Boy, it’s good to be here, invading a tiny corner of cyberspace as the new life sciences columnist for Xconomy.
It is a journalist’s dream to be given free rein, and unlimited real estate, to write about the subjects she thinks matter. As a newspaper reporter (more about me here) the pressure to keep stories short was frustrating. It was hard to land an article on the front page. With The Pulse, I’m glad to be free from these constraints, but I face a different predicament: I know I’m just a click away from oblivion. The world doesn’t need another pundit. So I’ll try my best to use this soapbox wisely. And I really want this to be interactive so please write to me (at email@example.com) or post below with feedback, tips, and comments.
This is an interesting week to be launching my first column. Wall Street is again under scrutiny, thanks to the suit brought against Goldman Sachs by the Securities and Exchange Commission. At the center of the clash are complex debt structures (“collateralized debt obligations”—who comes up with those names?) that were concocted by Goldman, among other players, and sold as novel products to investors. It allegedly wasn’t completely transparent how these products were built, but that didn’t seem to matter. People trusted people. A product essentially set to fail was sold to the public, or so we’re told.
From my financially unsophisticated 10-mile view, I wonder: how could something like this happen? How could companies sell to the public a product that they knew would likely fail?
Come to think of it, that’s not too dissimilar from the question posed in 2004 to Merck & Co. as it stood accused by thousands of patients of knowing about the deadly side effects of Vioxx years before it recalled the drug. (The company never accepted liability and settled in 2007 for $4.85 billion.) Similarly, Guidant, which was later acquired by Boston Scientific, fueled public outrage in 2005 for allegedly selling cardiac defibrillators that it knew might be defective (that suit was settled as well). There are plenty more examples like these. Even the Food and Drug Administration has at times faced this kind of scrutiny–it has been admonished for approving drugs and devices despite advice to the contrary due to safety red flags. When those products turn out to have serious side effects, the outcry begins. How could they, people ask. Isn’t the FDA here to protect us?
It’s always easy to look back. The prism of hindsight splits the world into us versus them, the righteous and the crooked, but that’s an illusion. The real question is, at the moment when the Merck or the Guidant (or the Goldman Sachs) tragedies were brewing inside each of these companies, what were the protagonists thinking? Scandals don’t materialize overnight; they begin with tiptoeing around the boundaries of the norm, until it feels comfortable to push a little further and the lines between proper and improper blur. And no industry is immune from this.
In life sciences, the same web of self-interests that holds the enterprise together constantly threatens to tarnish it. Academic researchers want tenure and funding; the medical journals want to keep their citation indexes high and their names in the press. The media wants to ramp up circulation; the journalists want a Pulitzer. The biotechnology companies want to survive to the next funding round; the pharmaceutical companies need to sell their drugs. The FDA wants the media, the public, and Congress off its back.
To satisfy these interests, patients’ lives are sometimes jeopardized. It happens when a promising research study is smeared by a scientist so a competitor does not get published. Or when the result of a conflicted study is hyped and the journal, plus the academic institution or company responsible for the research, get prime time visibility. Or when a biotech company shelves a drug candidate because it isn’t sexy enough for its venture backers or might hinder a possible IPO. Or when a pharma company kills a program because it’s just not worth it to deal with the FDA’s stringent requirements for that indication. Or when the FDA bows to pressure, on either end of the spectrum, to clamp down on drug approvals or make drugs more readily available, making decisions that are not always guided by patients’ best interests.
These are all examples of selfishness, some at a small scale, and they are the seeds from which the scandals of the future grow. They happen because in the day-to-day it’s easy to lose sight of the overarching goal of life sciences: to improve patients’ lives.
I will leave you with one last thought: Imagine these collateralized debt obligations had been treated as drugs—or more to the point, if they were treated as drugs are supposed to be treated. Imagine if, as potential new products to be unleashed on the market, the companies that created them first had to submit a voluminous packet to the SEC describing what the CDOs’ “ingredients” were, exactly how they were created, and what population they were geared towards. Imagine if the SEC had then asked these investment firms to spend hundreds of millions of dollars testing them out in market models, and in volunteers, for two or three years. And after that, imagine if the results of all that testing were presented to an independent panel of financial experts and upon any concern that these products might hurt people the SEC denied them from entering the market. I know, I know—what an utterly unrealistic scenario. Yet what a different ending this story might have had.