Saturday, March 01, 2014

A matter of public trust

Several weeks ago, I raised the issue of whether it was appropriate for the Dean of the College of Medicine at the University of Illinois to be on the Board of Novartis, a major biomedical corporation. My concern was quickly slapped down by a University spokesperson, who said, in part:

The University of Illinois views Dean Azar’s service on the Board of Director of Novartis as appropriate, given that the conflict of interest and commitment is well-managed. The UIC leadership and Dean Azar have commendable records of integrity and in dealing with conflict of interest issues associated with external activities."

I wonder if the University did any research into this matter before giving this response.  I'm going to present some of my own research, derived solely from public sources.  In so doing, please understand that I in no way seek to denigrate the exceptional scientific and clinic record of the Dean.  I merely seek to present facts and context that, in my mind, again raise the issue of governance and propriety--both for the University and for a company that has itself faced questions of ethics and governance:  How can this person exercise a proper duty of care and loyalty to both institutions, not only in terms of time commitment, but also in terms of the overlapping scientific research and clinical interests of the two organizations?  I raise this issue not to accuse anyone of misbehavior, or engaging in conflicts of interest that result in personal gain, but as a matter of public trust.

As noted by Joan Miller, Chief and Chair of Ophthalmology at Massachusetts Eye and Ear Infirmary:

As we try to sort through COI and the relationship between industry and academe, we want to do what is in the best interest of our patients and the public good. We want to maintain the positive advantages of collaboration and philanthropy, especially in educational grants and research, while holding ourselves free from possible bias. We must treasure and ensure the public’s trust. No one can do it better than we can. 

The Novartis business plan

How did Dmitri Azar end up on the Board of Novartis?

In April 2011, Novartis announced its acquisition of Alcon for $51.6 billion:

“With Alcon, we will add eye care as a fifth growth platform alongside innovative pharmaceuticals, generics, vaccines and diagnostics, and consumer health,” said Dr. Daniel Vasella, Chairman of Novartis. “The strong Novartis presence around the world, including in emerging markets, will open new growth prospects for the combined businesses. Novartis and Alcon can be expected to profit from the combination of complementary research and development activities and ultimately benefit patients suffering from eye diseases worldwide.”

“The new Alcon Division will cover more than 70 percent of the eye care segment with more than USD 9 billion in annual revenue,” said Joseph Jimenez, CEO of Novartis.

Less than a year later, in February 2012, Dr. Azar was elected to the Board.  Clearly his credentials in the field could not be questioned and would be of value to the company as it pursued its new line of business:

Dr. Azar, a US citizen, is Dean of the College of Medicine and Professor of Ophthalmology, Bioengineering, and Pharmacology of the University of Illinois at Chicago, USA. He holds a medical degree from the American University of Beirut, Lebanon, an Honorary MA from Harvard University and an Executive MBA from the University of Chicago, Booth School of Business. Dr. Azar is an internationally recognized ophthalmic surgeon and prolific researcher. He has been named one of The Best Doctors in America and one of the Castle Connolly Top Doctors in America annually since 1994. He holds multiple committee positions with the American Academy of Ophthalmology, is a member of the American Ophthalmological Association, and sits on the Board of Trustees of the Chicago Ophthalmological Society and the Association of Research in Vision and Ophthalmology. He has received multiple leadership awards, including the 2009 Lans Distinguished Award from the International Society of Refractive Surgery.

Dr. Azar was well known at Alcon.  After joining the faculty at the University in 2006 as Head of the Department of Ophthalmology & Visual Sciences, he received, in 2007, an Alcon Research Institute award, "represent[ing] a unique example of industry support by identifying exceptional ophthalmic scientists and awarding each with $100,000 unrestricted grants to further their research endeavors."

The relationship grew. In the Illinois Statement of Economic Interests submissions dated 2008, 2009, 2010, 2011, 2012, and 2013, he reported receiving over $5000 for each of the previous years as a consultant to the company as well as getting honoraria in excess of $500.

