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Stealth Merger: Drug Companies and Government Medical Research

Some of the National Institutes of Health's top scientists are also collecting paychecks and stock options from biomedical firms. Increasingly, such deals are kept secret.

December 07, 2003|David Willman, Times Staff Writer

Thousands of patients go there each year seeking experimental treatments that, if successful, can pioneer new standards of care for all Americans. Drug companies, eager to get new products to market, vie to have their medicines and technologies tested in the NIH research.

This places Gallin and the 600 physicians he oversees in a delicate position: He is an intermediary between the hopes of patients and the ambitions of industry.


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Yet Gallin, whose government salary is $225,200, has reported investments in eight biotechnology and pharmaceutical companies. And he received between $145,000 and $322,000 in consulting-related stock proceeds and fees from 1997 through last year, according to his government filings.

The potential for conflicts of interest is raised by Gallin's government positions: He is the Clinical Center director and a leader of the NIH Laboratory of Host Defenses, where he has helped manage gene therapy experiments.

Gallin has filed recusals, pledging not to participate in government decisions affecting the companies in which he has disclosed a financial interest. His outside dealings have been approved by other NIH leaders.

"I thought the experience of working with a biomedical company would give me an opportunity to learn about industry as well as broaden my exposure to current research," Gallin said. "It is necessary that all entities work together to improve the health of the nation."

But taking industry's money, while at the same time avoiding the companies in his NIH role, has proven a challenge, as his dealings with a company specializing in gene therapy, Cell Genesys Inc., show:

In June 1997, Gallin and his lab were completing work on a gene therapy study in collaboration with industry partners. That same month, Cell Genesys acquired one of those partners -- a company that had contributed crucial gene-transfer technology.

In July 1997, Cell Genesys made a "demand," according to Gallin: The company wanted the published results of the gene therapy study to identify Cell Genesys as the contributor of the technology -- even though it had not performed the work.

Gallin's top lab deputy granted the company's request; Gallin did not object. When they submitted the article to a journal that month for publication, the authors cited Cell Genesys as the contributor of the gene technology. On Sept. 3, 1997, Gallin became a paid consultant to a Cell Genesys subsidiary, Abgenix Inc.

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