Thursday, November 30, 2006
List of 300 key healthcare recruiters
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Whistleblowers: Fired, silenced . . . and killed.
Whistleblowers are traitors. There is no question that this is what most corporations and government entities think. It doesn’t matter if the target is a private corporation, such as Enron with whistleblower Sherron Watkins, a government entity such as the FDA with whistleblower David Graham or an entire country, such as President Putin’s Russia, which former Russian KGB agent and whistleblower Alexander Litvinenko harshly criticized.
All these entities react the same way: Shut down the whistleblower. Fire him, silence him, or kill him, whatever it takes.
It is no secret that former Enron CEO Ken Lay immediately contacted his lawyers and tried to come up with a way to fire Sherron Watkins after she wrote an e-mail warning him that “I am incredibly nervous that we will implode in a wave of accounting scandals.”
It is also no secret that the FDA brass tried to shut down David Graham. Dr. Graham said, “Prior to my Senate testimony in mid-November of 2004, there was an orchestrated campaign by senior level FDA managers to intimidate me so that I would not testify before Congress.”
Dr. Graham explained that this intimidation took several forms. The FDA tried to stop an article he wrote for the Lancet; they contacted Senator Grassley's office and attempted to prevent him from calling Dr. Graham as a witness and his superiors even posed as whistleblowers and contacted Dr. Graham’s attorney and attempted to convince him that he should not represent Dr. Graham.
And as far as the ex-KGB spy Alexander Litvinenko goes, we all know by now that he was poisoned in the U.K. with deadly polonium-210, which is extremely hard to come by unless you own a nuclear reactor. In fact, Polonium 210 is highly radioactive and extremely toxic. By weight, it is 250 million times as toxic as cyanide. This means a particle smaller than a dust mote could be fatal if ingested or inhaled. Polonium 210 destroys the internal organs, and death is slow, painful and sure. There is no antidote. No one knows for sure if Russia did this, but most observers have concluded that another former spy, Russian President Vladimir V. Putin probably knows who did it.
And Putin certainly had the motive. Back in 1998 Litvinenko accused his security bosses of ordering the murder of Russian oligarch Boris Berezovsky. The tycoon fled to Britain, where Litvinenko soon followed, supported by Berezovsky. It didn’t help Litvinenko that he continued to openly criticize Russia and started to investigate the death of Anna Politkovskaya, a Russian journalist who also had been very critical of Putin. And it doesn’t help Russian President Putin that his critics appear to die like flies around him. Not that this means Mr. Putin did anything. He may just be a lucky guy, who happens to have short-lived critics.
Most noticeable, however, is the Russian media’s reaction. The Putin-controlled Russian television networks reported that Mr. Litvinenko did not die of poison, but of "intrigues" in the Russian exile community in London. Mr. Litvinenko was, according to Russian television, "a pawn in a game that he did not understand."
Reality is that most people never get into a situation such as the one Sherron Watkins, David Graham or Alexander Livinenko found themselves in. Most people silently agree to do whatever their company bosses, party bosses or government tells them to do, and look the other way when things get ugly. Commit a few illegal accounting tricks, fine. Let the public die because drugs are unsafe, no problem. Kill a big-mouth oligarch, hey if you’re in the KGB, that’s what you do, right? This is a great strategy for survival but it is certainly not a path to bravery.
In fact, Senator Grassley has repeatedly stated, “Whistleblowers are American heroes.” I’d only add that they are heroes wherever they appear. And especially today, with more and more rampant corruption we need more such heroes.
Because, as Edmund Burke said, “All that is required for evil to triumph is for good men to do nothing.”
All these entities react the same way: Shut down the whistleblower. Fire him, silence him, or kill him, whatever it takes.
It is no secret that former Enron CEO Ken Lay immediately contacted his lawyers and tried to come up with a way to fire Sherron Watkins after she wrote an e-mail warning him that “I am incredibly nervous that we will implode in a wave of accounting scandals.”
It is also no secret that the FDA brass tried to shut down David Graham. Dr. Graham said, “Prior to my Senate testimony in mid-November of 2004, there was an orchestrated campaign by senior level FDA managers to intimidate me so that I would not testify before Congress.”
Dr. Graham explained that this intimidation took several forms. The FDA tried to stop an article he wrote for the Lancet; they contacted Senator Grassley's office and attempted to prevent him from calling Dr. Graham as a witness and his superiors even posed as whistleblowers and contacted Dr. Graham’s attorney and attempted to convince him that he should not represent Dr. Graham.
And as far as the ex-KGB spy Alexander Litvinenko goes, we all know by now that he was poisoned in the U.K. with deadly polonium-210, which is extremely hard to come by unless you own a nuclear reactor. In fact, Polonium 210 is highly radioactive and extremely toxic. By weight, it is 250 million times as toxic as cyanide. This means a particle smaller than a dust mote could be fatal if ingested or inhaled. Polonium 210 destroys the internal organs, and death is slow, painful and sure. There is no antidote. No one knows for sure if Russia did this, but most observers have concluded that another former spy, Russian President Vladimir V. Putin probably knows who did it.
And Putin certainly had the motive. Back in 1998 Litvinenko accused his security bosses of ordering the murder of Russian oligarch Boris Berezovsky. The tycoon fled to Britain, where Litvinenko soon followed, supported by Berezovsky. It didn’t help Litvinenko that he continued to openly criticize Russia and started to investigate the death of Anna Politkovskaya, a Russian journalist who also had been very critical of Putin. And it doesn’t help Russian President Putin that his critics appear to die like flies around him. Not that this means Mr. Putin did anything. He may just be a lucky guy, who happens to have short-lived critics.
Most noticeable, however, is the Russian media’s reaction. The Putin-controlled Russian television networks reported that Mr. Litvinenko did not die of poison, but of "intrigues" in the Russian exile community in London. Mr. Litvinenko was, according to Russian television, "a pawn in a game that he did not understand."
Reality is that most people never get into a situation such as the one Sherron Watkins, David Graham or Alexander Livinenko found themselves in. Most people silently agree to do whatever their company bosses, party bosses or government tells them to do, and look the other way when things get ugly. Commit a few illegal accounting tricks, fine. Let the public die because drugs are unsafe, no problem. Kill a big-mouth oligarch, hey if you’re in the KGB, that’s what you do, right? This is a great strategy for survival but it is certainly not a path to bravery.
In fact, Senator Grassley has repeatedly stated, “Whistleblowers are American heroes.” I’d only add that they are heroes wherever they appear. And especially today, with more and more rampant corruption we need more such heroes.
Because, as Edmund Burke said, “All that is required for evil to triumph is for good men to do nothing.”
Tuesday, November 28, 2006
Pfizer's shell game: Cuts 20% of sales force
So the news is finally out, after months of speculation. Pfizer, the #1 drug company which started the arms race among pharmaceutical sales forces, is finally cutting back.
And they’re not cutting back lightly. 20% reduction is a huge change when it comes to the 11,000 sales people they have on board. Most doctors, however, probably won’t miss those displaced sales reps, since Pfizer also pioneered having multiple sales forces calling on the same doctor. So I guess the cutback means those docs will only get bagels once a day in the future.
And while this is a sad development for the people involved, it probably isn’t a bad development for patients. Less sales people means less hype. But let’s get real. 2,000 more or less sales people among around 100,000 in the entire sector isn’t going to make much of a difference.
The real difference may be that for the first time Pfizer is changing course, and since many of the smaller companies are simply trying to mimic what Pfizer is doing, they will feel they have the permission to do the same.
So careful disarmament appears to be underway in the drug business.
And here’s the part you may not read anywhere else, since most journalists really don’t know how a cutback such as this one affects a drug company.
The truth is, it doesn’t; not much anyway.
Here’s the deal. I’ve reviewed lots of sales force models, sales force restructuring scenarios, etc. And based on all the data we had, we found not only that more sales reps give a diminishing return, but we also found something else, which we didn't expect.
We learned that before that diminishing return hits home, there is a very wide flat area. What that means is that each new rep pretty much paid for himself; but he didn’t add much incremental revenue.
So the good news was that you didn’t have to be a rocket scientist when you organized a pharma sales force. A few thousand more or less really doesn’t make much of a difference. In the end, whichever size was used, they brought home about the same profit.
So why is Pfizer doing this?
For those of you who don’t know, Pfizer is trying to achieve annual savings of $4 billion by 2008.
2000 reps, with a salary cost of $100,000, plus car and a few other costs, probably no more than a total of $200,000 brings in a saving of about $400 million a year. That’s not exactly chicken shit, but it is less than 1% of Pfizer revenue and only about 3% of profit.
No major celebration from Wall Street in sight based on those cutbacks.
So, again, why is Pfizer doing this and why now?
Simple.
On Thursday, November 30, 2006 at 10:00 AM EST, Pfizer will hold its 2006 Analyst Meeting. And they probably don’t have terrific news. So they want to show they can be tough. Instill confidence in the Wall Street types.
And that’s the reason they do this now.
After all, when Pfizer’s biggest new product, torcetrapib, which reduces cholesterol, turns out to actually raise blood pressure, well, then a mass-firing of sales reps may detract some of the attention from Pfizer’s dry pipeline.
But there is more. When we look back at the drug industry, ten years from now, we will probably recognize that this was the turning point, when an entire industry started seriously contracting. So if you own drug company stocks, watch out. The worst may yet come.
And they’re not cutting back lightly. 20% reduction is a huge change when it comes to the 11,000 sales people they have on board. Most doctors, however, probably won’t miss those displaced sales reps, since Pfizer also pioneered having multiple sales forces calling on the same doctor. So I guess the cutback means those docs will only get bagels once a day in the future.
And while this is a sad development for the people involved, it probably isn’t a bad development for patients. Less sales people means less hype. But let’s get real. 2,000 more or less sales people among around 100,000 in the entire sector isn’t going to make much of a difference.
The real difference may be that for the first time Pfizer is changing course, and since many of the smaller companies are simply trying to mimic what Pfizer is doing, they will feel they have the permission to do the same.
So careful disarmament appears to be underway in the drug business.
And here’s the part you may not read anywhere else, since most journalists really don’t know how a cutback such as this one affects a drug company.
The truth is, it doesn’t; not much anyway.
Here’s the deal. I’ve reviewed lots of sales force models, sales force restructuring scenarios, etc. And based on all the data we had, we found not only that more sales reps give a diminishing return, but we also found something else, which we didn't expect.
We learned that before that diminishing return hits home, there is a very wide flat area. What that means is that each new rep pretty much paid for himself; but he didn’t add much incremental revenue.
So the good news was that you didn’t have to be a rocket scientist when you organized a pharma sales force. A few thousand more or less really doesn’t make much of a difference. In the end, whichever size was used, they brought home about the same profit.
So why is Pfizer doing this?
For those of you who don’t know, Pfizer is trying to achieve annual savings of $4 billion by 2008.
2000 reps, with a salary cost of $100,000, plus car and a few other costs, probably no more than a total of $200,000 brings in a saving of about $400 million a year. That’s not exactly chicken shit, but it is less than 1% of Pfizer revenue and only about 3% of profit.
No major celebration from Wall Street in sight based on those cutbacks.
So, again, why is Pfizer doing this and why now?
Simple.
On Thursday, November 30, 2006 at 10:00 AM EST, Pfizer will hold its 2006 Analyst Meeting. And they probably don’t have terrific news. So they want to show they can be tough. Instill confidence in the Wall Street types.
And that’s the reason they do this now.
After all, when Pfizer’s biggest new product, torcetrapib, which reduces cholesterol, turns out to actually raise blood pressure, well, then a mass-firing of sales reps may detract some of the attention from Pfizer’s dry pipeline.
But there is more. When we look back at the drug industry, ten years from now, we will probably recognize that this was the turning point, when an entire industry started seriously contracting. So if you own drug company stocks, watch out. The worst may yet come.
Court decision: Blogging is a trade and bloggers are journalists.
Blogging is such a new word that if you start typing this in a Microsoft Office Word program, such as the one I used for this post, it shows up as misspelled.
In fact, many people probably still don’t know what a blogger or a blog is. At least that’s what Judge William J. McCarroll wrote in a recent decision.
The reason this judge got interested in blogging is that a blogger had been arrested when he covered a public protest. The public had stormed a public meeting and lots of people had been arrested, but not the journalists.
Apparently, the police didn’t buy the blogger’s story that he was really a journalist. But the judge did.
In his decision the judge wrote, “I believe it’s fair to say that the defendant was doing nothing wrong at the time he was approached by Sergeant Parks and placed under arrest. He was simply plying his trade, gathering photographs and information for his blog alongside other reporters.”
You can read his blog here.
What is important about this case is that here we finally have a legal precedent.
A blogger isn’t just a blogger.
He is, according to Judge William J. McCarroll, a journalist.
In fact, many people probably still don’t know what a blogger or a blog is. At least that’s what Judge William J. McCarroll wrote in a recent decision.
The reason this judge got interested in blogging is that a blogger had been arrested when he covered a public protest. The public had stormed a public meeting and lots of people had been arrested, but not the journalists.
Apparently, the police didn’t buy the blogger’s story that he was really a journalist. But the judge did.
In his decision the judge wrote, “I believe it’s fair to say that the defendant was doing nothing wrong at the time he was approached by Sergeant Parks and placed under arrest. He was simply plying his trade, gathering photographs and information for his blog alongside other reporters.”
You can read his blog here.
What is important about this case is that here we finally have a legal precedent.
A blogger isn’t just a blogger.
He is, according to Judge William J. McCarroll, a journalist.
Monday, November 27, 2006
The Pill
The world changed when “The Pill” arrived. Everyone talked about this event, and some people feared what this liberator would do to humanity. The amazing part is how those two innocuous words came to represent a human revolution.
Of course you know what I'm talking about; the birth control pill. Few products have been so debated and had such an impact on how we view ourselves. And the fact that these two non-descript words are understood by everyone demonstrates how truly revolutionary “The Pill” was.
But also a bit sad; I mean, you don't think about a pill that cures cancer when I write “The Pill.” You don't associate this with a vaccine that eradicates dangerous diseases. No, in fact, you don't associate this word with any drug that cures any disease.
So if nothing else, this shows what branding can do. And so, “The Pill,” has come to represent our sexual drive and the freedom to exercise that drive. Which initially made some uncomfortable and still do.
But like anything related to women, “The Pill,” hardly stands for equality. After all, women need to take the pill, which completely alters the hormonal balance in their bodies, and can lead to a range of side effects. Here are the warnings for one of the most common birth control pills:
The use of oral contraceptives is associated with increased risks of several serious conditions including myocardial infarction, thromboembolism, stroke, hepatic neoplasia, and gallbladder disease, although the risk of serious morbidity or mortality is very small in healthy women without underlying risk factors. The risk of morbidity and mortality increases significantly in the presence of other underlying risk factors such as hypertension, hyperlipidemias, obesity and diabetes.
Just sit back for a moment and think . . . do you think any man would risk any of this? And do you think he would feel comfortable having his sperms destroyed by a pill?
I don't think so.
Then again, he isn't the one who gets pregnant and has to live with the consequences of a mistake.
But the inequality doesn't end there.
In fact, we stick it to women more ways than one. Most of us know by now that drugs are on average twice as expensive in the U.S. as in Canada or Europe. But as far as “The Pill” goes, American women often have to pay ten times as much as European women. For the same pill.
But it doesn't stop with The Pill. When women are too old to have any use for “The Pill,” we have something else ready for them: HRT or hormone replacement therapy. Loaded with estrogen, to make the transition into menopause easier, and keep the skin smooth. With very few side-effects.
Only that turned out to be, well, not entirely true. Estrogen is still recommended for women with severe menopausal symptoms, however, when the National Institute of Health was forced to stop the Women's Health Initiative study prematurely, it taught us that what we think we know may not always be true. In fact, the results indicated that hormone replacement therapy appeared to increase a woman’s risk of breast cancer as well as heart disease, blood clots and stroke.
And of course, we also stick it to our menopausal American women. Again. HRT therapy is often ten times as expensive in the U.S. as in other countries.
American women; we want them to handle contraception with pills that may cause severe harm, we charge them ten times as much for this pleasure as we charge in other countries, and we make abortion more and more difficult to come by. And as the coupe de grace, we then convinced them to use HRT, to stay pretty and feel good, when, in fact, this was just hyperbole and may have led to an increase in heart attacks.
I'm only surprised that female coffins don't cost more than male coffins.
Of course you know what I'm talking about; the birth control pill. Few products have been so debated and had such an impact on how we view ourselves. And the fact that these two non-descript words are understood by everyone demonstrates how truly revolutionary “The Pill” was.
But also a bit sad; I mean, you don't think about a pill that cures cancer when I write “The Pill.” You don't associate this with a vaccine that eradicates dangerous diseases. No, in fact, you don't associate this word with any drug that cures any disease.
So if nothing else, this shows what branding can do. And so, “The Pill,” has come to represent our sexual drive and the freedom to exercise that drive. Which initially made some uncomfortable and still do.
But like anything related to women, “The Pill,” hardly stands for equality. After all, women need to take the pill, which completely alters the hormonal balance in their bodies, and can lead to a range of side effects. Here are the warnings for one of the most common birth control pills:
The use of oral contraceptives is associated with increased risks of several serious conditions including myocardial infarction, thromboembolism, stroke, hepatic neoplasia, and gallbladder disease, although the risk of serious morbidity or mortality is very small in healthy women without underlying risk factors. The risk of morbidity and mortality increases significantly in the presence of other underlying risk factors such as hypertension, hyperlipidemias, obesity and diabetes.
Just sit back for a moment and think . . . do you think any man would risk any of this? And do you think he would feel comfortable having his sperms destroyed by a pill?
I don't think so.
Then again, he isn't the one who gets pregnant and has to live with the consequences of a mistake.
But the inequality doesn't end there.
In fact, we stick it to women more ways than one. Most of us know by now that drugs are on average twice as expensive in the U.S. as in Canada or Europe. But as far as “The Pill” goes, American women often have to pay ten times as much as European women. For the same pill.
But it doesn't stop with The Pill. When women are too old to have any use for “The Pill,” we have something else ready for them: HRT or hormone replacement therapy. Loaded with estrogen, to make the transition into menopause easier, and keep the skin smooth. With very few side-effects.
Only that turned out to be, well, not entirely true. Estrogen is still recommended for women with severe menopausal symptoms, however, when the National Institute of Health was forced to stop the Women's Health Initiative study prematurely, it taught us that what we think we know may not always be true. In fact, the results indicated that hormone replacement therapy appeared to increase a woman’s risk of breast cancer as well as heart disease, blood clots and stroke.
And of course, we also stick it to our menopausal American women. Again. HRT therapy is often ten times as expensive in the U.S. as in other countries.
American women; we want them to handle contraception with pills that may cause severe harm, we charge them ten times as much for this pleasure as we charge in other countries, and we make abortion more and more difficult to come by. And as the coupe de grace, we then convinced them to use HRT, to stay pretty and feel good, when, in fact, this was just hyperbole and may have led to an increase in heart attacks.
I'm only surprised that female coffins don't cost more than male coffins.
Friday, November 24, 2006
MedChatter
There is an interesting web site called MedChatter. This is a site which aggregates info from blogs in the medical and pharmaceutical area.
And what is interesting is that this site keeps track of all those blogs, and constantly displays most recent posts. But not only that, you can also find a ranking of most popular posts overall or in the last week or last 24 hours, based on how many have clicked on those posts.
