Tuesday, November 21, 2017

In US, More than One-Third Think Government and Business Leaders are Corrupt, Media Shrug

We have noted  (most recently here),  that health care corruption, particularly its global nature and its presence in developed countries like the US, is a taboo topic and thus remains anechoic.  Yet corruption in general, and health care corruption in particular, are huge global problems.

Transparency International just released the full results of the 2017 version of its Global Corruption Barometer.  (The November 14, 2017 news release is here.  The full report is available here.  Details about the methods are here. Country by country results are here.)

The report summarizes responses from 162,136 people to surveys done in 119 countries from 2016 to January, 2017.

Key Issues

The surveys asked about peoples' perceptions of corruption in various parts of government, including corruption affecting:
- the top executives (prime minister, president)
- the national legislature
- government officials

It also asked about corruption in business in general.  (Unfortunately, this version of the barometer did not specifically aska about health care.  Nonetheless, corruption in business and government is clearly relevant to corruption in health care, and to health car dysfunction.)

The survey, for the first time, also asked about how well government is dealing with corruption, and whether citizens feel empowered to challenge corruption.

Results in the US and Some Comparable Countries

Just like in 2013, while the US did not have the worst results, neither did it have results worthy of pride.  (Keep in mind, as well, that these surveys were all done before the Trump administration began, so they do not reflect any changes brought about by that.  We have seen many indications that corruption and its risk factor, conflicts of interest, are much worse under the Trump regime than previous administrations, e.g., look here.)

Some key results from the US, compared to three other developed Western countries (Austrialia, France, Germany, and the UK, but not Canada) follow. The numbers are those who agree with the header statements. (When the US had the best result of all 5, I highlighted that in green.  When it had the worst result, I highlighted it in red.)

Corruption Increased in Past Year (presumably 2016)

Australia     34%

France         44%

Germany      -

UK               48%

US                37%

Most of  President/ Prime Minister and Officials in that Office are Involved in Corruption

Australia      15%

France          35%

Germany         7%

UK                27%

US                 36%

Most Legislators are Involved in Corruption

Australia       12%

France           35%

Germany         6%

UK                 28%

US                  41%

Most Government Officials are Involved in Corruption

Australia        12%

France            31%

Germany          6%

UK                  25%

US                   32%

Most Business Executives are Involved in Corruption

Australia         20%

France             17%

Germany         33%

UK                   21%

US                   35%

Government is Handling the Fight Against Corruption Badly

Australia         41%

France             64%

Germany         24%

UK                  57%

US                   51%

It is Not Socially Acceptable to Report Corruption

Australia          22%

France             24%

Germany         12%

UK                  23%

US                   23%

Summary: Many People Believe Corruption Seriously Affects US Government and Business, but the Topic is Taboo

Thus once again, the US had results suggesting it has important problems with corruption.  More than one-third of US respondents thought that most executive branch leaders, legislators, and business executives are involved in corruption,  Just less than one-third thought that most government officials are involved in corruption.  More than one-half of US respondents thought that the government is handling the fight against corruption badly.  More than one-third thought that corruption had gotten worse in the previous year.  More than 20% thought it is not socially acceptable to report corruption.

Furthermore, the US had the worst results, compared to the other four developed countries, in four categories, and did not have the best results in any.

Thus, this survey suggested that substantial minorities of people thought that corruption in government and business was a major problem in 2016, and that perceptions of such corruption were no better, and likely worse in the US than in some comparable developed countries.

These would seem to be important, if discouraging results.  But in the US, they do not appear to be considered news, and it is likely that so far, hardly anyone in the US outside of readers of this blog have heard any of this.

To date, there has been no coverage that I can find of the 2017 Global Corruption Barometer results in the US at all, much less coverage in the US that focused on US results.  (I admit that since the full report was released, there has been litttle coverage of it anywhere.  Transparency International did release multiple reports on regional results earlier this year, but not including North America.  These did get some coverage in affected countries at the time.)

We have frequently noted how discussion of health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.
Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects somewhere else, mainly benighted less developed countries.  At best, the corruption that gets discussed is low level.  In the US, frequent examples are the "pill mills"  and various cheats of government and private insurance programs by practitioners and patients that lately have been decried as a cause of the narcotics crisis (e.g., look here).  (In contrast, the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics, e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences. 

Furthermore, of late there is reason to worry about worsening corruption of US government leaders in the health care sphere.  The Trump regime is being increasingly identified with corruption and impunity itself.   There has been an apparent recent increase in one particular species of corruption, the revolving door phenomenon, affecting appointments of key government health regulators and health care and public health policy makers, as noted most recently here.

However, the silence so far that has greeted Transparency International's latest Global Corruption Barometer in the US shows that corruption, including health care corruption, remains a taboo topic. 

So as I have said till blue in the face.... if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Thursday, November 16, 2017

Perpetual Revolving Motion: Yet More Transits Through the Health Care Revolving Door

The pace of people spinning through the US federal revolving door seems unprecedented. 

Most were people going from the health care corporations to government positions regulating or making policy influencing those same corporations.  Since our last roundup, of 11 days ago, we have found two more significant travelers from industry to government, and one from the previous administration to industry.  In addition, we realized that the case of one of the travelers discussed only last month is more significant than we realized.

Nina Devlin from Mylan to Senior Communications Adviser for the US Food and Drug Administration (FDA)

As reported extremely briefly by The Hill on Oct 27, 2017,

The Food and Drug Administration (FDA) has hired a senior executive from EpiPen maker Mylan to be a senior communications adviser in the agency, CBS News reported Friday.

Nina Devlin, who was the head of global communications at Mylan, was reportedly hired on Oct. 15 and reports to the FDA's chief of staff.

At the time Ms Devlin was doing public relations for Mylan,

Mylan reached a $465 million settlement with the federal government stemming from a Justice Department claim that it had overcharged the government for EpiPens.

The EpiPen is a medical device that treats dangerous allergic reactions by injecting epinephrine.
Accusations that Mylan overcharged for EpiPens got so much media attention that it seemed superflouous to discuss this case on Health Care Renewal. However, we did discuss some earlier and more obscure Mylan shenanigans here.

So this appointment is troubling because Ms Devlin went straight from a pharmaceutical company to the main federal agency regulating pharmaceutical companies, and she went from a company with a notably recently checquered ethical record.

Scott Mungo from Vice President for Safety Etc for Fedex to Assistant Secretary of Labor for the Occupational Safety and Health Administration (OSHA)

This case was described by Allgov.Com on November 12, 2017.  Mr Mungo's recent career was described thus,

In February 2000, Mugno was named managing director for corporate safety, health and fire prevention at FedEx. He held that post until December 2011, when he was named vice president for safety, sustainability and vehicle maintenance for the company’s FedEx Ground unit. Along with his more conventional duties there, Mugno served as 'brain coach' and 'den mother' for FedEx drivers participating in National Truck Driving Championship competitions. FedEx drivers often won their events. Mugno was in that job when nominated for the OSHA post.

In November 2012, Mugno was added to the Research Advisory Committee of the American Transportation Research Institute, and was its chairman at the time of his OSHA nomination. He is also chairman of the U.S. Chamber of Commerce OSHA subcommittee.

Mr Mungo's record suggests that he may be more sympathetic to the interests of big corporate executives than to the safety and health of their workers. Per Allgov,

Industry groups welcomed Mugno’s appointment to OSHA, who has represented the American Trucking Associations at Congressional hearings, believing that he will continue the Trump administration’s drive to weaken worker-protection regulations put in place under the Obama administration. In 2006, Mugno told the U.S. Chamber of Commerce that the actions of employees deserved more scrutiny, pointing out that obese workers and workers with high blood pressure and high cholesterol levels impact workplace safety. That same year, he told the publication Business Insurance: 'We’ve got to free OSHA from its own statutory and regulatory handcuffs.' He noted that much has changed since OSHA was established in 1971, and that some regulations should perhaps be subject to sunset provisions.

