Exploring Human Potential

Emory’s Center for Ethics, Tom Price, and AMA &AAMC 990’s: An Imagined Senior Seminar Class

Posted on | January 22, 2017 | No Comments

Mike Magee

The recent endorsements by the AMA and AAMC of Tom Price to head HHS should provide a remarkable future senior seminar in situational ethics for Emory’s Center for Ethics and their much lauded “Health, Science & Ethics Pillar”. The case study’s syllabus will most likely include the recent AMA endorsement, the AAMC press release, and the congratulatory and laudatory pronouncements of the CEO of Emory Healthcare, Dr. Price’s original home base.

These will contrast with a range of other documents, including the recent critical NEJM article penned by two HHS directors which stated, Price’s record demonstrates less concern for the sick, the poor, and the health of the public and much greater concern for the economic well-being of their physician caregivers.” Recommended readings will also include the 2014 990 IRS filings of the AMA and the AAMC, a collections of comments under #NotMyAMA, and an ever growing list of names on an online petition titled “The AMA Does Not Speak for Us”.

In Part I, question 1 of those 990’s, required of all non-profit organizations, students will find instructions stating “Briefly describe the organization’s mission or most significant activities. The AMA stated, “To further the interests of the medical profession by promoting the art and science of Medicine and the betterment of Public Health.” The AAMC wrote, “AAMC leads the Academic Medicine Community and strengthens the world’s most advanced medical care by supporting education, research, and patient care activities conducted by our member institutions.”

A careful reading will reveal that the two organizations combined assets exceeded $1.1 billion, and they employed just under 3000 individuals whose compensation exceeded $218 million that year. 546 of those employees received compensation of greater than $100,000. Combined, the programs and services offered that year generated $475 million in revenue. Almost half of the revenue generated by the AMA came from royalties and sales associated with their exclusive control of the nation’s CPT codes and the Physician Masterfile Database that fuels physician prescription profiling. Just under 2/3 of the AAMC revenue derived from three data driven and monopolistic product sales – ERAS (Electronic Residency Application Service – The Match: $69.2M), MCAT (Medical College Admission Test: $33.2M), and AMCAS (American Medical College Application Service: $30.4M).

Students will surmise from these two organization’s strong and immediate public support for HHS candidate Tom Price that  both organizations also support political action, but in two different forms. They will find that the AAMC is a non-profit 501(c)3. These organizations are “absolutely prohibited from engaging in political campaign activities…ie. election or defeat of a candidate.” “Insubstantial lobbying” however is allowed. The IRS doesn’t use the word “lobby” but rather the phrases “carrying out of propaganda” and “attempting to influence legislation”.

The AMA, in contrast is a 501(c)6, as are the National Football League, the American Bar Association, and the Independent Insurance Agents of America. Student research will reveal that these non-profits are permitted to engage in unlimited lobbying, and may engage in political activity, but are required to pay a 35% excise tax on their total political expenses. However, these activities may not be “the organization’s primary activity”.

The AAMC 990 will reveal 2014 listed expenditures of $3.9 million under the title “Influencing public opinion or legislation”. The report will further explain that “The other activities include meeting with or calling government officials or legislators, placing advertisements and issuing press releases to direct the organizations efforts to influence public opinion on legislative matters”.

Students querying Maplight and Open Secrets will report to the class that AMA lobbying expenditures for 2014 were in the area of $20 million. That funded close to 50 lobbyists (including 24 registered AMA employees) generating over 100 reports, many to effect the outcome of 81 different pieces of legislation. Those lobbyists made 43 visits to the House, 42 to the Senate, 17 to HHS, 15 to CMS, 11 to the White House plus 5 to the Executive Office Building, and 8 to the FDA.

In an interview with one of those future students who will reach out to me for comment, I will report that, “In a conversation with the then CEO of the AMA some years back, he expressed his desire to move the AMA headquarters to Washington since this was the organization’s primary focus. He was just being honest.” The student however will not be able to validate this in the public record. However, she will surmise that these inconsistencies may, in part, explain why only 17% of the nation’s doctors are AMA members. But she will also wonder out loud whether that matters with the AMA Federation of state and specialties in its hip pocket, and non-member revenues from CPT and Physician Masterfiles a monopolistic lock.

