[Congressional Record (Bound Edition), Volume 154 (2008), Part 10]
[Senate]
[Pages 13314-13316]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         PAYMENTS TO PHYSICIANS

  Mr. GRASSLEY. Madam President, I started looking at the financial 
relationships between physicians and drug companies several years ago. 
I first began this inquiry by examining payments to individuals who 
served on FDA's Advisory Boards. More recently, I began looking at 
payments from drug companies to professors at our nation's medical 
schools and more specifically at the payments from Astra Zeneca to a 
professor of psychiatry at the University of Cincinnati.
  I then moved on to look at several psychiatrists at Harvard and Mass 
General Hospital. These physicians are some of the top psychiatrists in 
the country, and their research is some of the most important in the 
field. They have also taken millions of dollars from the drug companies 
and failed to report those payments accurately to Harvard and Mass 
General.
  For instance, in 2000 the National Institutes of Health awarded one 
Harvard physician a grant to study atomoxetine in children. At that 
time, this physician disclosed that he received less than $10,000 in 
payments from Eli Lilly which makes Straterra, a brand name of 
atomoxetine. But Eli Lilly reported that it paid this same physician 
more than $14,000 for advisory services that year--a difference of at 
least $4,000.
  I would now like to report what I have found out about another 
researcher--Dr. Alan Schatzberg at Stanford. In the late nineties, Dr. 
Schatzberg helped to start a company called Corcept Therapeutics--Dr. 
Schatzberg is a copatent owner on a drug developed by Corcept. That 
company applied to the Food and Drug Administration for approval to 
market Mifepristone for psychotic depression.
  Dr. Schatzberg is a well-known psychiatrist and has received several 
grants from the National Institutes of Health to study Mifepristone. 
While Dr. Schatzberg has reported some of his income from Corcept 
Therapeutics to Stanford, he did not report a profit of $109,179 from 
the sale of 15,597 shares of Corcept stock on August 15, 2005 because 
he was not required to do that under Stanford's rules.
  But if it is not required by Stanford, I submit to you that it should 
be. Why? Because in his Stanford disclosures, Dr. Schatzberg only had 
to report whether he had more than $100,000 of stock in Corcept 
Therapeutics. However, his filings with the U.S. Securities and 
Exchange Commission show that he has

[[Page 13315]]

control of 2,738,749 shares of Corcept stock worth over $6 million.
  In addition, in 2002 Dr. Schatzberg did not report any income from 
Johnson & Johnson, but the company reported to me that it paid Dr. 
Schatzberg $22,000 that year. And in 2004, Dr. Schatzberg reported 
receiving between $10,000-$50,000 from Eli Lilly. But Eli Lilly 
reported to me that they paid Dr. Schaztberg over $52,000 that year.
  Before closing, I would like to say that Stanford has been very 
cooperative in this investigation, as have been many of the drug 
companies. I ask unanimous consent to have my letter to Stanford 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                         Committee on Finance,