Another reason for Mungo's appointment might have been

Mugno was an enthusiastic Trump supporter, even attending the inauguration.

Dr Karen DeSalvo from National Coordinator for Health Information Technology and Assistant Secretary of Health and Human Services to Member of the Board of Directors, Humana

As reported by Louisville Business First on November 13, 2017,

Humana (NYSE: HUM), a Louisville-based health insurance and health services company, named Dr. Karen DeSalvo as the 12th member of its board of directors.

DeSalvo, 52, is a former government public health administrator and university administrator, according to a news release. Most recently, she held two overlapping roles with the U.S. Department of Health and Human Services: national coordinator for health information technology from January 2014 until August 2016 and the assistant secretary for health in the HHS department from October 2014 until January 2017.

Dr DeSalvo will now be responsible for the governance of a large health insurance company with a considerable Medicare supplement business, and which certainly has important interactions with electronic health records after having been the principal government officer overseeing EHRs, and an administrator within the agency that runs Medicare and other government insurance programs.

Joe Grogan, Lobbyist for Gilead to Director of Health Programs, Office of Management and the Budget

We had briefly discussed Mr Grogan's move from pharmaceutical manufacturer Gilead to the "White House working group on drug prices" here.  A November 13, 2017 article in the Washington Post makes it clear that Mr Grogan's influence over health care in general and the pharmaceutical industry in particular is much broader than what we described.  Not only did it specify his title to be Director of Health Programs for the OMB, but it also included:

Grogan, perhaps more than any other member of Trump’s administration, holds the power to nix or give the nod to hundreds of regulations shaping how the federal government runs Medicare, Medicaid, the Affordable Care Act marketplaces, the FDA, the CDC and all the other sub-agencies contained within the sprawl of the Department of Health and Human Services.


It’s fair to say that virtually every rule change proposed or enacted by HHS — from easing reporting requirements for doctors to exempting more employers from paying for birth control to rolling back drug discounts — have Grogan’s mark on them in some way.

'Whether it’s a big home health regulations or nursing homes or hospitals, I can tell you it’s a 90 percent Joe call,' [former CMS administrator Tom] Scully said.

The article made explicit that Mr Grogan's decisions are influenced by his industry background:

In 2006, he went to the FDA as a policy adviser, and from there joined the drug industry -- first at Amgen and then at Gilead Sciences. Those who know him say he brings those industry sensibilities to the OMB job.

'Philosophically, he’s very focused on making sure he understands the way that private industry operates and interacts with the government,' AdvaMed chief executive Scott Whitaker told me.

But of course, as a member of the executive branch, he is supposed to foster government of, by and for the people, not of, by and for big pharmaceutical corporations.  This is all more disturbing because of the sketchy ethical track record of his former employer, Gilead.  We have discussed the company's excessive pricing and promotion of its anti-viral drugs for the treatment of hepatitis C, which went way beyond any evidence of the drugs' benefits to patients.  While these drugs can abolish detectable hepatitis C virus in patients' blood over the short-term, there is no good evidence that they produce any long-term benefits, particularly that they prevent the known complications of hepatitis C, or extend patients' lives. 


On and on it goes.  The revolving door has been a chronic problem for the US federal government, but the level of revolving door activity in the current regime seems way beyond anything we have seen before.  It seems we chronical multiple instances of people going from important health care corporate positions to government positions that regulate or make policy affecting those same corporations for every instance of someone coming from the previous administrations to industry.

As we have noted now again and again and again....    The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort and now this most flagrant example of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Sunday, November 05, 2017

Give Us Those Old Time Conflcts of Interest: Stephen Parente, Key Opinion Leader for UnitedHealth and Redeemer of Former CEO William McGuire to Assistant Secretary of HHS

This latest revolving door case echoes scandals of long ago.

Background: CEO Dr William McGuire and the UnitedHealth Affair

A long time ago,in a galaxy far, far away, actually, from 2006 through 2008, we posted frequently about shenanigans at huge for-profit health insurance/ managed care company UnitedHealth.  We often discussed the patient-unfriendliness of its policies and processes (look here), despite its apparently high-minded past mission statements and public relations, as a function of its persistently bad leadership.

In 2008, we wrote....  One hypothesis is that UHG has trouble adhering to its idealistic mission because of the shortcomings of its leadership.The story of the fall of its recent CEO, Dr William McGuire, was strikingly instructive. As we have previously discussed, (see these posts here, here, and here from 2006 with links backward) Dr McGuire received outrageously lavish remuneration, which stood in stark contrast to the previous UHG mission's pledge to "make health care more affordable."

Controversy has swirled over the timing of huge stock option grants given to Dr McGuire (see post here), leading to his resignation in October, 2006 (see post here). More recently, McGuire agreed to pay back some of those options, although that would reportedly leave him with more than $800 million worth of them (see post here).

Later, Dr McGuire paid $30 million to settle a class action lawsuit over these stock options, and agreed to return 3.68 million stock options to the company.  At the time this was one of the largest cash settlements produced by a class-action lawsuit over financial instruments.  There was supposedly a criminal investigation of the case ongoing in 2008, but I cannot find any record that it produced indictments or convictions.

So Dr McGuire was able to escape this situation with relative impunity.  Then, despite those tributions, we noted that Mr McGuire, however, was quickly offered a bit of redemption. In particular, at the same time, the Minneapolis Star-Tribune reported, Dr McGuire seems to have found ways to keep busy,

The University of Minnesota is courting William McGuire, the health insurance executive who lost his job in a stock options scandal, as "executive in residence" at its business school.

Stephen Parente, director of the Medical Industry Leadership Institute in the Carlson School of Management, said the school had given him the go-ahead to explore the idea with McGuire, former chief executive of Minnetonka-based UnitedHealth Group.

'We are courting him to be an executive-in-residence at Carlson,' Parente said, adding that McGuire's immense experience in health care is what appealed to the university.

Parente said he first reached out to McGuire in August 2007, inviting him to be the keynote speaker at an invitation-only event attended by 70 to 80 guests at the Lafayette Club in Minnetonka Beach. The subject of McGuire's talk was the future of health care.
McGuire hit familiar themes during the hourlong speech, including the need for universal access to health care and the need to track the quality of care by physicians and to pay them accordingly.

Parente said his approach to McGuire was along the lines of: 'We don't really care about the stock options. You know stuff. Tell us what you think.'

Since then, McGuire has attended two seminars at the Carlson school, including one where he arrived unannounced.

There was some discussion within the school, Parente said, on whether it was appropriate to engage McGuire, given the lawsuits and investigations in which he was embroiled. The conclusion was that it was.

'It's one thing if you're bringing in a criminal to speak. But if someone's under investigation, that's fair game,' he said.

Since then, McGuire has acted as "ad hoc kitchen-cabinet adviser" to him, Parente said.

In June, when Parente presented a paper titled 'Is Consumerism at Odds with Prevention?' at the American Society of Health Economics at Duke University, he listed McGuire as one of six co-authors.

At the time, we thought it was all pretty outrageous.  However, we could not find out why the business school in general, and Mr Parente in particular was so enamored of Dr McGuire despite his checkered past.

Now nine years later, and only out of the investigative reporting inspired by the Trump regime was this explained in retrospect.

