Probes Targeted UCI Researcher

TV news personality Jane Pauley had a message to deliver in April when she spoke at a fundraiser for UC Irvine’s Brain Imaging Center.

She told the 140 guests at the Island Hotel in Newport Beach about her battle with mental illness and spoke in support of the research being done by the center’s director -- and Pauley’s brother-in-law -- UCI psychiatry professor Steven G. Potkin.

Potkin is one of UCI’s biggest stars. The 60-year-old psychiatrist is among the university’s most prolific researchers. He brings in lucrative contracts from some of the world’s biggest drug companies and has presided over as many as a dozen clinical trials at a time.

Recently, his investigation into nicotine’s effects on the brain received national attention. And in March, the university proudly trumpeted his role in heading a $24-million National Institutes of Health project that will be headquartered at UCI.

But at the same time Potkin has attracted funding and recognition for UCI, he has also been investigated three times by the university for alleged ethical or financial breaches, according to more than 300 pages of documents obtained by The Times. And although Potkin says he was not disciplined as a result the investigations, each raised serious questions about his practices and how UCI dealt with the issues.

Most recently, administrators found in 2004 that the professor had skirted the school’s patient safety review board to test a drug for a pharmaceutical company without the required university approval. When UCI learned of the research, it ordered Potkin to immediately halt the study.

Seven years earlier, administrators looked into why Potkin had directed drug companies to pay more than $2 million in research funds to a firm his family owned. The payments were related to studies he was performing at UCI. The university concluded that the company may have been set up to avoid UCI overhead fees, and it prohibited Potkin from using the company in future research projects.

UCI launched its first investigation of Potkin’s work in 1989, four years after the psychiatrist arrived at the university from the National Institutes of Mental Health, where he specialized in schizophrenia research. Fellow UCI doctors accused Potkin of wrongfully billing Medi-Cal for his research. Although Medi-Cal rejected some billings for the clinical trial, the state and UCI concluded that Medi-Cal was not defrauded.

Despite the repeated investigations, Potkin’s star has continued to rise, and this summer he was given a raise and a promotion.

The grants that researchers such as Potkin bring are an important source of funds for universities. The publicity brings prestige that attracts students, professors and donors, which is especially important for a school such as UCI, which is still trying to build its reputation.

UCI’s medical programs have been racked by problems in the last decade, including the theft of eggs and embryos from patients, cancer research violations, illicit sales of body parts and shortcomings in its liver, kidney and bone marrow transplant programs. In each case, critics say, warnings were ignored and serious problems downplayed.

Dr. Mike Samoszuk, a former pathology professor who left UCI late last year to work as the chief medical officer for a medical device division of a drug company, said that although he had no knowledge of the Potkin case, the university’s thirst for research funding may have caused it to look the other way when ethical lapses were discovered.

“Even though clinical research is a noble and worthy activity, it’s very easy to lose your moral compass if your primary goal is the dollar amount of grant funding that you generate,” Samoszuk said.

UCI said it couldn’t discuss specifics of personnel matters. Potkin, in an hourlong interview, defended his activities, saying that UCI administrators approved his business dealings and that his work helped patients and the university.

But documents provided by the university suggest that some of Potkin’s activities had not been approved by UCI.

In 2004, Potkin and psychiatry department co-chairman William E. “Biff” Bunney applied to the university board that monitors human research for permission to test an Alzheimer’s drug for Praecis Pharmaceuticals, a small company in Waltham, Mass. The request was not immediately approved.

The professors went ahead anyway, using a private company they had previously formed to conduct the research at an assisted-living facility for Alzheimer’s patients in San Juan Capistrano.

The professors had previously signed an agreement with the university allowing them to consult on clinical trials through their company but not to work as principal investigators on a study through the firm. The agreement was later modified to allow the professors to supervise principal investigators through their company.

On learning that the men had gone ahead without university approval of a study that listed them as principal researchers, Thomas Cesario, the dean of UC Irvine’s medical school, took swift action.

In a Dec. 8, 2004, memo, Cesario told the psychiatrists that he had learned of their outside trial and that they were violating UCI policies.

“We require this study be halted immediately until further notice,” he wrote.

In a letter to Cesario the next day, the doctors acknowledged that they were listed as the principal researchers but said they were only providing “management and consulting” services for another company.

The company the doctors said was running the trial, Pharmacologic Development Physicians Inc., had been established two months earlier by Steven Mee, a former medical school student under Potkin and Bunney who had completed his residency the year before. Mee did not return a telephone call seeking comment.

Potkin said he was not trying to avoid university scrutiny but, rather, had moved the study out from under UCI’s auspices because of a shortage of psychiatry beds available for research.

“What this issue has all been about is the loss of research facility beds in a place that was supposed to do research,” Potkin said. “That was really the point. When we don’t have beds and don’t have resources to do that, we have to come up with other solutions to do that.”

He also maintained that the amended permission form gave him approval to conduct the trial and that UCI’s policy for monitoring research did not apply to “outside activities.”

“I would agree that things could have been written more precisely,” he said. “There’s no question in my mind that when we did this we had full approval to do this.”

Cesario thought differently.

