• Tips gratefully accepted here. Thanks!:

  • Recent Comments

    William on Gee-7
    Catscatscats on Gee-7
    Kathleen A Wynne on Gee-7
    William on Gee-7
    William on Healthcare, Medicare and …
    riverdaughter on Healthcare, Medicare and …
    lililam on Healthcare, Medicare and …
    Earlynerd on Healthcare, Medicare and …
    Earlynerd on Healthcare, Medicare and …
    lililam on Healthcare, Medicare and …
    lililam on Healthcare, Medicare and …
    lililam on Healthcare, Medicare and …
    William on Healthcare, Medicare and …
    William on Healthcare, Medicare and …
    Ga6thDem on Healthcare, Medicare and …
  • Categories


  • Tags

    abortion Add new tag Afghanistan Al Franken Anglachel Atrios bankers Barack Obama Bernie Sanders big pharma Bill Clinton cocktails Conflucians Say Dailykos Democratic Party Democrats Digby DNC Donald Trump Donna Brazile Economy Elizabeth Warren feminism Florida Fox News General Glenn Beck Glenn Greenwald Goldman Sachs health care Health Care Reform Hillary Clinton Howard Dean John Edwards John McCain Jon Corzine Karl Rove Matt Taibbi Media medicare Michelle Obama Michigan misogyny Mitt Romney Morning Edition Morning News Links Nancy Pelosi New Jersey news NO WE WON'T Obama Obamacare OccupyWallStreet occupy wall street Open thread Paul Krugman Politics Presidential Election 2008 PUMA racism Republicans research Sarah Palin sexism Single Payer snark Social Security Supreme Court Terry Gross Texas Tim Geithner unemployment Wall Street WikiLeaks women
  • Archives

  • History

    August 2019
    S M T W T F S
    « Jul    
     123
    45678910
    11121314151617
    18192021222324
    25262728293031
  • RSS Paul Krugman: Conscience of a Liberal

  • The Confluence

    The Confluence

  • RSS Suburban Guerrilla

  • RSS Ian Welsh

    • Week-end Wrap – Political Economy – August 25, 2019
      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 […]
  • Top Posts

  • Advertisements

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.

Advertisements

Hey, Hillary Episode 1: Your biggest donors are hurting us

Google Pittsburgh in Bakery Square, East Liberty.

This is the first in a series as I try to catch Hillary up to what has happened in the last 7 years.

Back when she suspended her campaign in 2008, I thought her presidential hopes were finished. 2008 was her best year in terms of what she might have accomplished. After the financial collapse, there was an opportunity for a disciplined and knowledgeable president to force rehab on the malefactors of great wealth. Well, that didn’t happen. Instead, the malefactors recruited someone more pliable and easily dismissed. I’ll never forget the passages in Ron Suskind’s book, Confidence Men,  where he recounts the meetings Obama had with Tim Geithner, Larry Summers and Christy Romer. Obama would make an executive decision and Geithner would essentially blow him off and nothing would get done.

Anyway, what I could see happening after Obama won is that the bad deals on the financial clean-up and healthcare reform would get concretized. The changes to the workforce brought on by the massive layoffs and restructurings would lead to a different kind, but by no means better, kind of work environment for working people. And that’s pretty much what’s happened. Now, you could say that she’s working with what she’s got and I agree. In these circumstances, given what she’s got to work with, her policies are going to have to be more modest than the opportunities that might have presented themselves in 2008 would have created.

But if all you’re planning to do as president is tweak what is a sucky situation and slightly improve the status quo, then what’s the point of running? No, seriously. Wouldn’t that just make you Babysitter in Charge instead of a president? Oh, sure, Hillary would be a great babysitter, one of the best. No one is going to complain about her protecting us. By the way, that doesn’t mean she is a “hawk”, whatever that means. There are shades of gray. You don’t have to be one thing or the other. And she’ll probably be really good on infrastructure projects, especially broadband. That right there would be a not insignificant legacy. However, for working people who have been so busy trying to keep their heads above water that they are only now realizing how far out to see they have been dragged in terms of work security and income stability, that’s not going to be enough.

Hillary, you need to talk to your donors. Because right now, they can do whatever stupid shareholder value, McKinsey generated idea that pops into their heads and it’s going to hurt them. It is time that someone sat them down and told them that just because they are hiring people in India, or bugging out of NJ and we all need to adjust, doesn’t mean they’re going to save money in the end. In fact, they could be making their problems much, much worse.

