two questions:  1 - what are the benefits and harms of rosiglitazone as a treatment of Type 2 diabetes, and therefore for which patients under what circumstances should this drug be used?  2 - what barriers have prevented physicians and patients from getting the best possible answer to the first question, and what can be done about them?
 
But the immediate response to the Nissen and Wolski meta-analysis was a spin cycle that seemed to obfuscate these questions, and the answers to him (see posts here, here, here, and here)
 
A Reconsideration
 
In the last few weeks, several articles about Avandia have appeared in the media, and in medical journals, that reconsider the issues, and in particular, the "Avandia Spin Cycle."  First was a commentary in the European Heart Journal by Dr Steven E Nissen, the first author of the meta-analysis [Nissen SE. The rise and fall of rosiglitazone. Eur Heart J 2010: published online here.]  Dr Nissen provided a narrative history of the Avandia case from his viewpoint, and summarized it thus:

What were the key mistakes and lessons learned from the rosiglitazone affair?

1. The FDA rushed to approve rosiglitazone because of hepatotoxicity concerns about troglitazone, resulting in failure to consider the ‘signals’ suggesting cardiovascular toxicity.
2. An early critic of rosiglitazone was intimidated by company representatives and effectively silenced, a process antithetical to the principals of open scientific discourse.
3. Although early warnings were issued for the risk of heart failure, these warnings went largely unheeded in the face of aggressive marketing and promotion suggesting cardiovascular benefits.
4. No well-designed cardiovascular outcome trials were ever conducted for rosiglitazone, despite evidence suggesting increased cardiovascular risks. The only cardiovascular outcome trial was an open label study driven by a soft endpoint (hospitalization) with low adherence to randomized medications, seriously underpowered, and not completed until 10 years following launch.
5. Although both the FDA and the company were aware of evidence of an increased risk of adverse cardiovascular outcomes, certainly by 2005, neither warned physicians nor the public.
6. When a meta-analysis of rosiglitazone was eventually submitted for publication, the company subverted the editorial review process by stealing a copy of the manuscript and used this advance knowledge inappropriately to unblind an ongoing randomized trial.
7. Approval of diabetes drugs based exclusively upon their glycaemic effects has been short-sighted and scientifically unwise. Drugs that lower blood sugar may have other adverse effects that overcome any inherent benefits.
8. The failure of  50 other PPARs, many for adverse cardiovascular effects, went largely unreported because of negative publication bias. Such knowledge might have warned the medical community about the potential risk of these agents.

Meanwhile, the New York Times published conclusions of some internal US Food and Drug Administration (FDA) reports, and of an investigation by the US Senate Finance Committee. FDA safety officials suggested that Avandia should be taken off the market. Some key points from the Senate investigation were:

The bipartisan multiyear Senate investigation — whose results are expected to be released publicly on Monday but which were also obtained by The Times — sharply criticizes GlaxoSmithKline, saying it failed to warn patients years earlier that Avandia was potentially deadly.

'Instead, G.S.K. executives attempted to intimidate independent physicians, focused on strategies to minimize or misrepresent findings that Avandia may increase cardiovascular risk, and sought ways to downplay findings that a competing drug might reduce cardiovascular risk,' ....

In combination, the Nissen commentary, and the Senate report nicely summarized what I called the "Avandia spin cycle" above.  It appears that research was suppressed, marketing was deceptive, and critics and whistleblowers were intimidated. 

Finally, Dr Harlan Krumholz published a commentary about the thiazolidinedione drugs (a group that includes rosiglirazone) in Circulation Cardiovascular Quality and Outcomes [Krumholz HM. A perspective on the American Heart Association Presidential Commission Advisory on thiazolidenedione drugs. Circ Cardiovasc Qual Outcomes 2010; 3 available online, link here], and an op-ed in Forbes. The latter sums it all up nicely:

I want to believe in America's pharmaceutical companies. I want to believe that people in these companies believe that the best strategy for success is to do what is best for patients. I want to believe that they are interested in scientific truth and eager to know of any safety issues and ready to share that information with the public.

This week I was disappointed again.

Over the years GlaxoSmithKline ( GSK - news - people ) has repeatedly reassured the public about the safety of its blockbuster diabetes drug Avandia. But this weekend the Senate Finance Committee released a report revealing that inside the company Glaxo's own experts and advisors were raising concerns about whether the drug could cause heart problems all along.

