#Pharma: Gobstopping Greed

Researchers are mostly a non-ideological lot. I sometimes wonder if we had been a little more ideological whether we would have kept our jobs but that’s for another post, someday down the road.

But some “capitalists” take greed to such an unbelievable level that even we are left almost completely speechless by the sheer audacity and (dare I say it?) evil.

Take the case of Martin Shkreli. I’ll let Derek Lowe at In the Pipeline tell this story:

He went on to form Turing Pharmaceuticals, whose business plan, by contrast, was (at least at first) to find some small-market drugs, buy them from their obscure producers, and raise their prices into geosynchronous orbit. As reported here by Adam Feuerstein, his first target was praziquantel (Biltricide), the antihelmenthic made by Bayer:

Shkreli is negotiating with the German drug giant Bayer to purchase marketing rights to Biltricide, a drug used to treat infections caused by worm-like parasites called liver flukes. A course of treatment with Biltricide typically involves taking six to nine pills in a single day and costs around $100. 

If Shkreli acquires Biltricide from Bayer, he plans to raise the price of the drug to $100,000 for a single-day course of treatment, according to people briefed on Turing’s business plans. No other changes or improvements to the drug will be made by Turing. The extra revenue generated by Biltricide is expected to earn Turing a fast profit for its investors and help defray the cost of developing other, experimental drugs, sources said.

We shouldn’t be surprised by this. This is just plain supply and demand economics. The number of small molecule drugs has fallen precipitously since the salad days of the 90’s. That means there are fewer blockbuster drugs to make money on and fewer drugs overall getting approved. Lowe reported a few weeks ago that the number of FDA approvals had gone up in 2014 but that represents work that happened about a decade earlier and now that we’ve been furloughed for the sake of “shareholder value”, that might be a high tide mark. The shift is from small molecule drugs to biologicals. This is not necessarily a bad thing but it does turn a whole generation of researchers into the equivalent of steelworkers while vastly reducing the output of small molecule drugs.

The consequence of not discovering new small molecule drugs is that even though they are going off patent and should be cheaper, there are no “new and improved” drugs to replace most of them. So, when they become generic, that’s it. There is no higher end model to compete with. Therefore, the cost of generics has to increase. I mean, where else are you going to go?

Now, in comes someone like Shkreli who sees a vast landscape of obscure generic drugs that could get a new life through retesting or new indications. He scoops up what he can and, without any R&D, he can cash in hugely. He still has to account to the FDA on production and quality standards. This is not insignificant. Think about what happened to the Today Sponge. But in general, this is a pure profit business model on the backs of ordinary people who may need these previously cheap medications. He is the ultimate MBA.

Give that man a bonus.

Believe it or not, researchers are not heartless tools of the pharmaceutical industry. We’re also consumers, and some of us are rather poor now that we’ve been kicked out of the field. R&D is incredibly expensive. Don’t let lefties tell you differently. And companies do have a right to recoup those costs and make a profit- that they can plough back into R&D (note: this was the old business model). But Shkreli’s model is shocking. One of Derek’s commenters summed it up nicely:

I wish people would learn to distinguish two types of capitalism:

1. Social capitalism: Create long-term value for customers with innovation, and then distribute the value created among all contributing stakeholders, including customers, employees, suppliers, distributors, payers & providers, tax payers, and yes, also managers and shareholders.

2. Anti-social / psychopathic capitalism (aka greed): Screw everone and take value from others while destroying it, in order to make a quick profit for management and shareholders.

There is far too much of the latter, and its rapidly destroying society as we know it. And ironically, managers and shareholders will also pay the price, ultimately, as part of the same broken society and economy.

I swear I didn’t write that.

