We Must Hold Big Pharma Accountable For Predatory Pricing



It’s hard to remember now, but there once was a time when pharmaceutical companies were considered heroes, not villains.

In the 1920s, Dr. Frederick Banting and Charles Best discovered insulin could be purified and administered to diabetes patients via injection. Before this groundbreaking discovery, people living with diabetes were placed on starvation diets as a form of treatment, and many patients died.

Banting and Best understood the enormity of their discovery and considered insulin a public good. But as these researchers soon realized, insulin wouldn’t be able to save lives if patients couldn’t access it. They sold the rights to the drug to the University of Toronto for $1. The university, in turn, gave it to pharmaceutical company Eli Lilly for a 5 percent royalty so the company could manufacture at scale to meet the enormous demand. In 1923, insulin became widely available and saved countless lives, thanks to Banting and Best – and Eli Lilly.

Now, just under a century later, Eli Lilly and other insulin manufacturers are taking the exact opposite approach.

Big Pharma is pushing every scheme imaginable to squeeze money from the pockets of patients who need insulin to survive. Many with diabetes, faced with tripling insulin prices ($200 to $700 per month), are now forced to choose between life and rent. Some patients ― like 26-year-old Alec Raeshawn Smith, who aged out of his parents’ health insurance plan and whose job didn’t offer comprehensive coverage ― have died from a lack of affordable insulin.

Pharmaceutical companies can become heroes again, but only if they stop taking advantage of the patients who need them.

Eli Lilly says the company strives “to make life better for all those affected by diabetes around the world.” And because drug companies do save and improve lives (or, at least, are supposed to), the U.S. government allows them special privileges and protections. This includes tax breaks, government subsidies, extensive patent protection, free access to publicly funded scientific discoveries and more.

However, when drug companies use empty words to make promises they have no intentions of honoring, they do not deserve the public’s largesse.

Big Pharma has not shown any inclination to change its price gouging practices. On the contrary, drug companies continue to push higher costs despite the horrific impact this has both on human life and the U.S. economy. Price freezes in the U.S. are rare (and are exclusively voluntary). They also tend to be set at high levels, like the price “freeze” for the HIV drug Isentress, which caused a stir among HIV patients because of its exorbitant cost compared to competitive products.

Some companies have rolled back drug prices but typically only in response to public humiliation. Doctors at Memorial Sloan-Kettering publicly rejected Sanofi’s Zaltrap, a colon cancer drug, because it was priced twice as high as a competing product. Three weeks after the doctors’ announcement, Sanofi cut its price in half. This is why consumers shouldn’t be satisfied with price freezes; only rolling back prices will return us to reasonable drug costs.

Pharmaceutical companies do sometimes offer “solutions” to runaway drug prices, like value-based pricing and discount cards, but though these practices may help some, they are generally gimmicks meant to distract the public. Value-based pricing sets prices according to a drug’s perceived value rather than according to the actual costs of developing and manufacturing it. Such a practice can put a limit on the price of marginally effective drugs, but on the other hand, it increases the price of medications like insulin ― drugs that save lives but have been around for years and are cheap to produce. Discount cards are sometimes offered to a small subset of insured patients and do very little to help the vast majority of users or those who need the drugs most.

In the U.S., our 20 top-selling medications cost consumers three times more than the exact same drugs cost in Britain. I once paid $36 for a medication in Canada that costs me more than $700 here at home. In many European countries, government committees calculate “reference prices” for classes of drugs with similar ingredients, based on the costs to develop and manufacture them and their clinical effectiveness. That said, it’s probably not realistic to expect our politicians to agree to this kind of approach; in the U.S., pharmaceutical companies are some of the largest contributors to political campaigns, giving more than $2.3 billion over the past 10 years.

Big Pharma is pushing every scheme imaginable to squeeze money from the pockets of patients who need insulin to survive.

Our legislators, too afraid to challenge Big Pharma’s pocketbooks, continue to propose tepid solutions, like price transparency, that only work around the edges. Pharmacy benefit managers ― the industry middlemen who play a role in drug pricing ― take a piece of the pie, but how large a piece remains a secret. Legislation around transparency regarding undisclosed PBM deals could drive down drug prices somewhat, but it likely wouldn’t affect the baseline prices set by drug manufacturers.

The Right Care Alliance ― a group of patients, physicians, nurses, patient advocates, students and other community members with chapters around the country ― is currently organizing a campaign to target price gouging in the pharmaceutical industry. We are planning year-long grassroots actions, including town hall meetings, marches and demonstrations, to pressure Big Pharma to stop predatory pricing, particularly for life-saving medications.

