The US Senate Finance Committee charges that Stanford University failed to properly monitor alleged conflicts of interest involvingAlan Schatzberg, who chairs the psychiatry department at Stanford University and who owns about $6 million in stock in Corcept Therapeutics, which participates in a National Institutes of Health study he oversees.
This is the latest such case involving high-profile academics, who receive funding from both the NIH and industry, to be investigated by Chuck Grassley, the ranking committee Republican, for possible violations of federal regulations. At issue are whether universities are adequately policing disclosures in an effort to maintain scientific integrity and objectivity.
Earlier this month, he targeted three Harvard University psychiatrists, including Joe Biederman, for failing to report income since 2000 from various drugmakers. And Grassley also singled out Melissa DelBello at the University of Cincinnati.
In the latest instance, Schatzberg is the lead investigator on an NIH-funded study at Stanford that is testing the abortion drug mifepristone for treating depression. In the past, The San Jose Mercury News writes that Schatzberg insisted he is not directly involved in recruiting or testing patents, and discloses his financial interest in paper and talks.
However, in remarks and a letter to Stanford published on 23 June in the Congressional Record, Grassley noted that Stanford requires that Schatzberg disclose stock valued at more than $100,000. Yet Stanford didn't require him to report profit of $109,000 by selling some Corcept shares in 2005, inform the school that his remaining 2.7 million shares are now worth about $5.8 million.
"Obviously, $6 million is a dramatically higher number than $100,000 and I am concerned that Stanford may not have been able to adequately monitor the degree of Dr. Schatzberg's conflicts of interest with its current disclosure policies, and submit to you that these policies should be re-examined," Grassley writes in a letter to Stanford president John Hennessy.
There were other examples of incomlete disclosure cited by Grassley, including in 2002, when Schatzberg didn't report any income from Johnson & Johnson, but the drugmaker reported to Senate investigators that Schatzberg was paid $22,000 that year. And in 2004, Schatzberg reported receiving between $10,000 to $50,000 from Lilly, while the drugamker reported that Schatzberg was paid more than $52,000 that year.
To find Grassley's remark in the Congressional Record, look here and then type 'Schatzberg' in the search box, and then click on 'Payments to Physicians." To see Stanford's reply, in which the university says Schatzberg did make proper disclosure about the Corcept stock and other payments, please look here.
7 Comments
Grassley's Investigators should check into Dr. Rajiv Tandon, who was a clinical investigator for Bristol Meyer Squib, for Abilify (BETA STUDY), Abilify carries a Black Box Warning of suicide and violence in children and adolescents.
Dr. Rajiv Tandon: Principles of Antipsychotic Prescribing for Policy Makers, Circa 2008 Missouri Minnesota Indiana Massachussetes *NEW JERSEY* Pennsylvania Ohio *FLORIDA*
A.G. Ann Milgram should investigate Dr. Tandon's conflicts of interest in New Jersey's Health Services since Abilify is the top selling antipsychotic for children in New Jersey's Foster Care Program. Our Taxpayer dollars hard at work!!!
ATTEMPTS TO SELL STOCK
Aside from the unreported sale of shares to which Sen. Grassley called attention, which netted Dr. Schatzberg a little over $100,000, Stanford and Dr. Schatzberg might claim that he made almost no money from the company. This was not for want of trying. In connection with Corcept’s planned IPOs, Dr. Schatzberg made 2 very determined runs at selling large parcels of stock. Reflecting Sen. Grassley’s concern about oversight, it seems these would never have been reported to Stanford under the institution’s existing rules or, if they ever were, it would only have been after the fact. Here are the specifics. 28 January 2002. Corcept Therapeutics, Inc. filed an S-1-A statement with the SEC containing the terms of its proposed IPO of company stock. The total number of shares offered was 4,500,000 at a projected sale price of $14-$16 per share. Proceeds from the sale of 4,000,000 shares were slated for company operations. Proceeds from the sale of 500,000 shares by a selling stockholder were not slated for company operations. The selling stockholder was identified as Alan F. Schatzberg, M.D. Had this plan been consummated, Dr. Schatzberg would have benefited by $7,000,000 at an IPO sale price of $14 per share. The cost basis of these 500,000 shares to Dr. Schatzberg was less than $200. This planned IPO in 2002 was later withdrawn due to market conditions. 19 March 2004. Corcept Therapeutics, Inc. filed an S-1-A statement with the SEC. This document provided details of the proposed second attempt to consummate the company’s IPO. A total of 5,000,000 shares was proposed for sale at an issue price of $15-$17 per share. A selling stockholder proposed the sale of an additional 750,000 shares pursuant to the underwriters’ exercise of their over-allotment options. Proceeds from the sale of the over-allotment were not slated to go to the operating capital of the company. The selling stockholder was identified as Dr. Alan Schatzberg. Had this plan been consummated, Dr. Schatzberg would have benefited to the extent of $11,250,000 at an IPO price of $15 per share. The cost basis of these 750,000 shares to Dr. Schatzberg was less than $300. 14 April 2004. IPO occurred, with Corcept Therapeutics, Inc. selling 4.5 million of 5 million offered shares at $12.00, which netted $54,000,000 to working capital of the company. An over-allotment option of 750,000 shares owned by Dr. Schatzberg was withdrawn when the opening price was reduced to $12 from a projected $15 - $17.
