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Engineering a Controversy
by Jodi Compton
When Assistant U.S. Attorney Janet Newberg made her opening argument in the case against Dr. John Najarian, a celebrated transplant surgeon, on January 17, 1996, she moved quickly to divorce his medical reputation from the charges against him. The trial beginning that day in St. Paul's federal courthouse, Newberg told the jury, was not about Najarian's achievements as a doctor, but about "what went on after Dr. Najarian left the operating room." Neither, she said, would the trial make any judgment as to whether the anti-rejection serum Najarian developed was a good drug or a bad drug. But long before the jury acquitted Najarian five weeks later, it had become clear that much of the case was a courtroom battle to control how the jury viewed Najarian as a medical researcher and his drug, Minnesota Anti-Lymphocyte Globulin (ALG).
When Najarian arrived at the courthouse on January 16, 1995, the first day of his trial, he was facing a 21-count federal indictment. Ten counts were charges of embezzlement and related mail fraud. Five were tax evasion. Two alleged obstruction of justice -- that Najarian had tampered with the case against him. Only four of the 21 alleged medical fraud.
But those four counts were disproportionately important to the case. The foundation of the case against Najarian was the charge that for 21 years he and others conspired to sell the unlicensed drug ALG for profit, bringing millions of dollars into the University of Minnesota surgery department. Two other charges claimed he failed to report two serious reactions to ALG to the Food and Drug Administration as required by rules on clinical drug trials. A fourth count said that he lied to an FDA agent, saying that ALG-specific consent forms were used at Minnesota on every patient administered the drug (since the mid-80s, they had not been).
These charges were "the engine that has driven the case," as Najarian attorney John Lundquist put it. Had it not been for these suspicions of medical fraud, it seems unlikely federal investigators would ever have turned their attention to Najarian's use of University funds and his tax returns. But by January 1996, the investigation into Najarian's drug study had become a multifaceted criminal case that took three years to build, cost the surgeon his University position, and perhaps permanently removed from the market a drug that once had a marked effect on the field of transplantation.
For 25 years, Najarian was the chairman of the University of Minnesota's Department of Surgery. As a specialist in the field of organ transplantation, Najarian gained a reputation for handling the difficult cases other surgeons would have thought twice about taking. The first infant and the first diabetic to receive organ transplants were both Najarian's patients.
As a surgeon, a teacher and an administrator, Najarian's workload was immense. "He had more responsibilities than anyone I've ever seen," Pamela Johnson, his former secretary, said of him. He did transplants and general surgeries weekly. He made rounds with medical students and went to weekly conferences in which surgeons discussed complications and deaths in the cases they handled. He was the head of Department of Surgery Associates, the private-practice partnership of University surgeons. He was on the editorial boards of 15 medical publications. He also published journal articles, becoming the 14th most prolific scientific writer during the 1980s. And about 25 times a year, he traveled to speak as a visiting professor or guest lecturer at other universities or medical societies. In addition, Najarian was the principal investigator of the Minnesota ALG program.
The drug which would become known as Minnesota ALG had its roots in Northern California, where Najarian was born and schooled and began his medical career. After getting his M.D. at the University of California -- San Francisco, Najarian joined the surgery faculty there. As a specialist in transplantation, the surgeon began working on the most serious problem facing the fledgling field -- rejection.
Organ rejection is a natural, although counterproductive, reaction on the part of the body's adaptive immune system. The body identifies some cells as abnormal -- cells infected with a virus, or tumor cells. Production of white blood cells called lymphocytes is stepped up in response. These cells attach to and destroy the infected cell or tumor. To the immune system, however, a much-needed transplanted organ is indistinguishable from other foreign cells and draws the same response. Tissue-typing, or matching donors and recipients as closely as possible, usually within families, helps to lower the risk of rejection. Nonetheless, what Najarian and other transplant specialists were working on in the late 1960s was a way to suppress the immune system's natural response to a foreign, transplanted organ.
Najarian began by injecting human lymphocytes into rabbits. He bled the rabbits and treated dogs with the blood product. Since large amounts of blood were required to treat one dog, Najarian turned to bleeding larger animals -- undesirable horses at Golden Gate Fields, a local racetrack. In 1967, Najarian came to the University of Minnesota, where he further developed equine and caprine (goat-derived) ALG.