In another sign of the times, I am starting to see some slight indications that the industry is falling out of love with academic research. A couple of postings I’ve seen for drug design support are specifically requesting industrial experience and one went so far as to say that academic modelers are not preferred. (And oh my golly, what a difference industrial experience makes, It really is amazing.) Of course, a PhD is still maniacally important so the wait continues…

Focus on your own Venti

When I first heard about how Mike Bloomberg’s food Nazi rules were going to affect coffee vendors, I thought it was going too far.  In case you aren’t up to date, Bloomberg is turning New York City into a helicopter parent’s wet dream.  There are rules on fat content, calorie labels and now, no sugary drink   can be over 16 ounces.  That’s to prevent you from binging on a “medium” soda while you’re watching a movie at a theater once a month.  {{rolling eyes}} So, let me see, most of the time, I order a bottle of water but Ok, maybe twice a year, I get a Pepsi.  I’m pretty sure that my muffin top is caused by my insufficient exercise, not my soda consumption, which is insignificant as far as calories go.  Nevertheless, I can’t be trusted around a large drink.  Whatever.  Mind you, Bloomberg has no power to stop people from buying multiple 2 liter bottles of soda and OD-ing on them at home, which is where the big problem is.  In any case, I don’t go to the city to see movies and now I have even less incentive to do so.

We rarely drink sugary soda at home.  It’s up there with Wonder Bread as the things we consume almost never.  Your mileage may vary.  But all in all, I don’t think fast food soda and drinks are the biggest problem we face as a nation.  I chalk these rules up to control.  Yep, the past 30 years have been all about how we can’t (or refuse to) control bankers and financiers who want to rob us blind but we *can* stop ordinary people from doing things we don’t like.  Lifestyle control.  Funny how conservative focus so much energy on lust and gluttony but completely ignore the deadly sin of Greed.  Hmmm…

ANYWAY, like I said, the whole drink rule is stupidly intrusive.  And then I read this about what effect it might have on Starbucks:

Then there is Starbucks, which interprets the rules as saying baristas can add sugar to large coffee drinks as long as the customer asks first; the city says the amount must be limited. Rather than spending money now on reprinting menus and retraining baristas, the company is waiting to make changes while officials gauge the response from city inspectors — and the outcome of a pending lawsuit against the rules filed by the beverage industry.

“A majority of our drinks fall outside of the ban, and we’re not expecting to make any immediate changes next week,” said Linda Mills, a spokeswoman for Starbucks, which has more than 300 locations throughout the city.

A typical grande beverage at Starbucks is 16 ounces; venti sizes and above will be affected. Many popular espresso drinks at Starbucks, like caramel macchiatos and pumpkin spice lattes, would be exempt from the restrictions, because they often contain a lot of milk. But Starbucks is unsure how to measure the milk content of the popular Frappuccinos, which are about 60 percent ice.

It’s too bad that it is an intrusively stupid health nanny rule that is forcing Starbucks to look at the sugar content of their drinks.  I love Starbucks flavored coffee drinks like pumpkin spice latte but they put waaaaay too much sugar in them, even in the Tall sizes.  What I want from a pumpkin spice latte is the spice and not to be overwhelmed with sugar.  But you can’t separate them when you order.  It’s either get the full dose of sugar or order half as much sugar (which is still pretty sweet) and get the spice cut in half.   There’s no way to just get all the spice with half the sugar. So, these days, I pass on the specialty concoctions even if I prefer flavor in my coffee.

Oh, the Barrista says, we have a sugar-free version.  Blecchhh.  It’s not the sugar I object to, it’s the amount of sugar.  Americans do have a sweet tooth and it’s apparently 5 times less sensitive than mine.  So, if this makes Starbucks rethink their formulas, then I can’t be too upset with this new rule.  If you absolutely must have 10 tablespoons of sugar in your Venti Pumpkin Spice latte, you can always add more on your own. Starbucks could be fully customizable and I won’t be forced to drink a one-size-fits-all formula based on the preferences of some 28 year old woman in Ohio.

I know, I know, first world problem.

Otherwise, this is a stupid rule.  Wake me when Mark Bittman gets in a snit to regulate the bankers over the LIBOR scandal.