Let’s take the latest examples of really stupid ideas in big pharma. It’s now more like, little disconnected, distributed pharma in a  very expensive part of the country. One of the latest Nature Alerts featured an article about the shortage of space in the Boston biotech belt and that the price of land in Cambridge Massachusetts is too expensive for new startups. In short, there’s very little land but big companies keep firing their R&D staff in Connecticut and New Jersey to relocate there. Now, the little start up companies to which we are all told we will find our pot of gold can no longer afford the cost of business there.

And we haven’t heard yet from the hapless souls who manage to get an invitation to work in Cambridge. Go read Derek Lowe’s comment sections on the latest relocation scheme to Cambridge of the virology division of BMS from Wallingford, CT. First, it should be noted that the business people are mostly keeping their jobs and relocating to a different site in CT. But by our calculations, the R&D staff is facing almost a 50% cut in personnel and the “lucky” ones will be relocated to… you guessed it. Cambridge. There’s a lot of anger and bitterness there. Housing prices are astronomical unless you live far from the city. If you live far from the city, your commute is long. Then there is the uprooting of families and finding new schools. Then, when they get there, there’s no guarantee that the job will be available for long. They will be expected to be ready to jump to a new job every couple of years.

And for what? What in God’s green earth would make all these companies decide that it HAS to be Cambridge or they aren’t truly living??

We have no f^&*ing idea.

Harvard is there and so is MIT. Ok, fine. But it’s not like there’s going to be a smorgasbord of people trading industry shattering techniques. Hell no. We all have secrecy agreements. You can’t just talk about what you’re doing over sushi with people from other companies or academic groups. Even 15 years ago the ACS meetings were becoming less and less useful and informative because presentations contained almost no relevant information, structures or data. It’s all protected by lawyers. So, the idea that Cambridge is some kind of hot bed of new open source learnings is just stupid. Do not let them tell you otherwise.

It’s not even like you even have to BE in Cambridge if by some weird chance you can actually share information. The internet makes location irrelevant. In fact, some of these companies farm out so much of their work to other companies that there’s no need for them to be in the same place geographically. Hey, if they want to break up their infinitely configurable corporate lab space and inefficiently run their research by having lab rats negotiate contracts with outside companies, complete with secrecy agreements so that they can become lightweight organizations free from the constraints of employees to whom they are obligated, let them do it and waste their money and talent. But in that case, they’d be saving a lot of money by relocating to Detroit.

And while we’re at it, why is it that the R&D people are the ones that have to make all the sacrifices? Why can’t an MBA who is after all just a bean counter live in a rust belt city? Aren’t they costing valuable office space for the shareholders if they’re located in Cambridge? I mean, if the almighty dollar is the reason why we are reconfiguring pharma, shouldn’t we eliminate the costs of things that don’t actually contribute to the discovery of drugs? If I were a shareholder, I’d want to know why the cubes have to be in an expensive high rise facing the Charles River. It’s not like an accountant or marketing person will have any reason to hob nob with the PhD superstars at Harvard so why are they there? Can’t we find plenty of English speaking MBAs in Hyderabad?

Speaking of rust belt cities, Pittsburgh, for example, offers a lot of culture and plenty of affordable housing for working people. We are not located in East Jabip, most people have all their teeth and this city has one of the most literate populations in the country thanks to Andrew Carnegie’s magnificent libraries. This is a great place to live and work with public transportation, a thriving university center with Carnegie Mellon and the University of Pittsburgh at the center. There’s plenty to do here from an outdoor perspective and free jazz every Tuesday in Katz Plaza downtown. And we have internet. We even have our own Google headquarters. Why Cambridge? Or why not Cincinnati? I only ask.

But nooooo. They’re all going to squeeze themselves into a shoebox or run themselves off a cliff like lemmings. In the process, they’re uprooting a lot of scientists or just plain ruining their careers, and setting back drug discovery by decades. Somewhere on Derek’s comments section a commenter noted that drug discovery requires Leonardos not Mozarts. That’s because it takes a very long time to learn to be a drug hunter. There are software moguls who think they can speed it up by applying something like Agile principles and maybe they can have a minor effect on the middle layer of research. That is, the layer between routine analysis and project team level collaboration. There is a sweet spot consisting of protein groups and crystallography groups that might be amenable to that kind of intervention. But, in most cases, they’re already there. They’ve figured it out and work as a team and they don’t need no stinking software guy telling them how to do it.

