Whose secret instructions wasted $100 million?

By Alan Cassels, February 2016

The likely cost of the unjustified firing of eight Ministry of Health researchers is staggering, yet no one has been held accountable.

Mike de JongNEXT MONTH WILL MARK four years since  whistleblower Alana James raised concerns to BC’s Office of the Auditor General about contracting and drug research irregularities in the BC Ministry of Health. Her complaint ignited a tiny fuse that led to a powder keg within the Ministry of Health. Thus began a truly unprecedented and bizarre chain of events that included the botched firing of eight employees and researchers, numerous investigations, a suicide, apologies, settlements and reinstatements.

There have been few answers as to why all this happened, and no one in government has been held accountable. At the time James raised those concerns, Mike de Jong was the Minister of Health. 

Since then we’ve seen an election come and go, a second explosion when it was revealed that an RCMP investigation into the firings that the government claimed was underway was never provided with evidence by the government, and a massive scandal—now dubbed “Deletegate,” about government employees deleting emails or otherwise not keeping records of vital public business—which could explain why many FOI requests about the Health Ministry firings came back “no records found.” All this led last summer to a massive outcry for a public inquiry to explain who set the charges that blew up the biggest ministry in the provincial government.

In late December 2015, the last two lawsuits were settled between the government and Bill Warburton (a contractor) and Rebecca Warburton (an employee in the Ministry of Health). While it might seem like a bit of closure has been achieved, the public is still no closer to knowing who led what appeared to be a vindictive, opaque and ham-fisted attempt to freeze numerous research projects in BC and destroy the reputations of people working in drug safety evaluation. The coziness between the pharmaceutical industry and the current government, on full display for the last decade, provides strong potential motives and is delicious bait for conspiracy theorists. But again, no answers and no accountability.

The lack of clarity on the issue came to a head last summer with shrill calls for a public inquiry. A compromise of sorts was found with Jay Chalke. BC’s new Ombudsperson hit the ground running as he was appointed to conduct a thorough investigation and get to the bottom of things. He demanded money, staff, and legislative authority to do the investigation and he basically got what he asked for.

However, few people expect that the Ombudsperson is going to turn up a smoking gun to answer the “Why?” question around the biggest scandal ever to hit a BC provincial ministry. He may have the power to subpoena witnesses and get testimony, but it may be another year before we have any answers. 

Meanwhile, can we estimate the financial impact of this debacle—how much has it cost BC taxpayers, so far?

There have been direct costs which are, to some degree, estimable, and indirect costs that may never be known. After some back and forth with the Ministry of Health, which admitted that it’s difficult to tease out the  costs of this investigation from everything else it does, I received no numbers from the Ministry other than what has been publicly available or what I have received from FOI requests filed by others. How to fill in the blanks? It’s worth at least a back-of-the-envelope calculation.

We do know the tab for the call centre that was set up to deal with an alleged data breach ($1.1 million) even though the centre received very few calls. Through an FOI, it was learned the government had spent an additional $2.1 million on the investigation up to March 2014 (which would include staff costs but not legal costs).

That doesn’t include lawyer Marcia McNeil’s two-month investigation and report later in 2014, which found the process flawed but failed to answer central questions around accountability because of “a dearth of documents.” Her bill was $80,069 and there were certainly other costs, such as staff time to brief her and prepare documents, so the final costs for this are likely closer to $130,000.

We also know that the budget for the Ombudsperson’s investigation was set at $885,000, and that he requested an additional $1.188 million, bringing that total towards $2 million.

Other related costs were four separate contracts with Deloitte dealing with data security matters: $1.6 million.

Here’s some guesstimates around other taxpayer costs related to the scandal:

• The Auditor General investigation and staff time dealing with the initial complaint:  $100,000 to $200,000.

• Legal fees for the fired union employees: $60,000 to $150,000 (plus whatever the BCGEU had to pay their own legal teams).

• Comptroller General’s investigation and report, staff time, etc: $100,000-$200,000.

• The Office of the Information and Privacy Commissioner investigation: $100,000 to $200,000.

