The Cancer Letter

Obama’s Executive Order Gives FDA Authority To Manage Shortages of Generic Cancer Drugs

By Lucas Thomas
November 4, 2011

President Barack Obama earlier this week signed an executive order aimed at reducing the shortages of prescription drugs—the government’s first visible attempt to combat the problem that affects many areas, including oncology.

The executive order, signed Oct. 31, expands FDA early notification requirements. Before, manufacturers were only required to report a shortage if they were the exclusive provider of the drug. The executive order broadens that mandate, making it a requirement for manufacturers to “provide adequate advance notice of manufacturing discontinuances that could lead to shortages of drugs that are life supporting or life sustaining, or that prevent debilitating disease.”

“This is a problem we can’t wait to fix,” said Obama. “That’s why today, I am directing my administration to take steps to protect consumers from drug shortages, and I’m committed to working with Congress and industry to keep tackling this problem going forward.”

In conjunction with the executive order, Obama announced his support of the Preserving Access to Life- Saving Medications Act (H.R. 2245, S. 296). If passed, this law would mandate early notification of all potential shortages, not just of drugs made by single providers.

Another component of the executive order is to expedite the approval process for new manufacturing

sites, providers and manufacturing changes.

FDA will receive increased resources for the Drug Shortage Program by enabling what the White House calls a “surge team” to specifically monitor the potential of a drug shortage. When a shortage is identified, the program will work to precede it by encouraging other manufacturers to increase their supply.

The executive order also includes provisions to prevent price gouging on the gray market, directing FDA to work with the Department of Justice to determine whether distribution practices are lawful. Anything deemed by the DOJ to be out of line with industry regulations could trigger “whatever enforcement actions…it deems appropriate,” the order reads.

This is significant because there had been no previous regulation in place to prevent gray market vendors from stockpiling drugs and selling them at inflated prices. The executive order now introduces the potential for legal action to be taken against any supplier operating outside the realm of “applicable law.”

“I commend the President for his actions today to help patients obtain lifesaving drugs that are in critically short supply,” said Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform. “In addition to ensuring that these drugs are available for patients who need them, we must ensure that so-called ‘gray market’ middleman companies are not gouging patients by charging exorbitant rates.”

Cummings began publicly investigating the gray market on Oct. 5, when he sent letters to five companies—Allied Medical Supply Inc., Superior Medical Supply Inc., Premium Health Services Inc., PRN Pharmaceuticals, and Reliance Wholesale Inc.— who were suspected of price gouging. The letters requested purchasing, sales and storage documents from the companies.

“The idea that some companies may be taking advantage of cancer patients and others in such vulnerable positions is criminal, and we are taking action to get to the bottom of this,” Cummings said.

On Nov. 2, two days after the president’s order was signed, Cummings pressured one of the identified gray market company by sending a second letter to Superior Medical Supply.

The letter begins: “After receiving my letter, an attorney working for your company informed my staff that you would cooperate fully with this investigation and provide the requested documents. Since then, however, several calls to your attorney have been ignored, and calls directly to you have not been returned. I am concerned that your recent lack of cooperation may signal a decision on your part to reverse course and obstruct a congressional investigation that potentially could impact the health of millions of Americans.”

This letter expands the concerns raised in the previous letter about Superior’s questionable operating practices.

It adds that, in 2008, the company paid $200,000 to settle allegations from the Justice Department that said Superior held “inaccurate and incomplete records related to the receipt, delivery, sale, and disposal of controlled substances that it received and distributed to customers” on 58 different occasions between January and September of 2007.

It also mentions a 2009 disciplinary action from the Colorado Board of Pharmacy for buying drugs from unregistered sources.

Cummings reiterated his request for the documents, as well as “all documents and communications relating to any disciplinary or enforcement actions brought against your company by any local, state, or federal authority,” due by Nov. 14.

The letter is posted at:

Bruce Chabner, director of clinical research at theMassachusetts General Hospital MGH Cancer Center and chair of the National Cancer Advisory Board, said in a perspective article in The New England Journal of Medicine that the executive order stops short of addressing the economic and production problems that have created the shortage.

