Thursday, June 26, 2008

The Six Million Dollar Man: Witch Hunt? Or Call to Action?

Senator Grassley has called both Alan Schatzberg and Stanford University onto the carpet about inadequate disclosures of Dr. Schatzberg's interests in a pharmaceutical company which he cofounded, Corcept Therapeutics. Grassley's investigation is ongoing, and I assume we can expect to see many other academics taking their own places in the Senate hot seat over the next few months. I assume Grassley is starting with the most dramatic examples of conflict of interest, and unfortunately for my specialty, the first of the all-stars have been psychiatrists.

I won't go into all the details of Dr. Schatzberg's financials, since I have covered them in a prior post
here, and they have been covered in more detail at Health Care Renewal here, and at Pharmalot here, where you can also find a comment form Bernard Carroll documenting Dr. Schatzberg's past failed attempts to cash in on his stock holdings.

In this formal
statement, Stanford has defended Dr. Schatzberg and the university's conflict of interests policies. Regarding Dr. Schatzberg, I have no problem with him owning $6 million worth of shares in a company trying to bring a new antidepressant to the market. While he may have inappropriately tried to hide this disclosure in the past (judge for yourself by reading this account), he has made no secret of his net worth over the past few years.

However, I do find it incredible that Stanford finds it acceptable for him to serve as the chairman of an academic department. As chairman of psychiatry, Dr. Schatzberg is involved with many decisions having to with hiring staff and funding research. While I have no doubt that he is an ethical person, the fact that he owns $6 million in stocks can never be far from his mind. If it were me, I'd be thinking about it when I woke up in the morning, during my coffee breaks, my meals, and while I was brushing my teeth at night. We're talking $6 million here, people.

Here are some problematic possible scenarios. A young professor in his department is up for promotion. But he is researching a medication in direct competition with mifepristone. Dr. Schatzberg has to make a decision, knowing that this could have an eventual impact on his ability to retire with $6 million.

Another scenario. A psychiatry resident has written a wonderful review paper on antidepressants which has been submitted for a departmental award. In it, the resident has concluded that mifepristone is not a promising agent. Schatzberg has to decide who will get the award.

Equally amazing to me is the American Psychiatric Association has no policy forbidding this level of conflict of interest in candidates for APA president. Shatzberg won the most recent election, and will be installed as APA president next May. What will happen if and when Dr. Schatzberg is asked to make decisions regarding the appropriate relationships between the pharmaceutical industry and the organization?


Anonymous said...

For those of us not familiar with the APA election process, Dr. Carlat, can you tell us who is responsible for the election of a new president? Do all APA members vote? Or just the leadership?

Daniel Carlat said...

All APA members vote. However, a nominating committee determines who can run.

Anonymous said...

you are too nice:
"while I have no doubt he is an ethical person..."
Why do you have no doubt? This behavior screams questions of ethical concerns, hence the Grassley interrogation, and you are being too kind.

Deeds, not words, is what to watch. I would think you would offer this as a perspective to a patient being burned by inconsistent, unscrupulous persons in his/her life, true?

Dr S. has no business being a department head and being involved in a company doing medication research; it is a conflict of interest and all of your scenarios about difficulties are right on the money.

I get the sense your interest to be on this committee to investigate the role of pharma on CMEs has you being too diplomatic with the APA big wigs. They sense you feel controlled or influenced, they got ya, doc. Truth trumps collegiality, please believe it!

Good posting though!

James M. La Rossa Jr. said...

The question at heart here is a simple one: At what point does someone's conflict of interest present a clear danger to the fulfillment of his or her obligations? Coincidentally, we had a recent example just this week.

To the dismay of many environmentalists, the U.S. Supreme Court on Wednesday reduced a $5 billion punitive damage award against Exxon Mobil to about $500 million in the 1989 Valdez case. Curiously, only eight of the nine justices voted in the case because Justice Alito did not participate due to his ownership of Exxon stock. Knowing that this case was before the High Court during his confirmation hearing, the obvious question is why didn't Alito sell the stock prior to his appointment? Is that a fair thing to ask of someone in general?

It should be quite obvious to anyone today that the chair of a psychiatry department of a major teaching hospital like Stanford has a huge responsibility to maximize research grant monies from both the public and private sectors. As such, Dr. Schatzberg has for many years had his pulse on the driving forces in psychiatric research. As part and parcel of being in the right place at the right time, he had an opportunity to invest in a company developing a psychoactive agent. DC gives numerous legitimate examples of potential conflict scenarios in Dr. Schatzberg's role as stock owner and department chair. Is it enough that, like Samuel Alito on Wednesday, Alan Schatzberg will recuse himself in situations where a potential conflict exists? Could these perceived conflicts prevent him from doing his job in a highly ethical manner? Not according to the APA membership which voted him in as the next president.

