Another Echo of the Fall of the House of AHERF: Hahnemann University Hospital to Close Its Doors, Stranding Patients, Leaving Trainees without an Educational Site, and Leaving Staff and Health Care Professionals Unemployed

Those who cannot remember the past are condemned to repeat it. [George Santayana]

The impending closure of a big teaching hospital in Philadelphia did not get much national attention, but should have.

The Closing of Hahnemann University Hospital

On June 26, 2019, the Philadelphia Inquirer reported:

Hahnemann University Hospital will close in early September, with the wind-down of services at the 496-bed facility starting immediately, hospital officials said Wednesday.

Officials representing American Academic Health System LLC, which bought Hahnemann and St. Christopher’s Hospital for Children early last year for $170 million, said the closing ‘on or about Sept. 6’ would be orderly.

The closure would likely have big impacts on health care and medical education in Philadelphia, and on health care professionals and other hospital workers.  The article quoted the president of the Pennsylvania Association of Satff Nurses and Allied Professionals:

Hahnemann is a safety-net hospital that for decades has provided care to an under-served community,

Oddly enough, I could not find much more in the media about projected impacts on patients.  A July 2 Philadelphia Inquirer article stated

Hahnemann University Hospital’s pending closure and immediate move to turn away critically ill emergency patients threatens a safety net that has served close to 150 emergency room patients a day — many of them poor minorities who rely on the hospital for even primary care.

Close to half of the people admitted to Hahnemann were on Medicaid and two-thirds are black or Latino, according to an Inquirer analysis of state inpatient billing data.


Hahnemann had 17,000 inpatient stays and 53,000 emergency room visits in 2017, making it the eighth-busiest E.R. in the city, according to state Department of Health statistics.

The plight of the hospital’s current house staff got a bit more attention.  An Inquirer article on July 3, stated,

The impending closure of Hahnemann University Hospital is forcing about 570 residents who work at the Center City institution to find a new place to continue their training.


Hahnemann’s closure is causing ‘the largest orphaning of medical residents in the history of the United States,’ Drexel University said in a Philadelphia Court of Common Pleas lawsuit against Hahnemann and its corporate parents. Drexel handles the educational side of Hahnemann’s residency programs.

And then there were the other employees of the hospital to think about.  An NBC10 Philadelphia article on June 26 included,

The closure would leave around 800 union nurses, said the union, which represents around 8,500 nurses across the state.

In addition,

The nurses are among about 2,500 employees that PAHS says are employed at the medical center.

A major teaching hospital will close, abandoning many poor and vulnerable patients, orphaning 570 house-staff and leaving about 800 nurses and about 1700 other staff unemployed, and the national media take no notice?  The numbness is striking.

Reactions to the Bankruptcy of Hahnemann

Also, in my humble opinion, the reactions to the impending bankruptcy were somewhat muted even in the local media.

The media did feature some complacent reactions from local health care experts with ties to other competing hospital systems or to  for-profit hospital management who seemed confident that everything would work out.  For example, from the June 26 Inquirer article:

with more hospital beds per capita than many urban areas, Philadelphia
is better equipped to handle the impact of a closure than many places,
said Stuart H. Fine, an associate professor in Temple University’s
College of Public Health.

‘Philadelphia is fortunate to
have enough hospital beds for the city’s needs, even if Hahnemann
closes,’ he said. ‘I’m not minimizing the impact of this closure on
those patients who live right by Hahnemann, rely upon it for their care,
and will have difficulty traveling to other locations.’

The article, though, failed to mention that Mr Fine, per his bio on the Temple website, is a former hospital manager with a health administration, but not a public health or medical background, viz:

having served as a health system CEO for more than 30 years, Dr. Stuart
H. Fine joined the faculty of Temple University in 2014 as Associate
Professor & Director of Programs in Healthcare Management for
the Fox School of Business.

A few public relations
people from other local hospitals seemed pleased about getting some of
Hahnemann’s business, but I could find no opinions from actual public
health experts.

On the other hand, there was outrage from unionized employees (look here for an account of a small public protest by union members.)

The Governor of Pennsylvania and the Mayor of Philadelphia, both Democrats, issued a statement saying

We continue to stand in solidarity with the workers, patients and community. For months, the commonwealth and city have been working aggressively to protect patient care at Hahnemann and find solutions to maintain current medical services at the hospital,

However, they did not propose very strong action

While it is clear that the hospital’s current operation is no longer financially viable, we are both committed to working with potential investors to find support for the restructuring of Hahnemann and for protecting St. Christopher’s Hospital for Children

Note that they did not seem to question the notion that any continuation of Hahnemann would have to be as a for-profit corporate entity funded by “investors.”

