Tuesday, March 20, 2018

Mrs. Smith Goes to Washington

Newly-appointed Minnesota Senator Tina Smith is off to an energetic start, challenging the powers-that-be in Washington, starting with Big Pharma.  She recently wrote to the CEOs of five drug companies, noting the gigantic tax windfalls reaped by their companies after the fall passage of the tax cut bill, and enquiring whether any of that money might enable them to reduce the skyrocketing prices of prescription drugs.

I am sure every one of the five CEOs privately gave a big horse laugh at the very thought. Each of them believes that their duty to the shareholders is precisely to exact the maximum possible amount from the public for their products, so lowering drug prices never entered their tiny minds. Instead, they announced stock buybacks and in some cases dividends, after the size of the windfall became apparent.  Senator Smith also enquired whether they had made increases to research and development investments after the tax changes, as well as asking about stock buybacks and monetary bonuses to company officials.

Tina Smith can’t possibly be so naïve as not to understand the actual priorities of the CEOs (her husband of many years is an investment manager). Nonetheless, her letters make an excellent point. Pharma’s frequently-invoked rationale for high drug prices – that they need to swell their profits to afford research – is utterly bogus. And every step that gets the public to understand that is valuable.

Although informed people do understand that, a lot of pretty intelligent members of the public who haven’t thought about it too deeply are still buying the falsehood, as I’ve found from talking to co-workers. So, thanks, Senator Smith!

Thursday, March 15, 2018

In "Trump Town," the Revolving Door Runneth Over: Yet More Ex-Lobbyists as Political Appointees at the Department of Health and Human Services

We have accumulated a remarkable number of stories of people transiting the revolving door from high-level positions in health care corporations to high-level positions in health care policy or regulation for the Trump administration.  These stories may not always appear in the most prominent places, but their accumulation suggests they should be of prominent importance.

ProPublica's "Trump Town" Project

ProPublica has just made public its massive "Trump Town" project.  An accompanying article explains it thus,

When the Trump administration took office early last year, hundreds of staffers from lobbying firms, conservative think tanks and Trump campaign groups began pouring into the very agencies they once lobbied or whose work they once opposed.

Today we’re making available, for the first time, an authoritative searchable database of 2,475 political appointees, including Trump’s Cabinet, staffers in the White House and senior officials within the government, along with their federal lobbying and financial records. Trump Town is the result of a year spent filing hundreds of Freedom of Information Act requests; collecting and organizing staffing lists; and compiling, sifting through and publishing thousands of financial disclosure reports.

Here’s what we found: At least 187 Trump political appointees have been federal lobbyists, and despite President Trump’s campaign pledge to 'drain the swamp,' many are now overseeing the industries they once lobbied on behalf of. We’ve also discovered ethics waivers that allow Trump staffers to work on subjects in which they have financial conflicts of interest.

In other words, 'Trump Town' offers a detailed view of the most massive and far-reaching campaign to instill conflicted corporate insiders into federal agencies ever attempted.  For years, we at Health Care Renewal have been trying to highlight particular instances of people who transit the revolving door to or from US government agencies involved with health care.  We stepped up this effort when we realized that the Trump administration seemed intent on moving a record number of people from the health care "industry" to positions within the government which could regulate or influence policy affecting that industry.  But ProPublica has shown there were far more such people than we dreamed of.

The Latest Crop of Revolving Door Travelers Publicly Revealed

So here we will review people listed in the ProPublica database who went from lobbying for the health care "industry" to the Department of Health and Human Services (DHHS) under the Trump administration.  We will emphasize those whom we have not yet previously discussed.  In alphabetical order:

John J. Bartrum
Assistant Secretary for Financial Resources

Former Partner, Squire Patton Boggs

Former Compensation Sources

American International Group (AIG), Inc. Legal Services
Biotechnology Industry Organization (BIO) Legal Services
Cadmus Group Legal Services
Management & Training Corp (MTC) Legal and Lobbying Services
Micropact Legal and Lobbying Services
Squire Patton Boggs LLP (US) Partner, Attorney
The Coca Cola Company Legal Services
Thomas Jefferson University Hospital Legal Services
University of Georgia (UGA) Legal Services

Kimberly L. Brandt
Principal Deputy Administrator for Operations | $179,700

Lobbied for


Robert Charrow
General Counsel

from Greenberg Taurig LLP and Registered Lobbyist, Intrexon Corp to General Counsel, DHHS, see this post

Shannon Christian
Director, Office of Child Care | $150,000

Former Compensation Sources

BLH Technologies, Inc. Development/training re: online communications system, and meeting/membership support for Child Care Policy Research Consortium, a project of OPRE, ACF, HHS

