Health Care Revolving Door Roundup

Increasingly, the regulatory and law enforcement functions of the US government in the health care sphere seem to be blending with the management of large health care organizations.  One mechanism for this is the "revolving door," the constant interchange of personnel between government agencies and corporate management. 


Here is a list of some of this year's interesting cases of people transiting the revolving door between US government agencies that are supposed to regulate health care organizations or enforce the relevant laws and the organizations subject to these regulations and laws.   Note that this list may not be complete.  It is difficult to keep track of these transitions. 

Leader of Health Care Fraud Section of Philadelphia US Attorney's Office to Teva Pharmaceuticals

Via MainJustice.org in March, 2013,

John Pease, who led the government and health care fraud section in the U.S. Attorney's Office in Philadelphia, has left the Justice Department for a job with a pharmaceutical company.

Pease, 45, is a new senior counsel at Teva Pharmaceuticals, where he oversees government investigations of the company for the Americas.  'I was just ready to try something different,' Pease said in an interview.

 Leader of US Department of Justice Fraud Section in Charge of Health Care Issues to Law Firm as Defender of Companies and Senior Executives

The initial notice again was via MainJustice.org in March, 2013

Sam Sheldon, the deputy chief in the Criminal Division's Fraud Section who oversaw health care fraud prosecutions, is leaving the Justice Department to join Quinn Emanuel Urquhart & Sullivan LLP.

Mr Sheldon's new job was made clear on the firm's website,

Sam Sheldon is head of the firm’s Health Care Practice Group.  He is a trial lawyer who represents companies and senior executives in litigation before the United States federal government including Department of Justice and Department of Health and Human Services, and other law enforcement and regulatory agencies.

FDA Deputy Commissioner for Global Regulatory Operations and Policy to Mylan

This story, in April, actually made it (briefly) to Reuters,

 Generic drugmaker Mylan Inc said on Tuesday it hired Deborah Autor, deputy commissioner for global regulatory operations and policy at the U.S. Food and Drug Administration, to help oversee its global regulatory strategy.

Leader of Health Care Fraud Enforcement of Philadelphia US Attorney's Office to Law Firm as Industry Defender

From Bloomberg, in August, 2013,

Marilyn May, a False Claims Act litigator at the U.S. Justice Department, joined Arnold & Porter LLP’s Washington office as litigation counsel with a focus on healthcare, pharmaceutical and medical device industry defense work. 

May was the head of healthcare fraud enforcement in the U.S. Attorney’s Office in the Eastern District of Pennsylvania. She coordinated healthcare fraud cases and investigations as well as handled False Claims Act cases involving pharmaceutical and medical device companies, hospitals, nursing homes and other healthcare providers, the firm said. 

The law firm's website states,

 Her litigation practice focuses on pharmaceutical, medical device and healthcare defense matters.

Summary

In each of these cases, a person with responsibility for regulation of and/or law enforcement for health care organizations went through the revolving door to either work for health care corporations subject to such regulation and/or law enforcement, or work for legal firms that specialize in defending such corporations and their leaders in regulatory and law enforcement actions.

As far as I know, none of these instances was the least bit illegal.  However, like previous examples of the revolving door, they raise the concern that people in government regulation or law enforcement who think that they may have future lucrative job prospects helping health care organizations attenuate regulation and law enforcement may not be the most enthusiastic, aggressive, or persistent regulators or law enforcers.  Why would one want to upset one's future employer?

While these cases of the revolving door are legal, they are clearly conflicts of interest in the sense that the prospect of such future employment likely may increase the risk of compromising a government official's devotion to serving the public and enforcing the law, if not in the legal sense.  In some particular case, the revolving door may actually lead to corruption according to the Transparency International definition, abuse of entrusted power for private gain, if not according to the legal definition.  Thus the continuing occurrence of government officials blithely transiting the revolving door no doubt was a reason that more than 40% of the public consider the US health care sector to be corrupt (see this post.)

True health care reform would require curtailing the severe sorts of conflicts of interest created by the revolving door.  This might require both improving pay and working conditions for government regulators and law enforcers, and specific laws to prevent immediate transitions from being a regulator/ law enforcer to handling corporate responses to or defenses of such regulation and enforcement.

Of course, I can already hear the protests of those people who decry paying more for government or increasing government regulation.  I can at least hope that the protests are not from those who personally profit from the current seemingly corrupt system.  

Why Do People Think US Health Care is Corrupt? - The Examples of Amgen, Mallinckrodt Settling Charges of Giving Kickbacks to Doctors to Induce them to Prescribe Their Products, While No Individual Suffers Negative Consequences

We recently posted a discussion of the results of Transparency International's 2013 corruption barometer, focusing on the US results.  43% of survey respondents thought US health care is corrupt.  Our coverage, apparently the only substantial discussion of the US results published in the US, got star ranking for a while on Reddit.  But many anonymous commentators dismissed the survey results as coming from a naive public who does not understand health care economics.