University purchases of Novartis equipment and supplies

And the relationship has grown in both directions.  Three phacoemulsification machines (for cataract surgery) were purchased from Alcon.  I do not have information about the timing of this purchase decision. If it occurred during his tenure, did Dr. Azar recuse himself from this issue, given his relationship with Alcon? There are competing companies for this type of equipment.  Was the original purchase of equipment a sole source purchase, or were competitive proposals received?  I note that University purchases from around this time were criticized in a report from the State Auditor General--"The University did not review and approve sole source justification forms as required by University Policy."--but it is not clear whether that criticism was directed at this specific purchase.

This kind of decision regarding capital equipment has long-term financial ramifications.  After purchasing the three phacoemulsification machines from Alcon, the University was locked into buying the supplies for these machines from the same company.  For example, in 2009, it entered into a sole source purchase for such supplies.

Purchase of intraocular lens implants, probes, drapes, crescent knives and retractors for Alcon Phaco machines for the period of July 1, 2009 through June 30, 2011. 

Cost:  $1.1 million

This purchase is a sole source because the items are patented and compatible with existing equipment from the only manufacturer. Currently the Hospital owns three Alcon Phaco machines that are used to soften, shatter and remove cataracts. Alcon equipment is a standard in the industry for removal of cataracts in cataract surgery. The supplies are required for the operations of these machines. 

Likewise, in 2013, the University entered into a similar sole source purchase:

The University awarded a contract for PHACO System Packs to Alcon Laboratories, Fort Worth, TX, for an estimated $2,925,000.

Purchase from Alcon Labs their Infinity and Constellation PHACO system packs for the 3 Alcon Phaco machines (a Phaco Machine is a ultrasonic device used to soften, shatted and remove cataracts) currently used in the Hospital Operating Room.

The University has determined that this purchase is only economically available from this source because the item or service is copyrighted or patented and is not available except from the holder of the copyright or patent. 

The same equipment was purchased for the Millennium Park Eye Center, the site where Dr. Azar sees patients.

Leading edge technology purchases

In 2012, the University acquired a new LenSX laser for cataract surgery from Alcon, among the first in the Midwest.  Did Dr. Azar recuse himself from this issue, given his relationship with Novartis?  The Alcon femtosecond laser is not the only one on the market.  Again, I do not have documentation as to whether the purchase was a sole source procurement, or whether a competitive process was used.  But this article suggests that the former was the case, quoting a member of Dr. Azar's faculty, who (as I discuss below) receives financial support from Alcon:

Another consideration for Dr. de la Cruz in choosing the LenSx Laser was the university's prior experience with Alcon. "The technology fits well in our operating room, because we already have the Infiniti phaco system," Dr. de la Cruz says. "We were confident the company would provide good support and maintenance."

While it is common for academic centers to invest in state-of-the-art technology for research purposes, it is still appropriate to ask if purchase of this machine was a good business choice for the University.  Did such a conversation take place among University officials?  If so, did Dr. Azar recuse himself from the discussion of this issue, given his relationship with Novartis?  Under whose authority did the purchase take place? According to this 2011 article, the cost-effectiveness of this approach is not yet proven:

The final discussion point for FLACS is cost. These laser machines with integrated OCT or Scheimpflug technology will add considerable cost to a currently standard procedure. The final cost -benefit analysis will be more complete once long-term data on the laser systems is available. Because the size of the laser platforms is quite large, many surgery centers may require an extra step of moving a patient from the preoperative laser suite to the operating room. This will also be an extra cost in both time and efficiency.

A Medscape article also found:

Femtosecond laser-assisted cataract surgery (FLACS) represents a potential paradigm shift in cataract surgery, but it is not without controversy. Advocates of the technology herald FLACS as a revolution that promises superior outcomes and an improved safety profile for patients. Conversely, detractors point to the large financial costs involved and claim that similar results are achievable with conventional small-incision phacoemulsification. . . . While in its infancy, FLACS sets out the exciting possibility of a new level of precision in cataract surgery. However, further work in the form of large scale, phase 3 randomised controlled trials are required to demonstrate whether its theoretical benefits are significant in practice and worthy of the necessary huge financial investment and system overhaul. Whether it gains widespread acceptance is likely to be influenced by a complex interplay of scientific and socio-economic factors in years to come. 

