Retreat Back to Regulatory Capture: US FDA, NIH, Department of Health and Human Services All Back Off

After some brave words about transparency, integrity and all that, US government officials seem to be running back to the arms of the health care corporate CEOs.

Weakening FDA Conflict of Interest Rules

As reported by Reuters,

U.S. lawmakers likely will change the criteria for advisers reviewing new medicines next year because of complaints that the rules meant to prevent conflicts of interest make it harder to find real experts.

Congressional lawmakers may require the Food and Drug Administration to relax the rules that bar advisers from reviewing a drug if they have even indirect financial ties to related manufacturers, as part of an FDA funding bill.

This was not purely an initiative of legislators, but was egged on by a top FDA administrator

The agency often must delay panel meetings while it searches for experts without conflicts, lawmakers and FDA officials say. Top doctors are usually the ones drugmakers hire as speakers or consultants.

'We have had difficulty in recruiting highly qualified people. And we've had delays in having panels because of this,' Dr. Janet Woodcock, head of the FDA's drugs center, told a House of Representatives hearing earlier this month.

The result is that 23 percent of FDA advisory panels have vacancies, more than double the agency's stated goal, according to the FDA's quarterly report at the end of May.

The rationale was that those paid by drug and device companies are the most expert:

The FDA tightened guidelines in 2007 to minimize industry ties that could sway a panelist's view, partly inspired by the scandal with Merck's pain reliever Vioxx.

Ten of the 32 panelists advising the FDA on the drug consulted for drugmakers. Nine of the 10 recommended putting the drug back on the market after it was pulled in 2004 over concerns about heart risk.

The restrictions go too far, say lawmakers who want the FDA to approve more new medicines, in part because they promote American jobs.

'No longer can we deny experts simply because they have ties to industry,' said Georgia Representative Phil Gingrey during a House of Representative hearing on FDA funding last month. The committee's chairman, Fred Upton from Michigan, called the conflict of interest rules 'rigid and unrealistic.'

Industry executives, who want the FDA to speed drug approvals, also support relaxing the rules. Biogen Idec CEO George Scangos said the guidelines 'exclude a lot of people who would be the best qualified.'

Of course, the drug and device companies have been touting their paid "key opinion leaders" as the best and the brightest for a long time. There is plenty of evidence, however, that they are mainly those whom those companies find the most compliant, and in many cases, those who are willing to be stealth marketers on those companies' payrolls. (See this post about those who recruit KOLs regarding them as salesmen, and more here.)  "Key opinion leaders" supported by commercial grant funding may seem like experts to academic medical institutions' leadership who now value outside funding more than teaching and research excellence (see this post).

Furthermore, as reported by Politco, the Project on Government Oversight, a watchdog group, chastised FDA leadership for exaggerating the difficulty of finding unconflicted experts, concluding in their letter to the FDA Commissioner, "to gain the public trust, we must ensure that the FDA relies on the best available information for its policies, rather than personal opinions and biases."

So far, government officials seem to be more worried about the opinions of corporate leaders than the public trust.

Weakening NIH Conflict of Interest

As discussed in Nature,

Francis Collins hailed it as a 'new era of clarity and transparency in the management of financial conflicts of interest' (S. J. Rockey and F. S. Collins J. Am. Med. Assoc. 303, 2400–2402; 2010). But the director of the US National Institutes of Health (NIH) may have spoken too soon when he described a new rule, proposed last year, that would require universities and medical schools to publicly disclose online any financial arrangements that they believe could unduly influence the work of their NIH-funded researchers.

Nature has learned that a cornerstone of that transparency drive — a series of publicly accessible websites detailing such financial conflicts — has now been dropped.

