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      Week-end Wrap – Political Economy – August 25, 2019 by Tony Wikrent Economics Action Group, North Carolina Democratic Party Progressive Caucus Strategic Political Economy Give No Heed to the Walking Dead [The Scholar’s Stage, via Naked Capitalism 8-18-19] The People’s Republic of China is wealthier than any rival America has faced. Its leaders are convinced […]
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Phase out the 401K

401k-624x416There is a post in the NY Times today about the way companies that layoff their workers and replace them with H1B visa holders also require those workers to keep their mouths shut about what is going on.

The non-disparagement clauses might be partially responsible for the conventional wisdom that we need more STEM graduates when clearly we don’t. Long time readers of this blog know that I and my colleagues were laid off in NJ when our site closed. In fact, New Jersey, Connecticut, New York, Maryland, Delaware and Pennsylvania, the Northeast Corridor, laid off hundreds of thousands of invaluable researchers and replaced them with… nothing. In some cases, brand new research facilities, some built for very specific studies that cost millions of dollars to build, were mothballed or even destroyed.

That’s right, it made more sense to the bottom line to destroy valuable lab space than keep the facilities with the upkeep, maintenance and taxes on the books. The people? What about them? It’s interesting to me that the braintrusts who decided to lay off all those scientists and planned to rent out the buildings to new start ups had a hard time finding renters. Who did they think they were going to rent to? The same scientists who were laid off didn’t have the funds for the start ups that were meant to replace the large corporate labs. They were too stressed trying to find any work in any state while keeping their families in the expensive northeast and mortgaged houses out of foreclosure. So, the “rent the labspace to the old labrats” scheme turned out to be a bust and now the buildings have to come down.

There are a couple of states that benefitted from the destruction of the research industry. Those would be Massachusetts and California. The business models were changed from small molecule research to biologicals. But number of jobs created is small. Only a tiny fraction of those laid off were invited to go to Cambridge. Medicinal chemistry in this country is decimated. Compounds can be made very cheaply in India. There’s still research in graduate school labs but it does not begin to make up for what has been lost.

It’s not like there’s not enough biology to research and anyone in the research industry knows that training is not the problem. These are some of the most highly trained people in the world who have to continue reading the latest papers to keep up. Soooo, that’s not it.

What could be driving the frenzy to dismantle the country’s research industry? Hmmm, what could it be, what could it be.

Well, in some companies, the decision to close the site was followed a few days later by an email to all employees from the finance department that congratulated itself on reducing costs and creating a nice quarterly profit. Sort of a “You who are about to die, we salute you!” email.

When they say it’s not about money, it’s about money.

Working Americans have been forced to participate in their own destruction through the 401K. We invest in funds that are rewarded when companies merge, consolidate and layoff. Companies are sold like baseball cards, drained of their assets and left as hollow shells of what they used to be. Research is expensive. Paying for experience is expensive. Better to ship that out if you can, hire only short term contractors, buy up companies with a promising drug lead and lay off their early research staff.

In the meantime, the portfolios will grow and now the masters of the financial universe have brought us into the game, some of us unwillingly. We are now complicit, watching the quarterly earnings reports and demanding more shareholder value. Because there are no pensions in our old age. This is how we make our money- on the backs of our fellow Americans.

And let us now turn our attention to the H1B visa holders who unfortunately have no rights here. If they lose their jobs, they can be sent back to their home countries. It doesn’t matter if they have lives, relationships or property here. Those are risky luxuries. And it doesn’t help that these people may eventually get green cards. Some green cards are so narrowly tailored so as to make getting a new job after a layoff very difficult for the bearer.

It’s all because of the vast amounts of money that used to be tied up in safe, boring but reliable pensions that are now splashing around the world like colored scrip in a global game of Life. The greed of the financiers and titans of industry is gargantuan. The analysts who work for them on Wall Street are incentivized to accumulate as much wealth as possible, with as much risk as possible in as short a time as possible. If they lose money, the government will cover it or some stupid firefighter will take the hit. It’s their fault if they didn’t go to Harvard and make the right connections.