“This action represents a step forward in addressing this issue,” wrote Chabner. “The specific manner in which these orders will be implemented and the degree to which they will ameliorate the drug shortages are unclear. The executive order does not improve reimbursement for generic drugs or address the need for redundant production facilities or incentives such as rewarding past performance in the approval of new generics applications.

“It will be up to the community of cancer doctors, patients, and concerned citizens to demand further action at the federal level and by the private sector to ensure access to lifesaving and life-extending drugs. A license to market lifesaving products should entail a public obligation to meet demand. After all, if we can afford to spend billions of dollars on medical research, we should, as a society, enjoy the fruits of that investment by assuring the manufacture of generic drugs.”

Rep. Joe Pitts (R-Pa.), chairman of the House Energy and Commerce Health Subcommittee, which recently held a hearing about the drug shortages, issued a statement in response to the executive order:

“I am bewildered as to how the administration can claim that they can’t wait for Congress to address drug shortages since we have been anxiously awaiting a report promised by the administration at our hearing over a month ago. The issue is complex and witnesses, including HHS, testified at our hearing that there are multiple causes and as a result, it will require multiple solutions. I am disappointed that the administration has spent more time strategizing a press rollout to politicize this deadly issue than working with Congress to resolve the problem.”

Amgen Agrees To Settle Aranesp Suit, Reserves $780 Mil For Settlement

By Lucas Thomas
October 28, 2011

Amgen Inc. has agreed to settle several criminal and civil investigations that accuse the company of using illegal sales and marketing practices in promoting the red-blood-cell building agents Aranesp and Epogen. Amgen is setting aside $780 million to pay settlements.

“We announced an agreement in principle with the U.S. government to settle allegations relating to certain sales and marketing practices, which have been the subject of previous disclosures,” said Amgen CEO Kevin Sharer, during Amgen’s third quarter earnings call on Oct. 24. “We recognized a $780 million reserve in anticipating and finalizing this settlement, which should happen in the next three to four months.”

Most of the whistle-blower lawsuits are sealed. One lawsuit that was made available was filed by Kassie Westmoreland, a former Amgen sales representative and Aranesp product manager. The lawsuit was joined by 18 state-level attorneys general.

The lawsuit accuses Amgen of placing excessive amounts of Aranesp into containers and, as part of their marketing, told healthcare providers that they could sell the excess medication and profit from the sale.

The complaint and court documents are posted at

It alleges that Amgen overfilled Aranesp to compete with Procrit, a rival drug. According to court documents, the overfill in Aranesp prescriptions was higher than those of Procrit. Though Procrit is marketed by Johnson & Johnson, it’s produced in the U.S. by Amgen.

The lawsuit was filed in late 2009.

A court document showing an Amgen spreadsheet lays out the financial gains that doctors were encouraged to capitalize on, via the overfilled prescriptions.

Amgen “conspired to encourage medical providers to purchase Aranesp based on representations of the profits that the providers could realize from submission of inflated Aranesp-related claims to Medicare,” and “encouraged medical providers to overstate the amount of Aranesp administered so that the provider could achieve greater amounts of reimbursement form Medicare and/or Medicaid, thereby making Aranesp more attractive than competitive drugs,” the lawsuit states.

Several current and former Amgen executives have been subpoenaed. Five former Amgen executives pled the Fifth Amendment during their depositions, regarding questions of their employment at Amgen.

The states involved in the lawsuits include Georgia, California, Delaware, Florida, Hawaii, Illinois, Indiana, Louisiana, Michigan, Nevada, New Hampshire, New Mexico, New York, Tennessee, Texas, Massachusetts, and Virginia, as well as the District of Columbia.

Six Years Into Drug Shortage, Causes Remain A Mystery

By Lucas Thomas

October 14, 2011

Since 2005, the U.S. has been experiencing an escalating shortage of generic drugs.

In 2010, 178 drugs were listed by FDA as in short supply. This is three times the number of drugs listed in 2005, when FDA first started to track the problem.

