Synthes Settles, Agrees to Stop Giving Stock to Physicians Conducting Clinical Trials

Again, 'tis the season for legal settlements. From the Newark Star-Ledger,

New Jersey and Pennsylvania-based medical company Synthes reached a settlement today over the company's alleged financial conflicts of interest, which officials are calling a landmark deal, state officials announced today.

The attorney general's office launched an investigation early 2008 into Synthes, which produces devices for treating spinal trauma, to determine whether physicians were financially benefiting from conducting clinical trials on the company's products. Under the agreement, Synthes will no longer pay trial physicians with company stock and must disclose all payments to the physicians and whether the physicians have a financial stake in the outcome of the trial.

Attorney General Anne Milgram, who said such provisions were the first of their kind, said conflicts of interest are common within the medical community.

'It is outrageous that doctors who are testing and, in many cases, recommending the use of certain high-risk medical devices are being compensated with stock in the very companies that make the devices,' said Milgram. 'All patients -- but especially those considering high-risk devices such as spinal disc replacements -- deserve honest, objective clinical trial information about the products available.'

She also criticized the Food and Drug Administration, saying the federal agency was not vigilant enough in regulating Synthes, a $3.2 billion global company.

'Medical device makers have a duty to make certain that clinical trial results are accurate and unbiased,' Milgram said. 'In creating these financial incentives for doctors, Synthes and the rest of the industry have done the exact opposite. Going forward, if the industry will not address this problem voluntarily, we most certainly will.'

What will they think of next? We have seen plenty of cases in which physicians have been given payments that could influence their clinical decision making by companies with products or services to sell. Often, such payments are not disclosed. This is one of the few times I have seen physicians other than those on corporate boards, however, receiving payments in company stock. This would seem to be a new low. It surely would provide a more powerful incentive to make the studies' results favor the company's products than would mere cash payments. At least the settlement will stop this practice, and force disclosure of company payments.

The statements by the state Attorney General were particularly and admirably direct.

However, once again we see some familiar patterns. While human beings authorized or committed the acts that got the organization in trouble, rarely do these people seem to suffer any negative consequences. At most, the organization may pay a fine. In this case, the fine was, in corporate terms, tiny. However, even a large fine, however, may come out of dividends or the stock price, dispersing the cost to stock-holders, or out of salaries across the board. Thus, those who got the organization into trouble are unlikely to feel pain from it. Perhaps because of reverence for all organizations related to health care, and fear that the bankruptcy of any health care organization, even a health care insurance company, will leave patients in the lurch, prosecutors do not seem inclined to actually prosecute such organizations. The net effect, though, seems to be that dishonest executives of health care organizations can continue to act with impunity.Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade.

ADDENDUM (6 May, 2009) - See also comments by Merrill Goozner on GoozNews blog.

WellCare Settles, Accepts Deferred Prosecution Agreement

'Tis the season for deferred prosecution agreements for health care organizations. As reported by the Wall Street Journal:

WellCare Health Plans Inc. agreed to pay $80 million to settle a Florida Medicaid fraud investigation that has embroiled the company since the fall of 2007, previously prompting a management shake-up and restatement of more than three years of the company's earnings.

The settlement resolves federal and state criminal probes into allegations that WellCare defrauded Florida benefits programs for low-income adults and children of about $40 million by improperly inflating what it spent on care.

WellCare, based in Tampa, Fla., administers medical benefits for about 2.5 million enrollees in government-sponsored plans in several states.

Under a deferred prosecution agreement, the U.S. Attorney's Office for the Middle District of Florida in Tampa filed a fraud conspiracy charge against the company but said it wouldn't prosecute the case if WellCare meets all of the deal's terms.

U.S. Attorney A. Brian Albritton said in a news conference Tuesday that his office could have pursued a conviction but that it likely would have put the insurer out of business, hurting customers, innocent employees and shareholders. In penalizing the company, 'we have, at the same time, tried to avoid crushing it,' he said.

Under the terms, WellCare must forfeit $40 million and pay another $40 million in restitution to Florida's Medicaid and 'Healthy Kids' plans. WellCare also has agreed 'to accept and acknowledge full responsibility for the conduct that led to the government's investigations,' according to the deferred prosecution agreement. The company declined to elaborate.

