Latest Drugwonks' Blog
And you wonder why it’s hard to get the best people to work for the government!
Wall Street biotech insider gets No. 2 job at the FDA
By Alicia Mundy
Seattle Times Washington bureau
Only a month ago, Dr. Scott Gottlieb was a Wall Street insider, promoting hot biotech stocks to investors.
Now Gottlieb holds the No. 2 job at the Food and Drug Administration (FDA), the federal agency that approves new drugs, oversees their safety and affects the fortunes of companies he once touted.
Wall Street likes the appointment of Gottlieb, 33, who believes in faster drug approval and fewer news-release warnings to the public about potential side effects of drugs.
But some medical experts are shocked by his July 29 appointment, coming at a time when the public is increasingly concerned about the safety of popular medicines. In addition, the federal government has just begun scrutinizing the growing financial ties between Wall Street firms and doctors researching new drugs.
Gottlieb’s new job “further impedes the independence of the FDA,” said Dr. Jerome Kassirer, former editor of The New England Journal of Medicine. “Gottlieb has an orientation which belies the goal of the FDA.”
“I’ve never heard of anything like this,” said Merrill Goozner, a director at the liberal Center for Science in the Public Interest.
“If he’s had dealings regarding companies whose products are up for review at the agency, it strikes me as a potential conflict of interest. You want a barrier between the regulated and the regulators. It’s fundamental,” Goozner said.
Dr. Scott Gottlieb
FDA deputy commissioner for policy
Salary: About $140,000
1994: Bachelor’s degree in economics, Wesleyan University
1994-1995: Alex. Brown & Sons, investment bank
1995-1999: Mount Sinai Medical School, New York
1996-2001: Wrote for The Journal of the American Medical Association
1997-2005: Staff writer, British Medical Journal
2000-2002: Author, Gilder Biotech Report
2003-2005: Medical internist, Stamford (Conn.) Hospital
2003: Resident scholar on medical policy, American Enterprise Institute
March 2003-May 2004: Senior adviser, then director of medical-policy development, FDA
June-October 2004: Senior adviser, Centers for Medicare & Medicaid Services
Late 2004-July 2005: Resident scholar on FDA and Medicare policies, American Enterprise Institute
Late 2004-July 2005: Author, Forbes/Gottlieb Medical Technology Report
Late 2004-July 2005: Private consultant/speaker to investment firms and the pharmaceutical industry
Source: AEI and Dr. Scott Gottlieb
A half-dozen current or former officials at the FDA say they do not know of anyone from Wall Street moving directly into such a high-level job at the agency.
Until last month, Gottlieb was editor of a popular biotechnology investor newsletter, Forbes / Gottlieb Medical Technology Investor. Forbes touted Gottlieb’s stock-picking success on its Web site in mid-May:
“Special Offer: In the last few months, Dr. Scott Gottlieb recommended two cancer cure stocks to subscribers that have already climbed 38%. Click here for the latest report from Forbes / Gottlieb Medical Technology Investor, ‘Three Biotech Stocks To Buy Now.’ “
Now, as one of three deputy commissioners, Gottlieb will help oversee such major policies as the FDA’s fast-track approval process for drug and biotech products, a priority for many Wall Street funds and the pharmaceutical industry.
Gottlieb said he has cut his ties to Wall Street and discontinued his newsletter. He doesn’t see a conflict between that work and his new role as a high-ranking regulator.
“What I learned while working on Wall Street has informed almost everything that I have done since, but especially my work in the government,” he responded in an e-mail to questions from The Seattle Times. (The FDA would not allow the Times to interview Gottlieb or provide answers to questions about his background. The FDA has not released his financial-disclosure forms.)
“[It] has helped me appreciate where regulatory policy can be improved upon to help enable medical innovation and to turn scientific breakthroughs into practical medical solutions that can help patients.”
Gottlieb was an analyst for a Wall Street investment firm before going to Mt. Sinai School of Medicine in New York. He earned a medical degree in 1999, then did an internal-medicine residency. From 2003 until a few weeks ago, he saw patients during weekend shifts two or three times a month at Stamford Hospital in Stamford, Conn., he said.
Since becoming a physician, he has worn many hats. From 2000 to 2002, Gottlieb wrote the Gilder Biotech Report, an investment newsletter, reporting on potential FDA decisions, drug and biotech developments. He also worked as a staff writer for the British Medical Journal.