The students in general will not express surprise at the AMA’s full-throated endorsement of Tom Price. Their spread sheets will reveal that some Federation members went along (ACS, AAFP, a spattering of medical and surgical sub-specialties), and others went mute (AAP, ACOG, ACP-ASIM). One student, in open class discussion, will wryly remark that ”Apparently, for these organization members, you are part of the Federation, except when you’re not. What’s not to like?” Others with public health aspirations and “generalism” in their bones will wonder aloud why Family Medicine doctors at the time tolerated an endorsement of such a socially compromised legislator as Tom Price without a huge human outcry from AAFP members.

One student, an aspiring physician scientist, will sternly proclaim that “the halo around the head of the AAMC is undeserved.” He will explain to the others that the organization is governed by giant academic hospital enterprises, detached entrepreneurial medical school deans, and the vaulted “thought leaders” of medical research in America, now nearly indistinguishable from their industry counterparts. He will explain that he is deeply conflicted since support of the organization and its entities is all but essential to his own career advancement including access to NIH grants, publications, and placement on government and industry advisory committees in the future.

He’ll say he feels “ethically trapped”, supporting as he does the AAMCs highly publicized focus on new medical school curriculum, advances in physician empathy, and concerns for hospital safety and the rights of human research subjects, but dismayed by his own course work which reveals “conflict of interest in publications, patient advocacy organizations and in Twitter postings for God’s sake”. He’s especially dismayed that his own school’s top health care officer openly and enthusiastically supported the successful nomination of Emory’s former orthopedist Tom Price, who went on (after his confirmation) “to lead the nation’s survival curve, not just for the vulnerable but for everyone, due south.”

In the final week of this high level seminar class, the professor will assign her 12 students to provide four concrete recommendations that might address their concerns and begin to re-establish appropriate checks and balances. The following week, they will return with these recommendations, provided in writing on a piece of Emory stationary. It will read:

1. In this trumpian era, every single doctor in America needs to make a list of all the organizations of which each is a member or a provider, including medical associations, hospitals and health systems.

2. Each must then ask, “Are any of these associated with, represented by, or a collaborator with the AMA or AAMC?”

3. If the answer is yes, you must consider yourself a member as well, because you are!

4. Now you must determine what you are going to do about it.

More next week.

“The AMA (and the AAMC) Does Not Speak For Us.” – Oh, Yes They Do!

Posted on | January 18, 2017 | 1 Comment

Mike Magee

President-Elect Trump’s nomination of Rep. Tom Price for HHS Secretary has been ethically compromised from the start. The NEJM article last week, penned by the current and former department heads for HHS, simply defined the myriad of issues that undermine his candidacy in black and white.

The AMA and AAMC’s bullish recommendations of a strong “BUY” simply demonstrated how far these “guild” organizations will go to defend their vested interests, and served to highlight the medical and generational opposition, and the tools that opposition will use in the future to dog organized medicine’s power elite.

Two notable reactions were the appearance of the Twitter hashtag, #NotMyAMA, and the creation of an online petition titled “The AMA Does Not Speak for Us” signed by nearly 10,000 physicians. But a cursory examination of the structural design of both the AMA and the AAMC, and their reach, suggests otherwise. They do represent you, whether you like it or not.

The truth is that both organizations have evolved purposefully over more than a century to control and direct and protect the position of the physician guild and its role in care delivery, education and research. Together and intertwined, they are the pearl within the Medical Industrial Complex oyster.

Even if you are not a member of the AMA, it is very likely that you are represented by at least one of the organizations or associations that is a part of the AMA. The organization may be housed in Chicago, and represented by offices at 1101 Vermont Ave. NW, in walking distance from the Capitol, but their true power is nationwide and widely distributive. Fundamental is their highly orchestrated infrastructure of county medical societies, which feed state societies, which elect members to serve in the House of Delegates of the national society.

This system provides a career-ladder proving ground for up and comers, like Georgia AMA delegate Tom Price. It also has the ability to energize a wide political response, for or against an issue, which has a lively history including the coffee clutch days when AMA spouses gathered to listen to an AMA provided LP recording of Ronald Reagan warning that Medicare was the same as “socialized medicine” and would inevitability result in the government telling physicians where they could practice medicine.

In addition to this network, the AMA has deftly bestowed its generous moniker of “specialty society” on over 100 different organizations which are part of the AMA Federation. Originally designed to enhance membership and maintain “big tent” order on the House of Medicine, its lack of disciplined quality control is rapidly exposing the organization’s flank to some outsized potential class action liability.