The American Association of Medical Colleges put an informational article on its website, featuring an interview with Janis Orlowski, MD, AAMC chief health care officer. However, the article only discussed the nuts and bolts of how Hahnemann housestaff might go about trying to find new positions.  There was no hint of outrage, and nothing about anything the AAMC might do beyond that.

The only discussion about the bankruptcy beyond the Philadelphia area that I could find came from presidential candidate Sen Bernie Sanders (D-VT), who was quoted in Politco a few days after the bankruptcy announcement:

‘The business model of America’s current health care system is not about healing people or providing access to medical care — it is about making as much money as possible for insurance companies, drug companies and wealthy investors,’ the Democratic presidential candidate said.

‘The situation in Philadelphia illustrates the entire problem: In a city with one of the highest poverty rates in the country, a major hospital serving low-income communities is on the verge of laying off 2,500 people, abandoning 500 medical residents, and closing its operations thanks to an investment firm looking to make as much money as possible in a corporate fire sale.’

The Vermont senator added that he stood in solidarity with the nurses and others who are fighting to keep the hospital ‘from being destroyed by Joel Freedman and his investment firm’ and reiterated his call for ‘Medicare for All.’

Per the Inquirer, again, Sen Sanders is also planning a rally for July 15, and plans “to call for Philadelphia, state and federal officials to find a way to keep Hahnemann open.”

A major teaching hospital will close, abandoning many poor and
vulnerable patients, orphaning 570 house-staff and leaving about 800
nurses and about 1700 other staff unemployed, and there is no national outrage, particularly from health care professionals?  The learned helplessness is striking.

Finally, lacking in what reporting there has been, however, is much
explanation for why a big teaching hospital is coming to such a sudden,
and ignominous end, particularly, since in a sense it has all been done
before.  One gets the impression of deep seated ennui.

A Very Late Echo of the Fall of the House of AHERF

There might be a reason for that.  It has all been done before.

The June 26, Inquirer article did mention, somewhat as an aside:

Hahnemann, which traces its roots to a homeopathic medical college opened in 1848, has been through a tumultuous era dating to at least 1993, when Allegheny Health, Education, and Research Foundation acquired it as part of rapid expansion that led in 1998 to what was then the nation’s largest nonprofit health-care bankruptcy.

Tenet Healthcare Corp. bought Hahnemann and eight other Allegheny hospitals in the Philadelphia region but quickly scaled back, hanging on to just Hahnemann and St. Christopher’s, which were frequently the subject of sales negotiations that failed until Freedman decided to leap across the country from his Southern California base.

The Freedman to which this refers is one Joel Freedman, president and founder of American Academic Health Systems LLC, the last for-profit firm to own the hospital.

So Hahnemann and one other hospital were already the only survivors of the eight hospitals Tenet bought in 1998?  I could find a 2017 article that stated that all other hospitals it owned in Philadelphai were either sold or closed by then.  One hospital it sold, the Graduate Hospital, was converted into a long term care facility (look here). The fate of the other six hospitals seems anechoic. 

However, the lassitude greeting the demise of the last remaining hospitals was foreshadowed by the story of Tenet’s precursor in the Philadelphia “market,” the Allegheny Health, Education and Research Foundation (AHERF) whose demise has been much discussed on our humble blog as a harbinger of the dysfunction that would afflict US health care.

As we noted
in 2008 (and discussed most recently in 2013 here), although the AHERF bankruptcy appears to be the largest
failure of a not-for-profit health care corporation in US history, its
story has produced remarkably few echoes for doctors, other health care
professionals, health care researchers, and health policy makers. I
often use the fall of AHERF as major example in talks, at least the few
talks I am allowed to give on such unpleasant subjects. Rarely have more
than a few people in the audience heard of AHERF prior to my discussion
of it. I only could locate one article in
a medical or health care journal that discussed the case in detail,
albeit incompletely since it was written before Abdelhak’s guilty plea
[Burns LR, Cacciamani J, Clement J, Aquino W. The fall of the house of
AHERF: the Allegheny bankruptcy. Health Aff (Millwood) 2000; 19: 7-41.] I
doubt the case is used for teaching in most medical or public health
schools. The lack of discussion of such a significant case is
a prime example of the anechoic effect.

