Win the Lottery
Research for Online Investors

by John Dalt

9/02/09

What does it take to win the lottery?  So much money that you get to pay the cost of the U.S. government for a few hours.  If you are a pharmaceutical company, you could invite doctors to a retreat, pay for golf and massages. If you are unlucky enough to be Pfizer (PFE) and told the doctors about “off-label” uses for four of your drugs, you would be fined $2.3 billion dollars.

It is legal to use drugs “off-label.”  After all, do you take an aspirin once a week?  It is illegal for a drug company to market a drug for an “off-label” use.  Two sales managers were blamed, and have left the company.  This was the largest fine ever paid by a drug company.  The criminal fine part, $1.2 billion is the largest ever in U.S. criminal history.  ABC News has the story on the Record $2.3 Billion Fine.

Pfizer is currently valued by the market at $110 billion, so the government just seized about 2% of the shareholders value.  Should we be upset that a company and employee’s tried to bend the rules?  Is it wrong for the company to work to increase sales?  Should the four “whistleblowers” that will share $102 million in rewards be thanked, or should they be ashamed of themselves?

Every company should do all it can to increase sales, legally.  I dare say every one of the self-righteous justice department lawyers that prosecuted this case, would cry like babies for a little Bextra (painkiller) if it provided relief after an operation, and other drugs didn’t work.  But, how would their doctors know if a salesman didn’t tell them other doctors were using Bextra for other uses than just arthritis pain.

I followed a couple of rules when I worked for someone else, a long time ago.  As long as they are signing my check, I will do what they tell me, and keep my mouth shut.  These rules are hard learned, believe me, I have four daughters.  Nevertheless, they are important lessons to internalize.  What gives one individual the right to supplant his values or determination in place of his employers?  If you believe your employer is acting unethically or illegally, why not quit?   Find a job for an angel, someone else or another company that aligns with your values and ideas about how a business should be run.

This is exactly why I went in business for myself at the tender age of twenty-four.  I had no experience, but a burning desire to do it my way and never feel I had to compromise my integrity.  Do I regret it, no?  Will the “whistle-blowers” regret their actions?  I hope so; they have become a pawn in the government’s monitoring of our lives and liberty.

Let me say, I think it is important to comply with all laws, not just the one’s you agree with.  Unless the law has to do with speeding, smoking, wearing seat belts, motorcycle helmets, open containers and pay-offs to foreign bureaucrats when that is the only way to get anything done.  Do I, or have I broken any of these laws?  Yes, but….

Before you get angry with me, remember you are going to pay this fine.  If you own shares in PFE, YOUR money.  If you ever take any of their drugs, the price just went up!  Come to think of it.  It would be sweet for the Chairman Mr. Jeffery Kindler to order the check delivered by currier to the Justice Department.  Next Monday, double the price off all drugs to the government and all prescriptions paid by any government program.

If you have not read “Atlas Shrugged” Mr. Kindler, I will send you a copy.  You may also want to read “The Road to Serfdom” by F.A. Hayek, before you prostrate yourself in the White House thinking you will gain any favor with “world improvers.”

The market shook off good news yesterday, the ISM manufacturing index for August crushed analyst forecasts of 50 at 52.9  Pending home sales were expected to increase by 1.5% in July and instead increased 3.2%!  The ISM numbers were important as it was the first increase since January and new orders were at 64.9%  The market was up and down today trying to decide what to do, closing down three at 994 on the S&P 500  Gold, silver and treasuries soared, as traders rushed to a safe harbor.  I don’t think there has been enough pain yet.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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