Thanks to friends in HAI for telling me about a bizarre case before the European Ombudsman.
It is a complaint from an employee of the European Medicines Agency, alleging that the agency is guilty of maladministration in forcing her to sell her shares in a pharmaceutical company.
This is the summary of the complaint on the Ombudsman’s website:
1) EMA sought to apply the new conflict of interest rules before these rules entered into force (in February 2012);
2) EMA’s request to her was wrong because no provision of the new conflict of interest rules indicate that these new rules apply to existing staff that obtained shares before the entry into force of the new rules;
3) The new conflict of interest rules are discriminatory against one type of declared interest (shareholdings) when compared with other types of declared interests (previous employment and spouse’s employment);
4) The new conflict of interest rules are excessive and disproportionate (she states that EMA’s request would cause her substantial financial loss);
5) If she sold the shares in question she could be considered to be engaged in insider trading; and
6) The new conflict of interest rules constitute a retroactive change to her employment agreement.
Now the Ombudsman will look at the facts of the particular case, follow due process and apply the standards that it is his job to apply – but here’s my personal opinion:
A medicines regulator simply should not hold shares in a pharmaceutical company. Decisions of the European Medicines Agency directly affect the share prices of pharmaceutical companies. Regulators holding pharmaceutical shares stand to gain or lose by the decisions they make. They have privileged access to insider information. There could be little public confidence in an agency with such conflicts of interest.
In this case the shares may have been acquired innocently and in good faith. There may not have been any explicit rules on the subject at the time but – medicines regulators should not have shares in pharmaceutical companies.
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