In addition, the company also must retain an independent monitor to review its business operations, cooperate with the government's ongoing investigations and implement new procedures within 60 days to prevent future abuse or faulty reports to state health care programs.

This was not the first bit of trouble WellCare got itself into. We posted here 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, as we have found from blogging on Health Care Renewal for a while, organizations that are found to be committing one sort of mischief often are also found to be committing another sort.

We also see some other familiar patterns. While human beings authorized or committed the acts that got the organization in trouble, rarely do these people seem to suffer any negative consequences. At most, the organization may pay a seemingly large fine. This, however, may come out of dividends or the stock price, dispersing the cost to stock-holders, or out of salaries across the board. Thus, those who got the organization into trouble are unlikely to feel pain from it. Perhaps because of reverence for all organizations related to health care, and fear that the bankruptcy of any health care organization, even a health care insurance company, will leave patients in the lurch, prosecutors do not seem inclined to actually prosecute such organizations. The net effect, though, seems to be that dishonest executives of health care organizations can continue to act with impunity.

Until bad leadership of health care organizations leads to negative consequences for those practicing it, health care leadership can be expected to continuously degrade.

By the way, one member of the WellCare board of directors is Regina Herzlinger, a well known and prolific health policy expert, and holds the Nancy R. McPherson Professor of Business Administration Chair of the Harvard Business School. As far as I know, Prof Herzlinger is one of the many health policy experts who avoids discussing the sorts of problems with the accountability, integrity, and transparency of health care leadership which is grist for the mill here at Health Care Renewal. Yet under the stewardship of such an august expert, WellCare had to "accept and acknowledge full responsibility for ... conduct" that included fraud. Perhaps, Prof Herzlinger, like many other main stream health policy experts, should learn to acknowledge that health care leadership may be unaccountable, opaque, dishonest, and sometimes flagrantly corrupt. Furthermore, Prof Herzlinger, like many other well-paid board members of health care organization, should pay a bit more attention to the mischief being committed by those who answer to her.

EHR's and Scarcity of Public Reviews of the User Experience

I recently downloaded the public beta (incomplete trial version) of Apple's new web browser Safari 4.

I like its user experience and features, presenting a main page "posterboard" of most visited or user-selected sites, a searchable, flip-panel history of visited pages (using the Macintosh OS X Spotlight and Cover Flow paradigms), top located tabs, and other useful features. (Note: I use both Macs and PC's, and hold no financial stakes in Apple whatsoever.)

What struck me was the vociferous online discussions and debates about every facet of the new browser version, down to the level of minutiae. The following review particularly struck me for its level of detail - Observations, Complaints, Quibbles, and Suggestions Regarding the Safari 4 Public Beta Released One Week Ago, Roughly in Order of Importance by John Gruber. It includes minutiae such as this:

... THE TABS

Safari’s new tab layout, placing the tabs directly in the window title bar, is a radical change. There’s no use addressing the specific details — good and bad — of this new arrangement, without first trying to figure out why Apple did this. Again, the designers are behind Apple’s wall of silence, so we’re left to speculate.

Rule out the notion that Safari’s designers undertook this change lightly. This is a major change to an important feature that many users feel strongly about. My guess is that this is an attempt to bring tabbed browsing to the masses. The biggest and most important change is that the interface for the tabs is now far more prominent. In fact, previously, the entire interface for tabbed browsing was not visible in Safari by default — in a window with just one tab, Safari’s default settings were such that the tab bar was not shown.

In Safari 4, there’s a prominent and unique “+” button that is always visible in the top right corner of every window, where the standard tic-tac button for toggling the display of the toolbar usually resides.1 Because the interface to create new tabs is now obvious, I can only assume that the point of this redesign is to encourage more people to use, or at least try, tabbed browsing.

But the problems with this new tab layout are significant.

Conceptually, the basic idea is sound. Browser tabs are, effectively, a collection of separate browser windows grouped together in a single parent window. Safari’s new tab layout makes this a tab is like a sub-window metaphor more explicit. The anchor, the conceptual root, of a standard Mac OS window is the title bar, and in Safari 4, the tabs aren’t just in the title bar, they are the title bar ...

