COC Fee Holiday for calendar year 2017

The Health Facilities Community Blog: COC Fee Holiday for calendar year 2017





The Colorado
Department of Public Health and Environment’s Hazardous Materials & Waste
Management Division will host three one-day trainings this July and August.
These trainings are designed for health care facility personnel responsible for
identifying, managing and directing proper disposal of pharmaceutical,
laboratory and other typical waste which typically include but not limited to
pharmacists, director of nursing/nurses, administrators, environmental
professionals, laboratory directors/personnel, facilities managers/directors,
etc. This waste is most commonly generated by hospitals, long-term care
facilities, assisted living facilities, ambulatory services, pharmacies and
other health care facilities operating in Colorado. 
Topics to be
covered will include hazardous waste for healthcare explained, Resource
Conservation and Recovery Act (RCRA) review, typical healthcare waste and
disposal requirements (pharmaceuticals, laboratory, medical, etc), what to
expect during hazardous waste inspections, logistics of hazardous waste
management, self-certification, and a review of resources for healthcare as it
relates to proper disposal.  And, since I’m the primary inspector who
performs most of the RCRA inspections at healthcare facilities throughout
Colorado, who better to pepper with regulatory questions about proper
The three sessions
are at different locations in the Front Range including Fort Collins, Denver,
and Colorado Springs.  Be sure to
register early as seating is limited. You can register online using a credit
card or electronic check. A small processing fee will be added to your
The registration
fee includes food, beverages and training materials.
Onsite training
will be from 8 a.m. to 3 p.m. and includes a working lunch.

Thank you — we look
forward to seeing you there.

The CareFusion/ Dr Denham/ NQF /Leapfrog Goup Case that Would Not Go Away – NQF CEO Outed as Member of Premier Inc Board

The story of the CareFusion/ Dr Denham/ NQF/ Leapfrog Group case refuses to go away, even if it still has not created any echoes in the mainstream media or the medical and health care literature.  Now it appears that the NQF has an even bigger conflict of interest problem than previously reported. 


As of our last post on 5 February, 2014, the background was-
–  The case became public with an apparently routine legal settlement between CareFusion and the US Department of Justice
 –  The CareFusion settlement for $40.1 million was made in response to allegations that kickbacks were made to promote ChloraPrep, a solution meant for preoperative and other health care skin cleaning
–  The Department of Justice news release
also alleged that payments were made to a corporation called Health
Care Concepts to conceal kickbacks made to its owner, Dr Charles Denham
–  The implication was that Dr Denham was supposed to influence a
standard writing committee run by the National Quality Forum, a well
known organization that promotes quality improvement, issues
authoritative practice standards, a form of clinical practice
guidelines, and has contracts with the US government for quality of care
–  The draft of the standard to prevent surgical site infection written by the committee allegedly included
the use of ChloraPrep, although mention of that specific medication was
removed in a revision
–  The Department of Justice alleged that the standard was based on a
journal article sponsored by Cardinal Health, from which CareFusion
split, and which may have been manipulated by its sponsor
–  NQF leaders asserted that after hearing of the case from the DOJ, the
organization severed ties with Dr Denham and the non-profit
organization he runs,  established a policy not to accept money from
funding organizations whose leaders are on its committees, reviewed all
the standards set by the committee of which Dr Denham was co-chair, and
twice revised its conflict of interest policy.
– Despite these efforts by the NQF to remove excess influence by Dr
Denham, a specific recommendation to use ChloraPrep, specified by
formula but not by name, did appear in another NQF standard, one for
preventing central line infections; the NQF logo apparently appeared on
at least one educational event run by Dr Denham that advocated the use
of ChloraPrep; and CareFusion cited NQF support in at least one
promotional brochure
–  In retrospect, people who worked with Dr Denham on various health care quality and patient safety projects acknowledged they should have realized something fishy was going on.
–  Senator Charles Grassley is now investigating

The Conflicts of the NQF CEO

In our first post about the case, I noted that at the time that Dr Denham was a committee member, the NQF seemed to have a relatively weak policy on conflicts of interest, although  this post noted it was later strengthened somewhat.  I also commented that the organization seemed accommodating of conflicts of interest affecting its board of directors, and to have institutional conflicts of interest in that it accepted funding from health care corporations which might have interests in NQF quality standards being written in their favor. 

So maybe it should not be too great a surprise that the latest twist in this case is the revelation that the new CEO of NQF has her own quite significant conflicts of interest.  Last week, ProPublica published a story about the conflicts of interest of the new CEO of the NQF.  The basics were:

The top
executive at the country’s pre-eminent health care quality organization is
being paid hundreds of thousands of dollars by two large medical companies that
have a stake in the group’s work.

The payments to
Dr. Christine Cassel raise new conflict-of-interest concerns at the National
Quality Forum,
which endorses benchmarks that Medicare uses to compensate
hospitals based on performance.

