Breaking All of the Rules

As a follow up to my blog about the development of sulfa drugs I offer the equally compelling story of the next wonder drug Penicillin.

While it is generally accepted that Alexander Fleming was the modern scientist who brought attention to the drug penicillin, it is noted in every history of the drug that it had been used since the beginning of time by ancient societies upwards of 3,000 years ago to treat wounds and other bacterial infections of the skin. Fleming described his accidental rediscovery of the drug in 1928 at St Mary's Hospital.

At that time nearly all workers in Great Britian were covered for medical care by the passage of the National Insurance Act of 1911. Whether this first socialized medicine scheme was the reason we will never know for sure but for one reason or another the discovery of penicillin was then shelved for nearly three decades.

Then it was taken off the shelf by the need to treat wounded soldiers in WWII whose bacterial wounds were not responding to the "Red" pill described in my last post. First, however, the private labs in the United States had to "break all the rules" to develop the wonder drug.

The USDA established a lab in Peoria, IL in 1941 for the speedy development of the newly rediscovered miracle drug but could not develop a method to produce enough of the highly unstable chemical to fill the estimated need for a million doses by D-Day in 1944.

The project was languishing in Peoria until the "Drug Cartel" got together and broke all of the rules. Merck and Company, Charles Pfizer and Company, E. R. Squibb and Sons, and Abbott Laboratories were the industry giants trying to help government scientists but they were prohibited from working independently or collaboratively outside of government supervision by the Sherman Anti-trust laws in effect at the time.

Then John Wyeth and Brother, labs of PA broke the rules and hired a tinkerer from the American Home Products Company in Chester, PA named Raymond Rettew. Using an abandoned gas station garage Rettew used mushroom technology to create enough penicillin to supply the lab in Peoria. Then E. B. Badger Company broke the rules and hired a woman chemical engineer [the very first one from MIT] named Margaret Hutchinson Rousseau.

Margaret Hutchinson Rousseau was awarded a degree from Rice University in 1932. She then earned an advanced degree in chemical engineering in 1937 from MIT in Cambridge, MA. Badger's gamble on an untried woman chemist and mother of one young son paid off. she had previously developed a method to make high octane jet fuel. Using the same technology she then developed a procedure of aerating the penicillin to stablize the mixture and seperate the drug from the mushroom base.

As a result the engineers at Wyeth were able to ship 1 billion doses of penicillin to the US Army by June of 1944 and thousands of lives were saved that month and millions more in the years that followed.

But penicillin, the drug that was put on the shelf in government run hospitals in the social medical environment of Great Britain from 1928 until 1944 became a reality when US Capitalists broke the rules to develop the second wonder drug in medical history.

What would have happened if there were no private developers of new drugs in the US 1941? We know what happened when there were none in Great Britain.

Obama's pills

PINK PILL vs BLUE PILL

It is interesting that President Obama implied in his national media address on health care that the only difference between a costlier pill and a less expensive one is color. Why take a blue pill when a pink might be less costly? The White House is now proposing that one factor in keeping drug costs too high is the patent laws.

In making these arguments it is shocking for me to see these politicians who have degrees in History ignoring the historic role that color and patent law had in saving the life of FDR,Jr in 1936 and then in turn creating the public clamor in favor of the creation of the Food and Drug Administration. In one of the most compelling cases in patent law history it turned out that it was the color red that saved the life of the son of the President and millions of other people world wide to this day.

In 1932 the German Pharma giant Bayer concluded a five year research project on a red colored pill they named, Prontosil. The researchers noted that lab mice had been cured of bacterial infections when treated by the new drug. Prontosil was the first antibiotic and by showing the scientific community that bacterial infections could be treated it helped save many millions of lives throughout the world. Its developers received the Nobel Prize for Medicine.

But now the TWIST comes. It turns out that the color made all of difference in the effectiveness of the drug. And it was the patent for the medicines that helped scientists discover the true value of the color of the pill.

In 1936, the French Pharma group at the Louis Pasteur Institute realized that they could not compete with Bayer and other companies spending the equivalent of billions of dollars in today's economy on drug and patent development. So they took to researching how to create new drugs that were patent knock offs. That is, drugs that performed the same but were different enough to get around the patent laws.