“When you first conceived of the company with Biff, my clear understanding was that this was a consulting business,” Cesario wrote Potkin and Bunney on Dec. 18, 2004. “It was not a business to run clinical trials outside of the university.”

In April 2005 someone complained anonymously about the Praecis trial to the National Institutes of Health.

The agency asked UCI whether a Potkin-owned company had used NIH-funded school staff and resources for the research and whether the doctors had performed a clinical trial without review board approval. As a condition of receiving federal funding, research institutions such as UCI must guarantee that its review boards will safeguard human experiments.

“I’m surprised they didn’t suffer a direct, immediate and tough penalty,” said Dr. Arthur Caplan, chairman of the medical ethics department at the University of Pennsylvania.

Cesario acknowledged in a letter to the NIH that the doctors had conducted their research through a private company and that they had used UCI’s brain-imaging facilities. The letter also said the company paid for the service, which was allowable under the NIH grant.

The letter, obtained as part of a public records request, was never sent. UCI spokesman Tom Vasich said that before it was to be mailed, NIH said it only wanted a financial audit. The three-page audit contained none of the admissions in Cesario’s unsent letter. The report said the auditors “found no evidence” that NIH funds were used for Potkin’s and Bunney’s private company.

NIH accepted the university’s findings and did not conduct its own investigation. A spokesman for the agency would not comment on the case.

Potkin’s research had earlier come under scrutiny in 1997, when administrators asked questions about another outside company involved in his work.

Research funds typically are paid to the university. But in 20 of Potkin’s studies, he arranged for drug companies to channel some funding directly to the firm Pacific Clinical Studies, according to university documents.

Pacific Clinical Studies was owned jointly, by Potkin’s brother Ralph, a pulmonary care doctor, and a trust in their parents’ names. Potkin told university auditors that the money was used to pay staff used in recruiting patients for studies and for patient costs such as pet boarding.

One Potkin client, Janssen, a drug firm in Titusville, N.J., became “increasingly uncomfortable” with the payments it was making to PCS and stopped making them, according to a June 1998 internal UCI memo.

Janssen, according to the memo, was worried because of the arrangement’s similarity to a case in which the chairman of the psychiatry department at the Medical College of Georgia pleaded guilty to diverting research funding from the school to a company he controlled. A spokesman for Janssen parent Johnson & Johnson declined to comment.

The UCI audit, completed in September 1998, concluded that Potkin’s actions did not technically violate the university’s nepotism policy, since PCS got its money from the drug companies rather than from UCI.

However, the audit suggested that PCS “may have been established” to avoid paying university overhead that is attached to research projects. The report said all of the company’s money came from Potkin’s clinical trials, with the exception of one his brother ran. The drug companies paid PCS $2.4 million.

Seven months after the audit was completed, Cesario and Frederic Wan, then the vice chancellor for research, told Potkin that PCS could no longer work on clinical trials at the university.

Potkin said in the interview that UCI knew about PCS’ involvement, since it was mentioned in the school’s contracts with the drug companies. He said the money PCS received was in addition to any research grant to UCI.

“Patients benefited,” he said, “and more research was completed at the university.”

Vasich, the university spokesman, said that although UCI knew of the company’s involvement, Potkin did not reveal its ties to his family.

UCI investigated Potkin for the first time in 1989. Doctors there told administrators that Potkin was inappropriately billing Medi-Cal for patients in his research trials. Bills submitted for patients in Potkin’s studies had been turned down three times by Medi-Cal, documents show.

In response, Potkin called a meeting to present what UCI psychiatrist Dan Bates described in an affidavit as a plan to “fool Medi-Cal into reimbursing the department for unauthorized expenditures.”

The sworn statement was one of four that UCI doctors and a psychologist submitted in support of another physician who filed a complaint with UCI alleging that he was retaliated against for making the Medi-Cal allegations.

In the affidavits, Bates and psychiatrist Chris Heh said Potkin directed staff to keep two sets of records, disguising the names of the drugs that patients were receiving on the version made available to Medi-Cal.

According to the affidavits, although patients were receiving the experimental drugs Raclopride and Zacopride, one set of charts indicated that patients had been given drugs labeled Haldol-R and Haldol-Z. Haldol is an FDA-approved drug that is eligible for Medi-Cal reimbursement, while the other drugs are not.

Several doctors and nurses complained to administrators, and documents show the whistle-blowers thought that their warnings were ignored.

Larry Drake, a business manager for the psychiatry department, wrote to department chairman Bunney, “If you recall several months ago, after hearing of these issues, I suggested that you form a committee to review the ethics of the research unit. This was not done!”

UCI eventually launched an audit. The results, issued in September 1990, said there were no improprieties. It said Medi-Cal had approved payments for the hospital stays of some patients in the research trials and that the state had not been billed for experimental drugs.

The state attorney general’s office did not file charges after conducting its own inquiry.

In his interview with The Times, Potkin denied that billings were inappropriate. He said Medi-Cal was billed only for the hospital stays of patients before they were enrolled in the study.

He also said it was standard practice to keep two sets of charts in research trials and that the notations were “absolutely not” done to justify Medi-Cal billings. The drug labelings, he said, were a shorthand way of showing the drugs were being tested against Haldol.

In their affidavits, Drs. Heh and Nora Johnson said the drugs were being tested against a placebo.