Is Robert A. McDonald Fit to be VA Secretary?

After reports of problems with access, manipulation of data about waiting times, and most recently "a corrosive culture," the US Department of Veterans Affairs, the country's large government run health system, has had a massive leadership overhaul.  President Obama's nominee to head the agency is now Robert A McDonald, former CEO of Procter and Gamble.

The choice of a former CEO or a large corporation was called "unorthodox" by the Boston Globe, but many saw merit in a business leader running the VA.  As reported by the Globe, House Speaker John Boehner said that as a "private sector" leader,  Mr McDonald is the "kind of person who is capable of implementing the kind of dramatic systemic change that is badly needed and long overdue at the VA."  The Chairman of Boeing, also a member of the P&G board, hailed Mr McDonald as the person who "navigated Procter & Gamble through the difficult post-financial-crisis years, where he expanded business in developing markets and made substantial progress improving the efficiency of the company’s internal operations...."

On the other hand, a column in the Washington Post suggested that expertise in "selling Tide and Pantene" might not be relevant to fixing the VA. Yet aside from a single article on the Ring of Fire web site, all news coverage and discussion so far has ignored Mr McDonald's previous experience in health care leadership, but also that his relevant track record ought to raise questions about his fitness for the VA position.

Procter and Gamble and Health Care

According to Mr McDonald's official P&G biograpy, after various roles in various countries, before becoming CEO, "Bob returned to the U.S. as the Vice Chairman of Global Operations (2004 to 2007) and later P&G’s Chief Operating Officer (2007 to 2009)."

Although not widely known as a pharmaceutical company, P&G actually had a subsidiary that made prescription drugs, which Mr McDonald sold off in 2009 (see this Wall Street Journal report.)  As we noted here, its products still include over the counter pharmaceuticals (e.g., Pepto-Bismol, Metamucil, Prilosec OTC).  Also, while Procter & Gamble does not make it very obvious, it has owned MDVIP, a company that employs physicians to provide concierge medical services, since 2010, although as Cincinnati.com just reported, it will soon sell this unit to private equity.  So during Mr McDonald's tenure, his company was to some extent a pharmaceutical company, and a health care provider.

The Blumsohn - Procter and Gamble - Sheffield University Case

Furthermore, on Mr McDonald's watch as Vice Chairman of Global operations and Chief Operating Officer, there was a case involving Procter and Gamble that raised multiple concerns about the ethics of its pharmaceuticals operations.  We first posted about the case in 2005 (here).  For all relevant posts, look here.

In 2009 we described the case thus, "The case involved suppression and manipulation of research, ghost-writing, institutional conflicts of interest, and attempts to silence a whistle blower." This case, we pointed out, "provides lessons about the downsides of letting commercial firms sponsor and hence control human research designed to evaluate the products or services they sell; and of academic medicine becoming dependent on research money from such firms for such research."

We previously summarized the case's events:

• Dr Aubrey Blumsohn, a senior lecturer at Sheffield University, and Professor Richard Eastell performed a research project on the effects of the drug risedronate (Actonel, made by Procter & Gamble Pharmaceuticals [P&G]) under a contract between P&G and the University.
• Although the research contract designated Blumsohn and Eastell as "Investigators" under whose direction the project would be carried out, Blumsohn was not given access to the original data collected by the project.
• Despite numerous requests, (like this one), P&G refused access to this data repeatedly.
• Blumsohn was concerned that he and Eastell could be accused of scientific fraud if they continued to make presentations and write articles and abstracts without access to the data which they were supposedly writing about.
• Blumsohn became suspicious that some of the analyses done by P&G could be misleading, especially related to a graph shown to him that omitted 40% of patient data.
• Blumsohn objected to P&G arranging for papers and abstracts to be written by a professional writer, but with Blumsohn listed as first author. Blumsohn was concerned that such ghost-written documents were mainly meant to convey "key messages" in support of P&G's commercial interests.
• Eastell warned Blumsohn not to aggravate P&G, because the company was providing a grant to the University which "is a good source of income."
• After repeated failed attempt to get the data, Blumsohn complained to numerous officials at Sheffield University, including Eastell, medical school Dean Tony Weetman, University Vice-Chancellor Robert Boucher, and the Head of the University's Department of Human Resources, Ms R Valerio.
• Still unable to get the data, he spoke with news reporters about his case. At this point, Sheffield suspended him, but then offered him a severance agreement if he signed a contract binding him not to make any detrimental or derogatory statements about the University and its leaders.

Although this case occurred in the UK, it involved actions by the US based Procter and Gamble.  While many of the events in the case occurred before 2004, from 2004 to 2009 it became clear that Procter and Gamble was not going to go easy on Dr Blumsohn.  For example, according to Dr Blumsohn, in 2006, P&G released some scientific data relevant to the case, but not complete enough data to be meaningful.  In 2007, there was still shady business going on involving scientific abstract submissions apparently made in Dr Blumsohn's name by P&G operatives.

Since Procter and Gamble never made any known attempt to apologize, explain its conduct, or ameliorate Dr Blumsohn's plight during 2004 - 2009, as one of the most senior leaders of Procter and Gamble, seemingly with direct authority over its pharmaceutical operations in the UK during that time period, Mr McDonald ought to be held accountable for the company's misbehavior described above.  To my knowledge, though, no one at P&G, including Mr McDonald, has ever admitted responsibility or been made accountable in any way.  

Summary

Since Mr McDonald recently was an executive of a company that sold prescription and non-prescription pharmaceuticals, and provided direct health care, confirmation as Veterans Affairs secretary could be regarded as a transit through the revolving door, and hence open to question.  Since Mr McDonald got $15,928,015 in total compensation during his last year as CEO (2012-13) (see the company's 2013 proxy statement), and had accumulated 2,247,593 shares of stock or equivalent by 2013, worth approximately $179 million at today's price of $79.67, his ability to understand the needs of the often poor veterans whom the VA serves is also open to question. 

More importantly, while Mr McDonald held high executive positions at Procter and Gamble, the company was involved in a dodgy affair involving conflicts of interest, manipulation of research, and attempted silencing of whistle blowers.  In my humble opinion, given that these events occurred directly on his watch, his fitness to run a huge health care system ought to be in question unless his responsibility for these events is disproved.

The widespread huzzahs for Mr McDonald as potential VA leader based mainly on his exalted status as CEO of a big corporation show that many in the US still see corporate CEOs as aristocracy.  True health care reform would hold health care leaders accountable, particularly for upholding the health care mission and putting patients' and the public's health ahead of revenue generation and especially personal profit.

ADDENDUM (7 July, 2014) - Link to McDonald's official P&G biography fixed.