It is indeed problematic when financial transactions of this magnitude can potentially go unreported to the University by faculty members who are required to recuse themselves from hands-on involvement in related NIH-supported projects. Sen. Grassley’s call for a review of Stanford’s reporting requirements is timely.
My guess is that Stanford is going to put up a fight for their doctor. Take a look at this op-ed that appeared last year.
http://www.latimes.com/news/opinion/web/la-oew-rubin11dec11,1,3436804.story
"For example, in an August 2002 Stanford University news release, Dr. Alan Schatzberg, chair of Stanford's Psychiatry Department, stated that treatment of psychotically depressed patients with the abortion drug, RU-486, "may be the equivalent of shock treatments in a pill.…" Given that electroconvulsive therapy is the most effective treatment for such patients, this was a hugely exaggerated claim, particularly because there was no significant evidence for effectiveness of the drug at that time. (Indeed, later FDA-monitored clinical trials also have been uniformly negative.)"
In the spirit of transparency, Chuck Grassley should disclose every nickel and other perk he has received from lobbyists and special interest groups over the past decade. I sincerely doubt we're going to see that happen. Turnabout is fair play.
Alan Schatzberg is a man of unimpeachable integrity whose work has contributed to relieving the suffering of millions of people. If only Grassley and his ilk could make the same claim.
The only thing that's really transparent here is the politically-expedient and self-serving nature of Grassley's witch hunt.
The pharmaceutical industry makes significant contributions to our health care system. If you really want to start a crusade to expose the health care demons take a good look at the managed care industry and the pharmacy benefits organizations. These entities contribute nothing to our health care system and profit perversely from restricting access to care and to medicines.
A frustrated physician
Looks like Lee Majors had nothing on Schatzberg, a real life Six Million Dollar Man.
Chuck Grassley has the right to pursue conflicts of interest. He and his colleagues are picking on the weakest of medicine's specialities, weakest in terms of scientific support and financial support. He neglects the opulent medical device manufacturers and their sweetheart deals with surgeons. If he were an honorable man, he would also be investigating his colleagues for their lobbyist generated conflicts of interest, particularly the way managed care companies and insurance companies take profits ahead of patients. At least Dr. Schatzberg is trying to help someone other than big donors.
Dear Frustrated Physician,
So what pharmaceutical company do you work for?
It's always easy to spot bloggers from the pharmaceutical companies and their big time advertising agencies....always pointing fingers at others to distract attention from themselves.
People who have hearts, write from the heart.
Easy to see you do not have a heart with all those big adjectives...just too slick to be real!
I sincerely hope you remain frustrated.
All the negative publicity these doctors are getting because they are hired guns for the pharmaceutical companies is well deserved.
They are the page turners at the conferences. They are the paid consultants getting other doctors to prescribe drugs for off-label purposes.
It is illegal for the pharmaceutical companies to advertise off-label uses, so they pay "consultants" to do it.
The latest big revenue for pharmaceuticals is to use their adult drugs for children.
Pharmaceutical companies are pedophiles, preying on children and destroying childrens lives with their poisonous drugs.
Anti-psychotic drugs, cholesterol drugs, Motrin...you name it. The pharmaceutical companies have doctors prescribing all of them for children to increase their profits. To hell with the kids...
It's an awful world we live in because snake oil salesmen parading themselves as "pharmaceutical companies" steal people's lives every single minute of the day!
Praise the Lord for Chuck Grassley!!!
Lana Keeton