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US Health Care System

Defense of corporate interests

Project: US Health Care System
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Betsy McCaughey.Betsy McCaughey. [Source: Newsday / Gawker (.com)]Elizabeth “Betsy” McCaughey (R-NY), a lawyer and future lieutenant governor of New York, writes a scathing analysis of the Clinton administration’s health care reform plan. The article, “No Exit,” is published in the New Republic, and sparks not only a detailed rebuttal from the Clinton administration, but numerous editorials and responses praising the article and joining in the attack. Echoing McCaughey’s arguments, Newsweek writes, “The plan would reduce the quantity and quality of health care and medical technologies by vastly expanding government’s coercive role.” McCaughey and Newsweek question the proposed creation of a seven-member “National Health Board” which will, she claims, “guess the nation’s health care needs and decree how much the nation may spend meeting them.” According to Newsweek: “Everyone would be locked into one system of low-budget health plans picked by the government. Fifteen presidential appointees, the National Quality Management Council, not you and your doctor, would define the ‘medically necessary’ and ‘appropriate’ care a doctor could give you. Escaping government control to choose your doctor or buy other care would be virtually impossible. Doctors could be paid only by the government-approved plans, at rates set by the government. It would be illegal for doctors to accept money directly from patients, and there would be 15-year jail terms for people driven to bribery for care they feel they need but the government does not deem ‘necessary.’ Government would define a minimum level of care and herd people in particular regions into dependence on the lowest-cost organization able to deliver that level. Doctors would be driven into organizations in which they would be punished financially for giving more treatment than the organizations’ budget targets permit. The primary care physician assigned to you would be, McCaughey notes, a gatekeeper with an incentive to limit your access to specialists and high-tech medicine. The premise of the Clintons’ plan is not just that government knows best, but that government knows everything relevant, including how many specialists there should be no more than 45 percent of all doctors [sic]. McCaughey says many medical students will be told that the specialties they prefer are closed, or closed to them because they are not the right race or ethnicity. Yes, the plan subordinates medical values to ‘diversity.’” Prescription drug prices would be controlled through the Department of Health and Human Services, and, McCaughey and Newsweek claim, would “certainly suppress research” that might benefit patients of incurable diseases and disorders. [Newsweek, 2/7/1994]
Refuting McCaughey - The Clinton administration details the “numerous factual inaccuracies and misleading statements” contained in McCaughey’s article. The administration’s response says that doctors and patients, not “government bureaucrats” or a board of governors, will decide what treatments are “necessary and appropriate.” The government will not decide what treatments are, and are not, provided: “If anything, the ‘necessary and appropriate’ care provision in the bill delegates authority to the medical profession—rather than imposing further government bureaucracy between the patient and the doctor.” The plan will not block Americans from opting into private health care plans just as they do now, nor will it block doctors and hospitals from accepting payments from “non-approved” health care plans. Nor does the plan require doctors and hospitals “to report your visit to a national data bank containing the medical histories of all Americans,” as McCaughey writes. And the so-called “National Health Board” will not “decide how much the nation can spend on health care beginning in 1996,” as McCaughey claims. The plan will not seek to reduce quality of care in the interest of saving money, and it does not contain price controls. [White House, 1/31/1994] A year later, author and columnist James Fallows will call the article “a triumph of misinformation,” and refutes McCaughey’s (and others’) claims point by point. [Atlantic Monthly, 1/1995]
Instrumental in Derailing Reform - The article will later be cited by House Speaker Newt Gingrich (R-GA) as “the first decisive breaking point” in the plan’s initial support; the plan will never be implemented. The article itself will spark tremendous controversy, winning the National Magazine Award while being attacked for being fundamentally inaccurate. (In 2006, the new editor of the New Republic, Franklin Foer, will apologize for his magazine having run the article.) In 2009 McCaughey will be a fellow at the conservative Manhattan Institute and will soon join the equally conservative Hudson Institute. Both are heavily funded by health care corporations. [Daily Beast, 5/15/2009]

Entity Tags: Newt Gingrich, Franklin Foer, Elizabeth (“Betsy”) McCaughey, Clinton administration, James Fallows, US Department of Health and Human Services, Hudson Institute, Manhattan Institute

Timeline Tags: Domestic Propaganda

Category Tags: Defense of corporate interests, Clinton Health Care Reform

Thomas A. Scully, administrator of the Centers for Medicare & Medicaid Services (CMS), tells Congress that he believes only a third of the estimated $12 billion in improper payments to health care providers is fraudulent. He says “the rest is probably billing mistakes.” Scully, a former lobbyist for the health industry, admits the inspector general would probably disagree with his estimate. [US Congress, 7/26/2001, pp. 27 pdf file]