Of course, you may wonder which ones are the most popular posts since this service started earlier this summer . . . so here's the list of the most popular blogs, overall, according to MedChatter:
Bristol-Myers CEO MUST be crying like a baby now! Feed:Dr Peter Rost
Dooce blogger Heather Armstrong Settles Lawsuit with Kensington Publishing Group Feed:Dr Peter Rost
Bye, bye Peter Dolan, hello Karen Katen??? Feed:Dr Peter Rost
One More Casualty at Pfizer Feed:Dr Peter Rost
An Exclusive Interview with Robert Connely, President and CEO of Novo Innovations Feed:HIStalk
Sanofi Aventis Bristol-Myers Squibb? Feed:Pharmagossip
Worst case of hemorrhoidal prolapse ever & PPH Feed:Unbounded Medicine
The Cost of Pfizer's Two Party Jets Feed:Dr Peter Rost
BMS - Plavix: looks like September 12th is D (for Dolan) Day Feed:Pharmagossip
BMS - Dolan's departure: the analysis begins Feed:Pharmagossip
Somebody over at Cafe Pharma appears close to a complete break-down . . . Feed:Dr Peter Rost
"Pfizer/Pharmacia and the Art of Firing People; Pfizer Moves to Block Rost’s Book (excerpt included)" Feed:Dr Peter Rost
Splenic Injury and Hemoperitoneum in Blunt Trauma Feed:Unbounded Medicine
Wyeth - Prempro: second trial starting in Philly Feed:Pharmagossip
More Pfizer Management Changes? Feed:Dr Peter Rost
BMS - Dolan's departure: the analysis begins Feed:Pharmagossip
"Pfizer Cuts Marketing Execs, Not Marketing" Feed:Dr Peter Rost
Pfizer: Too Big to Fly? Feed:Dr Peter Rost
Are GSK and Novartis considering a merger? Feed:Pharmagossip
The Mother of all Job Search Videos . . . Not. Feed:Dr Peter Rost
How To Safely Select Hospital Clinical Software – Lessons from the Past. Feed:Australian Health Information Technology
Am I Clairvoyant or What? Feed:Dr Peter Rost
BMS - Dolan may need an office collection Feed:Pharmagossip
Sanofi Aventis Bristol-Myers Squibb? Feed:Pharmagossip
The Doctor is More Important than the Pill Feed:Clinical Psychiatry Blog
Retail Clinics, Mobile Diagnostic Busses, and Jurassic Park by Nick Jacobs Feed:Hospital Impact
Peritoneal Lavage [Flickr] Feed:Unbounded Medicine
Ronald Green, Famous Lawyer for Pfizer Caught Lying in Court Feed:Dr Peter Rost
Gallstone Ileus Feed:Unbounded Medicine
And what is interesting is that this site keeps track of all those blogs, and constantly displays most recent posts. But not only that, you can also find a ranking of most popular posts overall or in the last week or last 24 hours, based on how many have clicked on those posts.
Of course, you may wonder which ones are the most popular posts since this service started earlier this summer . . . so here's the list of the most popular blogs, overall, according to MedChatter:
Bristol-Myers CEO MUST be crying like a baby now! Feed:Dr Peter Rost
Dooce blogger Heather Armstrong Settles Lawsuit with Kensington Publishing Group Feed:Dr Peter Rost
Bye, bye Peter Dolan, hello Karen Katen??? Feed:Dr Peter Rost
One More Casualty at Pfizer Feed:Dr Peter Rost
An Exclusive Interview with Robert Connely, President and CEO of Novo Innovations Feed:HIStalk
Sanofi Aventis Bristol-Myers Squibb? Feed:Pharmagossip
Worst case of hemorrhoidal prolapse ever & PPH Feed:Unbounded Medicine
The Cost of Pfizer's Two Party Jets Feed:Dr Peter Rost
BMS - Plavix: looks like September 12th is D (for Dolan) Day Feed:Pharmagossip
BMS - Dolan's departure: the analysis begins Feed:Pharmagossip
Somebody over at Cafe Pharma appears close to a complete break-down . . . Feed:Dr Peter Rost
"Pfizer/Pharmacia and the Art of Firing People; Pfizer Moves to Block Rost’s Book (excerpt included)" Feed:Dr Peter Rost
Splenic Injury and Hemoperitoneum in Blunt Trauma Feed:Unbounded Medicine
Wyeth - Prempro: second trial starting in Philly Feed:Pharmagossip
More Pfizer Management Changes? Feed:Dr Peter Rost
BMS - Dolan's departure: the analysis begins Feed:Pharmagossip
"Pfizer Cuts Marketing Execs, Not Marketing" Feed:Dr Peter Rost
Pfizer: Too Big to Fly? Feed:Dr Peter Rost
Are GSK and Novartis considering a merger? Feed:Pharmagossip
The Mother of all Job Search Videos . . . Not. Feed:Dr Peter Rost
How To Safely Select Hospital Clinical Software – Lessons from the Past. Feed:Australian Health Information Technology
Am I Clairvoyant or What? Feed:Dr Peter Rost
BMS - Dolan may need an office collection Feed:Pharmagossip
Sanofi Aventis Bristol-Myers Squibb? Feed:Pharmagossip
The Doctor is More Important than the Pill Feed:Clinical Psychiatry Blog
Retail Clinics, Mobile Diagnostic Busses, and Jurassic Park by Nick Jacobs Feed:Hospital Impact
Peritoneal Lavage [Flickr] Feed:Unbounded Medicine
Ronald Green, Famous Lawyer for Pfizer Caught Lying in Court Feed:Dr Peter Rost
Gallstone Ileus Feed:Unbounded Medicine
Wednesday, November 22, 2006
Thank you, America
It’s that time of the year. Thanksgiving is upon us and we are supposed to feel thankful. When I came to the U.S. as an immigrant back in 1987, I felt a bit weird about this holiday. It wasn’t a tradition I knew what to do with, since it was the first time this holiday had been bestowed upon me.
But since I made the choice to come here, in fact, worked very hard to become a legal resident and then a naturalized U.S. citizen, I felt that maybe I had more reason to celebrate Thanksgiving than many Americans who were born here.
This was a wondrous country with more groceries in the supermarket than I’d ever seen before. It had bigger homes, bigger cars, and bigger most things. Even the salaries were much bigger. The only thing smaller than I was used to, were the taxes.
I loved my new life in my new country; my only serious disappointment during the first year was buying household appliances. I’d never before seen the old-fashioned, huge, washers that required preheated water, nor weird upright vacuum cleaners in dull colors that looked as if they were leftovers from an alien spaceship. Only now, twenty years later, have we in the U.S. picked up the appliance design and features Europeans have enjoyed for many years.
And don’t get me talking about the office and three-ring binders that open up and make all the paper fall out, as soon as you open them. In Sweden we had four interlocking grips that made it impossible for a single piece of paper to fall out. The U.S. paper format I liked though, a tiny bit more square than the European A4 format. Gallons and inches were a different story; to have any measuring system, which can’t be divided by ten, like centimeters and meters, appears to be another hang-over from the medieval ages.
Then we have the U.S. television. Yes, getting another one-hundred channels was really nice, if there only had been something to actually watch. And if not one of those screaming used car sales people came on every ten minutes during a commercial break. That was back in 1987. Today we have one of those feel-good drug commercials with dancing people and happy dogs every ten minutes. I don’t know which one I detest more. Many European countries only have commercials between the shows, at least they did in those days.
One of the things I liked most was that income taxes were less than half of what I used to pay. Funny thing, though, was that housing costs and auto insurance ate up a significant part of the difference. I just read a Swedish newspaper, which proclaimed that the most expensive single family home in Sweden, based on last year’s tax assessment is $1.5 million. Ten times that amount wouldn’t even begin to cover the most expensive homes in the U.S.
But of course, white-collar salaries in the U.S. are twice what they pay in Europe, so in the end it was a pretty good deal, even with that shocking auto insurance. And maybe one problem was that I didn’t have a U.S. driving record and that the first car I bought was a black Corvette. They put me in a high-risk pool and I had to fork over $3,000 for that pleasure—and this was some serious money back in 1987.
The Corvette I bought was less than a year old, however, I got to know the Chevrolet service manager better than the car. That car spent a lot of quality time in the shop; literally once a month. Everything broke down and I wasn’t going to take the risk with another domestic car, so it took another fifteen years until I bought another domestic auto. I know, I know, what do you expect with a sports car . . . but hey, this is the country where everyone had a car one generation before anyone in Europe had this, so I thought Detroit knew how to manufacture those darned things back in 1987.
During my love-hate experience with my Corvette, I bought Consumer Report, checked the reliability—or lack thereof—among American cars, and learned that my experience wasn’t the exception. Today American car makers have finally started to catch up, but they sure aren’t ahead. Nor are the models particularly appealing. So for once I agree with Bush when he told Detroit that car makers should stop bitching and “build a relevant” vehicle. At the same time, I have to say, I love my Jeep, and have had very few problems.
Jeep, in fact, is one of the few American auto brands that has consistently and skillfully created a good product and managed to position itself favorably around the globe. The other American cars you can hardly find in any other country, because very few people except those in the heartland want them. (That’s supported by hard, cold sales statistics.)
But even though I didn’t have a good experience with American cars, I had a great experience with Americans. Few people are as open, friendly and easygoing. The fact that I had a foreign accent didn’t seem to matter until much later in my career, and then I turned it into an advantage by transferring to the international division of a large company. Then again, if I hadn’t been tall, blond, and white, I’m sure my experience wouldn’t have been quite the same.
All in all, I wouldn’t have traded my life in America for anything. Moving here was one of the best things I ever did. That, of course, doesn’t mean that I don’t think there aren’t a few things we could improve, as those of you who may have read my book and my articles may realize.
One final reflection among many, about what moving to a new country does to you, is that you’re really never completely at home. You don’t have the same background and experience as the natives, and after a few years, you also don’t have the same experience as the people in your own home country. So you are something of a stranger everywhere. But that is also the beauty, because your life is so much richer with all those experiences.
And I, for one, am thankful for what America has given me and my family. I hope I have returned something of value and that I’ll be able to continue to do so.
But since I made the choice to come here, in fact, worked very hard to become a legal resident and then a naturalized U.S. citizen, I felt that maybe I had more reason to celebrate Thanksgiving than many Americans who were born here.
This was a wondrous country with more groceries in the supermarket than I’d ever seen before. It had bigger homes, bigger cars, and bigger most things. Even the salaries were much bigger. The only thing smaller than I was used to, were the taxes.
I loved my new life in my new country; my only serious disappointment during the first year was buying household appliances. I’d never before seen the old-fashioned, huge, washers that required preheated water, nor weird upright vacuum cleaners in dull colors that looked as if they were leftovers from an alien spaceship. Only now, twenty years later, have we in the U.S. picked up the appliance design and features Europeans have enjoyed for many years.
And don’t get me talking about the office and three-ring binders that open up and make all the paper fall out, as soon as you open them. In Sweden we had four interlocking grips that made it impossible for a single piece of paper to fall out. The U.S. paper format I liked though, a tiny bit more square than the European A4 format. Gallons and inches were a different story; to have any measuring system, which can’t be divided by ten, like centimeters and meters, appears to be another hang-over from the medieval ages.
Then we have the U.S. television. Yes, getting another one-hundred channels was really nice, if there only had been something to actually watch. And if not one of those screaming used car sales people came on every ten minutes during a commercial break. That was back in 1987. Today we have one of those feel-good drug commercials with dancing people and happy dogs every ten minutes. I don’t know which one I detest more. Many European countries only have commercials between the shows, at least they did in those days.
One of the things I liked most was that income taxes were less than half of what I used to pay. Funny thing, though, was that housing costs and auto insurance ate up a significant part of the difference. I just read a Swedish newspaper, which proclaimed that the most expensive single family home in Sweden, based on last year’s tax assessment is $1.5 million. Ten times that amount wouldn’t even begin to cover the most expensive homes in the U.S.
But of course, white-collar salaries in the U.S. are twice what they pay in Europe, so in the end it was a pretty good deal, even with that shocking auto insurance. And maybe one problem was that I didn’t have a U.S. driving record and that the first car I bought was a black Corvette. They put me in a high-risk pool and I had to fork over $3,000 for that pleasure—and this was some serious money back in 1987.
The Corvette I bought was less than a year old, however, I got to know the Chevrolet service manager better than the car. That car spent a lot of quality time in the shop; literally once a month. Everything broke down and I wasn’t going to take the risk with another domestic car, so it took another fifteen years until I bought another domestic auto. I know, I know, what do you expect with a sports car . . . but hey, this is the country where everyone had a car one generation before anyone in Europe had this, so I thought Detroit knew how to manufacture those darned things back in 1987.
During my love-hate experience with my Corvette, I bought Consumer Report, checked the reliability—or lack thereof—among American cars, and learned that my experience wasn’t the exception. Today American car makers have finally started to catch up, but they sure aren’t ahead. Nor are the models particularly appealing. So for once I agree with Bush when he told Detroit that car makers should stop bitching and “build a relevant” vehicle. At the same time, I have to say, I love my Jeep, and have had very few problems.
Jeep, in fact, is one of the few American auto brands that has consistently and skillfully created a good product and managed to position itself favorably around the globe. The other American cars you can hardly find in any other country, because very few people except those in the heartland want them. (That’s supported by hard, cold sales statistics.)
But even though I didn’t have a good experience with American cars, I had a great experience with Americans. Few people are as open, friendly and easygoing. The fact that I had a foreign accent didn’t seem to matter until much later in my career, and then I turned it into an advantage by transferring to the international division of a large company. Then again, if I hadn’t been tall, blond, and white, I’m sure my experience wouldn’t have been quite the same.
All in all, I wouldn’t have traded my life in America for anything. Moving here was one of the best things I ever did. That, of course, doesn’t mean that I don’t think there aren’t a few things we could improve, as those of you who may have read my book and my articles may realize.
One final reflection among many, about what moving to a new country does to you, is that you’re really never completely at home. You don’t have the same background and experience as the natives, and after a few years, you also don’t have the same experience as the people in your own home country. So you are something of a stranger everywhere. But that is also the beauty, because your life is so much richer with all those experiences.
And I, for one, am thankful for what America has given me and my family. I hope I have returned something of value and that I’ll be able to continue to do so.
Tuesday, November 21, 2006
Mankind
I have been around for a few years on this earth, but I still haven’t decided what I think of mankind.
I mean, some days I’m convinced that we’re a species of cockroaches, where every individual is in it for himself, trying to grab as much as he can, with the final objective to propagate his genes around the globes at the expense of everyone else.
Perhaps that is true. After all, such behavior may be what made our species win over the Neanderthals and we’ve continued fighting our own ever since then.
Other days I observe in wonder selfless sacrifices and bravery.
So who are we?
In the last couple of days, someone everyone perceived as a gentle man, “Kramer” of Seinfeld fame, aka Michael Richards, exploded on scene, howling horrifying insults to people of a darker color than himself (see http://www.youtube.com/watch?v=kDXWk9dTX-I) in front of a laughing audience. Meanwhile, Rupert Murdoch, Fox News, and Regan Books cancelled the book that was meant to shock everyone; “If I did it” by O. J. Simpson.
So are the people involved in all this aberrations? Or are they all of us?
The fact is that most of us are not wife beaters and possible murderers. Like O. J. Simpson. Most of us would not do anything for money. Like Rupert Murdoch or Judith Regan. And most of us would not scream insults to anyone, least of all from a stage, like “Kramer.” But many admire the drive that allowed all of these people to achieve so many other things.
Of course, today, they are all sorry for what they did. Except, perhaps, O.J. Simpson who doesn’t seem to have worried too much about how his book would make his now 18 and 21 year old children of a murdered mother feel.
But the question still remains, how much evil is inside us? What would we be capable of? Every war has taught us that irrespective of our nationality, background, and beliefs, humans are capable of the worst atrocities.
The winner keeps the land and writes history. The loser is gone, and so are his genes; just check out how many native Americans are left. And since the ruthless are more likely to win, we have become a species dominated by this trait.
And perhaps, because we fear what is deep inside all of us, many rejoice when others are publicly shamed for what is really inside them.
I mean, some days I’m convinced that we’re a species of cockroaches, where every individual is in it for himself, trying to grab as much as he can, with the final objective to propagate his genes around the globes at the expense of everyone else.
Perhaps that is true. After all, such behavior may be what made our species win over the Neanderthals and we’ve continued fighting our own ever since then.
Other days I observe in wonder selfless sacrifices and bravery.
So who are we?
In the last couple of days, someone everyone perceived as a gentle man, “Kramer” of Seinfeld fame, aka Michael Richards, exploded on scene, howling horrifying insults to people of a darker color than himself (see http://www.youtube.com/watch?v=kDXWk9dTX-I) in front of a laughing audience. Meanwhile, Rupert Murdoch, Fox News, and Regan Books cancelled the book that was meant to shock everyone; “If I did it” by O. J. Simpson.
So are the people involved in all this aberrations? Or are they all of us?
The fact is that most of us are not wife beaters and possible murderers. Like O. J. Simpson. Most of us would not do anything for money. Like Rupert Murdoch or Judith Regan. And most of us would not scream insults to anyone, least of all from a stage, like “Kramer.” But many admire the drive that allowed all of these people to achieve so many other things.
Of course, today, they are all sorry for what they did. Except, perhaps, O.J. Simpson who doesn’t seem to have worried too much about how his book would make his now 18 and 21 year old children of a murdered mother feel.
But the question still remains, how much evil is inside us? What would we be capable of? Every war has taught us that irrespective of our nationality, background, and beliefs, humans are capable of the worst atrocities.
The winner keeps the land and writes history. The loser is gone, and so are his genes; just check out how many native Americans are left. And since the ruthless are more likely to win, we have become a species dominated by this trait.
And perhaps, because we fear what is deep inside all of us, many rejoice when others are publicly shamed for what is really inside them.
Monday, November 20, 2006
Göteborgs-Posten: Läkemedelsjättar smiter från skatt
Göteborgs-Posten, 9 Maj, 2003
Läkemedelsjättar smiter från skatt
Sverigebaserade multinationella läkemedelsbolag undviker att betala skatt på försäljningsvinsterna. Företagen väljer att redovisa vinsterna i moderbolagets hemland och därmed går den svenska staten miste om hundratals miljoner kronor varje år, skriver Leif Björkman.
De utlandsägda läkemedelsbolagen i Sverige sysslar med två saker: de säljer internationellt sett dyra läkemedel till oss samtidigt som de smiter från att betala normal svensk bolagsskatt på sina höga försäljningsvinster. Genom så kallad kreativ bokföring manipuleras inköps- och försäljningskostnaderna, så att det svenska dotterbolaget rentav går med förlust och undgår skatt, trots att man säljer för miljarder. I stället redovisas och beskattas de svenska försäljningsvinsterna i moderbolagets hemland. Tabellen blixtbelyser omfattningen av skatteflykten.
Att till exempel multinationella Merck Sharp & Dohme AB trots allt redovisar 0,6 procent i svensk skatt på 1 324 miljoner kronor i omsättning och därmed tvingades betala 8 miljoner kronor till den svenska statskassan, framstår i sammahanget som ett litet "kreativt" misstag - möjligen till glädje för svenska skattebetalare som själva och via statskassan betalar för bolagets hela miljardomsättning av importerade piller.
Hur mycket skatt på motsvarande försäljning skulle ett svenskt handelsföretag tvingas betala? Lågprisföretaget Clas Ohlson i Insjön i Dalarna sålde varor under sitt senaste verksamhetsår för 1,7 miljarder kronor och betalade cirka 60 miljoner i skatt, hälften i Sverige och hälften i Norge.
Moderbolagen bakom de svenska läkemedelsbolaget drar "hem" sina svenska läkemedelsvinster och låter dem i stället beskattas i moderlandet. Som framgår av tabellen rör det sig om enorma belopp som "mödrarna" betalar i bolagsskatt: 30 000 - 700 miljoner kronor - mycket tack vare att "döttrarna" åtminstone enligt bokföringen tvingas leva i armod.
En skattevillig "moder" är således MSD i USA. År 2001 betalade bolaget drygt 30 miljarder i skatt - hela 13,7 procent av dess totala omsättning - till den amerikanska statskassan.
I tabellen redovisas de multinationella läkemedelsbolagens årsomsättning år 2001 och vad deras respektive "döttrar" har sålt för i Sverige, eftersom det är svårare att fuska med försäljningssiffror än med redovisad vinst. Så har omsättningen ställts mot vad man har betalat i skatt: noll procent betyder således att försäljningen i Sverige har gått med förlust.
Det är inte länge sedan vi hade fem stora och svenskägda läkemedelsföretag: Astra, Pharmacia, Kabi, Leo och Ferrosan som betalade rejält med skatt i Sverige på sina försäljningsvinster och då indirekt, via statskassan, subventionerade våra läkemedelsinköp vid apoteksdiskarna.
I dag finns inte ett enda stort och svenskägt läkemedelsföretag. Men den utlandsägda tillverkningen i Sverige inom Astra och Pharmacia beskattas i Sverige, och inbringade år 2001 drygt fyra miljarder kronor till den svenska statskassan. Detta måste i sin tur ställas mot att moderbolaget Pharmacia i USA samma år betalade drygt motsvarande tre miljarder kronor till den amerikanska statskassan, liksom Astra Zeneca betalade 12 miljarder kronor i skatt i Storbritannien. Detta trots att största delen av tillverkningen sker i Sverige.
Försökt förhindra
Hittills är det endast skattemyndigheten i Göteborg som har försökt förhindra multinationella bolags uppenbara skatteflykt från Sverige. När Volvo i april 1999 köptes av emerikanska Ford dröjde det inte länge förrän Ford skickade en räkning på "royalty" om 2,8 miljarder kronor till fabriken i Göteborg.
När det uppdagades och ärendet hamnade i skattenämnden beslöts den 19 mars i år att "avdraget" i Volvos Göteborgskassa skulle minskas till 138 miljoner kronor. Med vad det i slutändan kan betyda för att Sverige nu följer flera andra EU-länder för att framtvinga beskattning av de multinationella bolagens vinster i "rätt" land.
