“When the
Danish drugmaker Novo Nordisk wanted to test whether the main ingredient in
Ozempic, its wildly popular weight-loss and diabetes drug, could also treat
liver disease, it first needed approval from an ethics panel to ensure the
safety of trial volunteers in the United States.
Such panels,
called institutional review boards, have the power to reject drug trials or
order modifications if participants face unreasonable risks. They are supposed
to be independent watchdogs — counterweights to Big Pharma and overzealous
researchers.
Yet Novo
didn’t have to venture far to hire an ethics panel for its liver-disease trial
in May 2024: It chose WCG Clinical, a review board partly owned by its own
corporate parent, The New York Times found.
Novo
declines to discuss the review boards it selects; their names are scrubbed from
a federal online database, because the information is deemed proprietary. But
documents obtained by The Times reveal that the liver study was hardly an
outlier: In the six years since its parent company invested in the
private-equity-controlled panel, Novo has selected WCG to review at least 46
trials, a sharp increase over previous years.
Most of those trials grew out of Novo’s efforts to find new
uses — and markets — for semaglutide, the primary ingredient in Ozempic, Wegovy
and Rybelsus, the company’s top-selling drugs for diabetes or obesity.
What happened during those reviews remains confidential,
hidden behind the ethics panel’s closed doors. But the financial ties between
the drugmaker and its ethics panel highlight how private-equity investors are
transforming this obscure but vital corner of American health care — and the
questions that raises about the panels’ independence and rigor.
The first
ethics panels, created in response to testing scandals in the 1960s and ’70s,
were nonprofits based at universities and hospitals. But in recent years,
private-equity investors have increasingly reshaped them as for-profit
endeavors.
For drug companies racing to develop the next blockbuster,
private equity promised quicker, more efficient reviews. At the same time,
private-equity ownership has driven the boards’ expansion far beyond their
original watchdog role.
Both WCG and
its chief competitor, the private-equity-controlled Advarra, have close
corporate relationships with drugmakers. And both have become part of
multipronged enterprises selling pharmaceutical companies a wide range of
drug-testing services — blurring the line between the reviewer and the
reviewed, introducing potential conflicts of interest that threaten the review
boards’ mission, a Times investigation has found.
Any weakening of the ethics panels’ oversight, industry
critics say, is particularly dangerous today, amid widespread mistrust of
scientific research and the Trump administration’s slashing of the government’s
foremost pharmaceutical gatekeeper, the Food and Drug Administration.
“It looks like there is not much in place that will robustly
protect people who want to participate in research,” said Jill A. Fisher, a
professor at the University of North Carolina’s Center for Bioethics. The
result, she and other experts fear, will be less protection for trial
participants, and for the public at large.
In interviews, several prominent bioethicists expressed
concern upon learning that WCG had approved trials for one of its owners, a
relationship not previously reported. “That sounds like a grave conflict of
interest,” said Sarah Babb, a Boston College professor who has studied the
review boards’ evolution.
Today, more
than half of all U.S. drug trials are reviewed by for-profit panels. WCG and
Advarra accounted for all but a small fraction of those, according to a 2023
report by the Government Accountability Office.
Private
equity’s growing domination of the panels is just one facet of its powerful
role in health care. With private-equity backing, WCG and Advarra have bought
up competitors, as well as companies that provide an array of services to
drugmakers running clinical trials — all with little government oversight or
transparency, according to internal corporate records; government reports; and
interviews with bioethicists, former review board employees and clinical trial
experts.
WCG now
receives more revenue from helping drug companies conduct trials — including
designing the trials and finding volunteers — than from policing them on behalf
of those patients, records show.
WCG declined to be interviewed or answer emailed questions.
In a statement, WCG’s chief marketing officer, Carmin Gade, said company policy
forbade commenting on “client-related matters or specifics of their clinical
trials,” as well as internal company matters. But in a 2021 Securities and
Exchange Commission filing, the company denied having a conflict of interest,
asserting that its commercial interests were separate from its ethics reviews.
Advarra, too, declined to be interviewed, but said in a
statement that it “maintains strong safeguards and internal policies to ensure
the independence of its Institutional Review Board.” The company also said it
had recommended changes to a vast majority of the protocols it reviewed.
