Chapter Three
The Gift of Drug, Inc., or G.O.D. as those familiar with the company refer to it, sits at the corner of Oak Street and Brach Avenue in a six storied building on Chicago’s outskirts. Viewed from the outside, the building conveys an air of impermanence, as if its designers did not take the project seriously or intend the building to last for more than a few years. Paint bubbles and rust stains run like icicles below the windows, ornamenting the off white Dryvit with Rorschach like markings, and testifying to the building’s shoddy design and low budget fabrication. This architecturally uninspired workspace, commonplace and dull, is where Doug and his minions labor.
Outside, to the east of the building, opposite the main entrance, is a two acre lawn through which a serpentine gravel path meanders. Geese flock to the open turf by the dozens, intimidating any would be walkers and claiming the land as their own. It is not a surprise that goose shit litters the campus. On this same side of the building is a large rectangular reflecting pool, two feet deep with a coal black bottom, which is widely regarded as an eyesore. In summer, mosquitoes rise in droves from the algae laden water. In winter, the pool sits fallow and frozen, a grim reminder of Midwest winter. Year round, the pool collects cigarette butts and fast food wrappers.
Inside G.O.D.’s humdrum offices, cheap, efficient partitions provide a place for each employee, and an easy way for management to make certain each employee is in his, or her, place. Within the honeycombed, maze like environment, the employees are constantly reminded to think outside the box as they spend their day in a veal pen sized cubicle of less than a hundred square feet. The cubicle has not played out as the consultants promised. Rather than fostering worker equality and the free flow of information, the cubicle’s soulless and Orwellian nature has driven the employees to covet privacy above all else. To find solitude, employees e-mail the person in the adjacent space instead of engaging in conversation. Workers seated near each other dial into the same conference call rather than meeting in person. Paradoxically, the staff is driven to the most public areas of the floor for private conversations; the pantry, conference room, even the lobby. Places where they can tell their doctor how bad it burns when they pee, or when they’ll be able to make whatever payment they’ve missed and for fuck’s sake not to repo their car.
From the low ceilings, fluorescent lights cast harsh, artificial luminescence onto the muted earth tones that are the common denominator over everything from the furniture to the plastic, potted plants. The building screams mediocrity but the cries go unheard, absorbed by the low pile beige carpet. If the air didn’t have the faint reek of burnt popcorn, and a couple of windows weren’t boarded from Alan’s jump and the computer Nel’s tossed, the building would have no personality at all.
Dispatched from G.O.D.’s bland confines, to patients diagnosed with rare and often terminal illnesses, are life giving, extremely expensive prescription drugs. G.O.D.’s business, specialty pharmacy, was built on the economics that it was cheaper to fill prescriptions for these types of drugs at centralized locations and mail them to the patient than it was for the patient to use their neighborhood drugstore.
Like most corporations, G.O.D. followed a predictable path in which the founder, Norman, an old man unencumbered by consensus management and the limitations of quarterly profit statements, began mailing prescription to his patients as a means of convenience. The terminally ill patients he served appreciated doing what they wanted with their limited time, and not having to drive to and from the pharmacy. The business was profitable and grew steadily, but all good things must come to an end. In the late 1990’s, Norman sold the business to fund a south Miami lifestyle replete with face lifts, strippers, and the ongoing removal of pre-cancerous squamous cells that pop up on the bald heads of those with Gaelic origins who retire to sunny environs. Recurring appointments with his doctors were a minor inconvenience, as the last thing Norman wanted was to become a customer of his former business.
With Norman’s sale of the business and subsequent departure, any sharing of institutional knowledge and focus to longevity and future generations was abruptly ruled out. This became most apparent when the new owner took the company public, hoping to cash out. The investor community’s response to the initial public offering was lackluster and didn’t provide the windfall the new owner expected. Thereafter followed several financially disastrous years during which time those employees that were able to find alternate employment left for greener pastures. The result of the mass exodus was a reverse natural selection scenario in which the least desirable remained. Doug, the CEO, Cuddy, the COO, and Alan, the CFO, all sought exit, but none of them received any job offers from the few firms with whom they were able to secure interviews. Unable to persuade external candidates to fill out the upper management ranks and manage the leper colony as the company tanked, the three ascended into upper management as the beneficiaries of attrition. Mary, the VP of Sales, was given her position as payback for a favor her father did for Alan.
