Wednesday, August 10, 2005
And you thought only friends of Martha Stewart leaked information about drug trial results. Not so according to a recent article in the Seattle Times. The article by Luke Timmerman and David Heath entitled, "Drug Researchers Leak Secrets to Wall Street," details their recent investigation into the information sharing that allegedly goes on between researchers and investers.
A Seattle Times investigation found at least 26 cases in which doctors have leaked confidential and critical details of their ongoing drug research to Wall Street firms.
The practice involves doctors at top research universities from UCLA to the University of Pennsylvania, and powerful financial firms including Citigroup Smith Barney, UBS and Wachovia Securities.
In 24 of the 26 cases, the firms issued reports to select clients with detailed information obtained from doctors involved in confidential studies. The reports advised clients whether to buy or sell a drug stock.
Trading stock based on secret information bought from medical researchers is illegal, say legal experts who were told of The Times' findings.
"That's a good way to go to jail," said lawyer Thomas Newkirk, former associate director of enforcement at the Securities and Exchange Commission (SEC).
Whether they are paid or not, medical researchers who talk with Wall Street about their ongoing research violate confidentiality agreements they sign before drug companies allow the drug testing to begin.
Until now, the selling of drug secrets has been hidden from securities regulators and the public, but biotech and Wall Street insiders said the practice is widespread.
Health Care Renewal Blog has more information about this article and its contents here and here. The blog editor thinks that the researchers may not be the super bad guys the article potrays, but instead poster children for much needed revision in how we currently fund research in this country. [bm]