Memorial Sloan Kettering Leaders Violated Conflict-of-Interest Rules, Report Finds

This article was reported and written in collaboration with ProPublica, a nonprofit journalism organization.

Top officials at Memorial Sloan Kettering Cancer Center repeatedly violated policies on financial conflicts of interest, fostering a culture in which profits appeared to take precedence over research and patient care, according to an outside review released on Thursday.

The findings followed months of turmoil over executives’ ties to drug and health care companies at one of the nation’s leading cancer centers. The review, conducted by the law firm Debevoise & Plimpton, was outlined at a staff meeting on Thursday morning.

The cancer center also announced an extensive overhaul of policies governing employees’ relationships with outside companies and financial arrangements — including public disclosure of doctors’ ties to corporations and limits on outside work.

The review was one of several steps the nonprofit cancer center has taken in the wake of reports last year by The New York Times and ProPublica that several top executives and board members had profited from relationships with drug companies, outside research ventures or corporate board memberships. Those revelations prompted Memorial Sloan Kettering to hire outside firms to conduct inquiries into those relationships as well as into internal allegations of ethical lapses.

Mark P. Goodman, co-chairman of the law firm’s commercial litigation group, told doctors that the review found “a number of instances of serious noncompliance with M.S.K.’s conflict-of-interest policies,” according to a recording of the staff meeting.

The issues arose, he said, because of lax oversight, not intentional misconduct.

Mr. Goodman also said that the firm’s review, which included interviews with 36 current and former employees and board members and an examination of 25,000 documents, did not find that the ethical shortcomings had hurt patients or compromised research.

Scott Stuart, chairman of the cancer center’s Boards of Overseers and Managers, said in an emailed statement: “We took a deep and honest look at what went wrong at our own institution, examined what was occurring in the wider cancer research community, and are putting in place best practices that will not only allow us to learn from our mistakes, but will contribute to best practices for the wider research community.”

The cancer center has been reeling from a series of reports by The Times and ProPublica last fall, including that its chief medical officer, Dr. José Baselga, had failed to disclose millions of dollars in payments from drug and health care companies in dozens of articles in medical journals.

Memorial Sloan Kettering Cancer Center’s Revised Policies on Conflicts of Interest

The nonprofit institution is overhauling its procedures governing relationships and financial ties to corporations. (PDF, 9 pages, 0.14 MB)

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Dr. Baselga resigned in September, and he also stepped down from the boards of the drugmaker Bristol-Myers Squibb and Varian Medical Systems, a radiation equipment manufacturer. The British-Swedish drug maker AstraZeneca hired Dr. Baselga to run its new oncology unit this year.

Additional reports detailed how other top officials at Memorial Sloan Kettering had cultivated lucrative relationships with for-profit companies, including an artificial intelligence start-up, Paige.AI, that was founded by a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. The hospital struck an exclusive deal with the company to license images of 25 million patient tissue slides that had been collected over decades.

Another article detailed how a hospital vice president was given a nearly $1.4 million stake in a newly public company as compensation for representing Memorial Sloan Kettering on its board.

The reports prompted widespread outrage and changes within the hospital. In October, the hospital’s chief executive, Dr. Craig B. Thompson, resigned from the boards of Charles River Laboratories, an early stage research company, and the drugmaker Merck.

Then, in January, Memorial Sloan Kettering went a step further, barring its top executives from serving on the corporate boards of drug and health care companies. Hospital officials also told the center’s staff that the executive board had made permanent a series of policy changes designed to limit the ways in which its top executives and leading researchers could profit from work developed at Memorial Sloan Kettering, a nonprofit that admits about 23,500 cancer patients each year.

Since then, the law firm’s review continued and additional new policies were put in place.

Mr. Goodman said the law firm had not found evidence of intentional wrongdoing — defined as “a conscious decision to engage in misconduct” — by the hospital’s leaders or board members.

Although we did not identify evidence of breaches of fiduciary duty, we did find that processes and controls for the review and management of senior executive and board-level conflicts were deficient and resulted in instances of noncompliance with M.S.K. policies,” Mr. Goodman said.

Specifically, he noted, plans to manage executive conflicts of interest, a requirement at the hospital, “were not implemented because it was felt to be unnecessary or because there was a failure to realize that a management plan was needed.”

The policy changes that Memorial Sloan Kettering announced on Thursday are designed to provide additional oversight of conflicts of interest, including the creation of a board committee to focus on the issue, which had previously been required under hospital policy but that the law firm found was never carried out.

Moreover, the hospital said it would disclose financial interests of faculty members and researchers on its website and create a more centralized review of conflicts between employees’ work at the hospital and their outside duties.

Charles Ornstein is a deputy managing editor at ProPublica.

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