When Conflicts of Interest are Ridiculous, Are We Really Just Ignoring This?

Let me get this straight… on Friday, President Trump announced that Dr Moncef Slaoui would head the Operation Warp Speed program for the accelerated development of a vaccine. The President described him as

“one of the world's pre-eminent experts on vaccines. “

Dr Slaoui was head of Research and Development for GlaxoSmithKline, a giant global pharmaceutical company. So far, so good… tho I really want to know who in this administration is such a devout Trekkie (see Logo, Space Force).

At the time of his appointment, it was reported that Dr Slaoui had resigned from the board of Moderna, one of the companies working on a vaccine, in order to take the position. It was further reported that Dr Slaoui owned some 155,000 options for Moderna stock, valued then at over $10 million.

Hmmm…

To be clear, options (in this case, “call” options) are instruments that allow the holder to purchase the stock (in this case, Moderna) for a specific price for a specific duration. If the stock price goes up, the options become more valuable… if the price goes down, they could become worthless. That means that Dr. Slaoui will benefit from any rise in the stock price of Moderna, so long as it occurs within the covered period of time. It was not reported how long the options had remaining.

Weekend passes. Monday comes, and Moderna announces that (in simple terms) their version of the vaccine was inordinately successful, having positive results from all 45 cases. The stock soars, gaining 25% in value; Dr Slaoui is up to some $3 million overnight, with far more to come if/when the results are confirmed by next stage testing.

Double hmm…

Let’s assume for the moment that there’s nothing wrong here. Dr Slaoui took the position because he had both the expertise and desire to help. The vaccine that Moderna was working on was no secret, and the favourable results were due to come out at some near point regardless of the good doctor’s personal moves. The country will be deeply grateful for any confirmation of a successful vaccine, and this looks (at least preliminarily) like very good news. Cool!

Here is why perception matters. With Dr Slaoui in position to determine winners and losers in the heated contest to develop, produce and distribute the most important vaccine in generations, how will we trust that those decisions are being made for the benefit of our people, and not the doctor’s wallet? His prior role with Glaxo more than likely resulted in his garnering stock and/or options from that company as well. IF there are two competing vaccines with similar efficacy, will we trust when Moderna’s is selected, and Glaxo is tasked with manufacture and distribution, a contract worth many billions?

Economic Progress

I make no accusations here, and it’s far too early in the process to have any of this be particularly relevant. The point here is this: in one of the most important processes to America and trillions of dollars of economic progress, every step can reasonably now be challenged and doubted, subject to conspiracy theorists and bitter recriminations and PR battles from rival corporations. On the other end, what if Dr Slaoui elects not to use Glaxo because of the appearance of personal conflict… does the nation miss out on the best option because of such a minor issue?

As it often is, the damage from a conflict of interest is not in the actuality. In this case, the country couldn’t care less if the Dr. gets fabulously wealthy, as long as we get the right vaccine at the right price delivered as best as it could be. It is the appearance of a conflict that is corrosive, that complicates issues far greater than personal wealth or outcomes.

Age of Pandemic is Critical

So much of how we react, what we believe in this age of pandemic is critical to the choices that we make as a society, as an economy, as a country. The difference between collective and individual faith in what we are told, and constant questioning and doubt is measured in lives and trillions, as we hesitantly lurch into unknown territory.

The introduction of such obvious conflicts of interest into the very top of the decision-making pyramid is a poison, one which will have a specific and definable impact on the efficacy of the task force that Dr Slaoui has been asked to head. If there is what has become a commonplace lack of transparency and real-time disclosure in the various coming processes, sceptical media elements will be induced to dig harder, and likely promote more speculation and distrust.

Thoughtful and proactive attention to the critical issues of these appearances can allow for a simple resolution. The doctor could have been compensated with however many millions were necessary for exchange for his divestment of any conflicting possessions; offering him $10 million, or $20 million or whatever is a rounding error in our national allocation of funds, and would eliminate entirely all the coming mess. Assuming that his appointment wasn’t a knee jerk, overnight panic decision, then there was a period of vetting that would have determined the existence of those conflicts and allowed for a resolution.

Instead, we have potentially wonderful news that arrives in a silly cloud, with as many question marks as exclamation points. It wasn’t necessary, and it should not be… but once again, here we are.