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
jobs
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,

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

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.

Also,

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.

And,

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
drug.

Thereafter,

– 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.

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