7 ms·

McKinsey taught Big Pharma how to price-gouge

170 points by bing_dai 5y ago

Emigre_ 5y ago
I worked as a contractor some time ago in a project that, I did not know it, but was managed by contractors from McKinsey. It was an awful experience and I left as soon as I could. They gave me the worst of impressions. A mixture of arrogance and incompetence. Strong command and control. Obviously this is just an individual’s point of view… just my personal experience… who knows.
- smt88 5y ago
  Arrogance and incompetence is management consulting in a nutshell. They're mostly not hired to be competent, though. They're traditionally hired to cover the ass of the executive team that wants to take risks without getting fired by the board if something goes wrong.
carabiner 5y ago
For reference, this is your modern McKinseyite: https://instagram.com/sophiehilaire?utm_medium=copy_li https://instagram.com/sophiehilaire?utm_medium=copy_li McK even profiled her: https://www.mckinsey.com/careers/meet-our-people/careers-blog/sophie https://www.mckinsey.com/careers/meet-our-people/careers-blo... Her pedigree is elite, she's attractive with a variety of experiences. She would have no trouble being hired at a tech startup. She could be the pleasant person you grab a beer with after work, and would pass every culture fit test. And these are some of the most evil people in the corporate world.
- huitzitziltzin 5y ago
  This is a gross comment. What evidence do you have that that employee ever worked on anything having to do with pharma? Delete this.
  - adam_arthur 5y ago
    I agree, but seems influencers would enjoy free backlinks for SEO/awareness purposes. Not good form to publicize somebody's personal profile though
  - klyrs 5y ago
    FYI: replying "delete this" renders a comment un-deletable.
- deleted 5y ago
  [deleted]
- gruez 5y ago
  > For reference, this is your modern McKinseyite: https://instagram.com/sophiehilaire?utm_medium=copy_li https://instagram.com/sophiehilaire?utm_medium=copy_li can someone screenshot the page? I'm getting a login wall.
  - finexplained 5y ago
    It's just an instagram for a young (attractive) woman who likes taking nature travel photos. If you've seen one influencer instagram you get the gist.
- vladharbuz 5y ago
  I don't fully understand your comment, is there some specific background story about this person related to the pharmaceutical industry?
- thebean11 5y ago
  It looks like she doesn't even work at the company anymore? Why are you posting this woman's instagram?
radicalbyte 5y ago
My first-hand experience of them - clueless muppets - but luckily they were quickly replaced by a team of actual experts. They are masters of playing the one-eyed man in the proverb "in the land of the blind, the one-eyed man is king".
1cvmask 5y ago
This is completely evading the truth. Big pharma is protected by legislation. There are restrictions to importing medicine from other countries. There is even legislation preventing the world's biggest buyer (the US government) of drugs from negotiating prices downwards: When Medicare Part D was passed in 2003, lawmakers included the “non-interference clause,” which essentially prevents the federal government from stepping in to negotiate prescription drug prices. https://www.alec.org/article/should-the-government-negotiate-prescription-drug-prices/ https://www.alec.org/article/should-the-government-negotiate...
- simonw 5y ago
  Do you think Cory Doctorow avoided mentioning that for bad faith reasons, or do you think he just didn't mention it because he didn't feel it was relevant to the story he was covering here?
  - huitzitziltzin 5y ago
    Having read commentary of his on antitrust and economic issues, I think it’s entirely possible he just doesn’t understand. Certainly that is the case in his commentary on economics.
  - gruez 5y ago
    >or do you think he just didn't mention it because he didn't feel it was relevant to the story he was covering here? I feel like the regulatory environment that enabled such "price-gouging" is very relevant to the story he's covering.
    - simonw 5y ago
      I agree that it's relevant - but I don't think that means it warranted mentioning in the story. The specific new piece of information here is that newly released documents show that McKinsey have been helping pharma companies figure out how to extend their patents. At some point you have to stop adding extra background information to an article, otherwise it will never end!
ectopod 5y ago
Medium won't let me read it. Alternative link: https://pluralistic.net/2021/11/25/strikesgiving/#cool-story-pharma-bro https://pluralistic.net/2021/11/25/strikesgiving/#cool-story...
armagon 5y ago