As ProPublica
recently reported
, the Quality Forum is reviewing its conflict-of-interest
policies after being stung by allegations that the former co-chair of one of its
endorsement committees had accepted kickbacks to help a drugmaker win favorable

Cassel received
about $235,000 in compensation and stock last year as a board
member for Premier Inc.
, a North Carolina company that says it provides group
purchasing and performance improvement consulting for an alliance
of 2,900 hospitals
and thousands of nursing facilities and other providers.

Cassel also was
paid $189,000 as a board member for the Kaiser Foundation Health Plans and
Hospitals in 2012,
Quality Forum officials confirmed to ProPublica. Kaiser’s
tax forms are not available for 2013, but they show
that in 2010 and 2011 Cassel received a total of $357,125.

Cassel, who
declined to be interviewed, took over as chief executive officer last summer
after a decade as president and CEO of the American Board of Internal Medicine. 

Not unexpectedly, the official position of the NQF was nothing to see here, just move along.

group’s chairwoman
, Helen Darling, said in an email that the board was ‘fully aware’ of Cassel’s outside compensation when she was hired in December
2012. Darling, president of the National Business Group on Health, initially
agreed to an interview but did not respond to follow-up contacts.

Spokeswoman Ann
Greiner said the board got a legal opinion and discussed it in depth before
agreeing that Cassel could recuse herself ‘where her outside board service
would be construed as an actual or perceived conflict of interest.’
So far that
hasn’t happened, Greiner said.

Note that those defending NQF saw no reason to explain why it had not previously disclosed Dr Cassel’s other positions or how the conflicts would be managed.  Perhaps a board that includes executives of large health corporations, of a financial firm
with large health care interests, and of a trade associations for large health
care corporations would not see a problem with having a CEO who is simultaneously on the boards of a for-profit hospital group purchasing organization and a very large, albeit non-profit health care system.

Others were much more skeptical and critical. 

Two ethics
experts interviewed by ProPublica said Cassel’s relationships with Kaiser and
Premier present obvious conflicts given the Quality Forum’s broad involvement in health care.

The Quality
Forum maintains a clearinghouse of more than 700 quality measures —
covering everything from tracking hospital readmissions to setting information
technology standards — that are established by expert committees and
widely adopted by U.S. hospitals and other providers.

The ethics experts
said they were uncertain how Cassel could recuse herself
to anything related to Kaiser and Premier and still do her job.

‘Would that mean
every time somebody said the word ‘hospital’ she would have to say, ‘I can’t be
in this conversation?’’
said Eric
, a Harvard School of Medicine professor who has published
extensively on conflicts of interest.

‘Conflict of
interest is as much an appearance as it is an effect,’ added Sheldon Krimsky, a medical
ethics expert at Tufts University. He called Cassel’s conflicts ‘absolutely

Campbell and
Krimsky said the cleanest way to eliminate potential conflicts would be for
Cassel to resign from the outside boards.

The plot thickens because of the amount of influence wielded by the NQF,

 In 2009,
Medicare awarded a $40
million contract to the Quality Forum
to recommend measures
it could adopt. President Obama’s health care reform law accelerated the move
to pay-for-performance
. Medicare already has begun penalizing and rewarding hospitals based on readmission rates, mortality and patient satisfaction measures. By 2017, it’s expected that 9 percent of Medicare
will be based on performance.

Having some leverage on that influence would seem to be particularly important to Premier Inc, the now publicly held for-profit group purchasing organization on whose board Dr Cassel sits,

 Premier reported
revenues of $869 million in the fiscal year ending last June. It spent more
than $1 million on lobbying in 2013, according to In August
and November, the company urged members of Congress to instruct Medicare to run
any quality measures through the Quality Forum

Premier featured
Cassel’s status
as a board member and future top executive of the Quality
Forum in documents last May describing its initial public stock offering.
September Cassel
acquired 3,704 shares of Premier
stock that were then worth about $100,000.

The company’s
business involves group purchasing and a consulting arm that uses data analysis
to help providers perform better on various quality metrics. In October, a
measure sponsored by Premier to track hospital care by the average length of
stay was
up for renewal by the Quality Forum

Of course, a Premier Inc spokesperson denied that could be a problem,

[Spokesperson Blair] Childs said
Cassel’s role on the Premier board doesn’t pose any conflict of interest, and
that her relationship with Premier was vetted carefully by
the Quality Forum’s board
. Cassel was a good addition to the Premier
board because of her commitment to improved care and lower costs, he said.

However, I submit that the conflict here is particularly acute because Dr Cassel is not merely a part time consultant or adviser to Premier Inc.  She is on the board of directors.  In 2006 we first discussed a newly discovered species of conflict of interest in health care, in which leaders of medical or health care organizations were simultaneously serving on boards of directors of health care corporations.  We posited these conflicts would be particularly important because being
on the board of directors entails not just a financial incentive.  It
ostensibly requires board members to “demonstrate unyielding loyalty to
the company’s shareholders” [Per Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]  Of course, after the global financial collapse of 2008 made us sadder and a little wiser, we realized that many board members actually seem to have unyielding loyalty to their cronies among top management.  However, in any case, the stated or actual interests of a member of the board of a health care corporation, like a for-profit hospital purchasing organization, could be very different and at odds with the mission of an academic medical institution or a non-profit ostensibly dedicated to improving health care quality. 