Mr Parente Transits the Revolving Door from the Medical Industry Leadership Institute (MILI) to the US Department of Health and Human Services (DHHS) 

As we discussed briefly in October, 2017, as briefly reported within a larger August, 2017 ProPublica report on the many patients moving from industry to the Trump regime, Mr Parente was nominated to be Assistant Secretary of Health and Human Services (DHHS) for planning and evaluation.  That article listed him as coming from a position as Principal, Health Systems Innovation Network LLC, but did not mention the Medical Industry Leadership Group. 

This DHHS position is important, as explained in an October 30, 2017 Politico article. .

In his role as assistant secretary, Parente would be the 'principal advisor' to the HHS secretary on policy development and 'responsible for major activities in policy coordination, legislation development, strategic planning, policy research, evaluation, and economic analysis,' according to HHS' website. The job, known as ASPE, has been a springboard for policy leaders; it was filled by Bobby Jindal, the future Louisiana governor, and Ben Sasse, the future Nebraska senator, during the George W. Bush administration.

Moreover, the article also explained that Mr Parente's financial relationships and previous commercial work extended far beyond Health Systems Innovation LLC. 

Parente, a 52-year-old economist, has long maintained close ties both to UnitedHealth and to other insurers. A specialist in health care finance, he holds an academic chair at the university called the Minnesota Insurance Industry Endowed Chair. It is funded by Thrivent Financial and Securian Financial Group, which offer a variety of insurance products. UnitedHealth in 2010 made a five-year, $1 million gift to his center, and Blue Cross Blue Shield of Minnesota also was one of five corporate donors that made $30,000 annual gifts to Parente’s academic center.

'Without the support of corporations, MILI would not have evolved beyond [the] start-up stage,' Parente said in a 2015 interview with his business school’s magazine.

Beyond the university, Parente has served as the chairman of the Health Care Cost Institute, a nonprofit research consortium backed by UnitedHealth, Aetna, Humana and Kaiser Permanente. Parente also has a private consulting business that has done work for UnitedHealth and other health care organizations.

In addition,

Parente’s longtime center is intended to bring together academics and the industry and help foster career opportunities for students, school officials say. The center supports research into industry challenges, and students attend lectures taught by executives at UnitedHealth and other industry companies. 'MILI offers national and international firms access to the rigorous intellectual community we have established,' the center’s website touts.

According to a University of Minnesota department directory, Parente is still listed as the director of the small center, which he helped launch more than a decade ago and had led since 2006. School officials say he is no longer leading the center. The center also has a staffer who handles administrative duties, but the institute has been viewed as 'a one-man shop' run by Parente for years, according to two individuals who have knowledge of its operations. Eight other people, three of whom either previously worked for UnitedHealth or currently work there, are listed as part-time instructors at MILI.

Some experts interviewed by Politico explained the importance of Mr Parente's arrangements with UnitedHealth.

'I absolutely think there’s a concern here,' said Wendell Potter, a former insurance executive who’s now a consumer advocate.

Given Parente’s years of work with the insurance industry, 'I would imagine that he would certainly have a bias toward the current model of health insurers,' Potter added.

Potter, a frequent critic of the insurance industry who once ran Cigna’s communications, said that the industry’s gifts to universities are 'widespread' and part of a broader strategy to encourage pro-industry research. [Insurers] absolutely want to make sure that their interests are protected, and they are seen by this administration as … effective and efficient and a crucial part of the health care system,' Potter said.

In other words, it is likely that Mr Parente and his institute were funded as part of a systematic stealth health policy advocacy campaign by UnitedHealth.  Furthermore, it is likely that Mr Parente, especially given that he was a paid consultant to UnitedHealth, functioned as a key opinion leader for it, especially concerned with advocating not for UnitedHealth's products, as many health care professional key opinion leaders do for drug, device and biotechnology companies, but for UnitedHealth's policies.

It seems that Mr Parente has been recently advocating for policies aligned with UnitedHealth, viz

UnitedHealth, like all insurers, also is heavily affected by the rules and regulations published by HHS, which can be informed by the analysis conducted by the office Parente has been nominated to run. As an academic, Parente has played a role in the Obamacare fight, offering supportive analysis of separate proposals by House Speaker Paul Ryan and then-Rep. Tom Price to repeal and replace the Affordable Care Act. He’s also criticized the law as too costly and warned that it would effectively lead to an insurance market death spiral. 'The autopsy will show that [Obamacare] died from a lack of affordability, leaving behind millions of Americans who were sold a bill of goods,' Parente wrote in a 2014 op-ed for The Wall Street Journal, in which he predicted that 40 million Americans would be uninsured by 2024. Since that article, the number of uninsured has fallen from 36 million in 2014 to about 28 million this year.

And UnitedHealth seemed to have added to the center's financial pot in hopes of further cementing Mr Parente's relationship with the company

Five months after President Donald Trump nominated Stephen Parente to be an assistant secretary for Health and Human Services, the nation's largest health insurer quietly gave a $1.2 million gift to a tiny academic research center that Parente helped found and served as director over the past decade.


So here is just the latest embellishment in the march of people transiting the revolving door from health care corporations, and related firms, such as lobbying firms, the the executive branch during the Trump administration. 

Fortunately, good investigative journalists have looked more deeply into this cases, showcasing its more interesting aspects.  First, Mr Parente was not simply a corporate executive moving to the executive branch where he would be able to influence the fortunes of his former corporation.  Mr Parente was apparently a distinguished academic in a business school.  However  he had conflicts of interest, albeit not obvious ones.  These were similar to those affecting many health care academics, as we have frequently discussed.  Making his conflicts inapparent may have allowed him to more effectively advocate for his commercial colleagues in the guise of a disinterested academic.  This is the same game many health care professionals and academics have played (that of the key opinion leader), although many more in the apparent service of pharmaceutical and device marketing than in the service of corporate policy goals.  Nonetheless, such marketing or public relations, carried on by apparently unbiased academics who may really be paid, directly or indirectly, by corporate marketing or public relations departments, is much more insidious and deceptive than marketing or public relations carried out by identifiable corporate spokespeople. 

And now one of these deceptive corporate advocates is already in the executive branch, and perhaps on his way to an even more influential role.

This argues again for the importance of the dangers presented by the web of conflicts of interest that now drapes over medicine, health care, the government, and it seems the whole society.   I say again that all conflictis of interest affecting any medical, health care, or health policy decision makers should be revealed in detail, and most ought to be banned. 

This case also again argues for paying attention to the problem of the revolving door.  As we have said all too many times,...   The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Finally, this case argues that impunity, especially of top health care (and other leaders) has consequences.  One wonders what might have happened had Dr McGuire suffered much more severe negative consequences after the stock backdating case.  Mr Parente would not have been able to get further into the graces of UnitedHealth by giving a distinguisehd academic position to its apparently disgraced former CEO.  Maybe Mr Parente's career trajectory would have been different.  Who knows?  But still.... If we do not make health care leaders accountable for patients' and the public's health, leaving them free to put self-enrichment first, all our health will be further impoverished.   

Sunday, October 29, 2017

The Ultimate Version of Ill-Informed Health Care Leadership: Dumb, Incoherent, Confused, Perhaps Psychotic Things President Trump Says and Does About Health Care Policy

The controversy over the Affordable Care Act, aka "Obamacare," still goes on in the US.  The ACA, which is still the law of the land after congressional Republicans made attempts to repeal and replace it, was meant to increase access to health care by increasing access to health care insurance without disturbing the current US reliance on private, mostly for-profit health insurance companies It used a variety of complex, if not Rube Goldberg like mechanisms to tweak the US health care market.

