Stiffed: Why Are Bailed-Out Banks Helping Pfizer Buy Wyeth?

Are U.S. taxpayers getting stiffed? Pfizer, Viagra's daddy, is using money from taxpayer-bailed-out banks to help buy major pharmaceutical competitor Wyeth in a $68 billion deal. That won't help taxpayers or consumers. Nor is it designed to. It will harm the companies' workers, 20,000 of whom will likely be laid off. It's even likely to hurt small bio-tech companies, drying up potential sources of capital and leaving fewer potential major investors or purchasers.

The deal may be good for Pfizer, helping the company recover from a $2.3 billion legal settlement over misleading marketing on the pain reliever Bextra, and helping them amplify the clout of the $3 million they recently spent lobbying against the right to import cheaper drugs from Canada. But it won't help the rest of us.

So why are banks bailed out with taxpayer dollars furnishing the $22.5 billion of debt financing for this deal? On NPR, a financial analyst crowed about how wonderful it was that major banks were lending this kind of money in the current economy. But it troubles me that among the deal's prime financial backers--Bank of America/Merrill Lynch, Barclays, Citigroup, Goldman Sachs and J.P. Morgan/Chase--all but the British-owned Barclays received money from the Congressional bailout. So the funds they lent to this merger won't be available to help smaller (or larger) companies keep their doors open producing and selling products--ideally ones that actually benefit society--and not just to consolidate control over their industry. This seems one more case of public subsidies for private gain.

I'm no economist. For all I know, maybe in some Henry Paulson-Alan Greenspan dream world this will end up boosting America's physical and fiscal health. Perhaps the new combined entity will come up with some miracle drug that neither company would have created on their own. But mostly, it seems just one more example of how a bailout without strong government control, or even oversight, just feeds the same greed-driven abuses that have gotten us into our current predicament. It's going to take more than Viagra to strengthen our economy once more.



Paul Rogat Loeb is the author of The Impossible Will Take a Little While: A Citizen's Guide to Hope in a Time of Fear, named the #3 political book of 2004 by the History Channel and the American Book Association. His previous books include Soul of a Citizen: Living with Conviction in a Cynical Time. See www.paulloeb.org To receive his articles directly email sympa@lists.onenw.org with the subject line: subscribe paulloeb-articles

This thing is all screwed up.

The bailout isn't helping people, its helping CEOS.

its bad pharma news, sending whatever competition between the two existed down the toilet.

:hi:

creating jobs nor paying meaningful taxes. They are just moving assets around and you and I need not demand accountability for our money. I hope Congress wakes up and turns this situation inside out.

but don't know how possible to go BACK and tell recipients they MUST use the money in certain ways.

But I hear ya. I wish I'd wake up and find myself inside a new and wonderful world, rather than more of the New World Order.

Can't someone buy Obama the Lincoln biography that actually covers the section of President Lincoln's life where he overturns our banking system and removes the Central Bank and has the government operate as its own currency issuer?

For years, this country wasn't really creating any new wealth. It's been a series of scams, ponzi schemes and fascist big business/government collusion that has finally come together to bite this country in the ass.

This merger should never be allowed under the circumstances the lenders involved received their capital.

the plan changed in mid-stream on the first TARP monies. They threw in another shell and confused everyone. Plus Pharma will have a bigger chip in the fight against health care.

The top ten drugs that seniors use went up in price as soon as Bush agreed to pay whatever the drug companies demanded. It was a massive giveaway. So, why does Pfizer need our money again? So that it can corner the market on drugs? Hell no!

AND the 'no bargaining' clause REMAINS a massive giveaway. Its GOT to be removed.

I stopped taking a medicine that the copay was costing me $300 a month, more than I could afford after paying my Medicare and insurance premiums on a fixed income that hasn't kept up with inflation.

seeding their growth through government handouts for a while now. Tax breaks for moving into an area etc.
In Port Angeles, the Rayonier pulp mill, now closed, stalled cleanup for nearly a decade. The state grew frustrated and sought an organization to partner with the mill to get the site cleaned up. One was formed by the city and port. Now instead of Rayonier paying for the cleanup, the partner, will search out state and federal grants and loans to clean up the site. Rayonier at one time signed an agreement to pay in full but they are now expecting their partner to seek the funds.
State and federal taxes will end up paying for a minimal cleanup!

This is what corporations do now, of course with the full cooperation of elected officials.

Good Jobs First: Corporate Subsidy Watch, Overview Corporate Subsidy Watch Overview. Diligent readers of the newspaper business section learn about these deals all the time. A new auto assembly plant ...
www.goodjobsfirst.org/corporate_subsidy/overview.cfm - 23k - Cached - Similar pages

Good Jobs First: Corporate Subsidy Watch, Case Studies, Companies The company exploits the eagerness of local officials to land one of its stores by getting them to provide tax-increment financing deals and other subsidies ...
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Subsidy Watch Issue 1, June 2006 | Global Subsidies Initiative Subsidy Watch Issue 1, June 2006. ... Government to Stay Rich and Get Richer. Bill Gates, doctors and corporate agricultural producers all receive a hit. ...
www.globalsubsidies.org/en/subsidy-watch/issue-1 - 12k - Cached - Similar pages

Thanks for posting this.