In more detail,

The NIH's parent agency, the Department of Health and Human Services (DHHS), proposed the new rule in May 2010, after congressional and media investigations revealed that prominent NIH grant recipients had failed to tell their universities or medical schools about lucrative payments from companies that may have influenced their government-funded research. The DHHS called the proposed websites 'an important and significant new requirement to … underscore our commitment to fostering transparency, accountability, and public trust'. Under the proposal, institutions with NIH-funded researchers would determine, grant by grant, if any financial conflicts existed for senior scientists on the grant. For example, these would include receiving consultancy fees, or holding shares in a company, 'that could directly and significantly affect the design, conduct, or reporting' of the research. The institutions would post the details online, where they would stay for at least five years.

But of course the medical schools decided that it would just be too much trouble to do all this:

'The websites don't appear out of nowhere,' says Heather Pierce, senior director of science policy at the Association of American Medical Colleges (AAMC) in Washington DC. They would 'require employees to not only create the website but to pull the information, review it, and make sure it is up to date and accurate'.

That is not the only objection from the powerful academic lobbies. During the public comment period last summer, the Association of American Universities and the AAMC submitted a joint statement saying: 'There are serious and reasonable concerns among our members that the Web posting will be of little practical value to the public and, without context for the information, could lead to confusion rather than clarity regarding financial conflicts of interest and how they are managed.'

Given how academic medical institutions have expanded their administrations and bureaucracy, the enormous amounts they spend on management, and the huge compensation they give their executives, and further given how much of their revenues come from government sources (Medicare, Medicaid money for patient care, Veterans Administration money supporting many faculty members, Medicare money funding graduate medical education, and NIH and other government research grants), the notion that getting a few staffers to process disclosures would be administratively or financially burdensome is just laughable.

At least Iowa's Republican Senator Charles Grassley, seemingly one of the last politicians in Washington who cares about the integrity of government programs and spending, is upset. As reported again by Nature,

The US Senate's leading advocate for government transparency wrote today to the White House's budget office, demanding that it protect a proposed rule that would obligate universities to post their publicly-funded biomedical researchers' financial conflicts on a publicly accessible website.

'The public's business should be public... I urge OMB to follow through and approve a rule that includes a publicly available website,' Senator Charles Grassley, Republican of Iowa ..., wrote in in this letter to Jacob Lew, the director of the White House's Office of Management and Budget (OMB).

Furthermore, he wrote:

I am troubled that taxpayers cannot learn about the outside income of the researchers whom the taxpayers are funding, and this flies in the face of President Obama's call for more transparency in the government.

We will see if his protest does any good, but again it appears that government officials are more worried about the revenues of big health care organizations than the needs of the public.

Retreating from Threats to Disbar Forest Laboratories CEO

We previously posted about how the US Department of Health and Human Services threatened to disbar the CEO of Forrest Laboratories from dealings with the government after his company pleaded guilty to obstruction of justice and misbranding, and paid a $313 million fine.

Now, per Alicia Mundy writing for the Wall Street Journal, things have changed:

The U.S. government dropped efforts to force the resignation of a prominent pharmaceutical-company chief executive, reversing course after protests from the company and major business groups.

The about-face on Forest Laboratories's longtime leader, Howard Solomon, represents a significant retreat by the Department of Health and Human Services, which has said it wants to step up punishments against drug-company executives when wrongdoing happens on their watch.

Forest agreed last year to plead guilty to misdemeanors involving marketing of its drugs including the antidepressant Celexa, and it paid $313 million to resolve the matter.

Mr. Solomon wasn't personally accused of any wrongdoing. Nonetheless, the government notified him in April that it was considering excluding him from jobs at health-care companies that sell to the U.S. government. It invoked a little-used clause in the Social Security Act that allows such an action against corporate leaders of companies found guilty of criminal misconduct, even if the leaders had no knowledge of the misconduct.

The exclusion move would have effectively forced Forest to remove Mr. Solomon from office, because Forest and other drug companies rely on business from U.S. government agencies such as Medicare and the Veterans Administration.

In a letter to Mr. Solomon on Friday, the office of the inspector general of the Department of Health and Human Services said, 'Based on a review of information in our file, and consideration of the information your attorneys provided to us both in writing and in an in-person meeting, we have decided to close this case.'

