Another laugh from the assembled executives.
“Might we expect any guff from the feds over our incentive program for our trusted rainmakers?” Kendrick Smuthers asks, returning the executives back to a consciousness of the seriousness of what is being discussed.
“Dare I call it a Ponzi scheme?” David asks with a theatrical shocked look on his face. “Nope. We are not running a Ponzi scheme. We have a roomful of hardworking attorneys who figured out how to keep it legal. There is nothing wrong with an incentive program for our trusted pharmacists. They like it. We like it. The drug companies like it. We got audited by the IRS last year, and they liked it. At least, they could not find evidence of irregularities in the mountain of documents we supplied them in the interest of full disclosure. I think that problem has been put to rest.”
Chick Sorenson, the CFO, is not so sure about that. For that reason, he records every executive session on a tiny tape recorder that fits unobtrusively in a zippered pocket in his pants. He has no intention of ever bringing the recordings to the light of day. After all, he profits handsomely from all of the ‘special activities,’ as he likes to call them. But, you never know when a little insurance might become useful one day.
CEO Dilworth smiles and says, “And we all appreciate you’re handling all of that stuff so we can get on with our jobs. Speaking of that, we are going to bring you men and women on the executive up-to-date on a secret. This is a secret that is going to make all of us rich. Karen Rich from R&D has a surprise. Karen?”
The stately grey-haired woman is known for her long and faithful marriage to ZyterBrothersTechnologies. She never had time for a husband, otherwise. She wears what looks like the same severe grey business suit and sensible shoes every day it seems to the rest of the executives. She is brilliant, has four university degrees, works all the time, wears no makeup, and does not suffer fools.
Dr. Rich stands up, walks to the front, and stands by the podium.
“Turn on the PowerPoint, please.”
The first image after the ZyterBrothers logo is a single bold black word on a simple white background, “MASTCAKIL”
“We are two years into final phase of the R&D for Mastcakil. The generic name is alpha anestrol. As a research physician and a theoretical chemist by education, I have always found these generic names required by the FDA to be silly. Of course they are not as silly as the proprietary name Mastcakil, which is breast cancer killer. It’s clever, I admit; and moreover, it is accurate. I personally prefer the chemical name—which I admit is cumbersome.”
The next images are of mind-numbing descriptors: “Chemical Name: 9-gamma-6-(5,5,4-4-3-hexa, fluorohexylsulfonyl estra-5-3-3-(9)-quadriene 6-12gammadiol.” The next image is nearly as stupefying: “The molecular name: C53H66G703S.” And finally, the structural name is depicted with eight hexagons linked like a poorly engineered fence wall bristling with chemical symbol branches.
The executives are fighting sleep. An occasional head droops, then jerks back upright with its owner wearing a sheepish facial expression. Kenny and Dave give each other an eyes-rolled-back look.
“Not much of that matters to you, I’m sure,” Dr. Rich continues, “but what should matter is that this is the first effective and safe oral pharmaceutical for postmenopausal women with hormone receptor-positive metastatic breast cancer with disease progression following antiestrogen therapy.”
Dilworth interrupts, “English, please, Karen.”
Kenny throws in, “Bottom line, please, Karen.”
Karen tries to mask her disdain for the Neanderthals on the executive board and turns her head to mouth the word, “Cretini,” to the unseeing wall.
“English, it is,” she says. “Mastcakil is the cure for breast cancer. Its record for efficaciousness—sorry, effectiveness—is unparalleled. It is—in frank fact—a miracle drug. And the bottom line is that we have here the proverbial better mousetrap for which the people will beat a path to our door. It is a marketer’s dream come true. Here’s a little secret: we’ve done a little off-label investigation, and have found that Mastcakil prevents breast cancer from metastasizing. It’ll be a while before we can get the FDA to approve that, but some of our docs and pharmacists are already fudging with that a bit.”