The original Federation members like the American College of Surgeons, the American College of Physicians/American Society of Internal Medicine, the American Academy of Pediatrics, the American Congress of Obstetrics and Gynecology, and more recently the American Academy of Family Physicians are more than well-established and have lives of their own. The same is true for the multiple sub-specialty organizations they have spawned over the years, including the American Urological Association which I belonged to for years.

In more recent years, the tent has expanded to include others like the American Academy of Pain Medicine ,whose origins were so deeply entangled with the rise of Purdue Pharma and the overselling of “pain as the 5th vital sign”(which the AMA has subsequently rejected) and Oxycontin, that the subsequent downward bending of U.S. survival curves is viewed by critics as part of the organization’s work product. The deaths of thousands, and compromised human potential of many thousands of their children, raise high liability stakes for both the Pain people, and the Federation, should those harmed discover each other and seek out legal representation to track liability back to source.

Then there is the Association of American Medical Colleges or AAMC. As with the AMA, this is a carefully structured and overlapping group of organizations under one roof. The organization is almost as old as the AMA, originating as a group of 22 medical schools in 1876 with the stated objective “to consider all matters relating to reform in medical college work.” Now, nearly a century and a half later, their influence is far more extensive and far more organized.

At the core of the AAMC’s power structure, exercised from their offices at 655 K Street NW in Washington, DC, are their Council of Deans (includes the Deans of all U.S. MD granting Medical Schools), Council of Faculty and Academic Societies (more than 370 faculty representatives appointed by member medical schools and academic societies) and Council of Teaching Hospitals and Health Systems (400 member teaching hospitals in addition to its medical school community.) In addition their management also staffs 18 different affinity groups. And, like the AMA, their Government Relations program is aggressive and activist, not shy in mobilizing outreach at a moment’s notice. As they say, “Collaborations are key to advancing the AAMC’s advocacy agenda.”

Were this not enough, the two organizations are close and historic controlling partners of the Accreditation Council for Continuing Medical Education (ACCME) and the Accreditation Council for Graduate Medical Education (ACGME). The origins of these organizations date back to 1942 with founding partners being the American Medical Association, the American Board of Medical Specialties, the American Hospital Association, the Association of American Medical Colleges, and the Council of Medical Specialty Societies. Today they have their fingers in any and all deliberations regarding funding, manpower needs, educational reforms, conflict of interest, research funding and more. They also provide a meaningful interface for physician leaders like Tom Price intent on moving their careers up legislative or academic ladders.

The institutional reach outlined above and their non-profit status (AMA, a 501(c)6, AAMC, a 501(c)3), combined with historic professional autonomy that creates partial immunity from public criticism and prosecution, has helped fuel and foster a remarkable consolidation of power and influence over the past half-century, reinforced by both government and industry.

“The AMA (and the AAMC) Does Not Speak for Us” . Oh yes they do! And it will take more than signing an online pledge to re-establish appropriate checks and balances. How will legitimate grievances, such as the AMA and AAMC’s strong endorsements of Tom Price whose values are so clearly in opposition to those stated by both these organizations, be reconciled? Likely the push back will come through the back door as our legal system probes the weakest links of each of these highly profitable “non-profits”. Liability often finds its way back to source. More on that next week.

Why Did The AMA Support Tom Price?

Posted on | January 13, 2017 | No Comments

Mike Magee

Not a few health professionals have been asking themselves, “Why did the AMA support  Tom Price for head of HHS”? Their concerns took voice in this week’s New England Journal of Medicine in a piece titled “Care for the Vulnerable vs. Cash for the Powerful – Trump’s Pick for HHS”. In the article, written by the current and former Assistant Secretaries for Planning and Evaluation at HHS, Price’s record and value system are contrasted unfavorably with two former physician directors – Otis Bowen and Louis Sullivan. The authors concerns include:

1. “Price’s record demonstrates less concern for the sick, the poor, and the health of the public and much greater concern for the economic well-being of their physician caregivers.”

2. “Price has sponsored legislation that supports making armor-piercing bullets more accessible and opposing regulations on cigars, and he has voted against regulating tobacco as a drug.”

3. “ …he was one of only 47 representatives to vote against the Domenici–Wellstone Mental Health Parity and Addiction Equity Act, which improved coverage for mental health care in private insurance plans.”