The rest of the time, research just needs to grind through it, one cell assay at a time. It’s aggravating to the shareholders who have the attention span of a newt. Ok fine, Ditch the shareholders. No, seriously, they don’t seem to have any appreciation for this stuff. Outsourcing doesn’t make the process go faster, in fact it can cost money and time in the end. What looks like a sure fire way to cut costs and put money in the shareholders’ pockets just doesn’t in the end.

So, Hillary, the next time you meet with these guys, and they are almost always guys, ask them why they are doing what they’re doing. Does it really make sense from a business perspective? Is cutting R&D really the only thing these toadstools can think of doing to increase shareholder value? Aren’t there better ways to cut costs? Or is there a hierarchy of costs to cut that have nothing to do with actual productivity? Are these titans of industry deliberately overlooking the obvious in order to appeal to their MBA culture of smartness? What is the long term strategy or is there even a long term strategy? Is all this pain on the R&D side really necessary? And how does that result in new drugs? Is relocation to certain areas of the country really about costs and collaboration, or is it really about egos and classism? And ask to see the numbers. Tell them you’ll wait until they find them.

Someone needs to start asking these uncomfortable questions and getting straight answers. Because if you want to be the next president and champion for us, you’ve got to start getting the executive class to explain how their McKinsey generated restructurings actually work in the shareholders’ favor. I’m not seeing how it provides value over what we had when the industry was working through new technology but still producing blockbusters. Call me extremely skeptical.

Someone needs to start holding these people accountable for the havoc they are creating. If you’re not going to do it, don’t be surprised if the country doesn’t get all excited about your campaign. Do you really want to be another British Labour party politician?

Next week, does contracting everything out really work?

#antibiotics : somebody should do something

I’m blogging from my iPhone while I wait for my car to be inspected. Expect imperfection, although, some of you may not notice a difference.

To those of you on the left who are finally paying attention to pharma research, head on over to In the Pipeline. Derek Lowe has another story that illustrates the state of R&D research in the era of shareholder value and its potential impact on the rest of us.

This recent event is about Merck acquiring antibiotic research company Cubist. Cubist in-licensed much of its pipeline and had a small early discovery research team of 120 people. It has now been announced that those 120 researchers have been laid off.

I guess you could say, well, Cubist in-licensed much of their stuff anyway. But those 120 people presumably have many accumulated years of experience from working on antibiotic research and that experience will largely be lost because companies are not really investing in antibiotic research. Where are they going to go?

Some of them are going to get a nice payout from Merck but even if they pool their resources, it’s not going to be enough to make a dent in the hole of antibiotic research. It will mean starting from scratch-again- for many of them. Or casting around for another hard to keep job in one of the most expensive housing markets in thtalee country.

In the meantime, there goes some badly needed talent to combat multi drug resistant bacteria.

If only there was an institution big enough to fund research in the public interest…

 

 

Stupid Drug Discovery Advice, $2 Billion dollar prizes and Antibiotics.

The NYTimes posted a column from Ezekiel Emmanuel, Vice Provost at the University of Pennsylvania, on the subject of antibiotic resistance and how to encourage more companies to develop antibiotics. He wants to reward the successful researchers with a $2B prize. BUT, he says: “no payment for research that fizzles. Researchers win only with an approved product.” Oh, and he says that the bragging rights would be great! Yes! That would make the starvation diet so much more meaningful. Funny, we don’t expect any other employed person to live on nothing for close to a decade on something that might not pan out or may need to be sold to a big company to keep our little startup from declaring bankruptcy.

He’s identified the problem. Companies don’t want to invest a ton of money in a treatment that’s only going to be used for a short period of time. By the way, that’s the new business model. Back in the olden days when I first started working in pharma, we had all kinds of therapeutic areas to choose from. But during the mergers and acquisition years during the 90’s to the mid Naughties, those therapeutic areas had to be eliminated to make room for shareholder value. Ok, I don’t want to get into this too deeply because it’s territory I’ve covered before but I might touch on it towards the end.

