Memorial Sloan Kettering’s season of turmoil

In recent years, Memorial Sloan Kettering, like its competitors, has struck increasingly sophisticated deals to commercialize its discoveries, in some cases receiving equity stakes in startups rather than simply collecting royalties. But it's facing increased scrutiny for those deals. (David Plunkert for The New York Times)

Hundreds of doctors packed an auditorium at Memorial Sloan Kettering Cancer Center on Oct. 1, deeply angered by revelations that the hospital’s top medical officer and other leaders had cultivated lucrative relationships with for-profit companies.

One by one, they stood up to challenge the stewardship of their beloved institution, often to emotional applause. Some speakers accused their leaders of letting the quest to make more money undermine the hospital’s mission. Others bemoaned a rigid, hierarchical management that had left them feeling they had no real voice in the hospital’s direction.

“Slowly, I’ve seen more and more of the higher-up meetings happening with people who are dressed up in suits as opposed to white coats,” said Viviane Tabar, M.D., chairwoman of the neurosurgery department.

Innovation Awards

Submit your nominations for the FierceHealthcare Innovation Awards

The FierceHealthcare Innovation Awards showcases outstanding innovation that is driving improvements and transforming the industry. Our expert panel of judges will determine which companies demonstrate innovative solutions that have the greatest potential to save money, engage patients, or revolutionize the industry. Deadline for submissions is this Friday, October 18th.

“The corporatization of this institution is clear to many of us who have been here a long time,” said Carol L. Brown, M.D., a gynecologic cancer surgeon, according to an audio recording of the meeting.

The meeting ended after several doctors advocated an immediate no-confidence vote in the hospital’s senior leadership.

The turmoil followed reports by The New York Times and ProPublica that the hospital’s chief medical officer, José Baselga, M.D., Ph.D., had been paid millions by drug and healthcare companies and failed to disclose those ties more than 100 times in medical journals, and that hospital insiders had made lucrative side deals that stood to earn them handsome profits, sometimes for work they had done on the job.

RELATED: Memorial Sloan Kettering cancer doctor fails to disclose millions in payments

The day after the meeting, the hospital’s chief executive, Craig B. Thompson, M.D., promised greater openness with rank-and-file doctors about decision-making. He also committed to doing the “root-cause analysis” requested by the doctors of how “egregious conflicts of interest,” as one physician put it, had been allowed to happen.

Other hospitals around the country are confronting similar dilemmas. But at Memorial Sloan Kettering, one of the nation’s leading cancer research and treatment centers, they are especially acute. Internal emails, audio recordings of meetings and interviews with doctors show how this major New York institution has struggled to contain a crisis of confidence in its leadership.

Closer ties between nonprofit research centers like Memorial Sloan Kettering and corporations are being fueled by a rush of potentially breakthrough cancer treatments. Venture capital firms and drug companies have looked to cash in on the scientific discoveries, said Brad Loncar, the founder of an investment fund that focuses on cancer. “Money follows success,” he said, and Memorial Sloan Kettering has been a focus “because they conduct terrific science there.”

In recent years, the hospital, like its competitors, has struck increasingly sophisticated deals to commercialize its discoveries, in some cases receiving equity stakes in startups rather than simply collecting royalties.

The predicament of Memorial Sloan Kettering also reflects a shift in its own culture. Its prior chief executive, Harold E. Varmus, M.D., a Nobel Prize-winning scientist, personally kept companies at arm’s length, while Thompson, also a respected cancer researcher, has more fully embraced such relationships. The new approach has been applauded by some for expanding access to the cancer center’s discoveries, even as others have worried that the hospital may be losing sight of its mission.

Its leaders and top researchers also hold influential positions in the corporate world. When news of Baselga’s disclosure lapses broke in September, 12 doctors and researchers at the hospital served on the boards of publicly traded companies, more than at any other major cancer center, according to a review by the Times and ProPublica. Baselga has since resigned from the hospital and the two boards he served on. And a day after the physicians’ meeting on Oct. 1, Thompson resigned from the boards of the pharmaceutical giant Merck and Charles River Laboratories, a healthcare company, that together had paid him $585,050 in compensation in 2017.

RELATED: Fall from grace: Questions about prominent researchers raise bigger questions about ethics in medicine

The concern of ethicists and health experts is that a bias in favor of industry can unduly influence scientific research and medical treatments and remove a valuable check on soaring drug prices.

The problems at Memorial Sloan Kettering have shaken other cancer centers. At Dana-Farber Cancer Institute, officials have said they are considering whether Laurie H. Glimcher, M.D., their chief executive, and others should continue to serve on the boards of publicly traded companies, including drugmaker GlaxoSmithKline, on whose board Glimcher sits.

At the Fred Hutchinson Cancer Research Center in Seattle, a task force is reviewing the conflict-of-interest policies that govern employees’ financial relationships with drug companies. And medical centers around the country have instructed researchers to review their financial disclosures to medical journals, leading to a series of corrections to scientific articles.

