Doctors On the Take-Engaging in Vairous Dubious Activities for Cash / Stock Options

Tue, 16 Aug 2005

A series of current articles in The Wall Street Journal, the Journal of the American Medical Association (JAMA), and the New York Times describe the many questionable non-medical income-producing activities that America¹s physicians have embarked on. More often than not, doctors in academia are shown to be “On the Take” (the title of a Dr. Jerome Kassier¹s book).

Doctors are exploiting the public¹s misplaced trust to pitch drugs for the companies that pay them – whether patients are helped or harmed. Other doctors sell their insider information from clinical trials to investment company analysts. Yep, doctors, who were once looked up to as the pillars of integrity, have taken lessons from their pharmaceutical biotechnology partners that increasing profit is the ALL that matters. So, doctors now sell their name and information gained from their various dubious corporate relationships to whoever is willing to pay–

1. Yesterday, the WSJ reported that an examination of Securities and Exchange Commission documents revealed:

“As of the end of last year, 12 doctors were supplying information about the catheter’s effectiveness to a registry the company uses to evaluate the SilverHawk — its only product — and to promote it to other doctors. Ten received consulting fees from the company and eight owned FoxHollow shares — in all about 1% of its stock, which is valued at more than $12 million, according to Securities and Exchange Commission filings.

The registry is controversial because the company isn’t using the more standard method of proving that a health-care product is effective — a clinical trial.

Company executives say 26 doctors now submit registry data, but they won’t say how many are being compensated or own shares. No one suggests that the registry has been manipulated or that the device doesn’t help some patients. Doctors contributing to the registry say they embraced the SilverHawk because it is effective, not because they have an economic interest in it. They also say they submit all results to the registry, both positive and negative.”

“Doctors owning FoxHollow shares have volunteered enthusiastic public reviews of the device. In June, FoxHollow’s stock climbed more than 10% after it issued a statement about upbeat registry data, including some collected by David Allie of the Cardiovascular Institute of the South. In the release, Dr. Allie said, “We are very encouraged by how well our patients have done.”

The release didn’t note that Dr. Allie was allowed to purchase more than 33,000 shares of FoxHollow before the company went public for less than the offering price. Dr. Allie says he still holds about half of those shares, valued at about $800,000, and profited by selling the rest earlier this year. “Regardless of whether there was an investment or not…”

2. In July, the WSJ reported how doctors are trained by pharmaceutical companies to make presentations to other doctors about the latest  “underdiagnosed condition” from migrane headaches to social anxiety – depending on the latest drug the company is marketing. Doctors have allowed themselves to be degraded to pill pushers for hire.  The WSJ reported:

“Some doctors have earned considerable sums from their moonlighting as speakers. Subir Roy, a gynecologist who teaches at the University of Southern California, received $61,250 in fees and an additional $11,117 for expenses in 2002 from Wyeth, according to a list compiled by Wyeth and submitted by Dr. Roy to the U.S. District Court in Phoenix. During that year he spoke 53 times about Prempro and Premarin, Wyeth’s drugs to ease the symptoms of menopause. The drugs were in the news that year because a big federal study suggested Prempro could increase the risk of heart attack and stroke in women.

The data about Dr. Roy emerged after a former Wyeth sales representative filed suit against the company, saying it failed to stop Dr. Roy from making unwelcome sexual advances on her. Dr. Roy denies doing anything improper. The former sales rep, Anissa Groves, alleges that Wyeth fired her because it didn’t want to jeopardize its ties with Dr. Roy. A Wyeth spokesman, Chris Garland, said the company treated Ms. Groves appropriately throughout her employment and that her departure, nearly two years after her allegations about Dr. Roy, was unrelated to her complaint. In a December 2004 deposition, Dr. Roy said he no longer spoke for Wyeth but gave talks for several other drug makers in 2004 including Pfizer Inc., Merck, Johnson & Johnson and Novartis AG. He said then that he maintains no private practice and relies on speaking to supplement his salary from USC.”