Etcetera and so forth, on and on, as in other reviews easily found online.

In Electronic Health Records and other clinical IT, by way of contrast, reviews at this level of detail are ... nearly nonexistent (I use the term "nearly" because I authored such a review, in general terms, starting here). One reason EHR and other clinical IT user experience and performance debates are so rare is because customers are contractually forbidden to engage in them publicly. Koppel's and Kreda's JAMA paper makes that clear:

Health Care Information Technology Vendors' "Hold Harmless" Clause - Implications for Patients and Clinicians, Ross Koppel and David Kreda, Journal of the American Medical Association, 2009; 301(12):1276-1278

Vendors claim they are protecting their "intellectual property." I'm not exactly sure what IP they are holding as closely as the crown jewels.

Is it their:

• Earth shaking, 22nd century user interfaces?
• Secretive and ingenious widgets that revolutionize user selection from choice lists?
• Hyper-efficient, never before seen data structures and algorithms?
• Artificial intelligence routines that would make Captain Picard and his android sidekick Mr. Data envious?

In other words, what, exactly, is being protected by shielding commercial EHR's from external scrutiny and debate?

Is this the Secret Sauce the commercial EHR vendors seek to conceal?

The loss engendered by such policies is the reduced feedback from, and reduced interaction among endusers. This interaction occurs commonly on the Internet in 2009 on a great number of topics, but EHR user experiences are not one of them.

Companies like Apple and Microsoft, strongly user centric, encourage such debates through release of their beta's, both of enduser tools and of operating systems e.g., Windows 7 Beta. I should note that with these pieces of software, lives are not at stake, unlike with electronic health records systems.

The Veterans Health Administration makes a full working copy of VistA Computerized Patient Record System (CPRS) available as a free public download to anyone in the world here. I use it in my teaching (and am forced to do so, as commercial EHR demos are as available as, say, demos of the National Security Agency's spy and decryption software).

What, exactly, is the commercial EHR vendors' real excuse for the levels of product secrecy they maintain?

Could it be embarrassment and fear of exposure of defects, ill conceived design features and a mission hostile user experience?

-- SS

Bio-Tech U

The San Francisco Chronicle just reported that a new Chancellor has been nominated for the University of California - San Francisco (UCSF). UCSF is functionally a health sciences university, and its Chancellor functions as its president. The UCSF medical school is generally considered one of the elite US academic medical institutions.

Genentech executive Susan Desmond-Hellmann has been nominated to be the next chancellor of UCSF, making her the first woman or biotech leader ever asked to run the research campus and hospital system that is San Francisco's second-largest employer.

Desmond-Hellmann has served most recently as president of drug development at Genentech, the South San Francisco biotech firm that was recently acquired by Swiss drugmaker Roche. She was trained as a physician, did her internship at UCSF and has taught there recently as an adjunct associate professor while working at Genentech.

Although prior UCSF chancellors have come from more academic or scientific backgrounds, [Dr Holly] Smith said Desmond-Hellmann's biotech connections would be an advantage as the university tries to translate scientific discoveries into medical treatments.

Dr Desmond-Hellmann is, in my humble opinion, a very unusual candidate to be Chancellor of one of the country's premier academic medical institutions. According to her official Genentech bio (taken off the Genentech server, but transiently available in the Google cache here), and a biography in Nature Drug Discovery, Dr Desmond-Hellmann, after getting both an MD and an MPH, spent two years doing AIDS research in Uganda as a UCSF junior faculty member, and then spent a few years in private practice hematology-oncology. She published few articles (5, according to Medline, last in 1995), and by 1993 went to work in industry, first for Bristol-Myers-Squibb. She started at Genentech in 1995, and worked her way up to her current position, "president, Product Development. In this role, Hellmann is responsible for Genentech's Development, Process Research & Development, Business Development, Product Portfolio Management, Alliance Management and Pipeline Planning Support functions. Hellmann is a member of Genentech's executive committee." Before her nomination to be Chancellor, Dr Desmond-Hellmann was "affiliated" faculty of the Department of Epidemiology and Biostatistics at UCSF, apparently with the rank of adjunct associate professor. In that capacity, she apparently gave a single seminar in 2007, and lectured in the Designing Clinical Research course in 2003.

