Healthy Skepticism Library item: 2697

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Lueck S, Mathews A.
FDA Head Held Shares in Regulated Firms In Regulated Firms as Late as '04
The wall street journal 2005 Oct 26
http://online.wsj.com/public/health

Keywords:
FDA

Notes:

Ralph Faggotter’s Comments:

“The forms also show an ethics official raised questions about information on Dr. Crawford’s financial forms shortly before he left the FDA.”

This may finally explain both the reason for and the timing of the recent mysterious and sudden departure of the head of the FDA.

Why is it that corporate executives are allowed to just scoot off with their lips sealed and their pockets full of wads of taxpayer’s money?

What about some transparency and accountability in public life?

Full text:

Former FDA Head Held Shares
In Regulated Firms as Late as ’04

By SARAH LUECK and ANNA WILDE MATHEWS
Staff Reporters of THE WALL STREET JOURNAL
October 26, 2005; Page A2

WASHINGTON – As late as 2004, former Food and Drug Administration head Lester Crawford or his wife owned stock in companies that make or distribute products regulated by the agency, a factor that may have led to his abrupt departure last month.

For most of 2004, Dr. Crawford was the FDA’s acting commissioner, and prior to that he had been a deputy commissioner at the agency. Financial disclosure forms released under the Freedom of Information Act show that during at least part of that time, he or his wife held stock in companies that have some of their business regulated by FDA, including Kimberly-Clark Corp. and Teleflex Inc., which make medical devices, food distributor Sysco Corp. and Embrex Inc., an agricultural biotechnology company on whose board Dr. Crawford once sat.

The forms also show an ethics official raised questions about information on Dr. Crawford’s financial forms shortly before he left the FDA.

Through his lawyer, Barbara Van Gelder, Dr. Crawford declined to comment last night.

On a form dated June 28, 2005, Dr. Crawford reported numerous stock sales during 2004, including shares of Teleflex, Sysco, Kimberly-Clark and Embrex, with each transaction valued between $15,001 and $50,000. He also listed a sale of PepsiCo Inc. stock valued between $50,001 and $100,000. However, on an earlier form, an ethics officer said in a notation dated Jan. 7, 2003: “all of the following investments were sold” in February and March 2002, and then listed companies including Teleflex, Kimberly-Clark, PepsiCo and Sysco.

On July 8, 2005, an ethics official wrote on the June 28 form: “need more info.” A note dated Aug. 12 indicated the ethics official had a telephone conversation “with filer’s broker” that also said “sending more info.” No ethics officer’s signature appears on the form. A signature would indicate that the information complied with laws and regulations. Dr. Crawford’s forms from previous years carried ethics officers’ signatures.

It’s unclear whether the ethics officials viewed any of Dr. Crawford’s holdings as a conflict of interest. A spokeswoman for the Department of Health and Human Services, which oversees the FDA, declined to comment.

In an interview last month, Dr. Crawford said he had been “careful to manage” his portfolio during several stints at the FDA and currently holds no stock in regulated companies. He added that the “classification of restricted stocks may change over time and as companies merge, acquire other financial entities or change in value, requirements may also shift.”

In late September, Dr. Crawford announced he was leaving the FDA, following Senate confirmation in July after contentious debate. People with knowledge of the matter said his departure was tied to a stock holding he may have failed to fully disclose. The inspector general at the HHS is investigating the circumstances surrounding his departure.

The disclosure forms, some of which were written by hand, show that Dr. Crawford arrived at the FDA for his most recent stint in 2002 owning stock in a variety of companies, including pharmaceutical firms Merck & Co., Johnson & Johnson and Pfizer Inc. He reported to ethics officials reviewing his information that he sold those stocks in 2002, along with shares of Kimberly-Clark, PepsiCo and Sysco. The form doesn’t say whether Dr. Crawford was told to sell any of those shares because of a possible conflict of interest. The forms also don’t specify whether he or his wife owned the stocks; both are required to be reported.

Though Dr. Crawford reported a sale of stock in Teleflex in 2002, later forms show that he or his wife continued to own some shares. In July 2004, an HHS ethics officer wrote that he had “recommended selling Teleflex also.” That sale occurred, according to the June form, in October 2004.

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