When the fox is in charge of the chicken coop, chickens beware.   In recent months our country has witnessed an extravagantly destructive financial meltdown.

         How could Bernie Madoff help  $50 billion disappear, though his involvement in Federally investigated Ponzi schemes now dates to at least 1992?  How could Harry Markopoulos send reams of data to the SEC since 1999, describing exactly how the scheme was must be perpetrated, only to be told the investigators could not understand the mathematics of derivatives well enough to investigate?

         How could credit default swaps, used as insurance on corporate bonds, get sold at ratios of sixty times what the bonds were worth, by companies who knew if things went south theyÕd never have the cash to pay?  How did Sarasota homeowners find their mortgages immediately sold to consortia who converted them into securities that became tiny pieces of larger securities, which were then split again,  so that they when they went to renegotiate their loans nobody knew who owned what or how to find the securities holders?  How did rating agencies rate bonds Triple A, simply because the company insuring those bonds was despite itÕs own failing finances also rated triple A?

         Simple.  Many of these results were inevitable.  When the people doing the oversight are controlled, paid, or directly influenced by the people theyÕre watching, greed takes over. The honest managers who still worry about the future will eventually be thrown out, replaced by those who promise higher profits.

         ThatÕs the conclusion of Michael Lewis and David Einhorn in a sad, hilarious article in the NY Times, explaining how our financial denouement was just watching a ball rolling downhill.  WhatÕs sadder still is how this mess is mirrored across our society, including our health care Òsystem.Ó

The Death of Drug Pens

         Recently the large pharmaceutical companies have declared they are turning over a new leaf.  Drug pens are no more.

          No longer will we see those multi-colored aluminum and plastic pastiches of played out derivations from twentieth century design textbooks.  Along with the blue-yellow torpedo pens, Viagra reading lights and other standbys of the doctorÕs waiting room will disappear, including the pizza and ham sandwich lunches brought by fetching drug reps to medical office staffs.  Further heralds of Òundue influenceÓ of Big Pharma will bite the dust, changing the landscape of medical advertising in ways that will protect the American public.

         Except they wonÕt.  When your profits are slumping and youÕre paying out perhaps twenty five thousand a year to personally lobby each and every American physician, getting rid of drug pens might conveniently provide both efficient cost-saving and a fine bit of PR.

         Things at the FDA will not change as fast as pharmaceutical advertising.  Not when the agency receives so much of its funding from the companies it is supposed to regulate.

         The FDA does not have enough personnel to do its job even with these many millions of company dollars.  Its brief is bizarrely mixed up Ð it regulates some foods, while the much bigger Department of Agriculture handles other foods, just as the SEC handles securities while the Commodity Futures Trading Commission handles derivatives.  Top agency officials know they can leave and go to work for the people theyÕve been overseeing at multiples of their former salaries, something many have no compunction doing, as during the last administration many had already worked as career corporate lobbyists or executives. 

         This bizarre situation becomes even crazier around medical devices.  FDA approved pharmaceuticals at least have to prove they are better than placebo, even if itÕs only by a whisker.  Device makers donÕt have to prove anything except that their products are not poisonous, immediately toxic or deadly.  If they can show that theyÕre similar to other, older devices already marketed, theyÕre Okayed that much more rapidly.

         Device makers are well aware of this advantage and not planning to give it up.  The FDA often reports it will soon have guidelines for medical devices, criteria like those for drugs, requiring proof that new devices are reasonably safe and at least slightly more effective than placebo.

         Such guidelines have been promised for over three decades, but never issued.  Similar lack of regulation allows virtually every over-the-counter supplement to be marketed without real oversight.  All the FDA can do with most of OTC pharmaceutical market is to slap them on the wrist when they promise freedom for heart disease and prevention of cancer.

         Oversight does not require strangulation.  Federal regulation needs an overhaul, and not just for the financial markets.  Otherwise we may watch the drug and device makers go the way of Citigroup and Freddie Mac.

         Have we forgotten Fen-phen and Vioxx already?

Dr. Matthew Edlund practices sleep medicine and psychiatry in Sarasota.  His new book, Designed To Last, is available online. He can be reached at 365-4308 and via his Web site at doctoredlund.com.