We have discussed - some might say endlessly - how despite numerous publicly reported cases of wrongdoing by health care organizations, hardly any individual who authorized, directed or implemented the bad behavior has ever faced any negative consequences. There have been recent fulminations by some government officials that this is going to change. The case of the Forest Laboratories CEO appeared to be an example of such change, but no more.

The Wall Street Journal went on to discuss why the government may have changed course:

The government's retreat came after a barrage of complaints from Forest and business groups including the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America, the drug industry's leading trade group.

In July, Forest spent $80,000 to hire former Louisiana Sen. John Breaux to lobby the government regarding exclusion, according to Senate records. Mr. Breaux didn't return a call requesting comment. Forest said earlier that it was just trying to make its case that this was a highly unusual action by the U.S. government.

Of course it was unusual. That is the whole problem.

In any case, it looked like the government was much more concerned about the coddling of corporate CEOs and their lobbyists' and cronies' opinions than about deterring bad behavior by large health care organizations.

Summary

After a bit of blustering by the current US administration about transparency and integrity it appears to be back to business as usual in the US capital. Over the last 20 years, government has increasingly answered to corporate CEOs instead of "we, the people." Protecting patients' and the public's health has given way to protecting the financial health of large health care organizations, and the compensation of rich CEOs. Federalism is giving way to corporatism. As long as this continues, expect our health care system to continue its slow collapse. Eventually, expect the CEOs to get in their private jets and escape while the rest of us picks up the pieces.

Until we dispel the fog of corporatism that has spread over the government that was once supposed to be of the people, by the people, and for the people, expect no real health care reform, and expect continuing rising costs, declining access, and worsening patient care. Obviously, true health care reform would start with the government and its officials putting patients' and the public's health first, way ahead of the financial comfort of corporate CEOs.

See also comments by Alison Bass.

Health Care for the Very Rich is Different from That for You and Me - the Case of the CEO's Six-Figure Hip Replacement

Another glimpse of health care for the very rich comes by way of a BNet post by Jim Edwards about the beleaguered CEO of Forest Laboratories.

The background is that:

The CEO is fighting to retain his place atop the company against both investor Carl Icahn, who wants his own directors on Forest’s board, and the Department of Health & Human Services, which wants to exclude Solomon from the drug business as a punishment for the company settling a $313 million investigation by the Department of Justice over its illegal marketing of Levothroid and other drugs.

We had posted about the government threat to disbar him from government business after his company here.

Edwards noted that despite these setbacks, Solomon's total compensation actually increased:

Forest Labs (FRX) reported that CEO Howard Solomon earned $8.9 million in fiscal 2011, 7 percent more than last year,...

This is par for the course for executive compensation in health care. We have discussed numerous instances in which such pay defies gravity, rising even when serious questions have been raised about the performance of the executives and the organizations they lead. We most recently belabored this issue here.

However, Edwards also wrote

The company also spent $316,638 on medical expenses for the 83-year-old CEO, up from $56,571 in 2010. The company’s proxy disclosure did not say what was wrong with Solomon. UPDATE: A spokesperson for the company said:

Mr. Solomon is in excellent health and has no ongoing medical conditions that would impair his ability to continue functioning as the Company’s CEO. A good portion of last year’s expense was related to hip replacement following a fall when he was playing tennis – which he has now reluctantly discontinued.

Later, he summarized the amounts the company paid for Mr Solomon's medical care in previous years:

Here’s how Solomon’s medical bills have increased over the last few years.

2011: $316,638
2010: $56,571
2009: $28,000
2008: $25,000

Mr Solomon is 83 years old, and therefore qualified years ago for Medicare, the US single payer health insurance system for the elderly and disabled. Medicare serves as the primary health insurance for many elderly people, and it covers hip replacements for quite a few of them. A publication by Zimmer, one of the larger manufacturers of prosthetic hips, noted that Medicare payment rates in 2009 for hip replacement were up to about $25,000 for hospitals, and up to about $1500 for surgical fees.

