Posted by: Audrey Erbes | August 10, 2014

Company Inversions: Mistaken Decisions Based on “Numbers” Plus Events and Jobs

I’m back on American soil and gradually getting over jet lag. Although I didn’t write blogs for the month I was in Vienna, Austria, I did read about the life science industry via a continuing stream of newsletters to which I subscribe on my small netbook. Perhaps because I was in the EU, I found the growth of “company inversions” in our industry most noteworthy news. Those who know me recognize I’m always looking at the industry’s activities in terms of the impact on the workforce as well as the major focus on the development of innovative products and related improved health and well-being of Americans.

I’ve been concerned for years with the increasing role of financial managers and their short-term thinking—laying off thousands of employees to improve this quarter’s profits, for example—in place of a “stakeholder” perspective of what’s good for the employees is good for the company and its future success. Those of us in the industry in business development and R&D recognize that destroying the company’s “knowledge and know- how base” to improve the numbers can easily start the “death spiral” that has afflicted many a company. Negative hiring attitudes that lead to laying off more experienced and naturally higher paid workers to be replaced by recent graduates at a lower price not only destroy trust among staff but demotivate employees.

I believe in international companies and commerce but don’t support giving non-U.S. companies the same benefits as U.S.-based companies that invest in their communities and play a supportive role of the larger country. Paying their fair share of taxes and supporting the benefits they enjoy provided by taxpayer dollars isn’t just patriotic but good business. Some would say it’s time for citizens to shame these companies like Mylan and Medtronics along with the other 45 American-based companies that have done corporate inversions. (See Jonathan Alter’s article August 4th article entitled “The United States Needs Corporate Loyalty Oaths” in the Daily Beast.)

See another article “Congress Moves to Punish Medtronic and other Corporate Deserters” in +Mass Device newsletter.

I worry that the bottom line focus of these companies’ under another country management will further distance them from the welfare of U.S. patients along with that of their U.S. employees. Making important decisions based solely on shareholder return for the quarter is taking our industry away from their mission of providing improved health care.

Overview of Upcoming Life Science Events This Coming Week

  • BioCentury This Week, See new program Webcast Starting Sunday, August 10, 2014, http://www.biocenturytv.com, Available anytime starting at 9:00 a.m. EDT. Watch on the Web Any Time. biocenturytv.com. Topic: Emotional Contagion: Facebook Experiment
  • PBSS, Monday Afternoon, Aug. 11, 2014. Topic: Excipient – Drug Interaction: understanding the physical, chemical, physiological and biochemical interactions and impact on pharmaceutical and pharmacokinetic. Speakers: Tian Wu (Amgen), Helming Tan (Amgen), Harvey Wong (Genentech)
  • Joint Bio2Device Group and EPPIC, Tuesday Evening, Aug. 12, 2014. Topic: “Diabetes and Cardiovascular Disease Risk Factors in Multi-Ethnic Groups: Comparison Study Findings from the MASALA Study.” Speaker: Alka M. Kanaya, M.D., Professor of Medicine, University of California, San Francisco
  • Golden Gate Polymer Forum, Tuesday, Aug. 12. 2014. Topic: Golden Gate Polymer Forum August Dinner Lecture: Light- and Air-Induced Reversible Self-Repairing Polymer Networks. Speaker: Prof. Marek W. Urban, Department of Materials Science & Engineering and Center for Optical Materials Science & Engineering, Clemson University
  • WIB, Wednesday Evening, August 13, 2014. WIB-San Francisco Bay Area Presents: South Bay Speed Networking

You can find the complete list of events included in Audreys Picks August 10, 2014with full details and the latest list of JobsThatCrossedMyDeskThrough August 10, 2014 by right clicking on the highlighted documents or on my blog found at www.Audreysnetwork.com.

Audrey

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