Memorial Sloan Kettering’s season of turmoil

Defining an Institution’s Role

Founded in 1884 as the New York Cancer Hospital, Memorial Sloan Kettering was the first hospital in the country devoted exclusively to treating cancer. Its benefactors have included some of the wealthiest families in America, from the Astors and Rockefellers in its early years to the Kochs today.

It now operates more than 120 research laboratories, employs more than 1,000 doctors, admits some 23,500 patients a year, operates one of the world’s largest clinical trial programs and had revenues of nearly $4.5 billion in 2017. It recently completed a $3.5 billion fundraising drive, and its charity ball remains a fixture on New York’s social calendar.

As a leading force in cancer research, the hospital has long grappled with striking a balance in its collaborations with drug companies. While it did business with industry during the tenure of Dr. Varmus, a former director of the National Institutes of Health, he and a top deputy, Robert E. Wittes, MD, did not consult for companies, own their stock or serve on their boards, according to several people who worked for Dr. Varmus while he was at the hospital from 2000 to 2010. Dr. Varmus and Dr. Wittes declined to comment.

But some on the hospital’s board wanted its chief executive to do more to encourage company-financed clinical trials and to bring discoveries to market. In an interview, John R. Gunn, the cancer center’s chief operating officer from 1987 to 2015, said board members felt gems of research were “lying fallow and nobody was kind of pushing it, to commercialize it.”

By the time Dr. Varmus left to direct the National Cancer Institute in 2010, Memorial Sloan Kettering’s board was looking for a leader who was as comfortable in a corporate boardroom as in the lab, according to several longtime current and former cancer center employees.

Dr. Thompson met that criteria. He headed the Abramson Cancer Center at the University of Pennsylvania, was the co-founder of a biotech startup, Agios, and served on the board of Merck.

His early tenure was marred by controversy. In 2011 and 2012, he was sued by his former employers, the Abramson center and the University of Pennsylvania, which accused him of walking off with valuable research and using it to start Agios. At the time, Dr. Thompson denied wrongdoing and the suits were later settled for an undisclosed sum.

In 2012, Dr. Thompson hired Dr. Baselga to be the top physician at Memorial Sloan Kettering. Dr. Baselga, who had made his name as a key investigator of the breast cancer drug Herceptin, was also seen as having bridged the worlds of research and industry. Dr. DeAngelis, the hospital’s acting physician-in-chief, said that under Dr. Baselga, clinical trials were approved more quickly, helping speed treatments to patients.

But several doctors who worked under Dr. Baselga said in interviews that he had an abrasive style and created a culture where ties to industry were not kept in check. Dr. Baselga has not responded to requests for comment.

In his years at Memorial Sloan Kettering, Dr. Baselga’s personal financial conflicts were handled differently from those of other doctors, according to Clifford A. Hudis, MD, who was chairman of the hospital’s conflict-of-interest advisory committee through early 2016, when he left to become chief executive of the American Society of Clinical Oncology.

Dr. Baselga’s conflicts were not overseen by Dr. Hudis’ committee, but by the audit committee of the hospital’s board of directors. “I was told this was pretty standard for the highest level executives,” Dr. Hudis said. “I didn’t understand why any clinician would have separate rules from any other.”

Mr. Morey said that the hospital is evaluating its process for reviewing conflicts of interest, but that executives like Dr. Baselga had their financial relationships overseen by the board “to protect faculty from being put in a position of having to review their supervisor’s potential conflicts.”

Dr. Baselga is not the only leading researcher to have maintained extensive ties to the drug and health care companies — as some also did under Dr. Varmus. Jedd Wolchok, MD, a noted pioneer in immunotherapy, has financial relationships with more than 30 companies, according to recent disclosures. Charles L. Sawyers, MD, another of the hospital’s biggest names, has founded several cancer startups, one of which Memorial Sloan Kettering has invested in, and serves on the board of the Swiss pharmaceutical giant Novartis.

Ethicists and health experts say having leaders and researchers at nonprofit hospitals sit on corporate boards is especially problematic. When they serve on the board of a publicly traded company, they have a legal duty to the corporation and its shareholders, which can clash with their duty to their patients and primary employers. Those who sit on boards are often paid hundreds of thousands of dollars a year.

“I don’t think you can serve two masters,” said Bernard Lo, MD, who led an influential Institute of Medicine panel in 2009 that investigated financial conflicts in medicine. “The whole reason for being in the cancer care business is that you’re trying to help people in need, and that’s not at all the company’s main purpose. It’s to generate profits on their products.”

A report in November in BioPharma Dive found that 12 of the 19 largest pharmaceutical and biotech companies had at least one board member who also worked at a nonprofit health care institution. A 2014 study in JAMA found that about 40 percent of the largest publicly traded drug companies had a leader of an academic medical center on their boards.

Robert Benezra, PhD, who heads a lab at Memorial Sloan Kettering that focuses on how tumors grow, is the president, chief executive officer and a board member of AngioGenex, a tiny, publicly traded biotech company that is developing drugs to treat cancer based on the discoveries made in his lab.

Though he takes no salary from AngioGenex, Benezra owns nearly 9 percent of the company he helped found through stock or options, setting him up for a lucrative payday if the company is acquired or its drugs come to market.

In 2017, Dr. Benezra wrote to AngioGenex shareholders that a recent policy and leadership change at the hospital “afforded me the freedom to assume a more active role in the company” and to recruit other Memorial Sloan Kettering scientists to work with the company.

Dr. Benezra said in a statement issued through the hospital, “While I do not work directly with patients, I hope that this important science can one day make an impact in the lives of cancer sufferers.”

Mr. Morey said Dr. Benezra spends just 30 hours a year on business related to the publicly traded company. “We’re talking about 45 minutes a week, which is less than what most people spend on Netflix in a night,” Mr. Morey said.

Dr. DeAngelis, the acting physician-in-chief, said the high number of Memorial Sloan Kettering leaders who serve on corporate boards is reflective of their stature. “Maybe we should turn this around and say, we have more people on corporate boards because people value the opinions from our faculty,” she said in an interview.