Joseph McGee Private Investigator: Book Six
ANOTHER
WHISTLE BLOWER
McGee and Big Pharma Criminals
Carl Douglass
Neurosurgeon Turned Author Writes With Gripping Realism
PO Box 221974 Anchorage, Alaska 99522-1974
[email protected]—www.publicationconsultants.com
ISBN 978-1-59433-594-5
eISBN 978-1-59433-595-2
Library of Congress Catalog Card Number: 2015960881
Copyright 2015 Carl Douglass
All rights reserved, including the right of reproduction in any form, or by any mechanical or electronic means including photocopying or recording, or by any information storage or retrieval system, in whole or in part in any form, and in any case not without the written permission of the author and publisher.
Manufactured in the United States of America.
Dedication
To the Whistleblowers, the Truth Tellers, and the Officers of Counterintelligence
Contents
Chapter One
Chapter Two
Chapter Three
Chapter Four
Chapter Five
Chapter Six
Chapter Seven
Chapter Eight
Chapter Nine
Chapter Ten
Chapter Eleven
Chapter Twelve
Chapter Thirteen
Chapter Fourteen
Chapter One
The day has been long and boring, like most other days in pharmacist Cecil Edgington’s routine life. He begins tidying up and securing the prescription drugs in their locked bins. He has owned his drugstore—Sugarhouse Family Drugstore, at 1346 South Kensington Avenue in Salt Lake City, Utah--for thirty-two years. His day’s end activities have become a matter of rote. He is mildly disappointed in himself. His dreams as a young man to become an affluent owner of a chain of family drugstores around the Western United States has come to naught like those of many of his fellow self-employed pharmacists. His wife is bored with him and his overly conscientious attention to the store and everything that goes on there. His two adolescent sons were neglected by their father in their early childhood sports careers; and now, they neglect him as being largely irrelevant. He cannot argue effectively against their opinion.
Cecil is a tidy little man—five feet nine inches tall, 138 pounds in weight—with greying and balding hair, an average face that was never attractive to women, and an off-putting fastidiousness in his personality. He has a minor nervous twitch involving his right eye—his doctor calls it “intermittent stress-related essential blepharospasm”—and an annoying stammer when he gets stressed. He is one of the grey/invisible people to whom few pay any heed. He has many acquaintances but few friends. Most of his associations are superficial and related to his life as a drugstore owner.
If the truth be known, Cecil Edgington would love to chuck it all, move from Utah with its unpleasant winters, and go to California or Hawaii where it is warm. Whenever that thought crosses his mind, he recalls an oft-quoted question asked frequently by a long-ago governor of Utah, J. Bracken Lee, “Where we gonna get the money?” and has a little laugh at his own expense.
Two men with smooth suntans and expensive tailored suits walk into the store at quarter to five. Cecil wants to leave early, but this is obviously business—and he feels obligated to honor the listing of his store hours plainly printed on the glass front entry door. Cecil has one pride in himself: he is scrupulously honest; and that is associated with punctuality, reliability, and a strict adherence to both the spirit and the letter of the law in his personal and business life.
He sighs, and asks, “What can I do for you, gentlemen?”
The taller of the two says in a soft Florida accent, “Well, my friend, it may well be what we can do for ya’ll.”
That sounds like a tip-off that this is going to be a sales pitch to Cecil. The two men are older than the usual drug reps, and considerably better dressed. Both give Cecil a heartwarming, perfect white even-teeth smile emanating from golden-brown tropical tanned faces. Cecil reckons that those smiles cost each man between $25,000 and $30,000—no, they are not the usual struggling drug reps.
“I am about to close,” he looks pointedly at his watch; “so, I can give you fifteen minutes. Then I have some important matters to attend to outside the store.”
He gives the younger men a rather knowing, unwhitenedteeth avuncular smile.
“Ya’ll have a place where we could sit and look at some papers across a table, Mr. Edgington? We are busy, too; so, we won’t keep ya’ll long.”