However, in my humble opinion, the issue here goes even beyond a blatant and undisclosed conflict of interest.  That a top steward of a big for-profit health care corporation could simultaneously be the top leader of an influential non-profit health care quality improvement organization suggests that increasingly US health care is run by an insular group of insiders whose influence gets ever larger because of their collective power, not necessarily because of their dedication or ability to improving health care.  As ProPublica put it,

Rosemary Gibson,
an author and senior adviser to The Hastings Center, a research group dedicated
to bioethics in the public interest, said she wasn’t surprised at Cassel’s
outside compensation. So much money permeates decision-making in Washington,
she said, that participants have become oblivious

‘The insiders
don’t see it,’ Gibson said. ‘It’s like a fish in water.

Additional Questions

Finally, the forced disclosure of Dr Cassel’s conflicts of interest raise some additional questions. 

Did Dr Cassel Have an Equally Severe Conflict as CEO of the ABIM?

Dr Cassel was previously the CEO of the American Board of Internal Medicine (ABIM).  This non-profit organization also has a very substantial influence on health care.  Physicians must pass its examinations to become certified as internal medicine specialists or sub-specialists such as cardiologists, gastroenterologists , etc.  Recently certified physicians, and soon all certified physicians will have to participate in ABIM sanctioned “maintenance of certification” activities or risk being flagged as not adequately keeping with the board’s concept of medical progress.

Thus the content of the ABIM examinations and sponsored activities can influence physicians’ thinking and decision making.  How the ABIM under Dr Cassel’s leadership dealt with conflicts of interest affecting those who write examinations, provide content, and lead the organization is unclear.

Furthermore, it seems possible that Dr Cassel had a conflict of interest generated by her work for Premier Inc while she was still CEO of ABIM.  However, before Premier Inc made its initial public offering, information about its management and governance was scarce.  Whether Dr Cassel was on the board of a precursor to the publicly traded Premier Inc is not easy to ascertain.  Maybe the current ABIM leadership needs to consider whether Dr Cassel had a conflict involving Premier Inc or its precursor while she was CEO of ABIM, and how that conflict could have affected the direction of ABIM at the time. 

How Would Dr Cassel Respond to Criticisms of Premier Inc and How Would that Reflect on the ABIM and the NQF?

Premier Inc is a hospital group purchasing organizations (GPOs).  GPOs, particularly including Premier Inc, have been criticized for anti-competitive practices that distort the market in health care drugs and devices, for accepting the ethical equivalent of kickbacks, and particularly for generating drug shortages.  For example, an opinion piece in the Baltimore Sun claimed,

 The main reason is that most of these drugs are purchased through a
handful of supply chain middlemen called hospital group purchasing
organizations, or GPOs, whose anti competitive practices and self-dealing
have been documented in Senate antitrust hearings, media reports,
government investigations and lawsuits.
These buyers’ monopolies
purchase upward of $300 billion in drugs, devices and supplies annually
for about 5,000 private acute care hospitals, including virtually every
one in Maryland. Five giants account for roughly 90 percent of all such
purchases. [Apparently including Premier Inc – Ed]

Under a ‘pay-to-play’ arrangement, vendors compete not
on the basis of who can supply the best product at the best price but on
who can pay the biggest fees to these cartels. In return, they receive
exclusive contracts. This artificially constrained supply chain is why
many drug manufacturers have fled the marketplace,
leaving just one or
two to produce many drugs. In turn, hospitals receive incentives based
on their compliance with contracts the GPOs award to favored suppliers.

1987, Congress enacted the Medicare anti-kickback ‘safe harbor,’ which
exempted GPOs from criminal penalties for accepting payments from
suppliers — payments that in virtually every other industry would be
considered unlawful kickbacks.

The GPOs trade organization vigorously contested this argument, of course.

But the awkward fact is that Dr Cassel, as a board member of Premier Inc, can be seen as a steward of that corporation, and hence responsible for the its overall direction.  Thus, Dr Cassel could easily find herself in the uncomfortable situation of having to defend and justify questionable behavior by Premier Inc while simultaneously wearing the hat of CEO of NQF.  How that would play out is not obvious.


So now it appears that the problems with conflicts of interest at the NQF affect not only its standard setting committees, board of trustees, and organizational funding.  They also affect its CEO.

Dr Joe Collier said, “people who have conflicts of interest often find
giving clear advice (or opinions) particularly difficult.”  [Collier J.
The price of independence. Br Med J 2006; 332: 1447-9. Link here.]  To reduce further unclear thinking and its consequences, we again urge that academic medical institutions, and non-profit organizations dedicated to improving patient care and public health forthwith begin real reductions of conflicts of interest affecting all those who make clinical or policy decisions.   