We must force companies like Eli Lilly to address the gap between what they say they stand for and their actions. We must be loud with our demands to counterbalance the hold Big Pharma has on U.S. politics. Drug companies can become heroes again but only if they stop taking advantage of the patients who need them.


Tenet eliminates poison pill, adopts governance changes


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Dallas-based Tenet Healthcare announced March 5 that its board of directors has approved several changes to the company’s corporate governance.

Here are five things to know about the changes.

1. The board approved changes to Tenet’s bylaws that allow shareholders with a 25 percent stake in the company to request a special meeting. The move comes after the board approved amendments to the company’s bylaws in January that allowed majority shareholders to request special meetings.

2. Tenet approved a short-term shareholder rights plan in August 2017, which was designed to protect $1.7 billion in net operating loss carryforwards and ensure the board could protect all shareholder interests as it executed CEO and board changes. Under the poison pill, if any person or entity acquired 4.9 percent or more of Tenet stock, all holders of rights issued under the plan are entitled to acquire shares of common stock with a 50 percent discount.

3. Tenet terminated the poison pill March 5. “The board made this decision based upon the reduced value of the NOL shareholder rights plan following recent tax law changes and an increase in the company’s stock price since the NOL shareholder rights plan was adopted, as well as shareholder feedback,” Tenet said in a statement. The poison pill was originally slated to expire following Tenet’s 2018 annual meeting of stockholders, which is typically held in May.

4. Tenet announced March 5 that it also eliminated the executive committee as a standing committee of the company’s board of directors.

5. “The board of directors and management have spent considerable time in recent weeks engaging with shareholders representing a majority of our outstanding stock and we received constructive input regarding Tenet and our objective to lead with best corporate governance practices,” said Ronald A. Rittenmeyer, executive chairman and CEO of Tenet. “We believe the actions which we are taking today demonstrate our continued commitment to being responsive in a timely manner to shareholder feedback and to implementing measures that increase transparency and accountability.”



Nearly 50% of Upper-Level Managers Avoid Holding People Accountable


46% of upper-level managers are rated “too little” on the item, “Holds people accountable … .” (HBR)

You missed the point if accountability is:

  1. Coercing reluctance to do things it isn’t committed to do.
  2. Expecting performance from weakness. Accountability won’t help squirrels lay eggs.
  3. Punishment.


  1. Says we are responsible to each other.
  2. Expresses commitment. Those who aren’t willing to be accountable haven’t committed.
  3. Defines dependability. What’s more insulting than one unprepared person on a team filled with talent?
  4. Demonstrates confidence and self-respect.
  5. Sets the ground rules for respect and trust.

Accountability recognizes strength and honors performance.

Mutual accountability:

I’ve never been asked to lead a workshop on how to hold ourselves accountable. It’s always about others. That is the heart of the problem.

Accountability is something to work on together, not mandate from on high.

One-sided accountability:

  1. Leverages fear.
  2. Depends on carrots and sticks.
  3. Promotes disconnection and arrogance. Relationships disintegrate when leaders stand aloof.
  4. Invites resentment and disengagement.
  5. Dis-empowers those who need to feel powerful.

Mutual accountability:

  1. Requires leaders to go first.
  2. Demands respect-based interactions.
  3. Strengthens connection and relationship. We are responsible to help the people around us succeed.
  4. Honors integrity and courage.
  5. Gives opportunity for humility.

Jim Whitehurst, CEO of Red Hat, said, “Go into every interaction with those who work for you believing that you are as accountable to them for your performance as they are to you for their performance.”, and author of, “The Open Organization.”

Practice accountability:

Blurry responsibility leads to vague accountability. Vague accountability is no accountability.

  1. Who owns the project or initiative?
  2. Who makes decisions? The group. A project leader. Someone who isn’t in the room.
  3. What are the deliverables?
  4. What are the milestones and deadlines?
  5. What happens when deadlines are missed?

Complexity is like fog to accountability.

What might mutual accountability look like in your organization?

How might leaders lift accountability out of the category of punishment?

10 Questions to Ask Your Employees Every Quarter



MOST LEADERS (the less than great ones) can become afraid of learning their employees’ true feelings towards the company and its overall structure. In turn, they shy away from even initiating such conversations and asking the important questions.

