Monthly Archives: December 2015

CNBC: What’s Behind Skyrocketing Drug Prices

Can the outrageous actions of one individual taint an entire industry?drugs-skyrocket-cnbc

By demonstrating total disregard for the patients that drug companies serve, pharmaceutical bad boy Martin Shkreli, former CEO of Turing Pharmaceuticals, is trying his hardest to destroy the reputation of the industry. Shkreli became America’s most detested businessman when he jacked up prices on an AIDS drug 5,500 percent, from $13.50 a pill to $750. Meanwhile, a generic version of the drug is available for $1.00.

Shkreli proudly defended the price-gouging, unapologetically claiming his obligation was to serve investors. His extreme indifference to the patients whose lives are upended by his massive price hikes allowed the media to cast him as a “greed is good” Wall Street villain. His cavalier attitude may turn the full force of public opinion against the pharmaceutical industry, which is otherwise doing great work in treating and curing life-threatening diseases like cancer. Shkreli’s timing is ironic since it comes just as a new generation of breakthrough drugs is working its way through the arduous pharmaceutical trial process.

Shkreli got his 15 minutes in the spotlight last Thursday, but perhaps not the way he wanted. His photo in his gray hoodie was on the front page of every newspaper as he was led away by FBI agents. He was arrested for creating a quasi-Ponzi scheme by using money fromRetrophin, a prior pharmaceutical company he started, to pay off losses in his hedge funds.

Meanwhile, Valeant, a legitimate company with a different business model, drew scrutiny for its own pricing by increasing prices 200 percent to 500 percent. As Cleveland Clinic CEO Toby Cosgrove said on CNBC last month, “We worked hard to reduce costs across the system by $10 million, and all our efforts got offset by price increases from Valeant totaling $11 million.”

Two years ago Gilead caused an uproar when it announced its new Hepatitis C drug, Solvaldi, would cost $84,000 for a 12-week treatment, which put it out of reach of many patients. To its credit, Gilead spent billions to develop two breakthrough drugs, Solvaldi and a second Hepatitis C drug, Harvoni; together, they generated $14 billion in revenues in the first nine months of 2015.

The latest round of drug-price increases have stirred up a public furor. As a result, the U.S. Senate Committee on Aging held hearings on these enormous increases on Dec. 9, during which senators from both partiesdenounced the unconscionable price increases on decades-old drugs.

The pharmaceutical industry’s rationale that it needs high prices to afford the research has been turned on its head by Valeant’s business model of spending less than 3 percent on research & development (R&D) and paying less than 3 percent in taxes. Under CEO Mike Pearson’s leadership, Valeant attracted many investors and increased its stock-market value to more than $90 billion by last August. Since then, serious operating problems and questions about its business practices have contributed to a 60 percent share- price decline.

Pearson, a former management consultant, says 3 percent is sufficient because Valeant R&D is much more efficient than the big pharmaceutical companies. As a longtime medical technology executive, I find this assertion preposterous, because no pharmaceutical company can create breakthrough drugs for just 3 percent of revenues. The most productive pharmaceutical companies such as Merck, Eli Lilly, and Roche, spend 17 percent to 24 percent on R&D. They have deep internal expertise and take on scientific risk, rather than just acquiring small drugs and marketing them.

As egregious as these price increases may be, they are just the tip of the iceberg. A much deeper problem threatens the financial viability of the Affordable Care Act (ACA), known as Obamacare. When President Obama‘s former chief of staff Rahm Emanuel was putting together ACA back in 2009, he negotiated deals with leading pharmaceutical companies. For their support of ACA and $70 billion in payments to the federal government, the pharmaceutical industry obtained legal guarantees that the government could not negotiate drug prices. Now the chickens are coming home to roost for the government and private health plans as pharma makers regularly increase prices 6 percent to 10 percent — and many go far higher.