We previously suggested:that NQF leaders might also consider:
–  further strengthening their conflict of interest policy for standard
setting committees, particularly by minimizing the number of committee
members with conflicts, and banning individuals with conflicts from
chairing committees, as per the IOM report on standards for trustworthy clinical practice guideline development
–  increasing transparency about conflicts of interest, particularly by
making disclosures for all projects available without complex web
–  decreasing institutional conflicts of interest by refusing funding
from health care corporations whose revenues might be affected by the
content of standards and guidelines, and reducing conflicts affecting
NQF board members and executives

I would now add that in my humble opinion, the NQF ought to immediately fully disclose any other conflicts that might exist affecting its committees, staff, board of trustees, or funding, and then begin a progressive but ultimately complete phase out of all significant conflicts affecting these areas.  

Roy M. Poses MD for Health Care Renewal

The Corporate Psychopaths Theory of Health Care Dysfunction

A new article in the Journal of Business Ethics suggested that the global financial crisis, or great recession, was primarily due to a fundamental flaw in the leadership of financial organizations, one that has important implications for health care organizations. 

The article, Boddy CR. The corporate psychopaths theory of the global financial crisis.  J Bus Ethics 2011; 102: 255-259 is here.  Its premise was:

The Corporate Psychopaths Theory of the Global Financial Crisis is that Corporate Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the crisis.

Note that in 2004 we first posted about the possibility that a proportion of corporate managers, including those in health care, could be psychopaths, raised then by two experts on psychopathy, Paul Babiak and Robert Hare. In 2006, they published Snakes in Suits, about the dangers of psychopaths as executives and managers (see post here). However, the issue got scant attention in those days of letting the good times roll.

Defining Corporate Psychopaths

Boddy described psychopaths as:

the 1% of people who have no conscience or empathy and who do not care for anyone other than themselves. Some psychopaths are violent and end up in jail, others forge careers in corporations. The latter group who forge successful corporate careers is called Corporate Psychopaths.

Corporate Psychopaths as Leaders

Such people do not make good leaders:

Although they may look smooth, charming, sophisticated, and successful, Corporate Psychopaths should theoretically be almost wholly destructive to the organizations that they work for. The probable mal-effects of the presence of psychopaths in the workplace have been hypothesized about in recent times by a number of leading experts and commentators on psychopathy.

Researchers report that such malevolent leaders are callously disregarding of the needs and wishes of others, prepared to lie, bully and cheat and to disregard or cause harm to the welfare of others. Corporate Psychopaths are also poorly organized managers who adversely affect productivity and have a negative impact on many different areas of organizational effectiveness.

How Corporate Psychopaths Could Have Become Prevalent
Despite the dangers posed by such leadership, corporate psychopaths may rise quickly in management:

Psychologists have argued that Corporate Psychopaths within organizations may be singled out for rapid promotion because of their polish, charm, and cool decisiveness. Expert  ccommentators on the rise of Corporate Psychopaths within modern corporations have also hypothesized that they are more likely to be found at the top of current organisations than at the bottom.

The nature of current corporate culture may facilitate the rise of corporate psychopaths:

These Corporate Psychopaths are charming individuals who have been able to enter modern corporations and other organisations and rise quickly and relatively unnoticed within them because of the relatively chaotic nature of the modern corporation. This corporate nature is characterized by rapid change, constant renewal and quite a rapid turnover of key personnel. These changing conditions make Corporate Psychopaths hard to spot because constant movement makes their behaviour invisible and combined with their extroverted personal charisma and charm, this makes them appear normal and even to be ideal leaders.

The destabilization of modern corporations likely lead to the ascendancy of the corporate psychopath:

However, once corporate takeovers and mergers started to become commonplace and the resultant corporate changes started to accelerate, exacerbated by both globalisation and a rapidly changing technological environment, then corporate stability began to disintegrate. Jobs for life disappeared and not surprisingly employees’ commitment to their employers also lessened accordingly. Job switching first became acceptable and then even became common and employees increasingly found themselves working for unfamiliar organisations and with other people that they did not really know very well.

Rapid movements in key personnel between corporations compared to the relatively slower movements in organisational productivity and success made it increasingly difficult to identify corporate success with any particular manager. Failures were not noticed until too late and the offending managers had already moved on to better positions elsewhere. Successes could equally be claimed by those who had nothing to do with them. Success could thus be claimed by those with the loudest voice, the most influence and the best political skills. Corporate Psychopaths have these skills in abundance and use them with ruthless and calculated efficiency. In this way, the whole corporate and employment environment changed from one that would hold the Corporate Psychopath in check to one where they could flourish and advance relatively unopposed.

The Harms Caused by Corporate Psychopaths as Executives

Thus, Boddy hypothesized the rise of management by corporate psychopaths lead directly to the global financial crisis or great recession:

As evidence of this, senior level remuneration and reward started to increase more and more rapidly and beyond all proportion to shop floor incomes and a culture of greed unfettered by conscience developed. 

Corporate Psychopaths are ideally situated to prey on such an environment and corporate fraud, financial misrepresentation, greed and misbehaviour went through the roof, bringing down huge companies and culminating in the Global Financial Crisis that we are now in.

