PADS Co-Chair Fails to Declare Ties to Issio Solutions, Inc., Calls the Hospital Marketplace “Corrupt”
Stanford Professor of Anesthesia John G. Brock-Utne, M.D., Ph.D. served on the board of directors of Issio Solutions, Inc., a private medical software company founded and run by his son. But in a December article that ran in Anesthesiology News, Clinical Oncology News and The Bulletin, Dr. Brock-Utne lamented how some companies are “locked out of the hospital marketplace,” yet failed to declare that potential conflict.
Since October 2018, we’ve been looking into an organization called Physicians Against Drug Shortages (PADS) and its media campaign against group purchasing organizations (GPOs) that negotiate bulk prices of drugs and medical supplies for hospitals and other healthcare providers. In a series of opinion pieces and media interviews, financial ties between PADS co-chairs and certain drug and medical device companies have gone unmentioned. John Brock-Utne, MD, is a co-chair of PADS.
Issio Solutions was founded in Lafayette, California, in 2011 by Dr. Arne Brock-Utne, who is John’s son and also an anesthesiologist. Issio offers health IT and consulting services, including a cloud-based staff communications and scheduling tool for surgical centers. According to an informed source, the company received $5.5 million in three tranches of venture capital funding from 2012 to 2015. In the 2012 funding tranche, 1,110,000 shares were authorized at a conversion price of $1, according to PitchBook. An additional unknown number of shares were authorized in 2014 and 2015. The company’s valuation in 2015 was estimated to be $11.5 million.
For-profit company directors receive compensation in cash, company stock, stock options or a combination. John Brock-Utne was one of two original members of Issio Solution’s board of directors, in addition to his son Arne. At some point, the senior Brock-Utne left Issio’s board. What Dr. Brock Utne received for his service as a board member is unknown.
New Questions for the Doctor
These apparent facts spark new questions that we emailed to John Brock-Utne. We asked:
- When did you step down from the Issio Solutions board?
- Have you attended any Issio-sponsored events after leaving the board?
- Do you still hold an equity stake in the firm?
- Is Issio Solutions one of the companies that you argue has been “locked out of the marketplace?”
We also sent a version of these questions to John’s son, Arne Brock-Utne but have yet to receive a reply from either of them.
Spectros Board Membership
In addition, Dr. John E. Brock-Utne has also served on the board of directors of privately held Spectros Corporation. Founded in 1995 in Portola Valley, California, the medical device company manufactures molecular sensing and diagnostic tools. In a company overview, Dr. Brock-Utne is listed as one of three members of the board of directors.
We called Spectros and asked if Dr. Brock-Utne was still on its board and was told he no longer was. What cash, company stock or stock options he received is unknown.
These latest revelations add to previous questions about Dr. John Brock-Utne’s apparent financial conflicts. According to the Centers for Medicare and Medicaid Services Open Payments database, Dr. Brock-Utne received $48,245 from drug and medical device companies since 2013. This includes $23,864 from Grifols USA, a plasma-derived biological medicines producer; and $14,964 from Mylan Specialty, a producer of EpiPen and EpiPen Jr auto-injectors, as well as other prescription drug products. The payments were described as for “speaking, training or education engagements, consulting fees or education.”
Dr. Brock-Utne did not divulge any of these payments or company associations in his article published in Anesthesiology News, Clinical Oncology News or The Bulletin.
What Happened to “Declare Any Conflict”?
Several years ago, Dr. Brock-Utne co-authored a blog post for the California Society of Anesthesiologists in which he and his co-author argued for transparency by physicians speaking at industry sponsored events:
“[T]he speaker should always declare any conflict of interest prior to the lecture starts. At any such lecture or meeting, it is important that attendees be sensitive to the interpretations of endorsements.”
How is a published article different than a lecture?
In his public commentary, Dr. Brock-Utne repeats the same talking points that other co-chairs of Physicians Against Drug Shortages espouse, blaming GPOs and ignoring any possible role for drug and medical suppliers. The group claims everyone involved is working pro-bono and have no financial interests in the issue.
Yet John Brock-Utne’s December article is promoted on the website of his son’s company, Issio Solutions. Would Dr. Brock-Utne, his family or the companies he is associated with benefit financially if PADS prevailed in its policy objectives?
Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog blog that seeks to hold government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.