During the past month, President Trump has produced some dumbfounding verbiage concerning the basic issues of health care and health policy that provide the context for this controversy

The Scope of the Problem: "Fixing Somebody's Back or Their Knee"

Per the Hill, Oct 7, 2017, when asked about health care block grants, President Trump said,

I want to focus on North Korea, I want to focus on Iran, I want to focus on other things. I don't want to focus on fixing somebody's back or their knee or something. Let the states do that.

The ACA, of course, affects not just a limited range of elective orthopedic procedures, but the entire scope of US health and health care, from acute care for severe problems, to management of common diseases, to public health.  Trump appeared to totally underestimate the scope of the health care issues about which he so cavalierly opined

The Approach: "Vaccilate Daily"

An analysis in the Washington Post on October 18, 2017 showed Trump's wildly inconsistent approach to the specifics of managing the ACA.

Early Tuesday, Trump decided upon a justification for his controversial decision to cancel Obamacare payments to insurers that subsidized policies for low-income Americans: The insurance companies are getting rich off this stuff, he claimed.

His argument was dubious at best; insurance companies are making lots of money, but not on Obamacare plans. And not only that, but Trump then suggested at a news conference that he actually supported a newly struck deal that would restore the payments that he had said were lining insurance-company pockets.

And then he did a 180. He told the Heritage Foundation later Tuesday that 'Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies.' Then he tweeted the same Wednesday morning.

I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co's who have made a fortune w/ O'Care.

— Donald J. Trump (@realDonaldTrump) October 18, 2017

Sen. Lamar Alexander (R-Tenn.) who spearheaded the deal with Democratic Sen. Patty Murray (D-Wash.), is now suggesting Trump pulled the rug out from underneath him.

Lamar Alexander to press, per @GarrettHaake: 'The president called me 10 days ago and asked me to work with Senator Murray to do this'

— Benjy Sarlin (@BenjySarlin) October 18, 2017

If I counted that correctly, that was four reversals starting on Oct 17.  The article's conclusion that the president "seemed to vacillate daily" appears too kind. Over a short period of time he repeatedly contradicted himself, demonstrating wild inconsistency. 

The Responsibilities of the President: From "Gonna Blow That Thing Up" to "Its Dead.  It's Gone"

The ACA is still the law of the land.  As a Vox opinion piece by Professor Abe Gluck of Yale Law School on Oct 17, 2017, reminds us that

The president has a legal obligation, under Article II of the US Constitution, to 'take Care that the laws be faithfully executed.' That means he must make sure that our laws are implemented in good faith and that he uses his executive discretion reasonably toward that end.

However, it appears that President Trump's believes he is entitled to wreck, not implement the law.  For example, per the Guardian, Oct 15, 2017, Steve Bannon, President Trump's last campaign manager and former White House strategic adviser said about the president's approach to the Affordable Care Act,

Not gonna make the CSR [cost-sharing reduction] payments, gonna blow that thing up, gonna blow those [insurance] exchanges up, right?
How could a president "faithfully execute" a law by "blowing up" fundamental sections it?

Also, per the Guardian, Oct 16, 2017, when asked about "the Republicans' failure to repeal and replace the Affordable Care Act (ACA),"

'Obamacare is finished,' Trump told reporters before a cabinet meeting. 'It’s dead. It’s gone. You shouldn’t even mention it. It’s gone. There is no such thing as Obamacare any more.'

However, since the law has not been repealed, per the constitution, it is very much still in existence.

Furthermore, Prof Gluck documented specific actions Trump has taken to "blow up" the law.  He first noted that

The ACA requires the federal government to support the open enrollment period — in which individuals must sign up for insurance or lose their chance to do so. The ACA requires the federal government to, among other things, maintain a website and work with local “navigators” and other groups to educate consumers and encourage them to sign up for insurance.

However, Gluck alleged that Trump has sabotaged the law by cutting the open enrollment period in half, scheduled  extensive shutdowns of the enrollment website, canceled previously "scheduled events in which federal officials had planned to visit states and help with enrollment, cut by 90% the federal advertising for open enrollment, and cut funding for the navigator program by 40%.

So rather than "faithfully execute" this law, he seems to be simultaneously sabotaging multiple sections of it.

Citing Trump's statement that Obamacare is already dead (see above), Prof Gluck maintained,

Motive matters, with respect to whether the president exercises his power legally. If the president exercises his discretion to further the purpose of a statute, he complies with the take care clause. If he uses his power pretextually or unreasonably, he violates the Constitution. President Trump’s motives are unambiguous.

Per the title of his article, Prof Gluck declared "that's illegal."

Underlying It All: Complete Gibberish

On Oct 23, 2017, a Vox article by Matthew Yglesias discussed Trump's interview with Maria Bartiromo on the Fox Business Channel.  The article provided this transcript of Trump's discussion the proposed legislation by Senators Alexander and Murphy (the same legislation that provoked many reversals from Trump as above.)

Well, I’ve — I have looked at it very, very strongly. And pretty much, we can do almost what they’re getting. I — I think he is a tremendous person. I don’t know Sen. Murray. I hear very, very good things.

I know that Lamar Alexander’s a fine man, and he is really in there to do good for the people. We can do pretty much what we have to do without, you know, the secretary has tremendous leeway in the — under the Obama plans. One of the things that they did, because they were so messed up, they had no choice but to give the secretary leeway because they knew he’d have to be — he or she would have to be changing all the time.

And we can pretty much do whatever we have to do just the way it is. So this was going to be temporary, prior to repeal and replace. We’re going to repeal and replace Obamacare.

Yglesias made a heroic attempt to extract some meaning from this response, by suggesting that Trump judges the bill "entirely on the basis of his personal impressions of the legislators involved," although he also allowed "Trump has no information about, interest in, or knowledge of the substance of the bill."

Again, that is too kind.  Trump did not decline to answer, or say that this issue was one in which he was not interested (as he did above by dismissing it as involving only "bad backs and knees.")

Instead, most of Trump's verbiage was entrirely incoherent.  I challenge anyone to make sense out of the phrases highlighted above.  At best he seems to care so little about this issue that he cannot be bothered to make a coherent response.  At worst, this demonstrates he becomes temporarily incapable of rational speech or thought.  Parts of the passages above suggest the word salad produced by somebody with fluent aphasia versus the nonsensical responses produced by patients suffering from acute delusional states. 

And just to ice the cake, when asked about the Federal Reserve Bank during the same interview, Trump replied that it is

important psychotically

Again, I wonder if Yglesias was being too kind in concluding that he "meant to say 'psychologically.'"


We have discussed the doctrine of managerialism promoted in business schools that people trained in management should lead every type of human organization and endeavor.  Management by people from the disciplines most relevant to the mission and nature of particular organizations should be eschewed.  So managers, not physicians or other health care professionals, should lead health care organizations.  Following that theme, managers, or those like them, rather than health care professionals and health policy experts should lead health policy. 

However, managers who run health care organizations, or make policy, have an unfortunate tendency to be ill-informed (as well as unsympathetic if not hostile to health care professionals' value and the health care mission, and subject to perverse incentives that often put short-term revenue ahead of the health of patients and the population.)

In some sense, President Trump is the ultimate embodiment of managerialism.  He is a life long businessman, whose highest academic training resulted in an MBA from the Wharton School, with no demonstrated knowledge of or experience in public policy, the law, or the US Constitution.  Yet for years he has felt free to make pronouncements about any subject which caught his eye.

