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Causing More Harm than Good: Conflict-of-Interest Rules Thwart Medical Progress

October 26, 2010

By Richard A. Epstein

In the abstract, just about everyone favors the rapid development and deployment of new pharmaceuticals and medical devices. But when the question turns on how to organize these vital activities, universities, hospitals, and government agencies often adopt strategies that undermine this basic objective. The increased severity of conflict of interest regulation of firms developing drugs and medical devices offers a powerful illustration of the unfortunate recent trends in this area.

More concretely, these two industries are now facing a two-pronged attack. As regards the creation of new knowledge, a wide range of public and private regulations now curb cooperation among research scientists in the industry, the academy, and government. As regards the dissemination of information about new drugs and devices, pharmaceutical companies are subject to increasingly stringent rules on the types of promotional practices that they can use to market their new products. Together, these costly regulatory initiatives spell lower rates of innovation and slower dissemination of newer products.

In a recent report that I prepared for the Manhattan Institute, I seek to develop, at length, the downside of the strong, present push to add more teeth into conflict of interest regulation. It is useful to set out the key steps in the argument as it applies to new drug and device development.

The first point to note is this: It is not possible to just wish away the problem of conflict of interest in dealing with any productive human activity. I often like to joke that all it takes to have a conflict of interest is two persons whose goals and objectives differ from one another. But that point, although true, does not quite capture the more specific concerns that apply to most professions and industries, including firms that specialize in drugs and medical devices. In these cases, the concern is that no individual can serve two masters. Accordingly, the scientist or physician who owes duties of loyalty to either his academic peers or patient population cannot be allowed to subordinate their interests to either his financial well-being or that of the commercial enterprises with which he has some sort of business arrangement.

Yet, while the general point is surely true, at most, it only indicates an area that warrants some type of regulation. That general proposition, however, does not in and of itself indicate the kind of regulation that is needed. To answer that question, it is important to develop some sense of the frequency and severity of these conflicts of interest, on the one hand, and the crimp that these regulations could place on new and important collaborative work, on the other.

Most of the modern critics of the drug and medical device industries start with the assumption that the profit-motive alone is sufficient to distort the behavior of all scientists and researchers, so that something dramatic has to be done to curb abuses and to restore the (elusive) confidence of the public in the notion that these individuals are working only for the benefit of the public.

In order to achieve this goal, critics often advocate strong rules that are intended to prohibit the kinds of collaborative efforts that have long characterized standard practice in these areas. Today, we thus see a constant push toward the view that it is not enough to punish those malefactors who have indeed put their financial gain ahead of scientific work on the one hand, and patient welfare on the other. Nor in the eyes of many is it sufficient to “manage” these conflicts of interest by asking individual scientists and physicians to make disclosures to some competent administrative party who can then figure out whether to allow some collaborative project to go through, and, if so, on what kinds of conditions.

Instead, the newer push is for rules that seek not disclosure, but disqualification right at the outset, so as to nip these problems of potential conflicts in the bud. It is now common to hear calls that no scientist who sits on any Food and Drug Administration (“FDA”) review committee, or any hospital conflict of interest committee, should be allowed to have connections with the pharmaceutical industry. Similarly, it is often insisted that the collaborations between government and industry scientists on research projects of common interests should either be totally eliminated or heavily regulated. Finally, other types of regulation seek to limit the control that these companies can exert over the direction of meetings and research projects which they wish to fund. These companies should be allowed to contribute money to these programs, only if they leave the management of these funds to others. Indeed, in some instances, petty regulations go so far as to deny the opportunity of drug companies to pay for the meals of doctors or to give them free fountain pens and note pads.

There is, to be sure, no categorical way to wish the conflict of interest problem away. But it is equally important to keep it in perspective. In the first place, the number of instances of serious abuses of power in the drug and device industry, like in medical research itself, is small, relative to the huge number of interactions that have taken place. But it would be a mistake to assume that the most conspicuous illustrations of outright fraud involve drug or device companies. Rather, the most serious abuses that have come to light involve academic research scientists whose urge to gain tenure or to establish research priority leads to regrettable lapses in judgment.

The proper response inside universities is to establish programs that combine serious sanctions after the fact for major violation of academic norms with an ex ante disclosure regime that asks individual scientists and physicians to report potential conflicts of interest as they arise to determine what, if anything, should be done to control these risks going forward. A research investigator may not be allowed, for example, to run clinical trials on the products that she invented, but could participate as an unpaid consultant at the request of those in charge of the project. I favor the continuation of this more nuanced approach because it has resulted in relatively few breakdowns in scientific standards, and allows for more extensive collaboration of industry researchers with those in academics or government.

The attempts to block these efforts up front have some serious adverse consequences that cannot be ignored, even if they are not often visible to the public eye. It should be treated as a sociological given that modern scientific research into new drugs and medical devices depends on an extensive division of labor, driven by an ever increasing specialization in knowledge. Any major new drug research project could easily require the work of specialists in biophysics, biochemistry, biostatistics, engineering nanotechnology, and physiology, just for starters. The free interchange of information within and across firm boundaries is best calculated to allow the sharing and coordination of vital information.

