Conflict of Interest Regulation Category

Over the last several decades the increased pace of medical and pharmaceutical innovation has led physicians, hospitals, and academic centers to ever greater collaboration in the search for ways to improve patient care. Many critics, however, are suspicious of the relationships between industry and physicians and have called for quarantining medical practice from the supposedly baleful influence of market incentives under the rubric of stronger conflict of interest regulation. Despite the good intentions of proponents, using ever more restrictive conflict of interest regulations to police the marketplace for medical information is not only short-sighted, but counterproductive. By limiting doctors' and patients’ access to information on or participation in the development of new treatment and prevention alternatives, the conflict of interest movement ultimately reduces patients' access to care.


The pharmaceutical industry - collectively and often individually - has tarnished its own reputation through unethical commercial practices such as off label promotions, bribery in China, covering up (or at best, not being as forthright as they might have been) safety concerns, and manufacturing problems leading to massive recalls. Besides creating their own problems, other players in the healthcare industry have pointed the finger of blame at pharma companies as a major cause of runaway costs.

Pharma companies are constrained in what they can say and how they communicate with key stakeholders such as the public or physicians. Whether they are marketing a particular product, or the company as a whole, they are limited by regulations and their message is likely to fall upon a skeptical (if not hostile) audience. Any attempt to get their own message out is undermined by the perception that they are greedy and self-serving.

While there has been increasing pressure for companies to publish all of their clinical trial data for some time, they can at least control the timing and method of its release. The publishing of data could be timed with the news cycle to enhance positive news and downplay anything that might harm the company's reputation.

Today, however, much of the data about marketed products is generated and stored beyond the control of the manufacturers, whose ability to manage their reputation is further weakened. As real-world evidence becomes more pervasive - and a more critical component of reimbursement decisions - control of that data will reside with payers, providers, and analysts more than with Pharma manufacturers.

Additionally, considering the abundance of unstructured and often non-validated data communicated about a product through "new media" such as health-care chat rooms, blogs, Facebook, and Twitter, it is easy to see how reputation management has become increasingly difficult for manufacturers to influence - let alone control.

Healthcare is one of the most popular topics discussed on the Internet. Chat rooms are full of patients, caregivers, and physicians discussing diseases, treatments, and side effects - all unregulated and often non-validated. While Pharma companies can monitor what people are saying, there's very little regulatory guidance on how they can and should participate. How should they be able to address misinformation? Do they have a duty to report side effects discussed in a chat room?

How Pharma companies manage their reputation in a world where the data is out of their control will be an increasing focus in the years ahead.


I'm sure that consumers, medical policymakers and insurance companies are just oozing with joy. After all, we are rapidly heading for pharmaceutical paradise--a pharmacy packed with really cheap generics and not much else.

This will not only save tons of money, but also stick it to those bad boy pharmaceutical companies that invented the drug in the first place, and then sucked us dry by fighting off the noble generic companies for an extra two minutes of patent protection so they could suck us even drier.

Doesn't get any better than this. At least until you swallow the pill.

In today's "big surprise of the day," Ranbaxy Laboratories, India's largest generic manufacturer got a little $500 million slap on the wrist from the U.S. Justice department.

The company admitted that a few years ago that they manufactured and subsequently sold substandard drugs, which were made at two different facilities in India. Well, anyone can make an honest mistake. Except perhaps Ranbaxy, which as part of the settlement, admitted to lying about the problems by intentionally making false statements to the FDA.

Their guilty plea added up to three felony counts, $150 million in criminal penalties and another $350 million in civil penalties.

The drugs in question were for treatment of acne, epilepsy, neuropathic pain and one antibiotic-- ciprofloxacin.

This is hardly the first time that Ranbaxy has had problems with drug "quality"--a misplaced euphemism if ever there were one.

In 2008, the FDA prohibited the importation of 30 drugs from two of Ranbaxy's plants in India, and instituted a so-called "Application Integrity Policy," which stopped the review of any new drug applications from one of the company's facilities. The reason? Once again, fraudulent record keeping and reporting.

In a sane world, one might think that the company might be asked to take their business elsewhere, but sanity seems to have become, well, insane.

Despite the company's accomplished track record of incompetence and fraud, in November 2011 the FDA still gave permission for Ranbaxy (and only Ranbaxy) to sell the first generic version of the Lipitor. This was clearly well-deserved, as evidenced by the fact that in 2102, Ranbaxy was forced to recall multiple lots of the drug after the pills were found to contain glass particles.

One might think that this would be enough, but one would be wrong.

According to a recent Fortune report, the U.S. Dept. of Veterans Affairs recently signed a large contract to buy generic Lipitor from, who else? Ranbaxy. Two months ago.

OK. This stopped being funny quite a while ago. And the take home message is even less amusing--saving money is so important to our government and medical providers that they are going to look the other way while a bunch of hacks in India feed you a steady supply of crappy drugs.

And Ranbaxy's response doesn't exactly inspire confidence. According to CEO Arun Sawhney "While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy's stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance."

Which is about as comforting as in February, when the company also issued a statement that "[I]t was confident in the continuing safety and quality of its products."

Which begs the question, "what would happen if they weren't confident? "Oops- you swallowed a hand grenade instead of a cipro? Please hold."

And if you think this is an isolated incident, you perhaps ought to consider a little Wellbutrin therapy. Except last year, Teva, Israel's giant generic manufacturer was forced to recall all of its Budeprion XL, their version of Wellbutrin XL, (the generic name is bupropion). The problem? Its U.S. manufacturer, Impax Laboratories had a little problem with the time-release formula.

This is no laughing matter with bupropion, since the 300 mg time-release pill released the drug much too soon putting patients at risk for seizures, and cardiac arrhythmias. The maximum immediate-release dose for the drug is 100 mg, which was exceeded by the failure of the time-release formulation, leaving patients susceptible to side effects early on and sub-therapeutic blood levels later.

These are two of the biggest generic companies around, which makes me wonder what will happen when Joe's Pharmaceuticals starts making generic heart drugs in a U-Haul in Newark.

These are our future medicines, and inevitably most of us will eventually run into one. The FDA has shown little ability to catch this until after the problem has already occurred, and the cheap prices are simply too enticing.

This is just getting started. Open wide folks. There's going to be a lot for you to swallow.