So, on one hand, Dr Desmond-Hellmann, to be charitable, does not have much of an academic track record, at best approximating that of a very junior medical faculty member. She also certainly has no experience in academic administration. In general, people who lead academic medicine often have substantial track records in academics and in academic administration. So, in some sense, Dr Desmond-Hellmann's appointment seems to based on the theory of the generic manager. That is, the popular notion in the business world managers can manage anything, any organization, with any mission, in any context. Managing in the complex health care context, especially managing large, complex academic medical institutions, may not be easy for those used to managing elsewhere, even in the health care corporate world.

Furthermore, the complex mission of academic medicine, which includes providing excellent care of individual patients, while discovering and disseminating the truth in a spirit of free enquiry, is very different from the mission of a for-profit biotechnology company. How well someone used to the bottom-line mentality of the corporate world would uphold the academic mission is not clear.

Dr Desmond-Hellmann came from a company known for charging very high prices for the drugs it marketed, and Dr Desmond-Hellmann was on record personally defending this practice. Quoting from a news article in the Journal of the National Cancer Institute [McNeil C. Sticker shock sharpens focus on biologics. JNCI 2007; 99: 910-914.]

Never mind their novel targets and mechanisms. It's the cost of new biologic agents that's creating a buzz these days. At thousands of dollars a month, which can mean many tens of thousands for some regimens, sticker shock has generated recent, prominent articles in both the national and trade press.

On one level, the argument is about macroeconomics. Neal Meropol, M.D., of Fox Chase Cancer Center in Philadelphia, pointed out that cancer drugs account for 40% of all Medicare drug expenditures. That makes them a major contributor to the country's high health care costs, now about 17% of our gross domestic product (GDP) and growing. That percentage is much higher than in other developed countries with higher life expectancies, he said at a forum on cancer care costs at the American Association of Cancer Research annual meeting.

On the other side of the macroeconomic debate, experts point out that the U.S. has a high GDP to begin with and so can afford to spend more on health. And cancer biologics, though among the most costly drugs, are still only a tiny fraction of total GDP, said Genentech's Susan Desmond-Hellmann, president for product development, at AACR.

Hellmann and others argue that with these drugs’ potential to alleviate the huge societal burden of cancer, biologics are worth the cost.

The industry has responded to concerns about costs by putting more resources into patient assistance programs. When Genentech received U.S. Food and Drug Administration approval for bevacizumab in lung cancer last October, it also announced a cap on expenditures for the drug for patients with family incomes less than $100,000 a year. In 2005, the median household income was $46,326.

Originally announced as $55,000, the cap actually doesn't kick in until after a patient has received 10,000 mg. At the wholesale acquisition cost, 10,000 mg is about $55,000, said Genentech spokesperson Edward Lang.

What the companies have not done so far is reduce prices. The reason, industry representatives say, is the need to recoup massive research and development costs, including high manufacturing costs for biologics. These costs have long kept biotech companies from making much of a profit overall, Hellmann said. She noted that profit levels of publicly held biotech firms have "hovered close to zero" throughout the life of the industry.

But, while Dr Desmond-Hellmann was defending pricing drugs that at more than $55,000 a year, and complaining about low industry profits, she was pocketing lavish rewards. According to Genentech's 2008 proxy statement, (the last available, since the company has been bought out by Roche), her total compensation was $8,361,348 in 2007 and $7,820,142 in 2006. In 2007, her total compensation was equal to 0.3% of the firm's total net income, and the top five company executives' total compensation was equal to about 1.5% of the firm's total revenues. In 2007, the firm's stock price declined from 91.30 on 6 January 2007 to 66.38 on 4 January, 2008, or 27%, according to Google Finance. In 2007, she held 1,616,383 shares of stock, or stock options exercisable within 60 days of January 31, 2008. In 2007 she exercised 170,000 stock options, realizing $11,556,663. So perhaps those high drug prices were needed not only to pay for research, but to make top executives, including Dr Desmond-Hellmann, very rich.

