I noticed this one on my trip to Canada last week.... From the Globe and Mail, a story about the ongoing travails of Biovail, a large Canadian drug-maker best known as the manufacturer of Wellbutrin. The article described how the company's largest shareholder, Eugene Melnyk, is promoting a buy-out to take the company private, prompted in part after the company "became a pariah when regulatory probes, governance issues and operating profits drove the stock price down." But, "Mr. Melnyk has attracted controversy at Bioval because of his compensation and governance practices." "In 2001, he earned $122-million, making him the most handsomely paid CEO in the country, and in one three-year stretch he pocketed $226-million by cashing in stock options." In addition, "the U.S. Securities and Exchange Commission announced recently that it was expanding its 18-month investigation into the company's accounting practices.... The Ontario Securities Commission is probing four instances of probable insider trading involving Biovail, along with whether a company press release about a trucking accident in the fall of 2003 contained 'misleading statements.'" The press release apparently arose after the company issued a profit warning due to an accident in which a single tractor-trailer truck whose load included Wellbutrin XL got in an accident outside Chicago. The company valued its cargo between $10 and $20 million.
This is just a reminder that management and leadership issues are hardly limited to US health care organizations.
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