Since the federal government is now requiring that nearly all American citizens purchase health insurance, we must also remember that the federal government is now also the sole arbiter of what constitutes health insurance, and therefore what consumers must actually buy. A great article recently published by Manhattan Institute scholar Steven Malanga in RealClearMarkets explains how this new regulatory power is already undermining sensible health care policy in a whole host of ways. He writes:

Congress took for itself the ability to require that people only buy insurance that provides a minimum of 'essential health benefits'...At hearings held by the Institute of Medicine on what coverage HHS should compel, a spokesman for the National Kidney Foundation pleaded for mandatory coverage of multiple kidney transplants per patient, while an obstetrician argued for mandatory coverage of nutrition counseling. Folks from Connecticut wanted to ensure that treatment of Lyme disease was part of mandatory coverage. No one explained how people or firms are supposed to pay for all of this. After several hours of hearings, the head of the IOM commission complained that, 'We have an impossible task.'

As Malanga explains, the individual mandate along with dozens of new insurance regulations has opened up the floodgates for lobbyists from myriad special interest groups and providers to request that the services they provide (or want) be deemed "essential" for all Americans and covered by all available health insurance plans, public and private. Rather than deciding for themselves what kind of insurance they and their families need, Americans will now be told what they have to buy. Malanga also explains how the federal government has wielded the power of defining minimum "essential" coverage to heavily regulate certain kinds of popular insurance plans (such as health savings accounts), perhaps pushing them out of existence and driving up costs for employers:

The new law has reduced the amount of money you can set aside in health savings accounts, narrowed the products you can buy with them and doubled the penalties the IRS can impose on you for unauthorized purchases made through these accounts. There seems little hope that effective consumer-directed insurance can survive...When you total up the requirements and restrictions on what now constitutes adequate health insurance, no wonder that many small firms keep telling us that they will not expand beyond 49 employees because doing some makes them subject to the complexities and penalties of Obamacare.

Malanga's analysis shows that the survival of the individual mandate is only the tip of the iceberg, given the federal government's new and sweeping regulatory powers that allow it to control nearly every aspect of the health insurance market. While calling for more insurance competition and consumer choice, the federal government is actively engaged in thwarting competition and restricting choices. You can read the full article here.


For years, the FDA, Congress, drug companies, and retail distributors have struggled to agree on a nationwide system to ensure that counterfeit drugs (like fake Avastin) don't enter the U.S. drug supply chain. In a nutshell, industry stakeholders and regulators want to guarantee the safe, uninterrupted delivery of drugs from manufacturers all the way down to local retailers. Such a system, generally called "track and trace," would substantially reduce the chances of consumers encountering dangerous or substandard fake drugs.

When Congress took up debate over the Prescription Drug User Fee Act (PDUFA) this year, legislators seemed to broadly agree that the U.S. needed a track and trace system, but the House and Senate differed on exactly how that system should operate. Unfortunately, Pharmalot reports today that conference committee negotiators reconciling the House and Senate user-fee agreements have failed to reach an agreement on track and trace language:

The failure reflects a long-standing lack of agreement among the many players - drugmakers, wholesalers and pharmacies - about a suitable approach. A key sticking point is cost. To implement a uniform system that would allow each player to follow each shipment in the supply chain requires an investment to purchase equipment. This would include scanners for warehouses, trucks, and pharmacies to read bar codes placed on every bottle in each lot that is shipped.

Despite Congress's failure to procure an agreement on establishing a national system to protect the integrity of the drug delivery supply chain during PDUFA negotiations, it should keep trying. Without a commonsense national system to ensure the safe delivery of drugs, stakeholders will have to cope with complex and inconsistent regulatory schemes established by many different states. If the rules regulating drug delivery vary from state to state, manufacturers and distributors will incur needless compliance costs, costs that will be passed on to consumers through increased drug prices.

While the issue seems to be stalled for the moment, Congress could still pass a standalone bill establishing track and trace later. For an in depth look at the issues involved, and where things might go from here, see the RxTrace blog.



Dr. Thomas Stossel, an American Cancer Society Professor of Medicine at Harvard Medical School, has an op-ed article in the Scientist this week rebutting the argument that financial conflicts of interest are corrupting modern medicine.

Advances in medical and surgical care are hard-won. They require rigorous, carefully interpreted laboratory research. Equally important is the painstaking clinical work to translate basic discoveries into useful diagnostics, drugs, and devices. Despite the odds, the achievements made in the past half century are unmistakable: a 50 percent reduction in cardiovascular mortality despite an epidemic of obesity; a dramatically decreased cancer mortality rate; and the conversion of AIDS from a death sentence to survival with good life quality.

The key to such success has been the growing number and complexity of collaborations between academics, physicians, regulatory agencies, and--not least--industry. Unfortunately, over the past 20 years, a mania has taken hold that discounts the social value of collaboration and has mounted an inquisition against it, encapsulated by the epithet "financial conflict of interest (fCOI)." Critics' unwarranted allegations that such conflicts cause bias have limited the sources of intellect that can contribute to a given project.

Medical journals have taken a leading role in promoting this mania. A study recently published in the April issue of Nature Biotechnology documents its pervasiveness: a content analysis of 108 articles in four highly cited medical journals (The New England Journal of Medicine, JAMA, Lancet, and Lancet Neurology) found that 89 percent of the publications emphasized what they considered risky or problematic with industry collaborations.

But what is the basis for this assertion? Approximately half of these articles presented no evidence whatsoever for their conclusions. They merely postulated them as self-evident. When provided, the evidence was weak, and the interpretations one-sided: fewer than 15 percent even mentioned any alternative interpretations, and only 3 percent bothered to discuss them. In contrast, the comparatively few papers emphasizing benefits of collaboration all cited evidence, and recognized and attempted to rebut opposing viewpoints.

Stossel rightly points out the irony of ostensibly science-based medical journals advocating for sweeping changes in health care policy and medical education that are supported by little more than anecdote and assertion.

For another view of the value of industry-academic collaborations, see my recent post here.


In an article published a few days ago in FuturePundit, Randall Parker made a very interesting observation concerning the increasing collaboration between pharmaceutical companies and academic researchers. Citing an analysis by the Fox Chase Cancer Center, Parker highlights that 48% of the research presented at the 2011 ASCO conference had some degree of industry involvement, a significant increase from the research presented at the 2006 meeting, at which only 39% of the presented research had any connection to the pharmaceutical industry.

Increasing constraints on federal research funding are undoubtedly responsible for the shift, and some may view the increasing levels of corporate involvement with academic research as a disconcerting trend, one that threatens to subordinate the future of public health to the interests of a handful of "profit-maximizing" enterprises.

