Pfizer slapped with record £84 million fine over NHS drug

(qlmbusinessnews.com via standard.co.uk – – Thur, 8 Dec, 2016) London, UK – –

pharmaceutical
Vinnie Lauria/Flickr

Pharma giant Pfizer was on Wednesday slapped with the biggest penalty imposed by Britain’s competition watchdog, an £84 million fine for charging the NHS “excessive and unfair prices” for a key anti-epilepsy drug.

Pfizer, the US drugmaker “deliberately… hike[d] up the price for a drug which is relied upon by many thousands of patients”, the Competition and Markets Authority said.

In 2012, Viagra-maker Pfizer stripped its epilepsy drug Epanutin of its branding, turning it into a generic medicine, phenytoin sodium, as these are not subject to price regulation. It then sold the licence to British drugs distributor Flynn Pharma, which was today fined £5.2 million for its role in the scandal.

The pair broke competition law with a crucial medicine for some 48,000 UK patients, the CMA found.

They hiked the price of a 100mg packet of pills by 2600% “overnight” from £2.83 to £67.50 in September 2012. NHS spending on the capsules shot up from £2 million to £50 million in 12 months as a result.

Pfizer’s pricing for the same drug in other European countries remained far lower.

As epilepsy patients on certain drugs should not usually be switched to others, due to serious health consequences, “the NHS had no alternative to paying the increased prices for the drug”, the CMA said.

Pfizer and Flynn Pharma, which calls the capsules a “vitally important product” on its website, “abused [their] dominant position by charging excessive and unfair prices”, the CMA said of its record fine.

Boss Pfizer Ian Read claimed NHS patients would benefit from “better products, faster” during his £69 billion attempt to buy AstraZeneca in 2014.

The next-biggest penalty was a £45 million fine on GlaxoSmithKline and other drugmakers in February.

The CMA has also ordered Pfizer and Flynn to drop their prices, giving them up to four months to do so.

In September 2012, a Flynn company director claimed “for us to continue to make the drug available in the UK, we had to [hike the price],” while Pfizer had claimed it was making Epanutin at a loss, but couldn’t stop doing so as patients relied on it.

However, CMA research showed any losses would have been recovered within two months of the price rises.

Pfizer said it will “be appealing all aspects” of its fine. Flynn said the ruling was based on a “wholly flawed understanding” of the drugs market.

By Lucy Tobin

Rolls-Royce Holdings Plc to Cut 800 Posts

(qlmbusinessnews.com via bloomberg.com – – Thu, 1 Dec, 2016) London, Uk – –

Rolls Royce
Cedric Ramirez/flickr.com

Rolls-Royce Holdings Plc will cut 800 more posts at its marine-equipment and ship-design unit, or about 17 percent of the remaining workforce, as the lower price of crude hurts demand for oil-industry exploration and service vessels.

Restructuring steps will include a further simplification of the unit’s structure, including a “streamlining” of senior management, plus unspecified cost-reduction initiatives, London-based Rolls-Royce said Thursday.

The measures will cost about 20 million pounds ($25 million), split between this year and next, and should deliver annualized savings of up to 50 million pounds from mid-2017, according to a statement.

Rolls, best known for its aircraft engines, has already cut more than 1,000 jobs at its marine operation since 2016, with the division currently employing 4,800 people across 34 countries, including 1,900 in Norway, where it is based.

The offshore market is showing no sign of recovery, with the outlook bleaker as the backlog shrinks, Chief Executive Officer Warren East said Nov. 16. The marine arm has already shut or sold 12 of its 27 sites, and is looking at cutting more locations and shifting some production to emerging economies.

Rolls-Royce’s aviation business has also been hit by a slump in sales of business and regional jets, lower utilization of older wide-body planes and a slowdown in A330 engine deliveries as Airbus Group SE switches to an upgraded model. East has said the company is on course to deliver savings close to 200 million pounds by the end of 2017.

The marine division currently supplies gear including propellers, rudders and propulsion equipment for offshore vessels, oil and gas platforms, freighters, cruise liners, ferries, trawlers, luxury yachts and naval craft, as well as designing entire ships. While the unit markets engines, they’re made by the power systems arm, which has also laid off staff.

As part of the changes Rolls plans to establish a services hub and research center for new propulsion products in Ulsteinvik, Norway.