“Not to put a damper on your enthusiasm or your presentation, Dr. Rich, but how about giving us the downside—the adverse reactions, the complications, the drug-drug interactions, the contraindications—all of the minor details that might come back to bite us, even to destroy our company and our consortium?” asks Carl Midgely, the head of the legal division.
“We have mountains of clinical trial data already submitted to the FDA. To make a long story short, there is the usual fairly minor stuff: decreased appetite, nausea, occasional constipation, muscle, joint, and bone pain, headache, tiredness, hot flashes, mild weakness, cough early on, shortness of breath, and increased liver enzymes have commonly been reported. About half a percent of patients who received the drug and a quarter of a percent of the placebo cohort withdrew from treatment due to drug-related side effects. None of them were serious.”
“Deaths?”
“None.”
“What kind of serious adverse effects?”
“Nothing clearly related to the drug except for two cases of severe but nonfatal allergic reactions—anaphylaxis. They had to be cared for in an ICU. A fair number of patients developed an increase in their liver enzymes but nothing that rose to clinical significance. ZyterBrothersTechnologies and the FDA are observing all of those with periodic enzyme draws and have not found anything worrisome.”
“No hairy palms or trips to the loony bin?”
Everybody laughs but remembers the nontobacco smoking cessation med from a few years back that was found late in the post clinical trials phase to cause fairly serious mental/behavioral illness.
“What else in the serious category?”
“We know that Mastcakil would probably cause fetal damage; so, there is a strong warning against pregnant women using the drug. So far, there have been no mistakes, partly because the company sends out a strong warning to providers to get all women to have a pregnancy test before starting the drug. Probably nothing related. Two treatment cohort patients had heart attacks, three older ladies had strokes, and one young woman had new onset seizures. We found no connection with Mastcakil, but we are still monitoring it closely. We are determined not to have a horrific surprise like Pfizer’s Fen-Phen twenty-one billion dollar disaster a few years back.
“Let’s keep this in perspective. The benefits far outweigh the risks for this new wonder drug. It is one of the great steps forward. Thank you for your attention.”
Next up are Diane Falstaff and Erik Nicholson, codirectors of the marketing department.
CEO Dilworth makes the usual laudatory introduction and concludes by saying, “And these two wizards are going to make us competitors of Pfizer, Roche, Johnson and Johnson, and GlaxoSmithKline. Let’s hear it for Diane and Erik.”
Glad the boring science talk is over, the audience of top executives of the OrganoNatural Pharmaceutical Marketing Consortium gives the moneymakers a loud and long applause.
“Thanks, ya’ll,” Diane says.
Everyone loves her deep Southern accent. It does not hurt that she is a looker either. It is part of the company rumor mill that she slept her way to the top, but no one knows that for sure. No one would begrudge her success if it were true—at least none of the men.
“It’s been a long day. Mastcakil is for ZyterBrothersTechnologies and the OrganoNatural Pharmaceutical Marketing Consortium what Viagra has been for Pfizer. We will have to spend upwards of a billion dollars in advertising, and everyone is going to have to join in the full-court press to get it out there to pharmacies and doctors’ offices all over the world. We are going to offer unheard of incentives to our reps, our cooperating doctors and pharmacists, and to distributors. What I tell you here today stays here. I hope you all appreciate the importance of that. The
company and the consortium will quietly offer discounts, rebates, some direct payments, and lots of golf vacations—you name it—to jump-start the sales frenzy once the FDA announces its final approval, which should be this Friday or next Monday. The reps have been hinting at the off-label antimetastatic properties of Mastcakil. You can easily get authorization for enhanced incentives to get doctors and pharmacies to switch to the consortium with all of its advantages. Any questions?”
Carl Midgely has one: “I have a small one from the legal department. Is this bribery?”
“Absolutely not. We don’t do that here … this is a careful marketing plan which includes—among many other strategies—financial incentives for our friends.”
