Student Loans and Other Scams

Can you imagine the outrage lately among parents (like me) over the burgeoning student loan conflict-of-interest scandal? The mad scramble to raise the perfect résumé had the unintended side effects of sending college tuition bills into the stratosphere and burdening young adults with mountains of debt.

Intermediaries in government and the universities were supposed to get students a better deal. Instead, some saw it as an opportunity to feather their own nest.

The collapse of ethical restraints in this one corner of academic life is illustrative of what is happening on a routine basis in almost every professional sphere.

Perusing the backpages of the Wall Street Journal's online version, last week I saw that MarketWatch, a Dow Jones & Co. publication, admitted that another journalist had crossed a line that at one time was considered sacrosanct among practitioners of the trade: you don’t invest in companies that you write about. I spent decades in daily and weekly journalism, I signed documents every year revealing what I owned and promising my employer that I wouldn’t invest in anything remotely connected to my beats.

But in this case, MarketWatch columnist Bambi Francisco (is this a pseudonym?) touted companies that posted video clips on a hosting service she had invested in. Okay. Scratch that outlet off my list of trusted investment advisers.

Which brings me to the latest flare-up at the Food and Drug Administration. Later this week it will impanel an advisory committee to consider the merits of a painkiller called Arcoxia, which is a Cox-2 inhibiter produced by Merck & Co. Merck’s last Cox-2, you may recall, was pulled from the market because it increased the risk of heart attacks. It was called Vioxx.

Will this committee include cardiologists skilled at ferreting out cardiovascular risk from the mountain of data the company has submitted? We don’t know because the agency won’t release the roster of the full committee until the day of the meeting.

What we do know is that three of the members needed conflict-of-interest waivers to participate (the waivers get released two weeks ahead of time because of a sunshine provision passed by Congress in the wake of the Vioxx fiasco). They included Dr. Robert Levine, a gastroenterologist at the State University of New York who owns somewhere between $25,001 and $50,000 in Merck stock. The FDA deemed his participation crucial because of “the uniqueness of (his) qualification.”

Whom are they kidding? The only potential medical justification for this class of drugs is its purported ability to reduce the gastrointestinal side effects of traditional non-steroidal anti-inflammatory drugs like ibuprofen. With 125 medical schools in the U.S., is the FDA really claiming they couldn’t find another gastroenterologist capable of reviewing the data who that didn’t have a financial relationship with Merck?

A century ago, the progressive era gave rise to a professional class whose values and ethics arose from the need to mediate the power of newly ascendant corporations on behalf of a public that didn’t have the time or expertise to protect itself from unsafe products and monopoly power. Today, each of the institutions created or empowered in that era to act as counterweights to that power – non-profits and universities, the Fourth Estate and the regulatory agencies – have been subverted by incestuous financial ties with the corporations they’re supposed to influence and oversee.

To restore balance to the system, those ties have got to end.

Posted by gooznews at April 9, 2007 05:06 PM