Kelly Marie Cleary
Chief Legal Counsel, Centers for Medicare and Medicaid Services | $179,700

Former Positions Outside Government

Akin Gump Strauss Hauer & Feld LLP Attorney

Lobbied for

Alameda Alliance for Health
California Association of Physician Groups
Catalina Marketing
Guardian Life Insurance Company
Gundersen Lutheran Medical Foundation
Johnson & Johnson
Network for Regional Healthcare Improvement
ThedaCare Center for Healthcare Value
Wisconsin Medical Society

Eric D Hargan
Senior Adviser to the Secretary, Deputy Secretary, Health and Human Services

from from Lobbying for UnitedHealthcare for Greenberg Traurig Alston & Bird to Deputy Secretary, DHHS, see this post

Jenifer Lynn Healy
Chief of Staff, Office of Global Affairs | $161,900

Lobbied for

Adapt Pharma
American College Health Association
American Osteopathic Association
Bay Area Council
Braeburn Pharmaceuticals, Inc.
Coalition to Advance Medical Resident Training in Community Hospitals
Friends of the Global Fight
General Genetics Corporation
International Contrast Ultrasound Society
Kognito Solutions, LLC
L.A. Care Health Plan
Local Health Plans of California, A state wide trade association that represents publicly- financed, not-for-profit health
Maximus, Inc., Healthcare and business services company.
Mobilex USA
Physicians and Surgeons Association of Puerto Rico
Voices for National Service

Laura Holland Kemper
Deputy Assistant Secretary for Legislation (Public Health and Science) | $179,700

Lobbied for

American Academy of Adoption Attorneys
American Academy of Family Physicians
Association of Air Medical Services
C2C Solutions, Inc.
 Caravan Health (formerly known as The National Rural ACO)
Federal Hearings & Appeals Services, Inc.
 Horty, Springer & Mattern
ICOT Hearing Systems LLC
National Academy of Elder Law Attorneys, Inc.
National Association for the Support of Long Term Care, Trade assoc. representing ancillary of services and products to post-acute care settings
National Association of Community Health Centers
 Society of Hospital Medicine
U.S. Renal Care
Vital Decisions, LLC

Sery Kim
Senior Advisor | $149,337

Lobbied for

Budco Health Service Solutions
Dutko Grayling (on behalf of HSA Bank)

Courtney Austin Lawrence
Deputy Assistant Secretary for Legislation (Human Services) | $155,000

Lobbied for


Lance Leggitt
Senior Advisor to the Secretary | Chief of Staff | SES

from Baker Donelson Bearman Caldwell & Berkowitz to Chief of Staff for the Secretary of DHHS, see this post.

Keagan Resler Lenihan
enior Advisor to the Secretary | Senior Counselor to the Secretary | $179,700 |

a director of government relations at McKesson Specialty Health, a firm that supports independent health providers. Disclosure records show Lenihan directly lobbied HHS, see this post.

Christopher Edward Meekins
Senior Advisor, Office of the Assistant Secretary for Preparedness and Response | $161,900

Former Compensation Sources
FBR Capital Markets: Offered investment advice based on analysis of policy actions occurring in Washington, D.C.

 Lobbied for

American Society of Anesthesiologists

Sara Nur Morse
Deputy Assistant Secretary for Legislation (Congressional Liaison) | $155,000

Lobbied for

American College of Surgeons
American College of Surgeons Professional Association

Maya Michelle Noronha
Special Advisor, Office of Civil Rights | $131,767

Maya M. Noronha is an associate at Baker & Hostetler LLP in Washington, D.C. As a member of the Political Law Team, she focuses on redistricting litigation, voting rights cases, and campaign finance law. She has advised Members of Congress, federal candidates, state officials, state legislatures, campaigns, and political committees on election law. Ms. Noronha also works on Baker & Hostetler’s Public Policy Team, where she analyzes Congressional legislation and executive branch priorities to advise clients on political affairs.