Some of the important points of this case will sound familiar  (see also this narrative, starting on page 5):

  • AHERF, one of the largest health care systems of its day, was
    built by the poster-boy for health care imperial CEOs, Sherif Abdelhak.
  • Abdelhak, who started as food services purchasing manager at Allegeheny General Hospital, was repeatedly hailed as a “visionary” (in the March, 1997, ACP Observer)
    a “genius,” and the like. His plans to create a huge integrated health
    care system were part of the wave of the future. Abdelhak was even
    invited to give the prestigious John D Cooper lecture at the annual
    meeting of the American Association of Medical Colleges (AAMC), which
    was published in Academic Medicine [Abdelhak SS. How one academic health
    center is successfully facing the future. Acad Med 1996; 71: 329-336.]
    He proclaimed that “we will need to create new forms of organization
    that are more flexible, more adaptive, and more agile than ever before.”
    And he announced that “my aim as chief executive has been to unleash
    the creativity and productive potential of every individual and to
    provide an environment that encourages teamwork”
  • While Abdelhak was making these grandiose promises, he paid himself
    and his associates very well. For example, he received $1.2 million in
    the mid-1990s, more than three times the average then for a hospital
    system CEO. He lived in a hospital supplied mansion worth almost
    $900,000 in 1989. Five of AHERF’s top executives were in the top 10 best
    paid hospital executives in Philadelphia.
  • Although Abdelhak talked of teamwork, he warned the combined faculty
    of the new Allegheny University of the Health Sciences (AUHS): “Don’t cross me or you will live to regret it.”
  • As AHERF was hemorrhaging money, Abdelhak continued to pay himself and his cronies lavishly.
  • After the AHERF bankruptcy, which was at the time the second largest
    bankruptcy recorded in the US, Abdelhak was charged with numerous
    felonies involving receiving charitable assets. In a plea bargain, he pleaded no contest to misusing charitable funds, a misdemeanor, and was sentenced to more than 11 months in county prison.

Note that at its peak, AHERF had 14 hospital in its network.  After its bankrupcy, it transferred 8 hospitals, including Hahnemann and the Medical College of Pennsylvania teaching hospital to Tenet.  In 2003 Tenet closed MCP (look here).  Tenet is a for-profit hospital system with its own history of bad behavior (look here).  So out of a 14 hospital network ultimately only one, not Hahnemann apparently will survive.

However, few people, even in Philadelphia seem to remember that history, and therefore seem to have drawn lessons from it.  However, had they, perhaps they would have concluded, as we asserted in 2013,

The story of AHERF is not merely that of an unlucky bankruptcy. It shows
what can go wrong when health care is taken over by generic managers who adapt the latest management fads, and health care decision making is ruled by marketing, public relations and propaganda instead of evidence and logic, and allows power to be concentrated in organizations run by imperial CEOs.  We did not get a chance to learn this history, so we seem bound to repeat it.

Saving health care will take clear thinking and hard work by a lot of
people. The “visionaries,” if we let them, are likely to depart with a
huge cache of money, leaving us and health care worse off. If it is just
“not done” to talk about cases such as that of AHERF, and other
examples of “recent unpleasantness,” how will be learn not to fall for
the propaganda?

Of course, it is those who benefit from the propaganda who do not want us catching on to their game.

If physicians, health professionals, health care researchers, and health
policy makers do not learn the lessons of the fall of AHERF, and now the fall of one of its two surviving hospital components, they will
be doomed to see its endless repetitions, throughout the land.

With apologies to the Bare Naked Ladies – “it’s all been done before”

OASIS D Classes *FREE*

To: Federally Certified Skilled Home Health Facilities Administrators, Directors of Nursing, OASIS Coordinators, Billing and Coding Personnel, Licensed Home Health Facilities Administrators

From: The Education and Technical Assistance (ETA) Branch of the Health Facilities and Emergency Medical Services Division (HFEMSD)

ETA will offer classes on specific OASIS topics in Aurora, Colorado Springs, Longmont and Denver featuring OASIS D items and guidance. Some Aurora sessions are waiting list only. You may choose to take sessions all at once or individually as your interest and needs dictate. All registration is first-come, first-served, even for sessions within a hosting facility.

ETA reserves the right to cancel classes with low registration. Early registration is helpful.

OASIS D Basics (One Session): Course ID 1082008
This beginning three-hour class is how to get started with OASIS D.

OASIS D Item-by-Item (2 Sessions): Course ID 1082009
This practical application class reviews item-by-item data set completion. We will follow Mrs. Green’s assessment, which will require two sessions to complete. Attendance at both sessions is required to complete this class.

OASIS Quality Measures (One Session): Course ID 1066910
This course assumes familiarity with the OASIS D Item Set, covering more advanced content and application.

To see additional session details and register for on-site attendance for one of these offerings:
1. Go to 
2. Log in to your existing TRAIN account, or new users click “Create an Account”
3. Once you’ve logged in, or created an account, Search (top right) for the appropriate Course ID. (See above for desired training)
4. Click link for desired course.
5. Click the “Registration” tab.
6. Click the “Register” button for the session you wish to attend.
7. Remember to register separately for each desired course.

