The 2012 Wacky Wabbit Awards
Yes it is that time of the year when Diabetic Investor hands out our annual awards to the wackiest of the wacky in the wacky world of diabetes where anything can and usually does happen. This year we’ve decided to name the annual awards in honor of that silly rabbit Bugs Bunny and Elmer Fudd as this year has been particularly silly and overly wacky, so the Wacky Wabbit Awards will take their place alongside past award such as the Corporate Frog Awards which were given out last year.
So without further ado let’s get to it and give the first ever Wacky Wabbit to none other than the American Diabetes Association (ADA), yes that non-profit organization which is supposed to support people with diabetes. Earlier this year the ADA took some flak from the PC crowd when the organization accepted a $100,000 donation from the Coca Cola Charitable Foundation, a foundation which is founded by the same company that makes those sugary soft drinks which New York Mayor Bloomberg thinks should be banned from the planet.
Now never mind that this money was put to very good use supporting some excellent programs for patients with diabetes, nope the national ADA wasn’t overly thrilled that the Atlanta Chapter of the ADA took this money from this evil soft drink emperor. Keep in mind this is the same organization which has seen donations DECREASE over the five years. According to their own annual reports donations to the ADA have declined from $104 million in 2006 to slightly less than $82 million in 2011. Now the ADA is not the only non-profit who has seen donations decline over this period but it seems to be the only non-profit that thinks that any business that makes money is evil.
There was so much flak over the acceptance of these funds the ADA is forming a task force, and no this is not a joke, to determine whose money the organization should accept and whose is not worthy. If all this seems crazy, and it should, think about this for a moment. Over the past four years NIH funding for diabetes related research has barely moved from the $1,080 billion in 2008 to $1,076 billion in 2011. It also important to note that diabetes ranks well down on the list of diseases that receives NIH funding, even when these other diseases inflict lesser damage than diabetes, a fact that the ADA itself acknowledges.
It’s also important to note that no matter what happens with the fiscal cliff, one thing is almost certain in that it is highly unlikely the NIH budget will be increased and more than likely will be cut and everyone knows what the means less money for research. So at a time when donations to the organization are DECREASING and government funding for diabetes related research is also DECREASING, the ADA has formed a task force to decide what good money is and what bad money is.
Now if Diabetic Investor had any confidence in this task force, which we don’t, their first meeting should be their last meeting and they should issue a proclamation that the ADA wants everyone’s money no matter how that money was earned. Frankly we could care less whether donations come from companies who happen to make diabetes devices or drugs, soft drink makers, fast food conglomerates, the sugar plum fairy or the gingerbread man. Take the money and put it good use helping people with diabetes. After all isn’t this the mission of the ADA to help people with diabetes and does not that mission require funding?
What does the ADA have to say about all this, the same thing every organization that is failing says when asked; “were doing the best we can and looking at every possible way to turn things around.” The harsh reality is the ADA has lost total touch with the real world and has become lost in their own fiefdom. Keep in mind this is an organization that wanted to support Mayor Bloomberg in his quest to ban large sodas but won’t take a position on competitive bidding, reimbursement issues or actually anything that is not research related.
Yes it is true that research is important and Diabetic Investor is not suggesting for a moment it should not fund research, however to the majority of people living with diabetes TODAY this research won’t help them pay for testing supplies or get the FDA to be more reasonable when it comes to approving new drugs or devices. Looking at the economy, the budget issues facing this country and the fight for every dollar by every non-profit to Diabetic Investor the answer is not only to go after every dollar no matter who gives it but to increase the pool of potential donors. And about the only way we know increasing the pool of donors is to take on issues that are important to these donors TODAY, issues that if solved would help make their lives EASIER.