Of those drugs, 93 percent are deemed “medically necessary” by HHS.

Most of the drugs (132 of 178) in shortage are sterile injectables. The problem is not limited to any specific type of drug. The diminishing supply of cancer drugs, anesthetics, antibiotics and emergency medicine drugs shows that this issue spans the entire industry—yet FDA has little authority to take preventive action.

In most cases, the shortage of bulk ingredients is not the main cause. This affects only 10 percent of drugs, said FDA officials. No shortage of generic drugs exists outside of the country. Branded drugs, which are not affected by price controls in the U.S. market unlike generics, are in plentiful supply.

But the causes of the problem still remain unclear, and so far no one has proposed a comprehensive strategy for fixing the problem. Last month, FDA held a workshop on the shortages, and next week the agency is expected to issue a report.

Also last month, the board of the American Society of Clinical Oncology heard a proposal to fund a nonprofit drug company that would market generics . Sources said the proposal has been referred to a committee.

HHS officials attribute the shortage to a synergy of problems: industry consolidation, shortage of raw materials, changes in inventory and distribution practices, quality and manufacturing problems, discontinuation of a drug for financial reasons, and unanticipated increases in demand.

Manufacturing issues and consolidation in the generic drug industry are the principal causes of the shortages, said Howard Koh, HHS assistant secretary for health, and Sandra Kweder, deputy director of the FDA Office of New Drugs.

The two officials testified before the the Subcommittee on Health of the House Committee on Energy and Commerce Sept. 23.

Kweder said that the most pressing issue “by far and away has something to do with manufacturing and product quality”—problems that stem from outdated facilities. The drugs simply do not meet industry standards, and, as a consequence, production decreases.

The typical timeframe for developing new manufacturing facilities and seeking FDA approval for a new active pharmaceutical ingredient is between two and three years.

The concern among the subcommittee members was that this timeframe stalls efforts needed to connect patients with their treatments. Kweder testified that in the event of a shortage, this process can be expedited to “a matter of months.”

“These are areas where we are trying to show as much regulatory flexibility as possible to accelerate approvals when necessary,” Koh said. “Whenever there is an issue related to a supplier where it requires FDA to approve a new supplier or even a new facility, we turn those around very quickly; in a matter of weeks to months, these are not business as usual where there’s a long wait time,” Kweder added. “We understand patients are at the end of this line.”

Consolidation in the Industry

“We view industry consolidation as one of the driving root causes here,” Koh said at the hearing. “As you can imagine, if your denominator of available manufacturers shrinks—and then any one of them has a manufacturing problem or delay—it really puts the onus on the others. And if the others don’t happen to produce that product, and if this particular company is the sole-source producer, you have the ramifications we are seeing right now.”

Koh said that in order to ensure that consolidation does not lead to further shortages, maximum communication between FDA and drug manufacturers is required, adding, “We have had excellent dialogue to date.”

There are parallels to be drawn between consolidation and financial decisions to discontinue the production of a drug, FDA officials said.

Since the majority of these drugs are generic, they typically carry a small profit margin. This decreases the incentive for manufacturers to produce drugs that do not yield as much profit as name brand drugs—which is when industry consolidation usually occurs.

“There is an issue with respect to business forces here, and the profit margin is understood to be quite low for many of these individual products,” Koh testified.

In most markets, the concept of supply and demand would correct this problem, allowing companies to charge more for drugs that are in short supply. However, the power of the market forces is muffled in the generics market, Koh said.

“These agreements are made often through longterm contracts, and so this whole process involves multiple stakeholders, especially and including the pharmacy benefit managers and purchasing organizations, so it complicates this environment, and does not make relevant the standard supply and demand economic principles we see in other businesses,” Koh said.

Cancer patients have been particularly harmed by this shortage, losing access to treatments—some of which are exclusive on the market. The following is a list of oncology drugs in short supply: bleomycin, busulfan, carboplatin, cisplatin, cytarabine, dacarbazine, denileukin diftitox, dexamethasone, doxorubicin, etoposide, fludarabine, 5-FU, granisetron, idarubicin, irinotecan, leucovorin, mechlorethamine, mesna, mitomycin, ondansetron, paclitaxel and vincristine.