Entity Tags: Thomas A. Scully

Category Tags: Defense of corporate interests, Medicare, Medicaid

The US Department of Health and Human Services implements a new policy requiring that all enforcement letters to drug companies potentially engaged in false advertising be pre-screened by FDA Chief Counsel Daniel E. Troy. Prior to the policy change, the FDA’s drug-marketing division and district offices were free to determine when an enforcement letter was warranted. After the policy change, the number of enforcement letters sent annually drops by two-thirds. [Boston Globe, 10/19/2002; Boston Globe, 12/22/2002; Denver Post, 5/23/2004] In October 2002, the General Accounting Office (GAO) finds that the FDA is taking so long to review the letters that “misleading advertisements may have completed their broadcast life cycle before FDA issued the letters.” [Boston Globe, 12/22/2002] Fifteen months later, another report by the GAO finds that the review process is still slow, with the average approval time being six months. [Boston Globe, 1/30/2004]

Entity Tags: Daniel E. Troy, US Department of Health and Human Services

Category Tags: Defense of corporate interests

The Boston Globe reports that the FDA is considering the validity of the pharmaceutical industry’s argument that the agency’s regulation of drug advertisements violates manufacturers’ “free speech” rights. The inquiry is being led by FDA Chief Counsel Daniel E. Troy, who represented drug companies before being appointed to the FDA position in August 2001 (see August 2001). [Boston Globe, 10/19/2002]

Entity Tags: Daniel E. Troy

Category Tags: Defense of corporate interests

The Office of Policy at the US Department of Health and Human Services (DHHS) releases a report concluding that the US government should not impose price caps on prescription drugs. According to the report, doing so “could put the future of medical innovation at risk and may retard advances in treatment.” [US Department of Health and Human Services, 7/2002, pp. 2 pdf file] The deputy assistant secretary of the division, Ann-Marie Lynch, had used the same argument when she was a drug industry lobbyist (see June 2001) fighting against congressional efforts to cap drug prices. [Denver Post, 5/23/2004] Critics of the report say its conclusions are contradicted by the experiences of other countries that have remained innovative despite price controls. DHHS officials “haven’t taken as seriously their job of making medicines affordable to all Americans,” says Gail Shearer, director of health policy analysis for Consumers Union. According to critics, the report plays a role in the passing of Bush’s Medicare drug plan that prohibits the government from using its buying power to negotiate lower prices from the drug companies.

Entity Tags: Ann-Marie Lynch, US Department of Health and Human Services

Category Tags: Defense of corporate interests, Medicare

Pfizer attorney Malcolm Wheeler calls FDA chief counsel Daniel E. Troy requesting that the agency intervene in a lawsuit filed against the company. The lawsuit alleges that Zoloft, an antidepressant drug manufactured by Pfizer, caused Victor Motus of California to kill himself on November 12, 1998. It also says that the drug company should have warned physicians that Zoloft might cause suicidal thoughts in some people. On September 3, the FDA files a brief stating that the agency’s scientists have found no evidence that antidepressants cause suicidal thoughts. Furthermore, the FDA argues, if Pfizer had warned doctors of such a link, it would have been a violation of the law because all warnings must first be vetted by the FDA. According to Troy, the agency has “absolute control over the label.” This position, notes one of the plaintiff attorneys in the Pfizer case, contradicts arguments that Troy made when he was practicing in the private sector. Before he had argued that the agency’s rulings were arbitrary and capricious. [Boston Globe, 12/22/2002]

Entity Tags: Daniel E. Troy, Pfizer, Malcolm Wheeler

Category Tags: Defense of corporate interests

The FDA begins blocking consumer lawsuits against drug manufacturers and asking attorneys working for drug companies to notify the agency of such lawsuits so it can intervene on their behalf. The agency’s chief counsel, Daniel E. Troy, asserts that consumers cannot sue drug companies over drugs that the agency has approved because FDA decisions on the safety of drugs are absolute and cannot be challenged by any state court. According to the FDA, allowing such lawsuits to proceed would “undermine public health” and disrupt the FDA’s regulation of drugs by encouraging “lay judges and juries to second-guess” FDA experts. Furthermore, the Bush administration argues, lawsuits “can harm the public health” because they may cause companies to remove products from the market or to overstate the risks, possibly resulting in the “underutilization of beneficial treatments.” The policy of prohibiting consumers from suing drug companies, according to the FDA, is meant to protect consumers. This policy differs sharply with the agency’s past practice, which allowed states to adopt stricter standards. But the FDA’s new claim that it has absolute jurisdiction over the question of drug safety preempts state involvement in the regulation over drugs. [New York Times, 7/25/2004] The Boston Globe notes that this policy allows the White House to “use its administrative and legal powers to change the regulatory terrain without taking the often arduous course of asking Congress to change the law.” [Boston Globe, 12/22/2002; New York Times, 7/25/2004]

Category Tags: Defense of corporate interests

FDA chief counsel Daniel E. Troy intervenes in a lawsuit against Glaxo SmithKline, the manufacturer of the drug Paxil. The FDA says it disagrees with the judge’s temporary order that the phrase “not habit-forming” be removed from the company’s advertisements promoting Paxil. The plaintiffs in the case alleged that the phrase is misleading because they experienced withdrawal symptoms after they stopped taking the drug. The judge agreed saying, “It is difficult to imagine that the FDA would object to the removal of the reference that ‘Paxil is not habit-forming.’” But Troy does object. The FDA, taking the side of Glaxo SmithKline, says the product is not habit-forming and contend that the symptoms experienced by patients were not withdrawal symptoms, but rather symptoms of “discontinuation syndrome.” According to Troy, the FDA has absolute authority on the content of drug labels. Following the FDA’s intervention, the judge lifts her temporary order. [Boston Globe, 12/22/2002]

