Tylenol's "Soft Market Withdrawal"

The House Committee on Oversight & Government Reform heard testimony on Johnson & Johnson's Tylenol problems over the last year.  J & J  conducted six formal recalls on dozens of product, along with a phantom recall on Motrin.

This was the second hearing on the issue.  J & J CEO William Weldon missed the first hearing due to back surgery, relying on Colleen Goggins.  Weldom made this one, along with Ms. Goggins. 

Weldon's testimony omitted his and Ms. Goggins role in bringing about Tylenol's quality crisis.  However, Bill offered the usual ritual sacrifice in his closing:

I would like to close my testimony by noting my appreciation for Ms. Goggins’ leadership of Johnson & Johnson’s consumer group. As you know, she has announced that she will retire from Johnson & Johnson next year.

When asked about the term "soft market withdrawal," used in internal company memos,the pair responded:

Mr. Weldon:  Mr. Chairman, I have no idea what soft market withdrawal is.  I've heard the term.

Chairman Townes:  It's used in the memos and e-mails we received.

Mr. Weldon:  I'm not familiar with the term.  I do not know what it means.

Chairman Townes:  Ms. Goggins, do you know what that means?

Ms. Goggins:  No, we do not use that term regularly.  I've not heard it before this instance.

Chairman Townes:  Why would the employees use it?   Maybe it's the same thing as phantom recall.  I'm trying to figure this out, because you've seen, you've heard it.  What do you think it means?  We don't know.

Ms. Goggins:  I don't.., I agree with you.  I think the language is very unfortunate.  It's terminology we don't use.  Also, I don't think it reflects accurately our priorities and the fact that we try to put safety of patients first, and I think that this language is unfortunate.

Chairman Townes:  Do you want to comment, Mr. Weldon.

Mr. Weldon:  I think, Mr. Chairman, the comment that I would make is I think we've learned a lot of lessons through this, uh, unfortunate situation.  Um, I have said to you, to Mr. Issa and the committee that we have learned and benefited by being here....I can only assure you, we will do everything in our power to never let this happen again.  I think the characterization of phantom, soft, all kinds of things, I cannot explain to you  I wish I could, and I think many different people use many different terms.

It brought to mind BP's Tony Hayward.  I wonder is Bill and Tony used the same PR coach.  Maybe APCO Worldwide?.

(The interchange begins at 1:15:50 mark of CSPAN video)

Deficit Commission Holds Public Meeting

CSPAN aired today's meeting of President Obama's Deficit Commission.  This is the fifth public meeting for the Commission.  It's unclear how many private meetings they've held. 

Co-chair Erskine Bowles promised to gore everyone's ox.  Will he include his beast, currently slaving to build a new fortune?

Current Health Insurance Pain

Newsweek reported:

The average total health care premium per employee for large companies is projected to be $9,821 next year, up from $9,028 now. The amount employees will be asked to contribute toward this cost is $2,209, or 22.5% of the total premium, up 12.4% from last year. 

This shows the inanity of President Obama's pledge suggesting people can keep the insurance they had in 2008.  Those policies are long gone, as evidenced by.

Average employee out-of-pocket costs (copayments, coinsurance and deductibles) are expected to be $2,177 next year—a 12.5% increase from this year. These projections mean that in a decade, total health care premiums will have more than doubled, from $4,083 in 2001 to $9,821 next year. Employees' share of medical costs—including employee contributions and out-of-pocket costs—will have more than tripled, from $1,229 in 2001 to $4,386 next year. 

Employers shifted cost increases to employees.  At what point do they drop the benefit altogether and pony up the fine?  Paying $2,000 per employee (for firms with more than 50 workers) could save $8,000 per head. 

CBO projections show employer sponsored coverage falling to 48.5% of all Americans.  It was 63% in 1998.  That 48% may be optimistic given current trends.

Update 8-24-11:  Many large employers plan to dump their health insurance benefit come 2014.   I theorized this was the aim of health reform, a seismic shift in who provides and pays for health care coverage.  That seems to be playing out.

Super PAC's

ABC News reported on the newest political animal.  It's a donkey-elephant "money machine" hybrid, known as a Super PAC:

Unlike traditional PACs, or political action committees, they cannot give money directly to candidates or coordinate their efforts with individual campaigns. 

