That Old Time Revolving Door Keeps Spinning

Traditionally, the American examples we have seen of the revolving door involved 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.  These examples occurred during Democratic and Republican administrations.  However, during the Trump regime, we began to see many examples of the incoming revolving door, people coming form leadership positions in the health care industry to take government health care regulatory or policy positions that could affect their former organizations’ interests (look here).

However, the old-time bipartisan outgoing revolving door keeps spinning.  Here is a collection of examples in chronologic order by the date they were made public.  Also, I found an example of the incoming revolving door at the US state level, involving Democrats, not Republicans.

From Secretary of Veterans Affairs to the Board of Armada Health

On March 12, 2019, a brief item in Modern Healthcare stated:

Former Veterans Affairs Secretary Dr. David Shulkin has joined the board of ArmadaHealth, a Maryland health data company that offers a database for patients to find physicians.

President Donald Trump fired Shulkin last year from the top post at the VA, where the former secretary also served under President Barack Obama.

I could find little further information.  Note that Dr Shulkin served in both Democratic and Republican administrations.  Note further that with the increasing push to privatize the VA, its operations may have more to do with companies like ArmadaHealth.

From US Senate to Lobbying Firm Akin Gump Strauss Hauer & Feld

On March 14, 2019, Maplight.com noted:

Months after advising the Democratic Party to abandon the idea of ‘Medicare for All,’ a former U.S. senator has been hired by a lobbying firm whose clients are leading the fight against changes to the nation’s health care system.

Akin Gump Strauss Hauer & Feld LLP, a Washington, D.C.-based law and lobbying firm, announced on Wednesday that former Sen. Joe Donnelly is joining the firm as a partner and will be counseling clients in the health care and financial industries.

In particular, the article stated that:

Akin Gump has lobbied for the Healthcare Leadership Council since 2016. The trade organization’s members include health insurance, pharmaceutical, and hospital interests — industries whose profits could be threatened by a single-payer system. The firm has also lobbied for Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization, two powerful drug industry trade groups.

PhRMA, BIO and the Healthcare Leadership Council are members of the Partnership for America’s Healthcare Future, a coalition created last year to oppose Medicare for All, as well as any of the weaker measures offered by Democrats to provide health care coverage or insurance to more Americans.

Donnelly seemed like a pretty good candidate to lobby for thiese firms because:

He campaigned against Medicare for All, even though polling by Data for Progress and the Kaiser Family Foundation last year estimated that 55 percent of Indiana residents support a universal health insurance plan. In one Donnelly campaign ad, a narrator warned that ‘socialists want to turn health care over to the government.’ Donnelly replied: ‘Over my dead body.’

Since his loss, Donnelly has continued to warn Democrats against pushing for a single payer health care system. ‘When you talk Medicare For All … you start losing the people in my state,’ he said in December. ‘When we start talking about, ‘Hey, we’re going to work together with the insurance companies to lower premiums,’ that’s what connects. The talk on the coasts just doesn’t get it done in the middle.’

So Donnelly’s new position lobbying for industry groups that oppose single payer health insurance, which they presumably see as a threat to their revenues, could be viewed as a reward for his previous advocacy of their positions.

In that vein, the article quoted health care insurance whistleblower Wendell Potter:

a former health insurance executive who has spent a decade investigating the industry’s predatory practices, panned Donnelly’s career move.

‘Sen. Donnelly kept health care reform efforts at bay his whole tenure in Congress, and on his way out he went on national news to tell Democrats that Medicare for All was dangerous,’ said Potter. ‘Now we see his reward: A cush lobbying gig working for the health-care industry.’

‘Color me shocked,’ he said.

Were Senator Donnelly to have advocated the industry position because he thought it would enhance the chances of eventually getting a lucrative industry position, that could have appeared to be an abuse of entrusted power (as a Senator, to set public policy) for private gain, that is, as corruption in the ethical, if not the legal sense.

An article in the Indianapolois Star found this response from the Republican Party:

Indiana’s GOP criticized Donnelly’s decision.

‘While Donnelly may have moved back to Granger, he clearly can’t get enough of the swamp,’ said Pete Seat, executive director of strategic communications for Indiana Republicans. ‘From this day forward, consider ‘Democrat Donnelly’ retired, and ‘D.C. Lobbyist Donnelly’ deployed.’

That is a reasonable criticism, but I wonder if they would make the same criticism of similar behavior by a Republican politician?   

Meanwhile, in April, Politico briefly noted

Former Rep. Lamar Smith (R-Texas), meanwhile, who also joined Akin Gump after leaving Congress in January, reported lobbying for four clients. They include HerdX, a ranching logistics company; Otis Eastern Service, an oil-and-gas pipeline company; Pebble Limited Partnership, which is trying to develop an open-pit mine in Alaska; and Pfizer, the giant pharmaceutical company.

So this particular pathway from the Senate to this lobbying firm and then to health care industry clients is a well trodden one.

From the US  Drug Enforcement Administration to Consultant for Purdue Pharma

On March 20, 2019, NBC News reported:

A former senior U.S. Drug Enforcement Administration official who testified before Congress on the government’s efforts to stop the opioid epidemic is now paid to advise one of the largest opioid manufacturers in the country, Purdue Pharma, according to people familiar with the matter.

