Bloomberg Markets Special Report TK Month 2005 COVER STORY BIG PHARMA’S SHAMEFUL SECRET Every year, drug companies spend $14 billion to test experimental substances on humans. Across the U.S., the centers that do the testing—and the regulators who watch them—allow scores of people to be injured or killed.

PHOTOGRAPH BY BRIAN SMITH B l o o m b e r g M a r ke t s December 2005 37

By David Evans, Michael Smith and Liz Willen

‚Oscar Cabanerio has been waiting in an experimental America, drawn to this five-story test center in a con verted drug testing center in Miami since 7:30 a.m. The 41-year- Holiday Inn motel. Inside, the brown paint and linoleum BIG PHARMA’S old undocumented immigrant says he’s desperate for cash is gouged and scuffed. A bathroom with chipped white to send his wife and four children in Venezuela. More than tiles reeks of urine; its floor is covered with muddy foot- 70 people have crowded into reception rooms furnished prints and used paper towels. The volunteers, who are with rows of attached blue plastic seats. Cabanerio is one supposed to be healthy, wait for the chance to get paid for of many regulars who gather at SFBC International Inc.’s ingesting chemicals that may make them sick. They are SHAMEFUL test center, which, with 675 beds, is the largest for-profit testing the compounds the world’s largest pharmaceutical drug testing center in North America. companies hope to develop into best-selling medicines. Most of the people lining up at SFBC to rent their bod- Cabanerio, who has a mechanical drafting degree from SECRET ies to medical researchers are poor immigrants from Latin a technical school, says he left Venezuela because he lost

SFBC’s building in Miami, a former Holiday Inn, houses the largest for-profit drug testing center in the U.S. Bloomberg Markets Special Report 38 December 2005 COVER STORY: DRUG TESTING

his job as a union administrator. For him, the visit to SFBC University of Miami, says pharmaceutical companies are is a last resort. “I’m in a bind,” Cabanerio says in Spanish. “I shirking their responsibility to safely develop medicines by need the money.” using poor, desperate people to test experimental drugs. Every year, Big Pharma, as the world’s largest drugmakers “The setting is jarring,” says Goodman, 50, who has a doc- are called, spends $14 billion to test experimental drugs on torate in philosophy, after spending 90 minutes in the wait- humans. In the U.S., 3.7 million people have been human ing rooms at SFBC’s Miami center, which is also the guinea pigs. Few doctors dispute that testing drugs on people company’s headquarters. “It’s an eye-opener. Every one of is necessary. No amount of experimentation on laboratory these people should probably raise a red flag. If these human subject recruitment mills are the norm around the country, then our system is in deep trouble.” Pharmaceutical companies distance themselves from the experiments on hu- mans by outsourcing most of their trials to private test centers across the U.S. and around the world, says Daniel Federman, a doctor who is a senior dean of Harvard Med- ical School in Boston. The chief executive officers of drug companies should be held accountable for any lack of ethics in these tests, he says. “The CEOs of the companies have to be publicly, explicitly and financially responsible for the ethical approach,” says Federman, 77, who still sees patients. “It’s not possible to insist on ethical standards unless the company providing the money does so.”

EOs of 15 pharmaceutical compa- nies that outsource drug testing to Cfirms including SFBC—among them, Pfizer Inc., the world’s largest drugmaker; Merck & Co.; and Johnson & Johnson—de- clined to comment for this story. SFBC Chief Executive Arnold Hantman says his center diligently meets all regula- tions. “We take very seriously our responsi- Oscar Cabanerio, center, a Venezuelan immigrant with his wife, left, and son, bilities to regulatory authorities, trial says he enters experimental tests because he’s desperate for money. participants, clients, employees and share- holders,” Hantman, 56, says. “We are com- rats will reliably show how a chemical will affect people. mitted to conducting research that fully complies with Helped by human testing, drugmakers have developed anti- industry and regulatory standards.” biotics capable of curing life-threatening infections as well as The pressure pharmaceutical companies face to develop revolutionary treatments for diseases like cancer and AIDS. new drugs has intensified in the past 15 years. Faced with These medical success stories mask a clinical drug trial in- the expiration of patents on best-selling drugs like Astra- dustry that is poorly regulated, riddled with conflicts of inter- Zeneca Plc’s Prilosec, which has helped tens of millions of est—and sometimes deadly. Every year, trial participants are people with heartburn and ulcers, Big Pharma has been in a injured or killed. Rules requiring subjects to avoid alcohol and frenzied race to find new sources of profit. When the patent narcotics and to take part in only one study at a time are some- for a company’s blockbuster drug expires, a lucrative mo- times ignored by participants, putting themselves at risk and nopoly vanishes. Such drugs typically lose 85 percent of tainting the test data. The consent forms that people in tests their market share within a year of patent expiration, ac- sign—some of which say participants may die during the cording to CenterWatch, a Boston-based compiler of clini- trial—are written in complicated and obscure language. Many cal trial data. drug test participants interviewed say they barely read them. The U.S. Food and Drug Administration, the principal

Ken Goodman, director of the Bioethics Program at the federal agency charged with policing the safety of human BRIAN SMITH B l o o m b e r g M a r ke t s December 2005 39

drug testing, has farmed out much of that responsibility to a handing oversight of human drug experiments to private, network of private companies and groups called institution- for-profit companies is a mistake. “This whole world gives me al review boards, or IRBs. The IRBs that oversee drug com- hives, this privatized review process,” Caplan, 55, says. “I’ve pany trials operate in such secrecy that the names of their never seen an IRB advertise by saying, ‘Hire us. We’re the members often aren’t disclosed to the public. These IRBs are most zealous enforcer of regulations you could have.’ People paid by Big Pharma—just like the testing centers they’re sup- say, ‘We’ll turn it around faster. We’re efficient. We know how posed to be regulating. to get you to your deadlines.’” The oldest and largest review company is Western IRB, founded in 1977 by Angela Bowen, an endocrinologist. WIRB, ‘The FDA’s backbone has been Jell-O,’ an Olympia, Washington–based for-profit company, is respon- sible for protecting people in 17,000 clinical trials in the U.S. says Michael Hensley, a former FDA The company oversaw tests in California and Georgia in the investigator. ‘The FDA stopped 1990s for which doctors were criminally charged and jailed for lying to the FDA and endangering the lives of trial participants. enforcing the rules years ago.’ No action was taken against WIRB. Bowen says she didn’t see human safety issues in those trials. WIRB aims to visit test sites The Pharmaceutical Research and Manufacturers of it monitors once every three years, Bowen says. America, a Washington-based trade association and lobby- The FDA’s own enforcement records portray a system of ing group, says human drug tests in the U.S. are safe and regulation so porous that it has allowed rogue clinicians— well monitored. “The vast majority of clinical trials con- some of whom have phony credentials—to continue con- ducted in the United States meet high ethical standards,” ducting human drug tests for years, sometimes for decades. PhRMA, as the group is known, said in a written response The Fabre Research Clinic in Houston, for example, con- to questions. “The U.S. regulatory system is the world’s gold ducted experimental drug tests for two decades even as FDA standard, and the Food and Drug Administration has the inspectors documented the clinic had used unlicensed em- best product safety record.” ployees and endangered people repeatedly since 1980. In Joanne Rhoads, the physician who directs the FDA’s Divi- 2002, the FDA linked the clinic’s wrongdoing to the death sion of Scientific Investigations, says that view isn’t realistic. of a test participant. “What the FDA regulations require is not any gold standard Review boards can have for trials,” Rhoads, 55, says. blatant conflicts of interest. The agency doesn’t have The one policing the Fabre enough staff to aggressively clinic was founded by Louis monitor trials, she says, Fabre, the same doctor who adding that FDA regula- ran the clinic. Miami-based tions are a bare minimum Southern IRB has overseen and much more oversight is testing at SFBC and is owned needed. “You cannot rely on by Alison Shamblen, 48, wife the inspection process to of E. Cooper Shamblen, 67, get quality into the system,” SFBC’s vice president of clin- Rhoads says. “I know many ical operations. Both Sham- people find this not OK, but blens declined to comment. that’s just the truth.” SFBC’s 2005 shareholder Michael Hensley, a pedi- proxy, filed with the U.S. Secu- atrician who was an FDA rities and Exchange Commis- investigator from 1977 to sion, lists Lisa Krinsky as its ’82, says the agency has be- chairman and a director of come less active in clinical medical trials and refers to her trial oversight in recent 26 times as a doctor. Krinsky, years. Families of injured or 42, has a degree from Sparta dead trial participants seek- Medical College in St. Lucia in ing accountability for mis- the Caribbean; she is not li- takes have to file lawsuits. censed to practice medicine. “The FDA’s backbone has Arthur Caplan, director been Jell-O,” says Hensley, of the Center for Bioethics at Daniel Federman, a senior dean of Harvard Medical School, says 60, who’s now president of the University of Pennsylva- CEOs of pharmaceutical companies should be held accountable Chapel Hill, North Caroli- for any unethical conduct in drug testing experiments.

