He mentions that he was at a conference recently where ‘the senior executives spent the entire day talking about profits, market share and growth... they never once mentioned that the pharmaceuticals they were selling were saving lives, or that changes in the product or its pricing could reduce side effects or the load on the patient and her doctor.'
And yet many years ago the credo of George Merck (Merck, Sharpe and Dohme) had been:
‘We try never to forget that medicine is for the people, it is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered, the larger (the profits) have been.'
What happened in the pharmaceutical industry to make profits more important than healing and curing? Did the bean counters take over?
And is that what happened at BP as we watch the horror that is hundreds of gallons of oil gushing into The Gulf Of Mexico?
Did the bean counters and studiers of the bottom line forget that they were in the business of providing oil for industry and communities; but that the oil needed to be delivered safely and with great respect for the environment? Or did they just rush to saving dollars and focusing on the bottom line? Because boy, their bottom line looks sad right now given that they are having to shell out (excuse the pun) US$20billion to all those communities who have lost their livelihoods - and in 11 cases - their lives. Their share priced has halved and banks are reluctant to prop up their loans. Not to mention the fact that, until the leak is plugged, which could take months, it could take decades for the environment to recover.
Consider these cost cutting decisions that various people made:
- Only 6 devices were used to centre the drill instead of the regulation 21
- The equipment required to centre the well in all 21 places wasn't on the rig and officials decided against flying the equipment to the rig
- BP saved us$7-10 M by using a more risky option for well casing
- BP decided against a 9-12 hour procedure that would have tested the integrity of cement. A service team was on the rig but BP sent them home
- BP decided against a 12 hour procedure to fully circulate drilling mud - a process that would have helped detect gas - gas later shot up the well and caused the explosion
- BP did not secure the connections or casings between pipes of different diameters
Not such cost saving ideas in the end were they?
Ann Andrews CSP