In 2003, he was a full-time resident scholar working on FDA policy issues at Washington, D.C.’s most formidable conservative think tank, the American Enterprise Institute (AEI).
Along the way, he became a leading proponent of doctors increasing their income by selling their understanding of drugs and the federal regulatory process to stock analysts and investment firms Ã¢ “Moving your Career from Main Street to Wall Street,” as Gottlieb wrote in an investment column in the American Medical Association newsletter.
He joined the Food and Drug Administration in March 2003 as a senior adviser on policy and soon made an impression. Later that year, the SG Cowen brokerage house sent a report to subscribers, “A Recap of What’s Gone Right at the FDA,” that praised Gottlieb and other new FDA officials under then-Commissioner Dr. Mark McClellan for working to streamline the drug-approval process.
“Should McClellan’s team succeed in getting their strategies adopted into the framework of the approval process, the team’s impact on FDA policy could last well beyond the current administration.”
Gottlieb moved with McClellan, brother of White House spokesman Scott McClellan, to the federal Centers for Medicare & Medicaid Services in June 2004 and left that October.
He then returned as a full-time scholar at the AEI and started the Forbes / Gottlieb Medical Technology Report.
Gottlieb, a Bush administration appointee making about $140,000, comes to the FDA with an agenda. In addition to advocating faster drug approvals, he has complained the FDA sends out too many “shotgun warnings” on any particular drug’s emerging side effects, which he said may cause patients to overreact.
He wants the warnings to be sent to doctors first, and without “overstating a product’s risk.”
He also has urged that the FDA change longstanding policy and release data on experimental drugs at different stages of the research, from animal tests to final patient studies.
Releasing more data at each stage would help investors put money behind promising drugs and products earlier and would better protect patients in the clinical trials, he has explained.
Three years ago, Gottlieb wrote about an issue that was spotlighted last month in a Seattle Times investigation Ã¢ the practice of doctors leaking details of ongoing drug research to investment firms, which can then profit from the information by selling or buying stocks.
The Times found 26 cases in which doctors leaked confidential and critical details of their ongoing drug research to Wall Street firms. The report has led to a Securities and Exchange Commission investigation.
“Traders will go to great lengths to get market signals from medical researchers,” Gottlieb wrote in Barron’s, an investor publication, “and the tight lid the FDA keeps on clinical-trials data has spawned a thriving niche of boutique investment-research firms that link money managers with medical experts capable of giving investors a wink and a nod.”
Gottlieb is against such leaks. But he did not call for better enforcement of confidentiality agreements that should preclude such behavior. He instead urged that the FDA open up its drug-approval process to investors and the public.
“Bizarre FDA rules allow companies to hide clinical information practically in perpetuity. Something needs to change,” he wrote in the Gilder Biotech newsletter in 2002.
“The FDA could and should release data contained in a company’s (FDA) filings at each stage in the process. … Why shouldn’t markets know what bureaucrats and insiders do?”
Kassirer, the former editor of The New England Journal of Medicine, said early release of clinical-trial information “strikes me as potentially good for investors but bad for the validity of clinical research.”
“Releasing data early could result in premature and erroneous conclusions about the drug or device being tested, premature ending of clinical trials and even inappropriate enrollment of patients,” he said.
The FDA would not comment on Gottlieb’s ideas on changing policy to allow for earlier release of clinical trial information, except to note that the articles were written before Gottlieb joined the agency.
He also has consulted for, and written positively about, a major matchmaking firm that links doctors with Wall Street investors, the Gerson Lehrman Group in New York.
He has known founder Mark Gerson for several years, and both are part of the conservative establishment in D.C. With his pro-market views “Scott is popular with some people at the White House,” said Robert Goldberg of the Manhattan Institute, a conservative think tank. He is a friend of both men.
Gottlieb highlighted Gerson’s firm in investment columns he wrote for the AMA newsletter, and encouraged doctors to join Gerson’s network and others. Not only can doctors increase their income, but they can help Wall Street investors decide which new technologies to put their money behind, he wrote.
Gottlieb said by e-mail that he was not paid to recruit physicians for Gerson’s group. He added he had recommended a handful of policy-makers to Gerson Lehrman and was paid for probably fewer than eight hours of work.
Gottlieb said he also did a little work for the SG Cowen brokerage house but has not taken part in any conference calls between drug researchers and investors discussing ongoing clinical research.
