Confounding Issues in Cancer Progress—The Impact of Investor Requirements on Senior Management Compensation and Regulatory Decisions

Previous research has demonstrated that profits are a key requirement in private pharmaceutical development. We sought to examine the extent that pressure of financial incentives exerted by investors and the board of directors, including senior management financial rewards, have on regulatory decisions made by senior management. Our selected case study involved Aveo Pharmaceuticals Inc (Aveo). The specific question was to what extent the terms of financing, particularly the corporate governance goals which determined executive bonus compensation, may have dictated Aveo’s regulatory approach in the drug application process for tivozanib. These corporate governance goals emphasized quantitative over qualitative goals for the executive team. Aveo did not conduct the second arm of the randomized crossover trial, whose results could possibly have demonstrated a favorable clinical profile or a superior competitor’s product. Arguably, as a result of this decision, the participating research subjects were denied an opportunity for improvement, and progress in the study of renal cell cancer was curtailed.