How would you have them use federal money, your money? Give it to companies that will never pay it back?

Pfizer will pay it back with interest.

by raising the prices of the previously 'competing' drugs...so the consumers pay themselves off 'with interest'??...nice financing, if you can get it...

Pfizer's drugs generally don't compete with Wyeth's drugs - that's one of the main points of the deal. Drugs that still have patent protection generally don't compete either - that's the point of having patents.

There's no point in bailing out banks if they can't lend to creditworthy customers.

Where does the money the pols give to the mega-corps come from? Taxpayers.

Who gets screwed by the pols and the mega-corps? Taxpayers.

Who's gonna do something about this cycle of grand theft? Nobody. The financial industry and pharma are huge Obama contributors, so don't expect any changes in this situation anytime soon. Witness the so-called "stimulus" package that is being pushed through Congress now.

Looking down the road, what effect would this have if we get Universal Healthcare in this country?

Would the government then have a deal to negotiate lesser drug prices with one of these companies?

Or conversely,would fewer companies create a supply and demand issue for certain medications that have no generic equivalents?

Wyeth Funded Med School Course Promoting Risky Drugs
by Alexandra Andrews, ProPublica - January 26, 2009 4:46 pm EST



Between 2002 and 2008, Wyeth funded an online course promoting hormone therapy <2> at the University of Wisconsin-Madison's medical school. Thousands of doctors took the course, which was backed by a $12 million grant, reports the paper as part of its investigation into ties between doctors at the University of Wisconsin and the pharmaceutical industry <3>.

Unsurprisingly, the course has drawn accusations that Wyeth was using UW to push its hormone therapy drugs. "It is pure, undisguised marketing," a Georgetown University doctor told the Journal Sentinel. Drug companies are "funneling money through universities for advertising and trying to disguise it as education."

According to the Journal Sentinel, the course, which is no longer offered, "touted the benefits and downplayed its risks." The chief of the Women's Health Initiative branch of National Institutes of Health, Jacques Rossouw, reviewed the course materials and said they didn't represent the widespread views of the scientific community and weren't suitable for a medical school course. He added, "There is a history of this kind of thing from Wyeth."

The course was introduced at a time when Wyeth desperately needed a publicity boost for its hormone therapy drugs. In 2002, a high-profile hormone therapy trial was halted because researchers deemed the drugs -- both made by Wyeth -- too dangerous for the participants. According to the Journal Sentinel, researchers decided it would be "unethical" to keep giving the drugs to participants because women "who took hormone therapy drugs were at increased risk for breast cancer, heart disease, stroke and blood clots."

After the trial was halted, sales of Wyeth hormone products dropped by 65 percent, and drug companies became "very eager to keep coming up with ways to show it isn't harmful," said a professor at Stanford University’s School of Medicine.

The director of the UW course, who has her own financial ties to Wyeth, told the Journal Sentinel that "nothing in the course material was scientifically inaccurate" -- though she said "the material was presented in a 'more positive light' than she would have preferred." The dean of UW's medical school said only, "We expect all of our educational activities to follow the highest standards."

Meanwhile, if the Pfizer deal goes through, Pfizer will be inheriting around 8,700 lawsuits filed by more than 10,000 women over allegations that Wyeth's hormone drugs "caused them to develop breast cancer, stroke, ovarian cancer and heart disease." Wyeth is also under scrutiny by Sen. Charles Grassley (R-IA), as is UW's medical school.________________________Pro Publica(permission granted)

We don't need Pfizer becoming a monopoly, which is exactly what it's doing. Most people around here miss Upjohn, which was bought out by Pharmacia which was bought out by Pfizer all in the space of just a few years. Upjohn was run right, and every time it was bought out or mutated or changed, people lost jobs, research was set back, and the company's taken a huge step backwards.

In the last buyout, Pfizer cut over 6,000 jobs here in Michigan from Pharmacia, and most of those people went to Wyeth and a few other places in Indianapolis and New Jersey. If they get cut, I don't know where they can go next.

a political revolution.

And I don't mean barricades in the streets.

And we are expected to bend over and say "May I have more please?"

http://www.theday.com/re.aspx?re=a3f1d1bf-2e31-4944-ace8-49e84e5cd084

Courtney seeks probe of visa program tied to outsourcing


Published on 12/6/2008 in
U.S. Rep. Joe Courtney said Friday he will be calling for a government
investigation of a guestworker visa program that critics say has allowed
multinational corporations such as Pfizer Inc. to outsource thousands of
American jobs to foreign nations over the past two decades.
Courtney, D-2nd District, said his call for a probe by the Government
Accountability Office - Congress's investigatory arm - is tied to his
concern that the H-1B visa program is being misused by corporations at the
expense of American workers. His decision to ask for a GAO investigation
comes after a series of reports in The Day outlining allegations that
Pfizer is using large numbers of foreign workers at their R&D campuses in
Groton and New London in a systematic effort to replace their local
information-technology contracting force.