Ashley Morgan Palmer
Deputy Assistant Secretary for Legislation (Health Care Reform) | $124,406

Lobbied for

Health Industry Distributors Association

Rebecca Kathleen Wood
Chief Legal Counsel FDA | $179,700

Former Positions Outside Government

Sidley Austin LLP Partner

Former Compensation Sources

AT&T Corp. Legal services
AbbVie, Inc. Legal services
American Chemistry Council Legal services
Arthrex, Inc. Legal services
Association Of American Railroads Legal services
Baker & McKenzie LLP Legal services
Bayer Pharma Legal services
Bayer USA Legal services
CSX Transportation, Inc. Legal services
 Duke Energy Corporation Legal services
Electric Insurance Company Legal services
Helmerich & Payne, Incorporated Legal services
 Medical Information Working Group Legal services
 NII Holdings Legal services N
ew Enterprise Asociates Legal services
Norfolk Southern Corp. Legal services
PhRMA Legal services
Sidly Austin LLP Legal services
St. Jude Medical, Inc. Legal services
The Timberland Company Legal services
Union Pacific Railroad Company Legal services


On and on it goes.  The revolving door has been a chronic problem for the US federal government, but the level of revolving door activity in the current regime seems way beyond anything we have seen before.  It seems we chronical multiple instances of people going from important health care corporate positions to government positions that regulate or make policy affecting those same corporations for every instance of someone coming from the previous administrations to industry.

So, as I have said before, e.g.,  in August, 2017,

The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,
The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

Remember to ask: cui bono? Who benefits? The net results are that big health care corporations increasingly control the governmental regulatory and policy apparatus.  This will doubtless first benefit the top leadership and owners/ stockholders (when applicable) of these organizations, who are sometimes the same people, due to detriment of patients' and the public's health, the pocketbooks of tax-payers, and the values and ideals of health care professionals.  

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Saturday, March 10, 2018

Quattro! More from the DOG Patch.

Some more offerings in our fourth effort in these pages to get rid of this damned dander. It's still up! Here in the DOG Patch, D is for Dander, and the dander, in spite of smatterings of good new lately, has still got itself up.

Vive le Québec! Nodbody's taking sides in Canadian separatism, if it's still brewing north of the border. But a certain sense of fairness surely prevails, and we have to give them a rousing "jolly good" (whoops) among Canadian physicians. At least in the one province.  As reported by the WaPo, a large group of doctors there have produced a petition (interesting to read here) asking that their proposed recent salary increases be rolled back. They're concerned about the sorry state of care and salary support throughout their province and nation. Pretty astonishing. It remains for those of us suffering from DTs (dander-toting) to investigate how it's being received in places like Ontario, or even moreso, Alberta and Saskatchewan. It's also intriguing that the signatories include almost half subspecialists--not just a bunch of lefty primary-care types. Ah, but there are 700 or so signatories here. And Quebec has over 17,000 physicians. 'Nuff said. Let's take back that explanation point above. Make it a question mark, and nonetheless hats-off to those young and resident physicians who signed the petition.

Should Textbook Authors Declare Conflict of Interest? Have to admit, this hadn't exactly been uppermost in our minds--I've no recollection that we at HCRenewal ever really discussed it at meetings--but now a scholarly journal has reported out some fascinating findings on COI among the authors of Harrison's venerable textbook of internal medicine, and several others. (Hell, some of us even knew Dr. Harrison: what would he say, and does it even matter?) In any case, this was reported recently in one of the STAT newsletters. They found an important piece in the journal AJOB Empirical Bioethics about potential COI problems with over a quarter of authors on patents, and almost a third on up to 800,000 dollars per author in pharmaceutical company payments. Seems that journal editors, especially in the top tier, do better than this in requiring declarations from submitting authors. After all, quite a few years ago the editors all got together and created a COI policy that many of us know first-hand when we try to publish. But tetbook editors seem to have, still, a sort of noblesse oblige about their solicited authors. When Harrison's successors anoint a certain individual as her resident expert on a given disorder, it's almost as though that expert is automatically considered above reproach. Or, is it the case, for example in the instance of McGraw-Hill and Harrison's, that the publishers haven't gotten to the same point of transparency as the journal editors did years ago? Either way, it needs to change.

Two Trump HHS Secretaries: the Doc and the Pharma Exec. Who's Choosing Wiselier?  In that order. Dr. Price first, and now Mr. Azar. What does it mean when, pitting them head-to-head for decision-making and general comportment, the latter looks a damn sight better than the former? Says something about the ethics of a lot of physicians in our country, and especially so about those those who choose to run for elective office. On the one side we have Dr. Price, the orthopedist whose wife (herself a physician and state representative) inquired a few months ago whether HIV patients could be quarantined. And who himself did everything he could to weaken Obamacare, according to Politico and others. Comes now Azar, and remarkably, he's made some very adequate middle-of-the-road decisions. First that comes to mind: backing away from the radioactive attempts in Idaho (see an earlier DOG Patch Report on this) to gut the Affordable Care Act by skewering its structuring of insurance. It's all technical and full of legalese, but the eight-page letter Azar had Seema Verma write to Governor "Butch" Otter is a master stroke. And long. And canny. (Shows why Azar is where he is--wonder whether any ultra-right plants from the White House are in HHS as they are in the VA, undermining their own secretary. Time will tell.) In essence, despite its Vermoid verbosity, we can boil it down to this: Verma says, and by proxy Azar says to old Butch, and in part we quote: "As you know ... ACA is failing to deliver quality health care options to the American people and has damaged health insurance markets across the nation." This must have felt good to read for those in Idaho afflicted with Trumpist ideology. But Butch, (s)he goes on to say, the law is the law. We're going to enforce it.