But Parker's blog post suggests that profit-oriented research will accelerate cancer drug discovery, as companies seek out the investigational targets and compounds that are most likely to produce successful drugs. Interestingly, he also cites a study that found that "studies from authors with ties to industry also tended to receive higher scores from their peers."

Corporate sponsorship of academic research does raise some legitimate conflict of interest concerns, but these can be effectively managed, and certainly shouldn't imply that industry sponsored research is biased or of lesser quality.

Of course, recent scandals over the inability of companies to replicate academic pre-clinical cancer research published in peer reviewed journals (hat tip: Ronald Bailey) also raises the issue of how much the pursuit of "funding and fame" is undermining cancer research by drug companies.

Companies, at least, face stringent FDA requirements for drugs approval - and thus have much less incentive to waste scarce research dollars on scientific dead ends. Thus the incentives of companies to find and develop better cancer treatments are closely aligned with the interests of cancer patients.


An interesting op-ed published by Trevor Butterworth in The Daily does a great job explaining how a new federal agency could effectively bias the U.S. health care system against more innovative and effective treatments under the guise of comparative effectiveness research. The "Agency for Healthcare Research and Quality (AHRQ)," is tasked with conducting comparative effectiveness research on a variety of medicines and treatments, but isn't subject to any oversight on how it communicates the findings of that research - not even from the FDA, which strictly regulates what pharmaceutical and medical device companies can say about their products to physicians.

But is the agency likely to be a neutral arbiter of "what works?" Butterworth thinks this is unlikely:

"Imagine that all the pharmaceutical companies united to create an institute for quality research, and gave it $1 billion to study "comparative effectiveness" -- whether drugs still under patent worked better for people than cheaper generics. Imagine that the pharma companies dug farther into their pockets and came up with another $11 million to train physicians, pharmacists and nurses to be ambassadors for this institute, and that these ambassadors would travel the country offering $4 million worth of further education credits to any doctors or nurses who would agree to listen to their spiel.

If you're thinking that this is, in fact, what Big Pharma already does, remember, this is still a hypothetical exercise. In reality, such a plan would never get by the Food and Drug Administration, which is to drug marketing what the Spanish Inquisition was to heresy. But if, somehow, such a project were ever to happen, you'd seriously doubt whether it would be unbiased, wouldn't you? It strains credibility to think that the pharmaceutical industry would go to such expense to say that the cheaper drugs were just as good as the expensive ones."

For instance, out of the $1 billion the agency has been granted to conduct and disseminate its research, it plans to spend $11.6 million to recruit health care professionals to explain the results of its research to large medical practices and health care providers across the country. Another $26 million will be spent on a PR campaign to increase public awareness of the program and its work (which, btw, is already available for free on its website).

Butterworth points out two major problems with this approach. The first is that in without FDA oversight of communications, the AHRQ won't have any external check on its recommendations, which will likely be drawn from meta-analysis of many published studies - blended results which are likely to be very sensitive to small changes in methodology or background assumptions, or downplay the effect of its recommendations on subpopulations.

As a government agency, AHRQ may also be tempted to favor generic drugs and cheap treatments that lower costs in the short term, but may lead to higher costs (and worse outcomes) in the long term.

It may also underestimate the market effects of incremental innovations that will spur greater innovation (and lower costs) in the future. As Butterworth points out, "there's always a trade-off between care and cost," and while one cannot fault the government for attempting to promote cheap treatments where they can (appropriately) substitute for more expensive treatments, markets and individuals are much better at balancing these trade-offs than centralized decision makers (no matter how well intentioned).

Butterworth also points out the stark double-standard with respect to how the government regulates medical research. No pharmaceutical company could make these kinds of communications to physicians or hospitals. Efficacy claims (comparative or otherwise) that companies can make on a drug's FDA approved label are typically the result of one or more double-blind, placebo controlled trials published in peer reviewed journals. They certainly wouldn't be allowed to attack their market rivals using the type of meta-analysis of multiple studies that AHRQ will be using to drive its comparative effectiveness agenda.

America's health care system certainly needs more information to help patients and physicians make patient-centered medical decisions, and there are some studies that only the government may be big enough to fund (like cancer trials testing multiple therapies). There is also certainly a lot more evidence needed on what kinds of payment systems drive better health care outcomes. But data dredging in support of generic medicines (which already account for about 80% of all U.S. prescriptions) is both unneeded and unlikely to do any real good.


Later this week -- possibly as early as tomorrow -- a bipartisan majority in the United States Senate is expected to vote in favor of S. 3187, the Food and Drug Administration Safety and Innovation Act, which among other things, reauthorizes the Prescription Drug User Fee Act of 1992. MPT readers will, of course, be familiar with PDUFA and what it does. But in an article published in yesterday's Washington Times, I called it "arguably the most important piece of health care legislation [most people have] never heard of."

Before PDUFA, FDA typically took two years or more to evaluate new drugs -- that's after they already had been through some 10 or so years of clinical testing. The net effect was that American patients were often the last to benefit from important medical breakthroughs. Since 1992, the PDUFA user fees have enabled FDA to hire new medical reviewers and improve its scientific capacity. More important, the average drug-approval period was cut in half, to just more than a year.

As I wrote in the Times:

"Ideally, individual firms should not have to pay user fees to fund regulatory oversight that is ostensibly for the public's benefit. But in an era of tighter federal budgets, Congress has given the FDA more and more responsibilities but not the additional revenue to fund them. Without PDUFA, the FDA's budget shortfall would mean fewer new medicines reaching the patients who need them. Reauthorizing the user fees is a second-best choice, but in the face of a slow economy and pressure to reduce the federal budget deficit, it seems to be the best available option."

As a libertarian, I generally oppose efforts to give the government more money. But let's face it: given all the responsibilities Congress has given the FDA, if we starve that federal agency of resources, we'd only be shooting ourselves in the foot. I'd prefer that FDA have far less power and fewer regulatory authorities. But until that day comes, we are better off with an agency that has sufficient resources to review medical products in a timely fashion.

The Food and Drug Administration Safety and Innovation Act (FDASIA -- let's pronounce it Fudd-Asia) not only reauthorizes the user fees for prescription drugs, but it also reauthorizes the medical device user fees first introduced in 2002, and it establishes new user fees to fund FDA review activities for generic drugs and biosimilars. But what is especially noteworthy about this year's reauthorization, known to insiders as PDUFA V, is that it incorporates very few additional "Christmas Tree" amendments - measures unrelated to the primary purpose of a bill that are added to "must pass" legislation.