• RCMP costs: There was no investigation, but there was apparently lots of back and forth between the Ministry and the RCMP, so it’s clear some staff time was used: $10,000 to $50,000. 

• The Stephen Brown Review: This is the deputy minister who reviewed the issue in 2013. Since he was already being paid, we’ll never know how much of his and his staff’s time went to this review because there are no records, but this undoubtedly chewed through considerable time: $40,000 to $100,000.

• Further government expenses for legal and internal management. Government-hired lawyers make up to $400 per hour but it is almost impossible to determine how many hours they billed the government for: $560,000 to $700,000.

• Finance Committee costs. Several meetings of MLAs, staff time: $20,000 to $30,000.

• Staff time to process Freedom of Information requests (finding documents, legal review, etc). This is almost impossible to estimate but with dozens of FOI requests and efforts by government to stop releases, let’s say $125,000 to $150,000.

• Settlements with Bob Hart, Ron Mattson, Malcolm Maclure, and Bill and Rebecca Warburton, modestly guesstimated at $250,000 to $600,000. 

What does this add up to? Somewhere towards $10 million in public funds, though I could be way off (either way) on some of the staff time estimates and the settlements. 

But that is just the beginning of what this scandal has cost. 

For the bigger picture we’d have to consider all the delayed and cancelled research and evaluation projects that were either in progress or in the pipeline. If you dial things back to 2011, PharmaCare had numerous drug safety evaluations in progress, looking at the safety of drugs for Alzheimer’s disease; smoking cessation drugs including Champix (considered so dangerous other jurisdictions in the world have stopped paying for it); Accutane, for acne (known to cause birth defects); antipsychotics (given to one-third of seniors in BC’s longterm care facilities in 2012/13); and new anticoagulants (very expensive drugs which are replacing Warfarin). 

The Alzheimer’s study has been completed but the government has yet to make a decision on whether to continue to fund these drugs, considered by most independent experts to be ineffective, and for some patients, intolerable and toxic. The three-year delay caused by the Ministry’s turmoil has meant three more years of profits for the companies and costs of probably $30 to $40 million for the taxpayer. Blood glucose test strips were also going to be re-evaluated but those studies were delayed for four years, meaning a waste of about $10 million per year, or about $40 million (new limits were placed on them in January 2015). The cancellation of research on atypical antipsychotic use means both avoidable deaths each year plus other costs in the use of the drugs deemed toxic for many seniors, especially those with dementia—likely in the tens of millions. 

What are we up to now? It’s not a stretch to say that the cost of the scandal has been in excess of $100 million due mostly to delayed and cancelled research programs and halted policy changes.

Perhaps the biggest frustration in this scandal is the sense of loss of what had been a world-class capacity and willingness to evaluate drug safety in BC. With PharmaNet, our province-wide pharmacy database covering every soul in the province, we collect some of the most robust data in the country, meaning we can assess with a good deal of precision how well drugs are being tolerated. Yet with the ongoing chill over the Ministry, very few independent drug safety evaluations are being carried out. In fact the Research and Evidence Development branch at PharmaCare was destroyed and has never been restarted. 

So the math only goes so far in capturing the impact of this scandal. 

Is it acceptable that PharmaCare, a government agency that spends over $1.4 billion per year of public money on drugs, is overseen by a government with a chronic habit of siding with the pharmaceutical industry (and which receives political donations from them)? Is it acceptable that government has failed to revamp important evaluation studies that are measuring the population effects of the drugs it pays for? 

The loss to our health system—which I’m pegging at perhaps $100 million dollars—may some day be fully accounted for. The death of our drug safety monitoring capacity means more wasteful spending on drugs, and also that many more people will suffer and even die from the adverse effects of drugs—and that cost is incalculable. 

I admit that my back-of-the-envelope calculations may be wildly off, but let me ask you, dear readers: Do you have any data to help me make those calculations more accurate? Do you work in the Ministry of Health? Do you have any hard numbers I could put into my spreadsheet? More importantly, do you know who initiated the firings and why? Please contact me. Brown envelopes most welcome.

Alan Cassels is a drug policy researcher and author in Victoria. He attended the press briefing in September 2012 when the scandal was announced to the world, and has been following the saga ever since.