The report, based on more than 250,000 internal documents, provides a rare and unsettling glimpse into the decision by company executives to deflect safety issues--even as their own experts agreed with conclusions of outside researchers who were warning the public about possible harms.

The documents reveal that company researchers were deeply concerned about the cardiovascular safety of the drug as far back as 2003. The pages of the Senate report read like a spy novel: Glaxo receiving confidential documents leaked by a sympathetic academic who consulted for the company; the company embarking on a campaign to intimidate critics who warned about potential safety issues with the drug; and executives pulling strings to release data early from a scientific study that was supposedly controlled by an 'independent' committee of researchers.

So,

The story here is less about the drug--the Senate report breaks no new ground about Avandia's safety issues (even among experts there remains some controversy)--and more about the ethical behavior of a company. What is clear: Glaxo failed to disclose its own concerns even as it sought to discredit outside researchers who were raising questions about the drug.


This type of behavior is eroding the public trust in the pharmaceutical industry.

Policy Implications

Finally, Dr Krumholz concludes with some solutions with which I heartily agree:

The fix is simple: Once a drug is approved, all data relevant to drug safety should be placed in the public domain and independent investigators across the country should be able to use it. There should be big financial penalties for withholding relevant information. Drug studies sponsored by industry must be truly independent--outside of company control. Companies should give outside investigators independence over every aspect of the study. There are too many examples of companies wresting control of clinical studies from their consultant investigators for reasons that seem more related to product promotion than clinical science.

And on all sides there should be a commitment to protect against the intimidation of academics who are willing to raise questions about the safety and effectiveness of company products. The free flow of information about the effects of drugs and medical devices will best serve the public's interest.

Here in the US, the debate over health care reform has reached a new phase. Today the President is hosting an attempt to get bipartisan discussion of reform going again. Now that there is a new opportunity for discussion, I submit that would be health care reformers ought to think about the underlying causes of our continuing problems with rising costs, declining access, stagnant quality, and demoralized health care professionals.

One set of causes that is rarely discussed has to do with the distortion of clinical research by commercial research sponsors with vested interests in the results turning out in favor of their products, and the further distortion of clinical discourse and decision making by the deceptive marketing practices of these same organizations. If we started introducing steps like those suggested by Dr Krumholz into health care reform, maybe we really could decrease costs, increase access, improve quality, and renew professionalism.

*Bring Back the DSI?
To lighten things up a bit, and to explain the title...

When I was in school in the 1960s, I first became a fan of the Hardy Boys mysteries, then the slightly more mature Tod Moran series.  While on the Neiuw Amsterdam (the 1938 version) one day out of Kingston, Jamaica, I viewed Dr No, the first James Bond movie, a sophisticated spy thriller, not a spoof like some later entries in the series.  I later read all the classics, like those by Agatha Christie, Earl Stanely Gardner, Rex Stout, Ellery Queen, etc.  So it should be no surprise that I, like many other schoolboys and girls, collaborated to form an amateur detective and intelligence agency.  But this was the sophisticated 1960s, so we called it the Department of Scientific Investigation (DSI).  We skulked around New York City and its suburbs looking for spies, saboteurs, and common criminals.  Luckily, we never really found any.  As more realities intruded, I gave up any ideas about becoming an investigator or intelligence agent (although I still read mysteries, spy novels, and thrillers to this day, but mainly on airplanes.)  Once I became a physicians, those days in the DSI seemed very remote (although the title does now seem like it ought to be part of the NIH ;-) ).

However, after reading Dr Krumholz's article above, maybe we need to resurrect the DSI.  At least, maybe we health professionals ought to consider how we can become better and more organized watchdogs for the kind of problems revealed in the Avandia case, and in many other cases discussed on Health Care Renewal.

But if any of my old DSI colleagues want to set up a reunion, it would be fine with me. 

ADDENDUM (25 February, 2010) - see also comments by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog.

Cardinal Health Settles, Novartis Settles

And the march of settlements continues....

As reported by the Tulsa (Oklahoma) World,

A company that provides hospital pharmacy management services in Tulsa has agreed to pay $1 million in civil penalties for failing to account for large amounts of missing prescription drugs, the U.S. Attorney's Office in Tulsa announced Friday.

Cardinal Health Pharmacy Services agreed to settle allegations with the federal prosecutors' office, which alleged that the company's two Tulsa pharmacies were negligent and violated several provisions of the Controlled Substances Act.

An audit showed that nearly 400,000 dosage units of hydrocodone, a painkiller, and 234,000 units of alprazolam, an anti-anxiety drug, were unaccounted for at the Hillcrest Medical Center pharmacy from October 2005 through June 2007, according to a news release.

