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Donald Rumsfeld & Tamiflu: How an urban legend hurts pandemic planning

Have you heard about Donald Rumsfeld and his connection with Gilead Sciences, Inc., the developer of Tamiflu?

Well, if you have, you've probably heard wrong - because the story of Donald Rumsfeld and his "Tamiflu millions" basically is an urban legend, in my opinion. Unfortunately, like most urban legends, it keeps getting repeated. Even more unfortunately, some of the people repeating this myth (and giving it an air of credibility) are professional journalists. And, MOST unfortunately, it is hurting efforts to prepare for a possible flu pandemic.

If you haven't heard the story, it goes something like this:

  • Donald Rumsfeld (U.S. Secretary of Defense) served from 1988 to 2001 on the Board of Directors of Gilead Sciences Inc., the company which developed the antiviral medicine Tamiflu. (He was Chairman from 1997 to 2001.)
  • Tamiflu is the most prominent of the two antiviral drugs currently available for treating symptoms of influenza.
  • A lot of governments, corporations, and others are buying Tamiflu for use during any possible influenza pandemic.
  • Donald Rumsfeld owns stock in Gilead Sciences and is making a lot of money from his stock because Tamiflu sales are much higher than normal.
  • There's something wrong with this, so Donald Rumsfeld is bad.
  • (While we're at it, the Bush administration is bad, too.)

Some even add the absurdity:

  • Rumsfeld (or the Bush administration) has fabricated - or at least hyped - the bird flu threat in order to stimulate Tamiflu sales (for Rumsfeld's personal gain).


Bird flu hoax + Tamiflu hype = Rumsfeld millions

To see how widely this story has been repeated, I searched on Google for: bird flu bush rumsfeld tamiflu. These were among the first 10 items returned:

  • Defense Secretary Rumsfeld sees growth in Gilead stake

  • Donald Rumsfeld to Profit Millions from Bush Spending on Avian ...

  • Bird Flu Scare - 'Handsome Profit' For Rumsfeld

  • The Blue State.com: Rumsfeld is making millions off of bird flu ...

  • Who Owns the Rights on Tamiflu: Rumsfeld To Profit From Bird Flu Hoax

  • A silver lining for Rumsfeld in the bird flu threat

  • Donald Rumsfeld Makes $5 Million Killing on Bird Flu Drug

The story is out there all right.


Accurate information ... ignored

Through simple fact-checking, it's easy to see that Rumsfeld's accusers conveniently ignore key information - information which pretty much discredits their criticism.

It's certainly true that Gilead benefits from sales of Tamiflu. Gilead developed Tamiflu, then licensed the Swiss pharmaceutical firm F. Hoffmann-La Roche Ltd to manufacture and sell the drug. Roche pays Gilead a royalty based on Tamiflu sales. The question is: How much does that royalty contribute to Gilead's revenue?

The clear message from Rumsfeld's critics is that higher Tamiflu sales are singularly responsible for the nice appreciation in Gilead's stock price in recent years. To them, Tamiflu is Gilead. It's not. In fact, even with the bird flu-related demand, Tamiflu sales in 2005 accounted for less than 7% of Gilead's revenues.

Less than 7%. Are you reacting to that fact the same way I reacted? Something like, "Are you kidding me? People are criticizing Rumsfeld, claiming bird flu-driven Tamiflu sales are giving him huge profits in Gilead stock, but Tamiflu is less than 7% of Gilead's revenues?"

You know and I know that professional journalists and political pundits can find this information as easily as I can. (Just go to Gilead's Web site, click on "Investors" ... then "Financial Information" ... then "Annual Report." I'll make it even easier - here's a direct link.) Finding the information is easy. The hard part (for some people) is accurately reporting what you find.


So where does Gilead make its millions?

What are Gilead's main products? (I guess Rumsfeld's critics don't know. Or they choose not to mention the information.) The majority of Gilead's revenues (69% last year) comes from three products to treat HIV (www.Roche-HIV.com). Their next largest source of revenue is a product to treat severe fungal infections. Next is a product to treat Hepatitis B. Then we get down to that little 7% from Tamiflu.