Prior PDUFA reauthorizations, typified by 1997's Food and Drug Administration Modernization Act (FDAMA) and 2007's Food and Drug Administration Amendments Act (FDAAA), included dozens of amendments to the statutes regulating drugs, medical devices, and even foods. FDAAA, for example, introduced new advisory committee conflicts of interest rules, gave the FDA new post-approval recall authority, established a public database of clinical trials, and even changed the way the agency regulates the safety of pet food.

This year, congressional leaders succeeded in getting relatively clean bills reported out of the House Energy and Commerce Committee and Senate Health, Education, Labor & Pension Committee. It's not that the bills don't incorporate a few non-user fee related items. They do. But for the most part, this handful of additional items will help to streamline the drug and device approval processes by expanding eligibility for the Accelerated Approval pathway, permitting FDA to expedite the testing and review of "breakthrough therapies," and requiring the agency to solicit the views of actual patients when assessing the safety and benefits of medical products.

Other provisions provide incentives for the development of new antibiotics and orphan drugs.The bills also permanently reauthorize the Pediatric Research Equity Act (PREA) and Best Pharmaceuticals for Children Act (BPCA), which give FDA the authority to require pediatric testing of already approved drugs (which I oppose) and give companies that do pediatric testing an additional six months of market exclusivity (which I support).

One provision would also instruct FDA to issue a long-awaited guidance document clarifying the rights of drug and device manufacturers when promoting their products on the Internet (an issue I wrote about here). And the bills even soften the harshest effects of the FDAAA conflict of interest rules.

Arguably, the worst aspect of the House and Senate bills are one provision requiring the FDA to consider stronger warning labels on sunlamps and tanning beds and another intended to address the drug shortage problem that MPT contributors have written about here, here, and here. It's not that I think the drug shortage problem needs to be addressed, though. I just happen to think that the drug shortage provisions of the FDASIA will do extraordinarily little to solve the underlying problem.

All in all, this bill may be about as good as we could expect. So, it'll be a good day when the Senate and House pass the legislation, and when President Obama signs it into law.



I've been meaning to write about a recent letter - really a full blown article - published in Nature Biotechnology that examines the quality of the evidence - or rather dearth of it - in articles published in major medical journals that detail the supposed ills of industry engagement with physicians and academic medical centers and call for more stringent conflict of interest regulation at public and private institutions.

In their letter, Lesko, Scott, and Stossel point out that while extensive interaction between academic medical centers, physicians, and pharmaceutical and medical device companies has undoubtedly accelerated innovation and provided enormous benefits to patients, this has not prevented growing concerns about and criticism of such interactions. The ostensible concern is that:

...such relationships may degrade the performance and reporting of biomedical research and also induce physicians to behave in a manner inconsistent with cost-effective or ethical patient care--which are loosely defined under the operational term 'financial conflicts of interest' (COIs).

This is a legitimate concern, at least on its face. But it should be a testable hypothesis. So where is the evidence that such interactions result in actual harm - as opposed to theoretical harm?

The authors survey four major medical journals to assess "whether the positive and negative aspects of industry academic relationships were equally represented in top-tier medical journals but also to assess the weight of evidence in the COI literature that patient outcomes or public attitudes are indeed negatively affected by corporate interactions with academics and physicians."

This is certainly a fair question for medical journals that tout their professionalism and adherence to objective science. Still, Lesko et al found that out of 108 articles selected for analysis, nearly 90% "unambiguously emphasized" the risks of industry relationships (often in their titles: "Just how tainted has medicine become?") while presenting little quantitative evidence of such risks and downplaying potential benefits while calling for increased regulation of industry.

Here's the nut graph:

...it is clear that the preponderance of articles published in the four highest-impact medical journals that publish primary research focused on problems concerning COI relationships. These articles differed qualitatively from benefit-emphasizing academic-industry relationship papers. Most risk-emphasizing articles presented no evidence and many of the ones that did present evidence extrapolated that it had a bearing on patient outcomes or public attitudes.

The problem is that only presenting one side of an argument, often with little supporting evidence and without giving equal weight to opposing viewpoints, leads to a "conformity cascade" that shapes public policies that restrict industry interaction with the medical community to the point that innovation - and therefore patient health - may be affected.

In other words, it's like presenting a drug label that has 98 words about risk in bold print, and two words about benefits in small print. In that case, the patient is likely to avoid any treatment at all.

Ironically, the caricaturing of industry is likely to lead to the very jaundiced view of medical professionals and medicine that COI proponents say they want to prevent - since everyone has some conflict of interest (whether for tenure, publication, or in competition for grants or hawking their latest industry-bashing book), then no one can be trusted at all.

For a longer discussion of the growing thicket of COI regulations, and some practical solutions for managing conflicts that doesn't throw out the baby with the bathwater, see this Project FDA Report How Conflict-of-Interest Rules Endanger Medical Progress and Cures by Richard Epstein.



Earlier this week, U.S. Senators Tom Coburn (R, OK) and Richard Burr (R,NC) introduced the "Promoting Accountability, Transparency, Innovation, Efficiency, and Timeliness at FDA" Act or PATIENTS' FDA Act. A summary of the legislation can be found here. The full text can be found here.

Allow me to sum up the 55 page bill in a single, short sentence.

What gets measured gets done.

Among its key provisions, the Act requires the FDA to identify gaps in regulatory science that may be impeding innovation or slowing new product reviews; review all existing product regulations and guidance to ensure that "the regulatory principles of benefits of regulations and guidance [justify] the costs and the adoptions of the least burdensome approaches to regulation as outlined in President Obama's Executive Order 13563 to improve regulation and regulatory review"; repeals counterproductive conflict of interest restrictions that limit the agencies access to the most authoritative experts; and requires the FDA to (among other things) ensure that its IT capabilities are up to date and meeting the needs of the agency.