Entity Tags: Daniel E. Troy, Glaxo SmithKline

Category Tags: Defense of corporate interests

FDA scientist David Graham has analyzed data on 1.4 million Kaiser Permanente patients who took Vioxx, Celebrex, or another non-steroidal anti-inflammatory drug (NSDAID) between 1999 and 2003. Based on his findings, Graham believes there have been more than 27,000 heart attacks and sudden cardiac deaths in the US that would not have occurred had those patients been prescribed Celebrex instead of Vioxx. [Washington Post, 10/8/2004] When the FDA reviews a summary of his study, which Graham will present in France on August 25 (see August 25, 2004), his conclusion triggers “an explosive response from the Office of New Drugs.” Graham later tells Congress, “I was pressured to change my conclusions and recommendations, and basically threatened that if I did not change them, I would not be permitted to present the paper at the conference. One Drug Safety manager recommended that I should be barred from presenting the poster at the meeting.” [US Congress, 11/18/2004 pdf file] In an August 12 e-mail, John Jenkins, director of the Office of New Drugs, suggests “watering down” the report’s conclusions because the FDA is “not contemplating” a warning against high-doses of Vioxx. In response, Graham says, “I’ve gone about as far as I can without compromising my deeply-held conclusions about this safety question.” In another e-mail, a different top official expresses concern about how the report might impact Merck. The person writes that the company should be warned beforehand “so they can be prepared for [the] extensive media attention that this will likely provoke.” [Wall Street Journal, 10/8/2004; Washington Post, 10/8/2004]

Entity Tags: John Jenkins, David Graham

Category Tags: Defense of corporate interests, Suppression of data, Vioxx

David Graham, associate science director for the FDA’s Office of Drug Safety, appears before the Senate Committee on Finance to testify on the agency’s ability to protect the American public from harmful drugs. Graham, a twenty-year veteran of the agency, tells the committee that “the FDA, as currently configured, is incapable of protecting America against another Vioxx. We are virtually defenseless.” Graham was an early critic of Vioxx, a painkiller that was recalled in September (see September 30, 2004) because of its link to heart problems. Graham recounts how in August (see Mid-August 2004), the FDA tried to suppress a study he led which found that “nearly 28,000 excess cases of heart attack or sudden cardiac death were caused by Vioxx.” He says the study’s findings were “extremely conservative” and that “a more realistic and likely… estimate ranges from 88,000 to 139,000 Americans” of which “30-40 percent [or 26,400-55,600] probably died.” He notes that this figure is the “rough equivalent of 500 to 900 aircraft dropping from the sky… [or] 2-4 aircraft every week, week in and week out, for the past 5 years.” [US Congress, 11/18/2004 pdf file] The remainder of Graham’s testimony focuses on problems within the FDA’s Office of Drug Safety (ODS). He makes the following points:
bullet The Office of New Drugs (ONS), which approves all new drugs, is the same division that is responsible for taking regulatory action against those drugs after they have been released on the market. This is an inherent conflict of interest, he notes, because when a problem arises, recognizing it would require the ONS to acknowledge that it had made a mistake. Instead, the office’s “immediate reaction [to a problem] is almost always one of denial, rejection, and heat.” [US Congress, 11/18/2004 pdf file]
bullet The Office of Drug Safety (ODS) is subordinate to the Office of New Drugs, and consequently the management of the former sees its mission as pleasing the latter. [US Congress, 11/18/2004 pdf file]
bullet The culture of the FDA’s Center for Drug Evaluation and Research (CDER) “views the pharmaceutical industry it is supposed to regulate as its client, over-values the benefits of the drugs it approves and seriously under-values, disregards, and disrespects drug safety.” [US Congress, 11/18/2004 pdf file]
bullet The Office of New Drugs refuses to take regulatory action on any drug unless it can be shown with 95 percent or greater certainty that it is unsafe. However “to demonstrate a safety problem with 95 percent certainty, extremely large studies are often needed… [and] those large studies cannot be done.” Graham suggests the 95 percent rule makes as much sense as a person with a 100-chamber pistol loaded with 90 bullets saying that the gun is safe. “Because there is only a 90 percent chance that a bullet will fire when I pull the trigger, CDER would conclude that the gun is not loaded and that the drug is safe.” [US Congress, 11/18/2004 pdf file]

Entity Tags: David Graham

Category Tags: Defense of corporate interests, Defense of corporate interests, Vioxx

