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Executive Summary

HHS IG's REVIEW OF FDA/FINANCIAL INDUSTRY CONTACTS is being coordinated with the Justice Department in the Washington, D.C. and Chicago areas, according to the HHS Office of the Inspector General Workplan for FY 1992-1993. "The OIG is working closely with the Department of Justice in Washington and Chicago to obtain and examine evidence leading to identification and possible indictment of government employees and/or financial industry representatives who have released and/or received confidential FDA information." The study is planned for completion during this fiscal year. The workplan says the IG's study "was initiated following receipt of evidence indicating consistent financial industry attempts to contact and obtain information from several officers of the FDA." The workplan does not elaborate on the investigation; however, close to a year ago, several FDA employees appeared before a federal grand jury looking into information believed to be disclosed by telephone to employees of the Feshbach Brothers, a California firm that is known as a short-seller of stocks ("The Pink Sheet" April 8, 1991, p. 3). The recent FDA-commissioned "integrity" report by the law firm of Kutak, Rock & Campbell recommended wider and earlier disclosure of now-confidential information, such as pending product applications and review milestones reached by products, as well as measures to improve the physical safety of data and closer ties to the Securities & Exchange Commission ("The Pink Sheet" Jan. 20, p. 14). The report, entitled "FDA Safeguards Against Improper Disclosure of Financially-Sensitive Information," was requested by FDA Commissioner Kessler shortly after he was sworn in last year. The IG's workplan for the HHS Public Health Service agencies reports that the IG is looking into issues related to drug promotion that fall under the purview of both FDA and the National Institutes of Health. The FDA study, targeted for completion this year, "will catalog the range and nature of drug promotion practices in various settings, including hospitals and other institutional settings; assess the response of health care professionals to drug promotion; and determine possible impact and influence of marketing on prescribing." While much of the recent attention on pharmaceutical drug promotions has focused on possibly inappropriate activities, the workplan comments that there has been an "alarming amount of misprescribed drugs," and "one way of improving prescribing practices is to heighten physicians' awareness of and knowledge about pharmaceutical therapies." Regarding the NIH review, the workplan advises that there "have been charges that studies and reports from NIH may be serving the promotional interests of some sponsoring companies," the workplan states. "This inspection will examine the relationship between NIH and pharmaceutical companies with new therapies being investigated by NIH." The Inspector General also plans to "ascertain the reasonableness of royalty rates charges to licensees for patent rights" owned by NIH. The review "will determine whether industry participation and product life cycle or development phase or other pertinent factors are considered in establishing royalty rates."

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