A detailed example of the above process (if needed)

Questions?: Please email

MDS 3.0 Classes *FREE*

To: Federally Certified Skilled Nursing Facilities Administrators, Directors of Nursing, MDS Coordinators, Billing and Coding Personnel, Licensed Nursing Facilities Administrators

From: The Education and Technical Assistance (ETA) Branch of the Health Facilities and Emergency Medical Services Division (HFEMSD)

Classes on specific MDS topics are available in Brush, Denver, and Colorado Springs. You may choose to take them all at once or individually as your interest and needs dictate. All registration is first-come first-serve, even with sessions held within a hosting facility site.

ETA reserves the right to cancel sessions without adequate participation. Early registration is recommended.

MDS Basics (One Session): Course ID 1066903
This beginning three-hour class is how to get started with MDS.

MDS Item By Item (2 Sessions): Course ID 1066907
This practical application class reviews item-by-item data set completion. We will follow Miss Scarlett’s assessment, which will require two sessions to complete. Attendance at both sessions on subsequent days is required to complete this class.

MDS Quality Measures (One Session): Course ID 1066904
This course assumes familiarity with the MDS Item Set, covering more advanced content and application.

To see additional session details and register for on-site attendance for one of these offerings:
1. Go to
2. Log in to your existing CO.TRAIN account, or new users click “Create an Account”.
3. Once you’ve logged in, or created an account, Search (top right) for the appropriate Course ID. (See above for desired training)
4. Click link for desired course. Note open session options.
5. Click the “Register” button for the session you wish to attend.
6. Remember to register separately for each desired course.

Detailed Instructions for Using (if needed) 

Questions?: Please email

HCBS Settings Final Rule – Rights Modification Deadline

To: Provider Directors


The Department of Health Care Policy and Financing (HCPF) sent an Operational Memo to Home and Community-Based Services (HCBS) providers to inform case managers and HCBS providers that there will be an extension of the previously announced deadline for the rights modification process under the HCBS Settings Final Rule, and to clarify this process. Please review the attached Operational Memo. 

For further information, please see contact information provided in the Operational Memo

Updated MMWR Guidelines for Tuberculosis Screening & Testing for Health Care Personnel

Research has demonstrated low probability of tuberculosis (TB) transmission in U.S. health care settings. As such, working in a U.S. health care setting does not put health care personnel (HCP) at increased risk for acquiring TB. However, baseline testing, use of TB risk assessments and symptom screen, annual education and treatment of latent TB infection remains extremely important to prevent progression to TB disease among HCP and subsequent transmission. The following links outline CDC’s recommendations for screening and testing HCP in U.S. health care settings and this video gives a brief overview.

– Updated 2019 MMWR Guidelines 
– Guidelines for Preventing the Transmission of Mycobacterium tuberculosis in Health-Care Settings, 2005 MMWR 2005; 54 (No. RR-17) 

Related to this research and in response to the updated TB screening, testing, and treatment of U.S. health care personnel guidelines published by the Centers for Disease Control (CDC), the Colorado Department of Public Health and Environment (CDPHE) TB Program published resources outlining these guidelines. Attached to this email, please find a letter outlining available resources related to this topic and an algorithm outlining each step of the screening and testing process. 

Additional information can be located on our website or by contacting the CDPHE TB program at or 303-692-2638.

Health Facilities Chapter 2 Rule Revision Stakeholder Meeting

To: all Health Facilities


Meetings are open to the public.

When: July 11, 2019 from 10:00 a.m. – 12:00 p.m. 

Where: Colorado Department of Public Health and Environment
4300 Cherry Creek Dr. South
Denver, CO 80246
Conference room C1A
(visitors, please check in at the front desk in building A, doors near the flag pole) 

Audio line: 669-900-6833, conference code: 882 201 285 
Webinar: Zoom meeting (

To view the Chapter 2 meeting agenda go to: 

Meeting documents, schedules and archived agendas are available on the department website : 

To sign up to receive email communications regarding Chapter 2 go to: 

For further info:


HHA IDR Committee Meeting

This blog publishes information typically sent through the Health Facilities Web Portal to health care entities regulated by the Colorado Department of Public Health and Environment. Please note that the Web Portal is the official medium for business communication between the Department and licensed and Medicare/Medicaid certified health care entities. Health care entities should continue to monitor their portal accounts routinely.

Making the Revolving Door Great Again: Recent FDA Commissioner Dr Scott Gottlieb Joins the Pfizer Board of Directors

It has been less than six weeks since our last post on the revolving door. 

That post emphasized cases of the outgoing revolving door, that is, of
people leaving leadership positions in governmental bodies which
regulate health care or make health care policy, then soon obtaining
in the health care industry, particularly organizations which they
previously regulated or were affected by the policies they made, the
outgoing revolving door. Now we have another big case.