Use of this equipment was not covered by Medicare at the time of purchase by the University:

[P]reliminary published research has not been scientifically powerful enough to persuade private insurers or Medicare -- which pays for about 8 of every 10 conventional cataract procedures in the United States -- to compensate providers for the extra cost of using femtosecond lasers in cataract surgery. Practitioners are prohibited from billing Medicare beneficiaries for costs that the federal insurance program will not pay.  

"[But] in truth, you can't add femtosecond surgery [to your practice]," William W. Culbertson, MD, a professor of ophthalmology at Bascom Palmer Eye Institute in Miami, Florida, said. "You would lose money on every procedure." 

Or, as summarized here:

The use of a femtosecond laser during cataract surgery is a new and exciting option but an extremely expensive one. It raises important questions about reimbursement as well as the technology’s potential. 

There have also been concerns raised about training residents and fellows on this equipment.  At the University of Illinous, this became the topic of a research study:

Ophthalmology residents and fellows at the University of Illinois at Chicago performed a retrospective study comparing their experiences performing cataract surgery with and without the femtosecond laser. The 6-month results were reported at the 2013 meeting of the Association for Research in Vision and Ophthalmology.

The researchers concluded that resident surgeons on the initial learning curve for cataract surgery are capable of safely learning standard phacoemulsification techniques along with use of the LenSx Laser system. In addition, the LenSx Laser system appears to allow cataract extraction with less energy, which may result in improved long-term outcomes.

Was Alcon involved in sponsoring this research?  As noted in this February 2014 advertising supplement, Dr. de la Cruz--the lead faculty author for the research project--has received funding from the company (although his 2013 Statement of Economic Interests contains no hint of that.  Perhaps it will be included in the 2014 report.)

Did Dr. Azar recuse himself from any involvement in the decision to conduct the research or any aspects of it, given his relationship with Novartis?

Alcon involvement in University education programs

Beyond these matters, it is well documented and disclosed that Alcon supports continuing medical education programs at the University. Here's one example:

As Joan Miller notes in her comment above, this is not unusual and--properly disclosed--can be of value to all.  That's not the issue at the University of Illinois.  The issue at UIC is whether there is anything about the dual positions held by Dr. Azar that lead to his involvement in the decision to invite or include Alcon--particularly in preference to other ophthalmic equipment suppliers--to be the sponsor of such programs.


I for one believe it would take a superhuman effort on the part of the Dean to recuse himself from every financial analysis, purchase decision, research decision, and educational decision at the University of Illinois that has the potential to involve Novartis or its competitors.  As noted, I am in no way asserting or implying that this superb physician and researcher has improperly benefited or that he has failed to disclose under state law or University policy.  What I am saying is that both institutions require a person to exercise a proper duty of care and loyalty to each of them.  It is inconceivable to me that this is possible in this case, not only in terms of time commitment, but also in terms of the overlapping scientific research and clinical interests of the two organizations.

It is this matter that faces the Trustees of the University of Illinois.  It is this matter of public trust.


Jordan Lewis Ring said...

From LinkedIN:

"nothing to expose here...just the hidden layer of so many deceptions that exist today at all hospitals....they have truly forgotten, many times, the mission...not all --but one is too many........"

Anonymous said...

As the above commenter points out, this is not unique, but laying out the extent of it and details involved is valuable.

I just have one question for our profession: at what point did physicians convince themselves that all this stuff was OK? Indeed, delude themselves that they were actually performing a public service by using their professional knowledge for a company's benefit, thereby collaborating for mutual back scratching and money?

nonlocal MD

Anonymous said...

Answer: when we realized of the lack of control on us

Barry Carol said...

From a patient’s perspective, I wonder how great the price difference is between Alcon’s equipment and supplies vs. a competitor’s. With respect to new and unproven equipment and technology, somebody has to be an early adopter. If Alcon has, by far, the dominant market share in this area, as a patient, I would view that as a positive factor, other things equal. In the same vein, I bought a Generac whole house generator last year after Hurricane Sandy, in part, because it has a 70% market share and the price was competitive. I figured they must be doing something right to earn that market position.