Strong conflict of interest regulation poses real threats to these dynamic interactions. It is commonplace today for the best research scientists in universities to wear multiple hats. In addition to researching within the academy, they also offer consulting services to drug companies, or start businesses of their own. Sensible “conflict of commitment” policies can help make sure that the balance in question is consistent with the overall objectives of universities. It does not help matters, for example, when Partners Health, which owns the Massachusetts General Hospital and Brigham and Women’s Hospital in Boston, imposes a strict rule that its senior officials can only receive up to $5,000 per day in compensation for sitting on the boards of pharmaceutical and biotech companies. In the absence of any abuse, why crimp the behavior of the most gifted members of the academy who can also make major contributions to industry?

Much the same can be said about FDA decisions that require all persons who want to sit on its key advisory opinions to disclose detailed information about their financial arrangements to the public at large. To be sure, no physician should review any drug or device in which he or she has a financial interest: there are too many alternative experts available to tolerate that conflict. But the implementation of that customary rule does not have the overbroad effect of the new rule. It is commonly recognized that the ablest scientists often have the most extensive outside practices. It seems most unwise to block them from serving on these FDA advisory committees when, at the moment, about a third of the over 600 seats on these committees are vacant.

Nor does the removal of these scientists help to improve the impartiality of the review committees. The scientists who have no such connections could easily harbor strong beliefs that new and risky drugs should be kept off the market which, in turn, could lead them to overstate the risks and understate the benefits of these new treatments.

A similar set of concerns applies to the promotion and dissemination of new drugs and devices. No reputable pharmaceutical or drug company will undertake the hugely expensive work to do research on new products that have to make it past an ever thicker set of regulatory barriers without the ability to market those products in ways that let them recoup their costs (and profits). Any decision to limit the promotional activities accompanying these products increases the costs of their marketing and thus reduces the profitability of these drugs, which, in turn, will drive decisions to abandon more new products at earlier stages in the research and production cycle, especially those that treat small patient populations.

That cost would be worthwhile if serious abuses were prevented. But, in fact, most of the prohibitions in place are counterproductive. Let us assume that a company will have some incentive to slant its presentations in favor of its own product. The question is whether that fact alone is sufficient to limit its ability to conduct sessions through its “detail people” (who sell these drugs), to meet with physician groups, or to sponsor academic speeches at conferences in support of their products.

In most cases the answer is no. In particular, this argument ignores three critical features of the larger drug-promotion landscape.

First, distorted information is often better than no information at all. Yet, once the companies are not allowed to push their new products, who will take up the slack? Certainly not hospitals with tight budgets that have limited knowledge about the products and who may well be concerned with their own potential liabilities or reputations if they misstate the good and bad properties of given drugs.

Second, promotion is a strategy that should be available to all drug and device companies, not just some. The supposed excesses of the one company can therefore be checked with information that is supplied by rival firms. Those interactions, in turn, can lead independent parties to review the drugs in question, adding further information to the mix.

Third, drug and device companies face powerful reality checks against excessive promotion. No company can make money if it promotes drugs that turn out to provide little relief to patients or that generate adverse side effects that could lead to painful withdrawal programs, followed by potential suits for tort liability. The company’s self-interest requires it to be careful in selecting only its most promising drugs for promotion. It is therefore no surprise to see companies stop their trials, even after committing millions of dollars to the venture, when the data turns out bad.

In sum, it is clear that the public anxiety attacks over conflict of interest regulation are likely to do more harm than good. Yet, why do they persist? The simplest explanation is the most powerful. The people who line up most strongly against drug and device companies often treat the phrase “market forces” as though it embodies the worst things in life. In so doing, they forget the immense advances that are made under a system that combines public research on general, scientific principles with proprietary research on particular products of commercial power.

More specifically, proponents of extensive conflict of interest regulation think that corporate reputations exert little influence on corporate behavior, and so over punish the rare malefactor at the expense of the many virtuous firms. It would be a public tragedy if their misunderstanding of the complex interaction between scientific research and for-profit enterprises undercuts research and development seeking out new treatments for patients suffering from serious and life-threatening diseases. In this case, the cure of conflict of interest regulation is undoubtedly worse than the risk of self-dealing that it is trying to check.

* Let me disclose my conflicts of interest. Over the years, I have worked extensively with various groups in the pharmaceutical industry, but have done no such work in the past few years. I have also served from time to time on conflicts of interest committees, and also chaired a committee that drafted the rules for dealing with these issues at the University of Chicago. For this study, I consulted with no industry, physician, or government groups in preparing this study. Needless to say, the topic came up in previous writings and in the workshops and conferences that I have attended on these matters. The opinions are entirely my own.

Original Source: http://blogs.forbes.com/richardepstein/2010/10/26/conflict-of-regulation-of-pharmaceuticals-and-medical-devices/

 

 
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