As I’ve discussed before, the antibiotic shortage problem was bound to come up. Bacteria mutate. It’s what they do. They are masters of natural selection, if you believe in evolution. If you don’t, an infection might just be one of those mysterious things that happen to people who do not pray enough. See, there’s another topic I don’t want to get into right now.

Here’s the problem: as Derek Lowe at In the Pipeline has pointed out, the molecule space around the typical antibiotic therapy has been exhausted. There are other targets than beta lactamases but they are not low hanging fruit anymore. There are new mechanisms that we have to learn, like quorum sensing for example.

When a new target is identified, it takes many years for that project to reach any semblance of what Silicon Valley industries would call fruition. In fact, the most promising project I was ever on started back in 2006. I don’t know what its status is at this point. It was promising enough that I think there was a drug there. But I’m betting it is still in the early phases of clinical development even now. That’s almost 10 years later.

This is the problem that a $2B prize does not solve. You can’t incentivize research like this. The reason is that the money has to be spent up front. That is the problem that almost all R&D, both academic and industrial, is grappling with right now. The scientists have to be hired and paid, the reagents have to be ordered and paid, the equipment has to be bought and maintained, and the people funding all of this have to have the patience of saints while the scientists churn through iteration of iteration of assays, high throughput screening, medicinal chemistry and drug design, pharmacology, ADME/T optimization and scale up. It takes a long time and it’s expensive. What will the R&D staff live on in the meantime? What are they supposed to use to get their work done? It’s like marooning a bunch of scientists on a desert island and telling them to come up with a drug using sand and chewing gum. Or hitting their “friends, families and fools” up for early funding as the American Chemical Society encouraged us to do when we first got laid off.

There are ways to reduce costs. For example, don’t make everyone live in Cambridge, MA or San Francisco. That right there would save the funding agent a bunch o’cash. Move people back to the mid-west from whence they came 25 years ago. You know, those places like Kalamazoo and Cinncinatti or even Pittsburgh. It’s cheap to live here and there is such a thing called the internet. We might even use web meetings to interact with each other. Wow, I believe I even used to do that with my colleagues in France and Germany once upon a time about 5 years ago! Let’s face it, there is not a big melting pot of exchange going on in Cambridge when everyone has signed confidentiality agreements. The only reasons to relocate there is 1.) it allows the MBAs who were once bio majors but sold out for the big bucks to live vicariously and 2.) I have absolutely no idea. No one I know actually wants to relocate to Cambridge. But I’m getting off topic.

My point is that the investment has to be made up front. It doesn’t do much good if it comes afterwards, especially if there are side effects and litigation that need to be covered. This is the case with all drugs. To get the drug discovery mechanism rolling, the fuel has to come early in the process and be committed to seeing the process through. That’s what we don’t have anymore. Once the drug is discovered and marketed, the profits can be reinvested in the next drug. That’s what used to happen.

Note that in this scenario, it is the R&D professionals who are important, not marketing, finance or shareholders. The researchers aren’t in it for the big bucks. You will have to take my word for this. Almost no one I ever worked with went into chemistry or biology with the intention of becoming an entrepreneur or cashing in big on their first blockbuster. Pushing us to become what we are not may be hampering the drug discovery process. Do you want someone in the lab making discoveries or do you want that person negotiating with contractors and venture capitalists? You can’t have both. There may be a few people who have the energy for both but they are exceedingly rare or exceptionally lucky.

And here is where I revisit the cause for why antibiotics, and other therapeutic areas like CNS, Cardiovascular and reproductive health, have been abandoned. It was the frenzy to merge that caused this to happen. All of those mid-size labs were joined and then a purging went on when the executive bonus class and shareholders took their cut. They created “efficiencies” by cutting out R&D and imposing cost cutting measures on research. They made research departments compete with outside vendors for services. They destroyed the collaboration between departments and exacerbated the complexity of the problem to be solved. They looked at their post-merger portfolios and said, “Antibiotics are not chronic therapies. We can’t make money on those. Let’s cut them.”. That’s what happened, Mr. Vice Provost.