The 401K is at the heart of everything that is wrong with the current economic system. It encourages risk taking, it incentivizes avarice, it propels the short term investment cycle, it causes the outsourcing, it destroys industries and it is now starting to affect productivity. Because when you sacrifice your talent for youth and low wages, and then force everyone to account for every billable minute, you force the workforce to reinvent the wheel and cause anxiety and distraction in the offices with endless paperwork and minute swapping.

Phase it out. Get rid of the pyramid scheme. Disincentivize short term investment and greed. If we don’t tackle the 401K, all the unions in the world won’t make a dent. There will be no need for them when we are all independent contractors in the gig economy looking over our shoulders for the next layoff and becoming more angry by the minute.

This is the legacy of the last eight years when no bankers were held responsible and no hearings were conducted to ferret out the root causes of so much risk and destruction while the companies held revolvers to the heads of their laid off staff and told them to not say a word about what was happening to them. Funny, the CEOs don’t have any problem telling the researchers what they think of them and how expendable and exploitable they are.

It’s about the money. The 401K fuels the Gig Economy. It’s the Gig Economy, Stupid that’s undermining the middle class, causing income instability, family instability and a drag on spending. Get rid of it.

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Post in a hurry

Weather here in Pittsburgh is right up there with Edinburgh, Scotland this spring.  The forsythia still have yellow flowers on them.  The magnolia tree was in full bloom when we got a hard, hard frost a couple of weeks ago.  That turned all of the blossoms brown.  That same frost killed the flowers in my planter.  Don’t you love to spend money on plants to watch them die?

Lovely.

Cate Blanchett as Hedda Gabler

I noticed that someone was reading my Mad Men post from a couple of years ago.  I still stand by the Ibsen connection but I have a couple of revisions, as well as some theories about a secondary theme on the submission of the creative forces in business to the forces of convention and money.  Heads up: it doesn’t end well for the creative types.  But if you’re wondering how it is Americans celebrate the MBAs and their values to the detriment of everyone else, Matt Weiner may have an idea about how that happened.  I’ll try to map that out later.

Betty Draper as Hedda Gabler

In the meantime, what is the real world consequence of the defeat of the creative?  We may be about to find out when it comes to infectious diseases.  The NYTimes reported yesterday on the first case of MERS in the US.  MERS is a respiratory disease that is related to SARS.  It has a lethality rate of around 30%.  That’s scary high.  It doesn’t mean that MERS is going to take off like the pneumonic plague but I’m betting that fellow passengers on the flight with patient zero are sweating buckets right now.

MERS is a viral infection but resistant bacterial infections are the ones to really worry about.  Viral infections require vaccines and they’re trickier to treat once you get an infection.  For example, what do you take if you get the flu or ebola?  Cat’s out of the bag at that point.  You don’t have a lot of options but to wait it out and hope your immune system kicks in before you die. But we know how to make antibiotics.  We just aren’t making a lot of new ones these days.  Those kinds of drugs aren’t profitable because patients don’t take them for long periods of time so the shareholders aren’t getting a high enough return on investment.  The antibiotic projects get dumped from the portfolio in favor of cancer drugs and orphan disease drugs.  Maybe that’s reassuring to the cancer patients out there but how does it feel to be the shareholders’ cash cows?  And what about the patients with resistant infections, psychiatric illnesses and other illnesses that are difficult and expensive to discover drugs to treat?

In the meantime, the creative types are busily writing their resumes in the wake of another M&A announcement.  That’s the way the world works these days.  The research divisions are viewed as unpredictable and expensive weights on the bottom line.  The hardworking creative geniuses are at the mercy of the bean counters and MBAs.

And so are the rest of us.

Need Yves Smith’s analysis of new Pfizer hostile takeover of Astra-Zeneca

Derek Lowe at In the Pipeline has a post on Pfizer’s hostile move on Astra-Zeneca:

What the hell is Ian Read thinking? Pfizer is apparently going hostile with their attempt to buy out AstraZeneca, all but ensuring that the deal, if it goes through, will take place at the highest price and in the messiest fashion that it possibly could. And for what?

