Medtronic Has A Real "Bead" On Mardi Gras Time (Updates)
Two days after Eli Lillyannounced it'll become the first major drug company to publicly reveal its payments to physicianscomes a sexy article in today's "Wall Street Journal" and condensed on the WSJ's "Health Blog" about Medtronic'salleged past spending on docs.
There are reports of booze, women and beads--as in Mardi Gras beads. Specifically, the piece cites allegations from a lawsuit brought by a former MDT attorney who says the medical device maker sponsored a "discussion group" outing to New Orleans. Part of the discussion apparently took place on a Mardi Gras parade float that MDT paid $20,000 to $25,000 to put some docs on.
But, of course, a parade float ride wouldn't be complete without beads to throw. And for that the WSJ story says the company spent $15,000. Fifteen-grand worth of beads! That alleged expenditure also captured the eye of Miller Tabak healthcare analyst, Les Funtleyder. So he did a quick, back-of-the-napkin analysis.
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In a research note to clients this morning he writes, "At $0.25 (that's 25 cents) a strand of beads that is 60,000 strands of beads. We assume it was for the physicians on the Mardi Gras floats which depending on the size of the float is probably around 20 people or 3,000- beads each. We do not believe the physicians would have had enough time during a four hour parade to disburse the beads (125 strands/per physician/per minute seems unlikely). Next year there might be margin improvement potential if MDT supplies its physicians with fewer beads." Hilarious. Nice work, Les.
Medtronic declined to comment for the WSJ article, but has previously claimed that it doesn't do that kind of stuff anymore.
Laissez le bon temp rouler!
Update: Blog reader Jacob Quater, who has a Boston Scientific email address, writes into Pharma's Market with his mathematical calculation on the Mardi Gras bead rate of distribution:
"Please check your (Les Funtleyder's) math: at 3000 strands of beads per physician, and 4 hour ride - it comes to 12.5 strands per minute, not 125!!"
Thanks Jacob. Takes me back to my dreaded SAT exam.
Update 2: This story just keeps on giving. This afternoon Medtronic posted this statement about the WSJ article on its website basically saying that it "regrets" that the paper has dredged up alleged stuff that happened a long time ago, which it remains under a gag order of sorts not to discuss. And, as I pointed out in my original post, MDT says it has since cleaned up its act and supports proposed legislation to make the entire industry behave.
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