> The problem with [the plan of changing the formulas of drugs so they can be re-patented, from the patent-holder's perspective] is that a reformulation doesn’t stop the old drug’s patent from expiring, opening the market for cheap generics. To head this threat off, McKinsey developed a disinformation campaign to discourage doctors from prescribing generics and to convince patients to refuse such prescriptions. The McKinsey campaign included outright lies — false statements claiming that the old formulations were unsafe. Alongside those lies, McKinsey developed messaging to convince patients and docs that the old drugs were “a step backwards.”" Great explanation of Merck disclaiming Ivermectin (see https://www.merck.com/news/merck-statement-on-ivermectin-use-during-the-covid-19-pandemic/ https://www.merck.com/news/merck-statement-on-ivermectin-use... ) despite the drug being safer than Tylenol when used by humans ( https://www.thedesertreview.com/opinion/columnists/the-great-ivermectin-deworming-hoax/article_19b8f2a6-0f29-11ec-94c1-4725bf4978c6.html https://www.thedesertreview.com/opinion/columnists/the-great... ) Edit: They specifically called out "A concerning lack of safety data in the majority of studies" and spread FUD saying "Ivermectin should not be used during pregnancy since safety in pregnancy has not been established."
ab_testing 5y ago
This sounds like a blame shifting article. Sure McKinsey as a consulting company would advise its clients on how to do something / anything while staying within legal fringes. But it was the pharmacy companies that wanted to price gouge while avoiding any kind of scrutiny . So they roped in McKinsey for how to best do that without attracting any kind of government attention and McKinsey advised them on that. The author blames McKinsey for gaming the system . But what is the system - it is just a list of laws and regulations written by Congress . If Congress finds any kind of gamification-it should change the laws accordingly. The biggest reason for higher prices for drugs for Medicare was the prescription drug bill passed under the Bush administration that prevented the government from using its buying power to negotiate prices. I understand that affects only Medicare patients but that became the springboard for other opportunistic pricing employed by all drug companies. Also the age old practice of buying the patents of an old drug and hiking the price by 10000% or more ( as employed by Daraprim (Martin Shakreli) or numerous other companies )was not Mckinsey’s brainchild but rather the demand from the drug companies that McKinsey helped to materialize.
- croes 5y ago
  >But what is the system - it is just a list of laws and regulations written by Congress And how are this laws and regulations made? By massive lobbying. So first they rig the game then play the game.
- civilized 5y ago
  > The author blames McKinsey for gaming the system . But what is the system - it is just a list of laws and regulations written by Congress . If Congress finds any kind of gamification-it should change the laws accordingly. This is such a crap concept of business ethics. You expect Congress to be everyone's mommy and daddy and tell them right from wrong? Have you seen how Congress operates? If you do wrong, don't act all surprised and aggrieved if people blame you. It doesn't matter if the authorities happened to have a law on the books at the time. There's more to life than pursuing maximum profit.
  - AlphaSite 5y ago
m_ke 5y ago
Speaking of consulting firms, I just recently came across this from deloitte https://www2.deloitte.com/us/en/insights/industry/health-care/hospital-mergers-acquisition-trends.html https://www2.deloitte.com/us/en/insights/industry/health-car...
- sokoloff 5y ago
  Here’s another Deloitte gem. I can’t decide if the overall diagram is the peak of humorous or if the inclusion of two different items, one called “Simple Design” and the other “Rules of Simplicity” makes it even funnier. https://twitter.com/isaach/status/804726366038093824?s=21 https://twitter.com/isaach/status/804726366038093824?s=21
throwawayboise 5y ago
This is part of why I avoid doctors and prescription medication whenever possible. They are not motivated to get me healthy, they are motivated to keep me coming back for more.
pembrook 5y ago
The premise of this article is quite funny, the idea that Big Pharma wouldn't care so much about profit optimizing if it weren't for those evil jr. consultants! It seems McKinsey's chief value proposition of providing executives and governments cover for politically unpopular decisions (both internally or externally)...is in fact accurate. Amazing how this narrative manages to shift blame off of the government who created these bizarre incentives and the executives who run the damn drug companies and responded to those incentives. Somehow our joke of a healthcare system is now the fault of 24-year-old powerpoint jockeys and their theatrically fake-analytical powerpoint graphs.
- 88913527 5y ago
  It's easier to make a villain out of McKinsey than it is out of Congress. While it's true Congress is universally disliked, the discussion devolves into opining about my-team-versus-other-team, even though teams spend a great deal of time with lobbyists and fundraising. And even that point faces the critique that "both sides aren't the same", which sure, they aren't identical, but the means for securing influence are the same. None of us have pre-conceived notions about how to 'fix' McKinsey in the way we would with Congress. How to implement preventative measures that would block deeply unpopular policy from becoming law in the first place conjures discussions of first amendment rights.

