Friday, March 16, 2007

March Madness

March Madness is not about basketball.

March Madness is what you get when you learn that Pfizer will pay it's vice chairman Karen Katen $76.8 million to step aside when she leaves the company and you find it is considered chump change compared to the nearly $200 million that Pfizer's Chief Executive Henry "Hank" McKinnell got when he decided to step aside.

But this commentator to the above blog put this all in perspective:
What’s worse: Katen’s millions for running what was considered by many as the greatest Rx company in history OR paying drug reps $75,000+ a year to leave their house after 10am grab 10 quick signatures (never selling a thing!), spending $400 on lunch every day, then going home at 3pm. Get a clue! The whole industry is screwed up.


Anonymous said...

You think that's all a drug rep does? Many will say the same about a doctor who gets $100 for a five minute visit with a patient. In both cases, there is much more there then meets the eye.

DrWes said...

Anony 07:21 -

Let's do the math, shall we? Doctor bills $100 for 5 min visit, collects about $53 dollars from Medicare (if lucky). Of that, about say, $43 goes to pay overhead. Net profit: $10. Based on working 50 weeks a year at 40-hr work week, and assuming there are 12 five-minute periods per hour, the doctor's annual salary from those visits (assuming this is ALL he did all year), would be $240,000 per year.

Now lets work backward on $76.8 million for Ms. Katen. If this was given for a single year's work, we could take the same 2000 hours of work per year x 12 5-minute periods makes $3,200 take-home salary. To achieve this salary, she would have had to bill you $32,000 for the same 5 minutes to achieve her take (assuming the same take-home collection rate of 10% of the amount billed as in the example above).

And we're not even taking about the subsequent pension burden to Pfizer upon her departure.

Anonymous said...

Truly amazing! I may change to simvastatin sooner than later. I already choke each month when I pay for my Lipitor. Your anonymous commenter also failed to take the education that physicians have into account. I vote for the docs any day!