4. “He also voted against funding for combating AIDS, malaria, and tuberculosis; against expansion of the State Children’s Health Insurance Program; and in favor of allowing hospitals to turn away Medicaid and Medicare patients seeking nonemergency care if they could not afford copayments.”

5. “Price favors converting Medicare to a premium-support system and changing the structure of Medicaid to a block grant — policy options that shift financial risk from the federal government to vulnerable populations.”

6. “He also opposed reauthorization of the Violence Against Women Act and has voted against legislation prohibiting job discrimination against lesbian, gay, bisexual, and transgender (LGBT) people”

7. “He opposes stem-cell research and voted against expanding the National Institutes of Health budget and against the recently enacted 21st Century Cures Act”

8. “Price has also been a vociferous opponent of the Affordable Care Act (ACA)”

9. “The Price plan would eliminate the guaranteed-issue and community-rating requirements in the ACA and create anemic substitutes for these commitments to access to comprehensive coverage for Americans with preexisting conditions.”

10. “Whereas Price’s actions to date have not reflected the tradition of the physician as advocate for the poor and vulnerable, they do harken back to an earlier tradition in American medicine: the physician advocate as protector of the guild.”

In that final quote, the one referencing the “guild”, the authors point an arrow directly at the AMA’s heart. Why did they rush to support Price? Why not push “Neutral” over “Buy”? A substantial part of the answer may be found in the chart below tracking the percentage of active physicians who belong to the AMA. (full disclosure: I am one of them, and have been for nearly 50 years, as was my father before me.)

Source: Mother Jones

As the chart notes, in my father’s day 75% of active physicians were AMA members. These were the heydays when the organization teamed up with a younger Ronald Reagan to unsuccessfully fight Medicare. In the new Millennium, the AMA faced slow and steady continued declines in membership of 1 to 2%, from 2000 to 2007. In that period, they went from roughly 1/4 of the nation’s active physicians as dues paying members to 1/5. The downward slide was briefly halted in 2007 by offering 8,577 free memberships to residents in training.

The descent resumed with a 2% loss in 2008, 3% in 2009, and a record breaking 5.3% in 2010, bottoming at 17% of active physicians. What happened? Most track the cliff back to March 19, 2010, when AMA President Jim Rohack announced AMA support for Obamacare. To say that conservative members, especially those from southern states, were displeased is something of an understatement.

The losses were announced at the 2011 House of Delegates meeting, but no specific state breakdowns were provided. But MedPage, without citing sources at the time, wrote, “Membership declines were most acute in Southern states – the same region in which state medical societies have been championing opposition to the Affordable Care Act.”

According to MedPage’s report, in some of those states, AMA delegates like nephrologist Daniel Edney appeared to dislike the President’s signature legislative achievement so much, he not only wouldn’t call it “Obamacare”, he wouldn’t even use the acronym ACA, preferring the more bureaucratic original initialing PPACA for the Patient Protection and Affordable Care Act. “It’s PPACA and we all know it. PPACA is what is driving all our doctors crazy”, he said then with extreme confidence. In his home state of Mississippi, he claimed that 3/4 of their roughly 2400 AMA members had resigned over the issue. Same thing in Alabama, where resignations were so steep that only “good will” saved them from losing one of their proportional seats in the AMA’s House of Delegates.

So why did the AMA step way out front to support Georgia’s ultra-conservative orthopedist Tom Price? It certainly wasn’t because he aligned with the AMA list of the top 5 state legislative priorities for 2017 which includes strengthening and expanding Medicaid, funding solutions to the opioid epidemic, and improving public health funding for vaccinations, firearm safety, and reproductive health.

Far more likely is that the organization has a “southern strategy” of its own. It’s likely we’ll never know for sure. But one thing is for certain, it’s more about numbers than money. Through the years of declining membership dues, AMA profitability has continued to rise from publications, CME and business offerings like their Masterfile Database used to empower PhRMA physician specific prescription profiling. They had over $500 million in reserves in 2012. Money funds lobbying.  But total numbers of doctors represented ground the legitimacy of AMA’s government relations program.

Many younger physicians have fled the AMA state and national organization, and proudly proclaim that they have instead chosen speciality options like the AAFP, ACOG, ASIM or APA. What they seem to be unaware of is that, through the AMA Federation or ACCME or ACGME, they and their institutions continue to be represented by the AMA whether they like it or not. We’ll discuss that more next week.

AMA Signals Donald Trump (and Tom Price): “Enter At Your Own Risk.”