And THEN, to top it all off, the mergers and acquisitors decided that academic researchers were so much less expensive. Why not scrap the R&D group altogether and let grad students do it?? Not that I have a problem with grad students but realistically, you have to do industrial research and follow a project from start to finish (if that’s possible without being interrupted by a merger or layoff) before you actually “get it”. Solving a drug discovery problem is one of the most difficult problems in science. Pretending it can be done on the cheap or rewarded afterwards when the vulture capitalists are going to demand their cut is not really understanding the nature of the problem.

A $2B prize is not a solution. It is the definition of success from a country that thinks the only reward is money. THAT is the bigger problem that we have not solved and the reason why new antibiotics are in short supply.

#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…

Pondering Abramson’s firing- again (for the last time)

Update: Here’s a podcast from the Women’s Media Center on the subject of Jill Abramson’s firing featuring Carol Jenkins, Geneva Overholser, Gloria Steinem, and Soraya Chemaly.  They talk about some of the material I posted below.  As to how we tackle the problem of subtle but real discrimination, we need to take a lesson from Finland and open up a Gender Glasses office in the EEOC that will quantify absolutely everything in a suspect workplace.  Everything must be measured from the placement of desks to the time it takes for email to be answered to who reports to who to how many minutes women are allowed to present and how many times they are interrupted compared to a man.  Think of it like following sports.  Men respect statistics and, frankly, I think it is the only way this problem is going to get flushed out into the open.   Otherwise, it’s just our word against theirs.  If feminists are really serious about the issue, they need to lobby legislators to formally create a Gender Glasses type of bureau, fund it and publish the statistics.  You will know who your friends are when they are asked to co-sign the legislation and move it through the committees.

*******************************************************************************************************

I promise this will be the last time I write about this thing because it’s speculation anyway.  But there’s a lot going on here and, in the end, this is primarily a story about how gender stereotypes were used to serve Baquet.  I realize that he’s a likable guy but in the end, Baquet was the primary beneficiary of Abramson’s firing.  I think we have to acknowledge that he had a significant role in it.

The story is complicated by a family dynasty, recent history, embarrassment, loyalty, economics and a fundamental misunderstanding about how modern women (and some modern men) think.  So, this post will be in pieces parts with the hope that it will all make sense in the end.  Some of these pieces come from personal experience that I have witnessed or was encouraged to participate in.  The pharma field has given me a wealth of material to write several satires.

Let’s start with the most obvious factor plucked from another post I read this morning about positions traditionally held by men being replaced by female appointees and the irrational resentment that engenders.

“There aren’t any WOMEN here today, are there?”

1.) The male affirmative action program.  I ran into this one early in my career when the lab I worked for hired a woman to run a medicinal chemistry group.  As far as I could see, she was the only woman running a group of that size in the company.  There were other female chemists who had a few assistants and were running project teams but this one new hire, let’s call her D, was going to have a substantial group of PhD chemists running their own projects working for her.  It was unprecedented.  On the projects I worked on with D, I found her to be very intelligent, incisive, authoritative and, this one is important, calm.  There was no drama.  She was, and still is, a natural leader.

Needless to say, to this day, the chemists at that lab (who were all laid off en masse by Pfizer in 2009, but that’s another story) complained bitterly about why D was hired.  It wasn’t just that she was a token, it was that there were so many other more qualified men that could have been hired in her stead.  I had lunch with a bunch of these guys a couple of years ago.  They are all pretty decent people, even if they are mentally disabled by their Y chromosomes.  When the subject of D was brought up, I laughed at them. They were still convinced that there were better qualified men that could have been hired.  I pointed out that before D started, all of the group leaders were men and several, and I named names, were leaders that no one could stand.  They were irrational or untalented or autocratic or weird.  No one wanted to work for them.  But D comes along and instead of saying, hey, she makes JB look like a fricking nut case, why don’t we replace HIM, we’re getting all upset that she’s not some dude we know.  I gave them case after case of lousy male group leaders and they all agreed that no one wanted to work for them.  Working for D, on the other hand, was a pleasure because it was so damned rational.  So, what was the problem, guys?  Why is the answer always the affirmative action plan for men?  That shut them up and gave them something to think about for awhile.

Sometimes, you need to point out what a warped perspective men have about how the world works.  In some respects, their lives are as disadvantaged as a person who grew up in the ghetto.  It’s all they know.  They’re so used to lousy leadership from half of the men they work for that they fail to see what the real problem is when a woman steps in to a leadership position.