Writing in 2005, this author commentating on Corporate Psychopaths predicted that the rise of Corporate Psychopaths was a recipe for corporate and societal disaster. This disaster has now happened and is still happening.

What Could be Next

Worse, if this hypothesis is true, as long as it is not addressed, things will get worse:

The very same Corporate Psychopaths, who probably caused the crisis by their self-seeking greed and avarice, are now advising governments on how to get out of the crisis. That this involves paying themselves vast bonuses in the midst of financial hardship for many millions of others, is symptomatic of the problem. Further, if the Corporate Psychopaths Theory of the Global Financial Crisis is correct then we are now far from the end of the crisis. Indeed, it is only the end of the beginning.

Some Agreement

The plausible theory that corporate psychopaths ascending to top management positions in finance caused the global financial crisis has been noticed by a few prominent financial pundits. Writing in Bloomberg, William D Cohan agreed with Boddy’s suggestion that “anyone who makes decisions that affect significant numbers of other people, concerning issues of corporate social responsibility or toxic waste, for example, or concerning mass financial markets or mass employment, should be screened to make sure that they are, at the very least, not psychopaths and at most are actually people who care about others.”

Brian Besham, writing in the Independent, suggested that Richard Fuld, former CEO of Lehman Brothers, whose bankruptcy kicked off public awareness of the global financial collapse, saying he wanted to eat the hearts of those selling his company’s stock short (see this post), was a “terrifying” example of corporate executive psychopathy. Worse, Besham noted that he had discovered an case of an investment bank which “psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles.”  It may be that corporate psychopaths are actively recruiting their fellows.

Implications for Health Care

This is chilling. It also unfortunately is highly relevant to health care. As we noted, most recently here, leaders of big finance firms, including those whose failures were most spectacular, now often sit on boards of trustees of hospitals, academic medical centers, medical schools, and their parent universities. Thus, the likelihood that a good proportion of the stewardship of our most prominent not-for-profit health care organizations may be in the hands of psychopaths is not negligible.

Furthermore, health care organizations have become as unstable and chaotic, in the way these terms were used by Boddy, as finance firms. This would suggest that their current nature would make it as easy for psychopaths to rise to positions of power in them as they may have in financial firms. In health care we certainly have seen the consequences he suggested were due to psychopathic managers, including

intimidation (per Boddy, corporate psychopaths are “prepared to lie, bully and cheat and to disregard or cause harm to the welfare of others”);
– self-interest (“pursuit of self-enrichment and self-aggrandizement”) leading to outrageous executive compensation (“senior level remuneration and reward started to increase more and more rapidly and beyond all proportion to shop floor incomes”)
fraud and other crime (“corporate fraud, financial misrepresentation, greed and misbehaviour went through the roof,… “)

So as we noted in 2006, “a high prevalence of psychopathic managers could explain the prevalence of mismanagement, conflicts of interest, and corruption in the leadership of health care organizations that we have often discussed on Health Care Renewal.”

Boddy’s first suggestion to deal with the problem in finance was:

Measures exist to identify Corporate Psychopaths. Perhaps it is time to use them.

However, it is as hard to imagine top health care leaders willingly and honestly submitting to the use of instruments designed to identify psychopaths as it is to imagine finance leaders doing so. Furthermore, it is easy to imagine how corporate psychopaths in positions of leadership would ruthlessly deploy their legions of public relations personnel and lawyers to quash any challenge should the notion that they are so dominant gain any credibility.

However, if there is any significant prevalence of corporate psychopaths among the leaders of health care, woe will be unto us until we identify and remove them.

Sequenom Executive Pleads Guilty, Banned from Leading Any Public Company (for Misleading Investors About the Performance of a Diagnostic Test?)

We have frequently noted how health care organizations accused of kickbacks, fraud, and other unethical and sometimes potentially illegal behavior involving how they produce or market health care products or services often are allowed to settle the charges only with a fines to the companies, and sometimes with corporate integrity agreements.   

This report from Bloomberg describes a case in which a health care corporation was accused of lying to investors about the performance of a product which it hoped to market. The product was a diagnostic test, and so exaggerating its performance could have affected medical decisions, and hence patients’ outcomes, as well as affecting investors’ finances. Note how this case was handled.

Elizabeth A. Dragon, former senior vice president of research and development at Sequenom Inc., pleaded guilty today in federal court to conspiracy to commit securities fraud for lying to investors about the company’s prenatal test for Down syndrome, U.S. officials said.

Dragon admitted to making false claims to investors and analysts about the effectiveness of the San Diego-based company’s test as well as attempting to ‘inflate and sustain’ the price of Sequenom’s shares, said Laura E. Duffy, the U.S. Attorney for the Southern District of California in San Diego, in a statement. Dragon said in a court appearance before U.S. Magistrate Judge Barbara Major that she and others manipulated data to make the Down syndrome test appear more accurate than it was, Duffy said.