In 1971, after some preliminary testing, a subordinate of Najarian's applied for and got an Investigational New Drug (IND) license for the serum. Under FDA rules for investigational drugs, the University could use ALG on their transplant patients and ship it to other hospitals chosen as participants in the ALG study. FDA rules also stated that the drug had to be used as part of a study. Data on its use was to be collected from all doctors involved. Furthermore, an investigational drug is not to be sold, even at production cost. Whether the FDA ever made it specifically clear to Najarian that ALG was not to be sold, even at cost, would become one of the linchpins of his defense strategy at trial.
That trial, however, was years down the road. In the interim years, the ALG program enjoyed great success. In the early 1970s, after the advent of Minnesota ALG, the University Hospital had 15 percent better results with organ transplants than other hospitals nationwide. In time, the drug made at the University came to be used at 175 transplant centers across the country. The credit, said Richard Simmons, now chairman of transplantation at the University of Pittsburgh, was all Najarian's. "He set the course," Simmons said. "He set the ship on course."
FDA officials would later testify that during the 21-year period that ALG was manufactured, shipped and sold out of the University, the agency had some concerns over how the program was run and about whether the drug was unlawfully being sold. Correspondence between the program and the agency bears this out. Nonetheless, aside from periodic letters and site visits, no regulatory action was taken until 1988.
That year the FDA specifically forbade charging for ALG until an explanation was made and permission for sale-at-cost was granted by the agency. In early 1989, Najarian and Richard Condie, the immunologist who ran the program's day-to-day operations, and several other ALG employees met with the FDA and got permission to charge at cost for the serum. The reason the FDA made the exception to their rules, their documents indicate, was that Najarian had told them the University was no pharmaceutical company, and without cost recovery would be unable to make the drug that was in such high demand nationwide. In addition, FDA agents believed that Najarian and Condie would soon apply for a license to sell the drug commercially. The manufacture and sale of ALG continued.
The demise of the Minnesota ALG program and the beginning of Najarian's legal troubles started at a Los Angeles children's hospital in 1991. The hospital's Institutional Review Board discovered that one of its clinicians had administered ALG to a child without first having the parents sign a consent form identifying the drug as investigational. When this came to the attention of the FDA, the agency began an inspection into the ALG program. It was not the first inspection, but it was probably the most thorough, and certainly the last.
What they found, testified FDA consumer safety officer Patricia Holobaugh later, was that the ALG study wasn't run like a study at all. Minnesota was not getting all case histories and study protocols from participating transplant centers. The ALG study, Holobaugh said, "had no statistical endpoint determined in advance. They just kept treating people and treating people," she said.
The FDA shut down the Minnesota program in August 1992. Afterward, events suggest, Najarian genuinely wanted to straighten out the ALG program -- to get it running again with the FDA's blessing, and then license the drug for commercial sale. To this end, he hired a full-time "regulatory affairs specialist" to deal with the FDA, relegating Condie to strictly dealing with the scientific/research aspects of the program. But Najarian's problems were about to worsen, not improve. The chain of events which would eventually bring Najarian to the St. Paul courthouse was already in motion. Late in 1992, a federal grand jury began issuing subpoenas for records relating to ALG. In early 1993, under fire from the University, Najarian stepped down as head of the surgery department. In February 1995, when the University initiated tenure-removal proceedings against Najarian, he gave up his professorship as well. During this time, the grand jury continued to subpoena documents and call University and ALG-program witnesses as part of its ongoing investigation.
Two months after giving up his teaching position, Najarian was indicted on the counts of fraud, tax evasion, and embezzlement. Condie was indicted the same day on four related charges. Although Condie initially pleaded innocent, like Najarian, he changed his plea to guilty four months later. But Najarian called the federal case a witch hunt, maintained his innocence, and committed to a trial.
That trial was initially expected to last nearly three months. Instead, it lasted five weeks. And if it had comprised only the charges of financial illegalities, Najarian attorney Peter Thompson said, testimony would have lasted a mere four days.
Frequent witnesses in the prosecution's four-week case were medical professionals, doctors and nurses who came from different parts of the country to establish for the jury that nine transplant patients had ostensibly died after receiving ALG, that these deaths were reported to the ALG program, and that the Minnesota ALG program never in turn reported them to the FDA. The unreported deaths were said to be part of the conspiracy to defraud the government.
At regular intervals throughout the trial, the jury heard harrowing stories like that brought by Diane Bulman, a former University Hospital nurse who witnessed the 1983 death of Jay Brinkman. Brinkman, a diabetic, came to the University for a pancreas transplant. After the operation, Bulman testified, Brinkman was stable, alert, oriented. Then he began to receive his infusion of ALG, and within 15 minutes things changed.