If you’ve been following Pharmageddon from the beginning, you will know that Astra-Zeneca’s fall off the “patent cliff” was one of the steepest in the industry.  The patent cliff is the term used in the industry that refers to the expiration of patents for the major blockbuster drugs.

Patent Cliff by company since 2010.

 

Weirdly, most blockbuster patents have expired within the past decade because they were discovered in the 90’s, the golden age of drug research.  If you’re wondering why your blood pressure meds are suddenly so affordable, that’s why.  They’re generic now.  Pharma can’t make as much money off them anymore.  Great!, you say.  And it probably is great, to some extent.  The problem is there is not a lot in the pipeline to replace them, that is, if you’re interested in more effective drugs with fewer side effects.  There are several reasons for this that I’ve discussed in previous posts but the primary cause is NOT for lack of trying.  Researchers have seemingly endless dogged determination to preserver in  the face of failure after failure.  The problem is that research has to deal with *two* impossible systems: the complex biology and the self-serving, clueless managerial/finance class.  And the underfunded and politicized FDA.  Make that THREE impossible systems.  And the class action law industry.  FOUR! It all adds up to unnecessarily and ridiculously expensive drugs.  But I digress.

So, according to Derek, Astra had some really rough years, laid off a ton of people in Delaware and all around the world, but hired a new guy in 2012 to turn the ship around and has plans to consolidate a tiny fraction of their research unit in Cambridge, MA where no one really wants to work because it’s a.) expensive, b.) a pain in the ass commute and c.) an insecure career environment for researchers.  MBAs really are a bunch of status snob lemmings, I swear.  Or magpies chasing the latest shiny thing.

My bad, that’s Cambridge, UK where AZ wants to set up its stripped down R&D division.  It’s probably just as attractive to the relocated researchers (You happy few!  You band of brothers!) as the American Cambridge.

Derek makes a good point in that Pfizer has a lot of money to spend on the small, nimble biotech startups that MBA types have told the analysts are supposed to be able to generate a s^&*load of drugs to inlicense.  They’re like unicorns, these little startups, or like perfectly elastic collisions of particles in a box.  Theoretically, they exist but in the real world?  ehhhhh, not so much.  Drugs rarely emerge from these tiny incubators fully formed because, helloooooo, Silicon Valley, drug discovery is NOT like writing code for a new Facebook.  But you’ll find out in the next couple of years.  Just sit in on one of the project teams while the biologists drone on and on and on about how much to tweak the components of their confirmatory and cell based assays to make them reproducible and it will quickly dawn on you that drug discovery makes coding look like Chutes and Ladders.  Even so, we’ve got to wonder why Pfizer is choosing to forgo spending some of their billions on the biotech startups in order to sit on a pile of cash.  Where is the drive for innovation we’re always hearing so much about?

Anyway, where was I?  After pondering the problem for awhile, Derek hypothesizes that Pfizer is buying Astra-Zeneca, a foreign owned company, to hide its taxable profits from the US government.  Or the British government.  It’s like some British, Swedish, American threesome, which initially sounds like a good time for everyone except the citizens who actually count on corporations to respect them. It’s a rather strong accusation but Derek says he never wants to work for Pfizer anyway.  That’s Ok for him but my pension was acquired by Pfizer when it gobbled up Wyeth and then proceeded to lay off every one of the people I used to work with.  I’m kind of concerned with this wobbly third leg of my rapidly disappearing retirement stool so if Pfizer is up to something, I’d like to know what the heck it is.

The remaining survivors in research at Astra-Zeneca can see what’s coming.  They must be busily rewriting their CVs and networking instead of finishing that reaction or fishing the crystals out of solution to send to the synchrotron.  What a lovely way to spend your hours in the lab.  And the industry wonders why there is nothing in the pipeline after 20 years of this crap.