It's hard to see how the FDA could strenuously object to many of its provisions. For instance, take Title V, section 601, "Integrated Strategy and Management Plan":

Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to Congress a strategic integrated management plan for the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, and the Center for Devices and Radiological Health. Such strategic management plan shall--

(1) identify strategic institutional goals and priorities for the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, and the Center for Devices and Radiological Health;

(2) describe the actions the Secretary will take to recruit, retain, train, and continue to develop the workforce at the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, and the Center for Devices and Radiological Health to fulfill the public health mission of the Food and Drug Administration;

(3) identify results-oriented, outcome-based measures that the Secretary will use to measure the progress of achieving the strategic goals and priorities identified under paragraph (1) and the effectiveness of the actions identified under paragraph (2), including metrics to ensure that managers and reviewers of the Center for Drug Evaluation and Research, the Center for Biologics Evaluation and Research, and the Center for Devices and Radiological Health are familiar with and appropriately and consistently apply the requirements under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), including new requirements under the 2012 user fee agreements.

Developing a strategic plan for workforce management and continuous improvement is something the agency should be doing already - but without the "teeth" of actual Congressional oversight and pressure of reporting requirements, it is something that is likely to fall by the wayside amid the agency's many other responsibilities (like ensuring the safety of the food supply). Indeed, Senators Burr and Coburn note that a 2010 GAO report found that the FDA "does not use established practices for effective strategic planning and management" and that although the FDA agreed with GAO's recommendations, "three years later, many of these recommendations have not been adopted."

Again: what gets measured, gets done. In a competitive marketplace, private companies have powerful incentives to continuously monitor and improve performance of key products and services or risk going out of business. Government agencies can't go out of business, and many, like the FDA, have an absolute monopoly on the "services" they offer (in this case, marketing approval for medical products).

Ironically, the very mechanism that has led to improved funding and performance of the FDA - the Prescription Drug User Fee Act, first passed in 1992, and which gave the agency a much needed infusion of funds to hire new staff while also setting performance goals for the review of new drug applications - has probably diluted pressure for effective Congressional oversight outside of the user fee reauthorization process, which only occurs every five years.

Politico's Sarah Kliff describes PDUFA as the "most important health policy you haven't heard of." Kliff writes that

Over the past two decades, the new funding stream from pharmaceuticals has reduced FDA drug review times by nearly half. The agency added about 200 new staff members. A 2002 Government Accountability Office report found that user fees increased new drug reviewers by 77 percent in the first eight years of the act. The average approval time dropped from 27 months to 14 months over the same period.

Drug companies' user fees have, meanwhile, have become a crucial source of FDA funding: They made up 62 percent of the country's $931 million drug review budget in 2011. ...

But here's the funny thing: Among all the players on PDUFA, there's pretty widespread agreement that this is a fee that pharmaceuticals should be paying. It's a law that nearly everyone, from Republicans to Democrats to industry, thinks is working. ...

The question, now, is whether Congress can keep the law working. PDUFA doesn't make many headlines. But it's the one piece of must-pass health policy legislation in 2012.

Kliff is right that PDUFA is critical "must pass" legislation for patients, companies, and the FDA. But its "must pass" status and infrequent reauthorization results in little ongoing Congressional monitoring of FDA performance short of a full blown crisis (like contaminated Heparin, or drug shortages). But oversight-by-crisis (which frequently produces knee-jerk legislation) is hardly the most effective way for Congress or the FDA to ensure that it is not just "getting by" but actually excelling at its key responsibility of promoting and protecting public health.

In the FDA's defense, Congress continually adds to the agency's responsibilities - tobacco products and biosimilars regulation are among the most recent - without stopping to consider how well it is performing existing responsibilities or whether the agency has the capacity and resources to take on new ones.

This is a recipe for the FDA to fall into a state of dysfunctional disrepair. The PATIENTS' FDA bill is an attempt to remedy the not-so-benign neglect that Congress has inflicted on the agency and to begin to generate the data necessary to improve its performance in a thoughtful way.

Perhaps its most important provision is for the FDA to contract with an independent management company to conduct a top to bottom review of the drug review and approval process. The outcome of that review may or may not be welcome by the FDA - but it would force Congress to pay attention and highlight the FDA's importance as the gateway for medical innovation not just in the U.S., but for the world.

PDUFA must be passed - and the reauthorization negotiated by industry and the FDA (with input from patients' groups) does, in fact, contain several important incremental reforms.

But the PATIENTS' FDA Act is the long overdue start of a discussion on whether America has the FDA that we need in the 21st Century - to battle and eventually defeat life threatening diseases like cancer and Alzheimer's, drive innovation across the life sciences sector, meet emerging challenges like pandemic disease and bioweapons, and secure America's increasingly complex global food and pharmaceutical supply chains.

Do we have the FDA that we need? Let's not another five years to find out.


The Patient Protection and Affordable Care Act of 2010 (PPACA) - regardless of the view one has of the legislation - has created enormous disruption. And with disruption comes enormous opportunity, as well as risk. Many provider organizations (e.g. hospitals and physician groups) have responded to the changing healthcare delivery environment by safety in size through merger and acquisition. Payers are also buying or creating partnerships with hospitals, and hospitals are acquiring other hospitals and physician practices to become gigantic systems. To further complicate matters, PPACA directly supports this mass consolidation with its federally financed mechanism for healthcare delivery: the accountable care organization (ACO). But any attempt to fix healthcare through consolidation - at the expense of fair competition and without ensuring accountability - is destined to fail.


We at MPT have written extensively about how the FDA's and other groups' conflict of interest rules, which have the effect of discounting or ignoring information connected in any way to the drug and device industry, are not only short-sighted, but counterproductive (see here, here, and here for just a few of the more recent examples). Now, via Richard Epstein, we learn that some of the biggest critics of these rules are patients themselves:

"In addition to the endless regulatory hoops mandated by the FDA for marketing approvals, a significant, and wholly unnecessary, part of this protracted slow-down [in new drug development] stems from sharp limits on conflict of interest waivers for the agency's vital advisory committees that help the FDA review new medicines, which Congress imposed on the agency, with excessive zeal, in 2007. Rather than coming from industry, complaints about onerous conflict-of-interest rules have come primarily from patients groups representing the users and consumers of pharmaceutical products, for whom new drugs and devices often spell the difference between life and death. ...

"This prohibition has not only left about 20 percent of the FDA's many committee positions vacant but also led to a pool of 'experts' less qualified than those disqualified, by virtue of the simple fact that they are so pre-eminent in their fields that industry seeks out their advice and services. ...

"Quite simply, the current FDA conflict of interest rules regard doctors and scientists with any financial connections with drug and device manufacturers as corrupt shills, who should be banished from its sacred precincts. Yet it takes an all-too-tolerant position to such 'pure' advisors like Sidney Wolfe, from Public Citizen, who has served on the FDA's Drug Safety and Risk Management Advisory Committee since 2008, despite being an avowed enemy of the industry and a close ally to plaintiff's lawyers who launch multibillion dollar class action suits against drug companies - and who contribute generously to Public Citizen's coffers."