Brinkman became short of breath, a condition which quickly worsened to serious difficulty in breathing. As Bulman ran to the door to call her charge nurse and the physicians on duty, Brinkman began foaming at the mouth, fighting for air. The doctors' resuscitation efforts were futile, and shortly thereafter later Brinkman was dead, Bulman testified. Thirteen years later, the nurse still sounded shaken by the incident.
Brinkman's death was the most directly linked to Najarian's drug -- on his death certificate, anaphylactic shock due to ALG is listed as the cause of death. And the incident, it was correctly pointed out, was not reported to the FDA. But the story did more than reveal an unreported death. It made the violations of FDA rules not just an issue of paperwork getting done, but of patient safety. The inference jurors could draw from the patient-death stories was that patient safety was secondary to the ALG program staying open and making millions of dollars for the surgery department. While Najarian's subordinate Condie would later testify that reporting the deaths was his responsibility, not Najarian's, the prosecution pointed out repeatedly that Najarian was the principal investigator in the study -- Condie's boss.
Najarian attorney Peter Thompson readily admitted that ALG had allergic properties and could cause serious reactions in patients. But he was quick to dispute that nine patient deaths were a significant number. He estimated that 40,000 patients were treated with the drug. Even had there been 90 or 900 deaths linked to ALG out of those 40,000 patients, Thompson said, the number still would have fallen into the parameters of what the FDA calls safe.
It should be pointed out that when Condie took the stand, he estimated that about 20 deaths, not nine, went unreported. And an FDA spokesman says that the 40,000 cannot be verified -- lax tracking of patient data makes it impossible to know exactly how many people were treated with ALG. Still, there is no doubt that ALG was trusted and valued by transplant surgeons across the nation. That fact was central to Najarian's defense. His attorneys argued that ALG was not treated as an experimental drug. If patient data was not kept track of, it was because ALG was so safe it was investigational in name only. It was a point Najarian's lawyers didn't have to wait to call their own witnesses to prove.
Under the cross-examination of John Lundquist, the defense attorney who handled the medical testimony, prosecution witnesses who had just told the jury that they believed ALG had caused the death of a patient would attest to the drug's efficacy. Asked whether he had known ALG was experimental when he administered it to a patient, one Michigan doctor said there was some "confusion" over whether ALG was investigational or not. The feeling at his hospital, he said, was that the FDA had given the unlicensed ALG a "special status -- this was not to be treated like another investigational drug." Asked to clarify, he said, "It was word-of-mouth in the transplant community, that's the best way I can explain it."
Apparently, the confusion over ALG's unlicensed status began at home, the University of Minnesota Hospital. One University kidney specialist testified that she did not know that ALG was investigational until she read it in the Star Tribune (which did a series of articles on the ALG program in 1992).
In some cases, Lundquist was also able to weaken the assertion that an unreported death was in fact due to ALG. In some instances, death certificates or autopsy reports made no mention of ALG. Sometimes the link was as tenuous as "Suspect drug -- Minnesota ALG" on a hospital adverse drug-reaction report. At times the witness would admit to Lundquist that while he or she suspected ALG to be the cause of death, a colleague or superior who had treated the same patient did not agree.
"Did your hospital continue to use ALG after the patient death?" was Lundquist's routine question to these witnesses. In every case the answer was yes, until 1992, when the FDA shut the program down. "Was it a good drug?" he'd ask each doctor. Again, the answer would be yes. "It was a wonderful drug," one University of Texas doctor responded, exceeding Lundquist's question. One regular courtroom spectator, after hearing a Lundquist cross-examination, observed, "What they [the prosecution] really need is someone to get up there and say 'Boy, we'll never use that stuff again!'" That never happened.
In light of such overwhelming evidence that ALG was safe and effective, FDA-mandated paperwork was a triviality, Najarian's defense implied. If Najarian was too busy practicing medicine to pay strict attention to the rules, his patients were the better and not the worse for it.
So certain were Najarian's lawyers that the jury would agree with this sentiment that Thompson, in his opening statement, brought up a violation of FDA policy that Najarian had committed that was not even related to a charge in his indictment. In doing a transplant on an 8-month-old girl, he said, Najarian broke the rules by administering ALG to her.
It was this same case-- one of the unreported adverse reactions -- that perhaps proved the most Pyrrhic victory for the prosecution. Dr. Mark Saxton, a University Hospital resident, took the stand to recount the case of the baby who received a kidney in 1990. Saxton testified that Najarian's signature appeared on a diagnostic summary that included the fact that the baby had respiratory distress after receiving equine ALG.