Yet Forest Laboratories increased its payments to Mr Solomon for health care by about $250,000 due to his hip replacement. This amount is obviously an order of magnitude bigger than the usual Medicare payments for hip replacements, and presumably was paid in addition to the amounts Medicare paid for this surgery.

Nothing in Mr Edwards' post, or in the proxy statement from which the numbers came explains the use to which the $250,000 was put. The size of the amount does suggest that Mr Solomon received some sort of health care much more expensive than that available to the general public.

We have previously noted a few instances (e.g. here)  suggesting that the amounts large corporations pay for their top executives' health care are far larger than even the high prices charged by commercial health insurers.  Information from litigation suggested that one retired corporate CEO was entitled to payments for all sorts of amenities, such as first-class transportation, services of personal aides and trainers, cosmetic procedures, etc in conjunction with his health care (see post here).  The case of the Forest Laboratories CEO provides more evidence that top corporate leaders receive health care in what amounts to a system separate from and in a tier above what even supposedly well-insured "regular people" can access. 

The existence of this separate health care system for very rich corporate executives may provide yet another explanation of why real health care reform is so difficult.  We have frequently suggested that those who have become rich from the current health care system are likely to strongly resist any changes to that system that might threaten their continued accumulation of wealth.  These peoples' riches provide them with the resources to fight such changes, e.g., through stealth policy advocacy (see posts here and here).  Furthermore, these peoples' access to a separate health care system for the very rich makes it extremely unlikely that they or their families will ever experience the problems that drive many common folk to despair about our current health care dysfunction.

Perhaps some intrepid investigative reporter will write a Pulitzer prize-worthy story about the parallel health care system for the very rich.  Perhaps some honest health services researcher will study how the existence of such a system affects policy-makers.

At the least, we deserve health care policy informed by how the health care affects real people, and not made solely by those who are sheltered from he vicissitudes of the real, and currently dysfunctional health care system.

Logical Fallacies to Defend CEOs from Responsibility for their Companies' Bad Actions

There is now quite a kerfuffle over the US Department of Health and Human Service's threat to to stop doing business with the CEO of Forest Laboratories.  As we noted here, his company pleaded guilty to obstruction of justice and misbranding, and agreed to pay a $313 million fine.  The major allegations by the government were that the company marketed antidepressants to children when they had only previously been approved for adults. Their marketing tactics allegedly included suppressing negative studies, and paying physicians to prescribe the drugs.

The kerfuffle involves a number of ostensible authorities and pundits defending the CEO, and challenging the government's attempts to hold him responsible for his company's actions.  The kerfuffle also provides some splendid examples of logical fallacies deployed in defense of the powers that be. 

Double Standards: Avoiding Blame for Failures While Taking Credit for Successes

The greatest angst seemed to be generated that Mr Solomon could be sanctioned for actions which he did not directly take. 

First, the Wall Street Journal reported that:

Forest Labs representatives said they were shocked when the intent-to-ban notice was received a few weeks later, because Mr. Solomon wasn't accused by the government of misconduct.

Forest is sticking by its chief. 'No one has ever alleged that Mr. Solomon did anything wrong, and excluding him [from the industry] is unjustified,' said general counsel Herschel Weinstein. 'It would also set an extremely troubling precedent that would create uncertainty throughout the industry and discourage regulatory settlements.'

Later in the same article, there was more dismay that Mr Solomon should suffer any negative consequences for the actions of someone else:

Lawyers not involved in the Forest case said the attempt to punish an executive who isn't accused of misconduct could tie up the industry's day-to-day work in legal knots.

'This 'gotcha' approach to enforcement runs the risk of creating a climate within organizations that is inconsistent with the spirit of innovation that is critical to the industry,' said Allen Waxman of Kaye Scholer LLP in New York, who was formerly an in-house counsel at a drug maker.