ASIA KEPKA nia in Philadelphia, says na–based Hensley & Pilc Special Report COVER STORY: DRUG TESTING

Garry Polsgrove’s Fabre closed his trial center, its Web site said he’d tested drugs for leading pharmaceutical Last Battle companies, including Abbott Park, Illinois–based Abbott according to the FDA. The next Laboratories; New York–based day, lab tests showed he had life- Bristol-Myers Squibb Co.; and threatening kidney failure. New York–based Pfizer Inc., the Polsgrove died of myocardi- world’s biggest drugmaker. tis, or swelling of the heart, 22 The FDA wrote in the Janu- days after he enrolled in the ary letter that Fabre used unli- trial. The FDA waited until Jan- censed employees to run the uary 2005—nearly three years Ivax trial, failed to supervise after Polsgrove’s death—before them and then falsified the cir- telling Louis Fabre, 64, the clin- cumstances of the death. Pols- ic’s owner, that it would move grove, who was 5 feet 8 inches to shut down his testing center. tall, with brown hair and blue Fabre had conducted more eyes, spent his final days inside than 400 clinical trials involving the four-bedroom house that 20,000 people for at least 50 was Fabre’s clinic. drug companies since 1973. The “It was no issue with the FDA found human protection fail- FDA,” Ivax spokesman David ures in six inspections since Malina says. “I think we have no 1980. The mistakes at the clinic responsibility for the unfortu- included enrolling people who nate thing that happened to weren’t qualified to be in medical this man.” He says the FDA ap- tests, offering what it called free proved its version of clozapine treatment when it was actually after Polsgrove’s death. Fabre, testing unapproved drugs, failing who now runs a drug develop- to follow drug company–ordered ment company, declined to com- procedures for tests, keeping il- ment. His lawyer, Douglas legible notes and not promptly Farquhar of Washington, wrote reporting serious side effects. in a letter to the FDA that The institutional review board Fabre did nothing wrong. that was supposed to protect pa- “The homeless are the perfect tients from harm was the Human people to put in these trials,” says Investigation Committee in Hous- Ron Sellers, pastor of the Impact Nancy Gatlin holds photos of her brother, Garry Polsgrove, and his Purple Hearts. He died in a drug trial in Houston in which the ton. That IRB received an FDA Houston Church of Christ, who FDA says he had no care from anyone with medical credentials. warning letter in 1992 saying it knew Polsgrove. “Even if they die, had conflicts of interest: It was it’s not likely to be investigated Garry Polsgrove received two Miami-based Ivax Corp., the larg- run by Fabre himself. Members too seriously.” Purple Hearts for his service as a est U.S. maker of generic drugs. include his business partner, psy- Fabre left Polsgrove in the Marine in Vietnam. Three decades A day after he took the first dose, chiatrist Stephen Kramer, and his care of John Rodriguez. In its let- after that war ended, Polsgrove, Polsgrove’s heartbeat became ir- lawyer, Bruce Steffler. ter to Fabre, the FDA said Rodri- 55, was homeless and unemployed. regular, according to a January The FDA also said in a Janu- guez “is reported to have had In order to have a bed and earn 2005 letter to Fabre from the ary 2005 letter that the consent medical school training in Mexi- some money, he entered an experi- U.S. Food and Drug Administra- form Fabre gave Polsgrove co; he is neither licensed nor cre- mental drug test at the Fabre Re- tion. A few days later, he devel- “failed to describe clozapine’s dentialed in the United States.” search Clinic in Houston in April oped diarrhea. A clinician risk of fatal myocarditis,” the Six days before Polsgrove 2002, says his sister, Nancy Gatlin. misdiagnosed his condition as a disease that killed Polsgrove. joined the Ivax experiment, An- He was healthy when he signed on virus unrelated to the test, the Four months before Polsgrove drea Branche, an FDA inspector, for the medical trial, she says. FDA wrote. A week after that, began the experiment, the FDA visited Fabre and found that Polsgrove enrolled in a clinical Polsgrove developed low blood required a special warning for clinic records were illegible. trial for clozapine, a schizophre- pressure that was never ex- clozapine about that risk. Branche reported that Rodri-

nia medication being tested for plained, evaluated or treated, Until April 2005, when guez had screened subjects, MARK KATZMAN B l o o m b e r g M a r ke t s December 2005 43

performed physicals and con- still real,” Fabre said, according Inc., which advises pharmaceutical companies on FDA com- ducted electrocardiograms. to the inspection report. pliance. “The folks at the FDA stopped enforcing the rules sev- Fabre falsely presented Charles Arledge, 50, eral years ago.” Rodriguez as a licensed phy- participated in several of By law, drug companies must first conduct tests to deter- sician’s assistant, and the in- Fabre’s trials during 1974. mine whether potential drugs produce dangerous side ef- spector believed him. Arledge, now a Houston car- fects, such as organ damage, impaired vision or difficulty Kramer, 64, says Fabre’s penter, says he helped his breathing. The FDA calls them phase I tests. In 1991, 80 per- IRB held its meetings in res- girlfriend, a nurse at the clin- cent of industry-sponsored drug trials were conducted by taurants around Houston. ic, concoct phony paperwork medical faculty at universities, with protection for partici- Kramer says he offered Rodri- describing nonexistent pa- pants provided by the school’s own oversight boards, accord- guez tips on caring for Pols- tients at the clinic. “If you ing to the New England Journal of Medicine. Now, more than grove. “When that patient look at this as science, you’re 75 percent of all clinical trials paid for by pharmaceutical had trouble, he called me, and in trouble,” Arledge says. companies are done in private test centers or doctors’ offices, we discussed what to do,” “This is science fiction.” according to CenterWatch. says Kramer, who blames Fa- In 1992, Upjohn Co., now bre’s predicament on bad part of Pfizer, investigated ome test centers, FDA records show, have used poorly luck. “It’s unusual that the pa- Arledge’s allegations, finding trained and unlicensed clinicians to give participants tient died, and it was on his that Fabre had enrolled him- Sexperimental drugs. The centers—there are about watch, so he’s screwed.” self and employees in his tests. 15,000 in the U.S.—sometimes have incomplete or illegible Shortly after Polsgrove After the FDA documented records. In California and Texas, clinicians have used them- died, Fabre wrote that Pols- Polsgrove’s death, Fabre did selves, staff or family members as drug trial participants. grove’s low blood pressure experiments on humans for In- “Unfortunately, I don’t think it’s been recognized how impor- wasn’t related to the experi- dianapolis, Indiana–based Eli tant it is that people who actually conduct the trial be trained,” ment. “This a.m., patient was Lilly & Co. and Madison, New Rhoads says. “We oftentimes see people with no qualifications awake and well at 7:30,” Fabre Jersey–based Wyeth. Gerald whatsoever, but they’ll go to a one-day training course and they wrote. “We feel that this is not Burr, Wyeth spokesman, says call themselves a certified study coordinator.” These people often related to medication.” The the company halted its trial run 90 percent of the study with little involvement by physi- FDA said Fabre’s conclusion with Fabre in January after cians, she says. was contradicted by the high learning of the FDA’s action Participants in Miami clinical trials talk openly about how level of clozapine in Polsgrove’s against him. Wyeth found the they violate SFBC rules intended to protect the integrity of blood. Fabre should have sus- January FDA letter to Fabre research findings. SFBC prohibits people from taking part in pected Polsgrove’s heart irreg- on the Internet, Burr says. two clinical trials at the same time. ularity was clozapine related, “Lilly was not aware of the stopped giving him the drug seriousness of the FDA’s con- ‘This whole world gives me hives, and provided appropriate cern with Dr. Fabre in 2002, medical care, the FDA wrote. nor were we aware of the this privatized review process,’ The agency found Fabre death of the patient in the University of Pennsylvania failed to properly protect clozapine trial until February participants during inspec- 2005,” Eli Lilly spokesman bioethicist Arthur Caplan says. tions in 1980, ’93 and ’99 Phil Belt says. Lilly immedi- and twice in 2002, yet it ately stopped using Fabre’s Roberto Alvarez, 36, an Argentine in the U.S. on a visa; never stopped him from clinic in February, he says. Efrain Sosa, 35, a Cuban native; and Marlon Matos, a 27- doing any of his trials. Fabre Gatlin, 61, first saw the year-old immigrant from Venezuela, say they’ve participat- was cited again in March FDA findings on her brother’s ed in more than one clinical trial in Miami at the same time 2005. The confidential FDA death in August. She says the or gone from one test to another, ignoring required waiting process of banning a clinician FDA should have barred periods. They say they do it for the money, without telling can take years to complete. Fabre from running experi- the test centers, and that no one has ever caught them vio- Twenty-five years ago, the mental tests years ago. lating the rule. FDA found that dozens of “People like this should be “We maintain many safeguards to help us ensure that the pages of records were missing stopped,” says Gatlin, a re- participants of our clinical trials are not participating simulta- for a Fabre test, and investiga- tired postal clerk in St. Louis. neously in multiple clinical trials,” SFBC’s Hantman says. tors questioned whether all of “They slapped his little hand SFBC fingerprints participants to keep track of their tests at Fabre’s patients existed. “They and let him go on.” the company, he says. “Unfortunately, there is no clearing are there, and if some of the house that we’re aware of that would allow us to find if they data is missing, the patient is DAVID EVANS Bloomberg Markets Special Report 44 December 2005 COVER STORY: DRUG TESTING

were participating in another trial at the same time,” he says. return calls for comment. Eisai spokeswoman Judee Shuler says In April, Alvarez signed up for a 36-day clinical trial at Elite did everything it could to ensure participants in the clini- Miami testing company Elite Research Institute for a new sus- cal trial weren’t in other tests at the same time, including asking tained-release form of donepezil, an Alzheimer’s drug that subjects verbally if they were. Pfizer spokesman Stephen Leder- Tokyo-based Eisai Co. sells in the U.S. with New York–based er says his company had no role in the donepezil tests. Pfizer. At the time, Alvarez was in the middle of a 212-day test Gerald Burr, a Wyeth spokesman, says the company careful- sponsored by Madison, New Jersey–based Wyeth at SFBC for ly planned and monitored the clinical trial. The FDA requires an experimental muscular dystrophy drug, according to con- pharmaceutical companies to hire monitors to audit clinical sent forms he signed. “I hop around to get around that,” says Alvarez, a part-time construction worker who’s wear- ing a black T-shirt and jeans when he’s interviewed in a bagel shop two doors down from SFBC. “They ask, but I just don’t tell them. Everybody does that.” Steve Simon, a research biostatistician at Children’s Mercy Hospital in Kansas City, Missouri, says that when people participate in more than one clinical trial at a time, it can be harmful to people and research. “When neither researcher knows about the potential interactions with the other trial, that raises concerns about scientific validity,” says Simon, who has a Ph.D. in statistical re- search. “You don’t know how these things might interact. It’s asking for trouble.” Ernesto Fuentes, Elite’s clinical trial director, didn’t

