Blumenstyk, Goldie. "Verdict on a Surgeon," The Chronicle of Higher Education, 8 March


Blumenstyk, Goldie. "Verdict on a Surgeon," The Chronicle of Higher Education, 8 March
1996, pp. A31-A32.

Minneapolis - Even during John S. Najarian's trial on charges of tax evasion, embezzling from
his own university and conspiring to defraud the Food and Drug Administration, patients were
never far from his mind.

Court would recess at noon on Fridays. "I did a transplant every Friday afternoon during the
trial," he said.

Dr. Najarian, a world-renowned transplant surgeon and celebrated professor at the University of
Minnesota until 1995, was acquitted last month of all charges (The Chronicle, 23 February, 1

The verdict, however, did not quiet all of his critics, some of whom contended that he was still
guilty of ignoring established standards of conduct in research and of allowing sales of a drug he
helped to invent to continue for 20 years, even thought the government had not approved it. The
intravenous drug suppresses the body's natural rejection .of transplanted organs.

Dr. Najarian stood accused of concealing information about nine deaths and other adverse
reactions to the drug, failing to inform patients properly that the drug was considered
experimental, and allowing the university's department of surgery, which he chaired, profit from

The drug, known as Minnesota antilymphocyte globulin, or A.L.G., was manufactured and sold
under the department's auspices from 1970 until 1992, when the F.D.A. halted its production. By
then, it had been used by 175 transplant centers around the world, in about 50,000 transplants.

"It was the drug of choice," Dr. Najarian said.

Speaking from under a cluster of "Congratulations" balloons in his office last week - one of
many bouquets he received after his acquittal - he conceded that the A.L.G. program had

Some recipients were not given "informed consent" waivers, although, he insisted, "every patient
was told" what the treatment would entail. Not all of the adverse reactions were reported to the
F.D.A., but many were discussed in the medical literature, he said. The deaths that he says were
directly associated with the drug - three, he estimates - were reported to the director of the A.L.G.
program, who was supposed to report them to the F.D.A. Others question that figure because
complete records on A.L.G. use don't exist.

He and other Minnesota surgeons who used A.L.G. say they may have been inattentive to
paperwork, but not to their patients. "There wasn't a lot of sloppiness about the care of patients,"
said David E. R. Sutherland, a professor of surgery. A.L.G. itself "was a very good drug," he
said - so good that doctors stopped regarding it as investigational and began using it as standard
therapy, even thought the university had never had it licensed as non-experimental.

As for profits, Dr. Najarian said the money the program earned was designated to help the
surgery department, the medical school, and the A.L.G. program. When Minnesota's Board of
Regents in 1988 approved construction of a new building, which was to put the university in the
business of commercially manufacturing A.L.G., the entire $12.5 million cache of what Dr.
Najarian called "reserves" earned by the sale of A.L.G. and related products.

Profits were not the goal, he said. "I wanted to help the patients."

The university benefitted as well, he added. "They were pretty happy until we got shut down."

Few, if any, at the university question Dr. Najarian's devotion to his patients, or his talent.
Indeed, the surgeon - who is known for the 1982 liver transplant in 11-month-old Jamie Fiske,
the first one successfully performed on a patient so young - has brought fame and stature to the
university and the state.

But for the past three and a half years, federal and university investigations have painted him as a
researcher and administrator who flouted regulations, ignored standards of academic conduct,
and tolerated financial abuses by subordinates.

Dr. Najarian was responsible for "serious mismanagement of the department's affairs," said Nils
Hasselmo, the university president, who has issued two scathing reports on financial misconduct
in the department of surgery under Dr. Najarian. The reports concern the A.L.G. program and
management of nearly $20- million in grants from the National Institutes of Health. One of the
reports also criticizes the department selling A.L.G. without a commercial license and leading
university officials to think that such sales were legal.

In 1995, a panel of university professors, including two from the medical school, found Dr.
Najarian guilty of academic misconduct for, among other things, breaching standards on
informed consent. Another panel barred him from conducting university research involving

Dr. Najarian called those proceedings "a kangaroo court," because they went forward without his
participation. He didn't participate, for fear of jeopardizing his pending court case.

Panel members say their eight-month investigation was fair. "Universities must be responsible, at
some point, for the integrity of what goes on in them," said Frank J. Sorauf, a panel member and
professor of political science who has been at the university for 35 years.

The university itself is also paying a price. The N.I.H. is auditing Minnesota's entire grants
program and subjecting all $150-million in grants to special scrutiny. Federal prosecutors have
also suggested that the institution might be liable for back taxes on A.L.G. income, and for
repaying some or all of the surgery-department grants that Mr. Hasselmo said were misused. The
university says it has spent nearly $6-million on various investigations related to A.L.G.

