What does the government “teach” about conflicts of interest?

Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example,” Justice Brandeis famously wrote in his dissent in Olmstead v U.S.  So, what has the government taught us lately about conflicts of interest?

According to this story in the New York Times,  a report recently issued by the Inspector General of the Department of Health and Human Services found that “the federal Medicare agency had not clearly defined ‘conflict of interest’” concerning doctors and pharmacists who make Medicare coverage-related decisions about pharmaceuticals, and “did not enforce standards meant to prevent such conflicts from influencing coverage decisions by the panels, known as pharmacy and therapeutics committees.’ ” The report also found that, “’23 percent of [such] committees did not have recusal policies’ requiring members to abstain from discussions or votes when they had conflicts of interest related to a particular drug.”  The story noted, too, that a “former Medicare official who is a consultant to many insurers and was not involved in the report, said, ‘Hundreds of millions, even billions, of dollars are at stake each year in decisions about whether and how a drug is covered by a Medicare drug plan.’” The original of the report – which identifies numerous other COI-related problems – can be found here,  and note that “the acting administrator of the federal Centers for Medicare and Medicaid Services… defended her agency’s work, [saying that] beneficiaries were adequately protected”; that  “[t]he inspector general ‘did not identify any actual conflicts of interest’”; and that her office did  not “believe it necessary to establish a uniform definition or standards for managing conflicts.”

As with a number of the stories covered in these pages, this one is pretty complex and resolving the many specific issues raised in it is beyond the scope/resources of my humble blog.  But assuming that the broad outlines of the piece are reasonably accurate (or even that just some of them are), I can say – as one who has  spent much of the past two decades reviewing compliance programs – that it has been a long time since I’ve seen a private organization take this loose an approach to conflicts of interest management (at least where the risks of COIs are significant, which they undoubtedly are in this case).

So, what is the government “teaching” here?  The lesson is not, I think, that conflicts of interest don’t matter, so much as that rigorous compliance measures to identify and mitigate conflicts are not necessary.  This indeed can be seen as part of a larger lesson from the government’s general failure to implement strong compliance measures with respect to its own operations.   (Note that there are a few exceptions to this – most notably the Federal Bureau of Investigation, which does have a rigorous compliance program.)  Until the government decides “eats its own dog food” (to borrow from a less lofty metaphor than that used by Brandeis) when it comes to compliance and ethics, it may be disappointed in the performance of the rest of its “students.”

(For further reading on this general topic I encourage you to explore the web site of the Rutgers Center for Government Compliance & Ethics.)

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