This has been brought up before but the news media represents women’s points of view very poorly.  The ratio of men to women on the Op/Ed pages of the NYTimes is something like 10-2.  Just look at the Supreme Court to see how having even 3 out of 9 people judging while female has had damn little impact on the law of the land.  It only takes one Justice Kennedy or Anonin Scalia in love with his own self and sense of power to hold back modernity in this country.  But for some reason, all I ever read about is consternation over why Ruth Bader Ginsburg is still serving, a question that never came up when John Paul Stevens was serving well into his 90th year.  So, it’s no wonder that our perceptions of women in leadership roles are so twisted.  It’s like the privileged group just now noticed that there are women in the crowd.

2.) The layoffs are coming!  The layoffs are coming!  Anyone working in the last 30 years knows what it’s like to be on the verge of a layoff.  The MBA crowd starts sending out fatwas about money and getting lunch served during 4 hour meetings is suddenly not happening anymore and cuts start really biting into how things are done.  When this starts happening to a group of professionals who are heavily mortgaged and have kids to raise and college to pay for, alliances start to get formed very quickly.  It becomes necessary to find the politically well connected and become their best friend.  You like what they like and hate who they hate.

When the layoff rumors started at my last lab about 2 years before the ax fell, I had a conversation with one of my colleagues who told me a story about his family dynamics.  He said that he had two brothers and in order to get what he wanted, he always sided with the stronger brother at the time.  The brother on top would periodically change and he switched his loyalties accordingly.  This conversation was in reference to why he was siding with the guy who eventually turned out to be our boss just before the layoff decisions were made and not with the woman who was my boss.  He was offering me a choice.  Switch and help drive the knife in or suffer the consequences.  I opted for  loyalty.  I liked my boss and was learning a lot from her.  She was displaced a few months later and got a new job, and almost all of her former group members were laid off pretty quickly.  I jumped to another group and hung on.

I bring this up because I’ve heard a lot of stuff about how even some of the women in the newsroom complained about Abramson.  This is at a time when the CEO of the Times had been making his presence more widely known.  When it comes time to satisfy the shareholders, it’s important that you have made the correct alliance.  It is pretty clear from the posts I have read about Baquet that Sulzberger liked him and had regretted not appointing him instead of Abramson.  So, if the Times staff was in the unenviable position of picking a brother to side with in order to save jobs, Baquet was the one to go to.  In such a situation, it is appropriate and understandable to play up his good characteristics in order to justify why Abramson was stabbed in the back.  It happens all of the time.  I didn’t say it was nice, or fair, or loyal.  It’s just human.  It’s not a reflection on either Baquet’s or Abramson’s leadership qualities.  Pinch liked Baquet and didn’t like Abramson and that’s all you needed to know in order to save your own skin.

3.) Ovaries of Steel.  In this case, I am not referring to Abramson, although that plays into it as well.  No, I’m referring to the person who Abramson was trying to bring in, Janine Gibson, newly appointed editor-in-chief of The Guardian.  Frontline recently ran a two part series on the NSA scandal that everyone should watch for a wide variety of reasons.  What Janine Gibson did was both shrewd and incredibly ballsy and she learned what NOT to do by watching what the Times did with previous national intelligence stories.

So, here’s a quick summary.  In 2004, James Risen of the NYTimes wrote a story about the Bush administration’s possible violations of the constitution through a massive surveillance of American citizens.  It turns out that Risen only knew a tiny fraction of what was going on and Edward Snowden would spell it all out 9 years later.  Risen presented Bill Keller, executive editor at the time with his story and Keller and Sulzberger contacted the White House.  The White House, deep in reelection politics, knew it had a problem on its hands so it invited Keller and Sulzberger to a meeting. It then put pressure on the Times to sit on the story for a year.  The Frontline documentary makes it sound like the White House either threatened the Times or laid a guilt trip on it about “letting the terrorists win”.  Well, you remember the crap that the Bushies were always dumping on its critics.  Same thing.

Fast forward to 2013.  Janine Gibson sends her representatives to Hong Kong to vet Edward Snowden.  They check him out and say he’s legit and the story is huge.  At that point, she also calls the White House- and gives them four hours to respond before she goes to print. She refuses a meeting. Gibson knew that if she met with the White House and they stalled for time or found a way to silence her source, the story would vanish into the ether so she gave them very little time to engage in defensive tactics.  Now, I think Edward Snowden is a hero and Glenn Greenwald and Laura Poitras were inspiring but when it comes right down to it, none of revelations might have happened if Janine Gibson hadn’t had the courage and intelligence to pre-empt the White House and NSA’s stalling tactics.