The former director of the A.L.G. program, Richard Condie, and a former surgery-department
administrator, Bernard A. Ley, have pleaded guilty to federal charges of conspiring to defraud the
government and embezzling from the university. They are awaiting sentencing.

Dr. Najarian's acquittal, however, has opened up new questions about where the blame belongs.

Even the judge voiced an opinion. Before the defense began its case, U.S. District Court Judge
Richard Kyle dismissed the A.L.G. conspiracy and fraud charges against Dr. Najarian.
Prosecutors had not proved a conspiracy, he said, and the university, not Dr. Najarian, was
ultimately responsible for assuring compliance with the law. Once the jury acquitted the surgeon
of the other charges, including double billing for trips, Judge Kyle chided prosecutors and the
F.D.A. for bringing the charges in the first place.

The judge also accused the F.D.A. of acting with "benign neglect" for 20 years - a view shared by
many of Dr. Najarian's supporters and critics alike.

The Governor of Minnesota, Arne Caroson, has publicly blamed the university's central
administration for the scandal. At a press conference in which he praised the Academic Medical
Center as a vital stimulus to the state's $2-billion medical-technology industry and asked
legislators to give it an additional $22.5- million, the Governor said he was "delighted" to have
Dr. Najarian back and questioned the efficacy of the university's oversight mechanisms.

President Hasselmo said the administration had not caught the problems because it had not been
given all the facts. "It's hard to have a system to cope with what seems to be deliberate
deception," he said. The Governor's comment, he added, "reveals a profound ignorance of what

What did happen?

Dr. Najarian came to the university in 1967 as chief of surgery. Continuing work he had done at
the University of California at San Francisco, he developed a process for purifying A.L.G. In
1970, he applied to develop Minnesota A.L.G. as an investigational new drug and for the right to
charge for the cost of manufacturing it. The F.D.A. approved the permit to develop the drug.

Dr. Najarian's lawyers have maintained that the F.D.A. implicitly approved the right to charge
for the drug when it approved the applications. The agency knew that A.L.G. was being sold.
Sometimes it objected, but it did nothing to stop sales until 1988. That temporary halt on sales
was listed in 1989, when the agency formally authorized the university to sell the drug at cost.
But the agency remained dissatisfied with the program.

Mr. Hasselmo, who became president in January 1989, said he did not know the full extent of the
agency's concern with the A.L.G. program - the failure to follow consent procedures consistently
and report adverse reactions - until agency officials visited his office in August 1992. Later that
month, the F.D.A. shut the program down.

Dr. Najarian and other surgeons say the program director was responsible for record keeping.

At the medical school, some speculate that the F.D.A. clamped down because of complaints from
commercial competitors, the Upjohn Company (now Pharmacia & Upjohn Inc.) and Ortho
Pharmaceutical Corp. In fact, Upjohn, in a 1992 letter to the F.D.A. said it considered A.L.G.
unfair competition. Agency officials say this had no bearing on its actions.

As for its 20-year acquiescence, an F.D.A. spokesman said that before shutting a program down,
"we try very hard to work with people to bring them into compliance."

Ultimately, the F.D.A. joined with the Internal Revenue Service and the Federal Bureau of
Investigation in investigating the A.L.G. program. Mark B. Rotenberg, the university's general
counsel, said those lawyers found a program "wildly out of compliance."

Then the university sought a buyer, spending more than $2.3- million from June 1993 to March
1994 to keep the program viable.

Arthur J. Matas, a professor of surgery who hoped the university would find a way to keep
A.L.G. in use, said the Board of Regents' decision to stop its financing in March 1994 was
unfortunate. "Patients were left out of the look," he said.

William R. Brody, the health center's provost, who came here two months later, said the
university should not have been manufacturing the drug at all. It's one thing to develop a drug, he
said, and "another to assume the role of a pharmaceutical company."

G-therapy research is now being conducted in what was to have been the A.L.G. building. Dr.
Brody has appointed a director who reports to him, not to the researchers, to oversee it.

Mr. Hasselmo said the university was also taking steps to improve record-keeping and oversight
in all of its grants programs.

But while many people have praised the university for its investigatory zeal, a few - including
some major donors - question the president's conclusion that the blame falls mostly on Dr.

Mr. Hasselmo, who took office after a financial scandal in the president's office, said he does not
doubt his course. "We started out in 1989 saying, ‘Accountability is rule No. 1.' It still is."