Now he is in charge of health care and health care policy at the federal level, amongst other things. In this role, Mr Trump also appears to be the ultimate embodiment of ill-informed leadership, a term that again now appears much too kind. His message and actions have been not just ill-informed, but dumb, incoherent, confused, and possibly psychotic.

As I have said before,... We need health policy leadership that is well-informed, understands the health care mission, avoids self-interest and conflicts of interest, and is accountable, ethical and honest.   (Of course, we have often said we need leadership of health care organizations with these characteristics.)

Instead, as Mr Yglesias concluded,

On some level, it’s a little bit funny. On another level, Puerto Rico is still languishing in the dark without power (and in many cases without safe drinking water) with no end in sight. Trump is less popular at this point in his administration than any previous president despite a generally benign economic climate, and shows no sign of changing course.

Perhaps it will all work out for the best, and someday we’ll look back and chuckle about the time when we had a president who didn’t know anything about anything that was happening and could never be counted on to make coherent, factual statements on any subject. But traditionally, we haven’t elected presidents like that — for what have always seemed like pretty good reasons — and the risks of compounding disaster are still very much out there.

Thursday, October 19, 2017

Worst Health Care Revolving Door Case So Far, Version 2.0? - From President of Lilly USA to US Secretary of Health and Human Services?

Last week, we discussed what appeared to be the most egregious case of the health care revolving door seen so far.  A health care corporate lobbyist without any direct medical, health care, public health or biomedical science experience was named Acting US Secretary of Health and Human Services after being confirmed as Deputy Secretary.

Former Top Executive of Pharmaceutical Company Eli Lilly Considered for Nomination as Secretary of Health and Human Services

Only a week later, an even more egregious case may be in the works.  The name being "floated" as nominee to be the next Secretary of Health and Human Services is Mr Alex Azar, who through this year was a top pharmaceutical executive.  Again, he has no experience in medicine, the health professions, public health or biomedical sciences.

To repeat, you cannot make this stuff up.

As reported by Politco on October 17, 2017...

Azar has spent most of the past decade inside the drug industry, one of the key sectors he’ll regulate at HHS. Azar joined pharmaceutical giant Eli Lilly and Company in June 2007 as a senior vice president of corporate affairs and communications right after leaving the Bush administration.

He rose to head Lilly’s U.S. operations in 2012, a position he held until this January, when he left the company. At Lilly he worked on both international and federal government affairs and public policy. Other areas of focus included counterfeit medicines and health information technology.
By the way,

As part of his role at Lilly, Azar served on the board of directors for BIO, a drug lobby.

Mr Azar did have prior experience in the Department of Health and Human Services, but essentially as a lawyer/ administrator,

He served as the department’s general counsel and deputy secretary during the Bush administration.

Political, but No Medical, Health Care Professional, Public Health or Biomedical Science Credentials

To emphasize his lack of medical, health care, public health or biomedical science background, see this quote from what Mr Azar wrote this in his alumni profile for the Yale Law School,

I entered healthcare largely by accident. After law school, I clerked for Justice Antonin Scalia and then joined a D.C. law firm. I went to work for my mentor Ken Starr immediately after he became the Whitewater independent counsel.

While at my law firm, Wiley, Rein & Fielding, I was active in the Bush-Cheney campaign in 2000. After Bush won, I received a call from the office of Tommy Thompson, Secretary of the Department of Health & Human Services, asking me if I'd have interest in being General Counsel of HHS. I'll confess that I wrestled with the question, since I had not focused on health law in my legal career.

The Politico article suggests that the Trump regime might consider most of Mr Azar's credentials to be the top US health official are political,

He has also been a harsh critic of Obamacare and cheered GOP efforts to repeal and replace it, telling Fox Business in May that the Obamacare is 'fundamentally broken' and 'circling the drain.'

Azar emerged as a strong backer of former Florida Gov. Jeb Bush’s Republican presidential campaign in 2016, serving on Bush’s 30-member Indiana steering committee in the lead-up to the election.

Azar knows Vice President Mike Pence from his time at Lilly, which is headquartered in Indianapolis.
 Note that were he to become Secretary of DHHS, unless the Affordable Care Act ("Obamacare") were to be repealed, he would be charged with enforcing it.

And years prior to that, according to the Washington Post,

Azar clerked for Supreme Court Justice Antonin Scalia and, after Bill Clinton became president, worked under special counsel Kenneth Starr as he investigated Clinton’s failed Whitewater real estate investments.

Lilly's Poor Ethical Track Record on his Watch

Unlike the Mr Hargan, who transited the revolving door from a lobbying position, Mr Azar had direct operational responsibility, in this case, for Eli Lilly's US operations.  Thus he ought to be held responsible for the company's ethical misadventures during the time he was there.  In fact, the company has had a few such misadventures, some of which we have previously discussed.

Jury Found Takeda and Eli Lilly Concealed Cancer Risks of Actos, Company Subject to Punitive Damages of $36.8 Million - 2014

We discussed this in 2014.  This case seemed to involve serious deceptions, since the judge said in one ruling:

the evidence during the trial showed that the companies 'disregarded, denied, obfuscated and concealed' for more than a decade that Actos could increase patients' risk for bladder cancer.

Lilly Pleaded Guilty to Charges Related to Deceptive Marketing of Zypresa as Part of an Over $1 Billion Settlement - 2009

At the time, this was considered a landmark case.  Eli Lilly pleaded guilty to a misdemeanor criminal charges and settled allegations about questionable marketing practices for its anti-psychotic drug Zyprexa for over $1 billion in 2009 (see post here).  The settlement provided some instructive information about how big pharmaceutical companies employ ghost writing to sell product (see this post). The company pushed Zyprexa for elderly patients with dementia, despite the lack of evidence that the drug's benefits outweighed its clear harms, thus likely leading to patient harm.

Many other cases of dubious Lilly practices that did not necessarily lead to legal settlements or criminal charges can be found here.  These practices include older, lesser cases involving the revolving door; and various instances of apparently deceptive marketing practices such as planned obsolescence of drugs, use of physician "thought leaders" as covert drug marketers, payments to patient advocacy groups presumably to encourage them to act also as covert drug marketers, etc, etc

Furthermore, the company was involved in several major cases of misbehavior overseas about which  Mr Azar may or may not have been aware.  These included:

-  Lilly Fined by Brazil for "Sham" Litigation to Extend Patent on Gemzar - 2015

Per the Wall Street Journal, the government deemed the company to have engaged in anti-competitive behavior.

-  Lilly Settled Case Alleging it Bribed Foreign Officials to Win Business - 2012

We discussed this here.  This case seemed serious since it involved lavish gifts and payments made from 2006-2009 to Chinese physicians who worked for the government , bribes to health officials to Brazil starting in 2007, and other such transactions in other countries in previous years.


Last week we noted that Mr Trump famously promised to "drain the swamp" in Washington.  Last week, despite his previous pledges to not appoint lobbyists to powerful positions, he appointed a lobbyist to be acting DHHS Secretary.  This week he is apparently strongly considering Mr Alex Azar, a pharmaceutical executive to be permanent DHHS Secretary, even though the FDA, part of DHHS, has direct regulatory authority over the pharmaceutical industry, and many other DHHS policies strongly affect the pharmaceutical industry.  (By the way, Mr Azar was also in charge of one lobbying effort.) 

So should Mr Azar be confirmed as Secretary of DHHS, the fox guarding the hen house appears to be a reasonable analogy.

Moreover, several serious legal cases involving bad behavior by his company, and multiple other instances of apparently unethical behavior occurred on Mr Azar's watch at Eli Lilly.  So the fox might be not the most reputable member of the species.