Dr. Susan Molchan testifies before Congress.Dr. Susan Molchan testifies before Congress. [Source: CBS News]Dr. Susan Molchan, a former clinical researcher for the National Institutes of Health (NIH), testifies before Congress that her supervisor at NIH made a secret deal with the pharmaceutical company Pfizer that involved human tissue samples supposedly collected for the public good, but were instead used for Pfizer’s own research and garnered the company millions in profit. [CBS News, 6/14/2006] Molchan testifies before the House Energy and Commerce Subcommittee on Oversight and Investigations [The Scientist, 6/14/2006] that a collection of unused spinal fluid samples, which CBS News describes as a "a treasure trove of biological material, many painfully given up by Alzheimer’s patients" disappeared without a trace from her laboratory freezer at NIH. The samples were slated to be used for NIH studies on Alzheimer’s disease. Molchan says she was told that some of the samples were lost due to freezer malfunctions, but, "nothing solid, nothing that made sense. I never got a handle on what happened to them." [CBS News, 6/14/2006] Procuring the tissue samples alone cost the government $6.4 million, say committee staffers, who spent a year investigating the matter. "It would really be a shame if we find out that the National Institutes of Health has more control over its paper clips and trash cans than it has over its human tissue samples," says committee member Joe Barton (R-TX). [The Scientist, 6/14/2006] Molchan’s testimony, and other data gathered by Congressional investigators, prove that Molchan’s immediate supervisor, Dr. Trey Sunderland, a well-known psychiatric researcher, cut a secret deal with Pfizer at the same time Pfizer was launching and refining a new Alzheimer’s drug. "If individual scientists are making use of that tissue for their own personal gain, that’s something we need to know about it. It’s not the right thing," says House Energy subcommittee chairman Ed Whitfield (R-KY). Sunderland provided Pfizer "access" to 3,200 tubes of spinal fluid, costing the NIH and, as a result, taxpayers, an estimated $6 million. In exchange, Sunderland reportedly received $285,000 in personal compensation. Pfizer’s drug Aricept is now the top-selling drug in the world for treating Alzheimer’s, generating $1.6 billion in sales in 2004. "The more tissue samples you can collect these days and extract genetic information about risk and benefit, that’s the future of drug development around the world," says Dr. Art Caplan, a bio-ethicist at the University of Pennsylvania. The House committee finds that Pfizer itself broke no NIH rules or knew of any wrongdoing by Sunderland, who does not testify before Congress, instead invoking his Fifth Amendment right against self-incrimination. [CBS News, 6/14/2006] Sunderland himself received more than $600,000 in outside consulting and speaking fees from Pfizer from 1998 to 2004 without prior government disclosure or approval. A review by NIH’s Office of Management Assessment found that Sunderland "engaged in serious misconduct, in violation of HHS ethics rules and Federal law and regulation," the report stated. In December 2006, Sunderland will accept a plea bargain in regards to his accepting payments from Pfizer (see December 11, 2006). [The Scientist, 6/14/2006]

Entity Tags: Susan Molcher, Pfizer, Joe Barton, Pearson (“Trey”) Sunderland III, Art Capland, Ed Whitfield, United States National Institutes of Health

Category Tags: Fraud, Marketing, Defense of corporate interests

The Congressional Committee on Government Reform ends a 15-month investigation aimed at assessing how the FDA is fulfilling its regulatory responsibilities. The committee’s report, based on thousands of pages of internal agency enforcement records, concludes that enforcement activity has dropped dramatically under the Bush administration. According to the review, the annual number of FDA warning letters fell 54 percent between 2000 and 2005, from 1,154 to 535, a 15-year low. Additionally, the number of seizures of mislabeled, defective, and dangerous products dropped by 44 percent. According to the investigation, there were at least 138 cases where the FDA ignored recommendations from agency field inspectors to take enforcement actions. [US Congress, 6/26/2006 pdf file; New York Times, 6/27/2006] In letters written to the committee, experts voiced concern that the FDA is becoming less vigilant in its oversight duties. Dr. Jerry Avorn of the Harvard Medical School, wrote that there is “a growing laxity in FDA’s surveillance and enforcement procedures,” a “dangerous decline in regulatory vigilance,” and an “obvious unwillingness to move forward even on claims from its own field offices.” Avorn describes the FDA as “an agency unwilling to exert its regulatory authority in defense of the public’s health.” [Avorn, 6/26/2006 pdf file] Dr. Michael Wilkes of the University of California, Davis, School of Medicine, says the FDA has “systematically ignored District Field Officers and regularly overridden their explicit and well documented concerns about drug safety and public health.” It “seems unable and unwilling to step in to protect the American public,” he adds. [Wilkes, 6/10/2006 pdf file] Another problem identified during the committee’s review of the documents concerns the agency’s record keeping. In response to questions from the committee, officials said the FDA lacks a centralized case tracking system and does not maintain a record of the enforcement recommendations made by its district offices. As a result, the investigation had to rely on the personal recollection of field office employees. [US Congress, 6/26/2006 pdf file]

Entity Tags: Michael Wilkes, Jerry Avorn, House Committee on Government Reform, US Food and Drug Administration

