Pharma Fred Goes To Washington

This is Fred Eshelman, CEO of PPD, Inc, the man paying millions to attack Barack Obama. Perhaps Fred Eshelman is funding attacks on Barack Obama because he is chafing under Federal oversight after his performance at the House Energy & Commerce Subcommittee on Oversight and Investigations hearing in February 2008:

Fred Eshelman Congressional Testimony 1 of 3

Not much in the first clip. It gets more interesting in the second two clips:

Fred Eshelman Congressional Testimony 2 of 3

Fred Eshelman Congressional Testimony 3 of 3

Eshelman disavowed PPD Inc responsibility to directly alert the FDA to fraud in clinical trials for the new antibiotic Ketek for which PPD was paid $20 million by drug maker Aventis. The FDA found the fraud 2002 in a trial supervised by PPD, the doctor was indicted 2003, convicted 2004 and Ketek was approved 2004 by the FDA using the faulty data. It wasn't until early 2006 that liver problems in patients using Ketek came to light and subsequently, the continued reliance on the fraudulent data. Congressional hearings were called for in 2006 which were held 2007 and again 2008 when Eshelman testified with a prepared speech and with verbal responses to questions.

The FDA and drug maker Aventis were directly faulted. Eshelman washed his hands. Now he wants to roll up his sleeves and get his hands dirty in swiftboating for an administration that would further curtail FDA oversight of drug approvals. These clips show Fred Eshelman's verbal responses to questions.

PPD stock is now hovering around $35. It has averaged about $40 in the last year and has been as high as $49 in January. According to a proxy document for a May 21 shareholders meeting, Fred Eshelman is the owner of 8,564,415 shares. So it's clear that when the stock goes down $1, Fred Eshelman loses $8,564,415. In that context $2,733,919 to is small potatoes. Chairman Ernest Mario who contibuted $1,000,000 to RightChange is the owner of 644,843 shares. Both men have schools of pharmacy named after them. Eshelman at UNC Chapel Hill and Mario at Rutgers University.

Extra links if the FireFox 3.0 bug freezes the video embed:
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I'm crossposted at DailyKos but scrolling off the list. I forgot you have to grab attention in the first para. No worries, just trying to get the info out.

Ketek Timeline

Timeline from the New England Journal of Medicine showing when Ketek was approved despite faulty study.

Great work, Greg

I've got some other stuff in the works about Freddie boy and Liddy Dole, but it's still in the oven rising. ;)

SEC misc info

At close of business Thursday PPDI stock was $31.75 (down from the $49 high). SEC disclosure information posted on PPD's investor site show that Eshelman disposed of 39,000 shares on August 8th and 40,000 shares on August 29th (when prices were about $41-$42). This matches the timing of Eshelman's contributions to RightChange August 12th and August 29th.

Eshelman has exercisable options for 760,000 shares at prices ranging from $14.95 to $44.78 per share. 350,000 of those share options have an exercise price of over $33.61. For his part Ernie Mario had exercised some options on July 23rd for 20,000 shares at $13-$16 per share on a day when trading volume more than doubled and share price was about $39, a profit of about $500,000.

Legal Proceedings

Beginning in early 2007, we were named as a co-defendant in lawsuits involving claims relating to patients who took sanofi-aventis’ FDA-approved antibiotic Ketek, for which we provided certain clinical trial services to sanofi-aventis’ predecessor prior to FDA approval. Lawsuits are pending in New Jersey, North Carolina, Alabama, Wisconsin and New York. These suits allege multiple causes of action, including negligence, fraud, misrepresentation, breach of warranty, conspiracy, wrongful death and violations of various state and federal statutes, including unfair and deceptive trade practices acts. Generally, the plaintiffs are seeking unspecified damages from alleged injuries from the ingestion of Ketek, and in some of the cases claim damages of at least $20.0 million. It is possible that additional suits will be filed. While there can be no assurance of a successful outcome and litigation costs can be material, we do not believe that these claims against us have merit and intend to vigorously defend ourself in these matters.

The point of posting this information is show that there are powerful incentives in regulated industries like pharmaceuticals and finance to influence elections.