By Christopher Jasper

Using Smart Billing Strategies to Increase Profits

(qlmbusinessnews.com via uk.finance.yahoo.com – – Fri, 25 Nov, 2016) London, Uk – –

Ken Teegardin/Flickr
Ken Teegardin/Flickr

I used to work at a writing mill, churning out page after page of promotional material on technical subjects. I was not, thank you very much, a “tech writer.” Business writers view tech writers as failed engineers or talentless hacks who are one economic downturn from working at Taco Bell. Tech writers, in turn, think business writers to be technological maladroits who could not pour water out of a boot if the instructions were not written on the bottom.

I was new to the job and eager to impress. I was designing a training program, and I asked the program managers how many hours had been billed to the project; he looked at me blankly and shrugged. He didn’t know. Not to be dissuaded, I went to the CFO who told me, “We don’t track that.” When I asked him how many hours they based the quote on, he was equally clueless.

Ask me no questions.

So there I was working on a project without knowing how many total hours had been bid and how many of those had been used. Madness. By now self-conscious because I believed my questions sounded more accusatory than inquisitive, I gently inquired how in the living Hell the company knew whether or not it was making a profit. I was informed with withering condescension that we billed customers, and that was called gross revenue, and then we subtracted our costs, which revealed our net profit. Madness; all around me, madness.

I grew to accept that loosey-goosey accounting method that they don’t teach you in accounting classes. There were no lofty terms like depreciation and debits, and no such pesky acronyms as FIFO and LIFO inventories. No, this was something easier and somehow more pure. Truthfully, it removed any and all accountability: I was absolutely at peace with it. Still, this company did eventually collapse, largely because of its amateurish cash-flow system, but I had abandoned ship long before.

There can't be two.

I had another job in a velvet sweatshop writing training. I was sure the first company was an outlier: there couldn’t be two companies that didn’t manage profit and labor on an individual basis. I was wrong.

I was again plunged headlong into a world of madness where nobody kept score until the game was over. This time the company only tracked overhead, code for: You useless fool! You aren’t working making money for the company. Here, to have over 10 percent overhead on your timesheet was to put a bullseye on your back, although everyone quickly learned how to game that system.

If you are an entrepreneur — whether you are a sole proprietor or the owner of a medium- to large-sized company, you must know how much each project is costing you relative to how much you are billing for it. This is easier than it seems, but there are some rules you should follow:
Spell out exactly what is billable and what is not.

In your quotes to prospective clients, detail what's billable. Is travel to and from the customer site billable? How about kickoff meetings? A clear understanding of exactly what constitutes billable activity is essential; what’s more, it avoids disputes over billing.

Share the quote with the team.

Too many business owners are paranoid about their billing; in their minds, they don’t dare share that information with their employees. They fear that if their employees knew the rate at which they were being billed to a client, they would demand a raise. If you fear that, explain to your employees the concepts of burden rate (how much it costs a business owner to actually employ a worker) and profit (the reason you’re in business). Most people will get it, and the conversation will end well — except for ones where the employer is actively ripping off everyone in the equation. (You know who you are. So, in that case, you might want to fix that first, you greedy, dishonest pig.)

Don’t schedule mandatory nonbillable meetings and events.

Too many employers fill employees schdules with nonbillable meetings and then punish employees for being nonbillable. Now, assuming a 40-hour week (HA! LOL … sorry, I couldn’t even type that with a straight face), an employer scheduling a daily, two-hour staff meeting instantly cuts employees' billable time by 20 percent. Think about that, but also know I’m being kind here. I have worked for companies that harp on people for the level of their overhead billing and yet routinely schedule 20 hours of nonbillable activities (meetings, training, employee birthday parties, etc.). This practice puts the employee in an intolerable dilemma: either he or she can cheat and bill the customer for that time, or the employee can log an extra 20 hours or so of work outside the workweek to retain a high, useful billability rating.

Keep good time sheets.

Everyone hates doing timesheets. Show me someone who enjoys doing timesheets and I will show you someone who probably eats food they find on the side walk (“Oooh, street pizza”). Good time keeping allows you to understand how much effort a project really takes; it differentiates between people who are good at their work and those who aren’t.

Learn from your failures.

Just because you lost money on a project doesn’t mean you’re workers failed to perform. When you lose money on a project ask yourself why? Was it scope creep (where the project slowly grows but the price stays the same)? Was it poorly quoted? Did you miss listing key assumptions that affected your ability to bill the project more? By knowing exactly why you lost (or for that matter, why made money), you can correct the error and do better next time.

