(NaturalNews) Here's another blow to the idea that doctors and scientists are only using their research findings to help patients. It turns out there's a way to make money off drug research that doesn't even involve marketing the drugs. Although it's illegal, it's obviously a tempting way for some greedy folks unencumbered with ethics to make big bucks behind the scenes --- just take drug research info that hasn't been made public and secretly share this insider information with stock manipulators.
Consider this scheme that has just come to light. Sid Gilman was chairman of a safety-monitoring committee that watched over a clinical trial by Big Pharma's Wyeth LLC and Elan Corp. The study was designed to see if a drug called bapineuzumab, or bapi, was safe and helpful for patients with Alzheimer's disease. Meanwhile, according to the U.S. Justice Department and the Securities and Exchange Commission, Gilman was also pulling in big bucks on the side providing advice to then SAC portfolio manager Mathew Martoma.
Apparently, Gilman was leaking Martoma secret information about bapi for a year and a half in a huge money-making scheme. Specifically, bapi wasn't working. Like something out of a spy movie, Gilman and Martoma are alleged to have shared info using encrypted files and passwords.
Using the leaked drug trial results from Gilman, the indictments say, Martoma conducted insider trading. The SEC has sued, claiming Gilman's secretly leaked data allowed the Stamford, Connecticut-based SAC and its CR Intrinsic Investors unit to sell over than $960 million in Elan and Wyeth securities before a July 29, 2008, announcement that the bapi drug
was a failure.
A just unsealed FBI complaint against Martoma doesn't mention Gilman or say he is charged with a crime. He was specifically named in a non-prosecution agreement released by prosecutors; however, it orders him to forfeit $186,781 he collected for providing the tips. In other words, he's turning state's evidence.
"He (Gilman) is prepared to testify in connection with a non-prosecution agreement," U.S. Attorney Preet Bharara said earlier this week at a news conference held in New York City. Bharara refused to answer questions about why no charges were filed against Gilman, who is a University of Michigan
neurologist and director of the Michigan Alzheimer's
Disease Research Center in the university's medical school.
In an interview with Bloomberg News
, Erik Gordon, a University of Michigan
business professor who follows the Big Pharma industry, said Gilman's conduct raises compelling issues about firms that match investors with experts who have information about subjects which can cause stock prices to rise or fall.
"If the allegations are true, it's reprehensible conduct for someone who has misused a position of trust," Gordon told Bloomberg
. "This is crookery of really the lowest possible ethical standards. It doesn't get much lower."Sources:http://www.bloomberg.comhttp://www.freep.comhttp://michigandaily.com
About the author:
Sherry Baker is a widely published writer whose work has appeared in Newsweek, Health, the Atlanta Journal and Constitution, Yoga Journal, Optometry, Atlanta, Arthritis Today, Natural Healing Newsletter, OMNI, UCLA's "Healthy Years" newsletter, Mount Sinai School of Medicine's "Focus on Health Aging" newsletter, the Cleveland Clinic's "Men's Health Advisor" newsletter and many others.
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