A Matter of Trust

By the time Bill Hamlet to join the test, no one told him dropped out of a clinical trial of his psoriatic arthritis could Genentech Inc.’s Raptiva in De- worsen if he got a placebo. cember 2000, the 58-year-old Hamlet, who lives on 19 artist and woodcarver could wooded acres in Pittsboro, Bill Hamlet, with his wife, Jennifer Nygard, suffered permanent barely walk or stand. Thick red North Carolina, enrolled in the knee damage in a drug experiment in North Carolina. scabs from a severe outbreak test, sponsored by South San of psoriasis covered his legs, Francisco, California–based taking methotrexate. Within and “large encrustations,” ac- back and torso. Blood stained Genentech, at his doctor’s sug- weeks of discontinuing the suc- cording to a lawsuit he filed his sheets and clothing. gestion in July 2000. His doc- cessful treatment, Hamlet’s against Genentech, Fradin and Before entering the study, tor, Mark Fradin, 45, was the skin irritation flared up worse Western Institutional Review Hamlet says he was in good physician running the trial in than it ever had, he says. “You Board, which was hired by Ge- health. He took the medication nearby Chapel Hill. Hamlet see how horrible it was,” Ham- nentech to ensure that risks methotrexate to control says Fradin, a dermatologist, let says, flipping through a blue didn’t exceed benefits. psoriasis and a mild case of told him the experimental drug binder filled with photographs Genentech and WIRB paid psoriatic arthritis, a condition was promising and offered that chronicle his transforma- Hamlet an undisclosed amount causing inflammation of the fewer side effects than metho- tion from robust health to con- this year to settle the lawsuit, skin and joints. In his half year trexate. He says he trusted stant pain. which was filed in Orange in the trial, Hamlet was first Fradin and signed a consent Within a week of beginning County Superior Court in given a placebo, a substance form. “I always thought he the test with a placebo and 72 North Carolina. The defen- with no active medicine, and was my buddy,” Hamlet says. days after stopping methotrex- dants neither admitted nor de- then an experimental drug. He In order to begin the Genen- ate, Hamlet’s arms, trunk and nied wrongdoing. “We reached

says that when he consented tech test, Hamlet had to stop legs were covered with scabs a confidential settlement, and GREGORY FOSTER B l o o m b e r g M a r ke t s December 2005 45

Confined to quarters SFBC Inter- national strictly controls the behavior and movement of people who are paid to participate in experimental drug tests at its 675-bed center in Miami, the biggest experimental medical testing clinic in North America.

Source: SFBC consent form

trials to ensure patient safety and scientific validity. “Our spon- The shortcomings of human drug testing may come to sors visit our facilities frequently to monitor our trials and also light in the welter of litigation surrounding Vioxx, the block- routinely audit our work,” SFBC’s Hantman says. buster pain reliever that Whitehouse Station, New Jersey– Pharmaceutical company monitors spend more time scruti- based Merck pulled off the market last year after its own nizing data being gathered than watching out for people’s safety, studies found long-term use posed twice the normal risk of a FILEHarvard’sphardoc5 Federman says. “There are no monitors of monitors,” heart attack. A 2004 study by David Graham, the FDA’s asso- SIZEhe says.40p0 “It’s x 15p0 like looking at a dark cloud. There’s minimum ciate director for science and medicine, estimated that Vioxx NOtraining.TES Ne wThey’re size relying on people running the trials.” caused as many as 140,000 heart attacks and strokes, killing DECORATIVE

it’s not our policy to comment “Nor do I think the physician increasingly ill during the trial, Genentech said in a March on the details of a lawsuit,” Ge- did anything wrong with Ham- he didn’t drop out, convinced he 2004 news release. nentech spokeswoman Tara let,” Bowen says. was on a placebo and believing Greg Koski, a physician and Cooper says. Arthur Caplan, director of he would eventually get Raptiva former head of the federal Of- Fradin said in a deposition the Center of Bioethics at the instead. Hamlet, who had the fice for Human Research Pro- in July 2004 that he didn’t University of Pennsylvania says right to leave the trial at any tection, which protects people know whether Hamlet would such explanations make no time, says he suspected he was in federally funded clinical tri- be given Raptiva or a placebo sense. “It’s outrageous to take getting a placebo three weeks als, says patients who are during the trial. Fradin said he any patient for whom a therapy into the trial. Because the rules being successfully treated might have advised Hamlet not is working well and, without of the trial prohibited clinicians shouldn’t be taken off medi- to enter the trial if he had that person’s full, complete and from knowing who got place- cation to try an experimental known Hamlet might be given a indisputable knowledge, stick bos, Hamlet had no way to drug or placebo. placebo. “If I had known that them into a placebo-controlled know if he did. He confirmed his Hamlet’s case should be a he would not get any active trial,” he says. “The core suspicion when he saw his re- lesson to the clinical trial com- drug and if I had known that principle of medical ethics is cords more than two years munity, Koski says. “It’s an ex- he would have a significant ‘First, do no harm.’” later, after filing the lawsuit. ample of how the system can flare-up, then I might have Within a month of starting By October 2000, Hamlet really fall apart and result in counseled him not to do it,” the drug experiment, Hamlet was switched from a placebo to harm to individuals,” he says. Fradin said. developed symptoms of arthri- the experimental drug, and the On Dec. 21, 2000, Hamlet Fradin didn’t return calls tis, medical records show. By psoriasis slowly improved. His received his last injection in the seeking comment. His lawyer, December 2000, his condition arthritis, though, grew worse, trial. He dropped out a week William Daniell, says Fradin was so extreme he needed a his medical records show. before the trial ended. “I felt settled Hamlet’s suit without cane to walk. During the next The FDA approved Raptiva like a guinea pig,” Hamlet says. paying damages. “He feels the six months, Hamlet saw Fradin for treatment of plaque psoria- “I would say that I got zero care he provided was entirely at least 12 times, according to sis in October 2003. The medi- medical care during the study. I appropriate,” Daniell says. the suit. Fradin and WIRB cation doesn’t work to control became the person to observe, WIRB President Angela never advised him to leave the the arthritic symptoms that not to treat.”

PHOTO CREDIT Bowen says she doesn’t think trial, Hamlet says. were associated with Hamlet’s her IRB did anything wrong. Although Hamlet grew disease, psoriatic arthritis, LIZ WILLENTourline and DAVID goes EVANS here Bloomberg Markets Special Report 46 December 2005 COVER STORY: DRUG TESTING

as many as 55,000 people. On Aug. 19, a Texas jury ordered research firm BCC Inc. Schering-Plough Corp., for example, Merck to pay $253 million to the widow of a Vioxx user, an suffered a drop in revenue after losing U.S. exclusivity for amount that will be reduced to $26 million under state law. Claritin, an allergy treatment, in December 2002. The Ke- The company has been sued by more than 5,000 people who nilworth, New Jersey–based company’s sales fell 18 percent say they were hurt by the drug. to $8.3 billion in 2003 from $10.2 billion the year before, and the company reported a net loss of $92 million in 2003 ‘He trusted the system that compared with a profit of $1.97 billion in 2002. Schering- Plough shares averaged $17.42 in 2003, down from an aver- ultimately failed him,’ the age price of $25.99 in 2002. daughter of a doctor who died Schering-Plough has used SFBC for clinical tests, includ- ing trials in the past year comparing different forms of Clari- during a clinical trial says. tin. “We believe that they are at the industry standard, and the appropriate checks and balances are in place,” Schering Before Vioxx was approved by the FDA, Merck tested it on spokeswoman Rosemarie Yancosek says. thousands of people in early phase I clinical trials across the As drug companies try to get new drugs to market, time is U.S., including at SFBC’s Miami center. literally money. They lose as much as $5 million a day waiting Pharmaceutical companies sponsored 36,839 new clin- ical trials from 2001 to ’04, six times more than in the peri- od from 1981 to ’85. The search for the next money-spinning drug is fueling the surge in human testing. Pharmaceutical companies that make 28 top-selling drugs will lose a total of $50 billion in revenue as their patents expire from 2003 to ’08, according to Norwalk, Connecticut–based market

Death of a Doctor Scott Scheer wasn’t worried health was “very good,” giving it about side effects when he a rating of 90, with 100 the agreed to enroll in a federally highest, before the drug trial. He funded test of different combi- had been taking medication for nations of previously approved high blood pressure before the blood pressure medications in trial and was asked to stop so 1997. At age 57, the radiologist he could enter the study. He suf- wanted to help medical science, fered side effects including mus- and he assured his wife, Beverly, cle aches and swollen ankles in that some of the best physicians the first five months of the trial, in the Philadelphia suburbs medical records show. By July were overseeing the five-year 2001, four years after he en- study. “He completely trusted tered the trial, Scheer was dead. them,” Beverly Scheer says. In the days before his death, Laura Scheer Brooks holds a photo of her father, Scott Scheer, The consent form Scheer Scheer’s family grew alarmed a radiologist who died in a clinical trial near Philadelphia. signed before starting the by bruising on his arms, a rash trial at Lankenau Hospital in on his feet and overall exhaus- anemia that he said was prob- only time during that exam, Wynnewood, Pennsylvania, gave tion. On July 9, 2001, six days ably caused by hydralazine, one wrote in his patient report. no reason for concern. “Most before he died, Scheer visited of the drugs in the test. “Drug-induced lupus is a com- people who take these drugs do a hematologist outside Lan- “Scheer most likely has mon side effect of hydralazine, not have any side effects at all,” kenau Hospital. Dr. Edward hydralazine-induced systemic occurring in up to 70 percent of the document said. Stadtmauer diagnosed Scheer lupus,” Stadtmauer, who met patients eventually.”