The husband and wife research team, Jacques and Therese Trefouel, discovered that the red dye used by the Germans had a drying agent that made the color consistent. The drying agent's patent was old and in the public domain. But the real discovery was that the drying agent, SULFA, was the real antibacterial in the pill.

So color and patent law teamed up to create the world's first miracle drug. It is a twist that we should all be made aware of when looking to radically overhaul our pharmaceutical system.

The final twist in this story is the role SULFA then played in helping to form the FDA. Because the drug was off patent it was being manufactured by anyone who could mix the chemicals together to make the color red. There were no dosing regulations and no controls over the process. Eventually a small manufacturer unknowingly produced a sulfa drug with a mixture that was deadly for young children. The resulting outcry by the public helped in the creation of the FDA to regulate the manufacture and sale of medicines here in the USA.

It should be noted that the US is now the home to almost all of the top developers of new drugs and treatments. If we change our system how is it going to change the development of medicine? Or, is the White House simply saying that there is nothing new to be developed...especially if it costs too much.

Walter Cronkite

Walter Cronkite [November 4, 1916 – July 17, 2009],

He was the first TV News Anchorman for CBS and led them to the #1 rating over NBC in the early 1960's. But the joke among some young people, by the 1970's, went like this:

Walter Cronkite told me that if I voted with the GOP my vote would destroy social security, result in race riots on the streets of America, and involve the USA in a massive war in Asia.

I should have listened to Uncle Walter...I voted GOP and sure enough Lyndon Johnson did all of those things.

Those who have taken the time to read Walter Cronkite's written words since he was replaced at CBS now realize that he was indeed just a talking head [empty?] reading lines written by anonymous others.

Cronkite began his career as a disc jockey on WKY radio after being forced to withdraw from The University of Texas after four semesters of study. He traveled to several other AM radio stations as a sports reporter. He finally became a TV reporter in Washington, DC with WTOP in 1950 and because of his booming, officious voice and College Professor like looks was able to work his way up the TV glamour ladder.

But in later years he revealed that he had little insight into the events which swirled around him. He obviously supported Lyndon Johnson for President in 1964 and had no problem with Johnson's lies about Vietnam or other subjects. But Johnson lost Cronkite's support when he announced in 1968 that, unlike Harry Truman in 1952, he would seek a second full term. Evidently Cronkite felt as though Johnson had broken a deal in which Johnson would be a caretaker President until Robert Kennedy was ready to run for the office.

Cronkite then staged a mock visit to Vietnam during which he expressed shock at the lies he had been reporting all the years he supported Johnson. Cronkite blamed Johnson. But because Cronkite was seen by millions every night he assumed that he understood the American people. He never guessed that by derailing Johnson he had set the stage for a man he truly hated, Richard Nixon.

In later years Cronkite noted that the smartest man he ever met was Jimmy Carter. He noted that communism was a good system and he upraided John Kerry for not being Liberal enough. The saddest thing is that because he performed in front of millions he thought he knew the heart and soul of the American people. In reality we knew him but he never knew us.

Bailout Boondoggle Part II

The Face of the 2008 economic bailout belongs to Henry Paulson. He singlehandedly informed the world that the mortgage crisis in US publicly created Fannie Mae and Freddie Mac Corporations threatened the entire worldwide banking system.

Last week in testimony before the House Government Oversight Committee [chaired by the prominent NY member of the Black Caucus, Edolphus Towns], Paulson revealed that he had pressured Bank of America into its merger with Merrill Lynch. Mr. Paulson went on to defend the fact that he had secretly broken the intent of the TARP emergency legislation ten days after it was signed into law by George Bush... because he had to.

So it may be timely to look at the bio of Henry Paulson. A former Chairman of Goldman Sachs, Paulson joined a trio of former Sachs CEOs who became prominent politicians [Stephen Friedman was Chief Economic advisor to George Bush, Robert Rubin was Treasury Secretary for Bill Clinton, Jon Corzine used his millions to become US Senator and then Governor of New Jersey].

Paulson was reportedly an English Literature major at Dartmouth College. After College he joined the Nixon Administration and served as asisstant to John Ehrlichman during the Watergate investigation. He joined Goldman Sachs in 1974 shortly before his mentor was convicted and imprisoned for perjury, obstruction of justice, and conspiracy. Ehrlichman and Paulson were both Eagle Scouts and members of the Christian Scientist Church.