Posted on | January 3, 2017 | 8 Comments

AMA member Tom Price

The AMA took an unusual step this evening when it released the open letter below addressed to Congress, warning against removal of Obamacare without a suitable replacement. While addressed to Congress, the message is clearly intended for President-elect Trump, and secondarily to hard-liner orthopedist Tom Price. The latter has the support of the AMA in his nomination to head HHS, but the AMA took a great deal of heat from members in doing so. This letter clearly signals to Price the limits of their support.

Here’s the letter:

Congressional Leaders on Reform of Health Care System

CHICAGO – The American Medical Association (AMA) released the following letter today to congressional leadership from Chief Executive Officer and Executive Vice President James L. Madara, M.D., concerning legislative efforts to reform the health care system.

Dear Majority Leader McConnell, Leader Schumer, Speaker Ryan and Leader Pelosi:

On behalf of the physician and medical student members of the American Medical Association (AMA), I am writing regarding our ongoing commitment to reform of the health care system and potential legislative actions during the first months of the 115th Congress.

The AMA has long advocated for health insurance coverage for all Americans, as well as pluralism, freedom of choice, freedom of practice, and universal access for patients. These policy positions are guided by the actions of the AMA House of Delegates, composed of representatives of more than 190 state and national specialty medical associations, and they form the basis for AMA consideration of reforms to our health care system.

Health system reform is an ongoing quest for improvement. The AMA supported passage of the Affordable Care Act (ACA) because it was a significant improvement on the status quo at that time. We continue to embrace the primary goal of that law—to make high quality, affordable health care coverage accessible to all Americans. We also recognize that the ACA is imperfect and there a number of issues that need to be addressed. As such, we welcome proposals, consistent with the policies of our House of Delegates, to make coverage more affordable, provide greater choice, and increase the number of those insured.

In considering opportunities to make coverage more affordable and accessible to all Americans, it is essential that gains in the number of Americans with health insurance coverage be maintained.

Consistent with this core principle, we believe that before any action is taken through reconciliation or other means that would potentially alter coverage, policymakers should lay out for the American people, in reasonable detail, what will replace current policies. Patients and other stakeholders should be able to clearly compare current policy to new proposals so they can make informed decisions about whether it represents a step forward in the ongoing process of health reform.

We stand ready to work with you to continue the process of improving our health care system and ensuring that all Americans have access to high quality, affordable health care coverage.


James L. Madara, MD

Ralph Snyderman Challenges the Status-Quo 100 Years After Flexner.

Posted on | January 2, 2017 | No Comments

Credit: NEJM Catalyst

Mike Magee

In Hcom’s most read post of 2016, we challenged the notion of “personalized medicine” as often an empty  “branding exercise”, and subsequently noted a seeming disconnect between NIH supported scientific medical progress and human progress.

At around the same time, Ralph Snyderman and his team at Duke published an important paper in the NEJM titled, “To Adopt Precision Medicine, Redesign Clinical Care.” In it, he states, “the path from a scientific breakthrough to transforming health care is not straight”, and declares that “the basic approach to clinical care has to be re-envisioned to fulfill the promise of personalized medicine.”

In a series of accompanying illustrations, we see him peal back the onion toward prevention. He goes from “sporadic treatment of episodic disease” to “predicting disease” to “prevent and mitigate” disease. But to gain access to this new approach, policy makers must force us to enter the health care world through a different door. The new chamber, according to Snyderman, is “out of reach until the health care delivery system is designed for health promotion, comprehensive disease prevention, and efficient adoption of personalized and precision medicine (PPM) capabilities”.

The Duke team is optimistic professing that “with available and emerging tools, risk for disease can be quantified and prevention measures initiated before pathology develops”. One of the most interesting elements of the article is the illustration above focused on the “inflection curve” which demonstrates how late we come to the game of health delivery, and how this gives rise to unacceptable cost and irreversible human carnage. It also suggests the type of promise I described some years back with the Lifespan Planning Record.

LPR Video

If you follow the curve backward, you see limitless potential, if only we are prepared to no longer accept the status quo. But with the changing of the guard in Washington, that now seems a long way off. Clearly, Snyderman’s view is revolutionary, and it recognizes not only fundamental changes in the way we deliver care , but also the way we capture and advantage a range of personal, environmental and scientific data in real-time. As he says, “It aims to reorient front-line care so that health risks are identified and stratified early, healthful behaviors are promoted, and disease is either prevented or precisely treated.” And he admits that won’t be easy.