Now, it's not completely true that FDA has never ruled out someone for a so-called "intellectual conflict". Indeed, Sidney Wolfe himself was once prevented from voting on the disposition of a class of birth control pills containing the hormone drospirenone because a Public Citizen publication had warned against using those products. And a prominent cardiologist had once been invited and then "disinvited" from participating in an advisory committee hearing on the blood thinner prasugrel because the doctor had made disparaging comments about the drug.

Still, in the latter case, FDA later acknowledged that it should not have excluded the cardiologist for having a possible "intellectual bias". And though Wolfe was only permitted to sit on the advisory committee panel considering drospirenone as a non-voting member, he continues to vote on numerous other products despite having campaigned for more than 30 years against the evils of the pharmaceutical industry.

The point remains, conflict of interest allegations almost invariably run in one direction: against drug and device manufacturers and not their critics. The only time it seems the critics are willing to overlook a drug industry conflict is when the otherwise conflicted party is joining in on the criticism of another manufacturer's product.

Consider one particularly ironic case that I wrote about previously: U.S. Sen. Charles Grassley (R-Ia.) has been a frequent critic of FDA for not being harsh enough on industry conflicts of interest. But, at the same time, Grassley has frequently relied upon Cleveland Clinic cardiologist Steven Nissen to pursue their joint campaign against the diabetes drug Avandia. But it turns out that Nissen just happens to be one of the investigators on a study purporting to show that Avandia's closest competitor, Takeda Pharmaceutical's drug Actos, is superior to Avandia because it doesn't increase cardiac risk. And, as it turns out, Takeda provided $25,000 in funding to Nissen's Cleveland Clinic team to conduct the Actos study.

If the tables were turned, and it was Takeda's product that Grassley wanted banned, would he have relied so easily on Nissen's judgement that Actos was safe? Steven Nissen is a highly regarded scientist, and I am aware of no credible evidence that his views on Avandia or Actos have been biased by the funding from Takeda. But you could bet your bottom dollar that, in such a case, Nissen's views would not only be discounted, they'd probably be ridiculed as nothing more than "bought and paid for science".

Ultimately, conflicts of interest can never be eliminated, though they can and should be managed. But it seems clear that the way Congress and the FDA are trying to manage them has been a dismal failure.


Today's Wall Street Journal has a refreshing interview with Dr. Susan Desmond-Hellmann, who is chancellor of the University of California, San Francisco, and a former drug industry research scientist. The piece begins with an introduction that says, "Many universities are wringing their hands over the increasing coziness of medical schools and their corporate partners. Susan Desmond-Hellmann ... has no such qualms."

As the introduction notes, "potential conflicts of interest are a growing concern at many schools." That's a problem. What matters are not "potential" conflicts of interest but actual conflicts that result in a researcher or clinician putting his or her own self interest over the interests of the patients whose well-being they manage.

Unfortunately, the fear of being branded with a scarlet letter "I" -- for industry ties -- has led far too many universities, scientists, and clinicians to pass up opportunities to collaborate with the drug and medical device industries in ways that might have redounded to the benefit of patients. Fortunately, while it is clear from the interview that Dr. Desmond-Hellmann takes genuine conflicts of interest seriously, she has rejected the narrow-minded attitude that paints all industry ties as inherently corrupting:

"WSJ: What do you tell professors who won't work with drug or biotech companies?
"Ms. Desmond-Hellmann: I think that's a huge mistake. If you're a professor now, and you want to get your discovery to society, you either need to start a company or work with a company to commercialize a product. When professors have told me they won't work with companies anymore because they feel they'll have this scarlet letter, I think: 'Wouldn't that be sad if all the best scientists and clinicians won't work with companies because the public has said they're evil?'"

Unfortunately, the published interview is rather short, so Dr. Desmond-Hellmann is never asked to discuss her views on what exactly makes for a conflict of interest. We know, for example, that not all conflicts of interest involve money. The literature is full of examples in which such motivations as raw ambition, the desire to achieve research successes or to be the first to discover some phenomenon, or simply a basic fear of failure created conflicts that contributed to fraudulent research and/or harm to an otherwise innocent third party.

As medical ethicist Sigrid Fry-Revere puts it, a conflict of interest is any "clash of competing interests in which a socially sanctioned goal could potentially be compromised by a more personal goal. Conflicts of interest exist in every form of human interaction. Therefore, the question should be not whether conflicts exist, but whether relevant individuals will succumb to the temptation to satisfy more immediate personal desires at the expense of long-term personal benefit and long-term social goals."

In short, conflicts can never be eliminated, though they can and should be managed. And Susan Desmond-Hellmann should be congratulated for approaching the issue of conflicts with an open mind, for expressing an understanding that industry-academy relationships need to be monitored, and for realizing that the benefits of partnering with industry generally far outweigh the risks that might arise from conflicts of interest.



The issue of bias was in the news again this week as the Wall Street Journal reported that "three of the advisers [at an advisory committee meeting to discuss four Bayer birth control pills] have had ties to Bayer, serving as consultants, speakers or researchers."

Bias can be a hindrance to good decision-making. Unfortunately, most of us have some biases, whether they are religious, political, philosophical, nepotistic, analytical, or economic.

Religious bias can affect one's views on contraceptives, the termination of pregnancy, and "pulling the plug" on seriously ill patients. Political bias arises when the decision maker tries to foster a favorable image or to support a particular party or politician. Philosophical bias can affect how we think about who should be treated, or whether certain conditions should be treated at all. Or, perhaps, whether drug companies should be allowed to profit by treating illness. Or, perhaps, whether actions are best taken through public or private organizations. Nepotism means giving advantages to friends or relatives. Individuals can be analytically biased by, for instance, confusing low-risk and high-risk situations or by lacking the right analytical tools to make good decisions. Economic bias is the most common target and was the subject of the Wall Street Journal article referenced above. It arises when a person can profit from a role as a supposedly impartial judge.

If the FDA was serious about bias, it would consider all kinds of bias--religious, political, philosophical, nepotistic, analytical, and economic--and set up systems whereby the expertise of experts could still be extracted while the effects of their biases was minimized.

"A bias recognized is a bias sterilized." -- Benjamin Haydon, British painter and writer


The FDA has come under fire yet again over allegations that a drug advisory panel decision was tainted by financial conflicts of interest.