Tuesday, March 06, 2018

How Corporate Health Care Leaders Maintain Their Impunity: The Case of Purdue Pharma's Funding of the Washington Legal Foundation to Attempt to Weaken the Responsible Corporate Officer Doctrine

The ongoing epidemic of narcotic (opioid) abuse, and the resulting rise in the deaths due to overdoses, has focused attention on pharmaceutical companies' aggressive promotion of these drugs which minimized their substantial risk. A recent article in the Intercept showed how the leadership of one such company tried to insulate itself from responsibility for such actions even while such promotions were continuing.

Background: Impunity of Top Leaders of Big Health Care Organizations

For years, we have railed against the impunity of top leaders of health care organizations.  We have noted that despite numerous legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks, almost never do top leaders who presided over these actions face any negative consequences.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations. How executives got to the point of having such impunity has never been clear.

Timidity and lenience by regulatory agencies and law enforcement seem to be factors. For example, in 2014, we noted  that Attorney  General Eric Holder had previously been reluctant to go after big organizations because of the economic consequences of their failure:

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.
In general we have seen much tougher enforcement directed against relatively small health care players than against bigger ones.  For example, we noted in 2014 that settlements by  Merck, Eli Lilly, Takeda, and Teva, all large pharmaceutical companies, allowed the companies to pay fines to settle allegations that they pushed dangerous products, while none of the executives who authorized, enabled, or directed these actions faced negative consequences.  In contrast, at that time, the CEO of a relatively tiny Sheffield Pharmaceuticals was convicted of a felonious wastewater discharge (see this post).

However, this rationale does not address the failure to pursue enforcement actions against organizational leaders who who enabled, authorized, directed or implemented misbehavior.  It is not that there are no good legal tools available to do so.  We wrote in 2012,

As we noted here, a Supreme Court case from 1943 empowered the government to seek penalties against responsible corporate officers (the "responsible corporate officer doctrine") who were in a position to stop a fraud that resulted in a guilty plea or conviction, particularly for the selling of misbranded or adulterated drugs into interstate commerce under the US Food and Drug Act.    Despite a threat made in 2010 by the chief counsel of the Inspector General's office of the US Department of Health and Human Services to use such legal authority to "get high level executives out of companies," nothing of the sort has happened.

Later, in 2015, under the previous administration, there was a tiny sign of progress against impunity.  Then, Attorney General Holder authorized the creation of a Corporate Strike Force to take strong actions in response to health care corporate fraud.  However, last year the Trump administration gutted even that small effort  (look here).  The use of the Responsible Corporate Officer doctrine remains at best extremely rare.  Why?  

How Leaders of Purdue Pharma Tried to Undercut the Responsible Corporate Officer Doctrine

A recent article in the Intercept provided one explanation.  It provided a telling example of top health care corporate leaders who took active, but stealthy measures to preserve their own impunity by attempting to undermine the Responsible Corporate Officer Doctrine,

Executives at Purdue [Pharma]were once charged using the corporate office doctrine in 2007, in a case that found that the company had 'misbranded' its drugs as less likely to be abused than other narcotics. The company agreed to pay a settlement of $634.5 million.

As reported then by the New York Times, three corporate executives pleaded guilty of misdemeanor charges of misbranding Oxycontin.  It appeared that corporate leadership wanted to try to prevent further efforts to hold them accountable.

Purdue didn’t attach its name to the recent effort to weaken the responsible corporate officer doctrine. Instead, the company provided funding to the Washington Legal Foundation, a legal nonprofit that litigates in support of business interests, to petition the Supreme Court last year to accept a case that would give it the opportunity to weaken the RCO doctrine. The foundation closely protects the names of its donors and the drugmakers’ ties to the group were unclear until recently.

The legal strategy was confirmed by former staffers at the Washington Legal Foundation who spoke to The Intercept on the condition of anonymity. The foundation did not respond to a request for comment.

The effort revolved around a case known as DeCoster v. United States, one of the most significant challenges to the responsible corporate officer doctrine in four decades.

