Life Ain't Easy For A Big Pharma CEO

It's been a rough year for Peter Dolan. His office was raided by the FBI. He was outsmarted by Canadians. He watched the stock price of the company he ran, Bristol Myers Squibb, fall nearly 60% under his tenure and profits fall to under the level the company pays out in dividends. Two drugs the company had invested millions in, the blood pressure medication Vanlev and the diabetes drug Pargluva, were rejected by the FDA. The same FDA, incidentally, that had no problem with Baycol, Bextra, Duract, Posicor, Propulsid, Redux, Rezulin, Seldane, Tequin, or Vioxx, all drugs that later had to be pulled from the market after they injured and/or killed people. The board of directors finally had enough and showed him the door. After approving a 2.2 million dollar bonus for him. Seriously.

Ok, let's back up a little bit. The FBI raid was the result of an investigation into BMS's accounting practices. Apparently Mr. Dolan came up with a scheme to provide incentives for wholesalers to buy more of his company's product than they could sell. I'm no accounting guru, but I think it's safe to say when the feds come 'a knocking and make you agree to have a federal judge watch your actions in return for not putting you in jail, you've fucked up.

The outsmarted by Canadians part is my favorite, because I love Canada. It's my favorite country on the entire planet. Someday I'm going to show up on Canada's front porch in a basket with a little note attached asking them to adopt me. The particular Canadians to this story would be the generic drug company Apotex. Apotex had made a move to challenge the patent of Plavix, one of BMS's biggest selling drugs. Evidently this made Mr. Dolan soil his pants, as he entered into an agreement with Apotex to essentially pay them to drop the challenge and not make a generic version of Plavix. Apotex said they would take the deal only in the case that if the agreement was struck down by regulatory authorities, BMS wouldn't go to court for 5 days after Apotex starts making a generic and also would waive it's right to seek triple damages when it does go to court. BMS agrees, confident that there's no way the agreement will be nixed.

Guess what happened? Several states attorney's general and the FTC opposed the deal, which got scrapped. Apotex then cranks out the generic Plavix for 5 days and floods the market with enough product that BMS had to reduce it's earnings estimates for this year by 25%

BBBBWWWWRRRAAAAHHHAAAAAAAAHHHHAAAAAHHHHAAAAAAA!!!!!!!!

Wait, it gets better. A judge ruled in the original patent dispute in favor of BMS. Meaning there was no reason to ever enter into this disastrous agreement in the first place.

There is no way you can say that Peter Dolan wasn't a shitty CEO. Unless you're on the Board of Directors of BMS, which both gave him the previously mentioned 2.2 million bonus and fired him. So I guess they kinda did say he was a shitty CEO, in a weird type of way. The way they write a 2 million dollar check to a total fuck up makes you feel good about paying over $300 for a month's worth of Abilify doesn't it?

I can just hear the compensation committee next year evaluating the performance of Dolan's replacement:

"Well, let's see, he stopped all research and development, implemented a program where we start to pay people to take our drugs, and publicly declared that Bristol Myers Squibb would give preference in hiring to known pedophiles. I would say a bonus of around 1.5 million would be in order. All in favor?"

So yeah, enjoy your bonus there Peter, along with your regular salary of $1.25 million, your "other short and long term compensation" of $2.8 million, and your "long term incentive payout" of $1.1 million. You just take that total of 7.3 million dollars and try and pay someone to come up with a reason as to why you deserve it.

Peter R. Dolan. Business failure. Con man success.

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