Category Tags: Defense of corporate interests

A survey taken by 997 FDA scientists suggests a pervasive problem of low morale among agency employees, due in large part to political interference by appointees. Sixty-two percent of those who participated in the poll were senior scientists and almost a third had worked for the FDA for more than 15 years. The survey was conducted by the Union of Concerned Scientists and Public Employees for Environmental Responsibility (PEER).
bullet Seventeen percent said “FDA decision makers” had asked them on at least one occasion to modify conclusions in an FDA document for nonscientific reasons.
bullet More than 40 percent knew of situations where political appointees had interfered with FDA determinations or actions.
bullet Forty-seven percent knew of instances where “commercial interests” improperly engaged in efforts to modify FDA conclusions.
bullet Only 51 percent said they believe the FDA is effectively safeguarding public health.
bullet Forty percent said there were times they chose not to publicly express concerns for fear of retaliation.
bullet Almost 70 percent said the agency lacks the needed resources to fulfill its regulatory duties.
bullet Forty percent said morale is poor or extremely poor.
bullet Only 32 percent said they feel the FDA is moving in the right direction. [Union of Concerned Scientists, 7/20/2006 pdf file; New Jersey Star-Ledger, 7/21/2006]

Entity Tags: Public Employees for Environmental Responsibility, Union of Concerned Scientists, US Food and Drug Administration

Category Tags: Defense of corporate interests

Democrats, who will have control of both houses when Congress reconvenes next year, say they intend to push for legislation that will lower drug prices and tighten regulation of the pharmaceutical industry. They want to encourage the development of more generic drugs, allow imported drugs from Canada, investigate drug pricing and advertising, repeal legislation that limits vaccine manufacturers’ liability, and give the government the authority to negotiate lower drug prices for people on Medicare. [New York Times, 11/24/2006; Associated Press, 11/24/2006] In response, the drug industry begins hiring lobbyists with Democratic connections, with the hope of preventing the passage of these initiatives (see After November 7, 2006).

Category Tags: Defense of corporate interests, Medicare

Dr. Pearson “Trey” Sunderland.Dr. Pearson “Trey” Sunderland. [Source: CreativityFound (.org)]Dr. Pearson “Trey” Sunderland III, a National Institute of Health (NIH) senior researcher on Alzheimer’s disease, pleads guilty to a federal charge that he committed a criminal conflict of interest. The charges stem from Sunderland’s contract with the pharmaceutical firm Pfizer as a paid consultant for work that overlapped his duties as a public servant. Sunderland is the first official in 14 years to be prosecuted for conflict of interest at NIH, an agency rocked in recent years by revelations of widespread financial ties to the drug industry. According to the original court filing, in early 1998, “Sunderland initiated negotiations with Pfizer, the pharmaceutical giant, to be paid as a consultant for his work on the same project” that he headed for NIH, a research project into Alzheimer’s disease. In June 2006, Sunderland was revealed to have engaged in a secret contract with Pfizer to supply thousands of samples of spinal fluid collected from Alzheimer’s patients at taxpayer expense and slated to be used in NIH research. Sunderland turned those samples over to Pfizer, which in turn used them to refine and market its drug Aricept, a leading prescription drug for treating the disease (see June 14, 2006). According to the original charging document filed with the court, in 1998 Sunderland approached Pfizer with a proposal that he be paid $25,000 a year for “consulting” with the firm, plus $2,500 every time he attended a one-day meeting with company representatives. Pfizer agreed. Later that same year, Sunderland set up another deal with Pfizer to be paid another $25,000 a year, according to prosecutors. The House Energy and Commerce Committee received little cooperation from NIH—Sunderland himself invoked his Fifth Amendment right against self-incrimination when called to testify before the committee in June 2006—but subpoeaned 21 drug manufacturers known to have paid NIH researchers. Sunderland’s history of payments from Pfizer, which he did not reveal to the NIH as required by law, were some of those discovered. After that information was revealed in 2004, NIH director Elias Zerhouni requested that the inspector general of the Department of Health and Human Services investigate the matter. Government researchers found that 44 researchers, including Sunderland, had off-the-books relationships with drug and biotech companies; many of those researchers were reprimanded and/or took early retirement. At the time of Sunderland’s contracts with Pfizer, NIH restrictions against public-private collaborations were far more lax than they are today. [Associated Press, 12/4/2006; Associated Press, 12/5/2006; Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006]
'Public Trust Has Been Violated' - Congressman John Dingell (D-MI) asks, “Will a criminal conviction for conflict of interest be enough to get someone fired from NIH?” Bart Stupak (D-MI) adds, “If the National Institutes of Health and Commissioned Corps fail to discipline Dr. Sunderland, even after criminal charges have been brought, we can only conclude that no one is being held accountable, the system is broken, and the public trust has been violated.” [Associated Press, 12/5/2006; Los Angeles Times, 12/5/2006] Committee member Tammy Baldwin (D-WI) says: “I found this story incredibly distressing because it is so important that people have confidence in the NIH. It is a pretty big move for people to donate human tissue to further scientific discovery. People have to have confidence that that decision… is treated with the utmost respect.” [Washington Post, 12/5/2006]
Guilty Plea Avoids Jail Time - Sunderland pleads guilty to the charge under a plea agreement in which he admits to taking some $285,000 in “unauthorized” consulting fees from Pfizer as well as $15,000 in travel expense payments between 1998 and 2003. During the same period, he provided Pfizer with spinal-tap samples collected from hundreds of patients as part of a research collaboration approved by the NIH. He agrees to pay the government $300,000, perform 400 hours of community service, and serve two years’ probation. Sunderland faced up to a year in prison and a $100,000 fine, but avoided those penalties through his plea agreement. After the hearing, US Attorney Rod Rosenstein tells reporters that Sunderland’s actions constitute a breach of the public trust. [Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006] According to NIH spokesman Don Ralbovsky, Sunderland remains an employee, working as a “special assistant and senior adviser” in a division that gives out grants; Rabolvsky refuses to comment on whether Sunderland faces termination procedures. The branch of NIH that Sunderland once headed, the Geriatric Psychiatry Branch, no longer exists, according to Ralbovsky. [Washington Post, 12/5/2006] One media report says Sunderland is planning to retire. [Associated Press, 12/4/2006] Sunderland will later become a doctor and director of the Alzheimer Research Center at the Albert Einstein College of Medicine in New York. [Lundbeck Institute, 12/11/2008]
Pfizer Denies Wrongdoing - For its part, Pfizer maintains that it broke no laws and breached no ethics, saying in a statement: “We believe our actions complied with applicable laws and ethical standards. We are not aware of any allegation that we violated any law or regulation.” [Los Angeles Times, 12/5/2006; Washington Post, 12/5/2006; Los Angeles Times, 12/11/2006]