By Phil La Duke

Training Corporate Security Teams in The Event of Cyber Attack

(qlmbusinessnews.com via bloomberg.com – – Thu, 24 Nov, 2016) London, Uk – –

Computers
Longmont/flickr.com

Despite billions of dollars invested in antihacking technology over the past 10 years, companies appear to have little idea of how to respond to a cyber attack. When Target was hacked during the busy 2013 Christmas season, investigators found the company had missed early warnings that might have prevented the loss of data belonging to 70 million customers. When the news came out, lawsuits were filed, and Chief Executive Officer Gregg Steinhafel resigned. Sony Pictures Entertainment’s fumbling response a year later to North Korean hackers turned a bad situation into a terrible one, costing Amy Pascal, one of the most powerful women in Hollywood, her job as co-chairman.

IBM, which has spent five years buying companies to make itself the world's third-largest cybersecurity provider, wants to train corporate security teams, CEOs, and PR departments to handle those kinds of crises. Shortly after Election Day, the company unveiled a facility that combines gaming techniques and millions of dollars of sophisticated hardware to re-create scenarios like Target’s and Sony’s in white-knuckle, stock-plunging detail.

The idea is borrowed from the Pentagon, which uses a similar approach to train soldiers for cyberwar. Instead of the pressure of combat, the facility at IBM’s security division headquarters on the Charles River in Cambridge, Mass., wants to re-create a postbreach pressure cooker that can move rapidly from a regulatory investigation to a call from the FBI to whatever else the range’s multimedia producers can conjure. “We don’t want to scare the crap out of people,” says Caleb Barlow, vice president of IBM Security. “We do want people to feel a little of the adrenaline burst and the pressure.”

By the time IBM’s cyber range is fully operational in January, it will offer 12 training programs. Think of them as plays, Barlow says, with settings, acts, and an unusually wide range of actors, including general counsels, marketing teams, and C-suite executives.

The staging area is a bit like a flight simulator built for two dozen. Theater-quality video panels cover the front wall, and the ceiling is studded with the same sensors that allowed Tom Cruise to manipulate data with his hands in the movie Minority Report. (The ceiling array, made by Oblong Industries in Los Angeles, is the most expensive thing in the room.) Racks of servers located a floor below simulate the data stream of a full-size corporate network.

During a recent afternoon demo, the training program began with a phishing e-mail sent to a fictitious HR rep. The hackers made off with a cache of data before the IT crew could isolate the source of the breach. Then an insider leaked news of the breach, and the pressure mounted. The U.S. Securities and Exchange Commission initiated an investigation. More pressure.
As the afternoon wore on, events spun out of control. The security team discovered that the hackers hadn’t just stolen information, they’d also altered the company’s financial data shortly before its quarterly earnings report. Uh-oh.

$200 million: IBM spending on its cyber range and teams for intel and incident response

All this realism doesn’t come without risks. The range is designed to test out some of the most virulent malware, so the whole thing is air-gapped, which means it’s not connected to the real internet. Instead, developers collected data from thousands of web pages to create a miniature, self-contained internet.

Like many of the range’s features, that idea came from Joe Provost, the project’s threat modeling and simulation architect and a former master hacker for the National Security Agency. Two days after hackers took some of the world’s most popular websites offline in October with a botnet of infected home routers, TVs, and other internet-connected devices, Provost figured out how to replicate the attack so he could add it to one of the range’s scenarios. In the simulations, he also plays the main bad guy.
The facility is expensive, and IBM wouldn’t say exactly how much it costs to run. Barlow says the company had spent a combined $200 million on the range and the development of cyber intelligence and incident response teams for on-site investigations of major hacks. He may be reticent to break out spending on the facility, because there’s no guarantee the investment will pay off. IBM says it’s not planning to charge people who come in for the training sessions; it’s more of a marketing tool, an effort to convince companies there’s enough value in IBM’s various cybersecurity technologies to make them worth buying. “This is in some ways a grand experiment,” Barlow says.

Roland Cloutier, chief security officer of payroll-services provider ADP, says that based on what he knows of the gaps in traditional cybersecurity training, IBM’s plan should work. “What IBM has been able to do is take two very different processes and combine them into a single training,” he says. “One is technology-based—I have an attack going on, and I have to stop it. But then you have crisis management, which is about leadership in tough situations. That’s a whole different skill set.”

The bottom line: IBM has built a cybersecurity training center to test corporate readiness. Now it has to persuade customers to buy its gear.

By Michael Riley

(Updated second paragraph to correct IBM’s global market position.)