Stealth Merger: Drug Companies and Medical Research at NIH – LAT

Stealth Merger: Drug Companies and Medical Research at NIH – LAT

Sun, 7 Dec 2003

Los Angeles Times reporter, David Willman, who twice won the Pulitzer Prize (1994, 2001) has once again demonstrated what fine investigative journalism is about. His investigative series in 2000 put the spotlight on conflicts of interest at the FDA, and the agency’s approval of 12 lethal drugs that had to be recalled.

This time his focus is on financial conflicts of interest that have corrupted the integrity of clinical research at the National Institutes of Health. Willman documents how top NIH officials have violated the “honor system” by secret consultancy fees and corporate stock options.

Willman writes: “Increasingly, outside payments to NIH scientists are being hidden from public view. Relying in part on a 1998 legal opinion, NIH officials now allow more than 94% of the agency’s top-paid employees to keep their consulting income confidential. As a result, the NIH is one of the most secretive agencies in the federal government when it comes to financial disclosures.”

“The trend toward secrecy among NIH scientists goes beyond their failure to report outside income. Many of them also routinely sign confidentiality agreements with their corporate employers, putting their outside work under tight wraps.” As the opening of this investigative report demonstrates, those hidden contracts undermine the safety of patients enrolled as human subjects.

The covert, cult-like greed of NIH scientists and the betrayal of public trust is astounding–inasmuch as the public has showered the NIH with billions of dollars. Since 1990, the annual budget has nearly quadrupled, to $27.9 billion this fiscal year, and senior NIH scientists are among the highest-paid employees in the federal government.

Yet, as this documented report demonstrates, NIH scientists claim an entitlement to secret corporate contracts and immunity from government regulations about double dipping. The institutes comprising NIH have been essentially corrupted. NIH no longer serves as a model “island of objective and pristine research.”

The disingenuous responses of officials such as Dr. Ruth Kirschstein, deputy director, who has been second in command since 1993, but claims surprise by the LA Times findings, underscores institutional contempt for requirements of public accountability.

As I have noted in another notorious research case involving conflicts of interest, “a rotting fish begins to smell from the head down….”

In science and medicine conflicts of interest follow the pattern of infectious diseases. The malaise is spread across medicine from the top institutional leadership. See:

To hold scientists accountable, a law and independent enforcement mechanisms are essential.

Stealth Merger: Drug Companies and Government Medical Research
Some of the National Institutes of Health’s top scientists are also collecting paychecks and stock options from biomedical firms. Increasingly, such deals are kept secret.
By David Willman
Times Staff Writer

December 7, 2003

BETHESDA, Md. — “Subject No. 4” died at 1:44 a.m. on June 14, 1999, in the immense federal research clinic of the National Institutes of Health.

The cause of death was clear: a complication from an experimental treatment for kidney inflammation using a drug made by Schering AG.

Among the first to be notified was Dr. Stephen I. Katz, the senior NIH official whose institute conducted the study.

Unknown to the participants, Katz also was a paid consultant to Schering AG, a German company.

Katz and his institute staff could have responded to the death by stopping the study immediately. They also could have moved swiftly to warn doctors outside the NIH who were prescribing the drug for similar disorders. Either step might have threatened the market potential for Schering AG’s drug. They did neither.

Questioned later, Katz said that his consulting arrangement with Schering AG did not influence his institute’s decisions. His work with the company was approved by NIH leaders.

Such dual roles — federal research leader and drug company consultant — are increasingly common at the NIH, an agency once known for independent scientific inquiry on behalf of a single client: the public.

Two decades ago, the NIH was so distinct from industry that Margaret Heckler, secretary of Health and Human Services in the Reagan administration, could describe it as “an island of objective and pristine research, untainted by the influences of commercialization.”

Today, with its senior scientists collecting paychecks and stock options from biomedical companies, the NIH is no longer an island.

Interviews and corporate and federal records obtained by the Los Angeles Times document hundreds of consulting payments to ranking NIH officials, including:

Katz, director of the NIH’s National Institute of Arthritis and Musculoskeletal and Skin Diseases, who collected between $476,369 and $616,365 in company fees in the last decade, according to his yearly income-disclosure reports. Some of his fees were reported in ranges without citing exact figures. Schering AG paid Katz at least $170,000. Another company paid him more than $140,000 in consulting fees. It won $1.7 million in grants from his institute before going bankrupt last year.

Dr. John I. Gallin, director of the NIH’s Clinical Center, the nation’s largest site of medical experiments on humans, who has received between $145,000 and $322,000 in fees and stock proceeds for his consulting from 1997 through last year. In one case, Gallin co-wrote an article highlighting a company’s gene-transfer technology, while hiring on as a consultant to a subsidiary of that company.

Dr. Richard C. Eastman, the NIH’s top diabetes researcher in 1997, who wrote to the Food and Drug Administration that year defending a product without disclosing in his letter that he was a paid consultant to the manufacturer. Eastman’s letter said the risk of liver failure from the drug was “very minimal.” Six months later, a patient, Audrey LaRue Jones, who was taking the drug in an NIH study that Eastman oversaw, suffered sudden liver failure and died. An autopsy, along with liver experts, found that the drug had caused the liver failure.