Scheer told the hospital his with kidney failure and severe Scheer for the first and Stadtmauer says he ASIA KEPKA B l o o m b e r g M a r ke t s December 2005 47

to get approval of new medications, according to Cen- Profitable tests SFBC International, based in Miami, has increased earnings by an average of 31 percent a year since 2001. terWatch. Eighty percent of all experimental drugs test- ed in humans are never approved by the FDA. $50 SFBC stock price SFBC earnings per share; percentage of change, Big Pharma has an insatiable demand for people to year over year be in clinical trials, says Marcia Angell, a doctor who was 40 1.99 editor in chief of the New England Journal of Medicine 30 from 1999 to 2000. “Human subjects are in very short 1.31 supply, so it’s not surprising that under the growing pres- 0.99 20 sure to find them, there are sometimes terrible ethical 0.75 violations,” says Angell, 66, a Harvard Medical School $0.63 senior lecturer. “Drug companies may claim innocence, 10 but they need to take responsibility.” 1/31 10/11 21% 19 32 33 52 In 1978, the National Commission for the Protec- ’01 ’02 ’03 ’04 ’05 ’01 ’02 ’03 ’04 ’05* tion of Human Research Subjects, an advisory com- *Estimate. Sources: Bloomberg, First Call mittee appointed by President Richard Nixon, SFBC sites, says phase I centers often don’t conduct the in- recommended, in what became known as the Belmont Re- formed consent process properly. “I’d say it’s fairly wide- port, that clinical trial participants be fully informed of risks spread,” she says. “It’s a genuine social problem that needs to FILE pharstk7 and sign a consent form. So-called informed consent wasn’t be dealt with.” SIZE 21p10 x 14p0 required by the FDA until 1981. Alvarez, the clinical trial participant from Argentina, says NOTES Interviews with people in clinical trials and relatives of par- he skimmed over the 12-page consent form for a test SFBC ticipants who died in medical experiments across the U.S. sug- managed for KW-6002, an experimental Parkinson’s disease gests that researchers often don’t fully explain risks and potential drug made by Tokyo-based Kyowa Hakko Kogyo Co., before side effects. Bowen, whose Western IRB has overseen trials at signing the form on Aug. 30. “The thing I pay most attention

suggested he stop taking hy- drugs were added if a patient’s says. The hospital conducted its OHRP investigators found dralazine and tell the nurse in hypertension wasn’t success- own probe after the death and that the hospital had failed to the study. fully controlled. concluded the consent form adequately protect Scheer and In a wrongful death law- The consent form said par- Scheer had signed was inade- other patients in the study. “Your suit filed in state court in Phil- ticipants would be asked to see quate. The hospital also found father apparently was not told adelphia, Scheer’s family says doctors at least every three that the doctors running the about the risk of hydralazine- he died as a result of improper months during the first year of study, Burke and Duzy, failed to induced lupus,” says an OHRP monitoring during the clinical the study and every four notify the hospital and oversight letter to Bauer dated Dec. 20, trial. The family sued Lanke- months in subsequent years. groups of Scheer’s side effects 2002. The office also said the nau Hospital, Drs. James Burke Scheer’s family says his medi- as required by study rules and hospital’s protection of partici- and Michael Duzy and the Main cal records show that Scheer federal regulations. Burke and pants in the study fell short. Line Hospitals Institutional Re- had almost no care from the Duzy didn’t return phone calls “OHRP found that certain unan- view Board. The suit is pending. hospital and that he wasn’t seeking comment. ticipated problems involving Frieda Schmidt, a spokeswoman asked to come into the hospital Sometime from July 10 to 13, risks to subjects or others were for Main Line Health, which in- every three to four months. 2001, Burke learned that Scheer not promptly reported to appro- cludes Lankenau Hospital, says Phone interviews and postcard had been diagnosed with se- priate institutional officials,” the she can’t comment because of questionnaires replaced in- vere anemia and kidney failure letter says. the litigation. George Reichard, person visits, says his older on July 5, according to minutes Bauer says she had to fight chairman of the Main Line Hos- daughter, Kirsten Scheer of the Main Line Hospitals Of- to retrieve Scheer’s records pitals IRB, which oversees clini- Bauer, 39. On at least six occa- fice of Regulatory Affairs’ Alle- from the hospital. No one run- cal trials at Lankenau, didn’t sions, a nurse sent drugs to gations Committee. That group ning the test called to follow up return calls. Scheer’s home via Federal Ex- was formed in response to a after the family called to report The study set out to test press, Bauer says. complaint from Bauer. She also Scheer’s death, she says. “He different types of drugs used to For the four years Scheer went to the federal Office for trusted the system that ulti- treat high blood pressure and was in the test, side effects he Human Research Protection, part mately failed him,” says Laura high cholesterol and compare described were included on his of the Department of Health and Scheer Brooks, 38, Scheer’s them with the benefits of Pfiz- chart at Lankenau Hospital; Human Services. The office had younger daughter. er Inc.’s Norvasc and other, ge- none were treated by doctors authority to investigate because neric medications. Additional overseeing the trial, his family the study was federally funded. LIZ WILLEN and DAVID EVANS Bloomberg Markets Special Report 48 December 2005 COVER STORY: DRUG TESTING

to when filling this thing out is this,” says Alvarez, flipping end on Nov. 2, also includes 12 outpatient visits to test for through the form, written in Spanish, to a page that describes levels of KW-6002 in subjects’ bloodstream. payment terms. “How much it pays and how long it takes. I The consent form says KW-6002 can produce side ef- don’t read them too carefully.” fects that include heart palpitations, sleep disorders and Page eight of the consent form explains that the 57-day test breathing difficulties. An SFBC employee asked if Alvarez Alvarez has signed up for pays $4,300, spread out in payments had read the consent form and understood what the test en- tailed when he signed up, Alvarez says. He told the clinician ‘I have little doubt that there is a he had read the form, and the clinician didn’t say anything more about risks, he says. disproportionate burden of risk SFBC Executive Medical Director Kenneth Lasseter says that falls on the disadvantaged,’ a the center always explains risks to participants. “We have a whole team of people,” he says. “They go over the risks and former federal health official says. discomforts and explain them to the subject.” Lasseter says he’s never before heard that participants said they weren’t fully tied to completion of three 8-night “confinements.” During informed of risks in tests. “Everyone who is screened has a one- confinements, participants aren’t allowed to leave the SFBC on-one interview with one of the screening team that goes over building unless they decide to drop out of the trial. They live in the informed consent,” he says. “If they are denying that, that’s 12-foot (3.66-meter) by 24-foot rooms outfitted with three simply a fabrication. They simply are not being truthful.” double-decker beds. The center has recreation rooms with Informed consent documents routinely fail to explain televisions, pool tables and video games. The payment sched- risks to potential participants, says Laura Dunn, a professor ule provides an incentive for participants to stay the course: of psychiatry at the University of California, San Diego, who About half of the money, or $2,355, isn’t paid until the last wrote an article on informed consent that appeared this year week of the eight-week test. The trial, which was scheduled to in the Journal of the American Medical Association. “Decades

syndrome, a congenital The Youngest Victims heart condition affecting one in 5,000 babies. The Hours before 5-month-old in February. The Daddios allege “There was no institutional left side of the heart is un- Michael Daddio underwent sur- in their suit that doctors at Al- review board approval sought derdeveloped and too small to gery for a congenital heart de- fred I. duPont Hospital for Chil- or obtained,” the suit says. The pump blood as needed. Correct- fect in November 2001, his dren in Wilmington, Delaware, federal government requires ing it with customary techniques parents, Robert and Tracie, got ignored federal regulations re- IRBs, which can be private com- would require three surgeries. some unexpected news. Instead quiring that experimentation on panies or hospital groups, to The first stage is known as the of the operation the doctors had humans be approved by the hos- oversee medical experiments to Norwood Procedure, named for prepared them for—one they pital’s institutional review protect participants. Michael’s doctor, who pioneered say they were told would have a board. In surgical experiments, Tracie Daddio, 36, who does the method in 1979. 90–95 percent success rate— as in testing for new drugs, the public relations for a construc- The Daddios were at first Michael was going to undergo a U.S. Food and Drug Administra- tion company, says she still can’t glad that Michael was in the different procedure. The doctors tion requires that participants take down Michael’s crib or re- hands of the top specialist in the said the surgery would make his or parents be fully informed by move his toys from the nursery field. “We totally trusted him,” treatment safer and his recov- doctors of risks and sign con- in her Magnolia, Delaware, says Robert Daddio, 37, a Dela- ery less painful down the road. sent forms. home. “To think that something ware state trooper. Michael died of heart failure The Daddios say in the suit could have possibly been done in DuPont Hospital and its in July 2003, six weeks after his that doctors bypassed the in- a different way and that he IRB determined in its own in- second birthday. His parents formed consent process entire- could be here today is hard to vestigation that its doctors didn’t find out until after his ly. They are among 13 families accept,” she says. had failed to inform the fami- death that Michael had under- suing Dr. William Norwood, du- Michael’s condition came as lies that their children would gone experimental surgery aimed Pont Hospital and its Nemours a shock to the Daddios because get experimental surgery, and at preparing him to receive an un- Cardiac Center. Seven children their daughter, Tara, 7, is per- the families hadn’t signed con- approved medical device. died after the experimental fectly healthy. Shortly after Mi- sent forms, according a report The couple filed a wrongful surgery, according to civil suits chael was born, doctors told the by hospital investigators. The death and negligence lawsuit in filed by Philadelphia attorney couple that their son suffered hospital fired Norwood in Feb- U.S. District Court in Philadelphia Theresa Blanco. from hypoplastic left heart ruary 2004. Norwood filed a Endurance test Participants have to stay in drug tests to receive full payment. In Purdue Pharma’s trial of pain Day 53 killer Palladone at SFBC International, participants earn less than Florida’s $6.15 hourly minimum wage in the early $200 stages; 75 percent of the $2,400 total pay comes after the fourth confinement and the follow-up visit. per hour, for four hours. Purdue Pharma’s Palladone test pay scale (total pay: $2,400) Subtotal: $800

First Second Third Fourth confinement confinement confinement confinement $2.78 $2.78 $2.78 $13.89 per hour, for per hour, for per hour, for per hour— three full days— three full days— three full days— $333.33 per day. $66.72 per day. $66.72 per day. $66.72 per day. Subtotal: $1,000 Subtotal: $200 Subtotal: $200 Subtotal: $200

Source: Informed consent form from clinical trial at SFBC International, dated April 4, 2005

of research show that poor understanding of informed con- and eliminated from the body.” Joseph Brindisi, a spokesman sentFILE documentspharpay4 is widespread,” she says. for Kyowa’s U.S. unit, declined to comment. SIZEThe title40p0 ofx 13p0 the KW-6002 consent form says the test is a It’s inevitable that tests that often make healthy people phaseNOTES I Neclinicalw size trial. The document doesn’t explain what sick rely on the poor, says Greg Koski, who from 2000 to ’02, phase I means,DECORA thatTIVE the purpose is to determine the side ef- was head of the federal Office for Human Research Protec- fects and safety of an experimental drug. The test, the consent tion. A division of the Department of Health and Human form says, aims to determine how the active ingredient in KW- Services, the office oversees all federally funded clinical tri- 6002, istradefylline, is “absorbed, distributed, decomposed als; it doesn’t review pharmaceutical company–sponsored tests in private centers. “I have little doubt that there is a dis- proportionate burden of risk that falls on the disadvantaged members of our society,” says Koski, 55, who’s now a radiolo- gist in Boston.