The lawsuit challenged the conviction of executives at Quality Egg LCC, an Iowa-based company, who were found guilty for shipping salmonella-tainted eggs that sickened 56,000 people. The federal prosecution shocked the business community because it represented a rare case of corporate executives held criminally responsible for actions committed by subordinates. The Department of Justice prosecutors relied on the RCO doctrine, which has historically been used for food- and drug-related offenses in cases in which companies have caused widespread health problems, to sentence executives at Quality Egg to three months in jail.

Business interest groups watched the case with interest, and the foundation filed a brief to overturn the decision after the case was upheld by an appellate court.

In its petition to the Supreme Court to take up the Quality Egg case, the Washington Legal Foundation called the responsible corporate officer doctrine 'a peculiar anomaly in criminal law' that allows imprisonment of corporate executives 'based on little more than his supervisory role in the company.' The foundation urged the Supreme Court to take up the case as an “opportunity to revisit the very notion of Park doctrine liability.”

"Little more than his supervisory role?"  Corporate executives command huge compensation specifically justified by their "supervisory" role.

The Intercept provided more detail about the role of Purdue Pharma leadership in this challenge,

According to a former Washington Legal Foundation official, an attorney with Purdue Pharma reached out to thank them for the work being done on the RCO doctrine. Another former foundation employee noted that the Washington Legal Foundation has long worked to weaken the doctrine, and that Purdue Pharma was one of several donors that had supported the effort.

While the foundation says all of its funding comes in the form of unrestricted grants, former employees told The Intercept that donors had effectively influenced briefs and others filings made by the Washington Legal Foundation. Connie Larcher, president of the foundation, has long coordinated the nonprofit’s legal strategy in close coordination with donors, the sources said. Some of the Purdue Pharma money was intended to promote the legal strategy around the RCO doctrine.

Asked for comment, Purdue Pharma did not speak directly to the relationship with the Washington Legal Foundation.

The Intercept also provided more details about the ongoing relationship between Purdue Pharma leadership and the Washington Legal Foundation,

Ties between Washington Legal Foundation and Purdue Pharma were reported by The Intercept in 2015 in a story detailing how the foundation had helped Purdue Pharma attempt to block the Centers for Disease Control and Prevention from issuing voluntary guidelines to discourage the overprescription of opioid narcotics.

Last week, Sen. Claire McCaskill, D-Mo., confirmed the prior relationship and released a report revealing that Purdue Pharma had donated $500,000 to the Washington Legal Foundation. The report noted that the foundation had taken the unusual step of lashing out at the CDC opioid guidelines.

Finally, the Intercept suggested that the Washington Legal Foundation

has long faced accusations in the past that the nonprofit operates as a legal front for corporations to undercut public health and safety standards.

The group figured prominently in the tobacco wars that raged throughout the ’90s. The group routinely filed briefs supporting the tobacco industry’s lawsuits challenging government regulations on tobacco products. A 1994 memo by Philip Morris executive Roy Marden noted that he was '[w]orking with the Washington Legal Foundation (WLF) in the development of a strategy to counteract and attack the efforts of the antis,' a reference to public health advocates. The group also sponsored advertisements criticizing 'anti-smoking zealots in government' without disclosing that the group was being funded by several major tobacco firms.

So this suggests that leaders of large health care corporations have actively attempted to preserve their impunity.  Furthermore, their methods have been aimed not just at increasing their personal impunity, but the impunity of all corporate leaders, which has implications beyond health care. In that they resemble efforts of leaders of other big corporations, like tobacco companies, to combat specific regulations by campaigning against regulation in general.  Finally, they have deliberately obscured their efforts to dodge responsbility by using third parties paid with concealed funds.


The Intercept noted that the strategy employed by Purdue Pharma and the Washington Legal Foundation to change the results of DeCoster vs United States failed.  However, this case raises the possibility that health care and other corporate leaders are using other deceptive strategies to preserve their own impunity in other contexts.  Furthermore, these strategies could have the effect of increasing impunity widely for other corporate and top organizational leaders, thus reducing deterrence of corruption.   If we ever want to have really responsible corporate leaders, we will have to uncover the schemes current leaders use to avoid responsibility and maintain impunity.

Meanwhile, there is justified public anger about the narcotic (opioid) epidemic, and in the works are multiple legal cases against the drug companies that sold and aggressively marketed these drugs.  Will any hold responsible the drug company executives who presided over these companies?  As the man said, we will see....

To conclude with the usual exhortation,

True health care reform requires well-informed leaders who uphold health care professionals' values, put patient's and the public's health ahead of all other considerations, avoid self-interest and conflicts of interest, are honest and ethical, and surely are not corrupt.  They need to work in the context of a government that is of, by and for the people, not of, by and for a demagogic leader.