What this research project team really needs is a financially nerdly Yves Smith type who can look at the details of the proposed takeover and report back in a meeting to tell us what’s up.  More to the point, what does the UK’s new tax rates for foreign profits say about whether the conservative government is trying to make Britain into a sleeker global tax haven?  I’m just a chemist.  Money is not my area of expertise.  This project team needs a finance specialist.

 

 

The case against increasing H1B Visas: the Wyeth-Pfizer massacre

I’m on a roll this morning.  I’ll have another post later today on the “Academia discovers everything that pharma goes on to exploit” myth and explain why, counterintuitively, this is a self-fulfilling prophecy.  But for the moment, I want to go over the reasons why business leaders are lying through their teeth about needing more highly skilled workers from other countries because the US simply does not produce enough {{rolling eyes}}.

First, I want to say that I worked with a lot of Chinese, Indian and European scientists and back in the 90’s, the US benefitted from an influx of foreign scientists and students, particularly Chinese and Russian emigres.  Most of them have since become American citizens so whatever provision is made in the immigration bills to displace them with cheap foreign labor is going to affect them as well.  I’m also aware of some Chinese students who had a hard time getting their PhDs because their advisors saw them as indentured servants who could be kept working indefinitely because the only alternative for them was to go home.  And then there were the Chinese scientists who only had work visas who were promptly sent home as soon as their companies laid-off, closed their facilities, etc, because the company itself had sat on their green card applications while the MBAs decided how they were going to restructure their R&D facilities for the 450th time.  There are a lot of sad and tragic stories from foreign researchers that I knew personally whose lives and families were not at all important to the companies they worked for and lost their ability to live in the country they called home, where they BOUGHT homes and had children and friends.  Some of these people had no choice but to leave all of that behind when they lost their jobs.  This country can be cruel to the best and the brightest, especially those from foreign countries but this country doesn’t spare it’s own citizens either.

Secondly, I have to bust the myth about the superlative skills of the foreign scientist. Not all foreign researchers are geniuses.  They’re a lot like other researchers.  Some are brilliant, some are hard-working, some of them didn’t realize what they were getting into before they had invested a good chunk of their lives in science.

So, that out of the way.

In 2008, Pfizer bought Wyeth.  Pfizer is a behemoth of a pharma company that has spent the last 10 years gobbling up companies, extracting their pipelines and spitting out the people who, you know, actually did the discovery.

After Pfizer bought Wyeth, it laid off all of the Wyeth research staff.  Yep, all of them.  Oh sure, a handful of the 19,000 people were retained and sent to Groton where Pfizer had a few holes to fill in their own ranks.  But there were thousands and thousands of scientists, Americans, Chinese, Russians, Israeli, you name it, who were laid off en masse for no reason at all.

It didn’t matter how good they were and I knew quite a few who were excellent and extremely hard working scientists. It didn’t matter what their performance evaluations were like. The lay off was indiscriminate and didn’t separate the wheat from the chaff. It didn’t matter how cheap they were.  They didn’t choose to live on the East Coast where the cost of living is extremely high.  A lot of them had been displaced by previous mergers and acquisitions from more affordable midwest facilities.  And it’s not like Pfizer was particularly choosey when they laid off.  It didn’t look at both companies and pick the best people to save.  No, it just picked the losing company and laid off all of those researchers without any consideration at all whether they were laying off the next blockbuster discoverer or not.   You’d think the board of directors and shareholders would have preferred Pfizer to be more selective but that didn’t seem to be very important and no one seems to have asked why that was.

All that mattered was THERE. WERE. TOO. MANY. OF. THEM. FOR. PFIZER.

Researchers cost money and research costs money and that was getting in the way of the people who were trying to make money off the acquisition so the researchers had to go.  Other labs might have been able to absorb all this excess talent but other labs were also shedding American and foreign researchers like there was no tomorrow so most of my friends ended up contracting, consulting, working for much less money in academia or small start up companies or getting out of science altogether.