consent form they signed for Biomedical Research, says Michael’s second surgery in Norwood should have known 2001 called it an established better. “The only explanation I procedure. “We weren’t told it can see is poor judgment,” Hil- was experimental, and we debrand says. “You are world were never given any facts, any renowned. You have a proce- choices or options,” Tracie dure named after you. You Daddio says. should know the difference be- From the time of Michael’s tween research and practice.” second surgery until his Mona Barmash, a Pennsyl- death, he suffered complica- vania mother who heads the tions and spent months in the Congenital Heart Information hospital. When at home, he Network, says the case has was often hooked up to an raised awareness of the mean- iron lung, a machine that en- ing of informed consent. All abled him to breathe. the families were told their “Something in my stom- children would undergo ap- ach told me something was proved surgery with a high wrong because, after the sur- success rate, and none were gery, his health just kept going told their children were partic- downhill,” Robert Daddio says. ipating in experiments, she Tracie Daddio, with husband, Robert, and daughter, Tara, holds a “We kept hearing there was a says. “People were presented photo with her son, Michael, who died after experimental surgery. 90–95 percent success rate, with papers in some cases that Michael was just going after their kid is wheeled away wrongful termination lawsuit. was provided.” Norwood and through some rough times, and to surgery, and that’s no way His lawyer, Victor Battaglia, Sara Petrosky, his attorney in he’d be fine.” to obtain informed consent,” wrote in the suit against the lawsuits against him, didn’t re- James Hildebrand, director Barmash says. hospital, “No reason for termi- turn calls. of clinical research services

ASIA KEPKA nating Norwood existed or The Daddios say the at Nemours’s Department of LIZ WILLEN and DAVID EVANS Bloomberg Markets 50 December 2005

SFBC Executive Vice President Greg Holmes says money The Human is the main reason people sign up for phase I tests. “Look at the benefits,’’ he says. “There is little benefit other than get- ting paid. There’s no secret there.” Testing Mill SFBC conducted a test in June of a drug that may treat over- active bladders. The test was sponsored by Theravance Inc., a Roberto Alvarez has just goes to SFBC for the money. South San Francisco, California–based company that’s 21 per- finished eight nights of being One mid-September morn- cent owned by GlaxoSmithKline. The London-based company, confined in the largest cen- ing, a squeaky metal side door the largest drugmaker in Europe, has marketing rights for new ter for clinical drug trials opens onto a noisy waiting room, Theravance drugs, according to filings with the SEC. “The goal in North America, and he’s where more than a hundred of this study is to determine the highest daily dose of TD-6301 happy to get out. mostly Spanish-speaking volun- that will not cause an undesired teers go every weekday to sign increase in heart rate,” the con- up for experimental drug tests sent form says. that pay as little as $25 a day University of Miami bioethi- and as much as $6,900 for cist Goodman says the wording seven months. People line up at is misleading and confusing. a window as a clerk, also speak- “They’re saying it backwards to ing in Spanish, describes tests, a population that may not be of emphasizing how much they pay. the highest education level,’’ he “Aqui hay un estudio que says. The only way to accom- paga $2,000,” the clerk says to plish the intent of the study is to one man, referring to a test for raise the dosage of the experi- an experimental schizophrenia mental drug until heart rates in- medicine. “Here’s a study that crease, Goodman says. “The real pays $2,000.” purpose of the study is, ‘We’re SFBC Chief Executive Offi- going to make you sick in order cer Arnold Hantman says SFBC to find out at what level you get makes sure people understand sick when given this drug,’” tests in which they enroll. Par- Goodman says. “Obviously, they ticipants are “sequestered” in don’t want to say that.” some trials to ensure they aren’t SFBC’s Lasseter says the exposed to anything that could wording in that consent could affect the validity of data, he be better. “It’s clear to me,” he says. “We take very seriously says. “Perhaps it needs to be ex- compliance with the law and all plained more.” Marlon Matos, of Miami, ethical guidelines,” he says. GlaxoSmithKline spokesman Rick Koenig says his company says he used a phony So- SFBC has thrived on the wasn’t involved in the clinical trials. He adds that Glaxo- cial Security card to enroll $14 billion pharmaceutical in an SFBC clinical trial. SmithKline has the right, but not the obligation, to develop the companies spend annually on Theravance drugs. Theravance spokesman David Brinkley says Alvarez, 36, is being paid drug trials. SFBC has sites in his company policy is not to comment on specific clinical trials. $4,300 to be in a 57-day test the Americas, Europe, Asia of an experimental Parkinson’s and Australia. The company, abanerio, the Venezuelan immigrant, says he reads con- disease medication, and it’s which was founded in 1984 sent forms and questions doctors and clerks at SFBC the first time he’s been al- and went public in 2000, has Cclosely to weigh the risks against his need for cash for lowed outside SFBC Interna- boosted profit at least 45 per- his family. In July, he says, he needed the money so badly he tional Inc.’s center in Miami. cent a year since 2001. was willing to enroll in a test that could have had fatal results. The building, five stories high At SFBC’s Miami center, Cabanerio signed up for a trial that mixed alcohol with an ex- and peach colored, is located people wait to be called by a perimental opiate pain reliever called Oros Hydromorphone, next to the $62-a-night Sun ’n man who watches them sign made by Alza Corp., a unit of New Brunswick, New Jersey– Surf motel and a strip club ad- documents describing tests. Oth- based Johnson & Johnson. The test paid $1,800. vertising “Full Nudity.” ers sit in a hallway, ready to be Participants who chew Oros tablets, as opposed to swallow- “It can be weird inside, like examined by a doctor. In a near- ing them whole as directed, can overdose, which can cause a a jail,” says Alvarez, a part- by bathroom, an open trash can heart attack or death, a June 21 consent form in Spanish for time construction worker is stuffed with blood-stained

from Argentina. He says he adhesive bandages, the kind BRIAN SMITH Special Report COVER STORY: DRUG TESTING

used after samples are drawn. Alzheimer’s drug donepezil, which Massachusetts–based ActivBiotics In the center, participants sleep it markets in the U.S. with Pfizer Inc. developed to treat the bacte- six to a room in double- decker Inc. The 36-day test paid $2,125, ria that causes ulcers, according beds. Hantman says SFBC typically according to the 10-page consent to a 13-page consent form Matos occupies 35 percent of the 675 form Alvarez signed. signed on Jan. 25. Total pay for beds in the Miami center. In April “You get kind of desperate the test was $200. 2004, Hantman told investors, “We when you’re not in a study and Within a week, Matos needed can use all of the capacity.” SFBC start calling around,” Alvarez says. cash to send to his 6-year-old tells the Miami County Building Au- “You look at the calendar and fig- daughter in Venezuela, so he thority the maximum number of ure it out. When you overlap, you looked for more tests. He says he participants is 350. find out how to do one at another went to SFBC to sign up for Wy- “You get inside and see the clinic. It’s hard to stop.” eth’s muscular dystrophy trial and density of the people shopping for Ernesto Fuentes, the doctor abandoned the daily pill-taking studies based on convenience and who oversaw the test at Elite Re- regiment at the Miami Research payments,” says University of search, didn’t respond to three test. The new test’s payout was Miami bioethicist Ken Goodman, phone requests for comment. Eisai $6,900. Matos says he signed the 50, who spent 90 minutes in SF- spokeswoman Judee Shuler says consent form and showed an Testers wanted This SFBC ad seeks healthy volunteers in Miami. BC’s waiting rooms in June. Elite did all it could to ensure par- SFBC clerk his Florida driver’s li- Digitally re-created by Bloomberg. Source: Miami Herald “The line between compensation ticipants in the trials weren’t in cense and a photocopy of a and coercion is a very fine line.” other tests at the same time, in- forged Social Security card. providing assurance of patient Participants are required to cluding asking them verbally. Eisai “That’s not good,” says Joanne FILEsafety,”pharad6 he says. wear purple drawstring pants and and Elite expect volunteers to be Rhoads, the physician who directs SIZEGreg11 Koski,p0 x 23p6 a doctor who ran T-shirts. Signs in the waiting room honest, Shuler says. It’s almost im- the FDA’s Division of Scientific In- NOTESthe OfficeNew of size Human Research Pro- ban make-up, face creams and possible to detect someone in si- vestigations. “Unfortunately, we tection DECORAat the DepartmentTIVE of Health nail clippers. Anyone who shows multaneous trials if the participant have no way of knowing who’s a and Human Services from 2000 to up late is fined $20. hides the fact, Hantman says. professional guinea pig. There’s no ’02, says the integrity of a study is Some people try to make extra Marlon Matos, 27, who has database to see who’s been in an- harmed when someone participates money by getting around rules ban- been testing drugs since January, other trial.” in multiple clinical trials in quick ning participation in more than one has flouted the rules by using SFBC Chairwoman Lisa Krin- succession. Researchers don’t know test at a time. On Jan. 31, Alvarez phony documents and by enrolling sky says SFBC does all it can to how the different chemicals inter- signed up for a 212-day test for in trials in quick succession, with- prevent participants from breaking act or what side effects the mix Wyeth’s MYO-029, an experimental out telling the test centers. On Feb. rules and has removed people from may have on a person. “It’s a seri- drug to treat muscular dystrophy. 2, he went to Miami Research As- tests when they do. ous concern with respect to the va- On April 24, while he says he sociates and let a doctor thread a Wyeth spokesman Gerald Burr lidity of research,” Koski says. “That was enrolled in the trial at SFBC, tube known as an endoscope down says the Madison, New Jersey– could severely undermine the value Alvarez began another test, at his throat. His pay: $50. based company is monitoring the of the research as well as result in Elite Research Institute in Miami. That exam was the beginning of SFBC tests and is confident the harm to the participants.” Tokyo-based Eisai Co. was testing a 73-day outpatient test of rifalazil, center is following correct proce- a sustained-release form of an antibiotic that Lexington, dures. “Our clinical monitoring is MICHAEL SMITH and DAVID EVANS

Alvarez Double dipping Roberto Alvarez, 36, an Argentine immigrant, says he signed up for three clinical trials at two testing companies in Miami between January and September that will pay a total of $13,325. He says he violated SFBC rules by participating in two tests simultaneously.