Even as Memorial Sloan Kettering leaders have promised greater transparency, they have engaged a public affairs firm, SKDKnickerbocker, to manage their message and have aggressively pushed back against the idea that the hospital’s leaders are too close to industry.

“I can see how someone might think that business relationships are problematic,” said  Lisa DeAngelis, M.D., who has stepped into Baselga’s former position at Memorial Sloan Kettering on an acting basis. “But I’m telling you, as someone who works with patients, and I’ve worked with patients throughout my entire career here, that working with industry has helped me save lives.”

The Times and ProPublica asked to speak to Tabar and Brown about the critical remarks they made about the hospital’s direction at the Oct. 1 meeting. Mike Morey, managing director of the communications firm engaged by the hospital, arranged for them to speak to reporters on the phone while he listened. The doctors said they were not specifically referring to Memorial Sloan Kettering during the meeting that was recorded by one of those in attendance but to broader changes in the medical world.

Defining an institution’s role

Founded in 1884 as the New York Cancer Hospital, Memorial Sloan Kettering was the first hospital in the country devoted exclusively to treating cancer. Its benefactors have included some of the wealthiest families in America, from the Astors and Rockefellers in its early years to the Kochs today.

It now operates more than 120 research laboratories, employs more than 1,000 doctors, admits some 23,500 patients a year, operates one of the world’s largest clinical trial programs and had revenues of nearly $4.5 billion in 2017. It recently completed a $3.5 billion fundraising drive, and its charity ball remains a fixture on New York’s social calendar.

As a leading force in cancer research, the hospital has long grappled with striking a balance in its collaborations with drug companies. While it did business with industry during the tenure of Varmus, a former director of the National Institutes of Health, he and a top deputy, Robert E. Wittes, M.D., did not consult for companies, own their stock or serve on their boards, according to several people who worked for Varmus while he was at the hospital from 2000 to 2010. Varmus and Wittes declined to comment.

But some on the hospital’s board wanted its chief executive to do more to encourage company-financed clinical trials and to bring discoveries to market. In an interview, John R. Gunn, the cancer center’s chief operating officer from 1987 to 2015, said board members felt gems of research were “lying fallow and nobody was kind of pushing it, to commercialize it.”

By the time Varmus left to direct the National Cancer Institute in 2010, Memorial Sloan Kettering’s board was looking for a leader who was as comfortable in a corporate boardroom as in the lab, according to several longtime current and former cancer center employees.

RELATED: CMS: Doctors, hospitals received $8.4B in payments from drug companies last year

Thompson met that criterion. He headed the Abramson Cancer Center at the University of Pennsylvania, was the co-founder of a biotech startup, Agios, and served on the board of Merck.

His early tenure was marred by controversy. In 2011 and 2012, he was sued by his former employers, the Abramson Center and the University of Pennsylvania, which accused him of walking off with valuable research and using it to start Agios. At the time, Thompson denied wrongdoing and the suits were later settled for an undisclosed sum.

In 2012, Thompson hired Baselga to be the top physician at Memorial Sloan Kettering. Baselga, who had made his name as a key investigator of breast cancer drug Herceptin, was also seen as having bridged the worlds of research and industry. DeAngelis, the hospital’s acting physician-in-chief, said that under Baselga, clinical trials were approved more quickly, helping speed treatments to patients.

In his years at Memorial Sloan Kettering, Baselga’s personal financial conflicts were handled differently from those of other doctors, according to Clifford A. Hudis, M.D., who was chairman of the hospital’s conflict-of-interest advisory committee through early 2016, when he left to become chief executive of the American Society of Clinical Oncology.

Baselga’s conflicts were not overseen by Hudis’ committee but by the audit committee of the hospital’s board of directors. “I was told this was pretty standard for the highest level executives,” Hudis said. “I didn’t understand why any clinician would have separate rules from any other.”

Morey said that the hospital is evaluating its process for reviewing conflicts of interest, but that executives like Baselga had their financial relationships overseen by the board “to protect faculty from being put in a position of having to review their supervisor’s potential conflicts.”

Baselga is not the only leading researcher to have maintained extensive ties to drug and healthcare companies—as some also did under Varmus. Jedd Wolchok, M.D., Ph.D., a noted pioneer in immunotherapy, has financial relationships with more than 30 companies, according to recent disclosures. Charles L. Sawyers, M.D., another of the hospital’s biggest names, has founded several cancer startups, one of which Memorial Sloan Kettering has invested in, and serves on the board of Swiss pharmaceutical giant Novartis.

Ethicists and health experts say having leaders and researchers at nonprofit hospitals sit on corporate boards is especially problematic. When they serve on the board of a publicly traded company, they have a legal duty to the corporation and its shareholders, which can clash with their duty to their patients and primary employers. Those who sit on boards are often paid hundreds of thousands of dollars a year.