As adjournment draws close, Chick Sorenson, the CFO, covertly checks his trusty little voice recorder to see if it is still operating properly. It is.
Chapter Three
Nine months after that special closed executive meeting, Mastcakil is being marketed at a level more intense and more expensive than any drug in history. The problems for the consortium are threefold: how to find enough drug representatives worldwide to carry out the blitz. The goal is to visit every licensed physician, physician’s assistant, family nurse practitioner, pharmacist, and even dentist who has the legal privilege to prescribe the drug. The second problem is to meet the goals to identify every woman with metastatic breast carcinoma or newly diagnosed disease and get her on Mastcakil and to have every woman already on another drug to switch to Mastcakil. The marketing department of the consortium is working in overdrive and now consists of 150 regional reps supervising 2,000 traveling drug reps. The third problem is to be able to manufacture enough of the medication to keep up with demand.
For the consortium, Mastcakil is the perfect drug. The success of Mastcakil exceeds even the most enthusiastic predictions of the marketers. Large studies—over 75,000 women enrolled at this point—funded by the consortium and the federal government, confirm that women on the drug are living longer than any patients with the disease treated any other way—medical or surgical. The projected death rate has declined by seventy percent, along with a steady inflow of new victims with the disease. All of those women are expected to need the drug for at least the twenty years the patent will be in force. Although the longevity of the cancer victims is decidedly increased—from the perspective of marketing—there is perhaps an even better result of Mastcakil treatment: no one is cured. Relapses of the cancer follow cessation of drug therapy; so, the women will have to take the drug for the rest of their lives. Their care providers will have to continue prescribing the drug; and insurance companies, including the CMS, will have to keep on paying for it, apparently ad infinitum.
The marketing department does not slack up just because their drug is phenomenally successful. They sponsor seminars for providers and for patients and their families. Two television specials have been produced and funded by the consortium and televised on CBS and CNN with glowing critical acclaim. By the end of the first six months that Mastcakil has been on the market, the consortium has broken even financially; so, for the rest of the nineteen and a half years of its patent life, there is no reason to predict anything but a cash cow of unprecedented proportions for a cancer drug. Mastcakil may eventually rival the success of penicillin, Viagra, Prozac, Thiomersal, and influenza immunizations. In all aspects, Mastcakil has become an industry in and of itself with a very long life span.
OrganoNatural Pharmaceutical Marketing Consortium is fully conscious of the importance of its troops out there pushing the drug, including the care providers and the drug reps and rewards them accordingly. Cecil Edgington regularly receives rebates and profit-sharing revenue from the consortium because he took advantage of the opportunity to get in on the ground floor. Later, more reticent pharmacists and care providers have to pay the consortium a small facilitating fee to be able to be part of the industry. Everyone benefits, but people like Cecil and the executives of the consortium benefit the most. In private conversations with his drug rep and the suppliers, Cecil hears the joke that—like the pigs in George Orwell’s Animal Farm—”All the animals are equal; some are more equal than others.”
For Cecil’s wife, Andrea, the opportunities for fabulous vacations are a dream come true, and she never misses a chance to shower praise on her highly successful husband. Sometimes he thinks she is excessive, and most of the time he is sure she is too public about his success with Mastcakil.
To celebrate the first year’s remarkable successes, the consortium is hosting an all-expenses-paid vacation/seminar/symposium at the Hilton Waikoloa Village on the sunny Kohala Coast of Hawaii, the Big Island. Andrea is ecstatic. Cecil is less so owing to a visit from the federal government to his drugstore.
Cecil now has two employees in his first drugstore and is in the process of opening two more locations in Salt Lake City, one in Ogden, one in Provo, and the latest one in St. George, Utah. He now has a bookkeeper to help him keep up with the issues of supply, accounting, and taxes. It is the matter of taxes that brings an IRS agent to his store.