Test 1: 212 days, SFBC Test 3: 57 days, SFBC MYO-029 (muscular dystrophy); Wyeth KW-6002 (Parkinson’s); Kyowa Hakko unit $6,900 $4,300

SIGN-UP: JAN. 31 AUG. 31 SIGN-UP: START DATE: APRIL 24 SEPT. 6

Test 2: 36 days, Elite Donepezil (Alzheimer’s); Eisai $2,125 MARK ELIAS/ BLOOMBERG NEWS Start and end dates are based on approximate testing periods described in consent forms for each test. Sources: Informed consent forms for the tests, interviews

FILE phartime7 SIZE 40p0 x 17p0 NOTES New size DECORATIVE Bloomberg Markets Special Report 52 December 2005 COVER STORY: DRUG TESTING

the test says. People also can have allergic reactions to Oros, which, if severe, can be fatal, the form says. “It’s not the job I would choose, but financial circumstances require you to do it some- times,” Cabanerio says. The doctors who exam- ined Cabanerio during the screening process for tests at SFBC asked him to re- cite a couple of side effects listed on the test’s consent form to see if he under- stood the risks, he says. While being screened for the Oros test, Cabanerio says, a doctor told him there were few risks in- Arthur Caplan, a bioethicist at the University of Pennsylvania, says the people running clinical volved. “He said the stron- trials sometimes make it difficult for participants to drop out of experiments. gest reaction would be like a shot of whiskey,” Cabanerio says. “He said it would be fun.” for somebody to continue in a study even if they’re being The test included four 3-night stays in which some pa- made uncomfortable by it,” he says. tients were given Oros and up to 40 percent alcohol mixed Purdue’s payment schedule complies with guidelines set with orange juice on an empty stomach, according to the 14- by the FDA and international regulators, company spokes- page consent form. After Cabanerio and 18 other people man James Heins says. He says any experiment dropouts began the test on the fourth floor of SFBC’s center, one willing to return for the follow-up visit were paid $800. woman fainted, Cabanerio says. Another woman in the test Heins says anyone who dropped out in the middle of a con- got so drunk after drinking the brew that she began imitating finement period without a health reason was considered a strip-tease dancer. Cabanerio says he didn’t feel bad be- “noncompliant” and was paid $25 a day. cause he was in a different group of participants that received lower doses of alcohol and were allowed to eat beforehand. nder federal regulations, anyone can drop out of a Cabanerio participated in the test in July. That’s the same clinical trial at any time. University of Pennsylva- month the FDA asked Purdue Pharma LP, a Stamford, Con- Unia bioethicist Caplan says it’s often not easy to vol- necticut–based drug company, to withdraw another opiate untarily leave a test. He says he enrolled himself in a trial tested with alcohol at SFBC’s Miami center. Purdue withdrew in which a clinician inserted a tube down his throat. Caplan the drug, Palladone, because its time-release mechanism is says after the procedure started, he told a nurse: “You know, dissolved by alcohol, which could cause a deadly release of all I don’t like this. I don’t want to do it anymore.’’ He says the the opiates at once, according to the FDA. Participants were nurse told him: “You can’t do that. You can’t stop!’’ He com- given naltrexone to block the opiates. pleted the procedure. Alza ensures tests of its drugs are safe for participants by Wyeth sponsored trials at SFBC this year to find out what following FDA rules and guidelines approved by IRBs, com- dosages of an experimental drug to treat muscular dystrophy pany spokesman Ernie Knewitz says. “Patient safety is the caused side effects, according to the consent form for the most important element in each clinical study conducted by trial. Possible side effects included severe allergic reactions Alza,” Knewitz says. that can cause breathing difficulty, abdominal pain, increased The Purdue experiment paid volunteers $2.78 an hour, or heart rate and death, according to the consent form. Healthy $66.72 per 24-hour day, for the first nine days of confine- people were paid $5,500 for staying in the center for 15 nights ment. For those who remained, payment jumped to $333.33 during a 26-week test. Another version of the test with a 29- a day for the final three days, with a bonus of $800 paid fol- night stay in the center paid $6,900. lowing a single follow-up visit. John Juarez, who was born in Miami, says the injections Such payment backloading is coercive and thus unethical, of Wyeth’s experimental drug felt like a burning electric shock says Peter Lurie, a physician who is deputy medical director searing his body from within. “It made me feel really weird,” of Public Citizen, a Washington-based group that monitors says Juarez, 22. In the last few weeks of testing, Juarez devel-

patient safety issues. “It provides a very powerful incentive oped red hives up and down one arm that wouldn’t go away BILL CRAMER B l o o m b e r g M a r ke t s December 2005 53

for days, he says. And he started growing hair all over his trial if the risks are found to outweigh the benefits. Nobody body, including thick sideburns that he still wears. knows for sure how often trials are stopped since there is no Wyeth has documented that an IRB approved the trial, central database that tracks IRB actions. consent was handled properly and the test followed all FDA The exact number of IRBs is also a mystery. There are an rules, Wyeth spokesman Burr says. “Wyeth is committed to estimated 3,000–5,000 of them, according to the Govern- sponsoring and supporting carefully conducted clinical trials ment Accountability Office, the investigative arm of Con- as the fastest and safest way to find treatments that work in gress. The number is unknown because the companies don’t people and ways to improve health,” he says. have to register with the FDA. IRB members don’t have to be The FDA depends on IRBs to approve and review trials. trained or certified. For drug tests conducted at SFBC in Miami, AstraZeneca, FDA oversight of IRBs is scarce—and becoming scarcer. Merck and Purdue have used Southern IRB, the review board The agency conducted 175 inspections of IRBs in the year owned by Alison Shamblen, the wife of SFBC Vice President ended on Sept. 30, down from 327 in the year ended on Sept. Cooper Shamblen. 30, 2002, according to FDA records. When the FDA con- Purdue, whose Palladone tests were monitored by South- ducts an inspection, it reviews informed consent documents ern IRB, didn’t know Southern was owned by a relative of an and checks that an IRB has at least one person with a scien- SFBC executive, Heins says. “If Purdue had been aware of the tific background, one layperson and one community member. relationship you allege, the company would have looked into The agency reviews the IRB’s record keeping to see whether the issue before conducting trials at the site,” Heins says. it has maintained proper minutes of meetings. “The regula- “Purdue will address this issue should we decide to work with tions for IRBs are fairly loose,” the FDA’s Rhoads says. SFBC in the future.” The inadequacy of the IRB system is illustrated by the case Merck, which has relied on Southern IRB to monitor tests of Louis Fabre, the Houston psychiatrist who ran at least 400 at SFBC, including an April experiment for a drug to prevent clinical trials with 20,000 people for more than 50 drug com- nausea and vomiting, says the company wasn’t responsible panies at his Fabre Research Clinic from 1973 to 2005. To for using an IRB owned by a relative of an SFBC executive. monitor those trials, Fabre, 64, used an IRB that he had found- Merck chose SFBC because for years it had worked with Clin- ed himself. He called it the Human Investigation Committee, ical Pharmacology Associates, which SFBC bought in 2003, and its members included his business partner, psychiatrist Merck spokeswoman Janet Skidmore says. “SFBC selects Stephen Kramer, 64, and his lawyer, Bruce Steffler, 60. which institutional review board is most appropriate,” she The Human Investigation Committee allowed Fabre Re- says. “Merck did not choose Southern IRB; SFBC did.” search Clinic to run tests even as FDA inspectors found con- SFBC’s Hantman says Alison Shamblen hasn’t been affili- duct that put people at unnecessary risk during six inspections ated with Southern IRB since early 2005. Rosa Fraga, South- from 1980 to 2005. In 1980, the FDA reported that a woman ern IRB’s chairwoman, says Shamblen still owned the IRB as enrolled in one of Fabre’s experimental psychiatric drug tests of Oct. 10. Fraga says Alison Shamblen decided in October to had killed herself during the study. The FDA wrote that the shut Southern IRB after 16 years. Fraga herself will soon woman was supposed to be in an inpatient study, and Fabre open a new company called Southern IRB Services, she says. managed the study instead as an outpatient trial. Fabre was The FDA has found “significant objectionable conditions’’ never censured for that incident. during three inspections of SFBC since 2000. In 2002, the FDA found SFBC conducted invasive procedures on people An institutional review board that without getting proper consent from the participants. In March 2005, the FDA wrote up a significant objectional con- has monitored SFBC tests is owned ditions finding it hasn’t yet made public. by the wife of SFBC’s vice president SFBC’s Hantman declined to release the report. “We have consistently received positive feedback from the FDA’s re- of clinical operations. views,” he says. SFBC’s Lasseter describes the FDA reports as being “like a traffic ticket.’’ In January 2005, the FDA wrote a letter to Fabre detail- SFBC Chairwoman Krinsky says the company hasn’t re- ing his wrongdoing in connection with the death of Garry ceived a warning letter, which is more serious than a signifi- Polsgrove, an unemployed and homeless Vietnam veteran, in cant objectionable conditions citation, from the FDA in more his clinic in May of that year. Polsgrove, 55, died during a trial than 20 years. She says the company has addressed all obser- for generic schizophrenia drug clozapine that was sponsored vations by the agency. by Miami-based Ivax Corp., the largest U.S. maker of generic The phrase institutional review board dates back to the time drugs. (See “Garry Polsgrove’s Last Battle,” page 42.) when most boards—like the clinicians they monitored—were Fabre left Polsgrove in the care of John Rodriguez, who part of universities or hospitals. Today, the review industry is had no medical credentials, according to the FDA. Just six dominated by a handful of large, for-profit companies with days before Polsgrove enrolled in the experiment, an FDA enormous power. IRBs have the duty to reject or stop a clinical inspector visited Fabre’s clinic and found that Rodriguez had Bloomberg Bloomberg 54 5 0 0 2 r e b m e c e D get a whitewash,” he says. you themselves, about talk themselves to listen you “If man sees WIRB differently. Feder Harvard’s approve. don’t they tests company drug down turn to ingness and expertise and their will her members, their training of professionalism the of best in the industry because FDA. the to submissions drug all new of half than more for IRB the is Western says ia, Virgin Richmond, in Inc. P.William called Poythress 20 says. she decade, past the about for year a percent at grown has It 2004. in revenue in million $20 had IRB Western Bowen’s IRBs. to job the of much left has in trained process.” audit an doing are who basically “They’re says. background,”Rhoads medical or tific people by done but investigation, they don’t always have a scien tremendous are vestigators in field FDA the by inspections the is, line bottom “The list. says when inspectors review a test center, they follow a check FDA. the to response a in wrongdoing He denied comment. to declined Houston, in company development drug a runs a have long been time stopped ago,” she says. Fabre, who now should “He brother. her killed Fabre says trial, drug the ing start before healthy was brother her says who Gatlin, Nancy sister, Polsgrove’s 1967. in Vietnam in service his for Hearts trials. running Fabre from ban to moved it fore be death Polsgrove’s after years three almost waited agency dig because it takes a lot of work to do that,” Rhoads says. The to going they’re that likely not it’s inspection, routine a “On licenses. medical verify normally don’t inspectors FDA says Rhoads unlicensed. was Rodriguez that revealed have would assistant, Texas the Examiners to A call Medical of says. Board Rhoads physician’s licensed a false was Fabre’s Rodriguez that believed claim conducted inspector and The physicals electrocardiograms. performed subjects, screened ‘Some companies would be embar be would companies ‘Some Bowen says WIRB is the company drug a of president be to used who 73, Bowen, FDA the itself, by testing drug human oversee to Unable Rhoads time. any at site trial a investigate can FDA The Purple two won had who ex-Marine an was Polsgrove the biggest review board says. board review biggest the of head the research,’ doing people the of quality the saw they if rassed Markets - - - Schering-P Pressure onpro NO SIZE FILE *Diluted. Sour dr opped 18per TES DECORA Ne 31p10 x 17p4 phardec5 ce: Bloomber w siz lough lostitsU e TIVE cent andthecompanyr O SOR DRUG TING N I ST E T G U R D : RY STO R E COV fits g Special Report Special Companies ar .S. pr - otection forallergydrugClaritininDecember - - - - -