Entity Tags: Pfizer, Pearson (“Trey”) Sunderland III, Rod Rosenstein, John Dingell, Bart Stupak, Don Ralbovsky, Elias Zerhouni, United States National Institutes of Health, Tammy Baldwin

Category Tags: Fraud, Marketing, Defense of corporate interests

Sharon Eubanks.Sharon Eubanks. [Source: Washington Post]Justice Department prosecutors appointed by the Bush administration interfered in the landmark lawsuit against tobacco companies, says the leader of the prosecution team, Sharon Eubanks. Eubanks says that Bush loyalists in Attorney General Alberto Gonzales’s office began micromanaging the team’s strategy in the final weeks of the 2005 trial, to the detriment of the government’s claim that the industry had conspired to lie to US smokers. Eubanks says that a supervisor demanded that she and her trial team drop recommendations that tobacco executives be removed from their corporate positions as a possible penalty. He and two others instructed her to tell key witnesses to change their testimony and ordered her to read verbatim a closing argument they had rewritten for her. “The political people were pushing the buttons and ordering us to say what we said,” Eubanks says. “And because of that, we failed to zealously represent the interests of the American public.” Eubanks, a 22-year veteran at the Justice Department, says three political appointees were responsible for the last-minute shifts in the government’s tobacco case in June 2005: then-Associate Attorney General Robert McCallum, then-Assistant Attorney General Peter Keisler, and Keisler’s deputy at the time, Dan Meron. The sudden strategy change sparked an uproar in Congress, and led to an inquiry by the Justice Department. Government witnesses said they had been asked to change testimony, and one expert withdrew from the case. Government lawyers also announced that they were rolling back a proposed penalty against the industry from $130 billion to $10 billion. Justice Department officials say that there was no political meddling in the case, an assertion supported by the department’s Office of Professional Responsibility. Eubanks, who left the department in December 2005, has not spoken publicly about the case until now. She says she is now coming forward because she is concerned about what she calls the “overwhelming politicization” of the department demonstrated by the controversy over the firing of eight US attorneys. Lawyers from Justice’s civil rights division have made similar claims about being overruled by supervisors in the past. Eubanks says Congress should investigate the matter along with the US attorney firings. “Political interference is happening at Justice across the department,” she says. “When decisions are made now in the Bush attorney general’s office, politics is the primary consideration.… The rule of law goes out the window.” US District Judge Gladys Kessler ruled in August 2006 that tobacco companies violated civil racketeering laws by conspiring for decades to deceive the public about the dangers of their product. She ordered the companies to make major changes in the way cigarettes are marketed. But she said she could not order the monetary penalty proposed by the government. Matthew Myers of the Campaign for Tobacco-Free Kids was one of the witnesses whom Eubanks asked to change his testimony. Yesterday, he said he found her account to be “the only reasonable explanation” for what transpired. Eubanks says that she was particularly distressed when McCallum, Keisler, and Meron ordered her to read word for word a closing argument they had rewritten. The statement explained the validity of seeking a $10 billion penalty. “I couldn’t even look at the judge,” she says. [Washington Post, 3/22/2007]

Entity Tags: US Department of Justice, Sharon Eubanks, Robert McCallum, Office of Professional Responsibility, Matthew Myers, Peter Keisler, Alberto R. Gonzales, Gladys Kessler, Dan Meron