RELATED: Study finds 1 in 12 doctors received payments from opioid makers that totaled $46M

“I don’t think you can serve two masters,” said Bernard Lo, M.D., who led an influential Institute of Medicine panel in 2009 that investigated financial conflicts in medicine. “The whole reason for being in the cancer care business is that you’re trying to help people in need, and that’s not at all the company’s main purpose. It’s to generate profits on their products.”

A report in November in BioPharma Dive found that 12 of the 19 largest pharmaceutical and biotech companies had at least one board member who also worked at a nonprofit healthcare institution. A 2014 study in JAMA found that about 40% of the largest publicly traded drug companies had a leader of an academic medical center on their boards.

Robert Benezra, who heads a lab at Memorial Sloan Kettering that focuses on how tumors grow, is the president, chief executive officer and a board member of AngioGenex, a tiny publicly traded biotech company that is developing drugs to treat cancer based on the discoveries made in his lab.

Though he takes no salary from AngioGenex, Benezra owns nearly 9% of the company he helped found through stock or options, setting him up for a lucrative payday if the company is acquired or its drugs come to market.

In 2017, Benezra wrote to AngioGenex shareholders that a recent policy and leadership change at the hospital “afforded me the freedom to assume a more active role in the company” and to recruit other Memorial Sloan Kettering scientists to work with the company.

Benezra said in a statement issued through the hospital, “While I do not work directly with patients, I hope that this important science can one day make an impact in the lives of cancer sufferers.”

Morey said Benezra spends just 30 hours a year on business related to the publicly traded company. “We’re talking about 45 minutes a week, which is less than what most people spend on Netflix in a night,” Morey said.

DeAngelis, the acting physician-in-chief, said the high number of Memorial Sloan Kettering leaders who serve on corporate boards is reflective of their stature. “Maybe we should turn this around and say, we have more people on corporate boards because people value the opinions from our faculty,” she said in an interview.

A staff in turmoil

Tensions among doctors at the hospital over conflicts of interest mounted through September. On Sept. 28, Colin Begg, Ph.D., the chairman of its department of epidemiology and biostatistics, wrote to other department heads. “The key substantive issue is that the problems we face were not caused by failures to disclose conflicts. The problems were due to the conflicts themselves,” he wrote in the email, a copy of which was obtained by the Times and ProPublica.

Referring to Thompson and Douglas A. Warner III, the outgoing chairman of the hospital’s board of managers and overseers, who is known as Sandy, he said: “As far as I can tell neither Sandy nor Craig understand this very basic point. And if you don’t recognize that a problem exists there is no chance you will solve it.”

RELATED: No free lunch? Study finds meals from pharma linked to uptick in opioid prescriptions

He also said: “Making billions is not our mission. MSK is a nonprofit with a fundamentally social mission.”

Begg declined to comment.

Shortly before the doctors met on Oct. 1, Thompson sounded a conciliatory note. “I want to start by apologizing to the medical staff on behalf of myself and the rest of senior management,” he said, according to a draft transcript of the staff meeting. “The events of the last few weeks have not been handled as well as I would have liked.”

Warner also addressed the doctors, informing them that the board was assessing whether Thompson should remain on Merck’s board.

“Should Craig continue to sit on the Merck board? We have no policy on that,” Warner said, according to the transcript, noting that Thompson’s role on the board was initially seen as a “good thing” when he joined the hospital. “We need to step back from that now and ask ourselves whether that continues to be appropriate, whether it’s appropriate in the future.”

The next day, Oct. 2, Thompson announced that he was resigning from both boards on which he served.

Requests to interview Thompson and Warner were declined. Instead, the hospital arranged for reporters to speak to DeAngelis, who said she saw nothing wrong with the corporate ties that Thompson had earlier said were under review.

She downplayed the concerns voiced by Begg about the culture of the hospital. “He is a biostatistician. He does not work with patients. He works with data,” she said, adding that he does not have “as full an understanding” about policies to prevent doctors with corporate ties from having an undue influence on clinical trials.

Thompson and two deputies, including DeAngelis, sent a note to hospital doctors on Dec. 20, warning them about this article. While it mentioned the ongoing review, it offered a full-throated defense of those serving on corporate boards.

“We expect the piece to question the ethics of some of our most accomplished researchers and clinicians. We want you to know that we reject these insinuations and we stand behind our faculty 100%.”

Katie Thomas covers the pharmaceutical industry for The New York Times.

Suggested Articles

Molina aims to bolster its Medicaid business by acquiring certain assets from New York-based YourCare for $40 million.

Voters got a better look at Democrats’ healthcare priorities on Tuesday, as 12 of the leading candidates attended the fourth debate.

Electronics company Sony is jumping into the wearables and mobile health technology market with a business-to-business solution for developers.