So you know the drill....     The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,
The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort and now this most flagrant example of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Let me at least try to provide a new picture of the revolving door...

Wednesday, October 11, 2017

Worst Health Care Revolving Door Case So Far? - From Lobbyist to Acting Secretary of Department of Health and Human Services

Once again, you just cannot make this stuff up.

Last week we posted our latest revolving door roundup, one of many we have done during the Trump administration.  At the time we noted that a lobbyist, Mr Eric D Hargan, at Greenberg Taurig Alston & Bird, had been nominated to be Deputy Secretary of the Department of Health and Human Services (DHHS).

Wikepedia provides a little more information about his past lobbying employment.

Hargan left the government in 2007 and joined the health law department of law firm McDermott Will & Emery. Hargan joined the health and FDA business development practice of law firm Greenberg Traurig in June 2010. He is a shareholder in Greenberg Traurig's Health & FDA Business Practice.

Greenberg Taurig Austin & Bird has done considerable lobbying for health care corporations.  We previously wrote that it "has earned more than $4.4 million lobbying so far this year for health care companies and trade groups including Novartis AG, Verax Biomedical, the American Hospital Association, St. Jude Children’s Research Hospital, and Aetna...."

Prior to his most recent lobbying work, Mr Hargan was a corporate lawyer, and then served in several purely administrative positions in DHHS during the George W Bush administration.  He also apparently served on the Trump transition team (per Wikipedia). 

I can see nothing that suggests he has any direct experience or expertise in actual health care, public health or biomedical science.  

Today, as reported, for example, by CBS, the Trump administration announced he will be acting Secretary of DHHS, the most powerful government health care official.  By the way, so far today, the brief pieces on this nomination (see also Politico, CNN, The Hill) have not mentioned his lobbying background, or lack of medical, health care, public health, or biomedical science experience. 

As we noted in our last, very recent post on the revolving door in health care, candidate Trump promised to "drain the swamp" in Washington, and specifically to avoid appointing lobbyists to government positions that could influence the fortunes of the companies for which they lobbied.

Yet here is a flagrant example of a lobbyist appointed to the highest US government health care position.  We have often discussed the revolving door affecting health care.  I believe this is the worst example so far I have seen.  We will have a man most expert in pushing policies to improve the fortunes of large health care corporations and their management, but who apparently knows little about health care, medicine, public health, or biomedical science, and has no record showing he particularly cares about patients' and the public's health.  This man is now in charge of the health care and public health operations of the US government. 

 Mr Trump, at least this doctor asks, have you no sense of decency?

So, to repeat in anguish what I have said before, most recently last week. 

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort and now this most flagrant example of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Sunday, October 08, 2017

Round and Round It Spins - Our Latest Health Care Revolving Door Roundup

Sorry about the bad pun.  We have accumulated a remarkable number of stories of people transiting the revolving door from working for health care corporations in various but important capacities to positions in health care policy or regulation for the Trump administration.  These stories may not always appear in the most prominent places, but their accumulation suggests they should be of prominent importance.

As the New York Times reported on May 22, 2017, the Trump administration initially promised to drain the swamp, and specifically to prevent people who had lobbied the government from taking government positions with decision making power over their former employers' scope of interests.

President Trump signed an executive order in late January — echoing language first endorsed by Mr. Obama — that prohibited lobbyists and lawyers hired as political appointees from working for two years on 'particular' government matters that involved their former clients. In the case of former lobbyists, they could not work on the same regulatory issues they had been involved in.


Both Mr. Trump and Mr. Obama reserved the right to issue waivers to this ban. Mr. Obama, unlike Mr. Trump, automatically made any such waivers public, offering detailed explanations. The exceptions were typically granted for people with special skills, or when the overlap between the new federal work and a prior job was minor.


The Trump administration, in a significant escalation of its clash with the government’s top ethics watchdog, has moved to block an effort to disclose the names of former lobbyists who have been granted waivers to work in the White House or federal agencies.

The latest conflict came in recent days when the White House, in a highly unusual move, sent a letter to Walter M. Shaub Jr., the head of the Office of Government Ethics, asking him to withdraw a request he had sent to every federal agency for copies of the waivers. In the letter, the administration challenged his legal authority to demand the information.

In any case, information about people transiting the revolving door from health care lobbying firms has been coming out only in bits and pieces, as has information about people transiting from other health care positions.  I have been filing the information I can find about such people and present what I have found since May, 2017 here in chronological order.

Matthew Bassett from Senior Vice President for Government Affairs at Health Management Company myNEXUS to Assistant Secretary for Legislation at Department of Health and Human Services [DHHS]

Documented by the Nashville Post, May 5, 2017

Note that the article also stated that Mr Bassett "previously worked as a health care consultant and with ReviveHealth and DaVita"

Bruce Greenstein  from Health Care Technology Company Quartet to Chief Technology Officer, DHHS

As reported by Healthcare IT News on June 9, 2017

He previously

was CEO of Blend Health Insights, a consulting firm that advised health systems, payers, health IT companies and private equity firms in the U.S. and abroad on topics such as risk-based contracting, value-based purchasing and population health management.

Before that he

served as Secretary of the Department of Health and Hospitals in the administration of Louisiana Governor Bobby Jindal.


That position ended in controversy, however, when he resigned in 2013 amid accusations that he'd had improper communications related to a $197 million Medicaid contract awarded to a company, Client Network Services, Inc., where he had worked. Jindal canceled the contract, and Greenstein was indicted for perjury. The case was dismissed by the Louisiana Attorney General in 2016.

Oops. So in this case, there were at least previous allegations of corrupt behavior as well, although they remain unproven.

On June 15, 2017, the Intercept reported on several revolving door travelers.  These included:

Eric Hargan from Lobbying for UnitedHealthcare for Greenberg Traurig Alston & Bird to Deputy Secretary, DHHS


Paula Stannard  from Lobbying for UnitedHealthcare for Greenberg Traurig Alston & Bird to Senior Counselor to the Secretary, DHHS

Note that we previously posted on Ms Stannard's earlier position on a Trump "beachhead team" at DHHS.  At that time we noted that Greenberg Traurig Alston & Bird "has earned more than $4.4 million lobbying so far this year for health care companies and trade groups including Novartis AG, Verax Biomedical, the American Hospital Association, St. Jude Children’s Research Hospital, and Aetna...."

Randolph Wayne Pate from Vice President for Public Policy at Health Care Services Corporation to Associate Deputy Secretary, DHHS

That corporation operates Blue Cross Blue Shield plans in five states.

Keagan Lenihan from Lobbyist for McKesson Specialty Health to Senior Counselor, Secretary of DHHS

Note that we had posted about his previous position on a "beachhead team" here.

 The article also noted Lance Leggitt moving from Baker Donelson Bearman Caldwell & Berkowitz to Chief of Staff for the Secretary of DHHS.  We had previously posted about that position in May.

On June 21, 2017, Public Citizen published "The Swamp Nominees" which included 115 sub-cabinet appointments with questionable antecedents.   These included Mr Hargan, and Mr Bassett above.  They also included two people whom we had previously discussed, Dr Scott Gottlibe, Commissioner of the US Food and Drug Administration (FDA), Seema Verma, Administrator, Center for Medicare and Medicaid Services (CMS), and Brett Giroir, Assistant Secretary, DHHS.  However, there were quite a few more on ProPublica list, including...

Stephen Parente from Principal, Health Systems Innovation Network LLC to Assistant Secretary for Planning and Evaluation, DHHS

Robert Charrow from Greenberg Taurig LLP and Registered Lobbyist, Intrexon Corp to General Counsel, DHHS

Note that Mr Charrow as "principal shareholder" of Greenberg Taurig which "represents providers, scientists, pharmaceutical companies...."  I assume that this Greenberg Taurig is the same firm as that referred to as Greenberg Taurig Alston & Bird above.

