Springs firm will testify to D.C. panel

An official with Colorado Springs-based Coast Independent Review Board has been called to Washington, D.C., as part of a congressional investigation into whether federal regulators are paying enough attention to how such companies oversee clinical trials.

Staff for the House Energy and Commerce Committee's Investigations and Oversight panel will take a deposition from Coast Chief Executive Dan Dueber. The panel wants to know how one of Coast's medical panels gave approval for a fake company to begin clinical trials on a nonexistent product. The company later discovered that the fraudulent study was part of a "sting operation" conducted by the Government Accountability Office for the committee.

"We are not happy about this. We have spent tens of thousands of dollars on legal fees, overtime pay and travel expenses on this," said Dueber, who became the company's chief executive in September after heading The Gazette's finance operations for 12 years. "We feel that we are being harassed. We didn't do anything wrong; we were just trying to do our jobs. It is not right."

Both Nick Choate, a spokesman for subcommittee Chairman Rep. Bart Stupak, D-Mich., and Laura Kopelson, a GAO spokeswoman in Washington, declined to comment until the subcommittee holds a hearing. Dueber said he was asked to appear at a hearing first scheduled for today, which Kopelson said is now scheduled for March 26, but Choate said no date has been announced.

The sting apparently began in September, shortly after Dueber took over at Coast, when the fake company, Device Med-Systems, sought approval of the rules under which its study of Adheasiabloc would be completed. Coast's review board, which typically includes several medical professionals, approved the rules, called protocols, in November. The board also successfully sought revisions to advertisements seeking test subjects.

Dueber began looking into Device Med-Systems after subcommittee staffers contacted him last month about the company and learned that the company's address is a mail drop in a Virginia strip mall, and its medical director doesn't exist nor does its product, which supposedly was to reduce scar tissue after surgery. The telephone numbers for the company, which Coast officials called to get the advertisements changed, turned out to be for cell phones.

Coast supervises about 400 such studies at any one time and has reviewed between 4,000 and 5,000 such studies in its seven-year history, Dueber said. Federal rules do not require companies like Coast to audit every study, he said.

"It was very carefully contrived not to raise eyebrows. The substance involved is used in cosmetics and therapeutics. We are not required to check any of this. The IRS audits less than 1 percent of all tax returns," Dueber said.

The investigation comes less than a year after Coast founder Darren McDaniel, who still owns the company, resigned as chief executive. His resignation came after the Food and Drug Administration suspended Coast for two months from giving expedited approval of medical testing procedures. The agency suspended Coast amid allegations that the company violated federal rules in approving an advertisement for test subjects by a California firm.

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Call Heilman at 636-0234