I Sverige ökar numera årligen läkemedelskostnaderna med sju till åtta procent, vilket motsvarar cirka två miljarder kronor av nu totalt drygt 23 miljarder årligen.
Om den alerta skattemyndigheten i Göteborg börjar med att syna de här listade läkemedelesbolagen, kommer de sannolikt att få se en bokföring som under åtskilliga år har fyllts med en mix av "royaltyutbetalningar", dubiösa "forsknings- och försäljningskostnader" och höga internpriser från "modern" till "dottern". Sammantaget handlar det om så kallad kreativ bokföring som ger en vacker fasad åt verksamheten, men här döljer leveransen av vinster och svenska skattepengar till moderbolaget.
Kraftfulla åtgärder krävs
Läkare och patienter borde demonstrera mot de multinationella läkemedelsbolagens vinsthunger och obevakade härjningar i den svenska statskassan. Det skulle bli en hälsning till finansminister Bosse Ringholm om att man har tröttnat på att Sverige försvarslöst låter sig utnyttjas av dessa läkemedelsbolag och att vi förväntar oss kraftfulla motåtgärder.
Som framgått finns möjligheter att både återta uteblivna skatteintäkter och att sänka de svenska läkemedelskostnaderna. Det handlar ju om hundratals miljoner kronor, troligen miljardbelopp, vilket i dagsläget borde locka finansministern och därmed bli till glädje för alla skattebetalande undersåtar- sjuka som friska.
Läkemedelsjättar smiter från skatt
Sverigebaserade multinationella läkemedelsbolag undviker att betala skatt på försäljningsvinsterna. Företagen väljer att redovisa vinsterna i moderbolagets hemland och därmed går den svenska staten miste om hundratals miljoner kronor varje år, skriver Leif Björkman.
De utlandsägda läkemedelsbolagen i Sverige sysslar med två saker: de säljer internationellt sett dyra läkemedel till oss samtidigt som de smiter från att betala normal svensk bolagsskatt på sina höga försäljningsvinster. Genom så kallad kreativ bokföring manipuleras inköps- och försäljningskostnaderna, så att det svenska dotterbolaget rentav går med förlust och undgår skatt, trots att man säljer för miljarder. I stället redovisas och beskattas de svenska försäljningsvinsterna i moderbolagets hemland. Tabellen blixtbelyser omfattningen av skatteflykten.
Att till exempel multinationella Merck Sharp & Dohme AB trots allt redovisar 0,6 procent i svensk skatt på 1 324 miljoner kronor i omsättning och därmed tvingades betala 8 miljoner kronor till den svenska statskassan, framstår i sammahanget som ett litet "kreativt" misstag - möjligen till glädje för svenska skattebetalare som själva och via statskassan betalar för bolagets hela miljardomsättning av importerade piller.
Hur mycket skatt på motsvarande försäljning skulle ett svenskt handelsföretag tvingas betala? Lågprisföretaget Clas Ohlson i Insjön i Dalarna sålde varor under sitt senaste verksamhetsår för 1,7 miljarder kronor och betalade cirka 60 miljoner i skatt, hälften i Sverige och hälften i Norge.
Moderbolagen bakom de svenska läkemedelsbolaget drar "hem" sina svenska läkemedelsvinster och låter dem i stället beskattas i moderlandet. Som framgår av tabellen rör det sig om enorma belopp som "mödrarna" betalar i bolagsskatt: 30 000 - 700 miljoner kronor - mycket tack vare att "döttrarna" åtminstone enligt bokföringen tvingas leva i armod.
En skattevillig "moder" är således MSD i USA. År 2001 betalade bolaget drygt 30 miljarder i skatt - hela 13,7 procent av dess totala omsättning - till den amerikanska statskassan.
I tabellen redovisas de multinationella läkemedelsbolagens årsomsättning år 2001 och vad deras respektive "döttrar" har sålt för i Sverige, eftersom det är svårare att fuska med försäljningssiffror än med redovisad vinst. Så har omsättningen ställts mot vad man har betalat i skatt: noll procent betyder således att försäljningen i Sverige har gått med förlust.
Det är inte länge sedan vi hade fem stora och svenskägda läkemedelsföretag: Astra, Pharmacia, Kabi, Leo och Ferrosan som betalade rejält med skatt i Sverige på sina försäljningsvinster och då indirekt, via statskassan, subventionerade våra läkemedelsinköp vid apoteksdiskarna.
I dag finns inte ett enda stort och svenskägt läkemedelsföretag. Men den utlandsägda tillverkningen i Sverige inom Astra och Pharmacia beskattas i Sverige, och inbringade år 2001 drygt fyra miljarder kronor till den svenska statskassan. Detta måste i sin tur ställas mot att moderbolaget Pharmacia i USA samma år betalade drygt motsvarande tre miljarder kronor till den amerikanska statskassan, liksom Astra Zeneca betalade 12 miljarder kronor i skatt i Storbritannien. Detta trots att största delen av tillverkningen sker i Sverige.
Försökt förhindra
Hittills är det endast skattemyndigheten i Göteborg som har försökt förhindra multinationella bolags uppenbara skatteflykt från Sverige. När Volvo i april 1999 köptes av emerikanska Ford dröjde det inte länge förrän Ford skickade en räkning på "royalty" om 2,8 miljarder kronor till fabriken i Göteborg.
När det uppdagades och ärendet hamnade i skattenämnden beslöts den 19 mars i år att "avdraget" i Volvos Göteborgskassa skulle minskas till 138 miljoner kronor. Med vad det i slutändan kan betyda för att Sverige nu följer flera andra EU-länder för att framtvinga beskattning av de multinationella bolagens vinster i "rätt" land.
I Sverige ökar numera årligen läkemedelskostnaderna med sju till åtta procent, vilket motsvarar cirka två miljarder kronor av nu totalt drygt 23 miljarder årligen.
Om den alerta skattemyndigheten i Göteborg börjar med att syna de här listade läkemedelesbolagen, kommer de sannolikt att få se en bokföring som under åtskilliga år har fyllts med en mix av "royaltyutbetalningar", dubiösa "forsknings- och försäljningskostnader" och höga internpriser från "modern" till "dottern". Sammantaget handlar det om så kallad kreativ bokföring som ger en vacker fasad åt verksamheten, men här döljer leveransen av vinster och svenska skattepengar till moderbolaget.
Kraftfulla åtgärder krävs
Läkare och patienter borde demonstrera mot de multinationella läkemedelsbolagens vinsthunger och obevakade härjningar i den svenska statskassan. Det skulle bli en hälsning till finansminister Bosse Ringholm om att man har tröttnat på att Sverige försvarslöst låter sig utnyttjas av dessa läkemedelsbolag och att vi förväntar oss kraftfulla motåtgärder.
Som framgått finns möjligheter att både återta uteblivna skatteintäkter och att sänka de svenska läkemedelskostnaderna. Det handlar ju om hundratals miljoner kronor, troligen miljardbelopp, vilket i dagsläget borde locka finansministern och därmed bli till glädje för alla skattebetalande undersåtar- sjuka som friska.
HOW MULTINATIONAL CORPORATIONS EVADE TAXES
Drug companies and other multinational companies based in the U.S. systematically avoid paying tax in the U.S. on their profits. The companies elect to realize profits in low-tax countries and because of this the rest of us have to pay billions of unnecessary taxes to make up for the shortfall.
The biggest tax scam on earth has a very innocent sounding name. It is called “transfer prices.” That almost sounds boring. It is, however, anything but boring. Abuse of transfer prices is a key tool multinational corporations use to fool the U.S. and other jurisdictions to think that they have virtually no profit; hence, they shouldn’t pay any taxes.
Corporations involved in this scam are “model corporate citizens,” or so they would like us to believe. The truth is that they rob us all blind. The money we lose can be estimated in the tens of billions, or possibly hundreds of billions of dollars every year. We all end up paying higher taxes because rich corporations make sure they don’t.
But don’t take my word for this.
A few weeks ago U.K.-based GlaxoSmithKline (GSK), one of the largest pharmaceutical companies in the world, together with the Internal Revenue Service (IRS) announced that GSK will pay $3.4 billion to the IRS to settle a transfer pricing dispute dating back 17 years. The IRS alleges that GSK improperly shifted profits from their U.S. to the U.K. entity.
And U.K. pharmaceutical companies are not alone with these kinds of problems. Merck, one of the largest U.S. drug companies, also this month disclosed that they face four separate tax disputes in the U.S. and Canada with potential liabilities of $5.6 billion. Out of that amount, Merck disclosed that the Canada Revenue Agency issued the company a notice for $1.8 billion in back taxes and interest “related to certain inter-company pricing matters.” And according to the IRS, one of the schemes Merck used to cheat American tax payers was by setting up a subsidiary in tax-friendly Bermuda. Merck then quietly transferred patents for several blockbuster drugs to the new subsidiary and then paid the subsidiary for use of the patents. The arrangement in effect allowed some of the profits to disappear into Merck’s own “Bermuda triangle.”
So what’s going on here, how have multinational drug companies been able to gouge us for years selling expensive drugs and then avoid paying tax on their astronomical profits?
The answer is simple. For companies in certain businesses, such as pharmaceuticals, it is very easy to simply “invent” the price a company charges their U.S. business for buying the company’s product which they manufacture in another country. And if they charge enough, poof; all the profit vanishes from the US, or Canada, or any other regular jurisdiction and end up in a corporate tax-haven. And that means American and Canadian tax payers don’t get their fair share.
Many multinational corporations essentially have two sets of bookkeeping. One set, with artificially inflated transfer prices is what they use to prepare local tax returns, and show auditors in high-tax jurisdictions, and another set of books, in which management can see the true profit and lost statement, based on real cost of goods, are used for the executives to determine the actual performance of their various operations.
Of course, not every multinational industry can do this as easily as the drug industry. It would be difficult to motivate $6,000 toilet seats. But the drug industry, where real cost of goods to manufacture drugs is usually around 5% of selling price, has a lot of room to artificially increase that cost of goods to 50% or 75% of selling price. This money is then accumulated in corporate tax-havens where the drugs are manufactured, such as Puerto Rico and Ireland. Puerto Rico has for many years attracted lots of pharmaceutical plants and Ireland is the new destination for such facilities, not because of the skilled labor or the beautiful scenery or the great beer—but because of the low taxes. Ireland has, in fact, one of the world’s lowest corporate tax rates with a maximum rate of 12.5 percent.
In Puerto Rico, over a quarter of the country’s gross domestic product already comes from pharmaceutical manufacturing. That shouldn’t be surprising. According to the U.S. Federal Tax Reform Act of 1976, manufacturers are permitted to repatriate profits from Puerto Rico to the U.S. free of U.S. federal taxes. And by the way, the Puerto Rico withholding tax is only 10%.
Of course, no company should have to pay more tax than they are legally obligated to, and they are entitled to locate to any low-tax jurisdiction. The problem starts when they use fraudulent transfer pricing and other tricks to artificially shift their income from the U.S. to a tax-haven. According to current OECD guidelines transfer prices should be based upon the arm’s length principle – that means the transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. Reality is that standard operating procedure for multinationals is to consistently violate this rule. And why shouldn’t they? After all, it takes 17 years for them to pay up, per the GSK example above, even when they get caught.
Another industry which successfully exploits overseas tax strategies to cheat us all is the hi-tech industry. In fact, Microsoft Corp. recently shaved at least $500 million from its annual tax bill using a similar strategy to the one the drug industry has used for so many years. Microsoft has set up a subsidiary in Ireland, called Round Island One Ltd. This company pays more than $300 million in taxes to this small island country with only 4 million inhabitants, and most of this comes from licensing fees for copyrighted software, originally developed in the U.S. Interesting thing is, at the same time, Round Island paid a total of just under $17 million in taxes to about 20 other countries, with more than 300 million people. The result of this was that Microsoft's world-wide tax rate plunged to 26 percent in 2004, from 33 percent the year before. Almost half of the drop was due to “foreign earnings taxed at lower rates,” according to a Microsoft financial filing. And this is how Microsoft has radically reduced its corporate taxes in much of Europe and been able to shield billions of dollars from U.S. taxation.
But remember, this is only one example. Most of the other tech companies are doing the same thing. Google recently also set up an Irish operation that the firm credited in a SEC filing with reducing its tax rate.
Here’s how this is done in the software industry and any other industry with valuable intellectual property. A company takes a great, patented, American product and then develops a new generation. Then, of course, the old product disappears. Some, or all, of the cost and development work for the new product takes place in Ireland, or at least, so the company claims. The ownership of the new generation product and all income from licensing can then legally be shared between the U.S. parent company and the offshore corporation or transferred outright to the tax-haven. The deal, to pass IRS scrutiny, has to be made using the “arms-length principle.” Reality is that the IRS has no way of controlling all these transactions.
Unfortunately those of us working and paying tax in the U.S. can’t relocate our jobs and our income to Ireland or another tax haven. So we have to make up the income shortfall. In the U.S. we have a highly educated society with a very qualified workforce, partly supported by our tax payers. This helps us generate breakthrough products. But once a company has a successful product, they have every incentive to move the second generation of a successful product overseas, to Ireland and a few other corporate tax havens.
There is only one problem for U.S. companies with this strategy, and that is that if they repatriate this money to the U.S. they have to pay full corporate taxes. In fact, according to BusinessWeek, U.S. multinational corporations have built up profits of as much as $750 billion overseas, much of it in tax havens such as the Ireland, Bahamas, and Singapore to avoid the stiff 35% levy they'd face if they repatriated the funds back into the U.S.
But of course, Congress, which is basically paid for by our multinational corporations, generously provided for a one-time provision in the corporate tax code, so that they could repatriate profits earned before 2003, and held in foreign subsidiaries, at an effective 5.25% tax rate.
And so the game goes on.
In the end, multinational corporations live in a global world which allows them to pretty much send their money to corporate tax havens at will, and then repatriate this money almost tax free, with the help of the U.S. Congress.
The people left holding the bag are you and me.
The biggest tax scam on earth has a very innocent sounding name. It is called “transfer prices.” That almost sounds boring. It is, however, anything but boring. Abuse of transfer prices is a key tool multinational corporations use to fool the U.S. and other jurisdictions to think that they have virtually no profit; hence, they shouldn’t pay any taxes.
Corporations involved in this scam are “model corporate citizens,” or so they would like us to believe. The truth is that they rob us all blind. The money we lose can be estimated in the tens of billions, or possibly hundreds of billions of dollars every year. We all end up paying higher taxes because rich corporations make sure they don’t.
But don’t take my word for this.
A few weeks ago U.K.-based GlaxoSmithKline (GSK), one of the largest pharmaceutical companies in the world, together with the Internal Revenue Service (IRS) announced that GSK will pay $3.4 billion to the IRS to settle a transfer pricing dispute dating back 17 years. The IRS alleges that GSK improperly shifted profits from their U.S. to the U.K. entity.
And U.K. pharmaceutical companies are not alone with these kinds of problems. Merck, one of the largest U.S. drug companies, also this month disclosed that they face four separate tax disputes in the U.S. and Canada with potential liabilities of $5.6 billion. Out of that amount, Merck disclosed that the Canada Revenue Agency issued the company a notice for $1.8 billion in back taxes and interest “related to certain inter-company pricing matters.” And according to the IRS, one of the schemes Merck used to cheat American tax payers was by setting up a subsidiary in tax-friendly Bermuda. Merck then quietly transferred patents for several blockbuster drugs to the new subsidiary and then paid the subsidiary for use of the patents. The arrangement in effect allowed some of the profits to disappear into Merck’s own “Bermuda triangle.”
So what’s going on here, how have multinational drug companies been able to gouge us for years selling expensive drugs and then avoid paying tax on their astronomical profits?
The answer is simple. For companies in certain businesses, such as pharmaceuticals, it is very easy to simply “invent” the price a company charges their U.S. business for buying the company’s product which they manufacture in another country. And if they charge enough, poof; all the profit vanishes from the US, or Canada, or any other regular jurisdiction and end up in a corporate tax-haven. And that means American and Canadian tax payers don’t get their fair share.
Many multinational corporations essentially have two sets of bookkeeping. One set, with artificially inflated transfer prices is what they use to prepare local tax returns, and show auditors in high-tax jurisdictions, and another set of books, in which management can see the true profit and lost statement, based on real cost of goods, are used for the executives to determine the actual performance of their various operations.
Of course, not every multinational industry can do this as easily as the drug industry. It would be difficult to motivate $6,000 toilet seats. But the drug industry, where real cost of goods to manufacture drugs is usually around 5% of selling price, has a lot of room to artificially increase that cost of goods to 50% or 75% of selling price. This money is then accumulated in corporate tax-havens where the drugs are manufactured, such as Puerto Rico and Ireland. Puerto Rico has for many years attracted lots of pharmaceutical plants and Ireland is the new destination for such facilities, not because of the skilled labor or the beautiful scenery or the great beer—but because of the low taxes. Ireland has, in fact, one of the world’s lowest corporate tax rates with a maximum rate of 12.5 percent.
In Puerto Rico, over a quarter of the country’s gross domestic product already comes from pharmaceutical manufacturing. That shouldn’t be surprising. According to the U.S. Federal Tax Reform Act of 1976, manufacturers are permitted to repatriate profits from Puerto Rico to the U.S. free of U.S. federal taxes. And by the way, the Puerto Rico withholding tax is only 10%.
Of course, no company should have to pay more tax than they are legally obligated to, and they are entitled to locate to any low-tax jurisdiction. The problem starts when they use fraudulent transfer pricing and other tricks to artificially shift their income from the U.S. to a tax-haven. According to current OECD guidelines transfer prices should be based upon the arm’s length principle – that means the transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. Reality is that standard operating procedure for multinationals is to consistently violate this rule. And why shouldn’t they? After all, it takes 17 years for them to pay up, per the GSK example above, even when they get caught.
Another industry which successfully exploits overseas tax strategies to cheat us all is the hi-tech industry. In fact, Microsoft Corp. recently shaved at least $500 million from its annual tax bill using a similar strategy to the one the drug industry has used for so many years. Microsoft has set up a subsidiary in Ireland, called Round Island One Ltd. This company pays more than $300 million in taxes to this small island country with only 4 million inhabitants, and most of this comes from licensing fees for copyrighted software, originally developed in the U.S. Interesting thing is, at the same time, Round Island paid a total of just under $17 million in taxes to about 20 other countries, with more than 300 million people. The result of this was that Microsoft's world-wide tax rate plunged to 26 percent in 2004, from 33 percent the year before. Almost half of the drop was due to “foreign earnings taxed at lower rates,” according to a Microsoft financial filing. And this is how Microsoft has radically reduced its corporate taxes in much of Europe and been able to shield billions of dollars from U.S. taxation.
But remember, this is only one example. Most of the other tech companies are doing the same thing. Google recently also set up an Irish operation that the firm credited in a SEC filing with reducing its tax rate.
Here’s how this is done in the software industry and any other industry with valuable intellectual property. A company takes a great, patented, American product and then develops a new generation. Then, of course, the old product disappears. Some, or all, of the cost and development work for the new product takes place in Ireland, or at least, so the company claims. The ownership of the new generation product and all income from licensing can then legally be shared between the U.S. parent company and the offshore corporation or transferred outright to the tax-haven. The deal, to pass IRS scrutiny, has to be made using the “arms-length principle.” Reality is that the IRS has no way of controlling all these transactions.
Unfortunately those of us working and paying tax in the U.S. can’t relocate our jobs and our income to Ireland or another tax haven. So we have to make up the income shortfall. In the U.S. we have a highly educated society with a very qualified workforce, partly supported by our tax payers. This helps us generate breakthrough products. But once a company has a successful product, they have every incentive to move the second generation of a successful product overseas, to Ireland and a few other corporate tax havens.
There is only one problem for U.S. companies with this strategy, and that is that if they repatriate this money to the U.S. they have to pay full corporate taxes. In fact, according to BusinessWeek, U.S. multinational corporations have built up profits of as much as $750 billion overseas, much of it in tax havens such as the Ireland, Bahamas, and Singapore to avoid the stiff 35% levy they'd face if they repatriated the funds back into the U.S.
But of course, Congress, which is basically paid for by our multinational corporations, generously provided for a one-time provision in the corporate tax code, so that they could repatriate profits earned before 2003, and held in foreign subsidiaries, at an effective 5.25% tax rate.
And so the game goes on.
In the end, multinational corporations live in a global world which allows them to pretty much send their money to corporate tax havens at will, and then repatriate this money almost tax free, with the help of the U.S. Congress.
The people left holding the bag are you and me.