Wouldn't it be both fitting and ironic if Dr. Schatzberg -- who has been painted as overly industry-friendly -- is the very reformer the APA needs right now? When Dwight Eisenhower appointed Earl Warren as the Chief Justice of the U.S. Supreme Court, he thought he had tapped the most conservative, law and order former attorney general the State of California had ever seen. But Warren, in one of the greatest twists of judicial fate, became the architect of the most progressive law of the 20th Century. Likewise, perhaps one of the consummate insiders can help the APA move to the next level.

Psychiatrist in Iowa said...

When I voted, I took Pharma connenctions into considertion at every level. Thankfully, the APA does require candidates to disclose this (to the greatest extent possible anyway) on the profile that members review before voting.

I'm proud of my Senator, but I'm disgusted by my APA leadership. Wait until all of the anti-psychiatry groups get a hold of this. It only reinforces the public perception that drug companies and organized psychiatry are conspiring to over-medicatate America. I don't believe that psychiatrists are consciously participating in this scheme, but if you believe in subsconscious forces, then the public perception may not be too far from reality.

Radagast said...

I think that if one has a financial interest, then every decision that one makes where that interest is at stake will be made in favour of that interest. I believe this on the ground that I've never known anybody undermine their own interests, financial or otherwise.

When I was working in financial compliance, there was a basic rule of thumb: if a company was dominated by marketing types at management level, then the chances were that decisions would be made that undermined legal compliance. It might also mean that compliance personnel within the organization would be bullied into silence. I don't know, to be honest: Grassley looks like a man of integrity, and I think he's genuinely disturbed by what he's discovered. However, can he find a mechanism that will undermine the system of payola that's in place?


Anonymous said...

You have to wonder if Stanford and the APA are going to clean up this mess. My guess is that they will not.


Anonymous said...

It seems to me that if Dr. Schatzberg would like to do the profession of psychiatry a real service, he should immediately resign as APA president-elect. With this degree of ethical baggage, he cannot be an effective leader for a learned profession; I am not optimistic about Mr. La Rossa's hopes for Dr. Schatzberg becoming a reformer.

Put differently, Dr. Schatzberg's now incredibly tarnished image would only bring psychiatry's increasingly wretched public image into poorer repute. If Dr. Schatzberg resigned at this point, there would little or no negative publicity about the APA, and his veep elect has plenty of time to get ready to be president. When he/she becomes president, no one will notice a thing, and the organization can continue its own sleazy relationship with Big Pharma out of the spotlight as usual. This is an advantage for the psychiatrist-on-the-street who faces enough difficulties in practice that s/he does not need an efflux of questionable aroma from the APA to cause further difficulties.

If other APA members read this, I would be interested in their take, and especially in Dr. Carlat's.


Anonymous said...

Flash! Too late to save the APA! They wrote to their membership this morning saying that Sen. Grassley has now requested their materials on financial dealings with pharma as well. Their letter to members could have been written by the Stanford p.r. team.


Daniel Carlat said...


Can you provide us with more details about this? It's the first I've heard about it.


Anonymous said...

Here is what I received from the A.P.A. this morning. Along with having a signer of the Declaration of Independence on our logo, we can now boast of being the first medical society in the U.S. to be the subject of a Senate investigation. It is unfortunate that, for Dr. Stotland, it is the "public focus" on our relationships with pharma that is the challenge for medicine, not the nature of the relationships themselves.


Fellow Members of the APA:

The APA Office has just received a letter from Senator Grassley of Iowa, requesting a complete accounting of APA revenues, except those from advertising in our journals, from pharmaceutical companies starting in 2003. We will, of course, provide this information, which had already been available to our members.

These monies have supported activities including symposia, program bags, buses, and exhibits at our annual meetings and research and leadership training for outstanding residents. Our compliance with the rules governing these revenues has earned us accolades from the accrediting agency.

We are not alone; recent public focus on relationships between medicine and the pharmaceutical industry is a challenge for the whole field of medicine. The APA fully endorses the concept of transparency in our relationships with pharma and other entities and has been in the forefront of the disclosure process. In March, 2008, long before this inquiry from Senator Grassley, your Board of Trustees empaneled a working group charged to review all APA pharmaceutical revenues, sort them into categories, and provide the Board with options for ending pharmaceutical support in each category and the implications for the activities they currently fund. We are proud of what we do.

We will continue to keep you informed about this and all matters of importance to members of the APA.

Nada Stotland, M.D., MPH
APA President

soulful sepulcher said...

Interesting now Grassley is going after the APA's accounting.

Truthman30 said...

The whole psychiatric-pharmaceutical money making machine is corrupt to the core, without pharma psychiatry would not survive. They reap their profits from misery. It is disgusting. Take a look at the Irish Psychiatric Bi-monthly magazine, it is smeared with pictures of greedy psychiatrists at industry sponsored dinners and shaking hands with drug reps beside medication marketing stands.