Some recent research has suggested that women taking birth-control pills containing the active ingredient drospirenone -- such as the Bayer AG products Yaz, Yasmin, Beyaz, and Safyral, as well as several generic versions of the drug -- had roughly double the risk of non-fatal blood clots as those taking other oral contraceptives (see here and here). Last spring, Bayer issued a statement contesting the validity of the study methodology, and claiming that other research -- presumably more valid in Bayer's opinion -- found no heightened risk.

Who's right and who's wrong is a difficult question to answer. But at a December 9, 2011 joint meeting of the agency's Reproductive Health Drugs Advisory Committee and its Drug Safety and Risk Management Advisory Committee panelists sided with Bayer by a 15 to 11 vote that drugs containing drospirenone should remain on the market.

What's particularly noteworthy about the vote, however, is that an investigation by The Washington Monthly and the British Medical Journal has revealed that at least four of the committee members "have either done work for the drugs' manufacturers or licensees or received research funding from them." What's more troubling, though, is that the FDA did not itself make public any of these financial ties, and it took a couple of reporters to reveal the information.

By itself, the presence on FDA advisory panels of researchers who have done work funded by the drug industry is not problematic per se. After all, the purpose of the advisory panels is to provide the best possible expert advice, so the agency can better evaluate the benefits and risks of medicines. As Harvard Medical School researcher Thomas Stossel has explained over and over to anyone who'll listen, the manufacturers of drugs are going to seek out the best researchers with the most knowledge about a particular disease or condition to provide insights on their research and development programs. So, if you bar anyone with any financial ties to the industry from serving on regulatory advisory committees, that necessarily means settling for people who are not the best. Moreover, despite all the sturm and drang about financial conflicts of interest, and a growing literature examining the effects of these conflicts, "Evidence that relationships compromise scientific integrity is weak or false," and "there is no evidence at all about the effect of physician-industry relations on patient outcomes."

Nor am I especially concerned about the narrowness of the vote in this particular case. The Washington Monthly/BMJ report tries to make an issue of the fact that, without the four conflicted panel members, the result would have been an 11 to 11 tie. That still leaves us essentially where we were previously -- that is, with conflicting evidence and an essentially evenly split panel vote elucidating the fact that, with many drugs, it's difficult to tote up the benefits and risks and make a well-reasoned decision.

More importantly, though, those decisions are left to the FDA, not the advisory committees. By all accounts, the FDA was in fact aware of the financial conflicts. And the agency itself is fully capable of evaluating the full weight of scientific evidence and discounting the advisory committee's decision if deems those financial ties to have affected the votes of various members. The agency often does side with advisory committees in its approval or disapproval decisions. But there are far too many cases in which the agency rejected an advisory committee recommendation (almost always in the direction of rejecting approval for a drug that an advisory committee recommended approving) to think that the committee votes are anything more than what they purport to be: advisory in nature.

What I do find troubling about the whole affair, however, is the fact that the financial relationships were not previously disclosed by the FDA. There is nothing especially pernicious about these financial arrangements. But full information disclosure by federal agencies serves an important function: It lets the public evaluate the performance of our regulatory overseers. Sometimes information disclosure can be used more to intimidate and demagogue public and private actors -- and that is a tendency to be feared. But when it comes to government decision making, we ordinarily should prefer more information to less. In the end, disclosing not just potential financial conflicts of interest, but also other conflicts (such as intellectual ones) is a far better approach than excluding experts from fully participating in the regulatory process. And in that regard, The Washington Monthly and BMJ should be congratulated for their work.



Recently it has become common in my consulting practice for one of my clients to say, "I can't believe that so-and-so wasn't a member of that recent FDA advisory committee." So-and-so being a renowned expert in the field. The reason for this person's absence was his or her ties to the pharmaceutical industry coupled with the FDA's emphasis on preventing potential conflicts of interest in advisory committees.

The FDA is supposedly a scientific organization that makes decisions based on empirical data. A drug company can't simply approach the FDA and say, "Theoretically, this should work," and expect FDA approval for a new drug. The FDA wants to see empirical evidence. Unfortunately, the FDA applies this standard to other groups, like drug companies, but not to itself. When it comes to potential conflicts of interest among advisory committee members, the FDA has simply rounded up the usual suspects and declared them guilty without so much as a trial. Why would the FDA need empirical evidence when the problems with conflicts of interest are so obvious?

Well, I do happen to have some empirical evidence in this arena and it comes from Sidney Wolfe, one of the pharmaceutical industry's most vehement critics. David R. Henderson and I wrote an article about it in early 2009.

In a 2006 study to look at potential conflicts of interest, where outside FDA advisors had ties to industry, Wolfe and four other authors published an article in the Journal of the American Medical Association that drew on 76 product-specific meetings of FDA advisory committees that involved yes or no votes on individual drugs.



Industry critics like Marcia Angell have created an entire cottage industry of conferences and books devoted to decrying the "conflicts of interest" that for-profit drug and medical device industries supposedly inject into the otherwise "hallowed" halls of pure academic research. Get the dirty money out, or so the argument goes, and the angels of academia (pun intended) will be returned to rightful control of the academy.

Not so fast. A fascinating article in the Wall Street Journal today airs some the "dirty" laundry of academic medicine: many of the attention grabbing results published in top-flight medical journals, sans industry influence, can't be reproduced independently by "greedy" pharmaceutical companies.

From the Journal:

This is one of medicine's dirty secrets: Most results, including those that appear in top-flight peer-reviewed journals, can't be reproduced. "It's a very serious and disturbing issue because it obviously misleads people" who implicitly trust findings published in a respected peer-reviewed journal, says Bruce Alberts, editor of Science. On Friday, the U.S. journal is devoting a large chunk of its Dec. 2 issue to the problem of scientific replication.

Reproducibility is the foundation of all modern research, the standard by which scientific claims are evaluated. In the U.S. alone, biomedical research is a $100-billion-year enterprise. So when published medical findings can't be validated by others, there are major consequences. Drug manufacturers rely heavily on early-stage academic research and can waste millions of dollars on products if the original results are later shown to be unreliable. Patients may enroll in clinical trials based on conflicting data, and sometimes see no benefits or suffer harmful side effects. There is also a more insidious and pervasive problem: a preference for positive results.