Rumsfeld's critics have conveniently ignored the fact that Gilead isn't a Tamiflu company nearly as much as it's an HIV treatment company - and that 93% of Gilead's revenues come from sources other than Tamiflu.

It would be as logical to talk about Proctor & Gamble shareholders making a killing from battery sales. Batteries?? Isn't P&G the company that makes beauty and health products (Cover Girl, Head & Shoulders, Crest, Pepto-Bismol) and household care products (Tide, Pampers)? Yes. But they also happen to make Duracell batteries, which accounts for a small slice of their business (sort of like Tamiflu at Gilead). But we don't think of P&G as "the battery company."


On the fringes: pandemic threat is a hoax to sell Tamiflu

As I mentioned earlier, some people carry this into the realm of absurdity, contending that the threat of a flu pandemic is a hoax designed to sell Tamiflu.

That would mean Rumsfeld or the Bush administration has fooled all of the world's virologists, epidemologists, the WHO, CDC, other public health experts and agencies, veterinarians, the poultry industry, the risk managers at countless global corporations, economists, and everyone else (including you and me). And it ignores the fact that many of these experts - representing many countries - themselves have initiated the public warnings about the risk.


Losing credibility; Misleading others; Motive?

Three summary observations:

Observation #1: Sloppy reporting or political ravings can damage credibility. I have a question for the journalists and bloggers and all the rest who keep repeating this Rumsfeld-Tamiflu tripe. If you represent such as factually valid and reasonable, and people then find out it isn't, why should they believe you about other things? It makes you look uninformed and unprofessional, at best, or conniving, at worst. Unreliable, in any case.

Observation #2: Here's the main reason I'm upset. This is one more example of misinformation which encourages the public NOT to take the pandemic threat seriously. This Rumsfeld-Tamiflu tale makes some people think the pandemic threat has been overstated (or even fabricated) for someone's personal gain. As a result, people dismiss the risk, perhaps at their peril.

It is a needless, confusing distraction - one more piece of "noise" drowning out much-needed information about the pandemic threat. These efforts to alert the world to Donald Rumsfeld's supposed ill-gotten gain is anything but a public service.

While many people who repeat this urban legend aren't thinking about such ramifications, I've seen it on at least three bird flu and public health blogs. There's just no place for it. It's at cross-purposes with our communications needs.

Observation #3: This Rumsfeld-Tamiflu story is so ill-reasoned, given the plain facts, that you might wonder why anyone would claim such. But the motive is probably simple: many "Bush bashers" are too eager to grab any excuse to criticize Bush and everyone around him. Sometimes they grab pretty flimsy excuses.

That's my take on it, anyway. I'm confident I have the Rumsfeld-Gilead-Tamiflu facts straight. My assessment of the critics' motive is more subjective, of course - but probably correct. Wouldn't you agree?

(As always, if you think I do not have the facts straight, email me. I'd be interested to hear what you have to say.)

Stay tuned. Tomorrow, I'll dissect an example of the Rumsfeld-Tamiflu urban legend - from no less a source than The Independent, a major daily newspaper in London. [UPDATE (March 15, 2006): Here's a link to my follow-up post about The Independent.]

FOOTNOTE: This isn't the only place where Tamiflu has been the focus of misinformation. Two leading risk communications consultants say specious reasons are used to discourage people from stockpiling Tamiflu.

UPDATE (2-1-07): Tamiflu accounted for 12% of Gilead's revenues in 2006, according to Gilead's financial results reported yesterday. Meanwhile, sales of HIV-related products accounted for 70% of Gilead's revenues ... and were almost six times larger than its Tamiflu revenues.

So the two points still stand, of course: (1) 88% of Gilead's revenues come from sources other than Tamiflu - mostly from HIV-related products. (2) People were making charges of ill-gotten gain back when Tamiflu accounted for less than 7% of revenues in 2005 (even lower before then).