However, Mr Solomon is not a janitor.  He was the company CEO, and was paid a fortune ostensibly because he was responsible for everything going on in the company.

In fact, the most recent (2010) company proxy statement included this description of Mr Solomon:

We believe that Mr. Solomon's experience as a senior executive in our industry, his in-depth knowledge of our Company and its day-to-day operations, and his strong strategic vision for the Company qualify him to serve on the board. [italics added for emphasis]

These attributes presumably also justified his total compensation, which was $8,267,236 in 2010.

If Mr. Solomon's outsize compensation was based on his strategic vision, informed by his "in-depth knowledge of ... [the] Company and its day-to-day operations," how could his defenders claim he knew nothing and had no responsibility for its detailed and in-depth efforts to deceptively market antidepressants to children and adolescents? (See posts here and here for details of that marketing scheme as revealed in court documents.)  This appears to be a double-standard (as found in this alternative catalog of logical fallacies).

By the way, also note how Mr Waxman invoked the "innovation meme," i.e., that any regulation of the company or restrictions on its actions will prevent innovation. The same meme was invoked by a business school professor in one of the first attempts to defend this corporate executive from any attempts to hold him accountable for his company's bad behavior (see post here).  As I noted earlier, "innovation" is used so often to excuse almost any action by large health care corporations that I suspect the meme was developed by  corporate public relations.

Straw-Men and Double-Standards: Barring Mr Solomon vs "Imagined" Actions and Treatment of Foreign Leaders

Another protest was that the government's actions were disproportionate, especially how they treated other cases, as written by Robert Goldberg in the Spectator:

Now it turns out that Team O is tougher on drug company CEOs than it is on brutal dictators and a movement whose goal is wiping out Israel. The administration is applying a little used government approach to knee-capping executives it doesn't like by threatening that HHS won't allow Forest Laboratories to sell medications to Medicare, Medicaid, and other government health programs (which means every health plan under Obamacare) unless it tosses the company's CEO, Howard Solomon. According to news accounts, the action is being taken because government lawyers claim that just fining the company billions isn't stopping illegal behavior. But neither Mr. Solomon nor Forest has been found guilty of any wrongdoing.

Mr Goldberg also asserted, as in the examples above, that Mr Solomon was not personally found guilty.  This may be so, but given that his company gave him credit for all the good resulting from the company's day-to-day actions, denying his responsibility for day-to-day actions gone bad is a double standard.

Furthermore, Mr Goldberg's assertion that Forest was not found guilty is at best a quibble, and at worse, an untruth. As we noted above, the company pleaded (but was not "found) guilty to several charges, a felony and a misdemeanor.

Mr Goldberg then developed another kind of fallacy, this time by comparing the government's treatment of Mr Solomon with some hypothetical actions:

Can you imagine the administration using this tactic against health IT firms, unions, the New Black Panthers, ACORN, or investment banks? For different reasons for each, the answer is 'No.'

This appears to be a compounded set of straw men fallacies.  No one knows whether the government would use these tactics in future hypothetical cases.  What one may imagine could occur in such hypothetical cases is not directly comparable to what has occurred in the current case.  Invoking these imagined future actions amounts to invoking straw men.   
Mr Goldberg got even more imaginative, comparing the government's actions vis a vis Mr Solomon to its actions in the foreign policy realm:

Meanwhile the threat against Forest and its CEO is more draconian than actions the Obama administration is taking against Assad. The dictator who has slaughtered his people, aided Iran, built a uranium-enrichment facility, staged the Hezbollah takeover of Lebanon, and whose country is soon to be part of the UN Human Rights Council has received a stern warning from the president but nothing more.

Of course, it is one thing for a government agency to decide not to do business with an individual within the country whose company admitted to violating the law. It is another thing for a government to attempt to take "actions" against a foreign leader over whom the government has no legal authority.  So here is another kind of double-standard (see this alternative catalog of logical fallacies.)

