Public Health & Policy
Following the Money: Gold in Ivory Towers
Published: Apr 1, 2014
By John Fauber, Reporter, Milwaukee Journal Sentinel/MedPage Today
Academics who moonlight for drug companies have faced intense scrutiny in recent years, but new research suggests much larger sums of money are being paid to their bosses -- the leaders of medical schools and hospitals who serve on drug company boards.
Looking at the world's 50 largest drug companies, researchers found that 40% had at least one board member who held a leadership position at a U.S. academic medical center -- including medical school deans, chief executive officers, department chairs, and university presidents.
The average annual compensation from the drug companies was $313,000, according to the paper published today in the Journal of the American Medical Association.
"These relationships present potentially far-reaching consequences beyond those created when individual physicians consult with industry or receive gifts," the researchers wrote.
Big Jobs, Big Bucks
Others who were not involved in the study said such lucrative moonlighting for drug companies with vested interests simply should not be done by university leaders who oversee independent research and the instruction of medical professionals.
"I don't know how they can manage a conflict like that," said Susan Chimonas, PhD, who frequently writes and lectures on conflicts of interest in medicine. "My gosh, there is so much money they are making for a little side job."
Serving in dual roles raises so many potential conflicts that it would be wiser to eliminate them, said Chimonas, associate director of research for Columbia University's Center on Medicine as a Profession.
Unlike faculty or staff, top leaders of academic medical institutions are involved in business decisions and corporate partnerships, said Paul Levy, the former president and CEO of Beth Israel Deaconess Medical Center in Boston, which is affiliated with Harvard University.
Those decisions and partnerships could include performing clinical trials for drug companies, allowing drug samples to be given out in hospitals and clinics, allowing doctors to engage in drug company promotional speaking, endorsing and offering drug company funded continuing medical education (CME), and deciding what drugs to allow on a hospital's formulary, said Levy, who headed Beth Israel Deaconess from 2002 to 2011.
"You cannot serve two masters, even if you are highly intelligent," said Levy, who now blogs about the health industry and serves as senior adviser at Lax Sebenius, of Concord, Mass. "In fact, if you are highly intelligent, you will rationalize the problems away by saying that you cannot be personally corrupted."
By the Numbers
The JAMA paper did not list individuals, though it did name medical schools, universities, and academic hospitals whose officials served on drug company boards of directors. It also named drug companies, including Pfizer, Merck, GlaxoSmithKline and Johnson & Johnson.
For the study, the researchers only looked at the year 2012.
The Journal Sentinel and MedPage Today used proxy statements filed by the companies to identify some of the board members and find out how much they were paid.
From the Yale School of Medicine in New Haven, Conn., to the David Geffen School of Medicine at UCLA in Los Angeles, the institutions include some of the most prominent academic medical centers in America.
For instance, Robert Alpern, MD, dean of the Yale School of Medicine received $259,000 in total compensation serving on the Abbott Laboratories board of directors in 2013, according to the company's proxy statement.
As of Jan. 1, 2014, he also held 11,656 shares of restricted Abbott stock.
In its proxy, Abbott said Alpern's relationship did not impair his independence.
In an email, Karen Peart, a spokeswoman for Yale, said Alpern would have no role in any of the above decisions such as clinical trials, drug samples or drug formularies.
"If ever he had the opportunity to be involved in a decision affecting Abbott, he would recuse himself," she said.
She said the university encourages its faculty to consult widely and to engage in activities that may benefit the university and the public.
A. Eugene Washington, MD, dean of the UCLA School of Medicine, joined the Johnson & Johnson board of directors in November 2012. In 2013, he was paid $261,000 in total compensation by the company, according to its proxy statement. As of Feb. 25, 2014, he was listed as the beneficial owner of 5,129 shares.
In an email, a spokesman for Washington said UCLA does not allow drug companies to provide samples and prohibits faculty from promoting drugs.
"Dr. Washington manages any potential conflict of interest in accordance with university policies and makes no decisions regarding the purchase of pharmaceutical products or clinical trials," Dale Triber Tate, a UCLA spokesman said.
Mary Sue Coleman, president of the University of Michigan, also serves on the Johnson & Johnson board and was paid $276,000 in total compensation in 2013, according its proxy statement. As of Feb. 25, 2014, she was listed as the beneficial owner of 34,465 shares. That stock was worth nearly $3.4 million at Tuesday's price of about $98 per share.
In an email, Kelly Cunningham, a spokeswoman for the university, said the university already has banned drug company funded doctor education and drug samples from all companies.
She said Coleman is not involved in decisions involving Johnson & Johnson purchases or investments.
"The University of Michigan does not see President Coleman's service on the Johnson & Johnson board as a conflict of interest," Cunningham said.
In its proxy statement, Johnson & Johnson said it sells healthcare products and services to both UCLA and the University of Michigan. It also listed research grants and consulting fees with Michigan. It said neither of its board members from those institutions had any "direct business relationships" with the company.
The company also said its board determined that neither of the relationships conflicted with the interests of the company or impaired "the relevant nonemployee director's independence or judgment."
"It is a potential conflict of interest that is not often discussed," said senior author Walid Gellad, MD, with the VA Pittsburgh Healthcare System and an assistant professor of medicine at the University of Pittsburgh. "If a pen or a $150 dinner presents a conflict for a doctor, what does it mean if you get $300,000?"
Gellad noted that the research only involved drug companies. It did not include medical device companies and health insurance firms.
"I would say this is just the tip of the iceberg," he said.