Saxton's testimony might have demonstrated to the jury that Najarian himself knew about an ALG reaction that was never reported to the FDA. But what they also heard was that Najarian saved the life of an 8-month-old, the daughter of a 16-year-old mother whose grandmother had donated the kidney for the transplant, and who, after being switched to caprine ALG, recovered. Particularly attentive jurors might have remembered what Thompson said about the girl on the trial's first day. "She is fine. She is six years old. She is healthy. She lives out in Washington state. They say that is a crime Dr. Najarian committed."
It is not hard to guess what the twelve Minnesotans on the jury would have done with such information, but it never got that far. On Monday, Feb. 12, Najarian's lawyers argued for the dismissal of seven counts against Najarian, including the four counts of medical misconduct. They claimed that the prosecution had not proved its case on those charges even enough to let the jury decide them.
For defense attorneys to file such motions is standard. The response of U.S. District Judge Richard Kyle was not. The following day he ruled that on six of the seven counts, including the four ALG-related counts, Najarian's attorneys were correct. In what is called a directed verdict, Kyle acquitted Najarian on those counts himself.
The trial was over a week later. Suddenly facing only charges of financial illegalities, Najarian was the defense's primary witness.
Largely through the testimony of an IRS investigator, the prosecution had laid out a clear pattern of double-billing on the surgeon's part, amounting to about $76,000, which stopped when the grand jury investigation began. They also made a strong case that Najarian had knowingly deposited $42,000 of other University funds into his private bank account and deliberately filed false tax returns.
On the stand, Najarian told the jury that while he did double-bill the University for travel, it was only to regain money he lost on those same business travels. Among the expenses the University's travel policy wouldn't reimburse, Najarian said, were business dinners and entertainment expenses he incurred recruiting students and doctors to the University. All the money he spent, the surgeon said, benefited the University. And if he double-billed to make up his losses, it always essentially came out even. "It was a wash," he told the jury.
The tax evasion and the misappropriation of other money meant for the University? Bad bookkeeping and carelessness, Najarian maintained: details that slipped into the cracks of an incredibly busy life. He pointed out that in the end he repaid all the money he owed, "when it was brought to my attention."
To the jury, the explanations sufficed. One juror said Najarian made "some errors in judgment and some errors of omission," but overall the jury was ready to let bygones be bygones. On the morning of Feb. 21, they re-enter
After the jury left for a celebratory lunch at O.J.'s in downtown St. Paul, U.S. Attorney David Lillehaug, who oversaw the case's prosecution, conducted a press conference/postmortem on the case in the law library of the U.S. Attorney's office. Lillehaug's comments that morning recalled Newberg's early statement that the case was about "what happened after Najarian left the operating room." He indicated that despite the prosecutors' best efforts to drive home their theme that "no one is above the law," jurors may not have been able to fully separate the operating room from the courtroom. "We knew it was going to be tough going after the doctor in the white coat," Lillehaug said. "John Najarian was the most well-liked defendant in the history of Minnesota."
The jurors were not the only ones who seemed to have great respect for Najarian's medical reputation. After the jury returned its verdict, Judge Kyle chided the prosecutors for raising violations of FDA rules -- not laws in themselves -- to federal crimes. In doing so, he made clear his admiration for the ALG program. "We had a program here in Minnesota which for all its problems...saved a lot of lives," Kyle told the attorneys before dismissing them.
The verdict leaves a few unresolved questions. Minnesota ALG, painted during the trial as a drug in demand nationwide until the shutdown of the program, is still not on the market. The University, which owns the rights to the technology, has attempted without success to sell it to a pharmaceutical company. While two very similar products have replaced ALG in the nation's hospitals, both Najarian and Dr. David Sutherland, the current head of the University's transplantation program, have indicated that they are not superior products to ALG, having equal allergic properties. As the trial drew to a close in mid-February, head University attorney Mark Rotenberg confirmed that the University is currently in negotiations with a potential buyer for the ALG technologies.
As for Najarian, while he has been acquitted of all criminal charges, he has questioned whether his reputation will ever again be what it was before his indictment. Shortly after the verdict, he spoke bitterly of the University administration, which he said had "convicted me at every turn." And yet throughout his long legal battle he continued to practice through the University Hospital and has no plans to leave. In fact, it was to his University office that he returned the same day he was acquitted. Of all the things which have been questioned about Dr. John Najarian, his work ethic was never one of them. Only hours after the verdict, trailed by reporters and TV crews, Najarian put on his white coat and went back to work.