170 points by bing_dai 5y ago

I worked as a contractor some time ago in a project that, I did not know it, but was managed by contractors from McKinsey. It was an awful experience and I left as soon as I could. They gave me the worst of impressions. A mixture of arrogance and incompetence. Strong command and control. Obviously this is just an individual’s point of view… just my personal experience… who knows.

smt88 5y ago
Arrogance and incompetence is management consulting in a nutshell. They're mostly not hired to be competent, though. They're traditionally hired to cover the ass of the executive team that wants to take risks without getting fired by the board if something goes wrong.

carabiner 5y ago

For reference, this is your modern McKinseyite: https://instagram.com/sophiehilaire?utm_medium=copy_li https://instagram.com/sophiehilaire?utm_medium=copy_li McK even profiled her: https://www.mckinsey.com/careers/meet-our-people/careers-blog/sophie https://www.mckinsey.com/careers/meet-our-people/careers-blo... Her pedigree is elite, she's attractive with a variety of experiences. She would have no trouble being hired at a tech startup. She could be the pleasant person you grab a beer with after work, and would pass every culture fit test. And these are some of the most evil people in the corporate world.

huitzitziltzin 5y ago
This is a gross comment. What evidence do you have that that employee ever worked on anything having to do with pharma? Delete this.
- adam_arthur 5y ago
  I agree, but seems influencers would enjoy free backlinks for SEO/awareness purposes. Not good form to publicize somebody's personal profile though
- klyrs 5y ago
  FYI: replying "delete this" renders a comment un-deletable.
deleted 5y ago
[deleted]
gruez 5y ago
> For reference, this is your modern McKinseyite: https://instagram.com/sophiehilaire?utm_medium=copy_li https://instagram.com/sophiehilaire?utm_medium=copy_li can someone screenshot the page? I'm getting a login wall.
- finexplained 5y ago
  It's just an instagram for a young (attractive) woman who likes taking nature travel photos. If you've seen one influencer instagram you get the gist.
vladharbuz 5y ago
I don't fully understand your comment, is there some specific background story about this person related to the pharmaceutical industry?
thebean11 5y ago
It looks like she doesn't even work at the company anymore? Why are you posting this woman's instagram?

radicalbyte 5y ago

My first-hand experience of them - clueless muppets - but luckily they were quickly replaced by a team of actual experts. They are masters of playing the one-eyed man in the proverb "in the land of the blind, the one-eyed man is king".

1cvmask 5y ago

This is completely evading the truth. Big pharma is protected by legislation. There are restrictions to importing medicine from other countries. There is even legislation preventing the world's biggest buyer (the US government) of drugs from negotiating prices downwards: When Medicare Part D was passed in 2003, lawmakers included the “non-interference clause,” which essentially prevents the federal government from stepping in to negotiate prescription drug prices. https://www.alec.org/article/should-the-government-negotiate-prescription-drug-prices/ https://www.alec.org/article/should-the-government-negotiate...

simonw 5y ago
Do you think Cory Doctorow avoided mentioning that for bad faith reasons, or do you think he just didn't mention it because he didn't feel it was relevant to the story he was covering here?
- huitzitziltzin 5y ago
  Having read commentary of his on antitrust and economic issues, I think it’s entirely possible he just doesn’t understand. Certainly that is the case in his commentary on economics.
- gruez 5y ago
  >or do you think he just didn't mention it because he didn't feel it was relevant to the story he was covering here? I feel like the regulatory environment that enabled such "price-gouging" is very relevant to the story he's covering.
  - simonw 5y ago
    I agree that it's relevant - but I don't think that means it warranted mentioning in the story. The specific new piece of information here is that newly released documents show that McKinsey have been helping pharma companies figure out how to extend their patents. At some point you have to stop adding extra background information to an article, otherwise it will never end!

ectopod 5y ago

Medium won't let me read it. Alternative link: https://pluralistic.net/2021/11/25/strikesgiving/#cool-story-pharma-bro https://pluralistic.net/2021/11/25/strikesgiving/#cool-story...