The pressure for quicker reviews came not just from
drugmakers but from patient-advocacy groups seeking faster approvals for new
treatments. But the promise of speed brought certain risks. Several former
Advarra employees said the company had imposed daily quotas on reviewing
informed-consent forms for trial volunteers.
“If you are just focused on turnaround time, that doesn’t
tell you really anything about quality,” said Holly Fernandez Lynch, a lawyer
and bioethicist at the University of Pennsylvania. She added: “It inhibits
people from saying, ‘Wait, we need to pause on this. Is this the right thing to
do?’”
Waving through a poorly designed testing protocol could lead
to patients taking a drug with unexplored side effects. Yet an ethics panel is
largely a black box, offering no effective way to judge the quality of
individual reviews — or whether they might have been compromised by intertwined
corporate interests.
What’s more, federal oversight of institutional review
boards, or I.R.B.s, is piecemeal and limited, with little to no assessment of
whether they actually conduct rigorous reviews. The industry instead has opted
for self-regulation.
“Our system is based on the assumption that people are going
to follow the rules,” Ms. Lynch said. She added: “There’s nothing in the
regulations that says you can’t have a quota, for example. There’s nothing in
the regulations that says, here’s what high-quality deliberations look like.”
Federal watchdogs have repeatedly called for reform,
emphasizing the importance of independence. “We warned that the effectiveness
of these boards was in jeopardy,” the Department of Health and Human Services’
inspector general wrote in 2000. “Few of our recommended reforms have been
enacted.”
Two decades later, researchers wrote in the Annals of
Internal Medicine that the private-equity model was “particularly susceptible
to approaches that could undercut the ethical mission of I.R.B.s.”
Birth of an Industry
The 1966 report in The New England Journal of Medicine
shocked the scientific world.
Participants in 22 clinical trials had been subjected to
sometimes lethal tests without their consent. Live cancer cells had been
injected into patients. Experiments had been performed on babies less than 48
hours old.
These disclosures began a reckoning over the ethics of
medical research that intensified in 1972 after news of the Tuskegee study, in
which researchers followed Black men who had syphilis without offering
penicillin to treat it. Two years later, Congress passed the National Research
Act, mandating that I.R.B.s be used in federally funded trials.
The panels
were to be independent, with at least five members, a mix of scientists and
nonscientists. They would review the trial protocols, assessing whether the
drug’s potential benefits outweighed any reasonable risks to participants. And
they would ensure that the consent forms presented to volunteers clearly stated
the risks. The F.D.A. would then examine trial results and determine whether
the drug could be marketed.
Ethical
review panels were incubated at universities, hospitals and medical schools,
where academic volunteers were pressed into service with little incentive to
review studies quickly. And at first, those academic settings remained the
primary venue.
But the seeds of a new system were planted in Olympia,
Wash., where Dr. Angela Bowen, an endocrinologist and researcher, formed the
first independent ethics panel, Western Institutional Review Board. She set up
a fee-for-service model, using local doctors, lawyers and other experts to
review human research.
As the pharmaceutical industry expanded, with new
discoveries and increased competition, drugmakers sought faster turnaround
times. Commercial ethics panels were ready to oblige.
As for-profit review boards grew, so did concerns that they
might be inclined to sacrifice patient protection for greater profits. Those
concerns came to a head in a scandal over an experimental antibiotic, Ketek.
The F.D.A. approved Ketek in 2004, and within two years,
reports of liver failure and deaths linked to the drug began rolling in. Only
then did it emerge that F.D.A. approval had come despite reports of fraudulent
research and concerns within the agency over the drug’s safety.
Congress investigated, and it wasn’t only the F.D.A. that
came under criticism. There was also a for-profit ethics panel, Copernicus,
which would later become part of WCG.
At a 2008 hearing, Copernicus’s chief executive, Sharon Hill
Price, acknowledged that the company had failed to inform the F.D.A. after
receiving 83 notices of testing protocol violations. “So protocol violations,
no matter the number, wasn’t alarming to your organization, to Copernicus?”
asked Representative Bart Stupak, Democrat of Michigan.