There is no alternative to some of these drugs— such as cytarabine, which treats certain types of leukemia and lymphoma. Some of these drugs are available at high markup on the gray market—at prices upwards of 3,000 to 4,000 percent higher than the typical contract price.

Kweder and Koh pointed out examples of FDA action, such as in the case of cytarabine, where they worked with manufacturers to prevent a more significant shortages from occurring.

When the predominant manufacturer of cytarabine was experiencing production delays, FDA contacted lower-volume manufacturers and worked with them to increase production. This action was cited as an example of the usefulness of early warning notification.

Shortages have directly impacted NCI clinical trials.

“This impact is not only immediate for the patients in our clinics today, but also affects the future care of cancer patients because the next generation of cancer therapy is driven by today’s clinical trials,” said Robert DiPaola, director of the Cancer Institute of New Jersey, at the Energy and Commerce hearing.

DiPaola cited clinical trials have been halted due to shortages of of paclitaxel and doxorubicin. He added that half of clinical trials conducted by members of the Coalition of Cancer Cooperative Groups require drugs in short supply.

As a result, drugs need to be substituted in order to continue the trial.

Industry insiders propose purchasing drugs abroad as an alternative to shopping in the gray market. However this could be risky too, FDA officials warned.

Agency regulations on safety, efficacy and purity do not apply outside the U.S. “The importation process is done very carefully and selectively,” Koh said.

Members of the subcommittee questioned the agency’s level of confidence in foreign drugs.

Rep. Bill Cassidy (R-La.) posed the question to FDA’s Kweder: “Is there a worldwide supply of drugs that are currently in shortage here—it’s just that we are not trusting the manufacturing process by which they are produced, and therefore are not allowing their importation?”

Kweder said it’s not an issue if it is necessary to import the drug in question.

“If there is a foreign source, we are usually able to work through and get it approved,” Kweder said. “There have certainly been circumstances where there have been important problems that would prevent that, but in most cases if going to a foreign source is necessary, we are able to work through that.”

FDA Actions

FDA officials say that there is no policy in place that requires manufacturers to notify the agency of an impending shortage, unless the company is the sole provider of a certain drug.

Also, FDA can’t require a company to increase production during a shortage, and it can’t impose an allocation plan.

To combat these limitations, Reps. Diana DeGette (D-Colo.) and Tom Rooney (R-Fla.) introduced the Preserving Access to Life Saving Medication Act (H.R. 2245 and S.296). This bill would give FDA authority to make changes to the current system, by requiring drug companies to issue notifications of anticipated shortages. But even early notification can have a downside. While early notification can spur a proactive approach to drug shortages, the emergence of the gray market during this crisis has bred a cynical outlook. There is concern among sponsors of the bill that early warning could lead to hoarding of a particular drug.

“We take that potential for making things worse very, very, seriously,” Kweder said. Therefore, FDA is cautious as to when they should make that information public on websites and other outlets. “Early notification to FDA is a very useful tool, we see that as different than early publication,” Kweder said.

Kevin Coglan, corporate director of pharmacy at Rush University Medical Center, agreed with Kweder while testifying in front of the congressional commitee of behalf of the American Society of Health. “Public benefit of an early warning system far outweighs the risk of hoarding,” he said.

The Sept. 23 congressional hearing is archived at:


Hey Doc, Wanna Score Some Leucovorin? Drugs Available at 80 Times the Standard Price

Congress probes drug shortage, data requested from vendors

By Lucas Thomas

October 14, 2011

Few people claim to understand the reasons for the long-running shortage of cancer drugs. But one thing is certain: hospitals and physician practices across America regularly receive offers for drugs in short supply.

These offers are unsolicited, and usually they don’t include the details— such as the price or provenance of the drugs. The markup can end up being 80 times higher than the usual contract price.

According to a recent survey by Premier Healthcare Alliance, an organization that has analyzed the “gray market” in generic drugs, the advertisements urge potential buyers to act immediately: “We only have 20 of this drug left and quantities are going fast.”