The Hobbit Eve- Tolkien and wealth

Pete Petersmaug

I challenge Stephen Colbert to a Tolkien Geek Off.  I can name all of Galadriel’s names in Quenya, Sindarin and the Common tongue.  I know who the Fëanturi are. I know how many Glorfindels are running around Arda. Take that, Stephen!  He won’t take me up on it because he knows he doesn’t stand a chance.

Anyway, The Hobbit- An Unexpected Journey starts on Friday and there’s a good chance that I will be at the very first showing.  My local theater will show it in 24 fps but I don’t care.  I’m going for the story.

And what a story it is, a quest to burgle win back the Dwarves gold from Smaug the dragon. While I was reading advanced reviews of the movie, I came across this reminder of Tolkien’s thoughts on gold and wealth.  The New Yorker reviewer went back to the book to explain the greed of dragons:

It is there in every shimmering scale of Smaug, the dragon; deprived by a mouse-quiet Bilbo of a single precious cup, he falls, Tolkien writes, into “the sort of rage that is only seen when rich folk that have more than they can enjoy suddenly lose something that they have long had but never used or wanted.”

Like tax cuts they didn’t need on top of the insane amount of money that they have already hoarded for themselves and have been sitting on for more than four years.  It’s too bad this movie is split into three pieces and we won’t get to The Lonely Mountain until towards the end of the second movie*.  Tolkien didn’t like allegories but Smaug the dragon is a timely metaphor.  He is the very picture of greed without purpose, sitting on a mountain of gold and keeping all of that capital out of the hands of the people of Middle Earth who could put it to use it to set up their own Inns, mills, vineyards and small biotechs.

I won’t tell you how it ends if you haven’t read the book.  Let’s just say that dragons aren’t the only creatures with lust for gold.

One of my favorite quotes about wealth and gold from Tolkien comes in the Fellowship of the Ring when Galadriel asks Gimli the dwarve what he would ask of her as a gift.  Dwarves are particularly attracted to shiny objects and the craftsmanship of intricately worked gold and silver.  She would have given him whatever he asked for.  But he asks for a single strand of her beautiful golden hair.  She gives him three and says:

‘These words shall go with the gift,’ she said. `I do not foretell, for all foretelling is now vain: on the one hand lies darkness, and on the other only hope. But if hope should not fail, then I say to you, Gimli son of Glóin, that your hands shall flow with gold, and yet over you gold shall have no dominion.’

Discuss.

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Andy Serkis becomes Gollum:

*It has occurred to me that I might die before I see all of the Hobbit films.  I could have a house dropped on me or catch some nasty MDR bacteria or my kid could be infected with a zombie virus and will eat my brains some night when I neglect to arm my bedroom door.  It could happen.  It’s possible that I will never see film three.  Peter Jackson should rethink the timing of the movies.  Wait.  I had this very same irrational fear when the first LOTR movie came out and nothing bad happened.  Nevermind.

But I was 12 years younger then…

The NY Times wonders why Corzine’s MF Global wasn’t checked

MF Global embezzled, I’m sorry, misallocated funds from its depositors to cover bets it made that Greece would be bailed out by the ECB and German and French taxpayers.  You’d think that the brokerage houses would have learned from 2008 and the NY Times editorial says that most of them have (I’ll believe that when I see it).  But somehow, Jon Corzine’s brokerage was allowed to operate in a highly leveraged condition.  The editorial board just can’t wrap its head around this:

Another reason that Mr. Corzine’s bets may have gone so wrong — and another echo of the financial crisis — is that American regulators did not rein in the firm. MF Global was highly leveraged, with liabilities at the end of June of $44.4 billion and equity of only $1.4 billion.

In a research note published on Tuesday, Steve Blitz, a senior economist with ITG Investment Research, pointed out that MF Global was one of the firms designated by the Federal Reserve as a primary dealer in United States Treasuries. After the havoc of high leverage in the financial crisis, how is it possible that the Fed allowed MF Global to operate with so much leverage? Are the Fed, the Securities and Exchange Commission and other relevant regulators fully monitoring the risks at other broker dealers?