Friday, November 17, 2006
The Lounge
We all get them—the credit card applications. The better credit you have, the more letters you get in the mail, proposing that you should get one more credit card.
Funny thing is that many of those cards advertise themselves as a way to buy more, as if you’d never have to pay back anything. I can’t stop being amazed at the promises they make, as if they were little magic wands.
And when you try to find out how much it would actually cost to use the cards, you find microscopic, dense, text with all kinds of legal mumbo-jumbo. In the end, it usually says that the card company can change any of part of the cardholder agreement whenever they want to. And you can usually say goodbye to that bold introductory rate pretty much as soon as you get the card.
Many fall into the credit card trap and end up with debt on their back and nothing to show for it except exorbitant interest rates and sky-high penalties when banks “forget” to apply payment to the balance. A big part of this industry is really nothing but a legalized scam.
No wonder that there is not a single industry with more consumer complaints lodged against them than the credit card companies.
But sometimes the credit card companies do something really unexpected.
Yesterday it was American Express, which really surprised me. As I walked though the local shopping mall I suddenly discovered a fancy new café. Only it wasn’t a café, it was an American Express Lounge. I’d never seen anything like that, except for the business class lounges at airports where the wealthy travelers with expense accounts separate themselves from the poor peasants who have to pay for their own ticket.
In fact, this new facility looked just like a very exclusive airline lounge.
So I asked what was going on, and the gentleman charged with admitting only American Express card holders informed me that American Express wanted to “give something back to their customers.”
Of course, I’ve never met a single corporation that didn’t want something in return for “giving something” to their customer.
But as I took a tour of this secluded oasis, free of people who hadn’t had the foresight and wherewithal to get an AmEx card, I had to admit that this concept was pretty smart. I mean, I know all those card companies waste endless amounts of money on ads, commercials, and other things that give me no pleasure whatsoever.
But here, in an attempt to make the AmEx card really cool, they offered a free lounge, with designer furniture, coffee, and other goodies.
I think such an initiative should be encouraged.
Imagine if we could get more corporations to do the same thing? Instead of advertising and direct mail, you’d have the Chrysler Lounge, the Mars Chocolate Bar, the Citigroup Funplex, and so on. All of them free for their customers.
That would be marketing which actually returned some value to their customers.
Of course, American Express offers other rewards as well. If I spend a minimum of $250,000 per year I may be offered a Centurion card, made of hand-crafted titanium, which reportedly makes it feel more solid than a conventional “plastic” card. Allegedly it offers a desirable “plunk-factor” when dropped onto a desk.
I can’t imagine every reaching such a spending level, so I guess I’ll have to get used to the thought of continuing to use plastic. At least now I’m welcome in my own private lounge.
Then again, I can’t help being reminded of Groucho Marx’s famous words: “I don't care to belong to a club that accepts people like me as members.”
Funny thing is that many of those cards advertise themselves as a way to buy more, as if you’d never have to pay back anything. I can’t stop being amazed at the promises they make, as if they were little magic wands.
And when you try to find out how much it would actually cost to use the cards, you find microscopic, dense, text with all kinds of legal mumbo-jumbo. In the end, it usually says that the card company can change any of part of the cardholder agreement whenever they want to. And you can usually say goodbye to that bold introductory rate pretty much as soon as you get the card.
Many fall into the credit card trap and end up with debt on their back and nothing to show for it except exorbitant interest rates and sky-high penalties when banks “forget” to apply payment to the balance. A big part of this industry is really nothing but a legalized scam.
No wonder that there is not a single industry with more consumer complaints lodged against them than the credit card companies.
But sometimes the credit card companies do something really unexpected.
Yesterday it was American Express, which really surprised me. As I walked though the local shopping mall I suddenly discovered a fancy new café. Only it wasn’t a café, it was an American Express Lounge. I’d never seen anything like that, except for the business class lounges at airports where the wealthy travelers with expense accounts separate themselves from the poor peasants who have to pay for their own ticket.
In fact, this new facility looked just like a very exclusive airline lounge.
So I asked what was going on, and the gentleman charged with admitting only American Express card holders informed me that American Express wanted to “give something back to their customers.”
Of course, I’ve never met a single corporation that didn’t want something in return for “giving something” to their customer.
But as I took a tour of this secluded oasis, free of people who hadn’t had the foresight and wherewithal to get an AmEx card, I had to admit that this concept was pretty smart. I mean, I know all those card companies waste endless amounts of money on ads, commercials, and other things that give me no pleasure whatsoever.
But here, in an attempt to make the AmEx card really cool, they offered a free lounge, with designer furniture, coffee, and other goodies.
I think such an initiative should be encouraged.
Imagine if we could get more corporations to do the same thing? Instead of advertising and direct mail, you’d have the Chrysler Lounge, the Mars Chocolate Bar, the Citigroup Funplex, and so on. All of them free for their customers.
That would be marketing which actually returned some value to their customers.
Of course, American Express offers other rewards as well. If I spend a minimum of $250,000 per year I may be offered a Centurion card, made of hand-crafted titanium, which reportedly makes it feel more solid than a conventional “plastic” card. Allegedly it offers a desirable “plunk-factor” when dropped onto a desk.
I can’t imagine every reaching such a spending level, so I guess I’ll have to get used to the thought of continuing to use plastic. At least now I’m welcome in my own private lounge.
Then again, I can’t help being reminded of Groucho Marx’s famous words: “I don't care to belong to a club that accepts people like me as members.”
Wednesday, November 15, 2006
Britney Spears
I don’t follow the gossip press, and I couldn’t care less what Britney Spears does. But last week I had to get out of my protected environment and take the train to New York to film a documentary and not even I could avoid the headlines and the magazines on the floor of the train. So I figured I’d use Britney Spear’s wellpublicized divorce to make a point about women. And about men.
Apparently Britney, who is worth between $150 and $300 million, depending on which gossip magazine you read, is about to get divorced. To make things even juicier, her husband Kevin Federline, who the press calls K-Fed (by the way, doesn’t that sound like a drug? At least he seems to have been on drugs most of his marriage . . . ) has apparently spent his married years with hookers, strippers and was caught with his pants down at the Regency hotel when his wife stormed in. The hotel staff apparently relented and gave her a key, even though she wasn’t signed in, so he got a bit of a surprise. And now two of the hotel employees have been fired. (Can anyone stomp and demand a key to anyone’s room at the Regency?)
Problem for K-Fed is that Britney had this ironclad prenuptial agreement, so now K-Fed is allegedly threatening to sell a sex tape of the two lovebirds having consensual married sex. Perhaps not what Britney expected.
And the price tag is expected to be around $30 million for that tape. So K-Fed wants $50 million from Britney and the kids, or something like that in return for not selling the tape, to which he holds copyright, of their sex.
First, isn’t it sad, if true, that a sex tape with Britney can bring in more money than any Michael Moore movie has ever brought in? Ok, don’t answer that. I liked “Bowling for Columbine,” but I didn’t like “Fahrenheit 911” so much, so I’m hoping for his next one, “Sicko.”
Second, why is everyone beating up on Britney for marrying this deadbeat who made like $30,000 before marrying her, while she made millions? Shouldn’t we encourage our young and wealthy women to marry down to spread their wealth? Ok, don’t answer that one either, because, yeah, she could most certainly have found someone who appeared less sleazy than K-Fed, but then again, Britney isn’t the most classy girl either.
And here’s my real point, what really concerns me, about women.
I’ve read many times that women really don’t go for men who are authors, artists, photographers and other free professions, unless they are already very wealthy or famous (they apparently like rock stars). As an author that hurts a bit.
Women apparently prefer doctors, businessmen, accountants—anything with a stable income. Funny thing is; men don’t seem to be that way. They simply prefer to marry their pretty secretary, I guess to get the same service at home as they expect at work. In fact, nearly half of single women believe their professional success is intimidating to the men they meet. And that is outright sad.
I don’t know if any of this is really true, but those of you watching “Sex and the City,” may remember the episode when Miranda, the tough lawyer (who turned out to be a lesbian in her real life), tells a man she meets at a speed-dating event that she's a flight attendant. He tells her that he's a doctor. Both of them, however, are lying, she to diminish her status, and he to inflate it.
Sylvia Ann Hewlett has presented a study of smart women who weren't getting married or having children at the same rates as other women. In her book “Creating a Life,” she created panic among successful women, writing “Nowadays, the rule of thumb seems to be that the more successful the woman, the less likely it is she will find a husband or bear a child.” She claimed that high-achieving women who were still single at age 30 had a less than 10 percent chance of ever marrying.
Maureen Dowd from the New York Times has fanned the flames and blamed her own single life on her career success. In her book “Are Men Necessary?,” Dowd wrote, “I was always so proud of achieving more—succeeding in a high-powered career that would have been closed to my great-aunts. How odd, then, to find out now that being a maid would have enhanced my chances with men.” (That sentence sure made me understand how she picked the title of her book.)
I guess it doesn’t help that back in 2004 researchers at the University of Michigan published a study in the journal Evolution and Human Behavior. The study claimed that the men in their sample preferred to marry a woman whom they considered to be a subordinate, rather than a woman they considered to be a superior or a peer.
I’m not sure if any of this is true, personally I vastly prefer smart women. But maybe they don’t prefer me anymore now when I’m no longer a doctor or a Vice President at Pfizer, but simply an author. Then again I’m already married so I don’t have to worry. (Uh-uh . . . maybe that means I should worry. I better have a chat with my wife.)
Anyway, as I look around me it certainly seems to be true that men’s fragile ego makes them prefer women who submit to them and make them feel good.
So I think it is wonderful when smart, talented performers like Britney Spears are able to get married. Because, of course, K-Fed didn’t just take her for her money. Then he would be like a wom . . . !
But seriously, one key reason women go for rich men is the same reason people rob banks, “that’s where the money is.”
And the fact that poor men prey upon rich women shouldn’t be surprising. It is only sad that in 2006 so many men still feel emasculated by a relationship with a smart woman and so many women still feel they have to submit to a man to survive.
Apparently Britney, who is worth between $150 and $300 million, depending on which gossip magazine you read, is about to get divorced. To make things even juicier, her husband Kevin Federline, who the press calls K-Fed (by the way, doesn’t that sound like a drug? At least he seems to have been on drugs most of his marriage . . . ) has apparently spent his married years with hookers, strippers and was caught with his pants down at the Regency hotel when his wife stormed in. The hotel staff apparently relented and gave her a key, even though she wasn’t signed in, so he got a bit of a surprise. And now two of the hotel employees have been fired. (Can anyone stomp and demand a key to anyone’s room at the Regency?)
Problem for K-Fed is that Britney had this ironclad prenuptial agreement, so now K-Fed is allegedly threatening to sell a sex tape of the two lovebirds having consensual married sex. Perhaps not what Britney expected.
And the price tag is expected to be around $30 million for that tape. So K-Fed wants $50 million from Britney and the kids, or something like that in return for not selling the tape, to which he holds copyright, of their sex.
First, isn’t it sad, if true, that a sex tape with Britney can bring in more money than any Michael Moore movie has ever brought in? Ok, don’t answer that. I liked “Bowling for Columbine,” but I didn’t like “Fahrenheit 911” so much, so I’m hoping for his next one, “Sicko.”
Second, why is everyone beating up on Britney for marrying this deadbeat who made like $30,000 before marrying her, while she made millions? Shouldn’t we encourage our young and wealthy women to marry down to spread their wealth? Ok, don’t answer that one either, because, yeah, she could most certainly have found someone who appeared less sleazy than K-Fed, but then again, Britney isn’t the most classy girl either.
And here’s my real point, what really concerns me, about women.
I’ve read many times that women really don’t go for men who are authors, artists, photographers and other free professions, unless they are already very wealthy or famous (they apparently like rock stars). As an author that hurts a bit.
Women apparently prefer doctors, businessmen, accountants—anything with a stable income. Funny thing is; men don’t seem to be that way. They simply prefer to marry their pretty secretary, I guess to get the same service at home as they expect at work. In fact, nearly half of single women believe their professional success is intimidating to the men they meet. And that is outright sad.
I don’t know if any of this is really true, but those of you watching “Sex and the City,” may remember the episode when Miranda, the tough lawyer (who turned out to be a lesbian in her real life), tells a man she meets at a speed-dating event that she's a flight attendant. He tells her that he's a doctor. Both of them, however, are lying, she to diminish her status, and he to inflate it.
Sylvia Ann Hewlett has presented a study of smart women who weren't getting married or having children at the same rates as other women. In her book “Creating a Life,” she created panic among successful women, writing “Nowadays, the rule of thumb seems to be that the more successful the woman, the less likely it is she will find a husband or bear a child.” She claimed that high-achieving women who were still single at age 30 had a less than 10 percent chance of ever marrying.
Maureen Dowd from the New York Times has fanned the flames and blamed her own single life on her career success. In her book “Are Men Necessary?,” Dowd wrote, “I was always so proud of achieving more—succeeding in a high-powered career that would have been closed to my great-aunts. How odd, then, to find out now that being a maid would have enhanced my chances with men.” (That sentence sure made me understand how she picked the title of her book.)
I guess it doesn’t help that back in 2004 researchers at the University of Michigan published a study in the journal Evolution and Human Behavior. The study claimed that the men in their sample preferred to marry a woman whom they considered to be a subordinate, rather than a woman they considered to be a superior or a peer.
I’m not sure if any of this is true, personally I vastly prefer smart women. But maybe they don’t prefer me anymore now when I’m no longer a doctor or a Vice President at Pfizer, but simply an author. Then again I’m already married so I don’t have to worry. (Uh-uh . . . maybe that means I should worry. I better have a chat with my wife.)
Anyway, as I look around me it certainly seems to be true that men’s fragile ego makes them prefer women who submit to them and make them feel good.
So I think it is wonderful when smart, talented performers like Britney Spears are able to get married. Because, of course, K-Fed didn’t just take her for her money. Then he would be like a wom . . . !
But seriously, one key reason women go for rich men is the same reason people rob banks, “that’s where the money is.”
And the fact that poor men prey upon rich women shouldn’t be surprising. It is only sad that in 2006 so many men still feel emasculated by a relationship with a smart woman and so many women still feel they have to submit to a man to survive.
Tuesday, November 14, 2006
Revolution. Or maybe not.
Most people seem to despise Washington, Capitol Hill and our elected representatives, but not necessarily in that order. And on a regular basis we vote the people we despise the most out of office; those are the ones who won the prior election and proved to all of us that they couldn’t get anything done. Then we move the people into power who weren’t allowed to do anything, but at least they haven’t proven that they couldn’t get anything done, so we are still happy.
And that’s called democracy. Something like 30% of eligible voters in this country vote for Republicans and about 30% vote for Democrats, the other 40% don’t vote because they don't think it would make a difference.
So clearly, a majority of voters have shown by their overwhelming refusal to vote that they don’t think the system works. They also know that all the currently elected representatives don’t want to change the system which elected them.
In the old days this usually resulted in a revolution. It happened over and over again in a lot of big and small countries.
But today a revolution is a little bit more difficult to achieve. In the old days the government had a few musketeers and cannons, and the people had a few rifles and hayforks. It was pretty even. So when enough peasants got pi--ed off at the king who chopped off their heads when they didn’t bow deep enough, like the Russian Tsar, they stormed the palace and chopped off his head. Or something like that.
We can’t do that today. Not only is a revolution just as illegal as it has been since before the Boston Tea Party, today the government has atomic bombs and black choppers. So, perhaps for the first time in world history the peasants and us others have no chance to change the system.
And since in most states winners take it all in an election, the result is that only two parties are allowed to flourish, and, of course, those two parties are jolly happy about that.
It shouldn’t be surprising that one of the first quotes from the Democrats to big business was “now it’s time for you guys to start paying us.” I read it in the New York Times, I think, and I’m sure this isn’t official policy, but something tells me most of my readers will agree it may be a very in-official policy.
After all, forty percent already gave up on voting.
So I have shared in the joy that we have new people in Congress and the world will be a better place to live. But I’m not so sure about that.
I know that Nancy Pelosi has promised to change life as they know it for the drug companies and the oil companies within the first 100 hours of the new Congress, but I’ve also read the comments from the White House saying that any proposal to allow the government to negotiate drug prices would be vetoed.
So I just wanted to remind everyone that Bush is still the one with the executive powers. And he has that little thing called a veto.
Of course, all the opinion polls tell us that most of the American people hope that when Bush finally gets out of the White House, he’ll be replaced with someone very different. And maybe we’ll get lucky and that will really happen. Because the only way a revolution will ever happen again is from the top down. The people will not have much say in anything, ever again.
After all, most of them don’t even show up to vote.
And that’s called democracy. Something like 30% of eligible voters in this country vote for Republicans and about 30% vote for Democrats, the other 40% don’t vote because they don't think it would make a difference.
So clearly, a majority of voters have shown by their overwhelming refusal to vote that they don’t think the system works. They also know that all the currently elected representatives don’t want to change the system which elected them.
In the old days this usually resulted in a revolution. It happened over and over again in a lot of big and small countries.
But today a revolution is a little bit more difficult to achieve. In the old days the government had a few musketeers and cannons, and the people had a few rifles and hayforks. It was pretty even. So when enough peasants got pi--ed off at the king who chopped off their heads when they didn’t bow deep enough, like the Russian Tsar, they stormed the palace and chopped off his head. Or something like that.
We can’t do that today. Not only is a revolution just as illegal as it has been since before the Boston Tea Party, today the government has atomic bombs and black choppers. So, perhaps for the first time in world history the peasants and us others have no chance to change the system.
And since in most states winners take it all in an election, the result is that only two parties are allowed to flourish, and, of course, those two parties are jolly happy about that.
It shouldn’t be surprising that one of the first quotes from the Democrats to big business was “now it’s time for you guys to start paying us.” I read it in the New York Times, I think, and I’m sure this isn’t official policy, but something tells me most of my readers will agree it may be a very in-official policy.
After all, forty percent already gave up on voting.
So I have shared in the joy that we have new people in Congress and the world will be a better place to live. But I’m not so sure about that.
I know that Nancy Pelosi has promised to change life as they know it for the drug companies and the oil companies within the first 100 hours of the new Congress, but I’ve also read the comments from the White House saying that any proposal to allow the government to negotiate drug prices would be vetoed.
So I just wanted to remind everyone that Bush is still the one with the executive powers. And he has that little thing called a veto.
Of course, all the opinion polls tell us that most of the American people hope that when Bush finally gets out of the White House, he’ll be replaced with someone very different. And maybe we’ll get lucky and that will really happen. Because the only way a revolution will ever happen again is from the top down. The people will not have much say in anything, ever again.
After all, most of them don’t even show up to vote.
Monday, November 13, 2006
Whistleblowers: Crazy people?
Most people wonder how anyone can become a whistleblower—ever. After all, most stories of whistleblowers don’t end well. And that’s the reason most people keep quiet.
It’s called self preservation.
So who are these people who go against the crowd?
In my book “The Whistleblower” I start out with the following description:
A study of 233 whistleblowers by Donald Soeken, St. Elizabeth's Hospital in Washington, DC found that the average whistleblower was a family man in his forties with a strong conscience and high moral values. After blowing the whistle on fraud, 90 percent of the whistleblowers were fired or demoted, 27 percent faced lawsuits, 26 percent had to seek psychiatric or physical care, 25 percent suffered alcohol abuse, 17 percent lost their homes, 15 percent got divorced, 10 percent attempted suicide, and 8 percent were bankrupted. But in spite of all this, only 16 percent said that they wouldn’t blow the whistle again.
One thing I’ve learned—which didn’t exactly come as a surprise—is that most organizations react the same way to whistleblowers. The basic response is “kill the messenger.” And if he goes public, he is all but guaranteed to lose his standing in the group.
So when I blew the whistle the third time around, at the Huffington Post, it didn’t surprise me that they immediately locked me out and stopped me from writing further articles for them. Of course, one reason I criticized the HuffPo publicly was because, based on my experience, I didn’t think doing so quietly would help and I also wanted to test this hypothesis. It also shouldn’t surprise anyone that they were forced to implement my recommendations (prohibit employees from anonymously posting on blogs and remove “reader’s favorite comments” which I had shown could be abused).
Whistleblowers are often right, however, most organizations feel it is more important not to be embarrassed than to correct what is wrong. So the whistleblower is seen as a bigger threat than the problem they bring up. When Enron whistleblower Sherron Watkins went to the CEO to save the company, she didn’t get a pat on the shoulder. Instead, Ken Lay, the CEO, tried to fire her. This is a typical reaction. Of course, part of the problem is that corruption often starts at the top, so when employees try to correct things they discover that they step on some mighty toes.
So how can someone be crazy enough to blow the whistle?
After all, I wouldn’t recommend for anyone to do what I’ve done. I guess whistleblowing should have the same disclaimer they use in car commercials: Closed course, professional driver, do not try on your own.
