Health Journals May Force Reporting of Hedge Fund Ties

The New England Journal of Medicine and 13 other research publications may force scientists who submit studies to disclose payments from hedge funds in the wake of insider-trading probes involving a drugmaker and technology companies.

Editors for the New England Journal, the Journal of the American Medical Association and 12 other periodicals will discuss during their annual meeting in June whether researchers must reveal investment-industry ties, said Karen Buckley, a New England Journal spokeswoman. Existing rules on payments by drugmakers and device companies don’t cover arrangements with investors, Buckley said in a phone interview.

U.S. prosecutors in November said Yves Benhamou, a French researcher advising Human Genome Sciences Inc., leaked information about a drug study to a hedge-fund invested in the company. The case has focused new attention on doctors’ consulting work, said Jerome Kassirer, who was editor-in-chief of the New England Journal from 1991 to 1999.

“We have no idea what the doctors’ connections are, how much they know about new research, how much they’re talking to their friends about what the most promising drugs are,” said Kassirer, a professor at Tufts University Medical School in Boston, in a telephone interview today.

The journals publish peer-reviewed articles by scientists outlining their study results. They are followed closely by doctors and investors alike seeking insight into the value of medicines, devices and procedures, and their reports can move company stocks, Kassirer said.

Shares Jump

For example, Cepheid Inc., a maker of medical laboratory tests, jumped 7.2 percent in Nasdaq Stock Market trading on Sept. 1, after a study in The New England Journal of Medicine found a test developed by the Sunnyvale, California-based company could cut the time for diagnosing tuberculosis.

The International Committee of Medical Journal Editors meets in June and the question of whether to expand disclosure rules for researchers whose work is published in the journals is “on the agenda,” Buckley said.

Along with the Boston-based New England Journal, the panel includes editors from The Lancet of London and the Chicago-based Journal of the American Medical Association, also known as JAMA. Those three publications are the most influential, as measured by the number of times their articles are referenced in other publications. The rankings are compiled by Journal Citation Reports, a unit of Thomson Reuters Corp.

Discussion Needed

Jeffrey Drazen, the New England Journal’s current editor- in-chief and a member of the committee, declined to discuss the issue because it’s “premature” to say what the group will do, Buckley said. While there’s no guarantee the editors will expand disclosure, Drazen said he felt “this is an issue that’s been in the news” and merited discussion, according to Buckley.

While the journals’ disclosure form required authors to reveal any financial activities that may be “broadly relevant” to research, instructions and editorials that accompanied the form’s release referred specifically to company connections.

The New England Journal’s editors recognize that scientists can play a legitimate role in helping the financial community, Buckley said. Investors “couldn’t operate without getting the professional opinion of someone in the medical community,” she said.

JAMA Comment

Catherine DeAngelis, JAMA’s editor-in-chief, declined to comment, said a spokeswoman, Jann Ingmire. JAMA “believes it has been quite clear in what it requires of authors,” Ingmire said in a telephone interview.

Benhamou, the adviser to Rockville, Maryland-based Human Genome Sciences, was charged Nov. 2 with allegedly leaking information to a portfolio manager at FrontPoint Partners LLC, a Greenwich, Connecticut-based hedge fund.

In separate cases, U.S. prosecutors last year filed insider-trading charges against employees at hedge funds, technology companies and expert-network firms that allegedly connected the two groups in cases involving secrets at Apple Inc., Dell Inc., Advanced Micro Devices Inc. and Taiwan Semiconductor Manufacturing Co.

The Human Genome case is another example of the “ubiquitous” ties between doctors and those who have a financial interest in their research, said Marcia Angell, a former New England Journal editor-in-chief who now teaches ethics at Harvard Medical School in Boston.

The journals should expand disclosures to cover the investment industry, she said.

“Conflicts of interest have real consequences and whenever there is a financial benefit to distorting the results of your work in some way, then that should either be prohibited or at the very least disclosed more broadly,” she said by telephone.

To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net

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