So, verily I say unto you congresspersons who are about to flood an already flooded market with cheap indentured servants from other countries, you really need to stick an amendment into this bill that prevents companies that laid off thousands and thousands of experienced, well educated, highly skilled researchers from getting away with ruining the lives of those researchers, some of them foreign who they swear they need, and contributing to the collapse of the economy and housing markets in places like New Jersey.  It is time that companies who work here in the US who claim to be corporate “persons” to start acting like good citizens.

One last thing: there is simply no good excuse for Congresspersons and Senators to not check out the claims of the businesses who whine that they “can’t find good help anymore”.  All you have to do is get one of your congressional staffers to contact the departments of labor in New Jersey, Pennsylvania, Connecticut, California (San Diego area) and New York to verify that the unemployment rolls have been chock full of math and science majors who were laid off since 2008.  It shouldn’t take longer than a few hours in one afternoon to expose the truth.

Anything else is craven laziness that helps to depress the economy and further erode research in this country.  Researchers are not swappable, just-in-time, labor parts.  They’re individuals with specific knowledge bases who need continuity and support for their expertise to thrive.  Anyone who tells you differently is lying through their teeth.

Saturday: Power Wash

It’s a nice day, the kid is available, why not power wash the house? That’s what’s on the menu today. I’m headed off to the rental place to pick the washer up. Fun, fun.

In the meantime, remember a couple weeks ago when I wrote that Pfizer was a poster child for The Strategy of No Strategy and that the pension fund would start looking like a target soon?

Gettin’ closer. Pfizer announced on Thursday that they were ending their pension plan. Yep, everyone will now be transitioned to a 401K. Isn’t that special? It looks like people with pensions in companies that were acquired may be safe (please, please, please) but, you know, who knows at this point. The change in the pension plan will affect people who will be turning 55 in about the year 2018. Unfortunately, I know a number of Pfizer employees who may be affected by that and can only imagine how thrilled they are at this news after the cruel amount of stress they’ve been through in the past 4 years.

So, to recap, for scientists living in America but not some parts of Europe:

  • Pharmageddon continues at a steady pace, throwing many, many scientists out of work, perhaps permanently.
  • The only jobs we can get pay a LOT less. You don’t even want to know.
  • Benefits are few to non-existent.
  • Job-hopping and instability is now “expected”. You may have to leave your family behind. Better yet, don’t have a family.
  • You might end up working for a CRO where your input in projects is restricted to task oriented, boring procedures all day, like widget making. No more creativity or learning will be necessary after all those hard science courses.
  • You probably won’t be getting that pension you were counting on after 2 decades of work.
  • If you want health insurance for yourself and your family, you’ll have to pay through the nose for it from your vastly reduced salary at a CRO.
  • Your 401K is tanking- again. But THIS time, because you are out of work, there won’t be any build-back.
  • You are slowly being turned into an “entrepreneur” without any of the benefits. No group insurance rates, no labor protections, no reasonable business loans, and the costs of starting your own pharma, with all of it’s associated risks, are astronomical and suicidal. If you haven’t asked yourself whether all of the entrepreneur talk politicians keep touting will eventually lead to abuse and exploitation of workers without protections, now’s the time to think it over.
  • And finally, the morons in Congress whose skinny necks you would like to wring right now are blithely and capriciously talking about significantly reducing the only retirement option left to you- Social Security. (BTW, see Charles Pierce’s destruction of David Brooks this week. Very satisfying. I strongly suggest David Brooks stay out of central New Jersey because there are a lot of unemployed cancer researchers who he finds indistinguishable from Maury Povitch trailer trash who would like to rip the face off of people like him- metaphorically, of course.)

You know those elected people in Washington? Yeah, I hate those people. I knew the bastards would be putting the screws to us before the election to make people panic and agree to anything. But I never thought they could be this clueless, savage or viciously cruel. I’m not afraid but I am extremely angry at both parties. And, Yes, I know one party is much worse than the other but it hardly makes a difference which party is the worst when both have now crossed the threshold to the dark side. That leaves the vast majority of us without representation but still paying taxes, unemployed or not. And taxation without representation fueled the last revolution.

