There are good doctors and mediocre doctors. But according to the U.S. SEC, Dr. Richard Selden is in a class by himself. Selden, the former chief executive of Transkaryotic Therapies (TKT) [where Michael Astrue, the nominee to become Commissioner of Social Security, used to work], was charged by the SEC with allegedly hoodwinking investors about failed drug trials to artificially inflate the stock price--then selling off his own shares. According to the civil complaint filed Thursday by the SEC, Selden sent positive press releases even after the U.S. Food and Drug Administration had said in 2001 that trials of TKT's company's flagship drug Replagal, had failed.Who were these TKT lawyers whom Dr. Selden alleges advised him wrongly? Michael Astrue was TKT's Legal Counsel at the time, so he is almost certainly one of them. On the face of it, we have a simple situation. Astrue was the chief legal officer at TKT. He was responsible for making sure that the company stayed in compliance with SEC rules. His CEO apparently violated SEC rules in a spectacular way that nearly destroys the company. Why did Astrue not prevent this? Is he in some way culpable for what happened?
By selling his shares before disclosing the negative data about Replagal, Selden "unjustly enriched" himself by $1.66 million, the SEC alleged in the complaint filed in U.S. District Court in Boston. The agency is seeking that money along with the $1.1 million in salary and bonuses Selden earned in 2001 and 2002. According to an Associated Press report, Selden in 2001 sold 90,000 shares of TKT stock--well before Oct. 3, 2002, when TKT finally disclosed the problems with its FDA application. The next day, its shares plunged 61%, to $12.75.
Through his attorney Thomas J. Dougherty, Selden maintained TKT lawyers, who advised him wrongly, bore responsibility for his actions. "He deserves and expects to prevail at any trial of the issues," Dougherty told The Boston Globe.
The country had a big debate last year about Social Security, and the American people made their views plain: they do not support the President’s proposals to privatize Social Security and to deeply cut benefits. As he moves through the nomination process, I hope that Michael Astrue will be responsive to the Americans he wishes to serve. He should commit to maintaining the critical role that the Social Security program currently plays in providing income security for retirees, disabled workers, survivors, and their families. He will also need a plan to speed and improve service to the public, particularly those applying for disability benefits.
I look forward to learning more about Mr. Astrue and his views on managing the Social Security Administration.
I will also add that Current Commissioner Jo Anne Barnhart has done a good job leading this important agency in difficult times. Her dedication and expertise will be missed when she leaves, and she has my appreciation for her service.
Members of the Senate Finance Committee are keeping the pressure on the Medicare and Social Security agencies to fix a glitch that caused hundreds of thousands of beneficiaries to pay the wrong premiums.
The heads of both agencies met with the Finance Committee behind closed doors last week to go over their plans to rectify billing discrepancies that led to many Medicare enrollees owing unpaid premiums to the health-insurance companies providing their drug benefits.
Since meeting with Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan and Social Security Administration (SSA) Commissioner JoAnne Barnhart last Thursday, several senators have expressed concern that the plans from agencies might be too harsh, especially for poorer beneficiaries.
These billing errors have brought renewed attention to the pitfalls inherent in rolling out the massive new Part D prescription-drug benefit, which has required the coordination of federal agencies and health insurers.
The administration has disclosed two separate billing problems in recent weeks that together affected an estimated 700,000 Medicare beneficiaries.
First, the administration revealed that 230,000 beneficiaries were accidentally sent refund checks that would have to be returned or repaid.
Later, the administration said that the wrong Medicare premiums had been deducted from Social Security checks sent to 400,000 to 500,000 beneficiaries throughout the year, and that in some cases no premiums at all had been paid for months.
The health plans that administer the drug benefit likewise have not been paid the premiums that CMS and the SSA should have been collecting and passing along. These health plans also will ultimately be responsible for recouping unpaid premiums.
The agency already has contacted the beneficiaries who received accidental refunds and is working individually to establish installment plans for those who may have spent the money already....
Career U-turn brings ex-counsel back to TKT
On Jan. 28, with considerable effort, Michael J. Astrue shaved and put on a tie. It was the first time he had attempted either task in 11 days.
Astrue, the former general counsel at Transkaryotic Therapies Inc. of Cambridge, hadn't been taking his legendary casual-dress philosophy to an extreme. On Jan. 17, he had slipped on the ice while walking from his front door to his car. His left arm was pinned beneath him and he fractured his elbow.
But Astrue had a reason to make himself presentable: There was a reception that afternoon for people who had served on Governor-elect Mitt Romney's transition team.