I submit that one can recognize corruption without a degree in economics.  In fact, as we discussed in the initial post, there is a lot of evidence for the prevalence of health care corruption in the US, other developed countries, and globally.  It is just that such evidence rarely gets discussed in public (the anechoic effect, as we say on this blog), probably because doing so might make those who are profiting from the corruption uncomfortable.

So today let me summarize just the latest evidence about US health care corruption, as defined by Transparency International as the abuse of entrusted power for private gain.  (Note that the Transparency International definition of corruption, which is an ethical, not necessarily a legal definition, at least in most jurisdictions.)

Amgen

An article in the Thousand Oaks [CA] Acorn described the legal settlement,

Amgen Inc. paid the United States more than $15 million this month as part of a settlement agreement to resolve allegations that the biopharmaceutical company used financial kickbacks to persuade doctors to prescribe the cancer drug Xgeva to their patients.

The settlement resolves a qui tam, or 'whistleblower,' lawsuit filed Jan. 20, 2012, in federal court by William Davis and Spencer Miller—two Amgen employees who work at the company’s Thousand Oaks headquarters.

Davis, sales planning director for Amgen’s oncology business unit, and Miller, a senior marketing manager at the company, alleged their employer violated both the Medicare Anti- Kickback Statute and False Claims Act—two laws that aim to prevent Medicare fraud and abuse.

The allegations were that Amgen used a somewhat complex and deceptive strategy to pay doctors who prescribed its drug, using a survey about practice patterns as a cover story,

According to the U.S. attorney’s office, Amgen used what the company called 'Deep Dive' contracts—or data purchase agreements—in an effort to boost sales of Xgeva, which was approved by the FDA in late 2010 for use by certain cancer patients undergoing chemotherapy.

The drug is most commonly prescribed to prevent bone fractures in patients who have been diagnosed with a certain type of tumor after it has spread to the bones.

Under Amgen’s original Deep Dive program, the company paid doctors to fill out an Internet-based survey, which asked how they were treating patients with bone cancer and which drugs they used.

'That’s not illegal to do,' said Abraham Meltzer, assistant U.S. attorney in the Los Angeles civil fraud section. 'A lot of pharmaceutical companies purchase data legitimately on how various conditions are treated.'

But Amgen altered its Deep Dive program, Meltzer said, by increasing the amount of money it offered to pay the doctors who specifically prescribed Xgeva to their patients.

Also,

 The U.S. attorney’s office also alleged that Amgen paid oncologists and urologists to participate in market research surveys, audience response sessions and advisory programs that publicized the benefits of Xgeva.

As is typical in such cases, the settlement did not require any contrition on Amgen's part.  Instead,

In a prepared statement emailed to the Thousand Oaks Acorn on Tuesday, Amgen denied all allegations of wrongful conduct.

'Amgen settled this matter to avoid the delay, uncertainty, inconvenience and expense of protracted litigation,' the statement read.

As is also typical, there seemed to be no negative consequences for the human beings who must have engineered the "Deep Dive" contracts and the payments to the oncologists and urologists.  Nor was there any overt consideration of Amgen's sketchy recent ethical record, as described by the Acorn,

This month’s settlement is not the first time the biopharmaceutical giant has been held to answer for kickback allegations or false claims charges.

In December 2012, Amgen pleaded guilty to illegally selling the drug Aranesp, an anti-anemia drug, for uses or doses not approved by the FDA, according to the U.S. Department of Justice.

As part of the false claims case, which was also brought on by a whistleblower lawsuit, Amgen agreed to pay a $612-million civil settlement to the U.S. and individual states, as well as $150 million in criminal penalties.

Then in April, the Thousand Oaks-based company paid the U.S. another $24.9 million to settle whistleblower allegations that it gave financial kickbacks to long-term care pharmacy providers in exchange for switching Medicare and Medicaid benefi- ciaries from a competing drug to Aranesp, a DOJ press release states.

We discussed the guilty plea in the cases of Aranesp misbranding and alleged kickbacks to pharmacists.  Also, in 2013, we noted that Amgen settled allegations that it overpriced its products sold to government health programs in 36 states.  We also noted that despite, or perhaps because of all this misbehavior, the current CEO of Amgen received over $13 million in compensation in 2012, while his predecessor walked away with over $9 million that year.

Mallinckrodt

A small news item from the Associated Press, via the Nanaimo (MO) Daily News, outlined this legal settlement,

A St. Louis-based drug maker will pay $3.5 million to settle allegations that it paid doctors to prescribe 'outdated, third rate' antidepressants and sleep aids, the U.S. attorney's office in San Francisco announced.