But I always believed, that just like a professional driver, I’d be able to pull this stunt off. I’ve never encountered anything I couldn’t resolve in the end. We’ll see if that’s true this time around as well.
This still begs the question, however . . . how can anyone be crazy enough to be a whistleblower?
Clearly, there are lots of good, conscientious people in every industry; yet, most of them don’t end up in such an exposed situation.
The reason for that is, I think, that when you work in lower or middle management, you don’t see the big picture and you don’t see all the things that are going on. It’s not your job to deal with those problems. And, at least in my experience, once you get to a more senior management level, that’s when suddenly all hell breaks lose. And this is also the reason management is so careful about whom they promote to this level. Everyone knows this isn’t just about the best guy for the job—it is about trust. Management needs to trust the senior employee to do the “right thing,” and that may be defined very differently in different companies. Usually it means quietly solving things, or looking the other way, or to be able to take a hint when to back off.
But some people don’t take that hint. Are they born troublemakers, born whistleblowers?
I don’t think so. I think whistleblowers are made, not born. They simply saw enough and said “enough is enough.” It’s basically a matter of fairness. Some had no choice. “Join the conspiracy, act or quit.” Those are the options. Not an easy choice. And some choose to act. When the company doesn’t like their action they are branded “whistleblowers.”
Animal experiments support this contention.
You see, animals appear to have an inherent sense of fairness and justice, just like humans. In experiments with Capuchins, they proved they knew unfairness when they encountered this.
Capuchins prefer grapes to cucumbers, and when a scientist in a test gave a grape to one capuchin and a cucumber to another, the latter threw it onto the ground and stalked away rather than give in to this injustice. In another experiment, these animals learned to trade a plastic pipe for food. If they saw another capuchin make a trade for a delicious grape, but were offered a cucumber in exchange for their own plastic pipe, they were much more likely to refuse to hand it over in return for the stupid vegetable. Clearly, they felt it was better to go hungry than to give in to this unfairness. Many similar experiments have been performed, showing that animals rather have nothing than something, if another animal is treated better.
And humans may operate the same way. It may be better to become a whistleblower and stop an injustice, even though the cost is much higher than the gain, simply based on this sense of unfairness.
Many studies in humans have confirmed that this is how we operate. In one experiment, one person is offered $100 and then tells his teammate that he will only get $25 out of that $100, or they’ll both get nothing, and the teammate usually refuses, and so they both get nothing.
Whistleblowing; it’s about fairness. Doing the right thing; correct an injustice.
It’s not something people do lightly, because the penalties in our society are so high—no job, no money, no future, etc.
But deep down it is probably hardwired into our brains.
Just like the response is hardwired. We need cooperation to survive. Whistleblowing is perceived as a threat to the group: Kill the wolf that doesn’t acquiesce.
We are all wolfs in a Wolfpack.
Which pack do you want to belong to?
It’s called self preservation.
So who are these people who go against the crowd?
In my book “The Whistleblower” I start out with the following description:
A study of 233 whistleblowers by Donald Soeken, St. Elizabeth's Hospital in Washington, DC found that the average whistleblower was a family man in his forties with a strong conscience and high moral values. After blowing the whistle on fraud, 90 percent of the whistleblowers were fired or demoted, 27 percent faced lawsuits, 26 percent had to seek psychiatric or physical care, 25 percent suffered alcohol abuse, 17 percent lost their homes, 15 percent got divorced, 10 percent attempted suicide, and 8 percent were bankrupted. But in spite of all this, only 16 percent said that they wouldn’t blow the whistle again.
One thing I’ve learned—which didn’t exactly come as a surprise—is that most organizations react the same way to whistleblowers. The basic response is “kill the messenger.” And if he goes public, he is all but guaranteed to lose his standing in the group.
So when I blew the whistle the third time around, at the Huffington Post, it didn’t surprise me that they immediately locked me out and stopped me from writing further articles for them. Of course, one reason I criticized the HuffPo publicly was because, based on my experience, I didn’t think doing so quietly would help and I also wanted to test this hypothesis. It also shouldn’t surprise anyone that they were forced to implement my recommendations (prohibit employees from anonymously posting on blogs and remove “reader’s favorite comments” which I had shown could be abused).
Whistleblowers are often right, however, most organizations feel it is more important not to be embarrassed than to correct what is wrong. So the whistleblower is seen as a bigger threat than the problem they bring up. When Enron whistleblower Sherron Watkins went to the CEO to save the company, she didn’t get a pat on the shoulder. Instead, Ken Lay, the CEO, tried to fire her. This is a typical reaction. Of course, part of the problem is that corruption often starts at the top, so when employees try to correct things they discover that they step on some mighty toes.
So how can someone be crazy enough to blow the whistle?
After all, I wouldn’t recommend for anyone to do what I’ve done. I guess whistleblowing should have the same disclaimer they use in car commercials: Closed course, professional driver, do not try on your own.
But I always believed, that just like a professional driver, I’d be able to pull this stunt off. I’ve never encountered anything I couldn’t resolve in the end. We’ll see if that’s true this time around as well.
This still begs the question, however . . . how can anyone be crazy enough to be a whistleblower?
Clearly, there are lots of good, conscientious people in every industry; yet, most of them don’t end up in such an exposed situation.
The reason for that is, I think, that when you work in lower or middle management, you don’t see the big picture and you don’t see all the things that are going on. It’s not your job to deal with those problems. And, at least in my experience, once you get to a more senior management level, that’s when suddenly all hell breaks lose. And this is also the reason management is so careful about whom they promote to this level. Everyone knows this isn’t just about the best guy for the job—it is about trust. Management needs to trust the senior employee to do the “right thing,” and that may be defined very differently in different companies. Usually it means quietly solving things, or looking the other way, or to be able to take a hint when to back off.
But some people don’t take that hint. Are they born troublemakers, born whistleblowers?
I don’t think so. I think whistleblowers are made, not born. They simply saw enough and said “enough is enough.” It’s basically a matter of fairness. Some had no choice. “Join the conspiracy, act or quit.” Those are the options. Not an easy choice. And some choose to act. When the company doesn’t like their action they are branded “whistleblowers.”
Animal experiments support this contention.
You see, animals appear to have an inherent sense of fairness and justice, just like humans. In experiments with Capuchins, they proved they knew unfairness when they encountered this.
Capuchins prefer grapes to cucumbers, and when a scientist in a test gave a grape to one capuchin and a cucumber to another, the latter threw it onto the ground and stalked away rather than give in to this injustice. In another experiment, these animals learned to trade a plastic pipe for food. If they saw another capuchin make a trade for a delicious grape, but were offered a cucumber in exchange for their own plastic pipe, they were much more likely to refuse to hand it over in return for the stupid vegetable. Clearly, they felt it was better to go hungry than to give in to this unfairness. Many similar experiments have been performed, showing that animals rather have nothing than something, if another animal is treated better.
And humans may operate the same way. It may be better to become a whistleblower and stop an injustice, even though the cost is much higher than the gain, simply based on this sense of unfairness.
Many studies in humans have confirmed that this is how we operate. In one experiment, one person is offered $100 and then tells his teammate that he will only get $25 out of that $100, or they’ll both get nothing, and the teammate usually refuses, and so they both get nothing.
Whistleblowing; it’s about fairness. Doing the right thing; correct an injustice.
It’s not something people do lightly, because the penalties in our society are so high—no job, no money, no future, etc.
But deep down it is probably hardwired into our brains.
Just like the response is hardwired. We need cooperation to survive. Whistleblowing is perceived as a threat to the group: Kill the wolf that doesn’t acquiesce.
We are all wolfs in a Wolfpack.
Which pack do you want to belong to?
Saturday, November 11, 2006
This blog
I've been thinking a lot about this blog. Why I'm writing and why I should continue. A good reason to continue are all the fantastic people who come here to read. A good reason not to is because of the time it takes. Another reason to go on is that this is a lot of fun.
But I also think this blog needs to change. That's always scary, because if you change something you risk losing some readers, and not attract new ones, since it is very hard to get people to read anything.
I've realized that a newspaper or a blog or a show is like a friend. Most people have a limited amount of friends because they simply don't have time to spend on additional people. Same with newspapers and blogs. Most people don't even read the newspapers anymore. And if they read a blog, they may read two or three, but that's about it. It's simply too time consuming.
Sometimes my wife asks me "who has time to read any blog?"
And she's right. If you've got work and a family, reading a blog takes time away from a lot of other important things.
But a blog can also be like a good friend. It becomes a place to go to, and have another connection; a contact that doesn't require more than clicking on the computer.
But life goes on and our friends change. And I simply have this feeling that so should this blog. My feeling is that I shouldn't blog about whatever and do several entries per day. I should probably just do one entry and it should probably be a more personal one.
That's a scary thought, in a way, because sometimes it's just easier to put in a video or a TV clip or refer to a newsarticle. And while those things are all very interesting, they are not original. Well, of course the end result can be original, but they are still not original, original.
And I think this blog should be original.
I've tried a lot of stuff, different topics, different approaches, and I've learned some of what works. So I kind of know what I want to do with this blog. And I want to change it. Make it grow up a bit.
Of course, that's scary because, hey, it may not work out and there I'll be with eggs on my face. Then again, I think I can handle that.
Stay tuned. And as always, feel free to express yourself.
But I also think this blog needs to change. That's always scary, because if you change something you risk losing some readers, and not attract new ones, since it is very hard to get people to read anything.
I've realized that a newspaper or a blog or a show is like a friend. Most people have a limited amount of friends because they simply don't have time to spend on additional people. Same with newspapers and blogs. Most people don't even read the newspapers anymore. And if they read a blog, they may read two or three, but that's about it. It's simply too time consuming.
Sometimes my wife asks me "who has time to read any blog?"
And she's right. If you've got work and a family, reading a blog takes time away from a lot of other important things.
But a blog can also be like a good friend. It becomes a place to go to, and have another connection; a contact that doesn't require more than clicking on the computer.
But life goes on and our friends change. And I simply have this feeling that so should this blog. My feeling is that I shouldn't blog about whatever and do several entries per day. I should probably just do one entry and it should probably be a more personal one.
That's a scary thought, in a way, because sometimes it's just easier to put in a video or a TV clip or refer to a newsarticle. And while those things are all very interesting, they are not original. Well, of course the end result can be original, but they are still not original, original.
And I think this blog should be original.
I've tried a lot of stuff, different topics, different approaches, and I've learned some of what works. So I kind of know what I want to do with this blog. And I want to change it. Make it grow up a bit.
Of course, that's scary because, hey, it may not work out and there I'll be with eggs on my face. Then again, I think I can handle that.
Stay tuned. And as always, feel free to express yourself.
Friday, November 10, 2006
"Top 10 Thank-You Notes for Nancy Pelosi to Send this Thanksgiving"
I agree with those who say the Democrats didn't do much on their own to win this election. But clearly that was a very good strategy, and so I bring you this insight:
Top 10 Thank-You Notes for Nancy Pelosi to Send this Thanksgiving
By Richard A. Viguerie
Author
Conservatives Betrayed: How George W. Bush and Other Big Government Republicans Hijacked the Conservative Cause (Bonus Books, 2006)
Nancy Pelosi, who stands to be Speaker of the House when the new Congress is sworn into office, is a smart politician, and one of the smartest things she and other Democratic leaders did this year was to step aside as much as possible and let the Bush Republicans and their backers self-destruct. She must be overflowing with gratitude to countless Bushies, so to make the transition a bit easier for her, I have come up with the Top 10 thank-you notes she should put in the mail this Thanksgiving…
Nancy Pelosi says
thank-you to …
10. To Vice President Cheney, Bill Kristol, and their cell of “neo-conservatives,” for turning the Republicans into a Trotskyite party—just what Americans have always wanted.
9. To Rush Limbaugh, for his display of “compassionate conservatism” toward Michael J. Fox a week before the election.
8. To outgoing House Speaker Dennis Hastert (R-Illinois), for transforming a personal scandal involving Rep. Tom Foley into a GOP scandal.
7. To Sen. Ted Stevens (R-Alaska) and Rep. Don Young (R-Alaska), for creating an engineering marvel worthy of the Roman Empire—their beloved Bridge to Nowhere.
6. To Ken Mehlman, Chairman of the Republican National Committee, for taking conservative issues off the agenda, except for his direct mail fundraising letters.
5. To former House Majority Leader Tom DeLay (R-Texas), for paring every wasteful dollar out of the federal budget, thus creating a nasty image of the Republicans as the party of Uncle Scrooge.
4. To Karl Rove, for not reading Conservatives Betrayed, which would have awakened him to the dangers of making real conservatives unhappy.
3. To “Brownie” (former FEMA director Michael Brown), for doing such a heck of a job during Katrina, letting Americans see how prepared the Bush Administration was for a scheduled natural terrorist attack.
2. To Jack Abramoff, philanthropist, for his unlimited generosity toward his Republican friends.
And,
1. To President Bush and Secretary of Defense Donald Rumsfeld, for keeping their divorce a secret until the election was over.
Richard A. Viguerie, Chairman of both ConservativeHQ.com and American Target Advertising, Inc., pioneered ideological and political direct mail and has been called “the funding father of the conservative movement” for his role in helping build dozens of conservative organizations. He is the author of 5 books including the newly released Conservatives Betrayed: How George W. Bush and Other Big Government Republicans Hijacked the Conservative Cause (Bonus Books, 2006).
Top 10 Thank-You Notes for Nancy Pelosi to Send this Thanksgiving
By Richard A. Viguerie
Author
Conservatives Betrayed: How George W. Bush and Other Big Government Republicans Hijacked the Conservative Cause (Bonus Books, 2006)
Nancy Pelosi, who stands to be Speaker of the House when the new Congress is sworn into office, is a smart politician, and one of the smartest things she and other Democratic leaders did this year was to step aside as much as possible and let the Bush Republicans and their backers self-destruct. She must be overflowing with gratitude to countless Bushies, so to make the transition a bit easier for her, I have come up with the Top 10 thank-you notes she should put in the mail this Thanksgiving…
Nancy Pelosi says
thank-you to …
10. To Vice President Cheney, Bill Kristol, and their cell of “neo-conservatives,” for turning the Republicans into a Trotskyite party—just what Americans have always wanted.
9. To Rush Limbaugh, for his display of “compassionate conservatism” toward Michael J. Fox a week before the election.
8. To outgoing House Speaker Dennis Hastert (R-Illinois), for transforming a personal scandal involving Rep. Tom Foley into a GOP scandal.
7. To Sen. Ted Stevens (R-Alaska) and Rep. Don Young (R-Alaska), for creating an engineering marvel worthy of the Roman Empire—their beloved Bridge to Nowhere.
6. To Ken Mehlman, Chairman of the Republican National Committee, for taking conservative issues off the agenda, except for his direct mail fundraising letters.
5. To former House Majority Leader Tom DeLay (R-Texas), for paring every wasteful dollar out of the federal budget, thus creating a nasty image of the Republicans as the party of Uncle Scrooge.
4. To Karl Rove, for not reading Conservatives Betrayed, which would have awakened him to the dangers of making real conservatives unhappy.
3. To “Brownie” (former FEMA director Michael Brown), for doing such a heck of a job during Katrina, letting Americans see how prepared the Bush Administration was for a scheduled natural terrorist attack.
2. To Jack Abramoff, philanthropist, for his unlimited generosity toward his Republican friends.
And,
1. To President Bush and Secretary of Defense Donald Rumsfeld, for keeping their divorce a secret until the election was over.
Richard A. Viguerie, Chairman of both ConservativeHQ.com and American Target Advertising, Inc., pioneered ideological and political direct mail and has been called “the funding father of the conservative movement” for his role in helping build dozens of conservative organizations. He is the author of 5 books including the newly released Conservatives Betrayed: How George W. Bush and Other Big Government Republicans Hijacked the Conservative Cause (Bonus Books, 2006).
Thursday, November 09, 2006
Borat banned in Russia
A government agency said it would refuse to grant permission for Sacha Baron Cohen's controversial comedy "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan" to be shown in theaters in neighboring Russia.
The Federal Agency for Culture and Cinematography said the film could offend some viewers and contained material that "might seem disparaging in relation to certain ethnic groups and religions," according to Vadim Ivanov, theatrical sales director at Twentieth Century Fox C.I.S.
"Borat" was the top movie in the United States in its debut last weekend, pulling in $26.5 million.
Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan,'' is one of the first non- pornographic movies Russia has banned since the collapse of the Soviet Union 15 years ago, the Times said.
The Federal Agency for Culture and Cinematography said the film could offend some viewers and contained material that "might seem disparaging in relation to certain ethnic groups and religions," according to Vadim Ivanov, theatrical sales director at Twentieth Century Fox C.I.S.
"Borat" was the top movie in the United States in its debut last weekend, pulling in $26.5 million.
Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan,'' is one of the first non- pornographic movies Russia has banned since the collapse of the Soviet Union 15 years ago, the Times said.
Disenabled.
Peter,
I read your book "The Whistleblower", it has helped me in knowing that I am not the only person whose career has been "Disenabled". I like you continue the fight even though my corrupt company (Medical Device) continues to rip off taxpayers even after the officers of the company have been notified of the illegal activity.
I am luckily still collecting a paycheck so I have to hold off until I can shout from the rooftops.
Thank you for your book.
Dear reader, good luck to you. If you want any advice . . . feel free to check out what I told PharmaGossip, here: Dr Peter Rost - an exclusive interview with PharmaGossip on the day of his book launch / blog party.
I read your book "The Whistleblower", it has helped me in knowing that I am not the only person whose career has been "Disenabled". I like you continue the fight even though my corrupt company (Medical Device) continues to rip off taxpayers even after the officers of the company have been notified of the illegal activity.
I am luckily still collecting a paycheck so I have to hold off until I can shout from the rooftops.
Thank you for your book.
Dear reader, good luck to you. If you want any advice . . . feel free to check out what I told PharmaGossip, here: Dr Peter Rost - an exclusive interview with PharmaGossip on the day of his book launch / blog party.
"Voters Spank Health Care Ex-Honchos"
Voters Spank Health Care Ex-Honchos By Jim Cramer
It's hilarious that the two people who have been the most vocal on health care, former Pfizer CEO Hank McKinnell and former UnitedHealth CEO Bill McGuire, are being repudiated as much as the president is today.
Hank constantly talked about how to fix health care. He always blamed the hospitals. In truth, he was instrumental in making it so the government spent more money on drugs than it had to, which left a lot less money for everything else. Meanwhile he, like Ray Gilmartin at Merck, turned his company into a giant marketing team with little innovation.
Bill McGuire got his today, with a stream of bad headlines that could not have come at a worse time for the company he built. Of course, that company would have been down anyway because of the election, and shouldn't have run Tuesday.
So what is Jim Cramer referring to?
Well, Pfizer stock tanked after the election, and Bill McGuire's UnitedHealth Group Inc. warned investors on Wednesday that its stock option fiasco will cost much more than the $286 million it previously estimated, and said it would restate earnings all the way back to 1994. Last month, according to AP, a company-sponsored investigation concluded that some of the more than $1.5 billion worth of stock options awarded to then-Chairman and CEO William McGuire were probably backdated. That means they weren't really issued when the company originally said they were.
Ooops.
McGuire resigned as chairman and the company has said he will step down as CEO by Dec. 1. On Wednesday UnitedHealth spokesman Mark Lindsay said McGuire hasn't left yet, and that the final terms of his departure are still being negotiated.
Another billion perhaps before you go, Dr. McGuire?
I mean, you have already handsomly beaten Hank "83 million retirement package" McKinnell!
Ooops.
What goes around comes around:
Democrats Hold `Grudge' Against Republicans' Corporate Allies
Nov. 9 (Bloomberg) -- The new Democratic House majority's plans to go after oil and pharmaceutical companies while taking it easy on hedge funds and other securities firms reflects a time-tested Capitol Hill practice: Be tough on political adversaries and kind to friends.
The Democrats plan to rescind $11.6 billion in energy subsidies for Exxon Mobil and other oil companies and require pharmaceutical companies such as Pfizer Inc. to negotiate with Medicare on prescription-drug prices. Those two industries were among Republicans' biggest financial backers this year.
/snip/
A Pfizer spokeswoman didn't return a call seeking comment. A spokesman for Exxon declined to comment, though officials from trade groups representing the oil and gas industries said the Democratic proposals are misguided.
I love the part about "not returning calls." Happens every time Pfizer doesn't like the question.
Democrats Hold `Grudge' Against Republicans' Corporate Allies
Nov. 9 (Bloomberg) -- The new Democratic House majority's plans to go after oil and pharmaceutical companies while taking it easy on hedge funds and other securities firms reflects a time-tested Capitol Hill practice: Be tough on political adversaries and kind to friends.
