The FDA Is in the Pocket of the Drug Industry

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The US Food and Drug Administration (FDA) is responsible for promoting public health through the regulation and supervision of food safety, prescription drugs, dietary supplements, medical devices, tobacco products, vaccines, cosmetics, and more. The FDA has tremendous power, regulating about 10% of the US economy. The FDA’s budget in fiscal year 2015 was $4.7 billion.

Unfortunately, the FDA has proved time and again that it is unable to carry out this mission and protect the American people from preventable harm.

“User fees”

The Prescription Drug User Fee Act (PDUFA) of 1992 authorizes the FDA to collect fees from pharmaceutical companies, allegedly to fund and expedite the drug approval process, but really to pay the agency’s bills. Under this authority, pharmaceutical companies pay fees for certain new human drug and biologics applications, and the FDA’s review of an application cannot begin until the fee has been submitted.

Drug companies provide 60% of the FDA’s drug review costs, which means that the FDA’s review and regulation of pharmaceutical drugs is largely funded by the very drug companies under review—and this, of course, is a colossal conflict of interest. In 2013 the agency received $712.8 million from drug company “user fees.”

Freedom from prosecution?

Federal law makes it illegal for Medicare and Medicaid to do business with “an excluded or debarred entity resulting from serious criminal charges.” Accordingly, the FDA consistently refuses to prosecute major drug companies for wrongdoing so they can keep doing business with one another. For example, when Merck’s Vioxx drug was pulled from the market because evidence showed it greatly increased the risk of heart attack, the company was able to get away with paying a criminal fine and pleading guilty to one misdemeanor—no serious criminal charges were ever filed by the government, despite the fact that Vioxx killed about 60,000 people.

The revolving door

Moreover, it is commonplace for former FDA employees to find work with major drug companies—and vice versa. We call it the FDA’s “revolving door” policy. Decision-makers who produce Big Pharma-friendly policies are richly rewarded with top-level industry jobs.

Even the rules purporting to close DC’s revolving door are riddled with loopholes. As Hunter Lewis points out in his book Crony Capitalism in America, presidential candidate Barack Obama promised that “when I’m president, [lobbyists]won’t find a job in my White House.” On his first day in office, he signed an executive order forbidding employment of registered lobbyists within his administration for two years after they left their lobbying positions.

Only a few weeks later, the new president signed waivers exempting three new hires: a Deputy Secretary of Defense, a Deputy Secretary of Health and Human Services, and a Chief of Staff of the Treasury Department. More and more waivers followed—forty within a year and a half. Other waivers allowed these and other appointees to involve themselves directly in matters pertaining to former clients.

In addition, some rules only apply to registered lobbyists, not “senior advisors” or ex-lobbyists. That’s why it was perfectly legal for the Obama administration to appoint William B. Schultz as general counsel of Health and Human Services, despite the fact that he had represented medical and drug companies regulated by the agency, and was described as a “veteran lobbying presence.”

Over eight years, Schultz lobbied on behalf of seven different drug companies, plus the American Hospital Association, according to lobbying disclosure filings, earning $2.98 million. Nearly half that came from Schultz’s biggest client, Barr Laboratories, maker of the morning-after contraception pill known as Plan B. HHS Secretary Kathleen Sebelius in 2011 issued a rule requiring nearly all employer-based health plans to cover 100 percent of the cost of Plan B along with other contraceptives.

There are many, many examples of revolving door officials:  Let’s list the big ones in our article.

  • Claude Burcky, who took a job at Abbott Laboratories after negotiating a US/Australia trade deal that “undercut access to affordable medicines for Americans and Australians.”
  • Peter Pitts who, after serving as the FDA’s associate commissioner for external affairs, joined a major lobbying firm to “counsel pharmaceutical, biotech, and food companies…on driving thought leadership on food and health issues facing the industry.”
  • Michael Taylor, the perfect example of a revolving door “sandwich.” He started as an attorney for Monsanto, then “stopped by” the FDA long enough to draft FDA’s policies decreeing that GMOs are “generally recognized as safe” and are exempt from labeling, and then went back to Monsanto, before returning to a key FDA job in the Obama administration.
  • Elizabeth Fowler, who wins the dubious recognition of being the “embodiment of corporatist revolving-door greasing.” She started as a top aide for Sen. Max Baucus, then left to become a lobbyist for WellPoint, the nation’s largest health insurance provider. She then went back to Sen. Baucus’s office, where she became the acknowledged architect of the Obamacare legislation (which, of course, was a huge gift to the private insurance industry). Ms. Fowler then joined the White House in order to oversee the implementation of Obamacare, only to leave for a senior-level lobbying position at Johnson and Johnson.

The latest winner of the FDA-Big Pharma revolving door lottery is Dr. Robert Califf, the new FDA commissioner. Dr. Califf’s lucrative dealings with the drug industry are well known. He ran a clinical research center at Duke University that received the majority of its multi-million-dollar budget from Big Pharma. According to financial disclosures from last year, Dr. Califf received money for consulting with at least seven drug and medical device companies, and, according to the New York Times, six other companies at least partially underwrote his university salary, including Merck, Novartis, and Eli Lilly. The conflict-of-interest section of a paper he wrote for the European Heart Journal last year lists financial support from more than twenty companies.

All of this has led Daniel Carpenter, a Harvard political science professor and an expert on the FDA, to call Califf the “ultimate industry insider.” Indeed, the New York Times notes that “he has deeper ties to the pharmaceutical industry than any FDA commissioner in recent memory.”

Califf’s appointment shows that federal officials are dropping all pretenses of picking someone who would actually protect public health or stand up to industry, and instead are baldly installing a fox to guard the henhouse.

Is it possible that previous and future employers don’t influence the decisions of these revolving door officials? Sure. Just like it’s statistically possible to win the lottery.