Demetra Ashley, the former acting assistant administrator of the DEA who told a Senate committee in 2017 about the need for a ‘robust regulatory program’ to stop the diversion of opioids and other controlled prescription drugs, left the DEA last spring and started a consulting firm called Dashley Consulting, LLC

The arrangement inspired some critcism, for example,

‘This should not be allowed,’ said Dr. Andrew Kolodny, the co-director of opioid policy research at Brandeis University. ‘Former DEA and FDA officials should not be allowed to take money from companies they regulated.’

The issues here seem obvious.

From Top White House Adviser to Adviser to Juul

On May 21, 2019, the Washington Post reported that Johnny “DeStefano, a counselor to the president who served as a bridge between the Republican Party and the administration, is leaving on Friday.” As to his destination,

He is expected to advise a number of companies, including Juul, the e-cigarette company, while helping on the campaign, according to people familiar with his plans. Juul has significant business in front of the Food and Drug Administration

I could not find much more about this. However, as a top White  House adviser without a specific portfolio, DeStafano could have affected health care and specifically FDA policy.

From Venture Capital Firm New Enterprise Associates to Director of the US Food and Drug Administration (FDA) and Back to New Enterprise Associates

On May 22, 2019, Axios reported that

Scott Gottlieb, who recently stepped down as the head of the Food and Drug Administration, has rejoined venture capital firm New Enterprise Associates as a full-time investing partner, Axios has learned.

Context: Gottlieb had been a venture partner with NEA before President Trump tapped him to lead the FDA, where he became known for cracking down on e-cigarettes and working to battle the opioid epidemic.

Gottlieb previously spent a decade with NEA, but the new role is more substantive. He’s expected to lead investments in life sciences startups and take board seats.

Again, there was little other information and no substantive commentary publicly available about Dr Gottlieb’s return to his old firm.

We briefly noted the considerable public discussion about Dr Gottlieb’s conflicts of interest at the time of his ascension to the FDA post here. He had multiple relationships with multiple for-profit health care corporations in the years leading up to his 2017 appointment.    I should note that we have discussed previous examples, in 2007 and 2008 (look here, here, here and here),
of Dr Gottlieb’s strident promotion of the interests of pharmaceutical
and biotechnology companies.  After 2008, I  naively thought further
discussion of this topic would be redundant. 

From Director of the National Institute of Mental Health (NIMH) to Google’s Verily, to Mental Health App Developer Mindstrong, to California “Czar” for Mental Health

Last, but not least, also on May 22, 2019, StatNews reported:

Noted psychiatrist and former Verily leader Dr. Tom Insel is going to be the ‘mental health czar’ for the state of California, Democratic Gov. Gavin Newsom announced Tuesday.

Insel, the former National Institute of Mental Health director, will also continue his work with Mindstrong, a startup that is working on a mental health app, a company spokesperson confirmed. Insel joined the company in 2017 after leaving Verily, Google’s life sciences arm.

Insel’s new job will be to ‘inform the state’s work as California builds the mental health system of tomorrow, serving people whether they are living in the community, on the streets or if they are in jails, schools or shelters,’ according to a press release from the governor’s office.

In a press conference, Newsom said Insel was ‘volunteering’ his time as an adviser. ‘I’m calling him the mental health czar in the state of California,’ he said.

The article also noted that

Mindstrong, which is focused on using data on how people use their smartphone to detect trends in their mental health, already has a relationship with public officials in California. One of Mindstrong’s first large-scale rollouts was slated to happen in the state through county-level public mental health systems, STAT reported in October.

A spokesperson for Mindstrong said that Insel would recuse himself from conversations about the company, and noted that he will have ‘no fiscal or regulatory authority and will have no oversight of current programs in this voluntary role.’

Note that even after such specific recusal, Dr Insel would be in a position to generally influence state policy in ways that could favor Mindstrong.  Futhermore, state officials working for a “mental health czar” would be aware of his commercial ties and might thus tend to try to favor Mindstrong to please him.  

Note also that in 2010 our late blogger, Dr Bernard Carroll, wrote a series of posts about conflicts of interest and other ethical questions about Dr Insel’s tenure as director of the National Institute of Mental Health (NIMH) here, here, here, here, and here.  Also, in 2015 I noted that Dr Insel transited the revolving door from the NIMH to Google Life Sciences.  This is just another example of how people and organizations that get on our radar once for ethical and leadership lapses tend to appear again and again.

[photo of Dr Carroll]

Discussion

We have repeatedly said,  most recently in March, 2019, …

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

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

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

Remember to ask: cui bono? Who benefits? The net results are that big
health care corporations increasingly control the governmental
regulatory and policy apparatus.  This will doubtless first benefit the
top leadership and owners/ stockholders (when applicable) of these
organizations, who are sometimes the same people, due to detriment of
patients’ and the public’s health, the pocketbooks of tax-payers, and
the values and ideals of health care professionals.  

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

Leave a Reply

Your email address will not be published. Required fields are marked *