The Democrats plan to rescind $11.6 billion in energy subsidies for Exxon Mobil and other oil companies and require pharmaceutical companies such as Pfizer Inc. to negotiate with Medicare on prescription-drug prices. Those two industries were among Republicans' biggest financial backers this year.
/snip/
A Pfizer spokeswoman didn't return a call seeking comment. A spokesman for Exxon declined to comment, though officials from trade groups representing the oil and gas industries said the Democratic proposals are misguided.
I love the part about "not returning calls." Happens every time Pfizer doesn't like the question.
Wednesday, November 08, 2006
Merck: Business as usual.
Recently, Merck's Chief Executive Officer Richard Clark told the Wall Street Journal that the company was "very conservative" in its tax practices. He also claimed that he was not concerned with the company's potential liabilities, given Merck's financial results, stressing: "I don't lose any sleep over that."
Today, Merck said it faces as much as $5.6 billion in tax liabilities from the U.S. and Canada stemming from four "disputes."
And of course this once powerful and respected drug giant wrote in a regulatory filing that it disagrees with the proposed "adjustments." In fact, a Merck spokesman said that the company believed the disputed transactions are in "full compliance with IRS rules" and that it plans to contest the matter.
In one dispute with the Canada Revenue Agency, Merck has been asked to pay an addition $1.8 billion (U.S.) in taxes and interest, related to certain intercompany pricing matters.
What is that, you may wonder?
Oh, it is the beautiful world of a global business. You see, if a company doesn't want to pay tax in a particular market, like Canada, they simply charge their affiliate in Canada transfer prices for the drugs they sell that are so high that most of the local profits conveniently "disappear."
And then this profit instead lands in corporate tax havens like Ireland. Which is one reason so many pharma companies are building factories on the Green Island.
But apparently, finally, the Canadians got fed up. I just wonder how long it will take for the rest of the world to wake up.
Today, Merck said it faces as much as $5.6 billion in tax liabilities from the U.S. and Canada stemming from four "disputes."
And of course this once powerful and respected drug giant wrote in a regulatory filing that it disagrees with the proposed "adjustments." In fact, a Merck spokesman said that the company believed the disputed transactions are in "full compliance with IRS rules" and that it plans to contest the matter.
In one dispute with the Canada Revenue Agency, Merck has been asked to pay an addition $1.8 billion (U.S.) in taxes and interest, related to certain intercompany pricing matters.
What is that, you may wonder?
Oh, it is the beautiful world of a global business. You see, if a company doesn't want to pay tax in a particular market, like Canada, they simply charge their affiliate in Canada transfer prices for the drugs they sell that are so high that most of the local profits conveniently "disappear."
And then this profit instead lands in corporate tax havens like Ireland. Which is one reason so many pharma companies are building factories on the Green Island.
But apparently, finally, the Canadians got fed up. I just wonder how long it will take for the rest of the world to wake up.
Joy.
I grew up as a Republican, so why do I feel joy today?
In fact, one of the reasons I moved from Europe to the U.S. was because I couldn’t stand socialism and left-wing rhetoric. I voted with my feet when I came to the U.S., twenty years ago. And I was proud to become an American.
I loved Ronald Reagan, the open market, capitalism, and all what this stands for.
So why do I feel joy today?
I feel joy because of the powerful message the voters have given the Republican Party. I feel that joy because the Republican Party is no longer my party and since they no longer stand for an open and free market.
I feel joy for their loss, because the conservative movement has been hijacked by corporate interests that have no interest in fair competition or an open and free market.
The drug industry, for instance, doesn’t want lower priced drugs from other countries. They want to block drugs from Canada and Europe. The auto companies don’t want foreign imports. They want trade barriers. The insurance companies don’t want universal healthcare. They want to continue to mint new CEO billionaires on the back of the American People.
So I feel joy, because in spite of all the money those organizations have heaped over Republican candidates, they lost. I feel joy because perhaps, after all, this is a new beginning.
I feel joy because Rumsfeld is gone and I never believed for a second there were any weapons of mass destruction, and I was abhorred when I witnessed a war hysteria that reminded me of a dark past in European history. I feel joy that the American people finally stood up and said enough is enough.
But I also feel concern. I’m concerned that we’ll just exchange one part of the establishment with another establishment. I’m saddened that we continue to have a voting system in which the winner takes it all and only two parties are allowed to flourish.
I’m saddened that we don’t have a true democracy, in spite of being the first democracy. And I worry that not much will change. But I hope that I’m wrong. I hope we’ll see a woman president one day and I hope we’ll raise minimum wage and give healthcare to every American.
But I doubt that this will happen soon, because no matter who is in power, the money that fuels our system doesn’t allow for us to be a true democracy.
So while I feel joy today, I also feel sadness for our country. We could be so much more, so many great things and such an inspiration to the world.
But we aren’t.
Because the world knows that our system is built on greed and we don’t care that we have the highest infant mortality and the shortest life span in the entire industrialized world, as long as we can give tax breaks to billionaires.
So I don’t only feel joy, but also sadness. But what’s more important, I do feel some hope. After all, the fact that Rumsfeld is finally gone must be good news.
In fact, one of the reasons I moved from Europe to the U.S. was because I couldn’t stand socialism and left-wing rhetoric. I voted with my feet when I came to the U.S., twenty years ago. And I was proud to become an American.
I loved Ronald Reagan, the open market, capitalism, and all what this stands for.
So why do I feel joy today?
I feel joy because of the powerful message the voters have given the Republican Party. I feel that joy because the Republican Party is no longer my party and since they no longer stand for an open and free market.
I feel joy for their loss, because the conservative movement has been hijacked by corporate interests that have no interest in fair competition or an open and free market.
The drug industry, for instance, doesn’t want lower priced drugs from other countries. They want to block drugs from Canada and Europe. The auto companies don’t want foreign imports. They want trade barriers. The insurance companies don’t want universal healthcare. They want to continue to mint new CEO billionaires on the back of the American People.
So I feel joy, because in spite of all the money those organizations have heaped over Republican candidates, they lost. I feel joy because perhaps, after all, this is a new beginning.
I feel joy because Rumsfeld is gone and I never believed for a second there were any weapons of mass destruction, and I was abhorred when I witnessed a war hysteria that reminded me of a dark past in European history. I feel joy that the American people finally stood up and said enough is enough.
But I also feel concern. I’m concerned that we’ll just exchange one part of the establishment with another establishment. I’m saddened that we continue to have a voting system in which the winner takes it all and only two parties are allowed to flourish.
I’m saddened that we don’t have a true democracy, in spite of being the first democracy. And I worry that not much will change. But I hope that I’m wrong. I hope we’ll see a woman president one day and I hope we’ll raise minimum wage and give healthcare to every American.
But I doubt that this will happen soon, because no matter who is in power, the money that fuels our system doesn’t allow for us to be a true democracy.
So while I feel joy today, I also feel sadness for our country. We could be so much more, so many great things and such an inspiration to the world.
But we aren’t.
Because the world knows that our system is built on greed and we don’t care that we have the highest infant mortality and the shortest life span in the entire industrialized world, as long as we can give tax breaks to billionaires.
So I don’t only feel joy, but also sadness. But what’s more important, I do feel some hope. After all, the fact that Rumsfeld is finally gone must be good news.
Tuesday, November 07, 2006
Goosebumps. Anyone?
OK, so I confess. I'm feeling a bit blue. Not like really blue, probably not at all as blue as Faith Hill is feeling right now; just a tad. And Faith Hill singing that song in my prior post, "Help me make it through the night," made me look for a couple of other versions.
Just because this is what I feel like right now.
So what if that one reader already claims he fell asleep in my prior post and wouldn't come back until next week. The fact that I wrote about the CMA awards and Carrie Underwood predictably already made this a record day for the Dr. Peter Rost blog as far as hits from new readers. But that doesn't make me feel any better. Well, perhaps a bit less lonely, I guess.
So here is Gladys Knight (1972) "Help Me Make It Through The Night." And if you don't get goosebumps I wouldn't want to spend the night with you . . .
And . . . please use headphones when you listen to this one!
If you want a guy to sing this song to you, perhaps you will appreciate this version by Sakis Rouvas . . .
Then again, if you're more rough and tumble, and don't mind the most awful dress and decor, maybe this Johnny Cash version is for you . . .
Just because this is what I feel like right now.
So what if that one reader already claims he fell asleep in my prior post and wouldn't come back until next week. The fact that I wrote about the CMA awards and Carrie Underwood predictably already made this a record day for the Dr. Peter Rost blog as far as hits from new readers. But that doesn't make me feel any better. Well, perhaps a bit less lonely, I guess.
So here is Gladys Knight (1972) "Help Me Make It Through The Night." And if you don't get goosebumps I wouldn't want to spend the night with you . . .
And . . . please use headphones when you listen to this one!
If you want a guy to sing this song to you, perhaps you will appreciate this version by Sakis Rouvas . . .
Then again, if you're more rough and tumble, and don't mind the most awful dress and decor, maybe this Johnny Cash version is for you . . .
Not everyone likes a winner . . .
OK, I know. This blog is really degenerating. First in a number of posts I showcase that sultry all-girl pop-group who's name can't be spoken, then I feature Borat, and now American Idol winner Carrie Underwood who won female vocalist of the year at the 40th Annual Country Music Association Awards in Nashville yesterday.And not a word about the Election.
Of course, this is because I don't want to talk about the election. I just don't think too much will change. But, Carrie winning this CMA award, is, of course, very important to humanity.
And, hey, everyone who does some blogg-googling of Carrie's name will now find my blog. So, perhaps this is just commercialism on my part.
:)
Nah. I really care. I do.
Anyway, that's a long way of introducing this clip with Carrie winning and Faith Hill not winning.
Please note Faith's reaction. For the record, she may be kidding. We just don't know. I kind of like Faith Hill a lot more than Carrie. She is raising her hands in victory, then realizes she didn't win and you don't have to be a lip-reader to see the big WHAT? formed by her lips . . .
Will I be banned by progressive sites now when I tip-toed into redneck country?
Perhaps Faith Hill singing "Help Me Make It Through The Night" is appropriate. Oh, do I love that song . . .
Or, maybe Faith Hill's "Cry" is in place? After all country music makes it easy to find the right songs for this occasion . . .
Cultural learnings
Borat has now been on Hannity & Colmes, FOX news and that's all it takes to get onto this blog. What's good enough for FOX must certainly be good enough for the Dr. Peter Rost blog. Here is what the right-leaning FOX viewers are watching.
And don't complain, I know many of you are exhibiting withdrawal symptoms from watching too much of Nicole Scherzinger, and that girl band with the bad name. But, it is my responsibility to bring you the best and most culturally enriching material available, and so I have to provide variety. And, using my standard excuse, "The New York Times already wrote about this," I now introduce Borat. If you haven't heard of him you don't watch MTV, HBO or FOX News. Or read the New York Times. Sensitive readers may want to avoid his dating video.
Innocent
Borat dating
Borat hunting (it may help if you know that Borat is, in fact, Jewish . . . and, perhaps, is trying to make a point . . .)
Borat on FOX News
And don't complain, I know many of you are exhibiting withdrawal symptoms from watching too much of Nicole Scherzinger, and that girl band with the bad name. But, it is my responsibility to bring you the best and most culturally enriching material available, and so I have to provide variety. And, using my standard excuse, "The New York Times already wrote about this," I now introduce Borat. If you haven't heard of him you don't watch MTV, HBO or FOX News. Or read the New York Times. Sensitive readers may want to avoid his dating video.
Innocent
Borat dating
Borat hunting (it may help if you know that Borat is, in fact, Jewish . . . and, perhaps, is trying to make a point . . .)
Borat on FOX News
The Interview
This was a long interview with Ed Silverman from the Star-Ledger, on behalf of the Pharma Manufacturing article, "Running with (and from) the Wolfpack," and you can watch the video with part of the talk if you click the download prompt at the bottom. If you want the whole thing, just read the transcript. Funny thing, this was the first time someone really started asking a lot of questions about this blog . . . and questioning the content of the blog. I'd love to hear your comments, after all you are actually reading the blog.
I especially loved this part of the intro:
He has also gone on to become a blogger, first on the Huffington Post. Some of his posts were bitter diatribes against Pfizer and its then CEO Hank McKinnell; some were on topics completely unrelated to pharma. He may have earned a reputation, among some, as a lightweight by blogging about his student days as a model, or a married friend’s love affair. But he is a marketing specialist after all…he had studied blogging as if it were a science, blending topics surest to increase readership and using IT to analyze his audience, sometimes to a frightening degree, even disclosing some information on visitors. He ultimately discovered a troll on his blog, actually a member of the site’s IT staff. He now blogs privately and has published a controversial book entitled, “The Whistleblower: Confessions of a Healthcare Hitman.”
This article contains the full transcription of Ed Silverman's interview with Peter Rost (the briefer, edited interview is available for download as a Windows Media video).
PharmaManufacturing.com
By Ed Silverman and Agnes Shanley
Introduction
Whistleblowers are a rare breed. What drives them? Beloved by Hollywood, are they heroes, saints, publicity seekers, or are they simply obsessed? The drug industry has seen a number of high profile whistleblowers come forth recently. At best, they’ve saved lives, but even when they haven’t changed the status quo, they’ve managed to open up discussion about ways to improve an extremely secretive industry.
But why do whistleblowers do what they do? The costs to career and personal life are extremely high, and the fiercely competitive drug industry, unforgiving. Consider some recent cases: in 1998, Canadian researcher Dr. Nancy Olivieri disclosed issues with a drug being developed by Apotex. She was removed from her post, but later reinstated and praised for her service to the public. Six years ago, FDA’s Robert Misbin complained about the dangers of the Type-2 diabetes drug, Rezulin. He wound up resigning from the Agency, after he received his first negative performance review. “The writing was on the wall,” he said at the time. In 2004, Dr. David Graham, Senior Drug Safety researcher at FDA, blew the whistle on problems with the testing and approval of Merck’s drug, Vioxx, as did Dr. Eric Topol of the Cleveland Clinic. We read in the press of Dr. Topol’s being “demoted” since then.
But pharma’s whistleblowers aren’t all researchers. Last May, Mark Livingston’s case against Wyeth Pharmaceuticals was heard in Greensboro, N.C. court. Livingston’s lawyers invoked Sarbanes-Oxley, traditionally used for accounting fraud, to allege violations of good manufacturing practices at the Prevnar vaccine plant in N.C. Merck had a completely different story to tell, and Livingston lost his case, but plans to appeal. At the heart of his case, he says, was a question asked by someone who worked in the facility’s quality assurance department: “Are we about saving lives or about making money?”
What makes whistleblowers persist in their missions? Generally, by the time their allegations become public, there’s no turning back. The die is cast.
So what would it take for a pharmaceutical marketing executive to blow the whistle three times, on three separate employers? Today we interview Peter Rost, an M.D. who has spent the last 20 years working in pharmaceutical marketing.
His story began six years ago when he headed up marketing for Wyeth’s Nordic division. Dr. Rost had noticed a pattern of tax evasion and expense account padding involving some company executives working outside of the U.S.
Rost blew the whistle, but soon found himself transferred across the ocean to what the New York Times described as a windowless office in Philadelphia and greatly diminished job responsibilities.
He resigned and sued the company, moving the following year to Pharmacia, where he was hired as vice president of marketing for a product line focused on Genotropin, synthetic human growth hormone, a controversial drug and the lynchpin to boomer-targeted anti-aging “fountain of youth” therapies.
Pharmacia’s sales team was promoting the drug for unapproved uses, or practicing off-label marketing. Salesmen were also offering direct bribes to doctors and distributors and all-expenses-paid junkets.
The next year, an investigation was launched, and Pharmacia’s marketing director was dismissed. Yet, Rost alleges, the practices continued, as if they had been ingrained in the sales culture.
Two years later, Pharmacia was bought by Pfizer, and Rost continued to bring up these issues — by that time, he was reported as alleging, 25 to 30% of children’s prescriptions and over half the adult prescriptions for Genotropin were being used for off-label purposes. His lawyer informed the company that Rost would be filing a qui tam action suit; at Pfizer’s request, the Department of Justice launched an independent investigation.
Then, starting in 2004, Rost started to speak out about high drug prices, advocating re-importation of drugs, testifying before Congress and appearing on the television news show, “60 Minutes.”
Over time he found himself increasingly isolated at the company. Ultimately, his email and cell phone were cut off, and he says he was spied on by hired detectives and harassed by lawyers.
Last year, Pfizer fired Rost, who has responded with a “wrongful termination” lawsuit.
He has also gone on to become a blogger, first on the Huffington Post. Some of his posts were bitter diatribes against Pfizer and its then CEO Hank McKinnell; some were on topics completely unrelated to pharma. He may have earned a reputation, among some, as a lightweight by blogging about his student days as a model, or a married friend’s love affair. But he is a marketing specialist after all…he had studied blogging as if it were a science, blending topics surest to increase readership and using IT to analyze his audience, sometimes to a frightening degree, even disclosing some information on visitors. He ultimately discovered a troll on his blog, actually a member of the site’s IT staff. He now blogs privately and has published a controversial book entitled, “The Whistleblower: Confessions of a Healthcare Hitman.”
A great deal has been written about Dr. Rost, both positive and negative. While praised by some, he has also been accused of being relentlessly self-promotional, and a “serial” or “professional whistleblower.”
His book has received quite a bit of publicity, but we wanted to get a better understanding of what drives this complex figure, and to ask him a few tough questions. Is he an altruist, an egoist, or a bit of both? PharmaManufacturing.com contributor Ed Silverman interviewed Dr. Rost at his home in New Jersey earlier this month. And so we present Peter Rost, in his own words.
--------------------------------------------------------------------------------
Interview
E.S.: Why are you suing Pfizer for wrongful termination? You were terminated last year. What led to that?
P.R.: Very often, one thing leads to the next. I’d hoped to avoid this situation, but couldn’t, in the end, because of Pfizer’s actions. I was trying to work with the company for over a year. Some things they took care of. Some things they didn’t.
After I outlined the situation in writing, they responded by writing that they would fire me. This is such a basic thing — how you don’t interact with someone who brings forward troubling information. Then things got quiet and they kept me on. I didn’t know what would happen. But the meetings with Pfizer’s lawyers became very hostile.
So in the beginning of 2003, I contacted Pfizer in writing to make sure they understood what the concerns were here. They responded that they’ll fire me. It was a bit of a strange response. Also they didn’t tell anyone else at that point that they’d fire them. They waited until the actual acquisition (of Pharmacia) took place. And that’s when I got my first indication that people were not too happy about what I discussed with them and they took a very hostile approach.
E.S.: By mid-2003, Pfizer’s acquistion of Pharmacia was complete. You remained with the company, but isolated in your office in the New Jersey suburbs. Other Pharmacia employees were leaving — laid off, taking other positions. You got push back. You pursued the qui tam whistleblower litigation. You wrote in your book that you were isolated in your office. You weren’t sure who to report to.
Meanwhile, you pursued your stance with the price of prescription drugs and went public and got a national profile. This takes us into 2004 and 2005. At this point, though, I’m wondering why did you remain with the company? You don’t have any responsibilities. You don’t know who to talk to, you’re sitting by yourself, you’re isolated. People are taking off. You have no interaction with anyone inside the company. Why stay? Why didn’t you move on?
P.R.: I would’ve loved to have moved on. Like everybody else, I was doing lots of interviewing. We didn’t know what would happen when Pfizer took over (Pharmacia). None of us really knew what would happen. I had a great CV — and my results were, literally, among the best within all of Pfizer when they took over. If you looked at my actual sales versus forecast, versus budget. But my interviewing came to a very sudden halt. Suddenly, interviews were canceled. Things grew very, very quiet in 2003. And that’s around the same time as the newspapers started to write about the Wyeth situation, my prior employer, where I’d filed a lawsuit and the case had been dismissed to the mutual satisfaction of both parties. Once the papers started writing about that, interviews stopped abruptly.
E.S.: So you’re saying the reason you stayed hidden away in the suburbs, working for Pfizer, was you didn’t feel you’d have an opportunity to get another job because of what you spoke about publicly about pricing and your reputation in the industry?
P.R.: It wasn’t like I didn’t feel I could get another job. I worked very hard at continuing the interview process. But once it became known about the Wyeth situation in 2003, basically, all interviews shut down. Completely. I continued to try to look for another job — no one wants to sit in an office with nothing to do. But things got very, very quiet.
E.S.: So that brings us to late 2005, when your employment with Pfizer ended. For the past year and a half, you’ve been busy with other things. You continued the litigation, but you also got a high profile blogging. Why did you do that? And not do something else in health? You have an MD degree. You could’ve pursued something else, perhaps in public health. Why did you pursue blogging?