3. The Times reports about the issues raised in the JAMA article about profitable avenues that physicians who conduct clinical trials on behalf of pharmaceutical companies cash in on their inside knowledge.  The irony is that the very industry that corrupted medical practice and the integrity of physicians–by shifting the focus of medicine to promotion and sales–is crying foul:

“Matching investors with doctors can raise particularly troubling questions. Physicians frequently serve as clinical researchers for the pharmaceutical and biotechnology industries, testing new drugs. Inside knowledge about those tests, before it is publicly available, could be worth millions. The Securities and Exchange Commission has now begun looking at whether doctors, participating in clinical trials, are accepting money to talk to analysts and investors about the confidential results. Such a breach, under some circumstances, could be construed as a violation of insider trading law.

Among the businesses that have emerged as matchmakers is Gerson Lehrman Group of New York. Founded in 1998, Gerson is the industry leader in connecting investors with specialists in fields ranging from Turkish cement to underwire brassieres. Gerson’s 150,000 specialists include 60,000 physicians. Another company, Leerink Swann & Company of Boston, has a subsidiary that advertises a network of more than 11,500 medical professionals, including physicians, willing to talk to investors.

The idea is fairly new, but the business model has already come under scrutiny. Even though the companies prohibit panelists from violating confidences or revealing proprietary information, such conversations carry the risk that participants will betray secrets.

“The frequency of physician contact, this matrix or extraordinary network of physicians that were at the disposal of investment firms, is a setup for trouble,” said Dr. Eric J. Topol of the Cleveland Clinic, who co-wrote the JAMA article, which appeared in June, exploring the growing relationships between physicians and investment companies. Dr. Topol has firsthand knowledge of the problem. Last year, he gave up his own $12,000-a-year position on a hedge fund advisory panel after concluding it created the appearance of impropriety.

Dr. Topol was stung by implications that his expertise helped the fund short Merck before the company’s decision to withdraw Vioxx last September. But Dr. Topol had written about the cardiovascular problems associated with Vioxx and similar cox-2 painkillers well before he joined the hedge fund in 2003. Dr. Topol, the Cleveland Clinic’s chief of cardiology, also ended his relationship with several companies in the health care and pharmaceutical businesses. ”

The Times neglects to mention that Jim Greenwood is a former congressman who headed a committee investigating pharmaceutical company misconduct. Specifically, Greenwood was investigating company concealment of evidence about the severe, potentially fatal adverse drug effects from treating physicians and the public. Greenwood quit Congress to become the chief executive of  Biotechnology Industry Organization whose members are upset that doctors they trained to be salesmen are selling useful information.

“Mr. Greenwood said that one of the organization’s member companies, Isis Pharmaceuticals, complained three years ago to UBS. That was after a UBS analyst issued a report contending that a lung cancer drug had failed a Phase 3 clinical trial, citing “recent conversations with investigators involved in the trial.” Shares of Isis tumbled 20 percent the day of the report.”

What is missing from the discussion are the health and safety ramifications that are a consequence of the dubious contractual agreements and activities that physicians engage in.  By selling their professional integrity for cash, they have betrayed the trust of the American public and undermined the safety of patients who are increasingly ingesting harmful drugs – more than 100,000 deaths are attributed to adverse drug effects. 

Two recent articles in the WSJ: one by Scott Hensley and Barbara Martinez, “To Sell Their Drugs, Companies Increasingly Rely on Doctors” (July 15, front page), another  by Gregory Zuckerman, “Doctors Take Stock, Supply Data” (August 15, p. C-1);an article in JAMA by  Drs. Eric Topol and David Blumenthal, Physicians and the Investment Industry, JAMA.2005; 293: 2654-2657; and the Times report about the JAMA article, . Doctors’ Links With Investor Matchmakers Raise Concerns Stephanie Saul and Jenny Anderson (August 16, front page)

Contact: Vera Hassner Sharav
212-595-8974

Excerpts from:  THE WALL STREET JOURNAL Doctors Take Stock, Supply Data

Concerns Over Conflict of Interest:  Some Physicians Evaluating FoxHollow Device Own Options  By GREGORY ZUCKERMAN August 15, 2005; Page C1 

Some doctors helping evaluate the effectiveness of an increasingly popular device for clearing clogged arteries own stock and options in the company that makes it, regulatory filings show. FoxHollow Technologies Inc.’s SilverHawk catheter is one of the hottest selling new medical devices on the market and has sent the company’s stock surging since it went public in October. As of the end of last year, 12 doctors were supplying information about the catheter’s effectiveness to a registry the company uses to evaluate the SilverHawk — its only product — and to promote it to other doctors. Ten received consulting fees from the company and eight owned FoxHollow shares — in all about 1% of its stock, which is valued at more than $12 million, according to Securities and Exchange Commission filings. [Chart: Soaring shares in FoxHollow]