The pharmaceutical industry faces twin threats, just as the new generation of promising life-saving drugs is in final development. First, the entire industry is at risk of being vilified for not caring about patients. Second, the industry’s research-driven business model is under pressure from short-term investors arguing to abandon research in favor of simply acquiring drugs from start-ups. The pitfalls of price gouging are now being exposed, as are the consequences of simply buying drugs from others.

It’s time for the leaders of the pharmaceutical industry to speak out forcefully against these practices, and reaffirm their primary commitment to patients and research. That’s what Merck CEO Ken Frazier did at a recent Fortune conference, declaring, “Turing is not the market. This is a hedge-fund guy masquerading as a pharma exec.” Frazier is following the mission established by founder George Merck, who declared, “Medicine is for the people. It is not for the profits.”

All pharmaceutical companies should adopt that motto before the U.S. government, in response to public outrage, contravenes ACA to set strict price controls. Time is running short, and public patience is wearing thin.


This article was originally published on CNBC on 12/21/15.

 

CNBC: Get Your Balance Sheet in Order Now

With the Fed raising interest rates for the first time since 2006, you need to be prepared. Watch as I lay out my thoughts and advice on how to respond to a historic (albeit predictable) decision successfully.

This article was originally posted on 12/18/2015 on CNBC.com

Delta Sky Mag: Leading Through Giving

From a young age I have understood the importance of giving. My father and mother instilled in me the practice of giving tithes, and I have stuck with that practice my entire life. Both of my Bill-uncroppedparents were very involved in giving back – from local charities and organizations to the United Way and Rotary Club.

I believe that we must make a resolution to give back, however. It cannot be something that taught early but never executed. We must also be willing to donate our time in addition to our money.

Finally, it is critical that we prioritize the causes that we are truly passionate about. Otherwise, we may spread ourselves too thin between the innumerable amount of valiant causes that exist in the world.

Bottom line: Find the places you actually care about giving back to; then, commit yourself to contributing time, money, effort etc.

Link to full article


This was originally posted to Delta Sky Magazine.

 

Omaha.com: Understanding personal stories that matter — not just the facts of your life — can help you succeed

If you work in corporate America, you probably have a polished and well-rehearsed story you tell about yourself. omaha.com

Maybe it’s not Oprah Winfrey’s rags-to-riches tale; indeed, it may not seem to you like much of a story at all. But if you’ve written your LinkedIn profile or rehearsed an elevator pitch, you have at least begun to shape your experiences and attributes into story form.

As you move ahead or change direction in your career, you revise the story so it reflects your growth and highlights your latest achievements.

But despite how impressive your story is on paper, it’s less likely to become a success story if the voice inside your head keeps telling a different, doubt-filled version.

Perhaps it seems best to try to ignore or silence the harsh assessments that bounce around your skull. But a book on leadership suggests you tune in because a person’s life stories affect the future more than any set of inborn characteristics or leadership skills.

“Your life stories define your leadership, including the impact of parents, teachers, coaches, illness, poverty, trauma, rejection and other difficult experiences,” said Bill George, author of “Discover Your True North: Becoming an Authentic Leader” (Wiley, 2015).

Your life stories can spur you to excellence, but they also can hold you back. It depends on how you frame the stories and how you narrate them, consciously or otherwise, in your head. This narration — generally internal chatter called self-talk — can be constructive or crippling.

For example, you may tell yourself that you’re stuck. Though that’s not a story per se, it’s a lesson learned from one or more life stories that can shape your attitudes, decisions and behavior — and, therefore, your prospects if you allow it.

“The way you deal with your greatest adversities will shape your character far more than the adversities themselves,” George wrote. “Much like iron is forged by heat, your significant challenges and your most painful experiences present the greatest opportunities for your personal growth.”

It’s how you understand yourself through your stories that matter, not the facts of your life, he said.

Since self-awareness leads to self-acceptance, paying attention to the stories you tell yourself can empower you professionally and personally.


This article was originally posted to Omaha.com