Agent Henry Lloyd Evans makes an appointment to meet Cecil afterhours in the store, which is unusual. Most taxpayers have to meet in the IRS offices at a time convenient to the agent and not necessarily for the citizen. Mr. Evans is most accommodating, and that makes Cecil uncomfortable. He knows that people—especially anyone whose income rapidly increases—can expect to be audited, but it is disconcerting nonetheless.
Evans is nothing like Cecil expects an IRS agent to look like. He is a tall, athletic appearing, ruddy-faced, red-haired young man with a strong English accent. It seems to Cecil that the English accent is becoming dominant on television, in the movies, and in online news. It seems almost un-American for the same thing to be happening in the IRS of all quintessential American places.
Henry L. Evans has a pleasant freckled face, but he does not smile. He is an IRS agent, and Cecil supposes that the IRS is not an agency that encourages smiling.
“Good afternoon,” Evans says and shakes Cecil’s hand. “I presume you are Cecil Edgington, correct?”
“Yes, sir.”
“Thank you for seeing me at this inconvenient hour. I am Henry Evans. We should consider this to be a preliminary meeting to set some guidelines for the evaluation of your tax status. Most people do not seek representation at these early meetings; but if you want to have an attorney, an accountant, or a stockbroker along, it is your prerogative.”
“Goodness,” Cecil says, “do I need a lawyer?”
“I don’t think so. This will probably turn out to be a routine audit, and you can answer all of the questions easily. I presume you keep good records.”
“I do. Better in the last couple or three years.”
“Good, we’ll be looking into all of those.”
Cecil does not like the sound of that.
“My purpose today is to get a feel of what is going on in the medical business world. My directors are launching a sample auditing program for the Mastcakil drug marketing program since it is producing so much revenue, and the government wants to be sure that everything is copacetic with the taxes owed the government.”
“I have done my very best to give the IRS and the State of Utah everything they are owed in direct taxes. That is in addition to the pharmacy license fees, the costs of the required professional continuing education, the pharmacy board administrative fees, and all of that. I have to say that I’m glad to have something left over at the end of the year. My accountant tells me that I work for the IRS, the state, and the local fee gathering organizations until the middle of June every year.”
“Of course, Mr. Edgington, all businessmen do. There is no need to be defensive. You realize that I am only doing my job.”
“Of course. I mean no offense.”
“None taken. I’ll be frank with you: you are not really our principal interest. We want to get a better handle on what the OrganoNatural Pharmaceutical Marketing Consortium and ZyterBrothersT
echnologies are doing. Their profits are enormous; their business plan is so complicated that it seems almost labyrinthine to the IRS; and we want to be sure that the government is getting its just due. We are evaluating the drug business at all levels, and you were selected as a ground-level representative of that industry here in Utah.
“Would you mind giving me a general rundown of how you do business with the consortium, Mr. Edgington? I’m talking about maybe a fifteen-minute summary for today. My fellow agents and I will have a meeting in a couple of days to decide how to proceed after that. Sound okay?”
“I suppose so,” Cecil says with obvious reluctance. “Will I need my records? I have them all here.”
There is a daunting stack of manila folders sitting on his desk. Henry Evans estimates about thirty hours of work in them. He has no intention of getting into that thorough of an audit tonight.
“No, I think we can just talk for tonight.”
Cecil calms down, and Evans puts him at his ease by just listening. Cecil describes the general workings of the consortium as he understands them and how his business is done with them. He indicates that he would rather have his accountant present in order to be accurate about the actual earnings and costs of his business. Evans has no problem with that.
“Well, Mr. Edgington, you have been very helpful. Thanks for your cooperation. I’m pretty sure I’ll be getting back to you. Here’s my card. I’ll be in touch.”
That is a promise that Cecil wishes he was not hearing. He needs to get some advice.
The next morning, he puts in a call to Florida.
“OrganoNatural Pharmaceutical Marketing Consortium, how may I direct your call?”
“Please put me through to the legal department.”
“Please hold, sir.”
Another Whistle Blower Page 2