But the Chancellor Emeritus at Duke, and former President of the AAMC, comes at this with a deep historical perspective. He says, “The 1910 Flexner Report shocked the medical establishment into incorporating scientific advances to transform how disease is defined, diagnosed, and treated. More than a century later and a decade since the genomic revolution, it’s again time to redesign clinical care to also enhance health and prevent disease.”

Uncoupling Scientific Progress From Human Progress: Part III. The Loss of Checks and Balances: “Bayhing for blood or Doling out cash?”

Posted on | December 27, 2016 | 1 Comment

Mike Magee

The results of the Bayh-Dole Act were dramatic, at least for health care institutions. While 380 patents were granted to them in 1980, that number soared to 3088 by 2009. Those patents, now under the control of individual scientists and their parent academic institutions, were subsequently licensed to corporations for the development of a range of products and applications. According to one estimate, the resultant impact on the nation’s Gross Domestic Product (GDP) reached $47 billion in 1996, and soared to $187 billion a decade later. Since 1980, 2,200 new companies appeared and generated more than 1000 new products. As important, the new technologies spawned entirely new industries in the United States including the field of biotechnology.(1,2)

As a change agent, few legislative actions could compete with this one. The new industries spawned by the bill resulted in over 250,000 new jobs.(3) A second measure of the Bill’s impact was the fact that all universities involved in research today have a formal Office of Technology Management which oversees research related patents. In 1979, their trade association, the Association of University Technology Managers, had 113 members nationwide.(4) By the dawn of the new millennium, that number had swelled to 2,178.(5)

Of course, over time, it became clear that the legislation did have some unintended consequences. The licensing bounty for industry and academics was not insignificant.(6) It rapidly grew from just over $7 million in 1981 to $3.4 billion by 2008. And major pharmaceutical companies were at the top of the food chain. Over the first three decades with the Bayh-Dole Act in place, 154 new drugs were approved by the FDA with worldwide sales attributed to these products of $103 billion.

This led The Economist, in 2005, to headline their reappraisal of the Bill, “Bayhing for blood or Doling out cash?”(7) As the article states, “Many scientists, economists and lawyers believe the act distorts the mission of universities, diverting them from the pursuit of basic knowledge, which is freely disseminated, to a focused search for results that have practical and industrial purposes. Whether that is a bad thing is a matter of debate. What is not in dispute is that it makes American academic institutions behave more like businesses than neutral arbiters of truth… Researchers (and particularly their minders in university patent-licensing offices) are increasingly reluctant to share materials and knowledge with others unless such sharing is accompanied by legal agreements about ‘reach-through’ royalties on potential findings and the right to restrict publication of results.”

In the end, national competitiveness in the global economy had won out. Or as one critical review put it, “some critics have asserted that universities are only interested in the financial gain that can result from licensing technologies and ignore social considerations. It’s important to remember that Bayh-Dole was passed for economic development reasons, and as we have shown above, it has admirably fulfilled this mission.”(8)

As for Ted Kennedy, in the early stages of the Bill’s formulation, Bayh and Dole had decided strategically to limit the bill to universities and small companies. But at the time they originally presented their draft they were not certain that they would have the support necessary to advance the legislation. But the following day, Bayh’s staff received two independent calls from two senators’ offices offering to co-sponsor the Bill. One came from Strom Thurmond (R-SC) and the other from Ted Kennedy (D-MA).  As time would tell, the legislation would help give birth to the vibrant Rt. 128 biotechnology corridor in Massachusetts. On receiving the calls, Bayh’s chief of staff ran to the the Senate chamber to give his boss the good news. On receipt, Birch Bayh, peering over his reading glasses, wryly asked, “Are you sure this bill is OK?”(9)

In the political science of health care, the checks and balances of negative feedback loops are rapidly being replaced by positive feedback loops in the name of scientific progress and efficiency. And yet Americans pay more and get less in health than nearly all developed nations for all this “progress”. Integration and cooperation in the Medical-Industrial Complex is human mediated and profit driven. It has absolutely nothing to do with sound health system design, or rational and equitably delivery of population health. Kite Pharma’s corporate partnership with the National Cancer Institute, or Robert Califf’s former consultancy, funding, and financial relationships with Amylin, Lilly, Bristol-Myers Squibb, Janssen, Merck, Novartis Amgen, Bayer Healthcare, BMEB Services, Genentech, GlaxoSmithKline,–Daiichi Sankyo, Kowa, Servier, Medscape/, Regado, oche, N30 Pharma and Portola may yield profitable progress in science for investors. But this in no way assures, as we have seen over the past three decades in the U.S., that our human population will progress in tandem.