Dr. Ronald N. Germain, deputy director of a major laboratory at the National Institute of Allergy and Infectious Diseases, who has amassed more than $1.4 million in company consulting fees in the last decade, plus stock options. One of the companies collaborated with his laboratory on research. The founder of another of the companies worked with Germain on a separate NIH-sponsored project.

Jeffrey Schlom, director of the National Cancer Institute’s Laboratory of Tumor Immunology and Biology, who has taken $331,500 in company fees over 10 years. Schlom helped lead NIH-funded studies exploring wider use for a cancer drug — at the same time that his highest-paying client was seeking to make the drug through genetic engineering.

Jeffrey M. Trent, who became scientific director of the National Human Genome Research Institute in 1993 and, over the next three years, reported between $50,608 and $163,000 in industry consulting fees. Trent, who accepted nearly half of that income from a company active in genetic research, was not required to file public financial-disclosure statements as of 1997. He left the government last year.

Hidden From View

Increasingly, outside payments to NIH scientists are being hidden from public view. Relying in part on a 1998 legal opinion, NIH officials now allow more than 94% of the agency’s top-paid employees to keep their consulting income confidential.

As a result, the NIH is one of the most secretive agencies in the federal government when it comes to financial disclosures. A survey by The Times of 34 other federal agencies found that all had higher percentages of eligible employees filing reports on outside income. In several agencies, every top-paid official submitted public reports.

The trend toward secrecy among NIH scientists goes beyond their failure to report outside income. Many of them also routinely sign confidentiality agreements with their corporate employers, putting their outside work under tight wraps.

Gallin, Germain, Katz, Schlom and Trent each said that their consulting deals were authorized beforehand by NIH officials and had no adverse effect on their government work. Eastman declined to comment for this article.

Dr. Arnold S. Relman, the former editor of the New England Journal of Medicine, said that private consulting by government scientists posed “legitimate cause for concern.”

“If I am a scientist working in an NIH lab and I get a lot of money in consulting fees, then I’m going to want to make sure that the company does very well,” Relman said.

Relman and others in the field of medical ethics said company payments raised important questions about public health decisions made throughout the NIH:

Will judgment calls on the safety of individual patients be affected by commercial interests?

Can study participants trust that experimental treatments are chosen on merit and not because of officials’ personal financial interests?

Will scientists shade their interpretations of study results to favor their clients?

Will officials favor their clients over other companies that seek NIH grants or collaborations?

Conflict-of-interest questions also arise in the potentially lucrative awarding of patents.

Thomas J. Kindt, the director of in-house research at the National Institute of Allergy and Infectious Diseases, accepted $63,000 in consulting fees from a New York biotechnology company, Innovir Laboratories, and wound up an inventor on one of its patents.

Asked why the government received no consideration, Kindt said that he had contributed to the “basic idea” while using vacation time.

“No work was done on it as a government employee,” said Kindt, whose annual salary at the NIH is $191,200.

Others say the private arrangements undermine the public interest.

“The fact that paid consulting is happening I find very disturbing,” said Dr. Curt D. Furberg, former head of clinical trials at the National Heart, Lung and Blood Institute. “It should not be done.”

Private consulting fees tempt government scientists to pursue less-deserving research and to “put a spin on their interpretation” of study results, he said.

“Science should be for the sake of gaining knowledge and looking for the truth,” Furberg said. “There should be no other factors involved that can introduce bias on decision-making.”

Dr. Ruth L. Kirschstein, who as the deputy director or the acting director of the NIH since 1993 has approved many of the top officials’ consulting arrangements, said she did not believe they had compromised the public interest. “I think NIH scientists, NIH directors and all the staff are highly ethical people with enormous integrity,” she said. “And I think we do our business in the most remarkable way.”

In response to The Times’ findings, Kirschstein said, she would “think about” whether administrators should learn more about a company’s ties to the NIH before approving the consulting arrangements.

“Systems can always be tightened up,” Kirschstein said on Oct. 29. “And perhaps, based on this, we will do so.”

On Nov. 20, NIH Director Elias A. Zerhouni told agency leaders that he would form a committee to help “determine the appropriateness” of employees’ consulting and other outside arrangements.

“I believe we can improve our performance by subjecting ethics deliberations to a more transparent process,” Zerhouni said in a memo.

In a brief telephone interview last week, Zerhouni said he wanted the NIH “to manage not just the reality, but the perception of conflict of interest.”

“If there is something that could be viewed as improper, I think we need to be able to advise our scientists not to get into these relationships,” he said. “My sense is our scientists are people of good will.”

Temptations Abound

xxx cut xxx

For complete article see:

Copyright 2003 Los Angeles Times

FAIR USE NOTICE: This may contain copyrighted (© ) material the use of which has not always been specifically authorized by the copyright owner. Such material is made available to advance understanding of ecological, political, human rights, economic, democracy, scientific, moral, ethical, and social justice issues, etc. It is believed that this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior general interest in receiving similar information for research and educational purposes. For more information go to: If you wish to use copyrighted material for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.