Open letter to Mr. Hassan from a Schering-Plough Employee

Dear Mr. Hassan,

Sir, I am just one of the faceless little people working in SPRI, no fancy title, no big stock option packages, just a long serving and loyal employee of SP, hoping to retire at the end of the year. I started at our site in Bloomfield (now closed) many years ago, and looking back over my long career I have invariably been proud to work at SP, the best company, in the best industry in America, just as I was proud to serve my country prior to joining SP.

I have, maybe foolishly, invested much of my savings in SP stock over the years and though I've lost quite a bit of money in the past few days, over the long haul, SP stock has been a pretty good investment, so I have few complaints. And I'm hopeful that, under your excellent leadership, the stock can bounce back, but, sir, it will require absolute candor from you and your management team about the ENHANCE trial to regain our hard won prestige with our customers and employees.

Over the years at SP there have been several ups and downs, as we all know, and I, for one, was very glad when you joined SP in 2003 to initiate our turnaround after one of the most difficult periods of the company's history.

I was at your very first town hall meeting. Sir, you were like a breath of fresh air and you convinced me to believe in SP, in our people and in our products. I remember thinking at the time, here is an honest man that, like a new broom, will sweep away the sleaze that infected our fine company under Mr. Kogan.

I was sold on the 'earn trust, every day' outlook that you introduced, and even practice daily it in my personal life. While many of the 'legacy' employees thought it was a bit corny, I believed in you and the corniness was, in fact, a plus, especially after all of the fast talking, sharp suits that ran the place before you came. I guess you might call me a bit old-fashioned.

Now we are once again in difficulties but this time I find that my faith in you is being tested. I'm finding that this business with ENHANCE is bringing up the bad old memories of 2001 and 2002. Sir, I am worried that the carefully worded press releases drafted by our legal team don't really answer the key questions that I, and many others, including Congress, have. I'm sure that this is due to the abundance of lawyers that are currently infesting SP. Everywhere I turn there is another lawyer. Don't misunderstand me, I'm sure they are fine people, and I do understand that you need some legal advice from time to time, but sometimes a man just has to do the right thing even if his lawyers tell him to say nothing. Mr. Hassan, this is one of those times.

Sir, I am using this forum as there is no other way of anonymously posing these questions to you. I'm sure that as an transparently honest leader, you will answer them in plain language, without resorting to all the caveats and lawyerly words that our legal friends are so fond of.

What worries me about all of our lawyerly statements in the press is that they seem to imply that nobody in SP could possibly have known anything about the negative ENHANCE results because the blind wasn't broken until Dec 31st 2007. I do know something about the running of clinical trials and although don't have direct experience in monitoring them, I do know that even blinded results can, and often do, reveal a lot about a study.

So my first question is: sir, were you ever made aware, before the blind was broken, that there was no difference in the primary endpoint between the treatment groups in the ENHANCE study? If so, when was this known? This seems to me to be a much more important timepoint than the date on which the study was unblinded and which is widely reported in the press.

The second question: did anybody in SP, at a vice president level or above, know that there was no difference between the groups while the study still blinded? Did this knowledge lead to any extra analysis of the the data in an attempt to change or delay the result in any way? Sir, it seems to me that if anyone knew that there was no difference in the primary endpoint, even though the study was still blinded, then they knew that the ENHANCE results would disappoint Wall Street and would have a negative material impact on Vytorin and Zetia sales. This could possibly have led to requests to conduct additional fruitless re-analyses of the images in the hope that the outcome may be changed or at the very least that the publication of the results may be delayed.

The third question: sir, will you give me your undertaking as CEO that if it emerges that anyone knew that the results would not show a difference in the primary endpoint, and that they used such knowledge for personal gain eg by selling company stock, that you will fire that person(s)?

The final question: sir, assuming that there was no dishonesty, and that no-one knew from the blinded results that there was any possible problem with not meeting the primary endpoint, then it appears that SP's handling of the PR has been a complete fiasco. Will you be holding those responsible for the PR fiasco, and huge losses incurred by the stockholders, accountable for their incompetence?

Mr. Hassan, you were a hero to me and I sincerely want to believe in the dream of the New Schering-Plough. The silence of Ms. Cox and the ambiguous press releases that seem to be carefully drafted by lawyers is hurting mine, and many of my colleagues, belief in the core values of our company, and sadly, sir, in you personally. You send us many emails and we are all very grateful that you take the time to communicate with those lower down the totem pole. Please take the time to send us an email that answers these questions in plain language and helps to restore the faith of SP's excellent workforce in you.

Thank you, sir.

Comments

[WK]

As a retired physician I find this letter poignant. It speaks to so many of our national crises, not only with healthcare delivery and its bloated costs (some due to RX prices reflecting poor mgmt as in this case), but also the insecurity of retirement investments.
I hope this employee gets some of the answers he requests. For shareholders like me, perhaps there will be some justice emanating from the various govt investigations.