References on Request.


Return to:

Part I: How Did We Arrive At This Place?

Part II. The Loss of Checks and Balances

Uncoupling Scientific Progress From Human Progress -The Loss of Checks and Balances: Part II – The Bayh-Dole Act

Posted on | December 25, 2016 | 2 Comments

 The Bayh-Dole Act from

Mike Magee

Since Vannevar Bush presented his “Science the Endless Frontier” to President Truman, and the President had insisted on strong government control of federally sponsored research, there had been a prohibition on private ownership of patents that emerged from research discoveries supported by federal grant dollars.(1) As the thinking went, such discoveries, supported by public dollars, should be available to all, without the patent restrictions of a private company. But in reality, the lack of ownership of the intellectual property, and any market products or applications that would derive from it, frightened away private investors.

So the federally funded discoveries and their patents sat in the government vaults, largely unused and undeveloped. In fact, by 1978, with the economy still lagging, 28,000 scientific patents had accumulated. Over the years, fewer than 5% had been commercialized. (2) At that time, Indiana’s Purdue University was sitting on a number of new health related discoveries that had emerged from their research departments, supported by NIH grants. In face of the country’s “economic doldrums”, they decided to invest a bit of money on lobbyists to see if they might somehow wrest control of the patents, and future profitability tied to their inventions. They approached their senator, Birch Bayh (D-IN), and were delighted to see that he was receptive.(3)

At about the same time, the lobbyists discovered that Bob Dole had been exploring the same legislative territory.(4 Having been the unique recipient of life-saving health applications, and with a well established bias toward private investment and individual entrepreneurship over government management, Bob was delighted to conspire with Bayh on a possible fix for the problem. Together they fashioned a solution that would allow individual, small businesses and academic institutions to maintain ownership of their own intellectual property, even if it derived from government grant money. These liberalizations of the long standing restrictions on government funded discoveries would be justified on the basis of stimulating a rather moribund local economy and eliminating “bureaucratic regulatory waste”.(5) With Dole’s support, the technology transfer legislation swept through the Senate Judiciary Committee with unanimous support, and passed the Senate 91 to 4 on April 23, 1980.(6) Bayh then negotiated the Bill’s inclusion in the House’s version. But before merger of the two versions could be accomplished, the 1980 Presidential elections intervened. Ronald Reagan’s election displaced Jimmy Carter, and 12 Democratic senators as well, including Bayh.(7)

Not willing to give up, Bayh and Dole huddled, and seized on one remaining strategy to move the bill to closure before opposition could coalesce. Those opposed were mainly concerned that the bill, which was written to free up individuals and academics, would somehow be co-opted by large, profit-seeking corporations.(8)  Dole quickly saw an opening in the fact that Congress had failed to pass the budget that year which forced the need for a lame-duck session. Even though Bayh was on his way out, he would remain in place until Reagan was inaugurated. Bayh was well loved by his colleagues, and those in opposition to the bill agreed at least to allow the bill to come to a vote as a “farewell present.”(9) But when Senate Majority Leader Robert Byrd (D-WV) called for a vote and placed a 15 minute time limit on it, Bayh was caught by surprise, and was off site.(10) If they missed their time slot, the bill was lost. Bayh’s chief aide crossed the aisle to Dole, explaining the problem. Dole informed the leadership that he would be presenting their case. With bipartisan support, and with Dole having cleared all obstacles ahead of time, the bill was unanimously approved and sent on to the president.(11)

President Carter dragged his feet on the measure, and the lame duck session of Congress ended. Inaction by law would result in a pocket veto. Carter’s indecision on the bill had to do with his competing notions of what needed to be done. A notorious micro-manager, his preference was for a more comprehensive solution that cut across a range of intellectual property issues that plagued multiple sectors of the government. But with just a few days to spare, on December 12, 1980, he decided that “perfect was the enemy of the good” and signed the bill.(12) What were the results? I will address that in Part III of this three part series.

(References on Request)

Part I: Uncoupling Scientific Progress from Human Progress.

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