“Not at the time,” Ms. Price responded. “No.”
(Ketek’s manufacturer, Sanofi, ceased production in 2016.)
Dr. David B. Ross, who evaluated new drugs for the F.D.A.,
offered a harsh assessment of ethics reviews. “The I.R.B. system nationally is
broken,” he testified.
Private Equity Moves In
As the oldest and biggest independent review board, Western
attracted attention from private-equity investors expanding their health care
footprint. In 2007, Boston Ventures bought Dr. Bowen’s company and her
reputation.
Boston Ventures quickly recruited as chief executive Dr.
Stephen Rosenfeld, a veteran of the National Institutes of Health.
“I really thought we could have made it into something
great,” he said.
The next year, Dr. John Ennever, former medical director in
the clinical trials office at Columbia University’s medical center, signed on
as vice president of medical affairs.
Boston Ventures, as befits a private-equity firm, wanted
Western to grow, and that brought a cultural change, the two men recalled.
Dr. Rosenfeld said he was asked to do marketing and leave
some operational decisions to others. That was inconsistent, he said, with his
responsibilities as chief executive. “There was a tension between how a company
can run when it is owned by someone who founds it to serve a purpose, versus
when it’s owned by private equity,” he said. After two years, he was asked to
leave.
When another private-equity firm, Arsenal Partners, bought
Western in 2012, “the first thing they did is they laid off 30 percent of the
work force,” Dr. Ennever said.
They also replaced outside review-panel members with Western
employees, according to Dr. Ennever. With private equity, he added, “anything
you can do to improve the bottom line, you do it, and I think that leads to
less rigorous reviews.” Dr. Ennever left, too.
Boston Ventures and Arsenal declined to comment.
That same year, Arsenal bought Copernicus, which had
weathered the Ketek controversy, and merged it with Western to form the
Western-Copernicus Group — WCG.
WCG quickly
began a buying spree, acquiring 31 companies that recruit research subjects;
plan research studies; train trial investigators; and provide management
consulting, data monitoring and medical imaging. WCG also bought competing
review boards.
WCG frequently describes itself as a “servant to mankind.”
In promotional materials, it pitches the virtues of working both sides of the
street: “Strategically positioned at the very center of the clinical trial
ecosystem, we act as the key point of connectivity among our various clients.”
(Conflicts
of interest also exist in academe, where universities sometimes profit from
drugs developed by faculty members.)
WCG doesn’t identify its clients, but says it uses
“appropriate disclosure” to manage potential conflicts.
But in its 2021 S.E.C. filing, WCG cautioned that others
could see it differently: “Governmental or regulatory authorities may assert
that the combination of these services for a client compromises the integrity
of the I.R.B. decisions or the data or analyses generated during any trials.”
WCG, Novo and Ozempic
For decades, Novo Nordisk was known for making insulin to
treat diabetes. Then, in the 2010s, it developed semaglutide, first sold as
Ozempic, an injectable drug that causes the body to produce its own insulin
while also satiating hunger.
Ozempic went on sale in late 2017 and became a cultural
touchstone, promoted as a life-changing wonder drug by celebrities, influencers
and a bountiful advertising budget that, until recently, made Novo Europe’s
most profitable company. Novo later used semaglutide to make Wegovy,
specifically targeting obesity, and Rybelsus, a diabetes pill.
In late 2019, Novo’s parent, Novo Holdings, joined Arsenal
and another private-equity firm in recapitalizing WCG in advance of a public
stock offering. (The offering never happened.) Two Novo Holdings officials
would take seats on WCG’s board; WCG’s former chief executive would join Novo’s
advisory board.
Between 2012, when WCG was incorporated, and late 2019, it was
tapped 17 times to review interventional drug trials for Novo, according to
records obtained through a Freedom of Information request. That figure surged
to 46 trials in the years since the drugmaker’s parent invested in WCG.
The trials examined semaglutide’s effect on obesity,
diabetes, and certain types of liver and kidney disease; it was effective in
treating them, and in lowering the risk of cardiovascular disease.
