November 19, 2019

Senators Warren, Brown, and Sanders Investigate “Inherent” Conflicts of Interest of Private Equity-Owned Institutional Review Boards

Little data available to determine if companies are doing their job to keep research safe and maintain ethics standards that protect participants

Washington, D.C. - United States Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and Bernie Sanders (I-Vt.) sent letters to two major private equity-owned commercial institutional review boards (IRBs), WCG Clinical and Advarra, which review clinical research proposals to ensure that participant rights are protected and the research is conducted ethically. IRBs are entrusted with protecting participants and vulnerable populations. The lawmakers’ letter raises questions about whether for-profit IRBs are vulnerable to conflicts of interest that could inhibit their ability to protect research subjects, and whether the two companies are maintaining appropriate ethics standards. The lawmakers also request comprehensive information on their approvals, processes, policies, and quality metrics. 

In recent years, approximately 70% of clinical trial reviews have shifted from academic to for-profit IRBs, dominated by two large companies owned by private equity firms. For-profit IRBs introduce an inherent conflict of interest into decision-making, since their financial incentive is to minimize obstacles for researchers and prioritize profits and turnaround time over thorough reviews. 
“The recent trend of private equity ownership is especially troubling, given the pressures to reduce costs and ramp up profits that often accompany private equity’s entry into a field,” wrote the lawmakers. “If managers see their primary responsibility as generating returns for their investors, they may emphasize speed over thoroughness in the review process, creating risks for patients.”
The lawmakers also express concern about recent reports of a rise in “pay to participate” clinical trials, which for-profit IRBs have previously reviewed and approved. These “pay to participate” clinical trials ask patients to pay thousands of dollars for the opportunity to participate in sometimes lifesaving research studies. These studies may take advantage of vulnerable patients and their families, restrict access to treatment to those who can afford to pay, create incentives to over-sell the potential benefits of the trial, and potentially compromise the design of the clinical trial.
“IRB oversight should aim to prevent precisely these types of exploitative schemes,” wrote the lawmakers.
The lawmakers requested information regarding approvals, processes, policies, and quality metrics from the two for-profit IRBs for each of the past five years, by no later than December 13, 2019.

Senator Warren has been a vocal critic of private equity abuses throughout her time in the Senate and is fighting for reforms that protect students, workers, communities, and investors:

  • Senators Warren, Brown and Tammy Baldwin (D-Wis.), along with Representatives Mark Pocan (D-Wis.), and Pramila Jayapal (D-Wash.), introduced the Stop Wall Street Looting Act, a comprehensive bill to fundamentally reform the private equity industry and level the playing field by forcing private equity firms to take responsibility for the outcomes of companies they take over, empowering workers, and protecting investors. 
  • Senators Warren, Sanders, and Baldwin, along with Representatives Pocan and Jayapal, sent a letter to Ernst & Young, sharply criticizing a misleading report the firm released in partnership with the American Investment Council, a trade group for the private equity industry, about the scope of private equity’s influence in the economy.
  • Senators Warren, Brown, and Representative Pocan wrote to four private equity firms that currently invest or have recently invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector. 
  • Senator Warren, Representatives Pocan, and Lloyd Doggett (D-Texas) wrote last month to five private equity firms with investments and physician staffing and emergency transport companies, questioning the role these companies play in patients receiving exorbitant surprise bills for out-of-network medical treatment.
  • In June 2015, Senator Warren was an original co-sponsor of the Carried Interest Fairness Act, legislation to close the carried interest loophole that allowed private equity fund managers to pay lower taxes. The legislation was re-introduced in March 2019 and is included in the Stop Wall Street Looting Act.