In particular,

The lawsuit alleged the company targeted doctors who prescribed the type of antidepressants and sleep pills Mallinkrodt manufactured.

Again, the company was allowed to settle without admitting anything.

'While we deny the allegations in this matter, we are glad they are resolved,' company spokeswoman Erica Abbett said in a statement.

Again, although human beings would have had to engineer any payments to the doctors to induce them to prescribe, no human beings suffered any consequences as a result of this settlement.

Mallinckrodt, a storied corporate name, had been acquired by Covidien, and then was spun off again as a separate company in June, 2013 (look here).  It had been acquired in 2000 by Tyco International, which later spun off its health care operations as Covidien.   According to its 2013 proxy statement, Covidien's CEO received over $10 million in total compensation in 2012.


[Note that Tyco was the subject of one of the major scandal stories of the early 21st century.  In 2005, at a time when law enforcement authorities were still pursuing actions against elite corporate executives,  its former CEO and CFO were convicted of stealing millions from it (see USAToday summary)].

Summary - Why do People Think US Health Care is Corrupt?  

Again, the Transparency International definition of corruption is abuse of entrusted power for private gain.  I would argue that pharmaceutical companies are entrusted with the power to honestly sell drugs whose benefits to patients outweigh their harms.  I would further argue that paying physicians, who are entrusted with providing the best possible care to each individual patient, to prescribe drugs which may not be the best treatment for individual patients is an abuse of both the company's and the physicians' entrusted power.  Further, such payments provide private gain to the physicians.  They also may increase revenues for the company who makes these payments, and very likely these increased revenues lead to better compensation for those in the company who authorized, directed or directly provided the payments, that is to private gain for these corporate insiders.  Thus it seems that kickbacks to physicians to prescribe drugs is a form of corruption.

While both cases above were settled without admissions of guilt, such settlements do not refute the contentions that kickbacks were given.  Why would the law enforcement officials have brought the cases in the absence of evidence, and why would the companies have settled if the cases were completely baseless?  So I would argue that these settlements provide evidence, although not legal proof, that kickbacks were given.  People with far more legal knowledge than I possess have remarked on the absurdity of settling cases of alleged wrongdoing without any acknowledgement or statement of the facts (see posts here and here).

We have posted lots of instances of conflicts of interest affecting health care, many of which likely involved payments providing private gain that raised the risk of abuse of entrusted power.  We have also discussed many instances of crime, kickbacks, bribery, fraud other kinds of health care corruption.

So were the people who answered the Transparency International survey naive and foolish about health care corruption?  Or did they have reasonable beliefs about a topic that the powers that be really do not want to discuss?

43% Believe that US Health Care is Corrupt, 64% that Government is Run by a Few Big Interests, 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.  

Transparency International just released its yearly massive survey on corruption worldwide.  The results are not pretty for health care and related sectors world wide and in the US.  As expected, these results appear to be causing few echoes. 

Global Results

Some useful summary statements found in the written version of the report:

Governments are not thought to be doing enough to hold the corrupt to account.  The majority of people around the world believe that their government is ineffective at fighting corruption and corruption in their country is getting worse.

The democratic pillars of societies are viewed as the most corrupt.  Around the world, political parties, the driving force of democracies, are perceived to be the most corrupt institution.

Personal connections are seen as corrupting the public administration.  People surveyed regard corruption in their country as more than just paying bribes: almost two out of three people believe that personal contacts and relationships help to get things done in the public sector in their country.

Powerful groups rather than the public good are judged to be driving government action.  More than one in two people (54 per cent) think their government is largely, or entirely run by groups acting in their own interests rather than for the benefit of the citizens. 

The survey included questions about corruption in the health care sector.  Globally, respondents perceived it was a major problem.  On average, 17% said they or their family members had to pay bribes in connection with medical and health care.  The average perception of corruption in medicine and health care across all countries was 3.2, where 1 = not at all corrupt, and 5 = extremely corrupt.  (Scores for the media were 3.1, business sector, 3.3, education system, 3.1, public officials, 3.6, political parties, 3.8, and NGOs, 2.7)

US Results

While the US did not have the worst results, our numbers were not very good (see US specific results here). More than one-third (43%) of respondents thought that US health care is corrupt.  Large numbers of people also thought that related sectors were corrupt (53% thought business in general was corrupt, 34% education, 58% the media, 55% public officials, 61% the legislature, 78% political parties.)

For comparison, the proportions of people who thought the health care sector is corrupt were 24% in Canada, 28% in France, 48% in Germany, 47% in Japan, and 19% in the United Kingdom

Also, more than half (60%) of respondents said corruption in the US has increased over the last 2 years, almost two-thirds (64%) thought that the US government is run by a few big interests. 

Thus, this survey confirmed that health care corruption is a global problem, and that a large proportion of people in the US believe it is a major problem here. 