We are living in a kleptocracy and Democrats did not try hard enough to keep it from happening. Everything you’ve ever worked for your entire life can be stolen from you piece by piece. Your career, your patents, your house, your pensions, your retirement nest egg and all of those extra taxes you paid into a Social Security plan. Promises can be broken, you could get screwed and end up dying poor and no one is held accountable.

Yep, what Washington, DC needs is a good power wash, on the inside.

P.S.- Working people who vote Republican because of social issues should have their heads examined.

‘gits
****************************************
One more thing: according to a new book by James Mann, Hillary Clinton and Timothy Geithner didn’t get along at the beginning of the Obama administration. Geithner was muscling Clinton aside when it came to dealing with China. It seems that Geithner wanted the Treasury department to be in charge of foreign policy with China and to concentrate solely on economics. Clinton wanted to address more than economic matters and wasn’t going to yield on China. There was a standoff and Clinton won. But she was overruled on the issue of ambassador appointments. Why is that significant? It’s because the ambassador that Obama appointed to China is none other than former Republican presidential candidate and wealthy chemical company scion Jon Huntsman. Yep, read it and weep, labrats. The guy that Obama appointed to China at a time when our jobs were hemorrhaging there was none other than a Republican chemical company guy who speaks Mandarin.

No wonder this administration doesn’t give a royal F#%* about the destruction of our American research industry. It was the plan all along. Right, Mr. Geithner? You guys did nothing to slow things down. In fact, you went out of your way to make it easier for our companies to relocate to Shanghai.

So, let’s review: the people who really didn’t get along with Tim Geithner were all women. They were Sheila Bair, Elizabeth Warren, Christina Romer and Hillary Clinton. I’m sure there are others but any woman who stands up to Geithner and disagrees with him is ok by me. All of these women proposed policies that were ignored by Geithner and the White House but would later turn out to be right. In every case, Geithner had the upper hand except in his interactions with Hillary, where she had a victory on overall policy with China but didn’t get to pick the ambassadors.

And we’re still not at war with Iran.

It’s amazing how so many Democratic party activists got it so wrong. I wonder how that happened, given that they supposedly do not fall for political mind tricks and propaganda…

The Poster Child of “The Strategy of No Strategy”: Pfizer

Pfizer is trying to reinvent itself by shrinking, according to the New York Times. I can’t say that I’m surprised.  The CEOs and financial guys are still living in their own worlds.

The Strategy of No Strategy is strong in this one.  Oh such tasty morsels in this article.  Where to start.  How about this paragraph full of chewy goodness:

Pfizer — once the Big in Big Pharma — is making a radical shift, one being watched closely by the rest of the industry. It is getting smaller.

Last week the company announced it was selling its infant nutrition business to Nestlé for $11.85 billion, and it is expected to divest its profitable animal health business by next year. At the same time, the company is slashing as much as 30 percent of its research budget as part of a plan to focus on only the most promising areas, like cancer andAlzheimer’s disease.

1.) It’s getting smaller only 2 years after it made itself bigger.  Pfizer bought up Wyeth and laid off every single one of my friends and former colleagues in research.  It hired back a handful and sent them to Groton, CT.  I’ll get to Groton in a minute.

2.) It’s getting rid of valuable assets to concentrate on cancer and Alzheimers.  And why those two therapeutic areas, you ask?  Allow me to get cynical.  Well, more cynical than I already am.  These two diseases progress rapidly and the sufferers are almost desperate for a cure, cancer drugs get fast tracked for approval, toxicity profiles are relaxed, you can pretty much charge what the market will bear, and even if the drugs fail the patients rarely complain.  So, quick approval and no class action lawsuits.  What’s not to love?  Looks like you Lupus sufferers and schizophrenics are SOL though.

“It’s not necessarily smaller per se, it’s focused,” Ian C. Read, Pfizer’s chief executive, said in an interview Tuesday. “We are at our heart a biopharmaceutical company focused on applying science to improving people’s quality of life. That is what our core is. That is what will determine our success.”