In a classic case of the inept reveling in serendipity, G.O.D. saw record profits under Doug and company through a series of misadventures. Among the factors contributing to G.O.D.’s success were the rampant price increases taken by pharmaceutical manufacturers. These price increases, which hovered well into the double digits, coupled with G.O.D.’s inability to manage inventory, resulted in huge mark-ups in the value of the drugs G.O.D. stocked. As a result, the drugs G.O.D. paid $10,000 for were now worth $90,000. In any other industry, the penalty for overstocking inventory would have been the financial ruin of the company; however, G.O.D. made a killing as the pricing they charged was based on the manufacturer’s list price at the time the drug was shipped to the patient, which had no bearing on the acquisition cost at the time G.O.D. purchased the drug.
In addition to rampant price inflation, several key manufacturers realized a series of production mishaps resulting in product shortages for life sustaining drugs. G.O.D.’s inability to manage inventory again proved fortuitous as the company had unintentionally stockpiled these drugs. Price and demand skyrocketed, and G.O.D. capitalized on its monopolistic situation and again drove record profits. The worthless options the executives were granted during the financial morass, when they assumed leadership positions, moved well into the money and worth millions, as factors beyond their control drove the company into the black.
Piling on, the company’s name change to Gift of Drug, Inc., from Norman’s Specialty Pharmacy, bumped earnings a stellar three hundred basis points and drove the company’s market capitalization into the tens of billions. The company quickly learned when it called the terminally ill, announced, “Hello, this is G.O.D. calling,” and let the patient know they needed a refill if they wanted to live another day they ended up shipping a lot of drugs.
With the new name, Doug, Cuddy, Alan, and Mary, also benefited from the demand for Madoff-like returns when the electronic stock ticker scrolled G.O.D. as an investment option. Emboldened by a right wing conservative president, whose gift to the country was a reduction in tax for the wealthiest Americans, the rollback of environmental protections in favor of big business, and the dismissal of U.S. attorneys whose investigation might not favor those in power, the ministers and flock of mega Churches invested their money directly in the deity who answered their prayers. The cash poured in.
To date, the idea to rename the business has been the only sage advice the white shoe consulting house, which was firmly entrenched at G.O.D., has provided. As luck would have it, this idea was uttered in jest by a high school intern when he mistakenly answered a rhetorical question uttered by one of the partners in his firm concerning what could be done to drive sales. His other suggestion was to hold a holiday party, which didn’t turn out as intended and had him batting five hundred at the time of Alan’s jump.
Today, the specialty pharmacy business works off of strange economics and sits at the intersection of four customers w
ith opposing goals and of unequal importance. G.O.D.’s customers include; the pharmaceutical companies, which make the drugs; the health plans, which contract with G.O.D. to provide the drugs to its members; the doctors that refer the patients; and, the patients themselves. In descending order of importance to G.O.D., the ranking goes pharma, payers, prescribers, and then patients. To secure its patients G.O.D. contracts with the payers to serve as the exclusive pharmacy provider of specialty drugs. Under these arrangements, the patients don’t have a choice in their specialty pharmacy if they want to exercise their health benefit.
Unlike the time it was founded, G.O.D. no longer makes money buying and selling drugs. As it stands, the money G.O.D. makes is from the data it sells the pharmaceutical manufacturers about the patients it services; the more patients the more data, and the more data the more money made. G.O.D.’s financial model is now more like that of a market research company than it is a retail pharmacy. Another unique aspect of the specialty pharmacy business concerns the optics of providing life giving drugs to the terminally ill. G.O.D. has not solved the dilemma of shipping drug regardless of whether the patient paid their bill.
About a year before Alan jumped, the financial analysts and market makers that dictate requisite performance of public companies grew wise to G.O.D.’s shenanigans. Doug’s three card monte management initiatives, Separate Orders and Combine Orders, were exposed for the scams they were, and the price increases, product shortages, and name change, that drove profits recognized as one-time events that couldn’t be counted on to drive future earnings. As Cuddy hammed it up at the 2005 Board Meeting, Wall Street recast the company’s value and sent the stock on a slow and steady fall. Although it circled far from the drain of bankruptcy, G.O.D. now struggled to meet its investor’s expectations. This shortfall was primarily due to patient’s not paying their co-pays. As the stock fell in value, Wall Street found common ground in its belief that Doug was a buffoon, and his management team, especially the fatuous, blockheaded Cuddy, was a cluster of imbeciles.