Eliminating financial conflicts of interest from medicine is the new gospel of pure science. Not so fast: Who watches the watchmen? All human beings are fundamentally self-interested, and declaring freedom from an obvious financial conflict can merely mask other, equally problematic (but more subtle and thus dangerous) conflicts.

As anyone who's spent time in grad school knows, academia is a really a jungle red in tooth and claw. In academic medicine the spoils of high profile publications include tenure, lucrative lab assignments and government grants, and the accolades from your peers that come with the New York Times picking up the headline from your latest Lancet or New England Journal of Medicine article.

Ironically, medical journals - often at the forefront of decrying industry bias - are part of the problem, since they too compete fiercely for subscriptions and ad revenues, and seek out "splashy" headlines with big health implications that they then peddle to major media publications. From a scientific standpoint, studies that disprove their hypotheses are at least as valuable as positive ones, but they just don't get published. Or as Atlas' Venture's Bruce Booth told the Journal, "nobody gets a promotion from publishing a negative study."

In fact, there's a good case to be made that market incentives and government regulations enforce a much higher standard of scientific credibility on firms than on individual academics. Companies have to submit all of their studies and data (positive or negative) to the FDA, and must usually complete two successful "blinded" and placebo-controlled studies for FDA approval.

Academic researchers, on the other hand "rarely conduct experiments in a 'blinded manner' [which] makes it easier to cherry-pick statistical findings that support a positive result." Bayer has reported that it has "halted nearly two-thirds of its early drug target projects because in-house experiments failed to match claims in the literature," including those from the "most prestigious journals."

Bayer's approach is unsurprising: companies have powerful incentives to weed out bad science quickly, since the pivotal clinical trials for FDA approval (called Phase III trials) can cost hundreds of millions of dollars and take years to complete. So you'd much rather kill a bad idea quickly, and cheaply, than let it get too far along in development (although, sadly, this happens all too often in the industry anyway just by virtue of the underlying scientific uncertainty).

So where does this leave us? Companies might be biased, academic scientists might be biased, and the system is rife with incentives to promote you career or your product at the expense of good science.

Should we just close up the whole enterprise? Go back to bloodletting and herbal tea?

Not at all. We don't need men to become angels to produce good science or good government. Demanding disclosure of appropriate potential conflicts, seeking peer review from a wide-range of experts with varying opinions, and keeping a healthy skepticism about the latest scientific fads (even if they're published in leading journals) are all good checks on the spread of bad data.

And despite all hand wringing about conflicts of interest, the system has worked well for decades - producing incredible new treatments for AIDS, heart disease, and cancer. We cannot eliminate conflicts - and shouldn't even try to - but they can be managed appropriately. Indeed, self-interest, harnessed through market competition, can be an immensely powerful tool for good:

The principle of self-interest rightly understood is not a lofty one, but it is clear and sure. It does not aim at mighty objects, but it attains without excessive exertion all those at which it aims. As it lies within the reach of all capacities, everyone can without difficulty learn and retain it. By its admirable conformity to human weaknesses it easily obtains great dominion; nor is that dominion precarious, since the principle checks one personal interest by another, and uses, to direct the passions, the very same instrument that excites them.

The principle of self-interest rightly understood produces no great acts of self-sacrifice, but it suggests daily small acts of self-denial. By itself it cannot suffice to make a man virtuous; but it disciplines a number of persons in habits of regularity, temperance, moderation, foresight, self- command; and if it does not lead men straight to virtue by the will, it gradually draws them in that direction by their habits. If the principle of interest rightly understood were to sway the whole moral world, extraordinary virtues would doubtless be more rare; but I think that gross depravity would then also be less common. The principle of interest rightly understood perhaps prevents men from rising far above the level of mankind, but a great number of other men, who were falling far below it, are caught and restrained by it. Observe some few individuals, they are lowered by it; survey mankind, they are raised.



Lilly is facing a $13 billion dollar patent cliff in the next three years - but CEO John Lechleither explains to Xconomy that increasing R&D spending, rather than chasing mergers, will better help the company weather the storm in the long run.

U.S. Senator Claire McCaskill (D, MO) is calling for the Department of Health and Human Services to investigate the Obama's Administration's award of a $433 million dollar sole source contract to a company owned by billionaire Ronald Perelman, who also happens to be a "major democratic donor." The company, Siga Technologies, is set to make an antiviral drug for smallpox that cannot be tested or approved for use in humans, according to the FDA. For more on this, see my earlier commentary here and the L.A. Times, here.

Robert Samuelson looks at recent OECD data comparing health care costs and outcomes in the U.S. to other wealthy nations, and says the data paints a "devastating picture" of U.S. health care. For another view of the OECD data, at least on life-expectancy, see Avik Roy's excellent post here.

The A.P. reports a sobering picture of more parents "opting out" of having their children vaccinated for school. Health officials fear that the trend could lead to a resurgence of diseases that haven't been seen in the U.S. in decades, like polio.



Earlier this week, U.S. Senator Al Franken (D, MN) and Senator Lamar Alexander (R, TN) released draft legislation that would, among other things, relax the FDA's conflicts of interest standards to better ensure that the agency can get timely access to the expert advice it needs to approve new medicines and medical devices.

From the press release:

"After speaking with countless patients, doctors, and members of the medical device industry in Minnesota, I've learned that certain barriers in the regulatory process are making it harder to get patients the medical devices they need," said Sen. Franken. "My legislation would remove unnecessary barriers so that these critical medical devices get to the patients that need them as quickly and safely as possible."

Bipartisan FDA reform efforts seem to be breaking out all over Congress.

Check your local zoo. The lions may be lying down with the lambs.



An enormous, no-bid government contract went to Siga, a small biotech company, one of whom's biggest shareholders just happens to be leading Democratic billionaire and donor, Ronald Perelman.

Courtesy of the L.A. Times:

Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world's richest men and a longtime Democratic Party donor.

When Siga complained that contracting specialists at the Department of Health and Human Services were resisting the company's financial demands, senior officials replaced the government's lead negotiator for the deal, interviews and documents show.

When Siga was in danger of losing its grip on the contract a year ago, the officials blocked other firms from competing.

Siga was awarded the final contract in May through a "sole-source" procurement in which it was the only company asked to submit a proposal. The contract calls for Siga to deliver 1.7 million doses of the drug for the nation's biodefense stockpile. The price of approximately $255 per dose is well above what the government's specialists had earlier said was reasonable, according to internal documents and interviews.

More on this from Ed Silverman, at Pharmalot, and Michelle Malkin, at NRO.


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