The investigation also revealed that more than 30,000 doses of drugs at the Oklahoma State University Medical Center pharmacy were unaccounted for between April 2007 and July 2008.

Meanwhile, as reported by Associated Press (via Nj.com),

Federal prosecutors say a Princeton-based pharmaceutical company has agreed to pay $3.5 million to settle allegations that it claimed its heart drug was eligible for Medicaid reimbursement.

The U.S. attorney's office in Boston said Monday that Eon Labs Inc., a subsidiary of Swiss company Novartis AG, submitted false reports to the government between April 1999 and September 2008 that misrepresented Nitroglycerin SR's regulatory status and failed to advise that the drug did not qualify for Medicaid coverage.

Prosecutors say Eon Labs did so even after the Food and Drug Administration determined that there was a lack of evidence that Nitroglycerin SR was effective.

Note that we most recently discussed a settlement by Novartis last month (January, 2010). 

The march of settlements continues. To repeat, seemingly ad infinitum, these are just the latest in a now long parade of settlements that serve as reminders of poor behavior by myriad health care organizations. As we have previously noted, these settlements seem to have little deterrent effect on future bad behavior. (Note that many large health care organizations have settled or plead guilty in several major cases since we started commenting on such settlements.)  Usually, the companies involved only need to pay fines, and no individual who performed, directed or approved unethical or illegal acts will suffer any negative consequences. I submit once again that such fines are viewed merely as costs of doing business by the affected companies, and do not deter future bad behavior. Until the people who approve, direct, and perform unethical or illegal acts pay some penalties, expect such acts to continue. I again suggest that to truly reform health care, we need rigorous regulation of health care organizations that has the power to deter unethical behavior that may risk patients' health.

What Happens When "We'll Manage it the Way We Damn Well Want"

Back in the early days of Health Care Renewal (2005, to be exact), we first wrote about some very strange actions by the management of Phoebe Putney Health System.  At first, we noted that the Phoebe Putney responded to a reporter's inquiry about lavish travel expenses pertaining to the system's Cayman Islands health insurance subsidiary by saying, "We own it. We'll manage it the way we damn well want."

Then the story got far more convoluted.  In 2006, we wrote about the over the top response to anonymous faxes challenged hospital management's commitment to the institution's mission.  The system CEO compared the fax senders to "terrorists."  After the local district attorney handed over his investigative records to hospital system private investigators, the investigators allegedly threatened a local accountant whom they accused of sending the faxes.  Allegations that the district attorney received campaign funding from and may have had other financial ties to the hospital system surfaced.  The district attorney indicted the accountant and a physician colleague on charges of burglary and assault in the absence of any police report of such crimes.  We commented that regardless of the outcomes of the legal case, the hospital system's management's actions seemed at variance with its stated mission.

Now, in 2010, the case is in the news again.  Since our last post, according to the Atlanta Journal-Constitution, the prosecution of the accountant, Mr Charles Rehberg, and physician, Dr John Bagnato, failed.  The district attorney, Ken Hodges,

provided the information gathered through the subpoenas to Phoebe Putney, which the hospital system used to file a civil suit against Rehberg and Bagnato -- a suit that was ultimately dropped. Rehberg then countersued Phoebe Putney, and that case was settled out of court for an undisclosed sum.

Meanwhile, more ties between Hodges and the Pheobe Putney system turned up:

Hodges' decision to run for attorney general elevated the case from a localized matter to one of statewide import. While still a prosecutor in Albany, Hodges received political contributions from Phoebe Putney executives and individuals connected to the hospital system, and his wife was hired as public affairs manager at Phoebe Putney's hospital in Albany.

Since leaving the prosecutor's office in Dougherty County, Hodges has gone to work for the Baudino Law Group, which represents Phoebe Putney. According to records Phoebe Putney must file with the Internal Revenue Service, the hospital system paid Baudino more than $8 million for the fiscal year ending July 31, 2008, the most recent data available.

Now, it is Rehberg who is suing Hodges, for abuse of power. "Charles Rehberg's suuit essentially accuses him and another prosecutor of filing criminal chargest that they knew to be based on fabricated information." A preliminary hearing took place yesterday.