Dragon also was accused of lying to investors in a civil complaint filed today in San Diego by the U.S. Securities and Exchange Commission. Dragon settled the claims without admitting or denying wrongdoing and agreed to be barred from serving as an officer or director of a public company, according to the agency’s statement.

Here was how the SEC summed it up:

‘Elizabeth Dragon knew the truth about Sequenom’s Down syndrome test, yet she told the public it was a near-perfect success,’ Rosalind Tyson, director of the SEC’s Los Angeles office, said in a statement. ‘Her actions misled investors with exaggerated information about a significant new product that never materialized.’

What had the company done about this in the past?

In June 2009, the company announced an SEC investigation, and, in September, Sequenom said it dismissed Dragon and Chief Executive Officer Harry Stylli and couldn’t rely on the earlier test results.

And how did it respond to the latest news?

‘At this time the company has no comment to make other than we continue to cooperate fully with the government agencies and their investigations,’ said Ian Clements, Sequenom’s senior director of corporate communications, in an e-mail.

We have discussed multiple new entrants to the parade of legal settlements by health care organizations. We posted about the most recent entrant here.

It is instructive to compare what happened to the company and personnel involved in that settlement (which happened to be St. Jude Medical) to the events of the current case. As we noted above, when accusations are made about how a company produced or marketed health care products or services, the worst result for the company is usually a fine, rarely amounting to more than a small fraction of the sales of the product or service in question, and sometimes a corporate integrity agreement. Often meanwhile the company may make a statement that it did nothing wrong, and merely settled the case to get on with things.

In the Sequenom case, however, the accusation was of misleading investors (by statements that perhaps just coincidentally could have also misled doctors and patients were the product to have been marketed). The results, however, were that the executives who seemed to be responsible were fired as soon as the government investigation was made known, and a later guilty plea by the executive who seemed most immediately responsible, accompanied by her banning from future service as an “officer or director of a[ny] public company.”

It is striking that misleading investors, and thereby potentially endangering their financial health, may result in severe penalties to the individuals involved. However, up to now, misleading doctors or patients, and thereby potentially endangering the former’s reputations, and more importantly, the latter’s health and even survival, rarely has resulted in any penalties to the individuals involved.

What is wrong with this picture?

If executives who endanger investors’ finances can lose their jobs, and be barred from leadership positions in any public company, why can’t executives who endanger patients also lose their jobs, and be barred from leadership positions in health care? Inquiring minds would really like to know.

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

Pharma Takes Baby Steps in Health IT, learns CP/M

CP/M was the predecessor and template Bill Gates used (bought, in fact) for DOS, of course. CP/M is primitive, over three decades old, decidely “old fashioned”, and to just be learning it today would decidedly make an organization appear a laughing stock.

In “Pfizer Project Looks at Side Effects“, Wall Street Journal, Jan. 2, 2009 (subscription required), we learn that:

Drug maker Pfizer Inc. is joining with two Boston hospitals to test whether computerized patient records can be used in helping federal regulators detect dangerous drug side effects. [VERY innovative of them. Perhaps this George Jetson-ish idea came from their CEO, former head lawyer for McDonald’s? – ed.]

Massachusetts General and Brigham and Women’s hospitals are encouraging 30 of their doctors to report serious side effects to the Food and Drug Administration by making the reports part of their normal routine filling out electronic patient charts.

… “The public-health impact is much quicker recognition of problems with medicines,” said Jeffrey A. Linder, a Brigham and Women’s internist who is leading the three-month pilot. The two hospitals belong to the Partners HealthCare system.

Indeed. This article might better have been titled “An Experiment With The Obvious.”

We also learn that:

Martin P. Solomon, another Brigham and Women’s internist, said he had submitted only a half dozen reports in 32 years of seeing patients because the [written – ed.] reports took so long to fill out and send. Since the study began Dec. 9, Dr. Solomon estimates he has filed at least a dozen.

Removing inconvenience is simply good sociotechnical engineering for ultra-busy doctors. Workflow 101 for simpletons.

Sociotechnical refers to the interrelatedness of social and technical aspects of an organization. Sociotechnical theory therefore is about joint optimization, with a shared emphasis on achievement of both excellence in technical performance and quality in people’s work lives.

Now, thirty doctors is rather a minority of doctors in these venerable institutions. The amount of data to be entered is rather straightforward:

The cost of this experiment is far less than the cost of one glossy drug ad:

Pfizer, which has agreed to pay the hospitals $226,806 for the project, has talked with a few other pharmaceutical companies beyond Lilly about expanding the Boston approach, said Michael A. Ibara, a drug-safety official at the New York company. Pfizer has given an additional $117,000 to support groups that developed the technology.

Even at these low figures, excuse me? “Pfizer has given an additional $117,000 to support groups that developed the technology?” What technology, exactly? The same technology I use to send reports of my Mac OS X application crashes to Apple, perhaps?

