After a high profile set of scandals, the prominent cancer research hospital, New York’s Memorial Sloan Kettering made an unprecedented move to limit their executives capacity to engage with private industry while employed with Sloan Kettering. Part of a larger set of reforms, Sloan Kettering now has policies that curb or limit serving on corporate boards while employed at Sloan or from accepting certain forms of compensation such as stock or equity. These reforms were bold statements from a preeminent academic medical center about the need to ensure that financial conflicts aren’t compromising patient care or the work of the institution.
Yet, are these laudable reforms enough?
In order to understand what this is and why it matters, it helps to have some context. In late 2008, a joint investigation between ProPublica and the New York Times revealed significant relationships between Sloan executives and for-profit entities. In particular, José Baselga, then Chief Medical Officer of the institution was found to have had numerous financial conflicts of interest but had failed to report them in dozens of articles in high-ranking journals.
Such journals require that authors self-disclose financial conflicts of interest and thus, Baselga’s failure to disclose financial conflicts constituted a major breach and inspired a small PR nightmare for Sloan Kettering. In some instances, Baselga wrote about research areas and specific interventions where he had significant financial ties, without revealing those interests.
Potential Loopholes Around Memorial Sloan Kettering’s Crackdown on Conflicts
The move by Sloan Kettering is an important and useful one. Yet, questions emerge about it. For example, would the policy barring Sloan executives from sitting on boards of for-profit companies resolve larger revolving door relationships between executive staff and firms and startups? A lot of research has shown that there is a revolving door between academic medicine, global pharmaceutical companies, venture capital firms, and biotechnology startups.
Policies barring simultaneous board membership and employment at Sloan cannot get at the possibility that executives will simply be promised a lucrative position at any point once they resign from Sloan Kettering. It also doesn’t stop an executive with powerful financial ties at a company, resigning from a company, joining Sloan, but still acting to advance the “interests” of their former company. Relatedly, there are questions about delayed compensation. Many “creative solutions” emerged when institutions instituted a financial maximum that clinicians or researchers can make from outside for-profit entities.
Could people get around these Sloan Kettering regulations by refraining from board memberships while tenured at Memorial Sloan Kettering, but provide informal advisory services and a promise of potential stock equity in the event of that startup undergoes a lucrative acquisition or IPO? In other words, would it not be easy to be an “uncompensated” advisor and be given (as a form of “compensation”) a promise of stock only in the event of a lucrative exit? Certainly, such exits could be lucrative enough to warrant resigning from one’s position. There is a similar question in the case of conflicts of disclosure about whether authors may begin to start to “wait” to receive compensation from pharma companies until after they publish a paper, in order to avoid having to disclose such compensation.
Banning board membership may not get at arrangements whereby executive staff may still advocate for a company bereft of board memberships, and be provided a delegate kind of compensation. Non-board level advocacy on behalf of a company could include key introductions, working for the Venture Capital (VC) firms that are investing in a high-profile startup space and having compensation from the VC rather than the company directly.
A Good First Step
The move by Memorial Sloan Kettering is an important one, and constitutes a high visibility statement about the need to keep at bay the increasing financialization of science and medicine. Yet, the next generation of reforms must take into consideration the reality of these “revolving door” relationships and all of the creative ways to sidestep policies.
Mark Dennis Robinson is a 2018-2019 Petrie-Flom Center Student Fellow.
Image: José Baselga, former Chief Medical Officer of Memorial Sloane Kettering, in a 2013 file photo, via Wikimedia Commons.