Evaluating
these testing protocols was no small matter. Laboratory rats developed cancer
after taking it, and even though the F.D.A. approved the drug, it must carry a
boxed warning, indicating the highest level of risk. No evidence has emerged
linking the drug to cancer in humans.
More than
2,300 federal lawsuits accuse Novo Nordisk of failing to properly alert
patients to possible harm from semaglutide, including intestinal paralysis,
gallbladder injury and bowel blockages. “We have significant questions on what
was evaluated during the course of clinical trials,” said Jonathan Orent, co-lead
counsel on those lawsuits.
The drugmaker has denied the allegations.
Novo Nordisk declined to be interviewed or answer written
questions for this article. But in a statement, a spokeswoman, Liz Skrbkova,
said, “We expect all our partners, including WCG Clinical, to comply with
strict regulatory and ethical standards, in line with our unwavering commitment
to patient safety, data integrity and transparency.”
Advarra also underwent a transformation, advertising that it
could provide “an end-to-end solution for managing all aspects of a clinical
trial.”
Watching this was Blackstone, the world’s biggest
private-equity firm. In 2018, it bought Clarus, a company that funded trials of
experimental drugs.
Four years
later, Blackstone and another fund announced they had made “a majority
investment” in Advarra, laying the groundwork for potential conflicts of
interest like those at WCG. The Times’s analysis of federal data found that
Advarra was hired to review the trials of at least 10 drugs in Blackstone’s
Clarus portfolio. (In a statement, Blackstone said it did not make operational
decisions for those drug companies. Separately, Advarra said Blackstone “has
never attempted to influence the review of a clinical trial.”)
Inside the I.R.B.s
Speed is the
reason drug companies have turned increasingly to commercial ethics panels.
Instead of waiting a month or more for a university or hospital to render an
assessment, a commercial panel might take a week. With private equity, the
imperatives of speed only intensified.
“And they very, very rarely ask questions,” said Lisa Shea,
a former manager at a company that provides research help for pharmaceutical
and medical-device companies.
Ms. Shea said she had worked on 80 to 100 industry trials.
“Protocols are not written perfectly, even if it’s the final protocol.”
Nor are all consent forms — a vital element of protocol
reviews. “They too often appear to be designed more for protecting the legal
interests of institutions conducting research,” three researchers wrote in 2017
in The New England Journal of Medicine.
In interviews, four former Advarra employees spoke of
pressure to process consent forms faster. Three told of quotas for processing
those forms.
Falling short means “you get a warning,” said Alana Levy, a
former consent form development editor. She added, “You could get a bonus if
you did over a certain number.”
Another former consent form editor described a dashboard
that measured the amount of time workers took to edit each form.
In its statement, Advarra said it did not impose quotas or
give bonuses based on volume or speed.
A Times investigation last year showed the consequences of
one trial approved by Advarra. Among the trial volunteers were 274 whom genetic
tests had shown to be predisposed to brain injuries if they took the drug, but
the protocol stipulated that the patients not learn those test results. Two
high-risk volunteers died, and more than 100 others suffered brain bleeding or
swelling.
Advarra said in a statement that ethics panels outside the
United States had also approved the protocol.
At WCG, the
pressure to maximize profits contributed to internal discord, according to
former employees. Testifying in 2024 in an employment dispute, a former WCG
vice president, Michael Demo, said one executive took disfavored employees to
the back of a local Cracker Barrel restaurant to “scream at an appropriate
volume.”
In the same lawsuit, another former employee, Ericka
Atkinson, said “the morale was terrible.” To calm the waters, she said, WCG
called a senior leadership meeting in 2024 in Princeton, N.J., assisted by a
consulting group led by the retired Army general Stanley A. McChrystal.
Restoring order at WCG proved elusive. Ms. Atkinson, who
attended the session, said it devolved into small groups attacking one another.
“The meeting in and of itself was toxic,” she said. She, too, left WCG.” [1]
1. How Private Equity Oversees the Ethics of Drug Research.
Bogdanich, Walt; Kessler, Carson; Singer-Vine, Jeremy. New York Times (Online)
New York Times Company. Oct 4, 2025.