When the FDA announced Gottlieb’s hiring last month, it noted Gottlieb had been a practicing physician, a scholar at AEI and correspondent for the British Medical Journal. The agency did not mention Gottlieb’s stints as editor of the two popular biotech investment newsletters or his work with Wall Street firms.
Alicia Mundy: 202-662-7457 or firstname.lastname@example.org
In the movie “Marathon Man,” Lawrence Olivier’s Mengele-inspired dentist threateningly asks, “Is it safe?” That same question, under post-Vioxx fear, apprehension and recriminations, has the real threat of crippling open and honest scientific exchange at some high profile FDA advisory committees in September. Worse is the possibility that today’s bilious environment will keep new treatments from waiting patients. Worse still is the risk that such a Precautionary Principle-driven climate will drive the pharmaceutical industry away from important new therapies towards only the safest, least innovative R&D projects. These are frightening thoughts — and attention must be paid lest we find ourselves, micron-by-micron, abdicating the hope of 21st century medicine to politically expedient measures that serve only to further the political aspirations of sound-bite hungry politicians and the voracious appetites of trial lawyers.
Last week the New York State Pharmacy and Therapeutics
Committee met to discuss adopting an evidence-based medicine approach to state reimbursement practices. Except that’s not what the proponents of the measure really want. What they really want is to ration health care in New York State. Evidence-based medicine, according to the definition, is “The conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients. The practice of evidence-based medicine requires the integration of individual clinical expertise with the best available external clinical evidence from systematic research and a patient’s unique values and circumstances.” Sounds good, right? Wrong. Because what was being presented in Albany was what’s known as “Rational Use of Drugs,” better known as “rationing of drugs.” It’s the same drivel that the eurocrats in Brussels and Geneva have been trying to sell for years to an EU citizenry sick and tired of long waits and poor outcomes. As David Sackett wrote in a 1996 article in the British Medical Journal, “Doctors practicing evidence-based medicine will identify and apply the most efficacious interventions to maximize the quality and quantity of life for individual patients; this may raise rather than lower the cost of their care.” As a particularly pithy bit of testimony at the recent hearing put it, “The people of New York, especially vulnerable Medicaid patients, should not become unwitting subjects in this experiment, especially absent their informed consent.” Amen.
Ambush in Angleton
By RICHARD A. EPSTEIN
August 22, 2005
CHICAGO — The most memorable observation in Frederick Wiseman’s
film, “The Thin Blue Line,” runs like this: “It takes a good Texas
prosecutor to convict the guilty … and a great Texas prosecutor
to convict the innocent.” Today, this wry remark applies to
plaintiffs lawyers, now that Mark Lanier, down in Angleton, Texas,
has drawn blood from Merck for its former blockbuster drug, Vioxx.
Forget the jury’s whopping quarter-billion-dollar verdict in Ernst v. Merck, because it’s cut 90% by the caps that Texas law places on
punitive damages. Still, where do $25 million in actual damages come
from? Robert Ernst died in his sleep, without pain and without
medical bills. His lost income as a Wal-Mart employee was small. But
the $24 million price tag for anguish and loss of companionship to
his widow Carol is off the charts. And for what?
Not the death of her husband, whose arteries were 70% clogged and who died, so Dr. Maria Araneta’s death certificate states, of arrhythmia, or irregular heart beat. No mention of any heart attack. But in his
dramatic eleventh-hour maneuver, Mr. Lanier whisked Dr. Araneta back
from the Arabian peninsula to testify conveniently that she really
thought that an undetected blood clot had caused the death, but had
been dislodged in the last-ditch efforts at resuscitation.
Pretend that this new account is true, and it still doesn’t show that Vioxx caused the blood clot. Long before Vioxx, people died of heart
failure from all sorts of causes, including physical exertion and
dehydration. That second causal link to Vioxx was not made even if
the first one to a blood clot is generously presumed. Carol Ernst’s
lawsuit should be DOA right here, but a clever set of jury
instructions allowed the jury to say that Vioxx may have been a
contributory cause of death.