A congressional committee recently launched an investigation into this generic drugs gray market and sent letters to a handful of known vendors. The topic of gray market practices was also addressed at a recent House hearing.

“Where and how gray-market vendors are getting these drugs, no one knows,” said Mike Alkire, CEO of Premier, at a hearing of the Subcommittee on Health of the House Committee on Energy and Commerce on Sept. 23.

The gray market is legal. The vendors are licensed. However, the provenance of the drugs is untraceable. According to FDA officials, these drugs can have unlabelled ingredients, and often change hands several times before reaching a doctor and, ultimately, the patient. Imported drugs are similarly unmonitored.

In April 2011, Premier asked its members to report unauthorized offers to sell drugs affected by the shortage.

Premier gathered the following offers over two weeks:

• 1,745 offers were collected from 42 acute care hospitals

• 636 examples with both national drug codes and prices offered

• 310 different generic drugs that could be matched to Premier contract price

• Offers came from 18 different gray market vendors.

All the drugs offered were back-ordered by the manufacturer or were no longer available. The average markup,  compared to a typical contract price, was 650 percent.

The top ten highest markups include the following


• Labetalol—4,533 percent

• Cytarabine—3,980 percent

• Dexamethasone injection—3,857 percent

• Leucovorin—3,170 percent

• Propofol—3,161 percent

• Papavarine—2,979 percent

• Protamine—2,752 percent

• Levophed—2,642 percent

• Sodium Chloride Concentrate—2,350 percent

• Furosemide Injection—1,721 percent

“It’s been disheartening to learn that the so called gray market would take advantage of such a dire situation to engage in price gouging at the expense of those desperate enough to pay,” said Rep. Frank Pallone (D-N.J.) at the Energy and Commerce hearing.

The gray market stems from a shortage that has been growing in severity over the past five years, which now threatens the future of cancer clinical trials.

Even with the markup, these drugs can be cheap compared to newer-generation drugs. Yet they are still an essential element of oncology practice, and are frequently used in combination with new drugs.

The underlying issue here is—why does this happen?” NCI Director Harold Varmus said to the National Cancer Advisory Board Sept. 13. “What is the marketplace doing?

“We are never short of Avastin, but we are short of Ara-C.”

The shortage has left some doctors and hospitals with no way to acquire generics.

As generic drugs change hands on the gray market, the level of care for patients is essentially disregarded, said federal officials. It is common for these drugs to be improperly stored or subjected to adverse temperatures. By the time the drug reaches the patient, the potency may have been compromised.

“To have this dimension complicating an already complicated situation is very disturbing,” said Howard Koh, HHS assistant secretary for health, at the House hearing.

The only solution to eliminating the gray market may have to come from eliminating the conditions that have created the drug shortage in the first place. Mystery surrounding the gray market works it difficult to regulate, or even introduce practical legislation that could control untraced and even counterfeit drugs.

“There’s just too much money on the table for the counterfeiters in terms of the U.S. pharmaceutical marketplace,” Rep. Jim Matheson (D-Utah) said at the hearing Sept. 23.

Separately, the gray market is being investigated by the House Committee on Oversight and Government Reform, led by ranking member Rep. Elijah Cummings (D-Md.).

On Oct. 5, Cummings sent letters to five gray market vendors, requesting documents about their products.

The letters requested “the identity of all companies and individuals from which your company purchased [respective drug], the date of each purchase, the quantity of each purchase, and the price paid for each purchase; the identity of all companies and individuals to which your company sold [respective drug], the date of each sale, the quantity of each sale, and the price paid in each sale; your company’s handling, storage, and recordkeeping procedures for this drug; your company’s gross revenues, net profits, and the compensation of company executives; your company’s costs for labor, equipment, and other costs for handling, storage, and delivery.”

Cummings said he launched the investigation after receiving a letter from Brenda Frese, the head women’s basketball coach at the University of Maryland, whose son was diagnosed with leukemia and treated with cytarabine, a drug in short supply.