Sadly Diabetic Investor is not holding our breath waiting for the ADA to change and come out of their ivory tower. The fact is there is widely held belief within the organization that industry is evil and that any relationship the organization has should only be with organizations that are purer than the Virgin Mary. As noble as this may be, it is also highly unrealistic and downright stupid. Diabetes is growing at epidemic rates, one in three children will develop diabetes in their lifetime, there are another 60 to 70 million people with pre-diabetes, diabetes is the number six killer, cost the economy billions of dollars in medical expenditures and lost productivity – worst of all nearly two-thirds of all patients are not properly controlling their diabetes which will only make everything worse.
The simple fact is the ADA needs every dollar they can get and shouldn’t be finding new ways to alienate themselves from those willing to give. For their complete lack of getting with the program the ADA earns the very first Wacky Wabbit Award.
The second Wacky Wabbit also goes to a couple of non-profits as the Juvenile Diabetes Research Foundation (JDRF) and the Helmsley Trust who decided it was a good idea to give a multi-billion dollar corporation, Medtronic (NYSE:MDT) millions of dollars so that they would pursue research and possible commercialization of an insulin delivery system that Medtronic didn’t think was worthy of pursuing but changed their mind when someone else was willing to pony up the bucks. Now we know this is a crazy idea but shouldn’t this be going the other way with Medtronic, a company who makes millions from the sale of insulin pumps, to be giving money to the JDRF and not taking money from the JDRF.
This only happens in the wacky world of diabetes and earns the JDRF, the Helmsley Trust and Medtronic a Wacky Wabbit Award.
No wacky award could be complete without looking at our friends in Indianapolis, Roche and Lilly (NYSE:LLY). Now to be fair Roche only deserves only a partial Wabbit as their new Nano glucose meter is good product but it is their insulin pump unit that has earned them the award. Recently Diabetic Investor had the opportunity to talk with the company about this unit as we were curious how they planned to succeed after so much failure. It’s a fair statement to state that few companies have done greater harm to their brand than Roche and as we note with regularity the insulin pump market is one touch nut to crack. When asked what their goals were for this unit the company noted their goal was to provide patients with more choice. Thinking perhaps the question was poorly worded or that the company did not understand the question we asked again only this time made it clear we wanted to know how they would define success from a business perspective, as we don’t think stakeholders in Roche care about expanding the number of insulin pumps a patient can choose from and would prefer instead that unit actually sell as many systems as possible and possibly even make some money. It should go without stating but the company really doesn’t have any goals or at least any they are willing to share. Which is likely the reason why the unit is in the mess it is and likely won’t get out of, for this the Roche’s insulin pump unit earns a Wabbit.
Across town from Roche is Lilly who earns their Wabbit for taking a legacy franchise and turning into a dead franchise. The company should actually earn a second Wabbit for deciding it was better to have a series of me-too, copycat, and late to market drugs than to own the first and so far only once-weekly GLP-1.
Frankly it takes real talent to turn gold into sand, something which both Roche and Lilly excel at. Thank goodness for the Colts and their amazing coach otherwise people might have a distorted view of Indianapolis thinking it only produces losers.
We’d like to give Sanofi(NYSE:SNY) a Wabbit but think they suffered enough and besides it just might be possible to turn sand into gold as we should soon find out if they ever get around to actually closing the deal with Bayer, who in their own right deserves a Wabbit for not being able to close this deal.
A collective Wabbit goes not to the companies who are “developing” either a non-invasive glucose monitor or a non-invasive continuous glucose monitor but to the investors stupid enough to invest in these companies. The fact that people willing throw money at these sham companies is conclusive proof that the diabetes market is truly wacky.
Finally a Wabbit goes to no other than Diabetic Investor itself for waiting so long to actually have a Facebook page and not quite getting this Twitter thing. Yes we know this is the future and that social media can play a valuable role helping patients with diabetes. But alias we are not always the brightest blub on the tree and sometimes are preoccupied with such mundane things like providing everyone with thought provoking material on the wacky world of diabetes. And as 2012 should this is one wacky world and quite frankly wouldn’t have it any other way.
Happy New Year everyone.