Furious Seasons

June 27, 2008

Another Psych Researcher Outed Over Financial Conflicts

Sen. Charles Grassley (R-Iowa) is sure turning into a one-man wrecking crew for many psych researchers and will probably move onto other branches of medicine soon enough. He's already exposed massive conflicts and misreported payouts from pharma companies involving three Harvard child psychiatrists and one at the University of Cincinnati. Now, it's Stanford's turn with Grassley this week reporting that Alan Schatzberg, chair of Stanford's psychiatry department, has more than $6 million worth of stock in Corcept Therapeutics, a company trying to turn mifepristone into a depression treatment. That's not against the law, of course, and he reported the holdings in line with the university's regulations (he reported holding at least $100,000 in the stock), but you do have to wonder about just how disinterested his research and public pronoucements about depression treatment actually are.

You also have to wonder just how interested the psych field is in gaining the public's trust and in doing old-fashioned, conflict-free science--you know the kind that actually serves patients.

Schatzberg, as CL Psych points out, is a big hitter in the psych world. He's incoming president of the APA and has publicly touted Zyprexa, a drug with a very troubled history. You do have to wonder where Grassley is taking all of this--new regulations, a broader Congressional investigation or what?

Something clearly needs to be done. You'd think at a minimum that the APA would have some kind of rules governing these kinds of conflicts, especially for its new president, as Danny Carlat notes and that Stanford would feel uneasy about having an academic department chair so deeply in bed with a company trying to bring a drug to market.

"Arthur Caplan, chair of the Department of Medical Ethics at the University of Pennsylvania, agrees. 'The continuing number of problematic cases regarding investigator disclosures makes it clear that universities, academic health centers and professional societies must set clear conflict-of-interest standards for all to follow - or Congress is likely to do so,' he said.
"Dr. Bernard Carroll, former head of psychiatry at Duke University, said that Schatzberg and Stanford complied with the letter of the law - but not its spirit.

"'He disclosed ownership of more than $100,000 of stock. But, whoa - that is a real lowball. It is actually $6 million,' he said.

"'You can give a laundry list of what you're connected with - but buried in that, and unrecognized by the average reader, is really salient information about how close your association is with a company,' Carroll said."

BTW, Health Care Renewal and CL Psych were onto Shatzberg well before Grassley. But, then, maybe the Senator's staff are readers of mental health blogs.

Posted by Philip Dawdy at June 27, 2008 12:05 AM

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Comments

To be honest, the laugh here is that some portion of the stock of the company is worth $6 million! Who in heavens' name are we kidding? The Health Care Renewal link you cite -- and thanks so much for putting that up -- it's excellent background -- demonstrates that the science behind this drug as a treatment for psychotic depression is a complete joke and that it was seriously distorted in the write-ups. (Sounds a lot like the story in Side Effects by Alison Bass.) Living here in Silicon Valley (less than a very few miles from Corcept in fact) I can attest to the fact that doing well in venture capital is often all about the spin you put on your "story." Let's hope the value of Corcept is crashing very rapidly at this very moment.

Posted by: Sara at June 27, 2008 03:40 AM

:)
At last!
It's just the start Sen. Charles Grassley!

Posted by: Ana at June 27, 2008 08:59 AM

I am happy to report that after being at a high of $6.85 in the past twelve months it is now trading at around $1.90. Let's hope none of the crooks unloaded their stock when it was trading high and that it will soon be a "penny stock."

Posted by: Sara at June 27, 2008 09:43 AM

I love the swift pace this has taken, it's hard to keep up with, thanks for writing this post.

Posted by: Stephany at June 27, 2008 12:06 PM

There is a terminology (I don't remember for certain, just now, but it might even be "penny stock"), where a market price may not be established by the usual, recognized means. As such, worthless pap gets valued by investment managers according to how they want their balance sheet to look, and may not be readily validated by administrators/prime brokers! What could possibly go wrong?!!!!!!!!

Matt

Posted by: Matthew Holford at June 27, 2008 12:58 PM

Actually, I should tell you the rest of the story: there one is, then, as an investment manager, with a portfolio full of worthless stock. What to do, what to do? Well, one can, (but may not!), operate a "Ponzi Scheme," eponymously named after the first such fraudster, Charles Ponzi, whereby one pays redemptions not from the net proceeds of any profits generated by the portfolio, but from new subscriptions, paid in by investors attracted by the favourable valuation of the portfolio!

Like I wrote: what could possibly go wrong?!!!!!!!

Matt

Posted by: Matthew Holford at June 27, 2008 01:34 PM

After stewing on this report for the past day, I would suggest readers consider going to Dr Carlat's site and reading his take on this situation. It is disturbing, to say the least, that this guy is the head of a major academic teaching program and soon to be the American Psychiatric Association's President. If people in my field do not wake up and realize how this impropriety could be so damaging to respectability and reliability for the profession of psychiatry, much my be lost for my field. But, as I have said before, I work in a field with too many whores and cowards. But note I did not say ALL are whores and cowards. I am proud to note I do NOT belong to this organization (the APA) as it does not represent me. Maybe for those of you who are skeptical of psychiatry, ask your psychiatrist, if you see one, if he/she is a member, and if the answer is yes, why the provider continues to be one. There may be a good reason to belong, I just don't know of one for me.

Posted by: therapyfirst at June 27, 2008 08:13 PM

not particularly related to this post, but I read this article and immediately thought of Furious Seasons.....

http://www.theonion.com/content/node/39082/

Posted by: sara at June 28, 2008 08:18 PM

OMG! Very funny article in the Onion.

Posted by: Sophia at June 29, 2008 02:54 PM

I just read about mifepristone on wikipedia (granted it's not a brilliant place to get info on drugs but I can't read heavy shit in my current state) Anyway, it sounds terrible terrible terrible....it's bound to really screw up hormones in women and very likely in men too...crazy...

Posted by: Gianna at June 29, 2008 03:25 PM