Former US Food and Drug Agency (FDA) Commissioner to Join Pfizer Board

As we discussed in May, 2019, here, Dr Scott Gottlieb, FDA Commisioner from 2017 to May, 2019,  had been no stranger to the revolving door.  Prior to assuming leadership of the FDA, he had relationships with multiple for-profit health care
corporations, which drew wide notice when he was appointed to head the FDA in 2017, as we noted at that time here.  Also, Dr Gottlieb was clearly very comfortable with the pharmaceutical and biotechnology industries.  For example, in 2007-2008, we discussed many examples of Dr Gottlieb’s strident promotion of the interests of these industries
(look here, here, here and here).

Very quickly after leaving the FDA in 2019, Dr Gottlieb rejoined his old venture capital firm, New Enterprise Associates, as a full-time partner investing partner specializing in life sciences companies.
Then, as reported by CNBC on June 27, 2019,

Gottlieb, who stepped down as Food and Drug Administration Commissioner
in April, will join Pfizer’s board of directors, the company announced

Gottlieb resigned from the FDA this spring after nearly two years at the helm.

This seemed like an even more consequential case of the outgoing revolving door, obviously, because Dr Gottlieb held an extremely important
position of responsibility in health care regulation, and because he
quickly moved on to hold an important position of governance in one of
the world’s largest pharmaceutical/ biotechnology companies.  It also
occurs as the next big thing after an unrelenting stream of revolving
door issues affecting health care policy and regulation in the Trump
regime (look here)

An Immediate Protest by Senator Elizabeth Warren

So this time, not only did dissidents like your obedient servant mutter online, but a US Senator authored a swift rebuke.  As reported by Sheila Kaplan in the New York Times,

Senator Elizabeth Warren on Tuesday called on Dr. Scott Gottlieb, the former commissioner of the Food and Drug Administration, to resign from the board of Pfizer, saying his decision to join one of the country’s leading pharmaceutical companies ‘smacks of corruption.’

Ms. Warren, who is seeking the Democratic presidential nomination, said in a public letter to Dr. Gottlieb that the revolving door between government and industry ‘makes the American people rightly cynical and distrustful about whether high-level Trump administration officials are working for them, or for their future corporate employers.’

The explicit reference to “corruption” is notable.  Most people would think of cases of the outgoing revolving door as conflicts of interest.  The concern is that people in government regulatory or policy positions might bias their decision making, possibly unconsciously, to increase the likelihood of lucrative employment after the end of their government service.  Transparency International’s definition of corruption is abuse of
entrusted power for private gain.  The outgoing revolving door seems to
make such abuse more likely, but does not mandate it.

However, as we noted here, some, including experts from the distinguished European anti-corruption group U4, think the revolving door is corruption

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.

Senator Warren now seems to agree, at least in the case of Dr Gottlieb’s move to the Pfizer board.

Did Dr Gottlieb’s FDA Favor Pfizer?

In fact, within days, two reports surfaced that suggested possible reasons to think that Dr Gottlieb’s FDA had taken actions that would have benefited Pfizer, and hence that his appointment to its board might be corrupt.

Drop in FDA Enforcement Activities During Gottlieb’s Tenure

First, Science Magazine noted considerable evidence that the FDA during the Trump and Gottlieb era had notably deregulated the pharmaceutical industry.

By several measures … FDA’s compliance and enforcement actions have plummeted since President Donald Trump took office, Science has found.

In particular,

The agency’s ‘warning letters’—a key tool for keeping dangerous or ineffective drugs and devices and tainted foods off the market—have fallen by one-third, for example. Such letters typically demand swift corrections to protect public health and safety. FDA records from Trump’s inauguration through 22 May show the agency issued 1033 warning letters, compared with 1532 for the most recent equivalent period under former President Barack Obama.


Warnings from the FDA Center for Devices and Radiological Health, which helps ensure the safety and quality of medical devices, and from some of the agency’s district offices—including Philadelphia, Florida, and New York—have dropped even more steeply, by more than two-thirds. Two district offices have not issued a warning in more than 2 years.


Several other FDA actions under Trump show similar declines when measured against the end of the Obama administration. FDA inspection reports labeled ‘official action indicated’—typically a trigger for warning letters or similar actions—have fallen by about half under Trump and are continuing to trend downward. Even FDA’s rare injunctions, a more forceful step than warnings to prevent sales or distribution of unsafe or otherwise illegal products, fell from 35 in the last part of the Obama administration to 26 under Trump. (During a comparable period at the start of the Obama years, FDA issued 51 injunctions.) The agency’s ‘untitled letters’—for concerns that fall short of thresholds for formal warnings—also have dropped sharply under Trump.

Several experts interviewed by Science emphasized the importance of these findings.