After joining Goldman Sachs, Paulson worked his way through several administrative posts until he finally rose to the position of CEO. It is noteworthy that the two previous CEOs at Sachs were Democrats during Democratic Party control of the Senate, House, and White House. Then when the GOP controlled the legislative and executive banches, Sachs elevated their Republican staffers to the CEO position.

Cynics who have watched several of Paulson's public appearances note that he is not a dynamic speaker and that he punctuates his congressional testimony with blustery self aggrandizement. He rationalizes his seemingly illegal actions as necessary to save the monetary system. But others wonder if he was saving the investments of friends...especially those in the foreign community.

By forcing AIG to honor the fraudulent insurance claims of Fannie Mae and Freddie Mac and doing the same with Bank of America and Merril Lynch some observers believe that Paulson was saving the investments of Chinese banking interests. It is suspected that Paulson has undisclosed investments in China as observers note that it has been reported that Paulson has visited China over seventy times in recent years.

If Paulson is guilty of what Conservative Congressman are suggesting he may well follow in the foot steps of his first political mentor, John Ehrlichman. It might be unlikely, though, since chairman Towns seems more interested in getting to the truth than in prosecution of members of the other party. But if the truth leads to criminality by Paulson, then he may yet be prosecuted.

Conservative Radio host and Fox News analyst Glen Beck has described Paulson's actions as similar to a liquor store heist of the US Treasury.

AIG Bailout Boondoggle

The term "Bondoggle" was first coined in the 1930's to describe government projects that had no real purpose other than spending money.


Today's definition is as follows:

a project funded by the federal government out of political favoritism that is of no real value to the community or the nation.
–verb (used with object)
4. to deceive or attempt to deceive: to boondoggle investors....



The term"Bailout" was originally coined to describe the proces of escaping a plane crash in the 1950's.



Today's definition has evolved to the following:



an instance of coming to the rescue, esp. financially: a government bailout of a large company. [Dictionary.com]



But the AIG "Bailout Boondoggle" is developing into something of a novelists dream. As of today both the Federal Reserve Board and the Treasury Department along with the Federally appointed oversight Board of Directors of AIG, collectively refuse to give precise details regarding the bailout.



Then AIG in congressional testimony revealed that they were not insolvent at the time of the bailout and did not need a bailout. AIG revealed that they took the position that traditional insurance policy clauses in their policies buffered them from fraudulent acts by the lenders and borrowers of the failed mortgages.



That is, the loans that went bad from FREDDIE MAC, FANNIE MAE, Citigroup, Merril Lynch among dozens of others were given insurance by the giant insurer as a result of fraudulent misrepresentations made by the lenders and/or were given as a result of statements by the borrowers that the lenders knew or should have known were fraudulent.



However, Federal Treasury authorities along with members of the New York Federal Reserve Bank alledgedly told AIG that if the giant insurer did not assert its rights to relief due to fraud the FEDS would bail them out financially.



Now an unusual coalition of Congressional Conservative Republicans and prominent members of the Black Congressional Caucus are committed to forcing the bipartisan group of financial managers to reveal all of the AIG financial figures.



Recently the Wall Street Journal reported that from a leaked document they learned that US Funds funneled through AIG went to a list of prominent US and International Financial Institutions including the following:



Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group. [Reuters]



Senator Christopher Dodd, the Democrat who chairs the Senate Banking Committee said, "The lack of transparency and accountability in this process has been rather stunning." [Reuters]



In my opinion it appears as though a cabal of financial players have grabbed control of large portions of the countries money and banking system. It appears as though they are both Republican and Democrat in political orientation. They are cloaking their actions as necessary to "save the system". But so far they are refusing to name which of their friends benefited from the "bailout" funds given to AIG and it looks very fishy.



It certainly would have been more transparent if the Fed had simply allowed AIG to assert its right to refuse to honor fraudulent insurance claims and save the individual banks from the fraudulent claims made by Freddie Mac and Fannie Mae.



But that may be the exact reason they did it this way...as a means of hiding what really happened and who is actually being saved.