"We're in a tough economy right now, and companies are struggling,"
Courtney said in a phone interview. "It's hard to know what is the right
way to respond."

Courtney said he contemplated calling for a U.S. Department of Labor
investigation of Pfizer's use of H-1B visas, but ultimately was persuaded
not to go that route.

He said former Connecticut congressman Bruce Morrison, an opponent of
H-1Bs, told him that the use of the guestworker program is a gray area and
it is not clear that Pfizer's use of the visas would constitute a clear
violation of law. In addition, Courtney said the Labor Department under the
current Bush administration "has been pathetic in terms of upholding the
law" as it pertains to protecting employees, so he had little faith it
would act.

Sources have told The Day that H-1B visas have been used locally over the
past three years to transform a largely American IT force at Pfizer's
Groton and New London campuses into a place more and more composed of
foreign workers. The H-1B workers, the sources said, are often supplied by
Indian companies such as Infosys Technologies and Satyam Computer Services
rather than Pfizer itself, which said Friday that it has only 60 H-1B
workers companywide.

In the past few months, according to sources, Pfizer has been ratcheting up
the number of foreign workers locally. According to several sources, the
effort is part of a plan to outsource much of the company's local
information technology work from American contractors to outside
contracting firms that hire employees largely from India.

"They're taking jobs from people who live and work here," said one source,
who asked not to be identified for fear of being fired. "It's all about the
money. The Pfizer family is going out the window."

"This is a David and Goliath situation," said another source, indicating
that laid-off contractors felt powerless to fight the turnover at Pfizer.

Two sources said this week that Pfizer's outsourcing frenzy had been
expected to be completed by the end of this month, dovetailing with a
contingent-worker policy called Procedure 117 that required, as of the
beginning of this year, no contractor to work longer than one year or the
length of a contract. But the sources said Pfizer is now asking American
contractors to stay an extra three months to continue training the workers
who, allegedly, will eventually replace them.

Pfizer's outsourcing process is expected to save the company millions of
dollars and cost local contractors hundreds of jobs, the sources said.

Pfizer has been unwilling to discuss specifics or even acknowledge that
there has been an increase of foreign workers on the Groton and New London
campuses.

But according to a transcript of an October conference call in which Pfizer
officials discussed their third-quarter earnings report, both company chief
executive Jeffrey B. Kindler and Chief Financial Officer Frank D'Amelio
trumpeted the company's cost-savings plans, which cut $460 million during
the most recent financial reporting period.

D'Amelio promised even more cuts in the fourth quarter - at least $300
million - to fulfill or perhaps surpass Pfizer's two-year "Adapting to
Scale" goal of saving up to $2 billion.

"We have a wide array of outsourcing opportunities in various stages of
implementation," D'Amelio said.

"Manufacturing, logistics, finance, facilities and IT are among the
functions contributing to the financial and operational benefits of the
strategy."

Still, Pfizer has been less than forthcoming about what is happening to its
IT force in Groton and New London. A list of questions sent to Pfizer this
week elicited few additional details, other than both foreign and U.S.
firms would be used in the company's outsourcing efforts.

"Workforce reduction continues to be a reality in our business," said
Pfizer spokeswoman Joan Campion.

Previously, Toni Hoover, a senior vice president at Pfizer, admitted that
the company has been "pursuing further outsourcing opportunities in IT,"
but didn't address whether the pharmaceutical giant was involved in a
systematic effort to drop much of its U.S. contracting force in favor of
foreign workers.

Courtney said he has been in discussions with Pfizer over the past few days
about the allegations about the New York-based pharmaceutical giant's
outsourcing practices, but has gleaned few additional details.

Courtney and U.S. Sen. Chris Dodd, D-Conn., in response to The Day's story
last month about Pfizer's IT outsourcing, wrote a letter to Pfizer asking
the company to reconsider laying off its longtime contractor work force.

Courtney and Dodd also asked Pfizer to quantify the number of local workers
who would be replaced by foreign contractors on H1-B visas.

By asking for a GAO investigation, Courtney said he hoped to get an
unbiased view of H-1B problems so that fixes can be made in the next
immigration bill, which Congress hopes to pass next year.

"I think it will be helpful," Courtney said. "We will be starting with a
clean slate and a new administration. I think it will be good to take a
look at it in a nonpartisan fashion."

L.HOWARD@THEDAY.COM

Isn't or wasn't there some inquiry about this regarding Bill Gates,recently?