Category Tags: Defense of corporate interests

In a 93-1 vote, the US Senate passes the Food and Drug Administration Improvement Act of 2007 (H.R.2273), which grants the FDA broad new authority to monitor the safety of drugs after they are approved. It was based in part on the recommendations of a 2001 report by the Institute of Medicine (see September 22, 2001). The institute had been asked by the FDA to examine drug safety after it was revealed that the FDA and drugmaker Merck had permitted the drug Vioxx to stay on the market despite numerous indications that it increased patients’ risk of a heart attack. But the bill that is passed is much weaker than the original version, and ignores some of the institute’s most critical recommendations. A USA Today investigation will find that industry-friendly changes made to the bill were instigated by senators “who raised millions of dollars in campaign donations from pharmaceutical interests.” For example, 49 senators successfully defeated an effort that would have allowed US consumers to import lower-cost drugs from Canada and other industrialized countries. The senators who opposed the provision “received about $5 million from industry executives and political action committees since 2001—nearly three quarters of the industry donations to current members of the Senate,” USA Today found. Another factor contributing to the amendment’s failure was that President Bush said he would veto the bill if it permitted the imports. Also excised from the bill was language that would have give the FDA the authority to ban advertising of high-risk drugs for two years. This was one of the Institute of Medicine’s key recommendations. Senator Pat Roberts (R-Kan) argued that the change would restrict free speech. Drug interests have given Roberts $18,000 so far this year, and $66,000 since 2001. Sen. Judd Gregg (R-NH) was responsible for a change that reduced the agency’s power to require post-market safety studies. He insisted on limiting this authority so that the FDA could only target drugs when there’s evidence of harm. Gregg has received $168,500 from drug industry interests since 2001. The bill’s main sponsors—senators Edward Kennedy, (D-Mass) and Mike Enzi (R-Wyo)—agreed to water down a proposal that would have required all clinical drug studies be made public after meeting with industry officials. The senators agreed to change the language so that only studies submitted to the FDA would be available. Enzi and Kennedy have received $174,000 and $78,000, respectively, from drug interests since 2001. Amendments aimed at reducing industry conflicts of interest on FDA expert advisory panels were also stripped from the bill. One of those amendments would have made it more difficult for scientists to advise the FDA on drug approval applications from a company the scientist had received money from. Another would have required that FDA panels consist of no more than one member with financial ties to the drug industry. The Senate also rejected an amendment to establish an independent FDA office to monitor the safety of drugs after they are released on the market. The office that currently has this authority is the same one that approves new drugs, an arrangement that lawmakers and at least one FDA scientist (see November 18, 2004) believe is a conflict of interest. [WebMD Medical News, 5/9/2007; US Congress, 5/10/2007; USA Today, 5/14/2007]

Entity Tags: George W. Bush, Edward M. (“Ted”) Kennedy, Judd Gregg, Mike Enzi, US Food and Drug Administration, Pat Roberts

Category Tags: Clinical drug studies, FDA advisory panels, Defense of corporate interests, Vioxx

Larry Niven.Larry Niven. [Source: Larry Niven]A group of science fiction writers calling themselves SIGMA is engaged in advising the Department of Homeland Security (DHS) on how to protect the nation. Undersecretary of Science and Technology Jay Cohen says he likes their unconventional thinking. Two of the approximately 24 members are right-wing libertarian authors Jerry Pournelle and Larry Niven, who have collaborated on a number of books as well as writing numerous novels and short stories on their own. One of Niven’s more controversial ideas is to help hospitals stem financial losses by spreading rumors in Spanish within the Latino community that emergency rooms are killing patients in order to harvest their organs for transplants. Niven believes the rumors would discourage Latinos from using the nation’s emergency rooms and thus ease the burden on hospitals. “The problem [of hospitals going broke] is hugely exaggerated by illegal aliens who aren’t going to pay for anything anyway,” Niven says. Pournelle asks, somewhat jokingly, “Do you know how politically incorrect you are?” Niven replies, “I know it may not be possible to use this solution, but it does work.” [National Defense Magazine, 2/28/2008] One blogger, apparently angered by Niven’s proposal, later writes that Niven’s idea comes from his “magical, mystical fictional universe where hospitals don’t have to treat rednecks who OD on meth, insurance companies aren’t inflating the cost of hospital care, under-regulated drug companies aren’t making massive profits, and uninsured children of hardworking parents don’t fall off skateboards.” [Mark Frauenfelder, 3/28/2008]

Entity Tags: US Department of Homeland Security, Jay Cohen, Jerry Pournelle, Larry Niven, SIGMA

Timeline Tags: Domestic Propaganda

Category Tags: Defense of corporate interests, US Health Insurers, US Health Care Problems

Betsy McCaughey (R-NY), the former lieutenant governor of New York and a fellow at the conservative Hudson Institute, writes that health care provisions in the Obama administration’s economic stimulus plan will affect “every individual in the United States.” McCaughey writes: “Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors. But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and ‘guide’ your doctor’s decisions.” McCaughey says the provisions are similar to suggestions in the book Critical: What We Can Do About the Health Care Crisis, by former Senate Majority Leader Tom Daschle (D-SD), until recently Obama’s pick to head the Department of Health and Human Services. McCaughey writes that hospitals and doctors who do not use the system will be punished, by a federal oversight board to be called the Federal Coordinating Council for Comparative Effectiveness Research. Perhaps most worrisome is McCaughey’s claim that elderly Americans will be given reduced health care based on their age and expected productivity. “Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost-effectiveness standard set by the Federal Council,” she writes. “The Federal Council is modeled after a UK board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis. In 2006, a UK health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye. It took almost three years of public protests before the board reversed its decision.… If the Obama administration’s economic stimulus bill passes the Senate in its current form, seniors in the US will face similar rationing. Defenders of the system say that individuals benefit in younger years and sacrifice later. The stimulus bill will affect every part of health care, from medical and nursing education, to how patients are treated and how much hospitals get paid. The bill allocates more funding for this bureaucracy than for the Army, Navy, Marines, and Air Force combined.” [Bloomberg News, 2/9/2009] McCaughey’s claims are very similar to the ones she made against the Clinton administration’s attempt to reform health care in 1994 (see Mid-January - February 4, 1994). They will be proven false (see July 23, 2009).