Straw Man: The Case of Rituxan

Meanwhile, in Forbes, Charles L Hooper and David R Henderson argued that Forest Laboratories' actions do not merit any punishment at all, not of the company nor of Mr Solomon:

But it's bad to market unapproved drugs and to promote drugs for unapproved uses, right? Not exactly.

First, Hooper and Henderson argued that Forest Laboratories' off-label marketing of l-thyroxine (a thyroid hormone) was a mere technicality. This appears to be mainly a distraction, since most of the case involved marketing antidepressants.  In any case, they then argued that:

The fact is that off-label uses of drugs have saved lives. Consider Genentech and Biogen Idec's Rituxan, which the FDA approved in 1997 for relapsed or refractory CD20-positive B-cell low-grade non-Hodgkin's lymphoma (NHL).

Of course, the Forest Laboratory case did not involve punishing physicians for off-label uses of any drug. It involved punishing Forest Laboratories and possibly its CEO for the marketing of drugs for off-label uses. The drugs involved were obviously not Rituxan. They did include Celexa, an antidepressant, which no one ever claimed is a life-saving drug (but which is a member of a class of drugs that may be ineffective and may increase the risk of suicidal ideation or even action in children and adolescents, the groups for which it was marketed off-label by Forest Laboratories).   So the attempt to invoke Rituxan, as if someone was proposing restrictions on its off-label use, was another straw man.   

Summary

So once again we see how logical fallacies are used to defend the powers that be in health care.  Once again, note that the these logically challenged defenses come from those with financial ties to the same powers that be.  (In addition to the affiliations noted above, Mr Goldberg is Vice President of the Center for Medicine in the Public Interest, which SourceWatch describes as a "pharmaceutical industry front group," while Charles L Hooper is "president of Objective Insights, a company that consults for pharmaceutical and biotech companies.")

Let us see if anyone can offer a logical argument why health care corporate CEOs should not be held responsible for their corporations' misbehavior, or if anyone without financial ties to such corporations is willing to defend such lack of responsibility. 

Meanwhile, to repeat again and again,  we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Will a Pharmaceutical CEO Finally Be Held Accountable for Misbehavior on His Watch?

It appears there may be a move afoot to have the leader of a large health organization suffer some negative consequences for the misbehavior of his organization.  As reported by the St Louis Post-Dispatch,

For the past 34 years, Howard Solomon has presided over Forest Laboratories Inc., a midsize pharmaceutical company that runs its national sales operations from Earth City.

Solomon, 83, took home $8.3 million last year as the company's chairman, president and chief executive officer. But his company's marketing arm also fell into trouble, pleading guilty to federal charges that its sales force illegally marketed the antidepressants Celexa and Lexapro to children and adolescents, even though these drugs had not been approved for minors.

Now, the federal Department of Health and Human Services is attempting to oust Solomon from his job. According to the company, the agency's Office of Inspector General advised Solomon, a Yale Law School alum, last week that it planned to exclude him from doing any business with federal Medicare and Medicaid programs.

The move — similar to the government's exclusion of KV Pharmaceutical's former chairman, Marc Hermelin — is part of a new effort by regulators to use this enforcement tactic to root out 'untrustworthy individuals' who knew or should have known that health care fraud was being committed on their watch.

This appears to be big news. As we have discussed ad infinitum, there has been a parade of legal settlements by large health care organizations of charges of various kinds of wrong-doing. Some of these settlements have involved apparently large monetary penalties. However, the settlements have almost never been accompanied by any negative consequences for the people who authorized, directed or implemented the bad behavior.

The concern all along has been that monetary settlements may just be regarded as a cost of doing business, and as long as misbehavior is lucrative, such settlements have no deterrent effect. In fact, the current practice seemed to grant impunity to corporate leaders. Actually barring a corporate executive from Medicare, which could result in the collapse of his company were he or she not to resign, would be a significant step towards accountability.

