I was more than a little cynical about a speech from Fred Hassan of Schering a while back in which he suggested that everyone should put more money into their retirement accounts so that he could have more money in his. One would have thought that, with their stock prices tumbling, many of their products being pulled from the market and the public’s trust in their products and performance in dissarray, the CEOs of big pharma would be looking for a conciliatory approach. Instead here’s Eli Lilly CEO Sidney Taurel’s world view:
The nation’s health care system is ‘unhealthy to the core’ and soon will move from being chronically to critically ill if no changes are made. The principles of competition…… have become deformed in the health care field……Patients don’t see the true costs of health care because the government, their employers or insurance companies appear to be paying for them. Costs also are higher than they should be, Taurel believes, because the system is overregulated. "The free market hasn’t failed in the U.S.," Taurel will say. "It’s never been given a chance to work."
At least we agree on that last point. Basically Taurel says that he wants an unregulated system in which the consumer pays for everything out of pocket, and no doctor (or perhaps pharma company) is liable for anything they ever do. Funny that he didn’t seem to mention doing away with patent protection, but perhaps that’s not regulation in Indiana. Nor did he mention the teeny fact about how much money his company is going to make now that Medicare will be paying out for their products. Perhaps they just don’t know how their companies make money, although given the amount of money they spend on lobbying and corrupting PBMs and health plans, I suspect they do. Then it starts getting really funny.
Not every proposal would help the drug industry — at least not in the short term, Taurel says. Drug companies will feel as much pressure as the rest of the health care industry to cut costs. But Taurel says drug companies are better prepared to compete in that environment because they’re already feeling consumer pressure over drug prices and are trying to respond.
By putting up drug prices 5-10% since the election. That is a response, I suppose. But then comes the clincher:
"I’d much rather take my chances in a true, transparent, free-market system ruled by consumer choice than in a command and control system, driven by the winds of politics," Taurel says.
Now I’m rolling on the floor laughing my ass off. Pharma has made all its money in the last decade because of the increase in mostly private third party payment. Consumer payments went from being over 50% of all pharma spending in 1990 to less 32% in 2000. And pharma will make all its money in the next decade because of the increase in government third party payment. Payment that come courtesy of the Medicare Modernization Act that they bought and paid for! If you want to talk about the vagaries of politics consider that the director of the OMB and now new governor of Indiana is Mitch Daniels. What did he do before he went to DC? He worked for Tuarel at Lilly! The winds of politics are fine if you control the wind tunnel!
While I’m sitting here with my mouth gaping about the entire concept of this level of self-serving propaganda, The Industry Veteran has a rational explanation for the whole thing:
I suspect the Big Pharma CEOs are using some fairly simple mass communication principles beneath all their health care "reform" speeches. First, these braying donkeys command a forum. It’s amazing that the public immediately recognizes the mental vacuum accompanying the only other groups that attract such immediate media attention: Hollywood celebrities and professional athletes. CEOs of the top 500 companies maintain even greater access and control, but the public ignores their baldfaced self-interest and typical lack of expertise on subjects where they are venting blatant prejudices. At least there is the fascination of a novelty act in watching a bimbo starlet speak about wildlife conservation or dispossessed farmers. Our response to that phenomenon resembles watching a dog walk on its hind legs or turn the pages of a book with its left paw; we don’t expect it to be done well, as Samuel Johnson said, but feel a sense of patronizing amusement that it’s done at all. No such amusement accompanies a CEO’s pronouncements on public policy issues. As public spectacle it relies more on arousing latent, mass sadism, similar to the process of selecting a subject from the crowd for ritual slaying. At any rate, these thugs speak out on policy issues because they can and because they feel they can influence the outcome in their favor.Secondly, the Taurels, Hassans, McKinnells, Garniers and McKillops have started to broadcast their plutocratic preferences more widely within the last few years because they are slipstreaming behind George Bush’s strategy of promoting the Big Lie. Not many years ago a person would have been considered delusional after publicly announcing that individuals can more effectively provide insurance safety nets for their retirements than the Social Security system. Custodians of public safety would really have called for the thorazine and restraints if the same person also proclaimed that unconscionable tax breaks for the wealthy make the entire country more productive. When Barry Goldwater made similar assertions in 1964, a number of psychiatrists questioned his emotional competence to serve as president. In past years good burghers might have even stormed the White House/Frankenstein laboratory with flaming pickets if its self-same occupant also started a preemptive war using entirely phony reasons. Alas George W. Bush faced neither angry mobs nor a padded room. Instead thoughtful imbeciles pondered whether the Almighty transmitted His unseen wisdom to the W more or less accurately than a contradictory message He sent to Pat Robertson. So in a society that now constitutes Stanley Milgram‘s laboratory writ large, by virtue of its blind obedience to authority, Big Pharma’s capi di regime figure they might as well trot out their avuncular acts. Why settle for one sucker a minute when a simplified message, repeated frequently in the mass media, can create millions?As a third reason for this pathetic roadshow, the Big Pharma CEOs would not agree with your assumption that the public despises them. Improbable as it may seem, their batallions of sycophants and courtiers successfully insulate them from reality. As a result of such fantasyworld thinking, J.P. Garnier demanded that GlaxoSmithKline’s board double his salary despite the company’s abject failure at drug development under his leadership. Similarly, AstraZeneca’s Tom McKillop asserted his demand for one million pounds added yearly compensation, despite failures such as Exanta, Crestor and Iressa that substantially lowered share prices. I could continue at monograph length along such lines. Suffice it to say that Pharma’s CEOs do not accept public perceptions of their villainy. They actually think of themselves as benevolent, pragmatic, shrewd businessmen who are wrongly villified by a sensationalist press and political opportunists that seek scapegoats for an over-regulated, unworkable system. To change public perceptions, they have adopted Big Tobacco’s PR strategy. In 2004 Astrazeneca actually hired as its VP for US public affairs a fellow who spent his previous 12 years working for Philip Morris, now called The Altria Group. Under his direction their PR posture has been one of swift, hardball responses and preemptive attacks upon critics such as Public Citizen and Marcia Angell. In the UK, meanwhile, Astrazeneca arranged for The Scotsman to run a puff piece on Tom McKillop that makes him appear more a combination of Albert Schweitzer and Johnny Carson than the Celtic barbarian he is.So there you have it. The heads of Big Pharma have the forum, they want to push the Big Lie, they actually think they’re nice guys, and they’ll use every dirty trick to shove that idea down our throats and make us believe it.
It all reminds me a little of when Nicolae Ceausescu was dictator of Rumania and his thugs would arrange cheering crowds and full shops on the streets when he drove around Bucharest. One day he flew back from a foreign trip early and they didn’t know he was coming. He was amazed to see lines of pissed-off people queueing outside empty shops. Of course, it didn’t stop him from ending up against the wall with an over-abundance of volunteers for his firing squad.