4.) Putting it all together.  So, here’s my best guess as to how Abramson’s firing went down.  First, we have Baquet indulging in male affirmative action behavior.  Why shouldn’t he be executive editor?  Also, Abramson’s bringing in this Gibson girl to be his equal?  What?

(I’m going to guess this is when Abramson discovered that she had been underpaid at certain points during her career at the NYTimes.  She probably had to find out what salary, benefits and level she could offer Gibson and in the process, uncovered a pattern of pay discrimination that dated back to the time when she was a deputy managing editor.  Just a guess but the timing seems right.)

Then there is the sense of unease and impending cutbacks.  Baquet makes a lot of friends.  Sulzberger likes him.  Alliances are formed around Baquet.

Then there is the possible embarrassment to the Times if Gibson comes in.  First, it highlights Keller’s and Sulzberger’s toadying to the White House and, secondly, Janine Gibson looks like a loose cannon, something Baquet was likely to highlight during the amuse-bouche.  Abramson is making a rash decision to bring in someone who may get the NYTimes into another Risen situation with all of the potential legal headaches and expenses that would entail.  Did Pinch really want another embarrassing situation on his hands??  Come to think of it, it’s kind of flattering to be on the president’s good side, isn’t it?  And besides, Pinch was one of the forces behind trying to get Caroline Kennedy to take Hillary Clinton’s senate seat.  No doubt, Sulzberger considers himself to be one of the best people.  It just wouldn’t look good to hire this upstart boat rocker.  Did Abramson really think this over before she went over both of their heads to hire Gibson?

5.) The Pilhofer Pilfer.  Women who came of age during the 70’s and 80’s, before The Backlash, grew up believing that there were no boundaries to their ambition.  Oh, sure, we had professors who spent inordinate amounts of time fluffing some pissy little male students instead of us but we could rise above that.  Then we went to work and accomplished and moved into leadership positions and took some risks.  To us, I mean to the females in this cohort, there is a lot of admiration and respect for each other’s talents and life work.  We see ourselves as persons who are women with accomplishments.  However, to the rest of the world, especially to men who for some reason aren’t interested in hearing about the Abramson firing because it is booooorrrrrring to them, a person with Hillary Clinton’s or Jill Abramson’s credentials is still like a dog playing a piano.  They are one offs.

I have also read that women get their first crack at high level leadership when an organization is in trouble.  There are a couple theories as to why this is.  One is that the organizations have run out of other options.  Another is that women are seen as smoothing the waters when there is internal turmoil, although this is really a cultural stereotype.  Women are human beings and can be tough as well if they are given permission to do so.  Look at what happened in Iceland during the financial crisis of 2008.  Johanna Sigurdardottir was put in charge when the country faced down the IMF and the world’s biggest banks.  It initially had a severe recession but has recovered better than Ireland, Spain or Greece.  The risk to women is high in these situations.  If she can’t avert the impending disaster, her leadership is blamed and taints the careers of other women of her stature.

Abramson was put in a tricky position when she took over from Keller in 2011.  The Times is going through a harsh transition due to the changing nature of the media.  From all accounts, she was doing very well.  She was instrumental in putting up the paywall to the news, which makes a hell of a lot more sense than putting a paywall around the Op/Ed pages.  Maybe it wouldn’t have been enough to save her when the shareholders started demanding more for dinner.  Even superhuman accomplishments wouldn’t have been sufficient in that scenario.  And her reputedly “brusque” behavior was not unusual for executive editors of major papers.  I think the gender related complaints were just convenient excuses that Baquet and his allies used to get her out of the way.

But Sulzberger and Baquet are still working with old male brains because Janine Gibson *is* a force to be reckoned with and the fact that she poached one of the NYTimes’ up and coming digital content specialists in the aftermath of Abramson’s firing tells us quite a bit.  It tells us that there are some men who see an advantage to working for strong, courageous women, and that’s a very good thing for the rest of us.

And a very bad thing for the NYTimes.

 

 

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.