                                    Washington, DC, June 23, 2008.
     Dr. John L. Hennessy,
     President, Stanford University, Office of the President, 
         Stanford, CA
       Dear Dr. Hennessy: First, I would like to thank you again 
     for working with me to lower student tuition at Stanford 
     University (Stanford/University). It was a great leap forward 
     in the effort to help students afford a quality education. 
     Next, I would like to bring several other issues to your 
     attention regarding Stanford, its conflict of interest 
     policies, and a particular faculty member at your University.
       As you know, the United States Senate Committee on Finance 
     (Committee) has jurisdiction over the Medicare and Medicaid 
     programs and, accordingly, a responsibility to the more than 
     80 million Americans who receive health care coverage under 
     these programs. As Ranking Member of the Committee, I have a 
     duty to protect the health of Medicare and Medicaid 
     beneficiaries and safeguard taxpayer dollars appropriated for 
     these programs. The actions taken by thought leaders, like 
     those at Stanford, often have a profound impact upon the 
     decisions made by taxpayer funded programs like Medicare and 
     Medicaid and the way that patients are treated and taxpayer 
     funds expended.
       Moreover, and as has been detailed in several studies and 
     news reports, funding by pharmaceutical companies can 
     influence scientific studies, continuing medical education, 
     and the prescribing patterns of doctors. Because I am 
     concerned that there has been little transparency on this 
     matter, I have sent letters to almost two dozen research 
     universities across the United States regarding about 30 
     physicians. In these letters, I asked questions about the 
     conflict of interest disclosure forms signed by some of their 
     faculty. As you know universities like Stanford require 
     doctors to report their related outside income. But I am 
     concerned that these requirements are sometimes disregarded.
       I have also been taking a keen interest in the almost $24 
     billion annually appropriated to the National Institutes of 
     Health (NIH) to fund grants at various institutions such as 
     Stanford. Institutions are required to manage a grantee's 
     conflicts of interest. However, I am learning that this task 
     is made difficult because physicians do not consistently 
     report all the payments received from drug companies.
       To bring some greater transparency to this issue, Senator 
     Kohl and I introduced the Physician Payments Sunshine Act 
     (Act). This Act will require drug companies to report 
     publicly any payments that they make to doctors, within 
     certain parameters.
       I am also writing to assess the implementation of financial 
     disclosure policies at Stanford University. In response to my 
     letter of October 25, 2007, Stanford provided me with copies 
     of the financial disclosure reports that Dr. Alan Schatzberg 
     filed during the period of January 2000 through June 2007.
       My staff investigators carefully reviewed each of Dr. 
     Schatzberg's disclosure forms and detailed the payments 
     disclosed. Subsequently, I asked that Stanford confirm the 
     accuracy of the information. In March 2008, Stanford's Vice 
     Provost and Dean of Research provided clarifications and 
     additional information from Dr. Schatzberg pursuant to my 
     inquiry.
       In addition to obtaining information from Stanford, I also 
     contacted executives at several major pharmaceutical and 
     device companies and asked them to list the payments that 
     they made to Dr. Schatzberg during the years 2000 through 
     2007. These companies voluntarily and cooperatively reported 
     additional payments that do not appear to have been disclosed 
     to Stanford by Dr. Schatzberg. For instance, in 2002 Dr. 
     Schatzberg did not report any income from Johnson & Johnson, 
     but the company reported to me that it paid Dr. Schatzberg 
     $22,000 that year. And in 2004, Dr. Schatzberg reported 
     receiving between $10,000-$50,000 from Eli Lilly. But Eli 
     Lilly reported to me that they paid Dr. Schatzberg over 
     $52,000 that year.
       Because these disclosures do not match, I am attaching a 
     chart intended to provide to Stanford a few examples of the 
     data reported to me. This chart contains columns showing the 
     payments disclosed in the forms Dr. Schatzberg filed with 
     Stanford and the amounts reported by several drug and device 
     companies.
       The lack of consistency between what Dr. Schatzberg 
     reported to Stanford and what several drug companies reported 
     to me seems to follow a pattern of behavior. More 
     specifically, I have uncovered inconsistent reporting 
     patterns at the University of Cincinnati, and at Harvard 
     University and Mass General Hospital.

                     Institutional and NIH Policies

       Let me now turn to another matter that is of concern. 
     Stanford requires every faculty member to make an annual 
     disclosure related to both conflict of commitment (where no 
     financial information is requested), and conflict of 
     interest. As noted to me in your letter dated March 14, 2008, 
     ``It is our obligation to avoid bias in research, including 
     that conducted with federal funds.''
       Based upon the information provided to me to date, Stanford 
     has a zero dollar threshold for disclosures for research 
     involving human subjects. Faculty members are required to 
     disclose a range of amounts received from outside 
     relationships that are related to a faculty member's research 
     activities (such as participation on advisory boards or 
     boards of directors, or consulting). In most instances, the 
     University's standard for a significant financial interest is 
     whether the faculty member received $10,000 or more in 
     income, holds $10,000 or more in equity for publicly traded 
     companies, or has any equity in the company in the event the 
     company is privately held.
       Further, federal regulations place several requirements on 
     a university/hospital when its researchers apply for NIH 
     grants. These regulations are intended to ensure a level of 
     objectivity in publicly funded research, and state in 
     pertinent part that NIH investigators must disclose to their 
     institution any ``significant financial interest'' may appear 
     to affect the results of a study. NIH interprets 
     ``significant financial interest'' to mean at least $10,000 
     in value or 5 percent ownership in a single entity.
       Again based upon the information provided to me, it appears 
     that Stanford takes failures to report outside income quite 
     seriously. As noted in your correspondence dated March 14, 
     2008, ``It is our obligation to avoid bias in research, 
     including that conducted with federal funds.'' You then 
     described a Stanford investigation conducted in 2006 
     regarding a researcher who failed to report gifts, meals and 
     trips from a device company. That faculty member was later 
     terminated.
       Based upon information available to me, it appears that Dr. 
     Schatzberg received numerous NIH grants to conduct studies 
     involving Mifepristone for treating depression. Corcept 
     Therapeutics, a publicly traded company, has applied to the 
     Food and Drug Administration for approval to market 
     Mifepristone for psychotic depression. These grants funded 
     studies during the years 2000 through 2007 that examined the 
     treatment of psychotic major depression using Mifepristone. 
     During these years, Dr. Schatzberg, consistent with 
     Stanford's conflict policy, disclosed to Stanford a financial 
     relationship with Corcept Therapeutics (Corcept) including 
     stock ownership of over $100,000 and payments for activities 
     including its Board of Directors, Advisory Board Membership, 
     consulting, licensing agreements, and royalties. According to 
     his disclosures, these payments were between $50,000 to 
     $100,000 in the years 2003 through 2005, and between $10,000 
     to $50,000 in the years 2001, 2002, 2006, and 2007.
       However, it appears based upon the information available, 
     Dr. Schatzberg did not and was not required to report a 
     profit of $109,179 from the sale of 15,597 shares of Corcept 
     stock on August 15, 2005. This transaction is found in his 
     publicly available filings with the U.S. Securities and 
     Exchange Commission (SEC). Earlier that year, Dr. Schatzberg 
     began enrolling an estimated 100 patients for a clinical 
     trial, sponsored by the NIH, to evaluate Mifepristone to 
     treat psychotic depression.
       Further, while Dr. Schatzberg appropriately disclosed to 
     Stanford that his stock shares were valued at over $100,000, 
     I am not certain that this number captures the stocks' true 
     value. Dr. Schatzberg carries an equity interest in Corcept 
     with over 2 million shares of stock. For instance, as of 
     January 31, 2008, he reported to the SEC that he held 
     2,438,749 shares of Corcept stock, with sole voting power for 
     2,738,749 shares. On June 12, 2008, Corcept stock closed at 
     $2.24 a share, meaning that his stock is potentially worth 
     over $6 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.
       In light of the information set forth above, I ask your 
     continued cooperation in examining conflicts of interest. In 
     my opinion, institutions across the United States must be 
     able to rely on the representations of its faculty to ensure 
     the integrity of medicine, academia, and the grant-making 
     process. And the NIH must rely on strong institutional 
     conflict of interest policies to ensure the integrity of the 
     grant making process. At the