Finally, on August 31, 2017, ProPublica reported,

Joe Grogan from Lobbyist from Gilead to White House Working Group on Drug Prices

Note that Gilead was first to market with a new group of extremely expensive drugs to treat hepatitis C.  As we have discussed, there is no evidence so far that these drugs avert the severe complications of hepatitis C or increase longevity.  Furthermore, per ProPublica

As reported by Kaiser Health News, internal documents from the working group show that, despite vows by President Trump to lower the price of medications, Grogan’s team is pushing pharma-friendly policies, such as extending a drug’s patent time in foreign markets. Grogan and the Office of Management and Budget did not respond to requests for comment.
This suggests that this particular instance of the revolving door is leading to regulatory capture.

Obama Administration Officials Transiting to Industry

During the same period, in the interest of fairness, we also note that some former Obama administration health care policy or regulatory officials now have industry positions, including

Dr Robert Califf former FDA Commissioner to Google subsidiary Verity

Per StatNews on May 17, 2017

Note that Dr Califf transited the revolving door in the opposite direction in 2015 when he became FDA leader, as we noted here.

Kevin Coulihan, former CEO of HealthCare.gov to Centene

Per the St Louis Post-Dispatch, August 2, 2017,

Drew Littman former Counselor for DHHS to Brownstein Hyatt Farber Schreck LLP

Per the Washington Examiner, Aug 14, 2017,

Note that this law firm has clients that "include companies in the healthcare and biotechnology fields."


The revolving door has been a chronic problem for the US, but seems to only be getting worse.  We saw plenty of examples of people transiting the door to or from the US executive branch during the George W Bush and Obama administrations.  We are still seeing people transiting the door from the latter administration.  However, the number of people transiting the door into the Trump administration seems unprecedented, although admittedly that impression is based on series of cases, not systematic quantitative studies.

So, as I have said before, most recently in August, 2017,

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Sunday, October 01, 2017

Latest Legal Settlements Suggest Hazards of Making Pharmaceutical Regulation More Lenient, as is Apparently Favored by New FDA Leader

The new US Food and Drug Administration (FDA) commissioner Dr Scott Gottlieb is promoting making the agency's mechanisms to approve new drugs more lenient, according to the Cardiobrief blog.  Blogger Larry Husten wrote:

Gottlieb’s entire career has centered on loosening regulatory restrictions to enable industry to thrive. At the core of his philosophy is the view that with fewer restrictions the force of unbridled capitalism will unleash a torrent of industry innovation. In this view negative consequences, should they occur, will be quickly addressed by an efficient marketplace.

Should we trust pharmaceutical companies to innovate in such a light-touch regulatory climate?  On Health Care Renewal we have noted ethical violations by most of the major pharmaceutical companies, often involving deception in marketing, manipulation and suppression of clinical research, and distortions of dissemination of medical information, such as articles ghost-written by authors paid by industry.  We have documented numerous legal settlements of cases arising out of such misbehavior.

It is no surprise that more legal settlements have marched into view during the last few months to add weight to concerns about making regulation of the pharmaceutical industry more lax.  To summarize them, in chronological order...

Celgene Settled Allegations it Deceptively Marketed Thalidomid and Revlimid for $280 Million

Per the New York Times, July 25, 2017:

The pharmaceutical company Celgene has agreed to pay $280 million to settle claims that it marketed the cancer drugs Thalomid and Revlimid for unapproved uses, the company said on Tuesday.

Under the terms of the settlement, which resulted from a lawsuit filed by a whistle-blower — a former sales representative at Celgene — the company will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.

In particular, years before the company got approval to market its drug Thalidomid (generic name: thalidomide, the same drug that caused severe birth defects when marketed in Europe in the 1950s)

sales of Thalomid quickly took off, in part because — as [whistle blower] Ms. Brown claimed in her complaint — Celgene 'flooded the country' with sales representatives who were under heavy pressure to pitch the drug to oncologists for a variety of cancers. The F.D.A. sent Celgene two warning letters, in 1998 and 2000, claiming the company had been marketing the drug to treat cancer. In 2000, one Wall Street analyst estimated that 90 percent of Thalomid’s sales were to treat cancer, according to Ms. Brown’s complaint.

However, the drug was not approved for use in cancer until 2006. Also,

in 2005, the company received approval to sell Revlimid for a rare cancer, and Ms. Brown’s complaint claims that the company — as it had with Thalomid — marketed it to treat a broader range of cancers. It also pressured doctors to switch Thalomid patients to Revlimid, which is more expensive.

Ms. Brown’s complaint also claimed that Celgene’s inappropriate marketing of Thalomid exposed patients to heightened risks that included potentially fatal blood clots and other side effects. Those risks were added to the drug’s warning label only after it received the approval for cancer treatment, Mr. Guttman said.

Thus the company's actions may well have harmed patients.

We previously discussed, most recently in 2010, the immense price Celgene charged for Thalidomid, despite the fact that this compound, developed about 60 years ago, is available for pennies in many countries.  

Nonetheless, and also despite the amount of money that Celgene was making selling its drugs for unapproved uses (e.g., Revlimid's sales last year were nearly $7 billion), the US Department of Justice declined to get involved in this case.  Also, like most legal settlements involving big health care organizations, the company did not admit any wrongdoing, and no person who enabled, approved, or directed the misbehavior suffered any negative consequences.

Insys Settled Allegations of  Promotion of Narcotics for Unapproved Uses for $4.5 Million to Illinois

Per the Chicago Tribune, August 18, 2017:

An Arizona drug company has agreed to pay Illinois $4.45 million to settle allegations that it deceptively marketed and sold a prescription opioid drug for uses not approved by the U.S. Food and Drug Administration.

Insys' actions may well have contributed to the current opioid epidemic.

The company heavily marketed the drug to Illinois doctors with records of prescribing high volumes of opioids regardless of whether those doctors were prescribing opioids to treat cancer pain, the state alleged.

In particular,

According to Madigan's office, the top prescriber of Subsys in Illinois was Dr. Paul Madison, who wrote about 58 percent of all prescriptions for the drug in the state despite treating few, if any, cancer patients. Madison, an anesthesiologist and former owner of the Watertower Surgicenter on North Michigan Avenue in Chicago, was indicted in 2012 by the U.S. attorney's office in Chicago for billing insurers for procedures he didn't perform, and his medical license was suspended in November, according to Madigan's office.

We previously discussed Insys' stealth public relations campaign against medical marijuana here.

However, as in the previous case, the US DOJ was not involved, the company did not admit wrongdoing, and no individual involved in the misbehavior paid any penalty.

Novo Nordisk Settled Allegations it Minimized Risks of Victoza for Nearly $58.7 Million

Per Reuters, September 5, 2017:

Novo Nordisk will pay nearly $58.7 million to resolve claims the drugmaker’s sales staff downplayed the importance of U.S. Food and Drug Administration-mandated warnings about the cancer risks of its diabetes medication Victoza.

The U.S. Justice Department said Tuesday’s settlement would resolve claims Novo Nordisk supplied its sales representatives with information to give to doctors that created the false or misleading impression that warnings were wrong or unimportant.

In particular,

The lawsuit said that program required Novo Nordisk to provide doctors information about the potential risk of a rare form of cancer associated with the drug, which gained FDA approval in 2010.

Victoza’s FDA-approved labeling also contained a boxed warning related to that form of thyroid cancer, the lawsuit said.