Meanwhile, self-regulation is clearly not the answer. The Wall Street Journal reported on Monday that the Financial Industry Regulatory Authority, a self-regulatory agency for brokerages, recently warned MF Global to shore up its capital to cushion against its increasingly risky positions. Whatever the firm did, if anything, clearly wasn’t enough.

Are the authorities monitoring the risks?  Well, obviously, they weren’t monitoring this one.  How can that be?  What possible motivation could there be for averting one’s eyes from the MF Global’s collapse and unacceptable risk taking?  I mean, did they own Jon a favor or something?

Jeez, it’s like some kind of allegorical morality play.  “In this scene, Everyman is thwarted by the rich banker from Goldman-Sachs.  Which cardinal sins does he represent?  Anyone?  Bueller?”

Let’s not forget some of the delegate accounts from Denver where the Hillary delegates who tried to vote for her on the first ballot were cornered, screamed at, harassed in hotel lobbies, and threatened that they would lose their jobs if they didn’t change their votes before the roll call.  Here’s a few just to get a feel for how bad it was.  (I talked to some personally when I was in Denver and these accounts sound pretty accurate):

ARKANSAS: “I was so angry at the sham of a roll call that I just wanted it to be over… ” “the last time I felt such unbearable group pressure was on a jury”   ” Obama representatives yelling, you’ll be sorry” to “hold outs”.  It was brutal.”

An alternate kept calling out that the state voted 70% for Hillary yet recorded its 47 delegate votes for Obama – “how could that be?”

*

CALIFORNIA: Chris Stampolis reports “I cast my signed vote for Hillary this morning.  It will be added to the roll call count for California”.  Except, we may never know how California voted…

Delegate Ray Panko reports that, “The California vote was about 230+ for Obama to 160+ for Clinton which did not reflect the state vote.  The process was completely controlled by the DNC and the Obama campaign. They had us all vote at breakfast. They took our votes and tallied them. They did this to see how close the numbers would be between Obama and Clinton. The aim was to prevent the public from seeing the closeness of the race. California passed because the Obama/Dean,Nancy Church(DNC) told it to pass. It was a sham, show, farce, gimmick.

Overall, the process was reprehensible.  Each delegation was told a different story. No one was told the actual rules of the DNC which say delegates are required, in good conscience, to vote on the first ballot a vote that reflects the will of the voters who sent them to the convention. Gloria Allred was prevented from speaking to the California Hillary delegates to inform them of this rule and that it applies regardless of whether or not the candidate releases us or not.
http://www.youtube.com/watch?v…

People understood that pledged delegates would do what they came to Denver to do – vote for one of the nominees to reflect the votes of those who sent them.  We expected there to be respect for the 18 million votes and Hillary’s historic candidacy.  We even thought that Super Delegates would be allowed to do their job – to select the electable Democrat.   But that was not to be.  Instead, the roll call turned into one chaotic caucus rigged to be sure that the final vote would never be known, without any sublety or reverance for the sanctity of the vote or individual obligations.”

A Super Delegate reported that “CA “passed” without ever recording its votes because the Hillary delegation stood firm and had the vote been given accurately, Hillary would have been temporarily ahead in the roll call”.

Clinton delegate and LA attorney Gloria Allred grabbed a napkin from the tables at the California delegation breakfast and wore it as a gag to protest not being allowed to speak at the breakfast.  “I was not elected to be a potted plant,” Allred said through her gag, holding up DNC rules that say delegates must vote as they are elected. Californnia had 204 delegates pledged to Hillary Clinton, versus 166 for Obama.”

*

NEW HAMPSHIRE: “What thugs they are.  They make it clear that they really do not need us and have no intention of doing anything about the unity they mouth.”   “Our state voted strongly for Clinton but was threatened that funds would be withdrawn. The state cast its votes for Obama”.