{{rolling eyes}}

This part is good:

Drug executives are asking themselves: “What is it that we now face, given that in the past decade — when everything was going right — we didn’t build with this future in mind?” said Jeremy Levin, who oversaw a similar reorganization of Bristol-Myers Squibb and is about to take over as chief executive at Teva Pharmaceuticals.

At Pfizer, skeptics have questioned the decision to shed some of its most profitable units in favor of doubling down on the risky pharmaceutical business. Pfizer’s nutrition unit grew by 15 percent and animal health by 17 percent in 2011, while its pharmaceutical sales dipped by 1 percent. And Pfizer has suffered some notable flops over the last several years, including the failure of an experimental cholesterol treatment that was seen as a potential successor to Lipitor and poor sales of an inhaled insulin drug that the company eventually abandoned.

So, in the past decade, when everything was going right, why did Pfizer decide to eat smaller companies and lay off all the research staff and put companies and projects in a state of limbo while they merged, and how could that *possibly* result in not building with the future in mind?

Now it’s selling off it’s most profitable divisions.  It doesn’t take a rocket scientist to realize that it’s doing it to pay off the shareholders, who must be obeyed after all:

The acquisitions, some said, turned Pfizer into a Frankenstein’s monster — a giant stitched together from the scraps of smaller companies that lurched forward with little purpose.

“I think the company sort of lost their way in the years before the Wyeth acquisition,” said Catherine J. Arnold, an analyst for Credit Suisse.

Ya think?  Hey, how about the next time a merger is in the works, we actually ask the people discovering drugs whether it is a good idea.

Oh and about that plan to cut research costs by 30%:

Even so, the company’s decision to cut research budgets as it is planning to recommit to its pharmaceutical core struck some as risky. Mr. Gordon, the Michigan business professor, called it a “magic trick.”

It’s a magic trick, however, that most major pharmaceutical companies are also trying. “The question is how do you remain successful and sustain your operations if you’re investing less and less in R&D?” said Kenneth I. Kaitin, a professor and director of Tufts University’s Center for the Study of Drug Development. “The answer to that is to try to find a new way and a more efficient mechanism for discovering and developing drugs.”

If you want to discover more drugs, cut research!  Everyone is doing it.  Let me just suggest to the “smartness” crowd and masters of the shareholder universe that the reason you don’t have any blockbusters is because you treated research like a red-headed stepchild while you were busily merging your little hearts out and collecting bonus checks.  “A more efficient mechanism for discovering drugs” now means outsourcing to China all the grunt work while trying to buy licenses for drugs from struggling and desperate former research staff who will sell them for a tiny fraction of what they may be worth.

Pfizer plans to reduce its research budget from $9.4 billion in 2010 to $6.5 billion to $7 billion this year. It closed a research center in Britain and has been trimming its facility in Groton, Conn., and moving resources to areas closer to universities in Boston and Cambridge, England.

In 2011, the company ended 91 projects, canceling programs aimed at treating bladder infection, for example, as well as one to treat nasal symptoms from allergies. Company executives have also said they will be on the lookout for smaller acquisitions to fill gaps in their portfolio, and will expand partnerships with academic institutions.

Mr. Read said the cuts would not affect the areas that the company has prioritized. “Most of what I cut had a low probability of success,” he said.

Those projects had an even lower probability of success after tens of thousands of research jobs were cut, the budget was slashed more times than a libidinous teenager in a horror movie and the rest of the staff was made to play a game of musical chairs moving from Princeton and Pearl River to Groton to not Groton but we don’t know where yet to Cambridge.  I’ve heard reports that the few former Wyeth staff have been laid off more than once since the merger.