Novo Nordisk’s sales force employed messages and tactics that created a false or misleading impression with doctors regarding the cancer risks, leading some physicians to be unaware of them, the lawsuit said.
Thus, again this company's actions appeared to pose a risk to patients.

This company also has a track record of ethical misadventures.  In 2011, we discussed several previous settlements by Novo Nordisk.  Nonetheless, the US DOJ decided not to be involved in this litigation, which, as in the other cases above, did not result in admission of wrongdoing, nor any penalities for individual involved in the misbehavior.

Novelion Subsidiary Aegerion Pleaded Guilty, Fined $40 Million for Misbranding Juxtapid by Minimizing its Adverse Effects

Per Reuters, September 22, 2017:

Aegerion Pharmaceuticals Inc will plead guilty to two misdemeanors and pay $40.1 million to resolve investigations into its marketing and sales of an expensive cholesterol drug, U.S. authorities said on Friday.

The settlements will resolve long-running investigations into Aegerion, a subsidiary of Canada’s Novelion Therapeutics Inc, by the U.S. Justice Department and the U.S. Securities and Exchange Commission related to its drug Juxtapid.

In particular,

Prosecutors said after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating a rare genetic condition that causes high cholesterol, Aegerion promoted it for patients who had not been diagnosed with the condition.

Juxtapid, which cost $250,000 to $300,000 annually per patient, featured a black box warning on its label that it could cause serious liver and stomach problems, prosecutors said.

Sales representatives also were trained to tell doctors and patients that Juxtapid would 'take patients out of harm’s way' and prevent 'impending' heart attacks and strokes, despite the lack of data supporting those claims, prosecutors alleged.

Numerous patients discontinued using Juxtapid after suffering conditions including liver toxicity and gastrointestinal distress, prosecutors said.
Thus, once more, the company's actions appeared to result in patient harm.

The company also signed a deferred prosecution agreement.  By pleading guilty, it admitted the misbehavior in this case.  However, again no individual involved in the misbehavior faced any penalties, despite the severe nature of the adverse effects the company deceptively minimized.

AmeriSourceBergen Settled For $260 Million Allegations of Illegally Selling Repackaged, Perhaps Adulterated Drugs so as to Avoid FDA Regulation

Per Modern Healthcare, September 27, 2017:

AmerisourceBergen Specialty Group, a wholly-owned subsidiary of the major wholesale drug distributor AmerisourceBergen Corp., pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for skirting regulatory oversight.

Between 2001 and 2014, according to court records unsealed Wednesday, the group's now-defunct subsidiary Medical Initiatives prepared millions of syringes that had been filled with cancer drugs and shipped them to providers in all 50 states.

Medical Initiatives removed the drugs from their original glass vials and repackaged them into plastic syringes in an unclean and unsterile environment, allowing the company to sell excess drug product in the vials known as 'overfill,' according to court records. It combined the contents of multiple vials in a process known as 'pooling,' despite many of the vials carrying a 'single-use' designation.

In order to avoid the Food and Drug Administration's regulatory oversight, AmerisourceBergen Specialty Group did not register Medical Initiatives as a repackager or manufacturer with the agency, records show. Instead, the group portrayed Medical Initiatives as a state-regulated pharmacy, exploiting an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or repackagers, authorities said.
Given the problems with sterility, again the company's actions possibly could have harmed patients.

However, yet again, this settlement did again involve a guilty plea, but again no individual involved in the repackaging and adulteration suffered any negative consequences.


All the cases discussed above were of behavior that could have harmed patients.  Many of the companies involved had records of previous ethical misadventures.  While a few cases resulted in corporate guilty pleas (to misdemeanors), none resulted in monetary penalties that would have much impact on the companies' finances, and none resulted in any negative consequences for people who enabled, authorized, directed or implemented the bad behavior.

These, just the latest in the march of legal settlements by large health care organizations, again demonstrate how often and how seriously pharmaceutical companies (and other organizations) may misbehave, and how the leaders of these organizations exhibit continued impunity, never having any legal accountability for their organizations' actions.  These settlements again demonstrate the relatively light touch US regulators, including the FDA and DOJ, have exhibited when dealing with these organizations.

So what could happen if that touch is lightened still more, particularly by the ongoing initiatives of the current US FDA leader?  I submit the results will be higher drug prices, more use of minimally effective and/or seriously risky drugs, and larger compensation for top managers of pharmaceutical companies.  Will the public actually also get access to "life saving" drugs?  Perhaps, but most of the offerings of drug companies in the last years have had minimal efficacy, and rarely have been proven to extend life.

Why is Dr Gottlieb pursuing these initiatives?  Is he a true believer in market fundamentalism, perhaps untrammeled by lack of evidence supporting it?

Maybe he as he become intoxicated by all the money he previously made from the pharmaceutical industry.  Prior to his approval by the Senate, his extensive financial dealings with the pharmaceutical industry were detailed by the New York Times, and Stat News, among others.  The NYT article said:

The nominee, Dr. Scott Gottlieb, has spent the bulk of his career working in the drug and health care industry, which experts say raises the potential for myriad conflicts of interest. If confirmed to head the F.D.A., he would wield considerable power over companies and investment firms that have paid him millions of dollars over the years. From 2013 to 2015, for example, Dr. Gottlieb received more than $150,000 to advise Vertex Pharmaceuticals, a company whose two approved drugs are seen as breakthrough treatments for cystic fibrosis but carry list prices of more than $250,000 a year. He’s the acting chief executive of Cell Biotherapy, an early-stage cancer biotech firm that he helped found. He has served for years as a consultant to pharmaceutical giants like GlaxoSmithKline and Bristol-Myers Squibb and is paid by other companies for his expertise.
So Dr Gottlieb's move to the FDA was yet another example of the revolving door pheonomenon.

The Stat article concluded,

It also reflects the normalization of conflicts of interest in medicine, which has been debated in the pages of the New England Journal of Medicine and in the Lown Institute blog.

Gottlieb has criticized government efforts to shed light on conflicts of interest, such as the Physician Sunshine Act, as 'federal tinkering' leading to “the demise of American medicine.” We believe his confirmation will lead to the demise of some FDA rules that are already barely keeping a lid on useless or dangerous medical products.

That may not be so far in the future, if Husten's concerns mentioned at the top of this post are true. And when conflicts of interest start having such real world effects, they cease to be merely conflicts of interest, but become corruption.

We have long been railing against conflicts of interest and corruption.  Until recently we noted only some conflicts of interest affecting US government leaders, most often in the form of the revolving door.  Most of the conflicts we discussed involved health care professionals and leaders of health care organizations.

So we used to write things like this (in July, 2016):

True health care reform would first make transparent the web of institutional and individual conflicts of interest that seems to tie together nearly all big health care organizations, and open discussion of how to make health care organizations better serve health care rather than the narrow financial interest of their top leaders.

Or this (in June, 2016):

True health care reform would first expose these conflicts, then reduce or better yet, eliminate them, and make health care more about helping patients and less about making money by marketing commercial products.

However, since the last presidential campaign, more and more conflicts of interest and apparent examples of corruption involving President Trump, his family, and his ongoing business interests have appeared, so that at this time the Trump regime seems to be riddled with conflicts of interest and corruption (for example, see these lists compiled by the Sunlight Foundation and Newsweek).  Conflicts of interest and corruption involving the highest levels of US government have even more potential to damage patients' and the public's health than those involving, say, physicians or hospital CEOs.

 So we now must say that true health care reform in the US first requires vast reduction in the conflicts of interest and corruption of the leaders of US government.