‘FDA’s power to enforce its requirements is an important part of how it achieves its public health mission,’ says Patricia Zettler, a law professor at Ohio State University in Columbus and former FDA attorney. ‘If FDA is not using that power, it sends a signal that violations will be tolerated.’

Dr Gottlieb defended his former agency’s regulatory role, and implied, of course, that any criticisms were political:

Scott Gottlieb, Trump’s first FDA commissioner, defended his record after reviewing a summary of Science’s data. ‘We were pretty aggressive,’ he wrote in an email. ‘I don’t think you can paint us with a political narrative—that just because we were a Republican administration, somehow we must have ratcheted down enforcement activity. We didn’t.’

However, given the magnitude of the changes found, it is reasonable to wonder if Pfizer executives noted, and approved.

Lax Regulation of a Pfizer Drug (Xeljanz)

The next day, an article in the Milwaukee Journal Sentinel by John Fauber noted what appeared to be lax enforcement specifically involving a Pfizer product.

Unlike European drug regulators, the U.S. Food and Drug Administration under Scott Gottlieb did not say doctors should stop prescribing a potentially dangerous dose of a drug made by Pfizer — a company whose board Gottlieb soon joined.

In February, when Gottlieb still was head of the FDA, a Pfizer safety trial showed that rheumatoid arthritis patients who got a higher dose of the drug Xeljanz had a ‘statistically and clinically important difference’ of blood clots in the lungs and deaths.

The safety trial, which was required by the FDA, did not focus on the other two conditions for which the drug is approved — ulcerative colitis and psoriatic arthritis. The trial involved patients 50 or older with at least one risk factor for cardiovascular disease.

After safety concerns were found, Pfizer immediately stopped giving the higher dose to those in the trial.

Regulators in Europe went further.

The European Medicines Agency said in May doctors must stop giving the high dose to all patients who were at higher risk for blood clots, including those with ulcerative colitis for whom the higher dose was already recommended.

The FDA did not take that action, though it warned doctors about the safety findings that were discovered in the trial.

One ethics expert interviewed by Mr Fauber raised clear concerns about corruption.

‘It sounds like a reward for a job well done,’ said Carl Elliot, a physician and professor of bioethics at the University of Minnesota, when told by the Milwaukee Journal Sentinel about the FDA’s failure to halt prescribing of the potentially dangerous high dose of the drug.

‘It sure does look suspicious.’

Dr Gottlieb, not unexpectedly, denied direct involvement in the decision.

Decisions regarding Xeljanz were made by the agency’s career professional staff without my involvement. I did not participate in any matters involving this drug while I was at FDA

However, Senator Warren’s concerns about corruption were heightened:

‘Unfortunately, Scott Gottlieb joining the board of Pfizer will raise these kinds of questions about FDA decisions concerning Pfizer, whether it’s this or others,’ Warren said in a statement to the Journal Sentinel. ‘He shouldn’t have joined Pfizer’s board.’

IMHO, concerns that under the Dr Gottlieb the FDA could have taken a lax approach to drug industry regulation, particularly in the case of Pfizer’s Xeljanz, ought to be enough to launch an investigation into whether his appointment to the Pfizer board was corrupt.

Dr Gottlieb Will Now Engage in Governance of a Company with an Already Spotty Ethical Record

Dr Gottlieb’s appointment to the Pfizer board shuld raise major ethical questions.

Another set of questions he ought to contemplate is how he will deal with his new responsibility for Pfizer’s conduct given the company’s chequered ethical record.

We have long been posting about an amazing series of ethical missteps by Pfizer leadership, evidenced by various legal settlements, regulatory sanctions, and occasional guilty pleas.    Our most recent post on the subject, in 2018, noted how Pfizer settled charges of giving kickbacks to patients through disease advocacy organization to mask the prices of its drugs.  Our over 100 posts on Pfizer can be found here.

The company’s track record from 2000 to 2017 is staggering.

Since 2000, Pfizer’s troubles started, according to the Philadelphia Inquirer, with the following…

– In 2002, Pfizer and
subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to
settle allegations that the company fraudulently avoided paying fully
rebates owed to the state and federal governments under the national
Medicaid Rebate program for the cholesterol-lowering drug Lipitor.
– In 2004, Pfizer agreed to pay
$430 million to settle DOJ claims involving the off-label promotion of
the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions
included flying doctors to lavish resorts and paying them hefty
speakers’ fees to tout the drug. The company said the activity took
place years before it bought Warner-Lambert in 2000.
– In 2007, Pfizer agreed to
pay $34.7 million in fines to settle Department of Justice allegations
that it improperly promoted the human growth hormone product Genotropin.
The drugmaker’s Pharmacia & Upjohn Co. subsidiary pleaded guilty to
offering a kickback to a pharmacy-benefits manager to sell more of the