Pfizer has to be the poster child of The Strategy of No Strategy.  They’ve abandoned some of their hardest, smartest workers, and I know some of these people so I know how good they are, to chase get-rich-quick-schemes from the oh so cleverer people at Harvard and MIT and then get Chinese PhDs at a fraction of the cost to churn out compounds in Shanghai.  Pfizer has completely abandoned the idea that it takes 10-15 years to discover and develop a drug, and that continuity of research is crucial.  Pfizer first acquired and then ripped apart all of the smaller pharmas under it to become a bloated behemoth of a leviathan that could be consumed by shareholders in wild abandon.  It’s left a big gaping hole in the pharmaceutical landscape and so far as I can tell, not one politician has bothered to find out why our drug discovery expertise is disappearing right before our very eyes.

Right about now, it is dawning on Wall Street, the CEOs and the investors that they have unleashed Pharmageddon and that they’ve made some big mistakes, not least of which is that the profits that can be shared are slowing down to a mere trickle.  Nevermind all the scientists who no longer have careers, what about their bonuses?? I don’t know about bonuses. My former colleagues and I should be worried about our pensions.  That big pile of cash is going to look mighty tasty and we are all headed for a seniority of deprivation if we don’t figure out a way to stop them from consuming it all.

Psychopathic Cruelty

Atrios says that the oilmen are about to raise prices on gas again.  Let me guess, it’s the Iran thing, isn’t it?  The speculators are going crazy with delight.  Let’s just rattle some swords and make the Persian Gulf look all dangerous.

Or is it the refineries again?  They need to be scrubbed or something.

Whatever it is, one things is for sure.  It’s going to bite.  It will have a devastating impact on the economy.  Transportation will become more expensive and the cost of everything we eat will start to spike too.  All this and we still have a lot of people out of work pinching their pennies.  Fueling up is going to cost a lot of what we don’t have.

All of this to put the thumbs to the American public until we scream uncle.  I guess we were just too resilient.  We’re all just hanging in there until after the election, hoping things will start to turn around, doing our best Grapes of Wrath imitation.  They can’t have that.  They need to inflict real pain.  They need us to be so angry at the feckless Democrats that we turn on them.  Good!  Let’s see how long the Democrats are willing to stick with their current line up.

But for the rest of us, especially those of us who are unemployed, this really sucks and it’s cruel.  The people who have hoarded the oil are cruel.

What astonishes me is how many people on the right seem to think that we went to Iraq to get cheap oil.  Noooo, people.  This is not why we went to Iraq.  We went to Iraq so that the oilmen could keep oil off the market.  They are keeping it to themselves in order to make money and to manipulate a country that is dependent on it.  Why do you think there is all this pushback about global warming?  If we all changed to electric vehicles and solar power, how the heck are they going to extort us for money and political advantage?  You’ve been had.

And this is just in from Derek Lowe of In the Pipeline.  For the last several years, the pharmas have been shutting down business in places like NJ and PA, and moving a handful of scientists, the “best of the best”, as they say, to Massachusetts.  This weekend, Pfizer decided to lay off 40 of them.  So, now, even the best of the best in MA are getting the ax.  That’s bad news for the people who were already moved from their homes in Collegeville, PA to Massachusetts.  Relocation followed by unemployment.  Not good.  In fact, it’s just more cruelty to those families whose whole lives were uprooted, kids and all, only to be told that their projects are to be stopped and they’re out of a job.  They join the rest of the dispossessed in a precariot existence, bouncing from job to job with fewer and fewer benefits and domestic stability.

Now, you Doormat Democrats can wail and gnash your teeth about how terrible the Republicans are and will be and woe is us.  But I would remind you that all of this has taken place on Obama’s watch and much of it during the first two years when there wasn’t a thing to stop Democrats from reinstating the New Deal and then some.

Face up to it: The Democrats are a complete and utter failure.  I don’t like it either but that’s reality.  I’m no fan of Republicans and wouldn’t recommend anyone vote for one but for gawd’s sakes, stop being such fricking Doormat Democrats.  The squeeze is on and real people are getting hurt out here.  Stop giving Obama a pass and all this praise for having mass and taking up space.  He’s a complete failure and it’s not going to get better in term two.  If anything, it’s going to get worse.

Get angry for once.