The question really is, why do we need a funded experiment with 30 doctors to do what EHR experts have been proposing as a possibility for decades, namely, improved postmarketing surveillance? All that’s really happening is an increase in convenience away from using paper forms and mailing them. I presented this issue a decade ago as a simple side benefit of EHR, for example, at an Ethics & Public Policy Center conference on healthcare in Washington. It has been brought up over the years by many others. I brought up the possibility of linking to academic centers with EHR’s at Merck as well to gather postmarket data, to no avail.

So, why is pharma taking the baby step of soliciting adverse events reports electronically through an incredibly miniscule, cheap study?

This initiative’s lilliputian scope is laughable.

It’s decades behind the times and the capabilities of modern information systems. It’s as if pharma has decided to learn CP/M in 2009. This raises several questions:

  • Why did this “experiment” not happen long ago?
  • Why not go with a much stronger effort at collecting this data, which then opens up excellent opportunities for further research – as I pointed out in my 2003 paper “A Medical Informatics Grand Challenge: the EMR and Post-Marketing Drug Surveillance” (pdf, link)? I’m not sure what you can do in that regard with data from a mere 30 doctors.
  • Why not spend pharma-sized money on the project to allow the above to occur? After all, billions of dollars are spent annually on “gifts” to doctors and DTC advertising. Direct to patient (consumer) marketing expenditures of Pharma – est. $30 billion / year. (The entire NIH budget not long ago – est. $28 billion/yr.)
  • CRO’s are moving to electronic CRF’s (case report forms). What’s the hangup on use of EHR’s to report drug AE’s in patients not involved in a clinical trial?

The best answer I can propose: perhaps such capabilities will provide information that pharmas would rather have become apparent in a much longer timeframe. Time is, after all, money.

However, such an initiative can provide great P.R. on just how leading edge pharma is becoming in leveraging the EHR. The Wall Street Journal article looks like something Pfizer’s CEO would be proud to show grandma – and its marketing people to brag about to the public. I can’t wait for the TV infomercial.

CP/M is, after all, a great operating system to tinker with when experimenting with computers to learn if they can help run an international business enterprise.

— SS

How the Legal Case Against Purdue for Deceptive Marketing of Oxycontin was Nearly Derailed

We recently posted about how Purdue Pharma and its top executives pleaded guilty to “misbranding” the potent narcotic drug Oxycontin. It turns out the pleas bargain was almost derailed. Yesterday, the Washington Post reported,

The night before the government secured a guilty plea from the manufacturer of the addictive painkiller OxyContin, a senior Justice Department official called the U.S. attorney handling the case and, at the behest of an executive for the drugmaker, urged him to slow down, the prosecutor told the Senate Judiciary Committee yesterday.

John L. Brownlee, the U.S. attorney in Roanoke, testified that he was at home the evening of Oct. 24 when he received the call on his cellphone from Michael J. Elston, then chief of staff to the deputy attorney general and one of the Justice aides involved in the removal of nine U.S. attorneys last year.

Brownlee settled the case anyway. Eight days later, his name appeared on a list compiled by Elston of prosecutors that officials had suggested be fired.

Brownlee ultimately kept his job.

Justice Department officials said it was not unusual for senior members to weigh in on major criminal cases, and a spokesman, Dean Boyd, said the department ‘encourages healthy internal debate and discussion on complex cases like this one.’

Several former federal prosecutors also said that defense attorneys routinely try to appeal to high-ranking department officials in an effort to derail prosecutions. Still, Brownlee and other former prosecutors said nighttime calls such as Elston’s, coming just hours before the end of a long, complex case, are unorthodox, particularly when the department’s criminal division already has signed off on a case.

Brownlee said the head of the criminal division had authorized him that afternoon to execute the plea agreement.

This story is now linked to the ongoing controversy about whether the current US Attorney General improperly sought to fire several US Attorneys.

But the implications of this story for health care are additionally troubling. We have posted on many examples of deceptive and/or stealth marketing by pharmaceutical, biotechnology and device manufacturers, and questionable claims and advertising by hospitals and insurers and managed care organizations.

Physicians, particularly primary care physicians, working under increasing bureaucratic restraints and forced to see patients increasingly quickly now must also operate in a swamp of questionable marketing and pseudoevidence. When time is short, it is all too tempting to just prescribe the latest and greatest heavily promoted drug or order the the latest and greatest whizbang diagnostic test.

It is bad enough that corporate executives condone deceptive marketing of drugs and devices. It is worse to hear that government officials who are responsible for law enforcement seemed to want to cut those who were fostering deceptive advertisers and creating pseudoevidence some unjustified slack.

At least the US Attorney on the ground in this case stood up for what was right. But who else has the courage to stand up for some honesty in health care?

Drug industry officials see room to improve safety – or do they?

I’ve written about the substantial inadequacies of the postmarketing drug safety surveillance “system” here , here and here (note: the word “system” in this context is a bit of an oxymoron).

The Gartner Group utilized some of my opinions in formulating their report “Predicts 2006: Life Science Manufacturers Adapt to Industry Transitions” (unfortunately available only to subscribers). I’d been interviewed in the report’s preparation after a Gartner principal had seen my writings on the subject.