The registry is controversial because the company isn’t using the more standard method of proving that a health-care product is effective — a clinical trial. Company executives say 26 doctors now submit registry data, but they won’t say how many are being compensated or own shares. No one suggests that the registry has been manipulated or that the device doesn’t help some patients. Doctors contributing to the registry say they embraced the SilverHawk because it is effective, not because they have an economic interest in it. They also say they submit all results to the registry, both positive and negative.

Regulators and some in the health-care industry are increasingly concerned about conflicts of interest in the development and marketing of new drugs and medical devices. They worry that researchers with stakes in a company’s performance could — unwittingly or not — report biased data. Many medical organizations and journals now require researchers reporting on clinical studies to disclose any relationships with companies making the products they test. In March, the National Institutes of Health instituted new ethics rules after disclosures that drug and medical-device companies had richly compensated some NIH scientists and officials. More recently, the focus has been on doctors involved in clinical trials taking hourly fees for talking to investors, who could profit from early indications of a new product’s prospects. The American College of Cardiology and the American Heart Association say stock options are particularly problematic for doctors helping evaluate treatments because the data they supply can affect the value of the options.

The SilverHawk is used to treat the increasing problem of peripheral artery disease, or clogged leg arteries. R. Stefan Kiesz, a 53-year-old cardiologist who supplies data to FoxHollow’s registry, says he has used it on hundreds of patients and teaches other doctors how to use it. Dr. Kiesz says he informs colleagues in talks he gives that he is a FoxHollow consultant. He doesn’t say he and some other doctors contributing to the registry were given the right to buy shares at less than the initial-public-offering price, because he considers that irrelevant. Dr. Kiesz, head of the San Antonio Endovascular & Heart Institute, says he owns options giving him the right to buy 10,000 to 20,000 shares, and in recent months has sold about 8,000 FoxHollow shares. FoxHollow granted him the options, which he can’t cash in until next year, for advice he gave to help develop the device, he says.

“The fact that I own shares doesn’t influence me,” Dr. Kiesz says. “We do have a large population of patients who have done better than I thought” with the SilverHawk.

FoxHollow shares have more than tripled from the IPO price of $14 on the Nasdaq Stock Market, giving the company a market value of $1.2 billion. In 4 p.m. composite trading Friday, FoxHollow’s shares were down $1.63 to $51.52. ..cut….

THE WALL STREET JOURNAL

To Sell Their Drugs, Companies Increasingly Rely on Doctors For $750 and Up, Physicians Tell Peers About Products; Talks Called Educational Dr. Pitts’s Busy Speaking Tour

By SCOTT HENSLEY and BARBARA MARTINEZ July 15, 2005; Page A1

NEW YORK — On a recent Wednesday evening, neurologist Lawrence Newman spoke to a dozen doctors in a private alcove off the soaring dining room of Guastavino’s and made the case that migraine headaches are seriously underdiagnosed.  Migraine treatment “should be bread and butter for primary-care doctors,” he told attendees at the midtown Manhattan restaurant. While patients might say they’re having a sinus headache, there’s a good chance it’s actually a migraine and can be treated with a migraine drug, Dr. Newman said.

It was a message friendly to migraine-drug makers, and no wonder: The sponsor of the talk was GlaxoSmithKline PLC, maker of the best-selling migraine pill Imitrex. Glaxo picked up the tab for dinner, paid Dr. Newman a fee, supplied some of his slides, and scattered Imitrex notepads on the table.  Drug makers have seized upon an effective tool for getting their message across to doctors: other doctors.

 [Pitching Pills]

Across the U.S., thousands of doctors such as Dr. Newman, an associate professor of clinical neurology at Albert Einstein College of Medicine, have signed up as part-time lecturers for drug companies. At small meetings, often over lunch or dinner, these physician-pitchmen tell their peers about diseases and the drugs to treat them, often pocketing $750 or more from the sponsor. Dr. Newman declined to discuss his fee.