– In 2009, Pfizer paid a
$2.3 billion settlement of civil and criminal allegations and a
Pfizer subsidiary entered a guilty plea to charges it violated federal
law regarding its marketing of Bextra (see post here).
– Pfizer was involved in two other major cases from then to early 2010,
including one in which a jury found the company guilty of violating the
RICO (racketeer-influenced corrupt organization) statute (see post here). 
In that year the company was listed as one of the pharmaceutical “big
four” companies in terms of defrauding the government (see post here).
– In early 2011, Pfizer’s Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York (see post here).
– In March, 2011, a settlement was announced in a long-running class
action case which involved allegations that another Pfizer subsidiary
had exposed many people to asbestos (see this story in Bloomberg).
– In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post).
– In August, 2012, Pfizer settled allegations that its
subsidiaries bribed foreign (that is, with respect to the US) government
officials, including government-employed doctors (see this post).
– In December, 2012, Pfizer
settled federal charges that its Wyeth subsidiary deceptively marketed
the proton pump inhibitor drug Protonix, using systematic efforts to
deceive approved by top management, and settled charges by multiple
states’ Attorneys’ General that it deceptively marketed Zyvox and Lyrica
(see this post).
– In January, 2013, Pfizer settled Texas charges that it had misreported information to and over-billed Medicaid (see this post).
– In July, 2013, Pfizer settled charges of illegal marketing of Rapamune (see this post.)
– In April, 2014, Pfizer settled allegations of anti-trust law violations for delaying generic versions of Neurontin( see this post).
– In June, 2014, Pfizer settled another lawsuit alleging illegal marketing of Neurontin (see this post).
– In 2015, a settlement by Pfizer of a shareholders’ lawsuit stemming from charges of illegal marketing was announced (see this post).
– In October, 2015, a  UK
judge found that the company had threatened health care professionals for
using a generic competitor (see this post).
– In February, 2016, Pfizer settled a lawsuit for $785 million for overcharging the US government for Protonix (look here).
– In August, 2016, Pfizer made a $486 million settlement of allegations it bilked shareholders by concealing research showing the harms of Celebrex (look here for this and next two items)
– In December, 2016, Pfizer fined $106M in UK for using monopoly on production of generic phenytoin to overcharge National Health Service
– In November, 2017, Pfizer made $94 million settlement of allegations of fraud to delay generic competition

That Dr Gottlieb waltzed through the revolving door to a major role in the governance of Prizer does not give me great confidence that he will be part of the solution to the company’s ongoing ethics problems.

Discussion: the Swamp Gets Swampier

 President Trump came to office promising to drain the swamp.

[An alligator in the Everglades, 1963]

At least in terms of health care, Dr Gottlieb’s transit through the revolving door is just the latest example of how the swamp waters are rising.  So, as we have said again and again…

Our health care system appears to be rigged to favor of leadership and
management of large companies, as opposed to health professionals, and
particularly as opposed to patients.  For years now we have discussed
stories which include allegations of severe misbehavior by
large health care companies affirmed by legal settlements, but which
only involve paltry financial penalties to the companies, and almost
never any negative consequences to any humans, demonstrating the impunity of health care managers and executives. Furthermore, these stories are often relatively
anechoic, noted often only briefly in the media, and have inspired no
real action by the US government. We have previously discussed how market fundamentalism (or
neoliberalism) led to deregulation, which enabled deception, fraud,
bribery, and intimidation to become standard business
practices, and allowed increasing concentration of power by large
corporations. Managerialism allowed the top leaders of these
corporations and their insider cronies to amass increasing power and
money. Everyone else, other employees, stockholders of public
corporations, customers, vendors and suppliers, and the public at large
lost out.   These changes led to an increasingly
costly system which produced increasingly bad results for patients
and the public.

We have called for years for what we sometimes term “true health care
reform” to derig the system. Unfortunately, despite our hopes,
perceptions of a rigged
system may not always inspire honest reform. Instead, they can
enable the rise of demagogues and would be dictators who promise only
they can solve the problem.  Donald Trump cried out that only he could
fix our problems and drain our swamps.  However, at least in terms of
policing white-collar crime, particularly in health care, he seems to be
letting the swamp waters rise.

Nonetheless, let us remember the need for wholesale, real health care
reform that would make health care
leaders accountable for what their organizations do, and 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.

Health Care and Independence Day 2019

Your Best Health Care: Health Care and Independence Day 2019

Health Care and Independence Day 2019

Americans are preparing to celebrate the Fourth of July holiday with a full weekend of activities. Much of that will include getting together with family and friends for backyard cookouts, fireworks displays, and special events sponsored by local communities and other civic entities. There will be ballgames and events with the national anthem played and sung, and flyovers by military aircraft to honor the country’s heritage and national pride. Countless homes across the nation will fly the U.S. flag on their front porch, and the country will be flush with displays of red, white, and blue.