Cecil wonders why the man refers to him in the plural. It is a prejudicial thought that comes to mind because he does not want to have his routine disturbed.
“Okay. We can go to my office.”
As soon as the three of them get seated around Cecil’s small round lunch table, the younger of the two men—the movie star-handsome one—begins the serious conversation.
“Mr. Edgington, sir, we are part of the OrganoNatural Pharmaceutical Marketing Consortium….”
“Well, that’s one I never heard of,” Cecil interrupts, “but then, I’ve only been in the business for thirty-six years, including the last thirty-two right here on Kensington Av.”
“Why, sir, that’s highly commendable. You are the sort of stable businessman we are seeking. We would very much like you to become part of our consortium family. We believe we can improve your business flow and your bottom line by fifty percent minimum. Many of our people in the South—where our main efforts have been so far—have seen truly phenomenal improvements in the range of seventy to eighty percent increases.”
“You have my attention,” Cecil says to them, and thinks to himself, And it sounds like “too good to be true” to himself.
“Awright then, first let me tell you that the consortium is a powerful alliance between HealthFirst, PharmaPerfect, FitnessSupplementAid, and ZyterBrothersTechnologies. We are serious people, Mr. Edgington … would it be okay with you if we got less formal and called you Cecil?”
“Sure.”
Those are the four largest pharmaceutical companies in the world, not just America. Now, Cecil’s attention is piqued for real.
“Real good. I’m Kendrick Smuthers and this is David Carter-Smyth—Kenny and Dave. We’re what you might call the point men for a new way of competing in the ever increasingly competitive world of big pharma. Our economists, marketing gurus, and publicists have been working on a plan for some time now to help get the small pharmacies and pharmacists on board to create a powerful answer to some of the giants that can sell cheaper and more because their inventory is so huge, their advertising outlay is so high—about like the Republican Party in an election year—and their influence with the docs and pharmacists is so strong. They’ve more or less locked up the API [Australian Pharmaceutical Industries], Sigma Pharmaceuticals, and National Pharmacies in Australia; Brasil Pharma, Drogaries DPSP, Pague Menos, and Profarma in Brazil; Brunet, DRUGStore Pharmacy, Familiprix, Katz Group, Lawtons, and Pharmasave in Canada; China Nepstar and Watsons in China; Apoteket AB, Apoteket Hjärtat, and Apoteksgruppen in Sweden … well, you get what I’m telling you. The list goes on and on.
“We’ve made good progress … actually, very good progress, in the US with quite a few of the big twenty-five like Walmart, Macy’s, Walgreens, Costco, CVS, Rite Aid, Kroger, and Target, etc. You get that picture. We’ll get a bigger foot in the door with the major wholesalers as time goes on because we have a concept, like the Godfather said, ‘It’s a deal you can’t turn down.’”
He laughs vigorously at his own effort at humor.
“But, why have we come
to see you, Cecil? Because guys like you—the little guys—have been neglected, left out of the big picture because they aren’t organized and don’t have a strong voice. Today, we are here to convince you that our plan will be your voice.”
“Like I said, I’m listening.”
He sneaks a glance at his manufacture 1995 rugged, reliable, and cheap Russian Raketa 2623H caliber watch, a visible testament to his careful frugality. He found it online.
“To date, we have eight thousand smaller pharmacies with us, and by the end of the year, we expect to have between twelve and fifteen thousand. That many guys like you agree that our strategy is the one for them. This is the way we work:
“First of all, we work mainly with the established and reliable outlets with clearly defined marketing guidelines including Medicare, Medicaid, the VA system, and all branches of the US Military through the DOD. Second, we have hired an advisory group consisting of former IRS, DOD, Social Security, CMS [Centers for Medicare and Medicaid Services], federal attorneys, and university professors who know everyone and everything there is to know about the PPACA [Patient Portability and Accountable Care Act]. That committee keeps us able to streamline our approach, to get the maximum prices from the government, and—of course—keeps us honest … or at least legal all the way,” he says with a laugh.