employees, who refer to themselves as “Wirbies.” Review Review “Wirbies.” as themselves to refer who employees, 250 has It trees. Fir Douglas towering with studded campus (7.28-hectare) 18-acre an on space office of meters) square call “I says. she clueless.”them research,” doing people the of quality the saw they if embarrassed be would companies the of “Some be at amazed are tests how run, some she poorly clinical says. fooled everybody,” she says. Pharmaceutical companies would investigators wrote of WIRB. edge, discussion and decisions regarding researchafailure to activities,”have complete documentation ofFDA the board’s knowl criticized WIRB for its role in the doctor’s experiments.federalmonthsin15FDA1999prison. to inspection A report“There is ly members in trials. He pleaded guilty inly fabricated1997 and data was and improperlysentenced included employees and fami to the FDA. The FDA’s investigation found that FiddesRobert repeated Fiddes, a Los Angeles doctor who was charged with lying the case of Richard Borison, a Georgia doctor convicted in in convicted doctor Georgia a Borison, Richard of case the condition.” objectionable “significant a that called FDA The changes. the of record a without altered be could T the asks. Bowen have membership?” the all of to identities like you wouldn’t lawyer, plaintiffs a were you “If members. board’s the of names the are as public, the to discuss each issue. The meetings and their minutes are closed to minutes four of average an members giving meeting, each at considered are items 60 About says. Bowen effects, side serious of reports examine and tests ongoing review terials, ma recruiting trial and experiments new approve each to month meetings four-hour 40 about attend members board e rushing to de WIRB’s headquarters has 44,000 square feet (4,088 (4,088 feet square 44,000 has headquarters WIRB’s “He fraud. Fiddes’s about know didn’t WIRB says Bowen Inthe 1990s, WIRB oversaw 23clinical trials conducted by In a 1999 inspection, the FDA criticized WIRB’s role in in role WIRB’s criticized FDA the inspection, 1999 a In eported alossin tem lacked an audit function, meaning data entered entered data meaning function, audit an lacked tem sys computer WIRB’s August that in found agency WIRB The 2002. inspected recently most FDA he v elop ne 2003 w drugsaspatentse . 20 0 xpir 2, r e. After ev enue * - - - - -

PHOTO CREDIT Bloomberg Markets Special Report 56 December 2005 COVER STORY: DRUG TESTING

1998 of stealing more than $10 million of drug research WIRB he was a part-time professor. Letters from Borison to money in experimental tests and sentenced to 15 years in WIRB were on the school’s letterhead, listing Borison as state prison. chairman of the psychiatry department. In his indictment, Borison was also accused of endanger- n 1990, Borison, the chairman of the psychiatry depart- ing the lives of participants by using inadequately trained ment at the Medical College of Georgia in Augusta, hired employees and permitting his signature to be forged on pre- IWIRB to oversee his experiments with psychiatric drugs. scriptions. An FDA inspection report of Borison in 1997 also During the time WIRB was monitoring him, Borison stole detailed patient protection violations, finding that untrained the money provided for clin- employees administered ex- ical trials by Pfizer, Wyeth Less oversight U.S. Food and Drug Administration inspections perimental drugs, evaluated of independent review boards, which are supposed to protect and Basel, Switzerland– side effects and decided people in clinical trials, fell by 46 percent in three years. based Novartis AG. As a de- when to increase dosages. FDA inspections of IRBs partment chairman, Borison The FDA sent its findings to was required by college rules 2002 327 WIRB, which had allowed to use the school’s IRB. In- 2005 175 Borison’s tests to proceed for stead, the doctor used WIRB, Figures are for fiscal years ended on Sept. 30. Source: FDA six years. located 2,300 miles away, to Today, seven years after help conceal his fraud from the school, says George Schus- Borison’s conviction, Bowen says WIRB did nothing wrong FILE pharfed4 ter, chairman of the college’s IRB. “Borison bypassed us and in its oversight of the Georgia tests. “I didn’t see that there SIZE 19p6 x 6p9 went to WIRB,” he says. “We didn’t know until the whole thing were patient safety issues,” says Bowen, who sat on the panel NOTES blew up that they were using WIRB. If WIRB had followed its that oversaw Borison’s experiments. own rules, we’d have notified them it wasn’t acceptable. We WIRB told its staff to send its research approvals directly to wouldn’t have allowed the fraud to continue.” Borison’s home and not to the school, according to WIRB docu- WIRB’s rules required it to notify a school when it was ments obtained by state prosecutors. An undated WIRB memo hired to oversee research. Bowen says WIRB didn’t inform says, “Arrangement with Dr. Borison is to have all correspon- the Medical College of Georgia because Borison had told dence sent to his home address.” Bowen says WIRB clients are B l o o m b e r g M a r ke t s December 2005 57

free to use any address. “We send it to where they ask us to,” she Hamlet says the medication he was taking before the test, says. “We didn’t know it was his residence.” methotrexate, successfully controlled his psoriatic arthritis, a Prosecutor David McLaughlin of the Georgia Attorney condition causing inflammation of the skin and joints. When General’s Office in Atlanta says he was astonished by Bowen’s Hamlet began the drug experiment, his doctor instructed attitude about Borison. “I’m a prosecutor, sitting in her office, him to stop taking methotrexate. He became sick after going telling her they did this and that, and she was saying, ‘It’s not off the medication. During the trial, he spent weeks in bed a problem for us,’” he says. “That’s just bogus. I had such a because he was barely able to walk. Hamlet was left with per- bad taste in my mouth when I left.” The state brought no manent knee damage, his medical records show. (See “A Mat- charges against WIRB. ter of Trust,” page 44.) Pfizer spokesman Lederer says the results of Borison’s re- search were removed from Pfizer’s database and weren’t sent ‘You cannot rely on the inspection pro- to the FDA. Wyeth spokesman Burr declined to comment. In addition to monitoring phase I trials, the stage at which cess to get quality into the system,’ pharmaceutical companies test people for possible side ef- says Joanne Rhoads, head of the FDA’s fects, WIRB plays a leading role in supervising phase II and III trials. In a phase II test, clinicians experiment with vari- Division of Scientific Investigations. ous doses of a medicine to test effectiveness. In phase III, they aim to collect enough data on larger groups of patients “It was like a train wreck,” Hamlet says, recalling the pain to demonstrate that the substance works well enough to be and discomfort that became part of his life for six months. approved by the FDA. In all phases, clinicians monitor for “My whole persona was taken away in one fell swoop by a side effects. medical trial.” When the test began, Hamlet wasn’t told by his In 2000, Bill Hamlet, a 58-year-old artist and woodcarv- doctor that he might be given a placebo, a substance with no er in Pittsboro, North Carolina, entered a phase III clinical active medicine, he says. Nor was he told three months later trial for a proposed psoriasis treatment made by Genentech that he had been switched to the experimental drug. By de- Inc. Hamlet enrolled on the recommendation of his physi- sign, many drug trials don’t allow participants or clinicians to cian, Mark Fradin, 45, a doctor running the test. know who is getting placebos at the time of the tests. Bloomberg Markets Special Report 58 December 2005 COVER STORY: DRUG TESTING