(They were) created in the wake of two Supreme Court decisions earlier this year that lifted some limits on campaign spending and allowed corporations and interest groups to funnel money directly into political campaigns.

One might expect the foulest of political animals to gravitate toward Super PAC's.  They're right.

Gulf Oysters: NOAA Sentinel Species

CSPAN showed testimony before President Obama's Oil Spew Commission. In this morning's testimony, a NOAA scientist said "we aren't testing oysters."  That's odd, given NOAA identified oysters are a sentinel species, the water equivalent of the canary in the coal mine.

Not long ago ABCNews reported:

Gary Ott with NOAA said crews are using oysters to make sure there is no oil sinking to the bottom of the gulf. No oysters have tested positive for oil.

States are responsible for testing oysters.  Mississippi tested 35 oysters between May 26 and September 2, with 10 of those lab results pending.




Meanwhile, Mississippi oyster fisherman don't want the season reopened to give the few remaining oysters a chance to recover.

The mortality rate for oysters was 5% before the spill in the Louisiana Delta.  New Scientist reported it's now 20 to 75%. There's hope that Mother Nature will help the oysters recover.

Oil Spew Commission Focused on Alaska

President Obama's Oil Spew Commission pondered the impact of an oil spill in sensitive Arctic regions, specifically Alaska.  They discussed Alaska's National Petroleum Reserve and the Chuckchi Sea.  Co-Chair William Reilly asked about the impact of drilling delays, which impacts ConocoPhillips.

ConocoPhillips is Alaska’s largest oil and gas producer and the largest owner of state and federal exploration leases, with approximately 1.8 million net undeveloped acres at year-end  2009. Approximately 0.8 million of those acres are in the National Petroleum Reserve-Alaska (NPR-A). 


Chukchi Sea--Conoco Phillips was one of the major participants in the Chukchi Sea federal Outer Continental Shelf (OCS) lease sale held in February 2008. The company was a successful high bidder on 98 OCS tracts, or 0.56 million acres, with total lease costs of $506 million. Plans continue to progress for drilling an exploration well on the Chukchi Sea leases in 2012 or later. In January 2010, Conoco Phillips exchanged a 25 percent working interest in 50 of these leases for cash consideration and additional working interests in the Lower Tertiary Play of the deepwater Gulf of Mexico.

While Reilly took a leave from ConocoPhillip's Board of Directors, his stock holdings remain.  Reilly's ConocoPhillips stock is impacted by drilling decisions on Alaska and the Gulf of Mexico.  That puts Reilly in a sweet crude spot.

Reilly Said Drilling Moratorium to End Soon

Bloomberg reported:

President Barack Obama’s moratorium on deep-water drilling is likely to end before it is set to expire Nov. 30, said William Reilly, co-chairman of a presidential panel probing the BP Plc spill.

“I’ll be amazed if the moratorium is not lifted before November 30,” Reilly said today in an interview on Bloomberg Television. It’s unclear “why it’s taking so long” to restart deep-water drilling, he said.

The Reilly led Oil Spew Commission met in Washington, D.C.  Highlights included:

BP still can't answer why they promised a significant skimming capacity, yet never delivered.

Various government officials said a strategic decision was made to disperse (sink) the oil. 

Retired Admiral Thad Allen stated the perception of the response from the America public and government leaders were an impediment to response efforts.  Sorry Thad, blaming the victims is not very responsive.

Coast Guard Admiral Landry stated the oil spill was discovered on April 24.  The blowout occurred April 20.  The rig sank April 22. 

Plaquemines Parish President Billy Nungesser, severely affected by the spill, told the oil spill commission he still doesn't know who is in charge.  "This was a disaster from the way it was handled from day one."

At an earlier hearing a USC Engineering professor weighed in on BP's internal investigative report.  He asked, "How could you call this great work accident investigation ... and not address human performance issues and organizational issues and decision-making issues?"  There's a difference between an investigation and a risk management report.  The Gulf Coast knows this well, having experienced it after Hurricane Katrina with the Bush Lessons Learned report..

It remains to be seen what happens with the spate of investigations currently under way.  Did they ever nail down the aim of Reilly's commission?