An article has now appeared at Reuters stating that the system for monitoring drug side effects only needs “focused treatment” (?). It does not need “major surgery”, only additional funding of the FDA bureaucracy and ‘better ways to collect data.’ The latter on it face seems to mandate exploratory surgery due to problems such as this.

Excerpts from the article:

Drug industry officials see room to improve safety
Thu Jan 19, 2006 04:06 PM ET
By Lisa Richwine

WASHINGTON, Jan 19 (Reuters) – The U.S. government’s monitoring of drug side effects could be strengthened but does not need the major changes critics have advocated, industry officials told an expert panel on Thursday.

Additional funding for the Food and Drug Administration and better ways to collect and analyze safety information could help improve detection of unexpected problems after drugs reach the market, the officials said.

Drug safety in the U.S. definitely needs improvement. It needs a careful, focused treatment, but I would argue not radical exploratory surgery,” said Geoffrey Levitt, chief counsel for regulatory and research at Wyeth (WYE.N: Quote, Profile, Research) .

A string of serious side effects linked to widely used prescription drugs has led to calls for major changes, such as moving safety oversight to an independent board outside the FDA.

Industry officials who spoke to an Institute of Medicine (IOM) panel said they felt that that proposal, as well as suggestions that companies re-apply for approval five to 10 years after a drug launch, were unnecessary and could have negative consequences.

“We think that moving oversight of safety to another federal agency seems extreme and could significantly stall incremental progress,” [translation – stall profits? -ed.] said James Nickas, senior director of development at Genentech Inc (DNA.N: Quote, Profile, Research) .

The panel will consider the input as it prepares a report on drug safety oversight that is scheduled to be completed this summer. The FDA requested the investigation last year after the agency was criticized as being slow to respond to signs of problems with antidepressants and Merck & Co. Inc.’s (MRK.N: Quote, Profile, Research) withdrawn painkiller Vioxx …

“Exploratory surgery” is a metaphor that implies a major problem exists but is not yet identified nor understood, and exposure of the internals are required to establish a diagnosis and render treatment. My belief is that is exactly what’s needed to bring the paper-based, 1970’s approach to postmarketing drug safety surveillance into the 21st century.

One major improvement would be for pharmas to become more aware of the field of Medical Informatics, whose cross-disciplinary experts are working to move the U.S. towards national electronic health records. Such a resource is perhaps the best (if not only) way to move drug surveillance from the hit-or-miss systems currently in place (e.g., FDA MedWatch and use of payor billing information) to a concurrent, comprehensive system of data flow on this problem.

Yet I still see job postings such as this from my former employer, Merck (now struggling to regain the public’s confidence on clinical data issues). I sat on a “talent management” team there whose role was to suggest improvements in talent-seeking. On a number of occasions I advocated for medical informatics experts cross-trained in both medicine and biomedical information science for clinical data management and IT-related leadership roles. However, this type of posting is common throughout all pharmas:

Worldwide Clinical Data Management Operations Manager – Global Data Operations

The Manager of WCDMO (Worldwide Clinical Data Management Operations) is responsible for providing all aspects of supervision to individuals supporting a functional area within WCDMO … This position is in the Global Data Operations area.

Education: BA, BS or MS degree, preferably in Biology, Nursing, Computer Science, or related discipline. Experience: At least 8 years’ experience in data management, clinical research, and/or database design and development. At least 3 years of supervisory and/or management experience. Six Sigma and PMI certification is a plus.

Knowledge and Skills: An overall working knowledge of the clinical development process. Knowledge of database structures and available tools to manage, extract, and report data. A basic knowledge of statistical concepts.

Baccalaureate or masters degrees (but not doctoral or postdoctoral credentials), six-sigma (“management metaphysics”) and a “working knowledge of clinical development” are nice credentials, but represent basically the same credentials that might have been sought in, say, the 1970’s.

I also note the background of the Wyeth chief counsel for regulatory and research who argues for “focused treatment” of the “system” (which reflects a ‘let’s not rock the boat too much’ philosophy):

Geoffrey Levitt
Vice President and Chief Counsel, WYETH

Mr. Levitt is Vice President & Chief Counsel, Regulatory and Research at Wyeth Pharmaceuticals, Inc., where he is responsible for a wide range of legal/regulatory issues related to FDA compliance and clinical research. Prior to joining Wyeth in April 2001, Mr. Levitt was a partner and co-chair of the food and drug law group at Venable, Baetjer, Howard & Civiletti in Washington, DC. He has written and lectured extensively on food and drug law, and is a past member of the editorial board of the Food and Drug Law Journal.

Impressive legal credentials, but no apparent credentials in the medical and scientific domains, nor in biomedical information science.

As has been mentioned in this blog in the past and at sites such as this, when non-medical personnel decide they know best what’s needed to cure healthcare’s ills, the results are not often optimal.

I would add that a lawyer employed by industry would likely have significant, inherent conflicts of interest regarding matters of such import where impartial clarity is essential.

— SS