The University of Illinois did not have to purchase this system from Alcon. This to me is important when compared to the perception among Massachusetts employers that they have to have the Partners Health System in their networks which gives Partners extraordinary market power to extract excessively high prices from commercial payers.

There is also the issue of how many hoops should we expect an academic medical center to jump through every time it makes a significant purchase or business decision. In an organization that is probably already pretty bureaucratic, I don’t want to see a process that’s comparable to getting the Keystone Pipeline approved.

As a patient, the raw exercise of near monopoly power that drives up healthcare costs and insurance premiums troubles me a lot. In the situation described here, I’m willing to give UIC and Dr. Azar the benefit of the doubt.

Paul Levy said...


What a relief, after all these years of receiving your thoughtful and wonderful comments, to finally have a topic on which we appear to disagree!

The issue I raise here is not one of relative market power or of what the correct clinical decision is. The issue is that this is a public institution, subject to a number of standards designed to protect the public, and overseen by a governing body that, too, is supposed to represent the public interest.

When a high-ranking official in such an institution has a close commercial affiliation with a supplier to the hospital, it is appropriate to ask whether systems are in place to protect the public interest. It is also appropriate to ask whether it is possible for that individual can carry out a duty of care and loyalty to the two entities simultaneously.

In other words, this is a question of governance, a very different set of questions from the ones on which you focus in your comment.

Barry Carol said...


I think I understand the point you are making but I’m not sure I understand what you think a satisfactory process would look like. In my old business, at least since the 2000 bust in Internet in Telecom stocks, new rules were put in place related to recommendations made by analysts to outside investors that require disclosure of whether or not the analyst and/or his family owns stock in the company he is recommending and whether or not his Firm has a banking relationship with the company or seeks one in the future. The idea is to disclose potential conflicts of interest to potential investors.

If UIC thought that this relationship with Alcon were fully appropriate despite Dr. Azar’s position on the Novartis BOD and other compensation he may receive from the company, what would a satisfactory signoff look like and who within the hospital or UIC would do it?

Anonymous said...

To bring this issue full circle, the department of surgery has another living example of the complications caused by the UIC dean's compromised position.

I worked in the department of surgery and left a few years ago because of the compromised culture. For example, almost a decade ago, a very influential surgical oncologist established a for-profit startup company, CDG Therapeutics. The faculty member arranged to have his university research sponsored by CDG. After a few years, the surgeon's research program had a multimillion dollar deficit and UIC discovered that the reason was due to a habitual lack of payment by CDG. Instead of shuttering the research and seeking payment, UIC ate the cost and allowed the surgeon to continue conducting research.

Although the problem with CDG reached legendary status, there were no safeguards put in place by the current dean or the department head. Low and behold, I recently found out from a previous colleague who still works in surgery that the same faculty member has run up another million dollar deficit for a project that was contracted by CDG.

Given the dean's own unacceptable ties to the for-profit industry, he is not in a position to stop or discipline other faculty from inappropriate and self serving relationships that take advantage of the university brand and resources.

What is most galling is that all of these folks are supported by unsuspecting tax payers.

Paul Levy said...


If this were an individual with a limited scope of authority and control, then a simple disclosure might work. But the Dean has broad responsibilities, including review of conflicts of interest of all faculty members. There's just no way to limit the problem by his personal disclosures.

The solution for someone in a high and broad-ranging job is simple: Don't accept a board seat with a company whose activities overlap those of the University.

George said...

If Azar is allowed to serve as Dean despite the obvious (one does not need to read beyond the first few lines of your report to conclude) conflict, then the rules of engagement should change for everybody. Alternatively, Azar should choose which organization to serve.

Anonymous said...

In the end, this may come down to a simple matter of arithmetic? The demands of being a dean are very high. How can Azar find the time of day to effectively serve in both capacities even if the conflict of interest is averted? It would be interesting to see if his vacation reports at the university could stand up to an audit. Was he ever at a Novartis board meeting while on UIC's time?

Unknown said...