This raises further questions about her inclination to uphold the university's mission in the future.

University of California, San Francisco is a leading university dedicated to defining health worldwide through advanced biomedical research, graduate-level education in the life sciences and health professions, and excellence in patient care.

In any case, hiring a lavishly compensated top executive from a biotech firm known for its high drug prices to run a public health sciences university does considerably blur the line between academic medicine and the health care industry. In the Chronicle article, Dr Desmond-Hellmann declared, "I began my career at UCSF and my heart has never left it." If she does become Chancellor, let us hope that her heart will speak louder than all those millions she used to make by, among other means, charging more than $55,000 a year for bevacizumab.

BLOGSCAN - At UMDNJ, Lose Your Job, Keep Your Cell Phone

We have frequently discussed the plight of the University of Medicine and Dentistry of New Jersey (UMDNJ), the largest health care university in the US. Facing indictment for federal crimes, the university operated under a deferred prosecution agreement and the supervision of a federal monitor from 2005 to 2007. We most recently blogged about UMDNJ here, and see links backward to previous posts from here. On the University Diaries blog, Prof Margaret Soltan discussed the latest aspect of mismanagement at UMDNJ to be uncovered.

BLOGSCAN - Merck Hired Elsevier to Create Fake Peer-Reviewed Medical Journal

You just can't make this stuff up. On the Respectful Insolence blog, Orac recounted how pharmaceutical giant Merck hired medical publishing giant Elsevier to create what appeared to be a peer-reviewed journal, but theAustralasian Journal of Bone and Joint Medicine really was just a marketing outlet. The goal was to market Fosamax and Vioxx. This is another bizarre variant on the stealth marketing theme, taken to quite an extreme. And the pharmaceutical companies wonder why people don't trust them?

ADDENDUM (4 May, 2009) - Dr Aubrey Blumsohn is back online on his Scientific Misconduct Blog, and noted the academic luminaries who were willing to serve on the editorial board of this fake peer-reviewed journal.

ADDENDUM (11 May, 2009) - See also comments on Laika's MedLibBlog.

Was Google lobbying Washington for HIPAA exclusion of their PHR effort?

At "Should Google Seek the Resignations of Those Responsible for This Healthcare IT Debacle?" I expressed great concern about what I term the cross occupational intrusion of the IT industry into healthcare.

My major concern in that post was how the information technologists at Google, even with nearly unlimited access to capital (and therefore to the world's informatics expertise) badly mismanaged a Personal Health Records (PHR) project through commission of a most fundamental biomedical information science blunder (quite distinct from IT; most IT technologists and MIS personnel really stink at biomedical information science). They tried to map relatively ungranular, imprecise, and often misused billing codes back to enduser-viewable diagnoses, resulting in easily predictable patient panic and mayhem.

As usual in HIT: it's possibly even worse.

I am quite concerned about a letter from the consumer education and advocacy organization Consumer Watchdog.org and their allegations that Google has been lobbying Congress to be excluded from HIPAA provisions on privacy and forbidding sales of medical records. The letter, dated April 22, is here (http://www.consumerwatchdog.org/resources/LtrSchmidt042209.pdf).

Considering that Google is heavily into the PHR space, and even worse, considering they made an Informatics 101 error in attempting to map billing codes into user-viewable diagnostic data, I would (and I'm sure others would as well) view such attempts if they indeed occurred as ominous, a true heavy handed intrusion of the IT industry not only into the affairs of medicine but into what really is another human rights issue. (I'd pointed out another potential HIT-related human rights issue at the post "UPMC as Proving Ground for IT Tests On Children".)

I would be interested in additional information on the Google lobbying issue, especially from those at Harvard and other academic centers who have been involved in the Google PHR initiative.

I have shared these concerns with the American Medical Informatics Association (AMIA) clinical information systems workgroup (cis-wg) and the people & organizational issues workgroup (poi-wg) as well.

I hope the Consumer Watchdog allegations are not accurate, because if they are valid, the implications of national EHR grow increasingly unsettling.