In 2004, 237,000 meetings and talks sponsored by pharmaceutical companies featured doctors as speakers, compared with 134,000 meetings led by company sales representatives, according to market researcher Verispan LLC of Yardley, Pa. In 1998, events featuring sales reps and physicians were about equal at just over 60,000 each, Verispan says.

The growing use of talks by doctors comes as drug makers face criticism over other sales tactics. Direct-to-consumer advertising has drawn fire and some companies are voluntarily restricting the practice. The industry’s nearly 100,000 salespeople in the U.S. are facing resistance from doctors who complain about being besieged in their offices. Drug maker Wyeth plans to cut its main sales force, which calls on primary-care doctors, by as much as 30% this year.

Companies formerly curried favor with doctors by taking them on free golf outings or filling up their cars with a tank of gas in exchange for listening to a sales pitch. But a voluntary marketing code adopted by the largest drug companies three years ago barred such inducements. Hiring a doctor as a speaker and providing a free meal for the attendees is still acceptable — and, data suggest, highly effective. An internal study done by Merck & Co. several years ago calculated the “return on investment” from doctor-led discussion groups was almost double the return on meetings led by the company’s own sales force. …cut…..

Those who question the talks say drug companies are bombarding doctors with one-sided information through the seemingly neutral medium of independent speakers who often have prestigious affiliations. “An awful lot of the doctors in the audience are naive about the fact that these are really sales talks,” says Jerry Avorn, a professor of medicine at Harvard Medical School and author of a recent book that criticized drug companies’ marketing.

Also, speakers who make thousands of dollars in fees from drug companies aren’t required to disclose their side job to patients, although they are expected to disclose their ties in scientific papers….cut….

THE NEW YORK TIMES Doctors’ Links With Investor Matchmakers Raise Concerns By Stephanie Saul and  Jenny Anderson August 16, 2005, p. A-1

At first, the calls seemed innocuous. Investment companies were offering Dr. Ronald B. Natale $200 or $300 for 15 minutes, asking that he discuss general trends in lung cancer, sometimes over the telephone.  But Dr. Natale became suspicious as the money offers kept growing, just before he was to present the case for Iressa, a new lung cancer drug, to a Food and Drug Administration advisory panel in September 2002. Dr. Natale’s access to research data on Iressa made him an attractive source for investment researchers seeking inside information. “Wow, they were offering $1,000, $1,500, for 30 minutes of my time,” said Dr. Natale, a prominent researcher at Cedars-Sinai Comprehensive Cancer Center in Los Angeles. He said he routinely turned down offers to speak to investors.

While Dr. Natale has qualms, other doctors apparently do not. Nearly 10 percent of the nation’s 700,000 doctors have signed up as consultants with a new segment of the investment industry – companies that act as the Match.com of the investment world, according to an article in The Journal of the American Medical Association. For a fee, they arrange conversations between investors and leading professionals, experts or even employees of major companies.

Matching investors with doctors can raise particularly troubling questions. Physicians frequently serve as clinical researchers for the pharmaceutical and biotechnology industries, testing new drugs. Inside knowledge about those tests, before it is publicly available, could be worth millions. The Securities and Exchange Commission has now begun looking at whether doctors, participating in clinical trials, are accepting money to talk to analysts and investors about the confidential results. Such a breach, under some circumstances, could be construed as a violation of insider trading law.  Among the businesses that have emerged as matchmakers is Gerson Lehrman Group of New York. Founded in 1998, Gerson is the industry leader in connecting investors with specialists in fields ranging from Turkish cement to underwire brassieres. Gerson’s 150,000 specialists include 60,000 physicians. Another company, Leerink Swann & Company of Boston, has a subsidiary that advertises a network of more than 11,500 medical professionals, including physicians, willing to talk to investors.

The idea is fairly new, but the business model has already come under scrutiny. Even though the companies prohibit panelists from violating confidences or revealing proprietary information, such conversations carry the risk that participants will betray secrets.  “The frequency of physician contact, this matrix or extraordinary network of physicians that were at the disposal of investment firms, is a setup for trouble,” said Dr. Eric J. Topol of the Cleveland Clinic, who co-wrote the JAMA article, which appeared in June, exploring the growing relationships between physicians and investment companies. Dr. Topol has firsthand knowledge of the problem. Last year, he gave up his own $12,000-a-year position on a hedge fund advisory panel after concluding it created the appearance of impropriety.

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