Note that the St Louis Post-Dispatch article documented the rarity of imposing any negative consequences on corporate health care executives:

Prosecutors have long been criticized for seldom filing charges against individuals associated with drug companies that are convicted of criminal conduct. Huge fines in recent years against Pfizer Inc. and Eli Lilly & Co., for example, did not stop their chief executives from continuing in their jobs.

Also,

Solomon, who joined the company in 1977, would become the second drug company executive barred from doing business with federal health care programs under a specific provision of the law that authorizes the exclusion of individuals who have not been convicted of a crime.

In October, the agency's Office of Inspector General posted 'guidance' saying that, when there is evidence that an owner/operator or company officer "knew or should have known" of his organization's criminal conduct, the agency 'will operate with a presumption in favor of exclusion.'

Hermelin, an owner/operator of KV Pharmaceutical, was excluded in November from federal health care programs for 20 years — and stepped down from the company's board of directors. He pleaded guilty last month to two criminal misdemeanors connected with his firm's shipment of oversized morphine tablets, and was sentenced to 30 days in the County Jail.

In addition, three executives of the Connecticut-based pharmaceutical company Pardue Frederick were excluded for 15 years from federal health programs under a different provision of the law, after their guilty pleas in 2007 in connection with the misbranding of the painkiller OxyContin.

Meanwhile, it seems that health care corporate CEOs can find academics who will defend their actions no matter what.  It was instructive to see one such defense of Solomon described in the Post-Dispatch article:

Jackson Nickerson, a professor of organization and strategy at Washington University's Olin Business School, said the agency's 'underlying model' for exclusion appeared to be an example of over-regulation.

'It's predicated on the assumption that if a company has done something wrong, it must mean the senior executives have done something wrong,' he said. 'You are branded as being unethical if a subordinate makes a decision that turns out to be a bad one.'

Nickerson said that to encourage innovation, company executives needed to delegate certain responsibilities to employees lower down in the organization. 'The dilemma is, how do you engage in global competition and decentralize, while at the same time be held accountable as an individual leader?'

It does seem that it would be hard for top corporate executives to keep their eyes on the actions of all subordinates. On the other hand, it also seems that top corporate executives have justified their out-sized compensation by taking personal credit for everything good that happens to their organizations. If they want such credit, why should they escape responsibility when some actions go wrong?

Note that Prof Nickerson played the "innovation" card. A common justification for many corporate health care practices is that they enable innovation. This argument is thrown around so often I begin to suspect it comes from corporate public relations' talking points. (See this post about the development of such talking points.) Of course, the more a corporation is truly decentralized to support innovation, the less it can argue that the top executives deserve huge salaries because of their close involvement in everything that goes on at that corporation.

Furthermore, while Forest Laboratories' previous marketing practices might have been innovative, that did not make them ethical. As we noted in an earlier post, the company was accused of marketing anti-depressants to children when they had only previously been approved for adults. Their marketing tactics allegedly included suppressing negative studies, and paying physicians to prescribe the drugs. The company pleaded guilty to obstruction of justice for lying to the FDA during a plant inspection, and to misdemeanor charges of misbranding and distributing an unapproved drug contrary to an FDA directive.

In addition, an earlier post summarized memos made public by a congressional investigation about Forest Laboratories' marketing of Lexapro. These included coopting medical education, "key opinion leaders," and medical associations for marketing purposes:
- The marketing plan from the marketing department paid for medical education as a "promotional objective," that is, to market, not to educate.
- Thought leaders and consultants were again paid by marketing to market, and sometimes to provide opinions about "promotional strategies" and "commercial development."
- Medical associations are funded by marketing "for commercial and policy activities."

So the facts in the Forest Laboratories case make protests that holding corporate leaders accountable for misbehavior on their watches will stifle innovation seem disingenuous. Furthermore, it makes no sense to pay top corporate leaders outrageous amounts for everything good that happens on their watch without similarly holding them accountable for everything bad that happens then.

If the US government is really going to hold one corporate leader responsible for misbehavior by his subordinates on his watch, that would be a step forward.  As we have said again and again, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.