Thank you for doing and presenting all the research. Many hospitals I come across nowadays are struggling to achieve a margin because of the un-funded technology that their physicians insist they need. Do academic medical centers have a duty to consider the efficacy of new technology before exposing it to students and residents? Why train new surgeons on equipment that, if used in the real world, would be too expensive? Should new technology be off limits to students unless CMS and private payors agree to extra reimbursement for its use?

Paul Levy said...

I'm not sure I would go that far, Richard, because some programs want to expose their students to new technologies in any event. After all, over time, they may prove cost-effective, and academic medical centers can offer a good test bed with regard to efficacy determinations. (If they do real case-control experiments and not just "retrospective" studies.)

But the relevant issue here (i.e, with regard to questions of governance and propriety) is to make sure that the discussion that is held in the hospital to evaluate the matter does not include people who have a financial relationship to the equipment manufacturer. How is that possible when the Dean has such a relationship and also, as we see here, countenances it on the part of his faculty?

Thomas said...

And if I get a free pen from a drug company, I am accused of selling out to Big Pharma..

Bob said...

I just have to wonder where the official bodies are on this.

Anonymous said...

Dear Paul,

You missed another HUGE purchase by Azar from Alcon. 2006-2007 UIC purchased two laser systems for his private Millenium Park downtown office. Plus one for the lab! That's at least another cool $2.0 mil! (Plus more than $350 per procedure in disposables...)

Anonymous said...

Dear Paul,
The comment by Anonymous contains false information. At Millennium Park Eye Center of UIC, the lasers systems currently in use are from competitors of Alcon. The excimer laser system (Visx) is from Abbott Medical Optics (AMO). The Intralase laser is also from AMO. There are no laser systems from Alcon in Azar lab. There was one laser from Alcon (Ladarvision) that has been not been operational since 2008, so there is no question of using any $350 per procedure Alcon disposables. Also, Millennium eye center is not a private office of Azar, rather a UIC Department of Ophthalmology facility where at least 6 (maybe more) UIC faculty provide clinical care in numerous subspecialties like cornea, refractive surgery, contact lenses, oculoplastics, viteroretinal and strabismus.
I understand the important conflict of interest issues that you have raised and I think these issues deserve serious thought, but in doing so, truth must not be damned.

Paul Levy said...

I am so pleased you clarified the record on this. It is important that these matters be accurately presented.

This shows that it is all the more important that the University be absolutely transparent with regard to them all.

Anonymous said...

The above 2 anon comments support my point in an earlier post about how allowing these situations to develop promotes jealousy, strife and, yes, false reporting on rumors. This is all easily avoidable by simply not getting involved in anything that even smells of a conflict of interest.

So simple, yet seemingly so difficult for those involved to understand. Truly, the perspective has become completely distorted. Time for the outside rational agents to prevail.

nonlocal MD

Interested IL Citizen said...

So i am trying to wrap my head around this one... Dr. De La Cruz, a UIC employee paid by the State of Illinois, performs research on a product produced by Alcon, the state/institution pays for the non-reimbursible procedure, and Dr. De La Cruz gets paid by Alcon to present the research data? Then his boss (Dr. Azar) gets a sweet post with Alcon? SCORE!!! Sign me up! (Blago should consider hiring the UofI's legal team for his appeal! HA!)

Anonymous said...

Dear Paul,

I am well aware of Dr. De la Cruz’s research. The state/institution did not pay (directly or indirectly, partially or fully) for the non-reimbursable procedure.

For all of us who share the concerns regarding governance that Paul has raised, I would restate what Paul has said in an earlier comment – “It is important that these matters be accurately presented” and I think it is equally important that the debate on this issue focuses on governance policy.

The governance rules that allow external leadership positions are not unique to UIC or to the city of Chicago. As examples, the Dean of Weill Cornell Medical College in New York is on the Board of Directors of Bristol-Myers Squibb Pharmaceutical Corporation, and the Dean for the University of North Carolina School of Medicine is on the Board of Directors of Eli Lilly. This is an issue that extends beyond the city limits of Chicago – a city that I call home and I love.