Letters were sent to:

• Allied Medical Supply Inc., which offers cytarabine at over $990 per vial, more than 80 times a typical contract price—about $12 per vial. According to the committee, the corporate address for this company appears to be the same as the address for Minnuto Publishing LLC, which sells the “Passive Income For Life” system, allowing users to “create a steady stream of passive income every single month for the rest of your life with no money down apartment buildings.”

• Superior Medical Supply Inc., which offers paclitaxel for over $500 per vial—more than seven times the typical contract price, or approximately $65 per vial. The California attorney general filed a case alleging that the company “purchased, traded, sold or transferred dangerous drugs they knew, or reasonably should have known were misbranded,” and that the company “disseminated false, misleading or deceptive statements, claims or images via the internet, to induce the rendering of professional services or furnishing of products.”

• Premium Health Services Inc., for offering leucovorin for over $270 per vial— more than 50 times the typical contract price of approximately $5 per vial.

• PRN Pharmaceuticals, for offering fluorouracil at over $350 per vial, more than 23 times a typical contract price of approximately $15 per vial.

• Reliance Wholesale Inc., for offering magnesium sulfate—used to control life-threatening seizures in pregnant women and to treat magnesium deficiency in patients who receive intravenous feeding—for over $400 for 25 vials, more than 40 times the typical contract price of approximately $9 for the same amount.

When reached by The Cancer Letter, Allied released the following statement: “Recent media attention on prescription drug shortages highlights the vital role that Allied Medical Supply and other companies play to ensure that hospitals and patients have the medicines they need when they need them. Published surveys, highlighted in the media, grossly misrepresent Allied’s business model.

“Allied Medical Supply responds to daily requests from our hospital customers for medicines they need immediately for their patients. Our company purchases treatment of life threatening conditions, are not always being provided by in a timely manner to our customers by suppliers because of a variety of network distribution issues.

“The amount of the Leukemia drug Cytarabine that we sourced and delivered to our hospital customers is less than one percent of the total need for the drug. But it is medicine that they needed immediately for their patients.

“Allied Medical Supply welcomes a review of the secondary wholesale distribution industry and will cooperate fully with the inquiry initiated by the Congressional Committee on Oversight and Government Reform.”

Efforts by The Cancer Letter to reach the other four companies were unsuccessful.

So far, only Premium Health Services and PRN Pharmaceuticals have agreed to cooperate with Cummings’ investigation, committee sources said.

“Price gouging for drugs that treat cancer in children is simply unconscionable,” Cummings said in a statement. “We want to know where these companies are getting these drugs, and how much they are making in profits. Obtaining this information will help us develop concrete solutions.”

NIH Lowers Disclosure Threshhold to $5,000, Requires Disclosure of COI’s on Public Website

Under new rules, institutions remain responsible for researcher’s ethics

By Lucas Thomas

September 16, 2011

NIH has issued a final rule governing financial conflicts of interest on the part of extramural investigators.

The rule, which updates requirements first published in 1995, was presented to the National Cancer Advisory Board at its meeting Sept. 13.

As has been the case for the past 16 years, NIH maintains that insititutions employing the investigators are responsible to “effectively manage the financial interests of their own employees.”

Institutions remain accountable for identifying an investigator’s special financial interests “to assure that the research goes forward in an objective way without bias,” Sally Rockey, NIH deputy director for extramural research,said to NCAB.

If such is not the case, and an institution hasidentified a financial conflict of interest, the institution will then be mandated to follow new NIH regulations and report their findings to the NIH.

Insititutions that receive grant money from NIH will have one calendar year to implement the new policy.

The final rule states that the 1995 regulations “were aimed at preventing bias in PHS-funded research, and as such, were intended to be proactive rather than reactive to specific evidence of bias.”

However, widely reported allegations of bias on the part of NIH-funded researchers have led Congress to insert language in the 2010 HHS appropriations bill toamend the regulations “for the purpose of strengthening Federal and institutional oversight and identifying enhancements.”

This prompted NIH to make changes to the 1995 policy, revising the definition of “significant financial interest.”

