New Documents Raise Concerns About Potential Conflict of Interest of Former Drug Company Lobbyist Hired by Trump Administration

Washington, D.C. (July 11, 2018)—Today, Rep. Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Office of Management and Budget (OMB) Director Mick Mulvaney to request documents regarding OMB Associate Director of Health Programs Joseph Grogan's apparent conflict of interest in developing a payment model and cancer treatment for the drug company Novartis while his former employer, Gilead Sciences, Inc., was seeking to acquire a similar cancer treatment.

"Mr. Grogan's actions appear to run afoul of the Trump Administration's own ethics rules, and they raise serious concerns about whether President Trump's drug pricing policies are intended to benefit drug companies rather than American consumers," Cummings wrote.

Documents obtained through a Freedom of Information Act request indicate that Grogan, who previously lobbied for the drug company Gilead Sciences, Inc., was working on a demonstration project to develop a payment model for Novartis's CAR-T therapy while his former employer was seeking to acquire its own CAR-T therapy—without disclosing his apparent conflict of interest to OMB ethics officials.

Grogan did not alert ethics officials at OMB about his work on the Novartis project until the same day Gilead announced it had agreed to purchase Kite Pharmaceuticals. The following day, Grogan notified his supervisors of his recusal, claiming he had "no knowledge that such a purchase was a possibility," even though Gilead was actively pursuing the acquisition while Grogan was at the company, and the possibility of a deal had been publicly reported as early as 2016.

"The timing of Mr. Grogan's disclosures raises serious questions about his actions," Cummings wrote. "Mr. Grogan waited to disclose his potential conflict of interest until Gilead publicly announced the Kite purchase, even though Gilead had been actively pursuing the acquisition while Mr. Grogan was still at the company. In addition, Mr. Grogan's disclosure came one day before Novartis announced its new FDA approval and publicly praised the demonstration project."

Grogan's work on the Novartis project appears to have violated the Trump Administration's ethics pledge, which requires appointees to refrain from participating in: "any particular matter involving specific parties that is directly and substantially related to my former employer" or "any particular matter on which I lobbied within the 2 years before the date of my appointment" or "the specific issue area in which that particular matter falls."

Grogan was informed before he joined the Trump Administration that he would receive a "limited recusal" for his prior lobbying work and that OMB "may or may not seek a waiver" from the Administration's ethics rules. However, it does not appear that Mr. Grogan ever obtained a waiver to work on the Novartis demonstration project.

The demonstration project was reportedly canceled earlier this year over concerns that agency officials had been "unusually deferential" to Novartis in developing the payment model.

Cummings requested all documents or communications relating to the Novartis project or any other CAR-T therapy; all documents and communications between officials at OMB, Novartis, Gilead, or any other pharmaceutical companies; and all documents and communications between Grogan and OMB ethics officials.

Click here to read today's letter.