Strong leaders, on the other hand, happily ask these questions with an eye on making things better for their team. When everyone is heard and acknowledged, only then can a leader make the right decisions and give each employee what he or she needs. If you don’t ask, who will?

1. What is your overall satisfaction with your team?
This question is pretty straightforward, but perhaps the most powerful. As a manager, it allows you to gain access to the big picture—providing key understanding on what’s working and what isn’t, directly from your staff. It’s no secret that dissatisfaction with overall team performance is a primary reason for top talent to exit. Taking the initiative to ask your employees for feedback, and frequently, will not only provide you with valuable insight, but put you in a position to rectify concerns before the damage is done.

2. If the best place you’ve ever worked was a 10, please rate your current company.
You’ll either be the 10, or you won’t. If you are not, don’t become defensive or offended, ask what specifically was better at your employee’s previous company. Then compare it to your current team and ask yourself, as the leader, would it be possible to adopt some of those successful strategies?

3. How well does your leader do with supporting and developing you? (Consider time, tools and training.)
One of the top responses on employee satisfaction surveys, across the board, is how well we do with making our people a better version of themselves. If you are not actively investing in your employees, they will eventually move on to find someone who will. Do you give them enough of your time? Do you give them the right tools to compete and win? Do you train them in new skills and technologies that allow them to be more effective?

4. How well does your leader hold you accountable?
This is very important to a high-performance culture. Highly engaged and highly accountable teams outperform those who lack both. When you have the right people in the right seats, the best employees don’t mind being held accountable for their actions and their results. Those standards are what make them feel “elite.” After all, who wants to be part of a team that anyone can be a part of? If they are accountable, they know others are held accountable too, and that’s one of the main ingredients to employees giving their best day in and day out.

5. How well does your leader hold OTHERS accountable?
This question smokes out if your employees feel like there is any favoritism or double standards in play at your company. Obviously, you want to treat everyone on the team the same, but sometimes that doesn’t happen. Oftentimes you’ll discover that leadership and the “favorites” get a pass and the troops get the stick. When leaders are held to a higher standard and not a special one, you’ll find that it’s much easier to get buy-in and acceptance for so many things that seem tough to get. This is particularly relevant to family-owned businesses, where your last name matters more than it should.

6. How well does your leader communicate with you?
When discussing performance issues with their employees, I often find leaders have failed to communicate clear expectations and a clearly defined process of how they expect their employees to perform. The leaders are then bewildered that the task hasn’t been accomplished to their satisfaction. Leaders need to ensure that proper communication has been achieved before moving on to work on other things. An easy way to accomplish this is to simply ask, “OK, do you feel like you’ve got it?” (Almost always expect a “yes” answer, even when it’s really a “kind of” or a “no.”) Then say, “Great! Now echo that back to me, just to make sure I’ve explained this well to you?” By doing so, you’ll then have the opportunity to get crystal clear with them. Without this important step, prepare for some fuzziness in your employees’ results.

7. How likely are you to recommend your company to a friend that is looking for work?
This is like the Net Promoter Score for you as a leader, and for the company at large. If they were at a BBQ with their friends on a weekend and the topic came up, how do you think your team would respond? Would your employee say, “You’d be lucky to get hired. My company is world-class!” Or would the conversation be more like, “Well, if you can get past a ton of B.S., politics and red tape, you can grind out a living just like I do!”

8. Rate your team “health.”
To give you a gauge for their response, a 10 is when trust is very high, there is heathy conflict, nothing is personal, when something is called out for not being ideal, no one gets defensive or upset because everyone is there to make things as good as they can possibly be. A one is when people are not speaking the truth, everyone is walking around on eggshells, and it’s better for your career to not rock the boat and to go with the flow.

9. Do you feel adequately recognized for your contributions to the team?
This is another top response that I see on employee satisfaction surveys. Employees work hard, sometimes stay late, give their all and go above and beyond. If they aren’t recognized for these sacrifices, they will usually stop these activities because they don’t seem to matter. Sometimes others unjustly steal credit for their work, or leaders are simply oblivious to their contributions. What is your format to make sure this doesn’t happen at your company?

10. How likely are you to seek advancement at your company? 
This is a great way to identify your next leaders. It also speaks to how your leaders are perceived by the staff. If they feel your managers are a bit of a joke, are clueless and cannot imagine themselves being one of those types, you might have a bigger issue on your hands. Not everyone wants to be a leader, and that is perfectly OK. If they say no, ask why, but don’t try to “sell” management to them. It’s better to understand what their reasons are and to respect them.