However, in all this national display of patriotism, let us not forget the true meaning of what our liberty represents as the land of the free and the home of the brave. Americans have a rich history of freedom defended both at home and abroad, going back 243 years to our founding colonial roots. Beginning with the initial struggle against Great Britain by the colonists in the 1770’s, following with a long war for independence, a second onslaught by British troops and their monarchy to topple the young America in the early 1800’s, a long and bloody Civil War in the 1860’s that pitted family against family that created a split between North and South and resulted in the deaths of over 600,000 men and women on our own soil (finally culminating in a resolution bringing all Americans together again–though with lasting effects to today), more conflicts with Mexico, Spain, and other nations through the end of the 1800’s, two major World Wars in the 20th century–not to mention other major conflicts in Korea, Southeast Asia, and the Middle East which still are in turmoil today–Americans have given the ultimate sacrifice for liberty and freedom. Those events must ever be forefront in the national conscience when the July 4th Holiday is celebrated.

Less we forget, there are hundreds of books and media sources that outline the events and catastrophic loss of life and property for each of the epic struggles for liberty. A website that shows casualties by conflict for the Revolutionary War is . One source for casualties in the Civil War alone can be found at , and another site for overall casualties from all major conflicts can be seen at . Needless to say, America has lost many of its best and brightest to maintain liberty.

Many who served in those military endeavors died from disease and inadequate health care, especially in the 18th and 19th centuries. Health care has always been an issue during times of both peace and war. However, it is not a right but a privilege. Americans have certain inalienable rights as guaranteed by the U.S. Constitution. Certainly freedom of choice is a key ingredient for establishing life, liberty, and the pursuit of happiness. When the national government attempts to legislate or mandate regulations that are detrimental to the safety of its citizens and its own welfare, Americans must take a stand to let their elected representatives and politicians that enough is enough. Freedom to choose your health care provider is key to your own personal and moral freedom. Freedom to purchase or not purchase your own health insurance is key to your financial freedom. Nationalized health care is not constitutional, nor does it represent any freedoms based upon our history as Americans.

When you consider how much blood, toil, energy, and sacrifice has taken place since 1776, remember the picture of George Washington kneeling in the snow at Valley Forge. Although it is a painting, it represents our American heritage of reliance on “Providence”, as Washington often referred to a higher spiritual being. Although there has been some controversy about his personal religious beliefs, Washington was known as a morally righteous man, and a defender of faith and liberty. He knew that a fledgling nation would not survive unless its dependence was upon God and not on its own merits. The concept of religious freedom was then and is now paramount to our central core as a people, and from that basis stems all other freedoms Americans hold dear. It is the cornerstone on which all other freedoms are based because it focuses on the knowledge that without dependence on God, there is no liberty or freedom.

This quintessential holiday has been venerated as a time to step back and revel in all that is America–Land of the Free, Home of the Brave. How marvelous is it that our country is still “one nation, under God, one, and indivisible.” During the hot summer of 1776, when representatives from the 13 colonies stood resolute in Philadelphia, Pennsylvania, and put their lives, their fortunes and their sacred honor all on the line, the country was bracing for war with England. When the last of 56 signatures were penned on the Declaration of Independence, those men announced to a waiting public, and to the world, that Americans were a free and independent people.

Watch this video clip from the HBO miniseries “John Adams” of the vote to pass this document, this American Scripture: . Listen, as the Declaration is read aloud. Yet, with divine Providence, the nation survived intact and won its freedom against seemingly impossible, insurmountable odds. Today we celebrate again this good news, in spite of current criticisms. This national Holiday represents all that is good about our nation.

America’s true history has been largely ignored in much of the media today. Unfortunately, too much focus is based on fireworks and fun times, going to the beach or on vacation, and taking advantage of the big holiday sales events. Too little attention is focused on our heritage as a Christian nation, our memories of those who sacrificed life, liberty and their sacred honor to defend America, and the reasons Americans enjoy freedom and liberty. This weekend, take time to remember our liberty, our nation, our history as Americans, and then enjoy your country with new found respect and honor. Fly the U.S. flag at your home, sing the national anthem with gusto, and say a prayer of thanks to God that you live in a nation that provides freedom and liberty. If you know someone who has served in the military, tell them you appreciate their service. When you go to church, tell those around you that the Fourth of July should be honored with true Christian service and humility. Send your Congressman a note or call his/her office and encourage them to stand up for freedom and liberty.

Remember. It’s your country. Enjoy liberty and freedom. Most of all, keep it free.

Happy Independence Day!

Until next time.