P.R.: It was almost for fun, something to try out. I have an MD degree, but I haven’t worked as a physician for almost 20 years. It would’ve been very hard to go back into medicine. In addition, my degree was from overseas. I would’ve had to take tests all over again. It simply wouldn’t work for me to go back to work as a doctor. And the companies haven’t been very interested . . . So far, nothing has materialized. I’m looking in a very broad area. I’ve had some discussions, but nothing has come through. And I’ve come to realize people are probably nervous about someone who stands up and speaks about what’s going on. So the only remaining avenue I saw was, actually, if I could support myself in a more independent manner. For instance, writing. It’s not a situation where somebody has to hire you, especially the drug companies seem very afraid to do, despite my performance.
E.S.: Can you mention which agencies or non-profits you’ve talked to?
P.R.: I’ve had some discussions with Canadian pharmacies, but nothing ever moved forward. I’ve had interactions with non-profits, when I’ve been invited to speak. But nothing has been forthcoming.
You have to realize that all of the money, and most of the employment, is in the private sector. You have a lot of people who do volunteer work in non-profits with little or no pay, with no funding. The drug companies have all the money and control. With all the opposition you see in the debate about what’s going on, well, you’d think there’s another sector out there. But it turns out, most of those people do it for free or do it with extremely little money. It doesn’t offer regular employment. I’d expected, when I first started looking, that there’d be more but so far, I haven’t found anything. And I have legal obligations and personal obligations, taking care of my family. That’s why I started to write and build something new. Basically, I was forced into it.
E.S.: How do you support yourself?
P.R.: Right now, I hope, a little bit of money will come in from the book. I’ve also just started working with a law firm as a consultant on pharmaceutical matters. And that may also have potential for the future. I don’t know how it’ll work out.
E.S.: Do you see yourself testifying as an expert in court?
P.R. Possibly. Yes.
E.S.: What do you like about the blogging and to what extent do think it helps your situation, your career? By the same token, you’ve become a lightning rod — your public statements about pricing, your battle with Pfizer, which has belittled some of your blogging. To what extent has it helped your cause? And to what extent has it hurt your cause?
P.R.: I’d like to back up a bit and talk about another matter that may be important: the reason why I spoke out about lower-cost drugs. I always had the dream and objective of one day running a pharmaceutical company. That’s what I wanted to do.
E.S.: You wanted to be a CEO?
P.R.: Yeah. I kept my mouth shut. I didn’t discuss these political issues. I hoped to become a CEO, and do a good job as a CEO and changing some of the practices that pharma does today.
E.S.: So you saw yourself as another Hank McKinnell down the line?
P.R. Well, I thought I would’ve performed better than he did. I would’ve acted differently. But that was my objective.
You know, we all have a dream. I’ve put some of those things in practice when I was running my division in Europe. I dropped prices very significantly. I doubled sales in a couple of years. I did both things — good things for the business, but also something good for society. I had hoped to be able to do that on a bigger scale.
Once, when I was in the situation where Pfizer isolated me, where the drug industry stopped wanting to have me for interviews, that’s when I realized that I’m here, I’m a vice president. This is not moving on. And if I’m going to be able to have an impact, and a chance to do something, this may be my last chance. I was still employed by Pfizer. I was still a vice president. I didn’t know if anybody would listen to me, but that’s when I decided to speak up.
And I didn’t have a significant downside to lose. Pfizer had already isolated me. I was alone in the building with my secretary and nobody else around. I had wanted to achieve change from within. But I decided this was it — it was now or never. And what people didn’t realize was that all interviews had stopped. So it was to take a position. Of course, that worked out much better than I thought in that people really did pay attention.
The second part of that question is about blogging, which was an extension of that, although blogging was really for fun. It’s hard to get in the press. There’s so much to write about. And it’s easy to become a pest. It’s a tough battle. A blog gets you an outlet and you can write whenever you want. Initially, it was fun just to see if I could come up with something to write about every day. Then it turned out to become a good vehicle.
It’s not necessarily something that’s a good thing to do, from a legal point of view, because anything you say obviously, the opposing lawyers can take it, and have taken it, to the judge to use against you. It’s not necessarily something you can use to your benefit. I’m guess I’m the exception to that rule. I’m prone to take a little more risk. And I have an agenda — I want to impact things, irrespective of what happens with the litigation.
And as far as the benefits of blogging are concerned? What I’m doing now is trying to do the right thing and, quite frankly, trying to survive.
You try to push different buttons. You try to do different things and hope something will come out of it. If I keep blogging, will it mean somebody will offer me a job based on something I’ve written? I don’t know. Maybe that’ll happen. It’s a long shot. Will I be able to support myself writing? I don’t know. Five percent of all authors can support themselves. That’s not too many. But five percent can.
You have to have to balls up in the air and hope a few of them work out. Maybe the litigation will work out. I expect it will. I expect it will take five or seven years or 10 years. So I have to support myself until then. So I have to do all these different things. It’s really a fight for survival, but in a way that’s fun. Sure, you can take a job driving cab. That’s a fine job, but after having studied to become an MD, and done all these other things, you really want to use some of that knowledge. And the only way is to do exactly what I’m doing right now, which has been a lot of fun. It hasn’t generated that much money yet, but as I just said, I started working with a new law firm. It seems that things are starting to happen.
E.S.: You talk about having some fun and at same time, using the blog as a primary vehicle to get the message out. What do you think of criticism that the blog content is erratic and at times, haven’t addressed the pharmaeutical industry or its issues at all. And so you’ve diluted your message and created an impression you didn’t want to create — that you’re all over the map. You had this cause, but now you’re cut loose by your former employer, you’re all over the place on the Huffington Post. You even had a public spat with the Huffington Post and it seemed that, instead of sticking to the issues, the passions that drove you, you’ve become someone who’s constantly involved in sniping of some sort, and not even over issues of concern to a public that wants to read about prescription drugs.
P.R.: That’s a good point. Yes, if you work professionally at something and want to become an activist in a particular area, you should just stick to that one message. Quite frankly, my response is “it’s a blog.” It’s not that serious.
E.S.: But don’t you want to be taken seriously after all you’ve been through? You poke your head up, very unusually. To be a whistleblower anywhere is unusual. In the pharmaceutical industry, there are many whistleblower lawsuits filed, but the public doesn’t really know about any of them. It’s not the sort of thing that gets too much publicity. But you pushed yourself out there and stayed out there.
P.R.: The way I view the blog, which has a very extensive legal disclaimer about how to view the blog and what it’s all about, it’s like the Colbert Report on Comedy Central. It’s serious but it has a lot of fun with a situation and surrounding issues. So it’s taking the important issues but making it entertaining.
I get bored myself. If I were just writing about what’s bad with pharma, it would get really dull and nobody would read the blog. Secondly, not everything is bad with pharma. There’s a lot of good stuff there. It’s an industry I supported for 20 years. I just think we should change certain things. So I just point out some of these issues. But I also write about broader issues. And I’m finding my way as a writer. But I wouldn’t have the readers I do if I hadn’t had some fun with it and enjoyed it.
E.S.: So you’re saying it’s a strategy. You didn’t just stumble into what you’ve blogged about?
P.R.: It’s a strategy to make it entertaining.
E.S.: Did you start out that way?
P.R.: Yeah. I tried different topics that spanned quite a bit.
E.S.: Do you ever feel that you drill so deeply into something and say to yourself: Maybe I’ve gone too far? Maybe it’s time to go to a different topic? Maybe I appear as if I can’t let go and should let go?
P.R.: No, because I have a background and special knowledge in the pharma industry, it would be strange if I didn’t cover it. And point it out interesting tidbits and facts as they come up. But that doesn’t mean you’re harping on the same issue.
For instance, when it comes to reimportation of drugs and pricing, I haven’t written much about that for a long time. And quite a few people have pointed out that it’s pharma blog, but I don’t write much about pharma. So for a couple of reasons, people may think I’ve moved on, in that sense, and I’ve written about things that are fun to read about.
E.S.: Where are you taking the blog now? Will it be about something other than the pharmaceutical industry?
P.R.: I’m undecided. It’s a blog, which means you do whatever you feel like for that particular day. You’re impacted by the readers’ comments and what they seem to like. I’m a marketing person and I’m interested in what my readers are interested in and what they care about. And so I’ve used different tools where I could have the readers vote on what they wanted me to write about — pharma, interesting stories about this or that. And so I have all the data, and basically, my blog very well reflects what readers have decided to see. Half the people want to see things about the drug industry and then you have a couple of other categories that were more off-topic.
E.S.: What other kind of writing do you plan to do?
P.R.: My next project, what I’m really waiting for now, is some fiction writing. My first manuscript is for a fiction thriller has just been completed and I’m waiting to do a conference call with my agent.
E.S.: Will the pharmaceutical industry be in there?
P.R.: It’s a big-company thriller. It’s set in the drug industry, because it’s something I know and I can bring more reality to it. And the amazing part is that, some of things I wrote that I thought were fiction, I learned later weren’t fiction. Like when I found out Pfizer has a high-tech security bunker with monitoring equipment, where Jeff Kindler had himself shot in a picture for Pharmaceutical Executive.
I didn’t know that such a thing existed, but I used something like that quite a bit in the book. I was just surprised that reality was ahead of me. The next step is to see if we can sell the manuscript. It 100 times harder to sell a fiction manuscript, compared with non-fiction.
E.S.: How is the pharmaceutical industry portrayed?
P.R.: I think the pharmaceutical industry is portrayed realistically. It really shows the fights internally, between the companies. It’s warfare what goes on. You talk about warfare when it comes to gaining market share. Between the different people internally, who try to survive, who try to get up to the highest position, it’s a battle. It’s a daily battle.
This is fiction, a thriller. So clearly, it takes things a couple of steps further than you may see in any company, but the way people behave and interact, I really try to capture that.
E.S.: Do you think you’ll get pegged as somebody who’s trying to beat up the industry?
P.R.: I think I was pegged as that a long time ago, which really isn’t quite true.
E.S.: So, you’re not the anti-pharma?
P.R.: Listen, I gave 20 years of my life to pharma. I would like to to run a pharma company. My point is that some of the guys who are running pharma are doing the wrong things from a marketing point of view, the wrong thing for society, and they’re doing the wrong thing for the industry. And that’s part of the reason they’ve done so poorly.
There’s a reason Hank McKinnell lost 40 percent of his stock value. I think pharma is needed and is important. My experience is there’s tons of very good people in the industry.
But of course, none of these people are used to one of their own standing up and saying the emperor doesn’t have any clothes. And then some of them get very upset. And things get polarized and you’re cast as anti-pharma.
E.S.: Are you locked in this position where you have to be visible and vocal and critical in order to sell your blog, your books and get any sort of consulting? Assuming you can’t find a position you like, which you say is unlikely.
P.R.: Well, it would’ve been wonderful if I had the book ready a year ago. I think a lot of people have written a lot about my story. So now that the book is out, I have to repeat some of it. Clearly, for an author, it’s important to be visible. But you and I both know that I can’t just create PR and stories, because it has to be real, and really adds on to the story. So I don’t think it would work if I just tried to keep up with issues. The more you try to keep people informed, the less they’ll listen, because it just becomes a nuisance. That’s the art of trying to be out there.
Clearly, Pfizer has stated that, in very nasty words to the court and others, this is some kind of self-gratifying ego trip. You know, it’s fun to be in the newspapers the first month, it’s kind of nice the first year. But eventually, it’s not that big a deal. It definitely helps sell the book, because I can’t afford to pay for an ad. And clearly, I have had it in the back of my mind, knowing the book would come out, that it’s important to build a brand. But that wasn’t part of anything at all in the beginning, which was way before the book was developed. When you look back, it may look logical, but sometimes coincidence looks logical as well.
E.S.: When you’re not busy blogging or litigating, what do you do?
P.R.: It turns out that most of the time, I am working, at least if you ask my wife. Otherwise, I play with my kids. They know if the sun is going down, they’re allowed to play with daddy.
E.S.: You live in an area where there are a lot of people who work for pharma or do business with pharma. Does it make you uncomfortable, given your high profile and criticism, to walk through town or see people you used to know? Now you’re portrayed as an outsider and a sniper.
P.R.: This was never, ever a role I’d dreamt of in my career. If I could have seen me five years ago, I would have been pretty shocked. At the same time, this is also about winning and proving you’re right about certain things, even if it comes at a high price. Winning depends on how you define it, too. If nothing else, winning public opinion.
There’s been so much going on. Pfizer has said so many negative things, and outright lied to the press, in a very sophisticated manner, through court papers, that I don’t really have that much to lose. I can be very straightforward. I can say exactly what’s on my mind, because I’ve been pretty beaten up in the process. So it makes it quite easy. Also, I have a pretty thick skin.
Of course, you do learn who your friends are. But if you been around awhile in life, that shouldn’t be surprising either. You’ve been in business for 20 years, you know how people operate and how very little sincerity there is anywhere. It’s all about me, me, me, and what kind of advantage I can have in a situation. People want to know what kind of advantage they have and once that’s over, they don’t care about anything else. There are surprises. But I think I’m pretty realistic about the whole situation.
E.S.: And when Pfizer says you’re on an ego trip, what do you say to that?
P.R.: Well, you know, as far as it goes for being active with the press this year, for instance, I had a big hurdle to overcome, because when Pfizer fired me, they had planned this for a very long time, and literally, dozens of lawyers and PR people were involved. We know they tried to put out certain things that were complete lies that played well in the press and that I blackmailed them, which was completely untrue.
So it took me six months of work to get out the real story. That’s why I worked with various newspapers this year to get out the full story and showed some of the documents. To set things straight. It was a long process to do that. I would’ve like to have waited til the book was out, because it was important to get the story out. At this point, publicity is important because that sells the book, and that’s the only way to support myself. And if you worked for a long time on something, you want people to read it. So it is important. It’s not something you get a kick out of doing, it’s part of the process.
E.S.: If you had the chance to do something over, what would it be and what would you do differently?
P.R.: I’ve thought that thought so many times. I would’ve gone straight to the police, the Justice Department. I would not have gone to the corporation. My experience has been, the company doesn’t appreciate you coming to them. My advice to anybody thinking about something like this — don’t do it. Keep your mouth shut.
If you’re in a situation where you have to do it, where I felt I was, then go to the authorities. Don’t take your chances with the company. If I could just go back, I would have either gone straight to the authorities or gone to the company much earlier.
If I had to give advice, I’d say just avoid the situation. That’s the feeling I had when I joined Pharmacia. People thought, “Here we have a serial whistleblower and he’s doing it again and so clearly there’s something wrong with this guy, because it keeps happening.” And the truth is the opposite was going on.
When I went to Pharmacia, I wanted to stay as far away as I could from anything that smelled funny. It’s a no-win situation. I knew that. I had that experience. I’m a vice president for a franchise where there may have been off-label distribution, which is a felony. All of a sudden, my hand was forced.
It took me a year and a half before I approached the authorities. I tried to work with the company, both Pharmacia and Pfizer. I didn’t go to the authorities until I was forced and threatened to fire me and became very hostile. Of course, we all know that everything I asked for, well, Pfizer has now changed. I asked them to stop things Pharmacia had continued to do. So I feel I was right. In the end, they did what I wanted them to do. But of course, they didn’t want me anymore. It didn’t matter that I had good results.
E.S.: Hasn’t Pfizer argued that the government declined to join the case and so in the end, maybe you weren’t right.
P.R.: They’re trying to have it both ways. First, they go ahead and write these letters to the FDA and the Justice Department saying there’s a big problem. Then they try to say the government doesn’t want to intervene, so there’s no problem. There’s an ongoing grand-jury investigation, criminal investigation and if there was no problem, this wouldn’t happen.
Normally, when the feds call a grand jury in 98 percent of the cases, they indict somebody, because they don’t waste all that time for a year or a year and a half. So we are very far from the end of the story. Pfizer is trying to spin things different ways.
The Justice Department is completely overworked — they only take 10 to 20 percent of the cases that are filed under qui tam False Claims Act in Boston, because they have so many cases.
They know the government has put it in rules to make it more favorable for a private attorney to pursue a case. Marketing 101 is blame the whistleblower. Number two is make him out to be crazy. And it just goes to show it’s a dishonest corporation. If it wasn’t, they would’ve had to sign two corporate integrity agreements.
E.S.: But they haven’t signed one involving your charges.
P.R.: Not yet. These investigations take several years.
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To view video of this interview, click Download Now.
I especially loved this part of the intro:
He has also gone on to become a blogger, first on the Huffington Post. Some of his posts were bitter diatribes against Pfizer and its then CEO Hank McKinnell; some were on topics completely unrelated to pharma. He may have earned a reputation, among some, as a lightweight by blogging about his student days as a model, or a married friend’s love affair. But he is a marketing specialist after all…he had studied blogging as if it were a science, blending topics surest to increase readership and using IT to analyze his audience, sometimes to a frightening degree, even disclosing some information on visitors. He ultimately discovered a troll on his blog, actually a member of the site’s IT staff. He now blogs privately and has published a controversial book entitled, “The Whistleblower: Confessions of a Healthcare Hitman.”
This article contains the full transcription of Ed Silverman's interview with Peter Rost (the briefer, edited interview is available for download as a Windows Media video).
PharmaManufacturing.com
By Ed Silverman and Agnes Shanley
Introduction
Whistleblowers are a rare breed. What drives them? Beloved by Hollywood, are they heroes, saints, publicity seekers, or are they simply obsessed? The drug industry has seen a number of high profile whistleblowers come forth recently. At best, they’ve saved lives, but even when they haven’t changed the status quo, they’ve managed to open up discussion about ways to improve an extremely secretive industry.
But why do whistleblowers do what they do? The costs to career and personal life are extremely high, and the fiercely competitive drug industry, unforgiving. Consider some recent cases: in 1998, Canadian researcher Dr. Nancy Olivieri disclosed issues with a drug being developed by Apotex. She was removed from her post, but later reinstated and praised for her service to the public. Six years ago, FDA’s Robert Misbin complained about the dangers of the Type-2 diabetes drug, Rezulin. He wound up resigning from the Agency, after he received his first negative performance review. “The writing was on the wall,” he said at the time. In 2004, Dr. David Graham, Senior Drug Safety researcher at FDA, blew the whistle on problems with the testing and approval of Merck’s drug, Vioxx, as did Dr. Eric Topol of the Cleveland Clinic. We read in the press of Dr. Topol’s being “demoted” since then.
But pharma’s whistleblowers aren’t all researchers. Last May, Mark Livingston’s case against Wyeth Pharmaceuticals was heard in Greensboro, N.C. court. Livingston’s lawyers invoked Sarbanes-Oxley, traditionally used for accounting fraud, to allege violations of good manufacturing practices at the Prevnar vaccine plant in N.C. Merck had a completely different story to tell, and Livingston lost his case, but plans to appeal. At the heart of his case, he says, was a question asked by someone who worked in the facility’s quality assurance department: “Are we about saving lives or about making money?”
What makes whistleblowers persist in their missions? Generally, by the time their allegations become public, there’s no turning back. The die is cast.
So what would it take for a pharmaceutical marketing executive to blow the whistle three times, on three separate employers? Today we interview Peter Rost, an M.D. who has spent the last 20 years working in pharmaceutical marketing.
His story began six years ago when he headed up marketing for Wyeth’s Nordic division. Dr. Rost had noticed a pattern of tax evasion and expense account padding involving some company executives working outside of the U.S.
Rost blew the whistle, but soon found himself transferred across the ocean to what the New York Times described as a windowless office in Philadelphia and greatly diminished job responsibilities.
He resigned and sued the company, moving the following year to Pharmacia, where he was hired as vice president of marketing for a product line focused on Genotropin, synthetic human growth hormone, a controversial drug and the lynchpin to boomer-targeted anti-aging “fountain of youth” therapies.
Pharmacia’s sales team was promoting the drug for unapproved uses, or practicing off-label marketing. Salesmen were also offering direct bribes to doctors and distributors and all-expenses-paid junkets.
The next year, an investigation was launched, and Pharmacia’s marketing director was dismissed. Yet, Rost alleges, the practices continued, as if they had been ingrained in the sales culture.
Two years later, Pharmacia was bought by Pfizer, and Rost continued to bring up these issues — by that time, he was reported as alleging, 25 to 30% of children’s prescriptions and over half the adult prescriptions for Genotropin were being used for off-label purposes. His lawyer informed the company that Rost would be filing a qui tam action suit; at Pfizer’s request, the Department of Justice launched an independent investigation.
Then, starting in 2004, Rost started to speak out about high drug prices, advocating re-importation of drugs, testifying before Congress and appearing on the television news show, “60 Minutes.”
