Med schools urged to plug drug-research leaks

The Association of American Medical Colleges yesterday urged all of the nation's 125 accredited medical schools to tell their doctors to "scrupulously honor" confidentiality agreements for ongoing research.

The group, which has 96,000 U.S. medical-faculty members, acted after The Seattle Times reported Aug. 7 that it had found 26 cases in which doctors leaked confidential and critical details of their ongoing drug research to Wall Street brokerages or hedge funds.

Following the report, Sen. Charles Grassley, R-Iowa, head of the Senate Finance Committee, called for the Securities and Exchange Commission and Justice Department to investigate. SEC officials have since begun an investigation.

Legal experts say buying confidential information to help make investment decisions violates federal insider-trading law.

Several top medical schools recently have taken steps to address the problem, telling doctors to adhere to the confidentiality contracts they sign with drug companies at the outset of drug testing.

Doctors involved in drug research rarely consulted for Wall Street firms a decade ago, but the practice has been booming in recent years, with an estimated 75,000 doctors now doing it, according to an article in the Journal of the American Medical Association.

The firms typically pay the doctors $300 to $500 an hour to answer questions about drug research. Many times, doctors talk about drugs already on the market, not their ongoing research.

But investors who are able to obtain confidential information from doctors can then make quick profits in the volatile biotech market at the expense of ordinary investors. Those who know in advance whether a drug is going to succeed or fail can buy stock low or sell it high to those who don't know, taking advantage of unwitting investors.

Leaking details about ongoing research also can introduce bias into drug trials and possibly halt development of potentially life-saving drugs, biotech executives said.

UCLA and the University of Pennsylvania recently began internal reviews of faculty members who were named in The Times story as having revealed information to investors that was not publicly available.

Article sent to faculty

The University of Texas Southwestern Medical Center in Dallas said it plans to circulate The Times article among all of its 1,200 medical faculty as a reminder to honor its ethical standards. The University of Washington said it will send a similar message to its nearly 1,800 medical faculty after school resumes in September.

Albert Berger, vice dean of research and graduate education at the UW School of Medicine, said the university's policy requires all outside faculty work with for-profit entities to be approved in advance by department heads, the dean and the provost.

The policy, however, does not address how to handle consulting deals with investment firms. Berger would not say whether UW plans to amend policies to be more explicit about that form of consulting.

"This has really caught our attention and a lot of other academic medical centers," Berger said. "It's going to be something we are very serious about."

Rebecca Harmon, a spokeswoman for the University of Pennsylvania School of Medicine, said the school has sent the article to its faculty leaders and instructed them to discuss it broadly among its 1,500 medical faculty.

"The article provided important examples of potential conflict-of-interest situations, which we take very seriously," she said.

Internal review launched

Harmon said the school also has begun an internal review of Dr. Harold Palevsky, a pulmonologist.

According to a Feb. 10 analyst report, Palevsky said on a conference call with investors that "the overall incidence of major bleeding events is rather low" across several clinical trials for a drug called Thelin.

At the time, Palevsky was a member of the drug's data safety monitoring board, a position that gave him access to detailed safety data on the drug.

In an interview, Palevsky said he talked to investors strictly about publicly available information, not the unpublished results to which he had access.

At UCLA's David Geffen School of Medicine, Dean Gerald Levey said in an e-mailed statement that the school has formed a small group of faculty and staff to look into the practice of doctors consulting with Wall Street and make any needed recommendations. Current UCLA policy does not specify how to handle consulting with investment firms.

The review comes after Dr. Robert Figlin, a UCLA kidney-cancer expert, was described in The Times article as telling investors on a July 18 conference call about nonpublic information involving an upcoming cancer drug.

Figlin said later that he had talked about "generally available" information but acknowledged he may have discussed information he heard from other doctors involved in drug studies.

In its message to the 125 schools, the medical association provided Web links to The Seattle Times' Aug. 7 story as well as links to a later New York Times story and editorial on the topic.

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com