By what odds? Merck’s clinical trials showed an elevated risk of
heart attacks but only in persons that took Vioxx in heavy doses for
intestinal polyps for 18 months or more. Ernst took Vioxx only for
eight months. In post-trial interviews, the jury members revealed
their anger that the company didn’t show “respect” for its customers
by telling the truth about Vioxx’s risks. And they clearly were moved by Mr. Lanier’s expert bashing of Merck’s medical employee, Dr. Nancy Santanello, who struggled to explain how Merck tried to show the efficacy of the drug in response to criticisms of it.
All this goes to show that physicians under the gun make lousy
witnesses, which we already knew. To understand the Angleton verdict, one would think that Vioxx were the moral equivalent of mustard gas.
But in truth, we should be grateful to any firm that speeds its
product to market when its anticipated use promises many more
benefits than adverse side-effects. Merck should not apologize for
pushing hard to win quick market acceptance; before Vioxx was
withdrawn, countless people with chronic pain were able to get on
with their lives. Now these folks are left far worse off because of a double whammy: a Food and Drug Administration that yanks too many
drugs off the market because it has no idea how to evaluate risk, and individual jurors who think it is their solemn duty to “send a
message” to the drug companies on whose products we so desperately
So, in return, I would like to send my message to Mr. Lanier and
those indignant jurors. It’s not from an irate tort professor, but
from a scared citizen who is steamed that those “good people” have
imperiled his own health and that of his family and friends. None of
you have ever done a single blessed thing to help relieve anybody’s
pain and suffering. Just do the math to grasp the harm that you’ve done.
Right now there are over 4,000 law suits against Merck for Vioxx. If
each clocks in at $25 million, then your verdict is that the social
harm from Vioxx exceeds $100 billion, before thousands more join in
the treasure hunt. Pfizer’s Celebrex and Bextra could easily be next. Understand that no future drug will be free of adverse side effects,
nor reach market, without the tough calls that Merck had to make with Vioxx. Your implicit verdict is to shut down the entire quest for new medical therapies. Your verdict says you think that the American
public is really better off with just hot-water bottles and leftover
Ah, you will say, but we’re only after Vioxx, and not those good
drugs. Sorry, the investment community won’t take you at your word.
It realizes that any new drug which treats common chronic conditions
can generate the same ruinous financial losses as Vioxx, because the
flimsy evidence on causation and malice you cobbled together in the
Ernst case can be ginned up in any other. Clever lawyers like Mr.
Lanier will be able to ambush enough large corporations in small,
dusty towns where they will stand the same chance of survival that
Custer had at Little Big Horn. Investors can multiply: They won’t bet hundreds of millions of dollars in new therapies on the off-chance of being proved wrong. They know they’ll go broke if they win 90% of the time.
Your appalling carnage cries out for prompt action. Much as I
disapprove of how the FDA does business, we must enact this hard-
edged no-nonsense legal rule: no drug that makes it through the FDA
gauntlet can be attacked for bad warnings or deficient design. In
plain English, Mr. Lanier, you’re out of court before you make your
opening statement. You’ve already proved beyond a reasonable doubt
that the fancy diagrams that university economists use to explain why the negligence system maximizes social welfare is an academic
delusion that clever lawyers use to prop up a broken tort system.
So where does that leave Merck? Perhaps in Chapter 11, where this
madness may be brought to a halt.
Mr. Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago and the Peter and Kirsten Bedford
Senior Fellow at the Hoover Institution, has consulted extensively
for the pharmaceutical industry. His book on the industry will be
published next year by Yale University Press.
There is not a short supply of politicians who think they know better than the FDA when it comes to protecting the public health. The most recent is California Attorney General Bill Lockyer. Mr. Lockyer feels that the FDA’s warning about tuna and mercury isn’t strident enough (even though the tuna industry went ballistic when they were issued) — and he wants to take the matter into his own hands. He wants to require signs on store shelves or labels on tuna cans in California warning of the dangers of mercury. I guess he was not aware that labels on food are, by dint of the federal Nutrition Labeling and Education Act, under the suzerainty of the FDA. Fortunately the FDA was more than happy to remind him. In a recent letter, FDA Commissioner Crawford helpfully reminds Mr. Lockyer that, “California should not interfere with FDA’s carefully considered approach of advising consumers of both the benefits and possible risks of eating seafood.” Sometimes the same lesson has to be learned more than once. In 2004, when the state tried to add warnings onto nicotine patches, the California Supreme Court ruled that FDA-approved warning labels for the products precluded the state from requiring additional warnings. It’s sad that, in Prop 65 World, products like nicotine patches that help you quit smoking, and tuna that provides valuable health benefits — even to pregnant women — require more warnings but not more educational promotion — particularly from the Bully Pulpit of elected office. Plato’s “Allegory of the Cave” puts forth the proposition that the unenlightened cannot tell the difference between shadow reflections and reality. In California, the “Allegory of the Tuna” teaches us that only politicians can see the truth — and science be damned.