armagon 5y ago

> The problem with [the plan of changing the formulas of drugs so they can be re-patented, from the patent-holder's perspective] is that a reformulation doesn’t stop the old drug’s patent from expiring, opening the market for cheap generics. To head this threat off, McKinsey developed a disinformation campaign to discourage doctors from prescribing generics and to convince patients to refuse such prescriptions. The McKinsey campaign included outright lies — false statements claiming that the old formulations were unsafe. Alongside those lies, McKinsey developed messaging to convince patients and docs that the old drugs were “a step backwards.”" Great explanation of Merck disclaiming Ivermectin (see https://www.merck.com/news/merck-statement-on-ivermectin-use-during-the-covid-19-pandemic/ https://www.merck.com/news/merck-statement-on-ivermectin-use... ) despite the drug being safer than Tylenol when used by humans ( https://www.thedesertreview.com/opinion/columnists/the-great-ivermectin-deworming-hoax/article_19b8f2a6-0f29-11ec-94c1-4725bf4978c6.html https://www.thedesertreview.com/opinion/columnists/the-great... ) Edit: They specifically called out "A concerning lack of safety data in the majority of studies" and spread FUD saying "Ivermectin should not be used during pregnancy since safety in pregnancy has not been established."

ab_testing 5y ago

This sounds like a blame shifting article. Sure McKinsey as a consulting company would advise its clients on how to do something / anything while staying within legal fringes. But it was the pharmacy companies that wanted to price gouge while avoiding any kind of scrutiny . So they roped in McKinsey for how to best do that without attracting any kind of government attention and McKinsey advised them on that. The author blames McKinsey for gaming the system . But what is the system - it is just a list of laws and regulations written by Congress . If Congress finds any kind of gamification-it should change the laws accordingly. The biggest reason for higher prices for drugs for Medicare was the prescription drug bill passed under the Bush administration that prevented the government from using its buying power to negotiate prices. I understand that affects only Medicare patients but that became the springboard for other opportunistic pricing employed by all drug companies. Also the age old practice of buying the patents of an old drug and hiking the price by 10000% or more ( as employed by Daraprim (Martin Shakreli) or numerous other companies )was not Mckinsey’s brainchild but rather the demand from the drug companies that McKinsey helped to materialize.

croes 5y ago
>But what is the system - it is just a list of laws and regulations written by Congress And how are this laws and regulations made? By massive lobbying. So first they rig the game then play the game.
civilized 5y ago
> The author blames McKinsey for gaming the system . But what is the system - it is just a list of laws and regulations written by Congress . If Congress finds any kind of gamification-it should change the laws accordingly. This is such a crap concept of business ethics. You expect Congress to be everyone's mommy and daddy and tell them right from wrong? Have you seen how Congress operates? If you do wrong, don't act all surprised and aggrieved if people blame you. It doesn't matter if the authorities happened to have a law on the books at the time. There's more to life than pursuing maximum profit.
- AlphaSite 5y ago

m_ke 5y ago

Speaking of consulting firms, I just recently came across this from deloitte https://www2.deloitte.com/us/en/insights/industry/health-care/hospital-mergers-acquisition-trends.html https://www2.deloitte.com/us/en/insights/industry/health-car...

sokoloff 5y ago
Here’s another Deloitte gem. I can’t decide if the overall diagram is the peak of humorous or if the inclusion of two different items, one called “Simple Design” and the other “Rules of Simplicity” makes it even funnier. https://twitter.com/isaach/status/804726366038093824?s=21 https://twitter.com/isaach/status/804726366038093824?s=21

throwawayboise 5y ago

This is part of why I avoid doctors and prescription medication whenever possible. They are not motivated to get me healthy, they are motivated to keep me coming back for more.

pembrook 5y ago

The premise of this article is quite funny, the idea that Big Pharma wouldn't care so much about profit optimizing if it weren't for those evil jr. consultants! It seems McKinsey's chief value proposition of providing executives and governments cover for politically unpopular decisions (both internally or externally)...is in fact accurate. Amazing how this narrative manages to shift blame off of the government who created these bizarre incentives and the executives who run the damn drug companies and responded to those incentives. Somehow our joke of a healthcare system is now the fault of 24-year-old powerpoint jockeys and their theatrically fake-analytical powerpoint graphs.

88913527 5y ago
It's easier to make a villain out of McKinsey than it is out of Congress. While it's true Congress is universally disliked, the discussion devolves into opining about my-team-versus-other-team, even though teams spend a great deal of time with lobbyists and fundraising. And even that point faces the critique that "both sides aren't the same", which sure, they aren't identical, but the means for securing influence are the same. None of us have pre-conceived notions about how to 'fix' McKinsey in the way we would with Congress. How to implement preventative measures that would block deeply unpopular policy from becoming law in the first place conjures discussions of first amendment rights.