The Media Shrug


This would seem to be major news.  However, so far the Transparency International survey results have received little  media attention in the US.  Moreover, what attention they have received in the US makes corruption appear to be some other countries' problem.  .

Most of the US media reports avoided mentioning any results that relate directly to the country.  In particular, the New York Times, the Wall Street Journal, Fox News, CNN, NBC, and Reuters coverage said nothing about the US.  Businessweek provided reports from Malaysia and Russia that focused on those countries' results.  A brief report in the Los Angeles Times only noted a single US statistic, about the bribery rate, one area in which the US had relatively favorable results.  Only a lonely Forbes blogger alluded to the US results in slightly more detail,  (and then went on to summarize those from Brazil, Russia, India, and Mexico in detail).

In contrast, media reports from some other countries, like India, Ghana, and Israel, noted their own countries' poor results.

Summary

So once again we see how anechoic are the notions that health care corruption is a severe global problem, and that it affects all countries, including the most supposedly developed.  Of course, the unwillingness to discuss global health care corruption, health care corruption in the US, and the relationship of health care corruption in the US to corruption in other sectors may arise from the fear, as stated by one person interviewed in Charles Ferguson's documentary Inside Job, that discussion could lead to investigation, and investigation could "find the culprits".

On Health Care Renewal, we try to discuss global health care corruption,.  We were first inspired by the 2006 publication of Transparency International's Global Corruption Report which focused on health care, and documented how health care corruption is global, severe, and not restricted to the poorest countries  (see post here).

This blog focuses on the US, and we  now have in our archives some amazing stories that document various forms of health care corruption in the US, including numerous allegations of misbehavior by large health care organizations ending in legal settlements, and examples of outright fraud, bribery, kickbacks and other crimes. On the other hand, we have demonstrated again and again that bad  and corrupt behavior by large health care organizations is a taboo topic.  For example, we could find  very few significant efforts to discuss, teach about, or research ways to fight corruption, or to promote accountability, integrity, transparency, honesty and ethics by academic health care institutions. (See this post for how difficult it was to find academic institutions' initiatives to resist conflicts of interest.) One can count the conferences, meetings, symposia, and courses on such topics on one's fingers. When I last looked, I could count only a single course on fighting corruption at any US medical or public health school (at Boston University, by Prof Taryn Vian).

Of course, 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.

ADDENDUM (16 July, 2013) - See comments by Dr Howard Brody on the Hooked: Ethics, Medicine and Pharma blog.

Hospital Retaliation Against Outspoken Physician Reaches New Levels - La Cosa Nostra Levels, That Is

Physicians, take note:

The Advisory Board Company
Feb. 14, 2013  
Hospital Framed Physician; Planted a Gun

A jury has ordered a California hospital chain to pay physician Michael Fitzgibbons $5.7 million after its former CEO allegedly framed him by planting a gun in his car.

In 2006, Fitzgibbons—an infectious disease specialist and former chief of staff at Western Medical Center—was arrested in the hospital parking lot after police found a pair of black gloves and a handgun in his car. Police questioned Fitzgibbons and searched his car after an anonymous 9-1-1 call claimed that the doctor had brandished the gun in traffic.

DNA evidence from the gloves and gun exonerated Fitzgibbons, and he was never charged.

However, the arrest followed a series of disagreements between Fitzgibbons and the leadership of Integrated Healthcare Holdings Incorporated (IHHI), which owned the Santa Ana hospital. Fitzgibbons and his attorney—Ted Mathews—alleged that IHHI's then-CEO, Bruce Mogel, had framed Fitzgibbons in an effort to silence him.

Specifically, Mathews said that the frame was part of Mogel's attempt to "humble" Fitzgibbons after the doctor won a legal victory over IHHI in June 2006.

During the trial, former IHHI President Larry Anderson testified that Mogel had instructed him to create a $10,000 contract for a "scary guy" named Mikey Delgado immediately after Fitzgibbon's legal victory. The contract was for unnecessary work on the health system's website. In his testimony, Anderson said he realized after Fitzgibbons was arrested that the contract was actually for the frame. Mathews told the jury that the $10,000 was used to "[get] Dr. Fitz set up."

IHHI's board learned of the $10,000 contract during Anderson's deposition in 2008. Instead of firing Mogel, the board awarded him an eight-month consultancy worth $43,750 per month, Mathews says. This showed that IHHI board "knew what Mogel did to Dr. Fitzgibbons," Mathews told the jury, adding, "They ratified it, and they gave him a golden handshake goodbye.

The article notes Board acquiescence.

Two questions come to mind:

1.  Have the involved people been permanently removed from positions of authority in healthcaree?

2.  Have the persons involved been charges criminally?

Shocking.  Positively shocking.

-- SS