[[Page 13316]]

     same time, should the Physician Payments Sunshine Act become 
     law, institutions like yours will be able to access a 
     database that will set forth the payments made to all 
     doctors, including your faculty members.
       Accordingly, I request that Stanford respond to the 
     following questions and requests for information. For each 
     response, please repeat the enumerated request and follow 
     with the appropriate answer.
       1. For each of the NIH grants received by Dr. Schatzberg, 
     please confirm that he reported to Stanford University's 
     designated official ``the existence of [a] conflicting 
     interest.'' Please provide separate responses for each grant 
     received for the period from January 1, 2000 to the present, 
     and provide any supporting documentation for each grant 
     identified.
       2. For each grant identified above, please explain how 
     Stanford ensured ``that the interest has been managed, 
     reduced, or eliminated.'' Please provide an individual 
     response for each grant that Dr. Schatzberg received from 
     January 2000 to the present, and provide any documentation 
     supporting each claim.
       3. Did Dr. Schatzberg violate any federal or Stanford 
     policies by not revealing his stock sale in 2005? If not, why 
     not?
       4. Is Stanford considering any changes in its disclosure 
     policies to more fully capture the degree of a conflict when 
     a faculty member owns shares in a company that are in excess 
     of $100,000?
       5. Please report on the status of any possible reviews of 
     research misconduct and/or discrepancies in disclosures by 
     Dr. Schatzberg, including what action if any will be 
     considered.
       6. Please report if a determination can be made as to 
     whether or not Dr. Schatzberg violated guidelines governing 
     clinical trials and the need to report conflicts of interest 
     to an institutional review board (IRB). Please respond by 
     naming each clinical trial for which the doctor was the 
     principal investigator, along with confirmation that 
     conflicts of interest were reported, if possible.
       7. Please provide a total dollar figure for all NIH monies 
     received annually by Stanford University. This request covers 
     the period of 2000 through 2007.
       8. Please provide a list of all NIH grants received by 
     Stanford University. This request covers the period of 2000 
     through 2007. For each grant please provide the following:
       a. Primary Investigator;
       b. Grant Title;
       c. Grant number;
       d. Brief description; and
       e. Amount of Award.
       Thank you again for your continued cooperation and 
     assistance in this matter. As you know, in cooperating with 
     the Committee's review, no documents, records, data or 
     information related to these matters shall be destroyed, 
     modified, removed or otherwise made inaccessible to the 
     Committee.
       I look forward to hearing from you by no later than July 
     xx, 2008. All documents responsive to this request should be 
     sent electronically in PDF format to Brian_Downey@finance-
rep.senate.gov. If you have any questions, please do not 
     hesitate to contact Paul Thacker at (202) 224-4515.
           Sincerely,
                                              Charles E. Grassley,
                                                   Ranking Member.