So, in summary, two individuals sent anonymous faxes that charged that the Phoebe Putney system failed "to fulfill its charitable obligations as tax-exempt entity."  Hospital system executives accused them of terrorism, and hospital system investigators allegedly threatened them.  However, a criminal investigation by a district attorney with alleged financial ties to the hospital system ended without any convictions.  A lawsuit by the system against the individuals was dropped.  A suit by the indviduals against the hospital system was settled by the system.  A suit by the individuals charging that the then district attorney abused his power by basing criminal charges on false information is pending. 

So what did the hospital system's management's actions in this case have to do with the system's stated values? -

Phoebe pursues its mission through a patient-centered environment of care reflecting high standards and promoting a balance of professional preparation and service, continuous improvement and based on core values where:

* PEOPLE come first, are treated with dignity and respect, and diversity of culture and thought is respected.
* RELATIONSHIPS are built on honesty and integrity.
* REPUTATION is built on trust and pride.

In fact, the Phoebe Putney management's pursuit of Mr Rehberg and Dr Bagnato seems diametrically opposed to these values, intended to crush all criticism of management by any means. Once again, we see leaders of once-respected not-for-profit health care institutions whose main goal seems to be consolidating their power and thwarting criticism.

I say again, to truly reform health care, our health care organizations must be lead by those who put the institutions' missions ahead of their self-interest, who manage according to the mission rather than "the way we damn well want."

AstraZeneca Settles

Here is the latest in the parade of legal settlements of cases of alleged wrong-doing by health care organizations.  As reported by Duff Wilson in the New York Times,

The pharmaceutical company AstraZeneca said Thursday that it had reached a $520 million agreement to settle two federal investigations and two whistle-blower lawsuits over the sale and marketing of its blockbuster psychiatric drug Seroquel.

One of the investigations related to 'selected physicians who participated in clinical trials involving Seroquel,' AstraZeneca disclosed in a government filing. The other case related to off-label promotion of the drug.

Seroquel was the top-selling antipsychotic drug in America. It had $17 billion in sales in the United States since 2004, according to IMS Health, a research firm.

Tony Jewell, a company spokesman, declined to be more specific about the physicians or clinical trials under investigation. He said the company was in final negotiations to settle the whistle-blower suits and reach a corporate integrity agreement with the Justice Department.

The name of the whistle-blowers and other details of the suits remained sealed in federal court. Stephen A. Sheller, a lawyer in Philadelphia for the whistle-blowers, and Patricia Hartman, a spokeswoman for the United States attorney in Philadelphia, both declined to comment.

Here we go again. As the Times article noted,

AstraZeneca, based in Britain, joins a list of drug makers that have paid billions to settle inquiries initiated by complaints from former company insiders.

Earlier this year, Eli Lilly & Company paid $1.4 billion over its marketing of Zyprexa, another antipsychotic drug. And Pfizer announced it would pay $2.3 billion, including a record $1.195 billion criminal fine, mostly over its painkiller Bextra, which has been withdrawn from the market.

Does anyone really still believe that integrity agreements, and settlements assessed against huge corporations deter such profitable bad behavior? A half a billion dollar one-time settlement is just a small cost of doing business for a company that sold $17 billion worth of the offending drug in the last five years. As in the case of many other previously announced settlements, it appears that nobody who authorized, directed, or implemented the bad behavior that led to the settlement will suffer any sort of negative consequences.

We previously discussed allegations that AstraZeneca manipulated and suppressed clinical research, and organized deceptive marketing campaigns in support of Seroquel sales (here, and here).  If we do not discourage such practices, they will continue to bias the clinical evidence making expensive drugs and devices seem more effective and less dangerous than they really are.  Is it any wonder that we over-use and over-pay for these products?  Anyone seriously interested in reforming health care to improve quality and access while moderating costs ought to pay attention to behavior that leads to such over-use and over-payment. 

(However, there may be hope.  Perhaps in the future there will be more effective deterrence.  A recent indictment named not only the device company Stryker Biotech (a subsidiary of Stryker Corporation), but also its former CEO and three managers.)