Hamlet sued Genentech, Fradin and WIRB, which was times from Jan. 1, 2004, to March 31, 2004. Twice in three overseeing protection for participants in the clinical trial. All months, all of the members were alternates. three settled the lawsuit this year without disclosing terms. In 2003, the Hopkins minutes show, WIRB required a Genentech spokeswoman Tara Cooper says the company clinical trial sponsor to make changes in the recruiting mate- can’t comment because the settlement has a secrecy agree- rials for a trial in order to better protect participants in the ment. Bowen says that clinicians and WIRB did nothing experiments. The sponsor, whose name was deleted from the minutes by WIRB, asked WIRB to reconsider its decision. ‘The problem is a system in which On Feb. 26, 2004, the same WIRB panel, acting with four al- ternates and one of its regular members present, reversed its businesses have control over the decision and allowed the company to keep its original pro- evaluation of their own products,’ posed language. “That was worrisome,” Bowen says, after being informed Harvard’s Marcia Angell says. of what had happened. “I wish somebody had caught it soon- er.” Daniel Ford, vice dean for research at Johns Hopkins wrong in the Hamlet trial. Fradin’s lawyer, William Daniell, School of Medicine, says the reversal by WIRB concerns him. says the doctor did nothing improper. “It’s possible you could have manipulation,’’ he says, “One of In 2001, WIRB was hired by Johns Hopkins School of Med- the big things WIRB sells is speedy review.’’ Ford says WIRB icine in Baltimore to help review research at the school after a provides high-quality service. clinical trial participant died in 2001. Minutes of WIRB meet- The University of Pennsylvania’s Caplan disagrees. He ings from the first quarter of 2004, which are available at the says WIRB has failed to protect participants in clinical trials. medical school because a Maryland law requires such minutes “It appears they have basically reneged on their obligation to- to be public, show shortcomings in WIRB’s own review of re- ward subject protection and have become complicit in pro- search. A recruiting script for participants was approved by a tecting the interests of their sponsors because it serves an WIRB panel even after a doctor on that panel said she didn’t important business interest,” he says. “That’s just what you understand it. She abstained from the vote. The board also fear from commercial IRBs. They’ve had conflicts of interest complained that it took seven weeks for WIRB’s staff to inform since the beginning.” the board of the death of five people in a clinical trial. WIRB deleted some details and all names from the minutes provided n a 2002 Seton Hall Law Review article, WIRB’s di- for review by Bloomberg News. rector of regulatory affairs wrote that there’s an inher- For the Johns Hopkins review, WIRB’s nine-member panels Ient conflict within independent IRBs because their fees often met with just five members present, the minutes show. Al- come from the same pharmaceutical companies whose tri- ternate members made up the majority of WIRB boards 20 als they’re asked to monitor. “The conflict of interest faced by independent IRBs is real and Consequences In exchange for getting paid for trials for experimental substances, healthy substantial,” David Forster participants risk debilitating side effects and even death. The following warnings about potential wrote. “Independent IRBs side effects are listed on consent forms for these substances. are paid by sponsors and in- vestigators to protect sub- jects who are participating in research conducted by those sponsors and investigators.” There aren’t any federal rules requiring for-profit IRBs, which are often located thousands of miles away from trial sites, to visit or inspect the test center at any time. Nobody has ever studied the effectiveness of IRBs or tracked how many people are injured or killed each year while participating in clinical trials, says Harvard’s Feder- man, who chaired a national committee on clinical trial *Sustained-release form. Companies are sponsors of clinical trials performed by SFBC International. Alza is a division of Johnson & Johnson. safety in 2003. “An intelligent Stylized Bloomberg illustration. Source: SFBC consent forms

FILE pharrisk3 SIZE 30p0 x 21p8 NOTES New size DECORATIVE Bloomberg Markets Special Report 60 December 2005 COVER STORY: DRUG TESTING

person would assume we know this,” Federman says. “We profile at the FDA because of the current administration,” don’t know the number of persons harmed in clinical trials says Mary Faith Marshall, associate dean for social medi- each year and are missing a registry of all subjects that par- cine and medical humanities at the University of Minneso- ticipate in trials.” ta Medical School in Minneapolis. “There’s a much Angell, the former editor of the New England Journal of friendlier attitude toward Big Pharma and less emphasis on Medicine, says the protection of people in clinical trials shouldn’t human subject protection.” be left to companies funded by the pharmaceutical industry. “The FDA is an independent agency,” White House “The fundamental problem is a system in which investor-owned spokesman Trent Duffy says. “It has maintained its inde- businesses have control over the evaluation of their own pendence. President Bush supports a strong FDA that pro- tects American consumers.” ‘Patient safety should never be Harvard’s Federman says politics is at issue. “This type of in- quiry is not a high profile for the current administration,” he says. sacrificed for short-term profit by “This is not a government that particularly looks at big business. a company,’ Republican U.S. Senator Pharmaceutical companies have a huge lobbying operation.” PhRMA, which represents more than 40 drug compa- Charles Grassley says. nies, spent more than $16 million last year on lobbying, a 12.5 percent increase from the year before. PhRMA hired products,” she says. “Oversight of clinical trials is too important 136 lobbyists in 2004, according to Public Citizen. PhRMA to leave in the hands of drug companies and their agents.” declined to comment about its lobbying activities. “PhRMA Government agencies have repeatedly warned about inade- and its member companies are certainly willing to review quate protections for people in trials. “Pressures to recruit sub- proposals that could make a good safety record even better,” jects can lead researchers and IRBs to overlook deficiencies in the group says. efforts to inform subjects of potential risks,” the GAO cautioned One way pharmaceutical companies could improve safe- 10 years ago. In 2000, the inspector general of the Department guards for clinical trial participants is by checking to see of Health and Human Services wrote, “In a highly competitive whether the people running the tests are actually licensed marketplace, with few rules or guidelines governing recruit- as doctors. In Jupiter, Florida, a drug testing center called ment, there is a very real danger of a race to the bottom.” the Drug Study Institute lists its director of clinical research In 2002, after three people died in clinical trials at medical as Melody Sanger, who’s identified as a primary care physi- schools, bills were introduced in both houses of Congress to cian. Florida state records show Sanger, 50, isn’t a licensed strengthen protections for people in drug tests. The bills, spon- doctor. She’s licensed only as a registered nurse, according sored by Democratic Senator Ted Kennedy of Massachusetts to the Florida Department of Health. The company Web and Democratic Representative Diana DeGette of Colorado, site says she has run trials for AstraZeneca, Merck, Novartis stalled in committee and never made it to the floor for a vote. and Pfizer. “I hope Congress will act,” Kennedy says. “Recent failures of the current system have given new urgency to the need to guar- anger never misrepresented her credentials to Merck, antee the safety of clinical research and prevent similar trage- company spokeswoman Skidmore says. AstraZene- dies in the future. We need to protect research participants.” Sca spokeswoman Carla Burigatto says the Drug Study Testing companies must fully inform people of risks in clin- Institute did good-quality work, adding that Sanger didn’t ical trials, says Senator Charles Grassley, a Republican from serve as a doctor on trials for the company. Sanger declined Iowa. “The burden is on the research companies to go out of to comment. their way to make sure study participants are fully informed SFBC describes Chairwoman Krinsky as a medical doctor when consent is given,” Grassley says. “Pa- Solutions Doctors who served on in SEC filings and company literature. tient safety should never be sacrificed for federal panels recommend the following She’s never been licensed to practice short-term profit by a corporation.” protections for people who participate medicine in the U.S., SFBC’s Hantman The National Bioethics Advisory Com- in experimental medical tests. says. Krinsky’s laboratory technician li- mission, a presidential panel created in Set up one U.S. panel to oversee cense in Florida expired in 1998. Krinsky 1995 by executive order of President Bill all medical experiments is in charge of SFBC’s phase I clinical tri- Clinton, issued human protection recom- als. Hantman says Krinsky is a company Tape-record or videotape mendations in 2001. That panel folded in consent discussions executive who doesn’t run any clinical 2001, and President George W. Bush re- trials. “She is not required to be licensed Set up a compensation system placed it with the President’s Council on for research-related injury in Florida,’’ he says. Hantman says the Bioethics, which has issued reports on SFBC center has five physicians, as well Train institutional review board ethical issues of human cloning and stem as nurses and emergency personnel. members in research ethics cell research. Harvard’s Federman is concerned “Business has taken a much higher Source: National Bioethics Advisory Commission, 2001 that SFBC refers to Krinsky as a doctor

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without disclosing she’s not licensed. “It’s misleading in that system to compensate people for research-related injuries and most, perhaps almost all, readers would assume she is a li- said all IRBs should have to register with the federal govern- censed and fully trained physician,” he says. ment. In addition, it said all IRB members should be trained Hantman is SFBC’s treasurer as well as its CEO. Company in research ethics. SEC filings say he’s a certified public accountant. Hantman’s Mark Yessian, who oversaw investigative reports on IRBs Florida CPA license expired in 1989, public records show. Hant- over the past decade as Boston’s regional inspector general man says he’s been a lifetime member of the American Institute for the Department of Health and Human Services, says of Certified Public Accountants, a trade organization. changes are needed. “The drug industry is trying to bring products to market,” says Yessian, who retired in October. n Houston, the Fabre clinic used Rodriguez to give ex- “We don’t want to suffocate that, but we need to do it in a perimental drugs to people and make medical decisions more balanced way to give subjects confidence that there are Iduring tests. The FDA found that Rodriguez had neither people looking out for their interests.” a medical license nor any clinical credentials in the U.S. Koski says the mission won’t be easy. “It’s not really a ‘few There are better ways to do research, says Koski, the physi- bad apples’ problem,” he says. “We need to create a system cian who headed the federal agency for human protection for that grows better apples.”„ two years. Koski says a single U.S. panel should oversee all ex- perimental tests. The National Bioethics Advisory Commis- DAVID EVANS is a senior writer at Bloomberg News in Los Angeles. MICHAEL SMITH is a senior writer in Rio de Janeiro. LIZ WILLEN is a senior writer in sion suggested that informed consent discussions between New York. With additional reporting by KRISTIN JENSEN in Washington. researchers and participants be audio- or videotaped to ensure [email protected] [email protected] they’re done right. The commission also recommended a [email protected]

BLOOMBERG TOOLS Researching SFBC

For more information on clinical drug testing services com- pop-up menu of functions. For example, click on PPDI and pany SFBC International, begin by typing SFCC US select DES to find more information on Wilmington, North DES . Press for additional information on Carolina–based Pharmaceutical Product Development Inc. the company, including a link to its Web site and a listing of To read through Pharmaceutical Product Development’s its top executives. You can click on any name listed to access filings with the SEC, type CF for the Company Filings that person’s profile. Press twice, and you’ll see function. Click on a specific document, such as the 8-K filing that SFBC International went public in October 2000 at a for the period ended on Aug. 11, and type 1 to see that price of $8 per share. The company had two additional pub- it details Pharmaceutical Product Development’s purchase lic offerings, the most recent in March 2005 at a price of of 5 million shares of Series E convertible preferred stock of $38 per share. Tampa, Florida–based Accentia Biopharmaceuticals Inc. Type BQ for the Equity Summary function, which JOHN DIXON provides a current price quote and a composite overview of price, trade and fundamental data, as shown at right. On Oct. 11, SFBC traded at $39.04. Click on the icon in the corner of the Rela- tive Value section of BQ, and select RV–Relative Value from the pop-up menu. After the RV function appears, click on the arrow to the right of Sec- tor and select BICS Subgroup to find other companies in the drug research and develop- ment industry. You can click on any ticker listed for a

For the weightings of SFBC International stock in various indexes, type SFCC US WGT .