The sum of all of these questions together will give you valuable information on where you are doing well and where needs immediate attention. If you ask these 10 questions every 90 days, you can compare your team’s last quarter responses and spot any problem areas before things get too caustic to your beloved culture. Again, if you don’t ask, you are guessing, and that might not work out well for you, or for your team!



Transparency – All Cards Face-Up

Transparency – All Cards Face-Up

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Creating and leading high-performing teams in any setting requires a high-trust environment.  A critical component in creating and keeping that trust is complete transparency across the team.  Having seen the empowering effect of this simple notion, I regularly reminded my direct-reports that the expectation was, “All cards are face-up on the table for the full team, in every decision and on every topic.”

I first learned the value of this kind of full transparency during my years working in the Mission Control Room while operating Space Shuttles and the International Space Station.  Everyone on the team reviewed every report, procedure, and mission-related communication of any kind between Mission Control and the astronauts.

That thorough transparency was never about micro-management.  It was in recognition that:

  • Every area of responsibility on the team affects the overall risk to the mission (e.g. if any single critical system fails, the entire spacecraft, and all the astronauts, are in jeopardy).
  • Any part of the team can and will make a mistake.
  • If not caught and corrected, combinations of seemingly small mistakes, or even some single mistakes, could lead to a failed mission or worse.
  • Conversely, there is so much talent in every part of the team, that as a team we can catch each other’s mistakes, offer suggestions from different perspectives, and come up with better overall solutions to problems.

Everyone on the team knew that it was team success that mattered, not simply individual performance.  “Showing our work” to our peers was not a threat to our individual authority.  It was an easy method to get more eyes on every problem and engage broader and deeper expertise to ensure nothing slipped past us.  Rather than slowing down decision-making, for decades these teams have routinely discussed and resolved exceptionally complex issues and have been able to take critical actions in minutes to protect a spacecraft hurtling through space.

The same risks often apply in management, where mistakes in one part of a company can have ripple effects that cause problems for other areas.  If poorly managed or left unsolved, those problems can cost the company money, erode product quality, bankrupt the company, and in some industries, injure employees and worse.

Just as we discovered in Mission Control, transparency is the simplest way to engage all members of the management team, and with them, the expertise and perspective of the organizations they led for the enterprise.  And just like in Mission Control, that greater engagement brings with it better informed, highly-reliable decision-making.

As an executive managing a $650 million/year enterprise, my direct-reports would often quote me before telling me and their peers some “ugly truth” or something they didn’t think I’d want to hear, “Just remember, you always say, all cards on the table…”

Every time they used that quote, it made me smile and think, “Now we’re talking!  Now we’re getting to it.”  More times than not, what followed was news about a project that was over budget or behind schedule, an unresolved engineering hurdle with an upcoming mission, or some mistake we had made in an earlier decision that was now putting us at risk.  Most importantly, it gave the full senior management team and the team’s they led an opportunity to help us find the best solution.  In the end, this is never about highlighting some part of the team’s mistakes, it is to ensure the team catches any weakness in our on-going performance.

Of course, transparency does not just protect the boss from the team’s mistakes.  It also allows the team to catch and correct the boss’s mistakes, as well as to offer innovations the boss may not see, which I was reminded of as the boss many times.

For example, during a tour in a development lab, I was shown a demonstration version for a new space station simulator based in a desktop personal computer.  Seeing a cost saving potential, I suggested several copies be made immediately available for testing by a number of our divisions.  Eyes widened around the room, including by several senior managers, but the team saluted and went to work.

After months of mixed reviews, the division responsible for managing and developing our training systems reported, “Look, Paul, this isn’t going to work.  We never thought it would, but you told our people to do it, so we did.  We can keep throwing money and manpower at it, but the answer won’t change for a long time.  However, we can accomplish what you’re after through some other work we’ve been doing, and we’re ready to show that to you and the management team any time.”

What followed became a project that moved our space station training software from $2 million sets of equipment that filled a room, to a single rack of servers costing $50,000 and contributed to total fixed cost reductions of more than 50 percent.

Lesson learned:  Share those great ideas with the full management team before giving direction.  Rely on the same transparency to spark discussions that can lead to better ideas and innovations that deliver.

This kind of transparency can become a habit and part of your culture.  It isn’t just for the bad news, but also for routine requests for better ideas, assurance that we’re not missing something, sharing resources to the areas that can make the next big gain… it makes us stronger and more successful as an enterprise.

Yes, the truth will set you free, and transparency is the way to find it and set the entire team free.