Over time he found himself increasingly isolated at the company. Ultimately, his email and cell phone were cut off, and he says he was spied on by hired detectives and harassed by lawyers.
Last year, Pfizer fired Rost, who has responded with a “wrongful termination” lawsuit.
He has also gone on to become a blogger, first on the Huffington Post. Some of his posts were bitter diatribes against Pfizer and its then CEO Hank McKinnell; some were on topics completely unrelated to pharma. He may have earned a reputation, among some, as a lightweight by blogging about his student days as a model, or a married friend’s love affair. But he is a marketing specialist after all…he had studied blogging as if it were a science, blending topics surest to increase readership and using IT to analyze his audience, sometimes to a frightening degree, even disclosing some information on visitors. He ultimately discovered a troll on his blog, actually a member of the site’s IT staff. He now blogs privately and has published a controversial book entitled, “The Whistleblower: Confessions of a Healthcare Hitman.”
A great deal has been written about Dr. Rost, both positive and negative. While praised by some, he has also been accused of being relentlessly self-promotional, and a “serial” or “professional whistleblower.”
His book has received quite a bit of publicity, but we wanted to get a better understanding of what drives this complex figure, and to ask him a few tough questions. Is he an altruist, an egoist, or a bit of both? PharmaManufacturing.com contributor Ed Silverman interviewed Dr. Rost at his home in New Jersey earlier this month. And so we present Peter Rost, in his own words.
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Interview
E.S.: Why are you suing Pfizer for wrongful termination? You were terminated last year. What led to that?
P.R.: Very often, one thing leads to the next. I’d hoped to avoid this situation, but couldn’t, in the end, because of Pfizer’s actions. I was trying to work with the company for over a year. Some things they took care of. Some things they didn’t.
After I outlined the situation in writing, they responded by writing that they would fire me. This is such a basic thing — how you don’t interact with someone who brings forward troubling information. Then things got quiet and they kept me on. I didn’t know what would happen. But the meetings with Pfizer’s lawyers became very hostile.
So in the beginning of 2003, I contacted Pfizer in writing to make sure they understood what the concerns were here. They responded that they’ll fire me. It was a bit of a strange response. Also they didn’t tell anyone else at that point that they’d fire them. They waited until the actual acquisition (of Pharmacia) took place. And that’s when I got my first indication that people were not too happy about what I discussed with them and they took a very hostile approach.
E.S.: By mid-2003, Pfizer’s acquistion of Pharmacia was complete. You remained with the company, but isolated in your office in the New Jersey suburbs. Other Pharmacia employees were leaving — laid off, taking other positions. You got push back. You pursued the qui tam whistleblower litigation. You wrote in your book that you were isolated in your office. You weren’t sure who to report to.
Meanwhile, you pursued your stance with the price of prescription drugs and went public and got a national profile. This takes us into 2004 and 2005. At this point, though, I’m wondering why did you remain with the company? You don’t have any responsibilities. You don’t know who to talk to, you’re sitting by yourself, you’re isolated. People are taking off. You have no interaction with anyone inside the company. Why stay? Why didn’t you move on?
P.R.: I would’ve loved to have moved on. Like everybody else, I was doing lots of interviewing. We didn’t know what would happen when Pfizer took over (Pharmacia). None of us really knew what would happen. I had a great CV — and my results were, literally, among the best within all of Pfizer when they took over. If you looked at my actual sales versus forecast, versus budget. But my interviewing came to a very sudden halt. Suddenly, interviews were canceled. Things grew very, very quiet in 2003. And that’s around the same time as the newspapers started to write about the Wyeth situation, my prior employer, where I’d filed a lawsuit and the case had been dismissed to the mutual satisfaction of both parties. Once the papers started writing about that, interviews stopped abruptly.
E.S.: So you’re saying the reason you stayed hidden away in the suburbs, working for Pfizer, was you didn’t feel you’d have an opportunity to get another job because of what you spoke about publicly about pricing and your reputation in the industry?
P.R.: It wasn’t like I didn’t feel I could get another job. I worked very hard at continuing the interview process. But once it became known about the Wyeth situation in 2003, basically, all interviews shut down. Completely. I continued to try to look for another job — no one wants to sit in an office with nothing to do. But things got very, very quiet.
E.S.: So that brings us to late 2005, when your employment with Pfizer ended. For the past year and a half, you’ve been busy with other things. You continued the litigation, but you also got a high profile blogging. Why did you do that? And not do something else in health? You have an MD degree. You could’ve pursued something else, perhaps in public health. Why did you pursue blogging?
P.R.: It was almost for fun, something to try out. I have an MD degree, but I haven’t worked as a physician for almost 20 years. It would’ve been very hard to go back into medicine. In addition, my degree was from overseas. I would’ve had to take tests all over again. It simply wouldn’t work for me to go back to work as a doctor. And the companies haven’t been very interested . . . So far, nothing has materialized. I’m looking in a very broad area. I’ve had some discussions, but nothing has come through. And I’ve come to realize people are probably nervous about someone who stands up and speaks about what’s going on. So the only remaining avenue I saw was, actually, if I could support myself in a more independent manner. For instance, writing. It’s not a situation where somebody has to hire you, especially the drug companies seem very afraid to do, despite my performance.
E.S.: Can you mention which agencies or non-profits you’ve talked to?
P.R.: I’ve had some discussions with Canadian pharmacies, but nothing ever moved forward. I’ve had interactions with non-profits, when I’ve been invited to speak. But nothing has been forthcoming.
You have to realize that all of the money, and most of the employment, is in the private sector. You have a lot of people who do volunteer work in non-profits with little or no pay, with no funding. The drug companies have all the money and control. With all the opposition you see in the debate about what’s going on, well, you’d think there’s another sector out there. But it turns out, most of those people do it for free or do it with extremely little money. It doesn’t offer regular employment. I’d expected, when I first started looking, that there’d be more but so far, I haven’t found anything. And I have legal obligations and personal obligations, taking care of my family. That’s why I started to write and build something new. Basically, I was forced into it.
E.S.: How do you support yourself?
P.R.: Right now, I hope, a little bit of money will come in from the book. I’ve also just started working with a law firm as a consultant on pharmaceutical matters. And that may also have potential for the future. I don’t know how it’ll work out.
E.S.: Do you see yourself testifying as an expert in court?
P.R. Possibly. Yes.
E.S.: What do you like about the blogging and to what extent do think it helps your situation, your career? By the same token, you’ve become a lightning rod — your public statements about pricing, your battle with Pfizer, which has belittled some of your blogging. To what extent has it helped your cause? And to what extent has it hurt your cause?
P.R.: I’d like to back up a bit and talk about another matter that may be important: the reason why I spoke out about lower-cost drugs. I always had the dream and objective of one day running a pharmaceutical company. That’s what I wanted to do.
E.S.: You wanted to be a CEO?
P.R.: Yeah. I kept my mouth shut. I didn’t discuss these political issues. I hoped to become a CEO, and do a good job as a CEO and changing some of the practices that pharma does today.
E.S.: So you saw yourself as another Hank McKinnell down the line?
P.R. Well, I thought I would’ve performed better than he did. I would’ve acted differently. But that was my objective.
You know, we all have a dream. I’ve put some of those things in practice when I was running my division in Europe. I dropped prices very significantly. I doubled sales in a couple of years. I did both things — good things for the business, but also something good for society. I had hoped to be able to do that on a bigger scale.
Once, when I was in the situation where Pfizer isolated me, where the drug industry stopped wanting to have me for interviews, that’s when I realized that I’m here, I’m a vice president. This is not moving on. And if I’m going to be able to have an impact, and a chance to do something, this may be my last chance. I was still employed by Pfizer. I was still a vice president. I didn’t know if anybody would listen to me, but that’s when I decided to speak up.
And I didn’t have a significant downside to lose. Pfizer had already isolated me. I was alone in the building with my secretary and nobody else around. I had wanted to achieve change from within. But I decided this was it — it was now or never. And what people didn’t realize was that all interviews had stopped. So it was to take a position. Of course, that worked out much better than I thought in that people really did pay attention.
The second part of that question is about blogging, which was an extension of that, although blogging was really for fun. It’s hard to get in the press. There’s so much to write about. And it’s easy to become a pest. It’s a tough battle. A blog gets you an outlet and you can write whenever you want. Initially, it was fun just to see if I could come up with something to write about every day. Then it turned out to become a good vehicle.
It’s not necessarily something that’s a good thing to do, from a legal point of view, because anything you say obviously, the opposing lawyers can take it, and have taken it, to the judge to use against you. It’s not necessarily something you can use to your benefit. I’m guess I’m the exception to that rule. I’m prone to take a little more risk. And I have an agenda — I want to impact things, irrespective of what happens with the litigation.
And as far as the benefits of blogging are concerned? What I’m doing now is trying to do the right thing and, quite frankly, trying to survive.
You try to push different buttons. You try to do different things and hope something will come out of it. If I keep blogging, will it mean somebody will offer me a job based on something I’ve written? I don’t know. Maybe that’ll happen. It’s a long shot. Will I be able to support myself writing? I don’t know. Five percent of all authors can support themselves. That’s not too many. But five percent can.
You have to have to balls up in the air and hope a few of them work out. Maybe the litigation will work out. I expect it will. I expect it will take five or seven years or 10 years. So I have to support myself until then. So I have to do all these different things. It’s really a fight for survival, but in a way that’s fun. Sure, you can take a job driving cab. That’s a fine job, but after having studied to become an MD, and done all these other things, you really want to use some of that knowledge. And the only way is to do exactly what I’m doing right now, which has been a lot of fun. It hasn’t generated that much money yet, but as I just said, I started working with a new law firm. It seems that things are starting to happen.
E.S.: You talk about having some fun and at same time, using the blog as a primary vehicle to get the message out. What do you think of criticism that the blog content is erratic and at times, haven’t addressed the pharmaeutical industry or its issues at all. And so you’ve diluted your message and created an impression you didn’t want to create — that you’re all over the map. You had this cause, but now you’re cut loose by your former employer, you’re all over the place on the Huffington Post. You even had a public spat with the Huffington Post and it seemed that, instead of sticking to the issues, the passions that drove you, you’ve become someone who’s constantly involved in sniping of some sort, and not even over issues of concern to a public that wants to read about prescription drugs.
P.R.: That’s a good point. Yes, if you work professionally at something and want to become an activist in a particular area, you should just stick to that one message. Quite frankly, my response is “it’s a blog.” It’s not that serious.
E.S.: But don’t you want to be taken seriously after all you’ve been through? You poke your head up, very unusually. To be a whistleblower anywhere is unusual. In the pharmaceutical industry, there are many whistleblower lawsuits filed, but the public doesn’t really know about any of them. It’s not the sort of thing that gets too much publicity. But you pushed yourself out there and stayed out there.
P.R.: The way I view the blog, which has a very extensive legal disclaimer about how to view the blog and what it’s all about, it’s like the Colbert Report on Comedy Central. It’s serious but it has a lot of fun with a situation and surrounding issues. So it’s taking the important issues but making it entertaining.
I get bored myself. If I were just writing about what’s bad with pharma, it would get really dull and nobody would read the blog. Secondly, not everything is bad with pharma. There’s a lot of good stuff there. It’s an industry I supported for 20 years. I just think we should change certain things. So I just point out some of these issues. But I also write about broader issues. And I’m finding my way as a writer. But I wouldn’t have the readers I do if I hadn’t had some fun with it and enjoyed it.
E.S.: So you’re saying it’s a strategy. You didn’t just stumble into what you’ve blogged about?
P.R.: It’s a strategy to make it entertaining.
E.S.: Did you start out that way?
P.R.: Yeah. I tried different topics that spanned quite a bit.
E.S.: Do you ever feel that you drill so deeply into something and say to yourself: Maybe I’ve gone too far? Maybe it’s time to go to a different topic? Maybe I appear as if I can’t let go and should let go?
P.R.: No, because I have a background and special knowledge in the pharma industry, it would be strange if I didn’t cover it. And point it out interesting tidbits and facts as they come up. But that doesn’t mean you’re harping on the same issue.
For instance, when it comes to reimportation of drugs and pricing, I haven’t written much about that for a long time. And quite a few people have pointed out that it’s pharma blog, but I don’t write much about pharma. So for a couple of reasons, people may think I’ve moved on, in that sense, and I’ve written about things that are fun to read about.
E.S.: Where are you taking the blog now? Will it be about something other than the pharmaceutical industry?
P.R.: I’m undecided. It’s a blog, which means you do whatever you feel like for that particular day. You’re impacted by the readers’ comments and what they seem to like. I’m a marketing person and I’m interested in what my readers are interested in and what they care about. And so I’ve used different tools where I could have the readers vote on what they wanted me to write about — pharma, interesting stories about this or that. And so I have all the data, and basically, my blog very well reflects what readers have decided to see. Half the people want to see things about the drug industry and then you have a couple of other categories that were more off-topic.
E.S.: What other kind of writing do you plan to do?
P.R.: My next project, what I’m really waiting for now, is some fiction writing. My first manuscript is for a fiction thriller has just been completed and I’m waiting to do a conference call with my agent.
E.S.: Will the pharmaceutical industry be in there?
P.R.: It’s a big-company thriller. It’s set in the drug industry, because it’s something I know and I can bring more reality to it. And the amazing part is that, some of things I wrote that I thought were fiction, I learned later weren’t fiction. Like when I found out Pfizer has a high-tech security bunker with monitoring equipment, where Jeff Kindler had himself shot in a picture for Pharmaceutical Executive.
I didn’t know that such a thing existed, but I used something like that quite a bit in the book. I was just surprised that reality was ahead of me. The next step is to see if we can sell the manuscript. It 100 times harder to sell a fiction manuscript, compared with non-fiction.
E.S.: How is the pharmaceutical industry portrayed?
P.R.: I think the pharmaceutical industry is portrayed realistically. It really shows the fights internally, between the companies. It’s warfare what goes on. You talk about warfare when it comes to gaining market share. Between the different people internally, who try to survive, who try to get up to the highest position, it’s a battle. It’s a daily battle.
This is fiction, a thriller. So clearly, it takes things a couple of steps further than you may see in any company, but the way people behave and interact, I really try to capture that.
E.S.: Do you think you’ll get pegged as somebody who’s trying to beat up the industry?
P.R.: I think I was pegged as that a long time ago, which really isn’t quite true.
E.S.: So, you’re not the anti-pharma?
P.R.: Listen, I gave 20 years of my life to pharma. I would like to to run a pharma company. My point is that some of the guys who are running pharma are doing the wrong things from a marketing point of view, the wrong thing for society, and they’re doing the wrong thing for the industry. And that’s part of the reason they’ve done so poorly.
There’s a reason Hank McKinnell lost 40 percent of his stock value. I think pharma is needed and is important. My experience is there’s tons of very good people in the industry.
But of course, none of these people are used to one of their own standing up and saying the emperor doesn’t have any clothes. And then some of them get very upset. And things get polarized and you’re cast as anti-pharma.
E.S.: Are you locked in this position where you have to be visible and vocal and critical in order to sell your blog, your books and get any sort of consulting? Assuming you can’t find a position you like, which you say is unlikely.
P.R.: Well, it would’ve been wonderful if I had the book ready a year ago. I think a lot of people have written a lot about my story. So now that the book is out, I have to repeat some of it. Clearly, for an author, it’s important to be visible. But you and I both know that I can’t just create PR and stories, because it has to be real, and really adds on to the story. So I don’t think it would work if I just tried to keep up with issues. The more you try to keep people informed, the less they’ll listen, because it just becomes a nuisance. That’s the art of trying to be out there.
Clearly, Pfizer has stated that, in very nasty words to the court and others, this is some kind of self-gratifying ego trip. You know, it’s fun to be in the newspapers the first month, it’s kind of nice the first year. But eventually, it’s not that big a deal. It definitely helps sell the book, because I can’t afford to pay for an ad. And clearly, I have had it in the back of my mind, knowing the book would come out, that it’s important to build a brand. But that wasn’t part of anything at all in the beginning, which was way before the book was developed. When you look back, it may look logical, but sometimes coincidence looks logical as well.
E.S.: When you’re not busy blogging or litigating, what do you do?
P.R.: It turns out that most of the time, I am working, at least if you ask my wife. Otherwise, I play with my kids. They know if the sun is going down, they’re allowed to play with daddy.
E.S.: You live in an area where there are a lot of people who work for pharma or do business with pharma. Does it make you uncomfortable, given your high profile and criticism, to walk through town or see people you used to know? Now you’re portrayed as an outsider and a sniper.
P.R.: This was never, ever a role I’d dreamt of in my career. If I could have seen me five years ago, I would have been pretty shocked. At the same time, this is also about winning and proving you’re right about certain things, even if it comes at a high price. Winning depends on how you define it, too. If nothing else, winning public opinion.
There’s been so much going on. Pfizer has said so many negative things, and outright lied to the press, in a very sophisticated manner, through court papers, that I don’t really have that much to lose. I can be very straightforward. I can say exactly what’s on my mind, because I’ve been pretty beaten up in the process. So it makes it quite easy. Also, I have a pretty thick skin.
Of course, you do learn who your friends are. But if you been around awhile in life, that shouldn’t be surprising either. You’ve been in business for 20 years, you know how people operate and how very little sincerity there is anywhere. It’s all about me, me, me, and what kind of advantage I can have in a situation. People want to know what kind of advantage they have and once that’s over, they don’t care about anything else. There are surprises. But I think I’m pretty realistic about the whole situation.
E.S.: And when Pfizer says you’re on an ego trip, what do you say to that?
P.R.: Well, you know, as far as it goes for being active with the press this year, for instance, I had a big hurdle to overcome, because when Pfizer fired me, they had planned this for a very long time, and literally, dozens of lawyers and PR people were involved. We know they tried to put out certain things that were complete lies that played well in the press and that I blackmailed them, which was completely untrue.
So it took me six months of work to get out the real story. That’s why I worked with various newspapers this year to get out the full story and showed some of the documents. To set things straight. It was a long process to do that. I would’ve like to have waited til the book was out, because it was important to get the story out. At this point, publicity is important because that sells the book, and that’s the only way to support myself. And if you worked for a long time on something, you want people to read it. So it is important. It’s not something you get a kick out of doing, it’s part of the process.
E.S.: If you had the chance to do something over, what would it be and what would you do differently?
P.R.: I’ve thought that thought so many times. I would’ve gone straight to the police, the Justice Department. I would not have gone to the corporation. My experience has been, the company doesn’t appreciate you coming to them. My advice to anybody thinking about something like this — don’t do it. Keep your mouth shut.
If you’re in a situation where you have to do it, where I felt I was, then go to the authorities. Don’t take your chances with the company. If I could just go back, I would have either gone straight to the authorities or gone to the company much earlier.
If I had to give advice, I’d say just avoid the situation. That’s the feeling I had when I joined Pharmacia. People thought, “Here we have a serial whistleblower and he’s doing it again and so clearly there’s something wrong with this guy, because it keeps happening.” And the truth is the opposite was going on.
When I went to Pharmacia, I wanted to stay as far away as I could from anything that smelled funny. It’s a no-win situation. I knew that. I had that experience. I’m a vice president for a franchise where there may have been off-label distribution, which is a felony. All of a sudden, my hand was forced.
It took me a year and a half before I approached the authorities. I tried to work with the company, both Pharmacia and Pfizer. I didn’t go to the authorities until I was forced and threatened to fire me and became very hostile. Of course, we all know that everything I asked for, well, Pfizer has now changed. I asked them to stop things Pharmacia had continued to do. So I feel I was right. In the end, they did what I wanted them to do. But of course, they didn’t want me anymore. It didn’t matter that I had good results.
E.S.: Hasn’t Pfizer argued that the government declined to join the case and so in the end, maybe you weren’t right.
P.R.: They’re trying to have it both ways. First, they go ahead and write these letters to the FDA and the Justice Department saying there’s a big problem. Then they try to say the government doesn’t want to intervene, so there’s no problem. There’s an ongoing grand-jury investigation, criminal investigation and if there was no problem, this wouldn’t happen.
Normally, when the feds call a grand jury in 98 percent of the cases, they indict somebody, because they don’t waste all that time for a year or a year and a half. So we are very far from the end of the story. Pfizer is trying to spin things different ways.
The Justice Department is completely overworked — they only take 10 to 20 percent of the cases that are filed under qui tam False Claims Act in Boston, because they have so many cases.
They know the government has put it in rules to make it more favorable for a private attorney to pursue a case. Marketing 101 is blame the whistleblower. Number two is make him out to be crazy. And it just goes to show it’s a dishonest corporation. If it wasn’t, they would’ve had to sign two corporate integrity agreements.
E.S.: But they haven’t signed one involving your charges.
P.R.: Not yet. These investigations take several years.
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