NEW JERSEY:  “We overheard delegates from our state which had voted strongly for HRC saying that they understood DNC funding for local races in their state would be dependent on a unanimous delegation vote”.
A delegate was told “he needn’t worry about his vote – the totals for New Jersey were irrelevant, that the delegation was going to announce as unanimous”.

NEW YORK: “My guess, with no inside information at all, is that no-one expected her votes to melt away or be driven away – that the BOs would be gracious enough to let her have her votes and she would then nominate by acclamation.  That she did, but they had snarked away her delegates for maximum humiliation value”.

*

PENNSYLVANIA: An elderly weeping delegate who wanted to vote for Hillary was consoled by several fellow delegates who said they were all sent to Denver by their friends and neighbors to vote for Hillary but, “no-one seemed to care”.

OHIO: Flo Gurwin  After watching the convention proceedings in Denver, I certainly do believe in HIS change–his ability to continually change his mind.  I do not trust him.  I think he’s a snake and the scumbags surrounding him leave little doubt in my mind that he is not the sort of person I want for my president.”

*

TEXAS: Frances Morey: “I was less than enthusiastic about the impeachment of Bush AND Cheney because Pelosi would have been next in line for the Oval Office”. She also noted that “going into this convention Obama was flat-lining in the polls. If there is a bounce to follow we know who is responsible–The Clintons”.

“This morning I got my credential and was directed to go to another room. There I showed my badge and my id and indicated my presidential preference on a sheet next to my name and signed my name. This is the state tally sheet. Texas delegation officials, Boyd Richie’s staff and volunteers, have total control of this. They will use this tally sheet to report the Texas delegation totals for todays roll call vote at the Pepsi center later today.”

Blanche Darley, wearing a button saying ObamaNation Scares the Hell out of Me, on the impact of HRC’s speech: “We love her, but it’s our vote …we don’t trust or like him…”

Nata Koerber: “Hillary has a life-time of service to the Democratic Party and has done everything required and then some to encourage support of Obama. The responsibility of uniting the Party lies squarely in the lap of Barack Obama, and Joe Biden, Obama’s preferred choice for VP.”

A HRC pledged delegate, realizing that it did not matter how his delegation voted, announced that “it is obvious that the Obama campaign has no regard for the Clinton delegates or voters, that they were making it clear that Obama does not feel he has to treat us with even minimal respect.”

You can read more delegate accounts at Alegre’s Corner.

The bankers bought the superdelegates, the state parties, and Obama himself.  They own him.  He does their bidding.  And there was no one who symbolized that ownership more than Jon Corzine himself when he unanimously gave away the entire state of New Jersey’s delegates to Obama who lost the state by 10 points.  New York went right after we did and that put an end to the most rigged primary season and roll call vote in Democratic party history.

It’s no mystery why the Obama administration charged with oversight and regulation turned a blind eye to what Corzine’s fund was doing.  That’s the way the system was set up to work.

D’uh.

WHEN IS ENOUGH ENOUGH?

Madoff's Palm Beach home

Bernie Madoff was tucked into his jail cell bed the other night for what could be his home for the next 150 years. For a guy who once “had it all” this comedown must be pretty harsh to say the least. Bet that was no Posturepedic mattress that waited to embrace his cheating bones or someone willing to turn down those 800 thread sheets he was so accustomed to.  Oh well!

Bernie had it all. But “all” just wasn’t enough. I often wonder what a 7 million dollar penthouse gets you other than a panoramic view of NYC and beyond. I mean, how important does this make you feel just knowing that from that height you are able to look down on all those peons scurrying hither and yon trying to be just like you?

I read an article in Vanity Fair about Bernie. He owns 4 or 5 different mansions scattered around the globe. But just how much time does one expect to stay in one of those palaces of luxury when there are so many to choose from? Most of us would love having a second home as a getaway now and then but Bernie couldn’t seem to satisfy that wish. No, he had to have a handful of  mansions to reinforce the image of a very important personage, an honor bestowed on like minded Greedy Guts who try to outdo one another in their quest for “things”. Bernie just happened to lead the pack.