Here’s what Senator Charles Grassley had to say in wake of yesterday’s Vioxx verdict, “The Food and Drug Administration was also negligent in the Vioxx case … Those running the nation’s public safety agency repeatedly dismissed the concerns of their own scientists and seemed to do everything possible to keep the public in the dark about emerging problems with Vioxx.” Not only is this untrue and unfair to the 10,000 FDA career employees who work tirelessly on behalf of the public health, it is also a very clear sign that the Senator from Blameland is more interested in chest-thumping than helping to advance the public health. Chalk up another one for “Body Slam Chuck,” the King of Destructive Criticism. And talk about bellying up to the tort bar! I wonder how much more money the Senator will get from the trial lawyer lizards as a reward for such vituperative rants?
A rant appeared on Dr. John Grohol’s World of Psychology blog assailing GlaxoSmithKline for targeting a direct-to-consumer education campaign at, well, the consumer. The author is peeved not only because GlaxoSmithKline and other drug companies actually make a profit, but that they are advertising their products by repackaging already available information. He argues instead that drug companies should spend shareholder dollars promoting free online depression information or, better yet, send people directly to psychologistsÃ¢ offices without mention of any drug. (This is particularly rich since the host site, which repackages and serves as a portal to already available information, prominently pushes a book by Grohol on which he is presumably earning a profit.)
It might never occur to the author that the advertising from a drug company is actually the impetus that pushes a person suffering from depression into a doctor’s office. After all, GlaxoSmithKline and all other drug companies are powerless to 1) force anyone to purchase company products or 2) even sell products directly to consumers. Drug companies must rely on the professional opinion of doctors who may or may not prescribe the company’s product that provided the push to get the patient to seek professional help.
If one thinks that depression is an under-treated condition that has negative consequences for individuals, rants such as this are irrational. Perhaps the author might want to spend some quality time on a couch.
I hope this verdict will not chill the nascent movement towards more open and transparent sharing of information between the pharmaceutical industry, FDA, physicians, and patients. Now is not the time to let lawyers rule.
Nope, not a typo. Fee Speech. Like in speech you get paid for. Specifically the kind of speech doctors use when they get paid to talk with the investment community. Some (now including the venerable NY Times) believe that doctors participating in clinical trials shouldn’t talk to investors for fear that they will share confidential information. Should clinical investigators share confidential information — most certainly not — but that’s a lot different than saying they shouldn’t be allowed to speak with Wall Street types. It’s a slippery slope, friends. First ne parlez pas avec investors and then, who else? How about reporters? How about patients? How about each other? Are we really willing to say adieu to the free exchange of (appropriate) scientific information? It’s odd to me (but, alas, not surprising) that the same people who want full disclosure of clinical trial data want to muzzle trial clinicians. This isn’t to say that loose lips shouldn’t be slapped shut, they should —but the way to deal with blabbermouth docs is to aggressively put an end to such behavior through legal and professional remedies, not by selectively applying the First Amendment.
The Los Angeles Times uncovered a price-gouging scam on our nation’s pharmaceutical consumers. Americans, eager to acquire price controlled brand-name drugs from Canada, have been filling there generic prescriptions up North as well. They’ve been overpaying by as much as 78 percent compared to what they could have purchased at the corner drugstore, according to a study by the Fraser Institute, on which the story relies. Canada’s complicated price control system, which also controls competition and provides an effective floor as well as a ceiling for prices, makes generic drugs a bad deal in Canada. The Fraser Institute study pegs the cost difference at 78 percent for the 100 most popular generic drugs. It has long been known among serious researchers, as opposed to bus hopping activists and politicians, that it’s unclear if the basket of drugs Americans actually purchase, due to an abundance of generics, costs more or less in the United States than it would in Canada.
One thing is clear: It’s the fierce competition of free market in the United States that produces both the innovation necessary for the cutting-edge drugs that Canada’s government price controls and the low, low prices for generic drugs that have lost patent protection.