“Let’s get down to brass tacks. What do you have to do? Easy. We want you to use your considerable local influence to push the products from the consortium—HealthFirst, PharmaPerfect, FitnessSupplementAid, and ZyterBrothersTechnologies—which in the pharmaceutical world covers about everything from soup to nuts. We’ll supply you the meds at very favorable wholesale prices, and you can offer them to your customers and the doctors who prescribe for them at the best prices they’ve ever seen. After a while—once they’ve come to realize that your drugstore is the place to do their shopping and prescription filling, and that our medications are at least the match of anything they’ll find anywhere else—we can gradually increase the prices up out of the give-away range. You’ll sign on under the Utah Group of ONPM [OrganoNatural Pharmaceutical Marketing] which is divided up by counties. An incentive for you is to get other pharmacists to sign up. For every one who does, you get half a percent of everything that pharmacist sells. You will be paying that little bit to a pharmacist who works for Smith’s in Ogden. He pays a little bit to a group of pharmacists organized in Denver, and so on. We rebate you half a percent of your sales to your personal accounts. One of the great advantages is that the billing system of the federal government is so vast and complicated that they don’t have much time to scrutinize every transaction. Our profit margin is so low that we fly under the radar, and we want to keep it that way. No way do we want to tickle the federal tiger’s tale—the IRS, the FDA, or the CMS; so, our advisory committee makes us adhere to strict fiscal policies.”
“That’s pretty complicated,” Cecil says. “I have one question: is it legal?”
“We’re glad you asked. You bet it is. We have a small army of experts to be sure that we never come to the attention of the feds. We’ve been at this for ten years and nary a ripple in the ocean of scrutiny. It’s just efficiency, and that’s what our government is looking for.”
“How much do you figure I would stand to profit by signing up?”
“That’s another good thing you bring up. We can see that you have a good head for this. We offer a one-time signup bonus of $50,000 for each pharmacist who controls the purse strings of the pharmacy. As a further incentive, we offer bonuses of up to $10,000 a year for our best producers—those who bring in over $500,000 in profits for a year. If you don’t mind me asking, what do you clear a year now?”
Cecil is hesitant to give out his private information. He pauses, thinks about it, then decides, what the heck?
“Between $500 and $600k gross most years. I guess I’m taking $250 to $300K after taxes most years.”
“Wow, that’s very good! You seem like a guy that could turn his yearly net income to five-six hundred after taxes almost every year. Maybe get to take the little lady on a trip to Hawaii every now and again. That reminds me: our big producers are rewarded with a bonus vacation package every other year. How does that sound?”
“Too good to be true…. How big does a big producer have to be?”
The young blond and tanned Armani suit-dressed man laughs over much at what he is giving the appearance that he takes what Cecil just said as a joke.
“A mil a year. You’ll be doing that without breaking a sweat after three years with us. Guaranteed.”
It very much sounds like he is listening to Oil Can Harry or to an average used car salesman, but Cecil can envision the palm tree-lined beaches of Hawaii, and he allows his head to be turned further.
The fifteen minutes Cecil granted the two easterners has turned into an hour. But, for his signature on a contract, he is handed a check for $50,000—the largest single amount that Cecil Edgington has ever held in his hand at one time.
The three men shake hands, and the easterners start to walk out of Cecil’s store with the hail-fellow-well-met camaraderie still bubbling forth.
At the door, the older of the two men turns back and says to Cecil, “Oh, Cecil. Ya’ll are part of the team, and you know we expect team players. It’s a pretty long contract, but you should read it thoroughly. Take special note of the nondisclosure clause and the no-whistleblowers section. Whistleblowers are greedy little connivers who hurt all the rest of their teammates. That’s why that clause is in there. We all need the protection. Now, listen Cecil, you go home and take your wife and young’ns out for a dinner on the town. You and they deserve it.”
