Journal questions current rules governing financial holdings by FDA commissioners

An investigation published by The BMJ today raises concerns about financial entanglements between US Food and Drug Administration (FDA) chiefs and the drug and medical device companies they are responsible for regulating.

Regulations prohibit FDA employees from holding financial interests in any FDA “significantly regulated organisation” and the FDA says it takes conflicts of interest seriously, but Peter Doshi, senior editor at The BMJ, finds that financial interests with the drug industry are common among its leaders. 

Doshi reports that nine of the FDA’s past 10 commissioners went on to work for the drug industry or serve on the board of directors of a drug company. That includes Margaret Hamburg, who led FDA between 2009 and 2015, but whose story is less well known.

Like her colleagues, Margaret Hamburg had relationships with FDA regulated companies before and after her stint at the FDA’s helm, explains Doshi.

But unlike her colleagues, Hamburg was allowed to hold financial interests in Renaissance Technologies (RenTec), an exclusive hedge fund managed by her husband’s company, which The BMJ has found consistently invested in FDA regulated drug companies during Hamburg’s time at the FDA.

Following a review by the Office of Government Ethics (OGE), and before becoming FDA commissioner, Hamburg pledged to resign from more than 10 non-profit organisations at which she held a senior position and from the board of healthcare products supplier company, Henry Schein.

Hamburg’s husband, Peter Brown, sold his stock in Johnson & Johnson and Merck, among others, and the couple divested from several fund holdings at RenTec. 

But Brown kept his job at RenTec, and they were both allowed to keep their holdings in its flagship product, the Medallion Fund which, according to financial declarations, earned them more than $3m between 2009 and 2010. 

Both the OGE and FDA declined to provide The BMJ with any specifics about Hamburg’s relationships with RenTec.

According to an unnamed “administration official” the couple were allowed to retain their holdings in Medallion because the fund is based on programming that “does not allow for human tracking or input except in rare instances.” 

But the degree to which the algorithm controlling Medallion operated without human input was called into question by a 2014 Senate investigation into the abuse of structured financial products, in which Brown explained that the algorithm was frequently modified by programmers.

Brown did not respond to The BMJ’s request for an interview. However, a review of quarterly reports by The BMJ filed during Hamburg’s tenure at FDA shows that RenTec held stock in three major drug companies – Amgen, Novo Nordisk, and AstraZeneca – at an average value of $518m. Across 10 drug companies, the reports indicate average holdings of over $1bn.

“The facts raise concerns over the adequacy of current rules governing financial holdings by FDA commissioners,” writes Doshi.

Hamburg also declined an interview request from The BMJ but emailed a response through her personal communications agent: “In my capacity as a physician and a government official, I have always taken my ethical obligations very seriously. Prior to my confirmation as FDA commissioner, the US Senate and the Office of Government Ethics (OGE) thoroughly evaluated any potential conflicts, including those that might arise as a result of my husband’s position. Those potential conflicts were addressed in signed ethics agreements, and submitted financial disclosure reports were reviewed annually by the OGE during my tenure as commissioner.”


Notes for editors
Investigation: Revolving doors: board memberships, hedge funds, and the FDA chiefs responsible for regulating industry doi: 10.1136/bmj.q975
Journal: The BMJ

Funding: BMJ Investigations Unit

Link to Academy of Medical Sciences press release labelling system:

Externally peer reviewed? Yes
Evidence type: Investigation
Subject: Conflicts of interest