Moreover, just that morning he had received an invitation to attend a board meeting at TKT's Main Street headquarters. Astrue had resigned from the firm just five weeks earlier. The directors wanted to hear his advice for righting TKT, a 15-year-old biotech firm that had just suffered a series of severe regulatory setbacks that had crushed the near-term prospects for the company's Replagal drug and in four months slashed TKT's share price by 85 percent.
Astrue was planning to spend the new year doing research at the Hudson Institute, a conservative think tank based in Indianapolis, and teaching at the Boston University School of Law, while he sought an appointment somewhere in the Bush administration. But he accepted the invitation to meet the directors for two reasons.
''When provided with an opportunity to offer my opinions in detail, I usually take advantage of it,'' Astrue said. The 46-year-old also had a hunch TKT's board wanted more than to just pick his brain. In fact, Dr. Richard F. Selden, TKT's founder and chief executive, had asked Astrue whether he would consider the chief executive's job in November, just weeks before he left the
company.
''I knew they might be thinking about trying to bring me back,'' said Astrue, who took a taxi and arrived at the company at 2 p.m. Astrue ate a chicken salad sandwich, and talked for about two hours, after which Rodman W. Moorhead III, the chairman, asked him, ''Would you consider coming back as CEO?''
Astrue's return to TKT was announced Feb. 11. For the Milton native, it was another in a series of unexpected career U-turns. In 1985, while serving as a staff attorney at the Department of Health and Human Services, he was asked to interview for a position in the White House counsel's office. ''I was stunned,'' recalled Astrue, who advised presidents Reagan and Bush, ''but when the White House calls and asks you for your resume, you say yes.''
In just a few years, Astrue has become one of the more influential players in Massachusetts' biotechnology industry. After serving as associate counsel to the president, he was general counsel for the Department of Health and Human Services, overseeing an army of hundreds of lawyers. He later was a partner at Mintz Levin Cohn Ferris Glovsky and Popeo PC of Boston, and served as general counsel for Biogen, the Cambridge biotech giant, starting in 1993. He left Biogen for TKT in 2000, and was chairman of the Massachusetts Biotechnology Council in 2001.
For Astrue, the return to TKT is more than just another serendipitous career move. After nearly 20 years spent in supporting roles - overseeing law departments, advising chief executives, handling patent litigation - Astrue is finally the leading man. If he achieves success running TKT, it is likely to be the defining episode of what has already been a high-profile career in the biotechnology industry.
''Mike is an incredibly moral guy,'' said Dr. Burt Adelman, executive vice president of research and development for Biogen Inc., where Astrue served as general counsel. ''I suspect they got him back because he wasn't going to leave something he was committed to when they were having a problem. He doesn't walk away from a fight.'' ...
It is abundantly clear that Astrue has his work cut out for him. Next month, the company will announce a major layoff affecting about 100 employees, or more than 20 percent of its work force. Major changes are also forthcoming in TKT's senior management, according to a former TKT executive.
In a gesture to employees, Astrue said he would forgo his salary for three months. He also said he asked the board to pay him less than Selden earned last year, but declined to specify what his compensation will be. In 2001, the most recent reported year, Selden earned a salary of $400,000 and a bonus of $150,000, according to company documents. ...
Astrue left TKT convinced his future lay in Washington, with an appointment to some sort of government post. That ambition had been thwarted in 2001. President Bush was poised to nominate Astrue to head the FDA, and Astrue had been interviewed by White House officials. But Massachusetts Senator Edward M. Kennedy and other Senate Democrats blocked the nomination, saying it would be a conflict of interest for the drug industry's top watchdog to come from the industry the agency regulates. ...
''Mike is way too smart to be pigeonholed as a lawyer,'' said one TKT executive who worked closely with Astrue. ''He's a strategic thinker and a leader, as well as a lawyer. He wants to prove that he can do it all.''...
The President intends to nominate Michael J. Astrue, of Massachusetts, to be Commissioner of Social Security, for a six year term beginning January 20, 2007. Mr. Astrue previously served as Chief Executive Officer of Transkaryotic Therapies. Earlier in his career, he served as General Counsel at the U.S. Department of Health and Human Services. Previously, he served as Counselor to the Commissioner of Social Security at the U.S. Department of Health and Human Services. He also served as Acting Deputy Assistant Secretary for Legislation at the Department of Health and Human Services. Mr. Astrue received his bachelor's degree from Yale University and his JD from Harvard University.