 SELECTED DISCLOSURES BY DR. SCHATZBERG AND RELATED INFORMATION REPORTED
          BY PHARMACEUTICAL COMPANIES AND DEVICE MANUFACTURERS
------------------------------------------------------------------------
                                       Disclosure filed   Amount company
      Year              Company        with Institution      reported
------------------------------------------------------------------------
2000............  Bristol Myers       No amount provided          $1,000
                   Squibb.
                  Eli Lilly.........  No amount provided         $10,070
2001............  Bristol Myers       No amount provided          $4,147
                   Squibb.
                  Corcept             >$10,000<$50,000 a             n/a
                   Therapeutics.
                  Eli Lilly.........  No amount provided         $10,788
2002............  Bristol-Myers       Not reported......          $2,134
                   Squibb.
                  Corcept             >$100,000 b.......             n/a
                   Therapeutics.
                  Corcept             <$10,000 c........             n/a
                   Therapeutics.
                  Corcept             <$10,000 d........             n/a
                   Therapeutics.
                  Eli Lilly.........  No amount provided         $19,788
                  Johnson & Johnson.  Not reported......         $22,000
2003............  Bristol-Myers       No amount provided          $4,000
                   Squibb.
                  Corcept             <$10,000 e........             n/a
                   Therapeutics.
                  Corcept             >$10,000<$50,000 f             n/a
                   Therapeutics.
                  Corcept             >$100,000 g.......             n/a
                   Therapeutics.
                  Corcept             <$10,000 h........             nfa
                   Therapeutics.
                  Corcept             <$10,000 i........             n/a
                   Therapeutics.
                  Eli Lilly.........  No amount provided      $18,157.34
                                       j.
2004............  Bristol-Myers       <$10,000..........           $0.00
                   Squibb.
                  Corcept             >$10,000<$50,000a.             n/a
                   Therapeutics.
                  Corcept             >$100,000 g.......             n/a
                   Therapeutics.
                  Eli Lilly.........  >$10,000<$50,000 k         $52,134
                  Pfizer............  Not reported......          $2,500
2005............  Bristol-Myers       <$10,000..........              $0
                   Squibb.
                  Corcept             >$10,000<$50,000 a             n/a
                   Therapeutics.
                  Corcept             >$100,000 g.......              na
                   Therapeutics.
                  Eli Lilly.........  >$10,000-<$50,000.          $9,500
                  Pfizer............  No amount provided          $2,000
2006............  Bristol-Myers       Not reported......        l $6,000
                   Squibb.
                  Corcept             <$10,000 h........             n/a
                   Therapeutics.
                  Corcept             >$10,000<$50,000..             n/a
                   Therapeutics.
                  Corcept             >$100,000 g.......             n/a
                   Therapeutics.
                  Eli Lilly.........  >$10,000<$50,000 m         $20,500
                  Pfizer............  Not reported......            $300
2007............  Eli Lilly.........  Not reported......         $10,063
------------------------------------------------------------------------
a Physician disclosed payment for Advisory Board Membership, Board of
  Directors, and consulting.
b Physician disclosed payment for equity.
c Physician disclosed payment for serving as a Director, consultant.
d Physician disclosed payment for royalties.
e Physician disclosed payment for serving as a Advisory Board Member.
f Physician disclosed payment for consulting.
g Physician disclosed stock ownership.
h Physician disclosed payment for licensing agreement.
i Physician disclosed payment for serving as Director, Board of
  Directors.
j Physician disclosed payment of <$10,000 for consulting, and did not
  provide amounts received for research, grants and gift funding.
k Physician disclosed payment of <$10,000 for Advisory Board Membership,
  and >$10,000<$50,000 for honoraria for papers or lectures, and
  consulting.
l Bristol-Myers Squibb stated that Stanford intended to pay Dr.
  Schatzberg $6,000 for conducting an annual course for which the
  company provides a grant.
m Physician disclosed payment for serving as a Advisory Board Member and
  consulting.
Note 1: When a Physician named a company in a disclosure but did not
  provide an amount, the text reads ``no amount reported.'' When a
  Physician did not list the company in the disclosure, the column reads
  ``not reported.'' The Committee contacted several companies for
  payment information and the notation nla (not available) reflects that
  a company was not contacted.
Note 2: The Committee was not able to estimate the total amount of
  payments disclosed by Dr. Schatzberg during the period January 2000
  through June 2007 due to the fact that some amounts were not provided
  and in other instances ranges were used. Information reported by the
  pharmaceutical companies indicate that they made additional payments
  that are not reflected in his disclosures.


  

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