The Reappearance of a Ghost of Seasons Past

About a year after we started Health Care Renewal, in late 2005, we wrote multiple posts about the complex and unfortunate case of Dr Aubrey Blumsohn's attempts to keep a research project honest. The early posts were here, here, here, and here. In this post, we summarized the case thus:

• Dr Aubrey Blumsohn, a senior lecturer at Sheffield University, and Professor Richard Eastell performed a research project on the effects of the drug risedronate (Actonel, made by Procter & Gamble Pharmaceuticals [P&G]) under a contract between P&G and the University.
• Although the research contract designated Blumsohn and Eastell as "Investigators" under whose direction the project would be carried out, Blumsohn was not given access to the original data collected by the project.
• Despite numerous requests, (like this one), P&G refused access to this data repeatedly.
  Blumsohn was concerned that he and Eastell could be accused of scientific fraud if they continued to make presentations and write articles and abstracts without access to the data which they were supposedly writing about.
• Blumsohn became suspicious that some of the analyses done by P&G could be misleading, especially related to a graph shown to him that omitted 40% of patient data.
• Blumsohn objected to P&G arranging for papers and abstracts to be written by a professional writer, but with Blumsohn listed as first author. Blumsohn was concerned that such ghost-written documents were mainly meant to convey "key messages" in support of P&G's commercial interests.
• Eastell warned Blumsohn not to aggravate P&G, because the company was providing a grant to the University which "is a good source of income."
• After repeated failed attempt to get the data, Blumsohn complained to numerous officials at Sheffield University, including Eastell, medical school Dean Tony Weetman, University Vice-Chancellor Robert Boucher, and the Head of the University's Department of Human Resources, Ms R Valerio.
• Still unable to get the data, he spoke with news reporters about his case. At this point, Sheffield suspended him, but then offered him a severance agreement if he signed a contract binding him not to make any detrimental or derogatory statements about the University and its leaders.

So the case involved suppression and manipulation of research, ghost-writing, institutional conflicts of interest, and attempts to silence a whistle blower. It provides lessons about the downsides of letting commercial firms sponsor and hence control human research designed to evaluate the products or services they sell; and of academic medicine becoming dependent on research money from such firms for such research. Although Health Care Renewal, being US based, most often writes about such issues in the US, this case is a reminder that they are global. (Note that we posted more about this case in 2006, here, here and here, but since then it has not gotten much public attention.)

Last weekend the (UK) Guardian returned to it:

The Guardian has learned that one of Britain's leading bone specialists is facing disciplinary action over accusations that he was involved in 'ghost writing'.

The General Medical Council will call Professor Richard Eastell in front of a fitness to practice committee. Eastell, a bone expert at Sheffield University, has admitted he allowed his name to go forward as first author of a study on an osteoporosis drug even though he did not have access to all the data on which the study's conclusions were based. An employee of Proctor and Gamble, the US company making Actonel, was the only author who had all the figures.

Experts believe the practice is widespread in Britain.

In a letter published in the Journal of Bone and Mineral Research, which carried the original study, he stated: 'In the original paper one of the authors, a statistician working for P&G, Ian Barton, had full access to all the data.' The authors had full access to all the analyses of the data that they requested, he said – but those analyses were carried out by the company.

The letter, published in 2007, also acknowledged flaws in the study. A later independent analysis of the data 'identified some errors and poor practice', he wrote. The study was designed to show the strengths of Actonel which was in fierce competition with a rival bone-strengthening drug called Fosamax, made by Merck.

Eastell's paper concerned a study carried out on behalf of Proctor and Gamble, comparing the bone density of women prescribed Actonel with others who were not. Only the company knew which women were on the drug and which were taking something else.

Eastell's colleague, Dr Aubrey Blumsohn, wanted the codes which would say which of the patients who suffered fractures had been on the drug. The company refused. Blumsohn took his concerns to Eastell, but in a conversation which Blumsohn says he taped , Eastell said he was concerned that persistent requests might damage the relationship they had with the company. Eastell is said to have told him: 'The only thing that we have to watch all the time is our relationship with P&G. Because … we have the big Sheffield Centre Grant [from P&G] which is a good source of income, we have got to really watch it.' .

So, after four years, this case has generated an official hearing of sorts. The hearing is obviously late, and seemingly will only be devoted to only one aspect of this case (ghost writing). However, at least our friends in the UK are doing something. I cannot recall a single case that resulted in any serious consideration of imposing negative consequences on anyone who was accused of suppressing research, manipulating research, endorsing ghost-writing, or intimidating a whistle-blower. In fact, many of the more troubling cases have never resulted in any sort of public discussion either at the institutions at which they occurred, or at any organization with relevant regulatory, or even just moral authority. So the GMC hearing is at least a step forward. Two cheers for the British GMC, and none for US universities, academic medical centers, professional societies, and government regulators.

(If anyone can remind me of a case in which there was a public discussion at the relevant institution, or some public consideration of the case by a regulatory agency, professional society, or some group with moral authority, please remind me of it, and I would be happy to post about it.)