Entity Tags: Hudson Institute, Elizabeth (“Betsy”) McCaughey, US Department of Health and Human Services, Tom Daschle, Obama administration

Timeline Tags: Domestic Propaganda, 2010 Elections

Category Tags: Manipulation of data, Defense of corporate interests, Clinton Health Care Reform, Medicare

The Pharmaceutical Research and Manufacturers of America (PhRMA) acknowledges it has funded a series of television advertisements in support of legislation primarily written by Max Baucus (D-MT), chairman of the Senate Finance Committee, to reform US health care. The television ads are part of an agreement between the Obama administration, Baucus, and PhRMA in June, where the organization agreed to various givebacks and discounts designed to reduce America’s pharmaceutical spending by $80 billion over 10 years. PhRMA then set aside $150 million for advertising to support health care legislation. More progressive House Democrats such as Henry Waxman (D-CA) are pushing for stiffer drug industry givebacks than covered in the deal. PhRMA is led by Billy Tauzin, a former Republican congressman. Until recently, the organization spent some $12 million on ads by an offshoot coalition called Americans for Stable Quality Care, and aired television ads such as “Eight Ways Reform Matters to You.” PhRMA’s new ads will specifically support the Baucus bill. Many are critical of the deal, with James Love of the progressive research group Knowledge Ecology charging, “Essentially what the US got was not $80 billion, but $150 million in Obama campaign contributions.” [New York Times, 9/12/2009] Investigative reporter Matt Taibbi agrees with Love, accusing the White House of colluding with Baucus and Tauzin’s PhRMA to orchestrate a “big bribe” in exchange for the Democrats’ dropping of drug-pricing reform in the Baucus bill. Taibbi writes that in June, White House chief of staff Rahm Emanuel met with representatives from PhRMA and drug companies such as Abbott Laboratories, Merck, and Pfizer to cut their deal. Tauzer later told reporters that the White House had “blessed” a plan involving the $150 million in return for the White House’s agreement to no longer back government negotiations for bulk-rate pharmaceuticals for Medicare, and to no longer support the importation of inexpensive drugs from Canada. Taibbi writes that the White House worked with Baucus and PhRMA to undercut Waxman’s attempts to give the government the ability to negotiate lower rates for Medicare drugs. PhRMA’s ads are being aired primarily in the districts of freshmen Democrats who are expected to face tough re-election campaigns, and in the districts of conservative “Blue Dog” Democrats, who have sided with Baucus, Obama, and PhRMA to oppose the Waxman provision in favor of PhRMA’s own provision, which would ban the government from negotiating lower rates for Medicare recipients. [True/Slant, 9/14/2009]

Entity Tags: James Love, Henry A. Waxman, Americans for Stable Quality Care, Abbott Laboratories, Rahm Emanuel, Pharmaceutical Research and Manufacturers of America, Senate Finance Committee, Obama administration, Medicare, Max Baucus, Matt Taibbi, Pfizer, Merck, W.J. (“Billy”) Tauzin

Category Tags: Marketing, Defense of corporate interests, US Health Insurers, Obama Health Care Reform, Medicare

The Public Campaign Action Fund (PCAF), a campaign finance watchdog organization, finds that insurance and health management organizations (HMOs) have spent over $700,000 a day during the first half of 2009 to defeat health care reform. It also notes that health care and insurance interests, which include organizations outside of the HMOs and insurance companies, have spent roughly $1.4 million a day during the first quarter of 2009 to defeat reform efforts. During the first six months of 2009, the companies spent $126,430,438, mostly on hired lobbyists, to oppose the health care reform legislation working its way through Congress. Since 2007, the companies have spent around $585 million to defeat health care reform. “The insurance and HMO interests are fighting health care reform with hundreds of millions of dollars,” says PCAF’s David Donnelly. “Why are so many in Congress willing to listen to an industry that is spending tens of millions every month on politics rather than on lowering their premiums or helping to address the costs of health care? They need the cash to pay for their campaigns.” The HMO and insurance companies have 1,795 lobbyists registered in Washington to represent their concerns to Congress and members of the Obama administration; the same firms hired almost 2,000 lobbyists in 2008. PCAF says it compiled its data from information provided by the Center for Responsive Politics and the Senate lobbying disclosure Web sites. [Public Campaign Action Fund, 9/15/2009]

Entity Tags: Center for Responsive Politics, Public Campaign Action Fund, David Donnelly

Category Tags: Marketing, Defense of corporate interests, Obama Health Care Reform

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