The dollar amount that separates a significant financial interest from an insignificant financial interest has been shrunk from $10,000 to $5,000. In other words, any payment or equity interest an investigator receives from a third party in excess of $5,000 must be reported to the institution.

From there, the institution must decide whether this financial incentive compromises the objectivity of the investigator’s research.

In her remarks to NCAB, Rockey acknowledged that the new threshold is not based on data.

We really don’t have any quantitative data that are going to allow us to say that $5,000 is going to improve the ability to manage, to prevent bias,” she said. “However, it does give the institute more information. In other words, investigators will be now disclosing financial interest that they would not otherwise.

“There were comments on both sides when we put this out for rule. Some individuals thought that we should go to zero. Any payment to an individual from an outside source should be disclosed.

“We felt that the burden of that would just be overwhelming, so we came to this compromise, which had also been a figure that had been proposed by Association of American Medical Colleges of $5,000. It does include any equity interest in non-publicly trading entities. In other words, there’s no de minimis for nonpublicly traded entities. And there are also exclusions, primarily for non-profit types of organizations.

In the past, any money received from a non-profit organization didn’t have to be reported. Under the new rule, some of those payments will need to be disclosed.

“Because non-profits often times have strong relationships with for-profits, we have now described what types of non-profits are excluded,” said Rockey. “So it excludes anything from seminars, lectures, teaching, advisory boards, etc., for institutions of higher education, academic teaching hospitals, medical centers, or research institutions affiliated with institutions of higher education.”

In another change, investigators would have to disclose all financial conflicts related to their

institutional responsibilities”—not just research responsibilities.

Previously, the investigator ultimately determined what was considered a significant financial interest, and disclosed those interests to the institution.

“So we now changed that to say go ahead and disclose everything to your institution, remember you aren’t disclosing to us, all you’re doing is disclosing to your institution,” said Rockey.

From there, the institutions would determine and define what ultimately constitutes a conflict.

If an institution does identify a conflict of interest, it is required to report it to the NIH. Also, it must present a specific plan for managing the conflict.

To go along with the 1995 version of the rule that— in the event of an identified financial conflict—required institutions to report the name of the investigator with the conflicts and the grant number associated with the research, institutions must now also report the name of the entity with which the investigator has a FCOI, the value and nature of the financial interest, and the institution’s management plan.

The most controversial aspect of the new rule is public disclosure of financial conflict.

Institutions have to make conflict information available on a publicly accessible website, or make it available on request.

“We know that many institutions already have moved towards making information about financial interest of their investigators available on websites,” Rockey said. “We think therefore that most institutions will probably choose this route instead of making it available on request, but nonetheless we’ve given them the option.”

Finally, the rule requires that institutions educate and train their investigators on the new NIH guidelines. The requirements for training are every four years, but also “if an investigator is new to the program, [or] if there’s some non-compliance,” Rockey said, “we need you to be trained up.”

Rockey said NIH attempted to give institutions flexibility in managing financial conflicts.

We tried to be as flexible as possible, because we understand that things are different at every institution,” she said. “We want to give flexibility. But we have provided, in the regulation and particularly in the preamble of regulation, examples of kinds of conflicts of interest that arise and examples of ways to approach management.

“We are not going to dictate how you approach management. However we do know that for example some institute say that disclosure is their form of management. We have advised that we don’t think disclosure is the only way to manage a financial conflict of interest.

“There are other examples we’ve given. Some institutions install a data analysis group, and some don’t allow people with financial conflicts of interest to recruit patients, for example.

“We just do not want to be in a position where these become dogma that people have to manage that way, because every financial conflict of interest is different, and you know best the environment in which that investigator is working.”

The document is posted at

Clinical Trial Participants Sue Duke University, Potti, Nevins and Others For Causing Harm

Two cancer patient lawsuits claim fraudulent, harmful care

By Lucas Thomas
September 9, 2011

Patients participating in Duke University clinical trials of a discredited genomic technology filed two separate lawsuits against the university, its top officials and cancer researchers earlier this week.