Chapter Two
Three years into the contract, everything Kendrick Smuthers and David Carter-Smyth—Kenny and Dave—promised has come true for Cecil Edgington. He is now bringing home $750,000 before taxes, getting bonuses, and is preparing for his second trip to Hawaii, this time to Kauai, the Garden Island. Andrea, his wife of forty-three years, is ecstatic. She has decided that Cecil is a genius at business, and is glad she doesn’t have to worry about the details of the drugstore any more. She used to look over the books with a furrowed brow in the early years, but those lean times are over; now she can focus on her charities and clubs. She has even begun to take the Mormon missionary lessons. It is Salt Lake, after all, and that is where the social action is.
Truth be known, Cecil is a little uneasy about the very smooth way the consortium has his business going. It seems like he is losing control. But he can’t knock the success. He has just about made it. Three or four more years of this and he will be able to retire. No more shoveling snow and trying to get a good clean breath during the winter inversions with all of the attendant air pollution. Cecil is beginning to think he is developing something of a chronic lung condition. He usually avoids doctors—thinks most of them are corrupt—but maybe it’s time to get a checkup.
Kenny and Dave have done very well for themselves also. Kenny is a regional manager for the Southwestern United States and is looking for a promotion to be the head of the consortium in the UK. Dave is vice president and has a sumptuous office in Miami, the headquarters. The four big pharma companies that make up the leadership of the consortium have cleared fourteen billion dollars for three years running. The investors have earned ten percent, fourteen percent, and this year twenty-two percent, profits on their investments each of the last three years running. Kenny takes home $2.3 million a year, and Dave is in the $4.5 million bracket. There is no better place to spend that much fun money than Miami; so, both men and their families have more than their share of big-boys’ toys.
The closed session executive meeting is just getting underway.
CEO Martin Dilworth is serious. “The big wholesalers are eating our lunch. We are going to have to play the game their way, or we are going to fade away to the status of ‘also-rans.’ I—for one—am not about to let that happen. David Nelson here just came over from one of the big five to work
with us. I think it is safe to say that it has been a profitable move for him. David?”
David stands up and flashes a movie-star smile; in fact it was created by the dentist-to-the-stars in Hollywood.
“Hi, everyone. I bring news for you about how really big pharma works and how we can better help the government handle all of that money that keeps pouring into the federal coffers.”
Everyone laughs. They like this guy.
“I studied how the system works, and how not to run into IRS or FDA trouble. As you know from your experience with the pharmacies around the country, it is all about volume. Remember what the Treasury Department said when the Great Recession was about to descend on the country. AIG was about to go under and take America and the rest of the world into a Great Depression—worse than the one in the thirties.”
Dave Carter-Smyth shouts out, “They’re too big to fall!”
The executives applaud, and David laughs with gusto.
“Now, there’s a guy who’s done his homework. I have a close-knit little group that works under me. They have a very hefty budget labeled ‘Support Activities,’ and it would take you a month of Sundays to get through all of the spreadsheet accounting. Nobody up in DC wants to take time or spend the money to look into that kind of mind-numbing detail. You all … ya’ll … I forget where I’m working now….”
Another hearty laugh.
“Anyway, nobody here needs to get into the nitty-gritty of what we do; and, certainly, nobody needs to reinvent the wheel. We have a tried-and-true system. I guess if you looked into the massive volumes of numbers we—and every other drug company, marketing firm, device manufacturer, etc.—sends into the g’munt every month, you might find some accounting errors. Here and there, there could be an accidental double billing, a good-faith overcharge, an inaccurate or incorrect billing, a mistaken charge for what some grim-faced federal forensic accountant could consider unnecessary services, or some friendly padding coming in from the pharmaceutical companies to … let’s say … ‘encourage’ our faithful employees and our network of retailers.”
Another Whistle Blower Page 1