The two lawsuits filed Sept. 7 in the Durham County Superior Court claim that Duke and its researchers had “knowingly engaged in a plan to generate billions of dollars in revenue; and that rather than actively protecting the safety and rights of patients in proper clinical trials, they chose a path of conduct that was evasive, deceptive, misleading and fraudulent by falsely representing that the delivery of chemotherapy agents to human subjects was based on valid science, when in fact they either knew or should have known that it was not.”

In addition to claiming that patients had been harmed, the two suits focus on two companies owned by Duke and the researchers involved in developing the genomic technology and testing it in the clinic. The companies in question were CancerGuide Diagnostics and Private Diagnostic Clinic, PLLC.

The suits were filed by different lawyers, but contain identically worded claims that patients “under false pretenses, in a fraudulent clinical trial” were exposed to unnecessary chemotherapy.

One suit was filed on behalf of seven participants in the lung cancer trial against the following defendants: Duke University, Duke University Health Systems, Private Diagnostic Clinic, CancerGuide Diagnostics, Joseph Nevins, Anil Potti, Michael Cuffe, Sally Kornbluth, and John Harrelson.

Another, filed by a breast cancer patient, Joyce Shoffner, names the same defendants as well as Paul Marcom, the principal investigator in the breast cancer trial funded by the Department of Defense.

Duke spokesperson Sarah Avery declined to comment on the suits. “We have no comment on active litigation.”

CancerGuide Diagnostics and Private Diagnostic Clinic both provide healthcare through facilities owned and/or operated by Duke University and Duke University Health System, the lawsuits state.

In November 2006, Duke genomic researchers Joseph Nevins and Anil Potti, and two other Duke employees—Geoffrey Ginsburg and Judd Staples—founded CancerGuide Diagnostics under the former name Oncogenomics Inc “to capitalize on any financial gain resulting from the alleged cancer breakthrough research,” according to the court documents. In the same month, Nevins and the Duke Institute for Genome Sciences and Policy submitted a pre-IDE approval to the FDA for the clinical trials.

The following January, FDA sent Nevins a memorandum in response to the request, stating that the university’s submission “contained insufficient information and data.” Included in the memo were suggestions and analytical comments from the FDA.

Simultaneously, Keith Baggerly and Kevin Coombes, two biostatisticians at MD Anderson Cancer Center, expressed concern about the legitimacy of Duke’s research—claims that directly reached Nevins and Potti.

However the lawsuit claims that nobody in the Duke camp made any attempt to alter the trials’ protocols; and no final IDE approval was ever sought or granted before the clinical trials began.

Also included in the lawsuit are allegations of a Duke “cover up.”

After the research that formed the baseline for the clinical trials was called into question by NCI, Duke pledged a “genuine investigation and independent review of the Duke research and methodology.”

The university appointed Nancy Andrews, dean of the School of Medicine, and Victor Dzau, chancellor for health affairs and CEO of Duke University Health System, to oversee the internal review. Court documents point out that Andrews is married to Bernard Mathey-Prevot, “a Duke researcher whose career is closely tied with Nevins and Potti as a result of past collaboration with Nevins, and recent national journal publication with Nevins and Potti.”

The group ignored outside science; and those assigned by Andrews’ investigation to analyze the research of Nevins and Potti had no expertise in reviewing laboratory protocols or handling data, the suits state.

The review panel was ordered by Duke to not perform an extensive investigation into the matter and Andrews’ appointees buried potentially damaging information for the sake of shielding “the work of the Duke team of investigators including Nevins, Potti, and Mathey-Prevot, from adverse judgment and professional condemnation, and also in an effort to protect the highly valuable proprietary interests of Duke and/or DUHS, its patents, corporations and venture capitalists,” according to the lawsuit.

The names of the biostatisticians who eventually recommended that the trials continue were never made publicly available.

Even when the trials were suspended in October 2009, Duke chose to continue treating patients who were already participants.

Duke has retracted five major papers on which Potti figures as an author, and additional retractions are on the way, officials say. Potti has resigned from the university and is practicing medicine at the Coastal Cancer Center in Myrtle Beach, S.C.