Fraud, the Ever Present Story in Corporate Business (w/ Roddy Boyd)

BRIAN PRICE: Rod, you’ve been described as
one of the most feared men on Wall Street,
one of the most effective investigative reporters.
But that being said, you earned that title
given your ability to uncover fraud and wrongdoing
within public and private companies.
So what I want to do is just take a step back,
learn a little bit about who you are, your
education, your life, and how you got on this
path to discovering what it is that you were
put on this Earth to do.
RODDY BOYD: Just to be called an investigative
reporter is just what my life had been directed
to do.
I was born, you know, New York City suburbs,
Northern Westchester.
Pound Ridge, Bedford is where I was raised
And moved to Connecticut when I was 18.
I went to one of those kind of goofy boarding
schools up there.
And I kind of decided I wanted to get a little
more urban and wound up in University in the
Mid ’80s was an interesting time to be there,
but it was good.
I learned a lot.
I met my wife there, which I view as my primary
accomplishment there or primary benefit.
BRIAN PRICE: Likewise.
I came out of there with a degree in English.
And looking back on it, I certainly love literature,
but most of the time I was at Fordham, I was
really focused on journalism.
I used to cut a lot of classes just to go
to the library, and you know, get into the
microfiche or go back into the stacks for
really old copies of, quite frankly, papers
that aren’t around anymore, like The New York
Sun or I think one time, I was looking at
The New York– something– Telegram.
And I’d spend hours just reading.
I found the original the muckrakers, like
Ida Tarbell and stuff like that– you know,
what she did with Standard Oil and exposing
the Rockefeller colossus.
And I just, you know, it was brutal on my
grade point average, but I really wasn’t terribly
interested by my junior year in Chaucer, or
Milton, or Shakespeare.
I was, however, very interested in understanding
how life worked, how our government worked,
how policy was made, how the economy worked.
And I used to just spend hours, you know,
covering council meetings or doing exposés
around the campus and making no friends doing
And I learned to develop a thick skin and
I learned to do a lot of work.
I understood that if you’re going to say anything
in public, you best had do your work beforehand.
And doing work beforehand, I had learned–
I just sort of pieced this together– was
understanding fact sets, understanding rules,
regulations, the interconnection between business
and policy, or between finance and operations.
And I took all of that, did some stringing
or freelance work for the Greenwich Time for
a while, but I got married very young and
had a child pretty young.
And I decided that, well, while working as
a journalist for $13,000 or $14,000 a year
in 1990 was a noble thing, you know, my wife
and kid did have to eat.
And there were more kids behind it as I worked.
So I wound up on Wall Street for about seven
or eight years and really disliked it.
I disliked it intensely.
And most everything I did was– I used to
just sort of mentally say, OK, well, this
is one more day down till I can do what I
want to do.
And you know, I look back at one particular
I was a trader and I was on the phone with
a large, I think, mutual fund– or actually,
an institutional investor in Boston.
And this guy wanted to buy some convertible
preferred securities that I was selling.
And it was going to be a fairly good trade
for us, but I was talking to the guy and I’m
like, look, these are pieces of garbage.
I don’t think you’re going to be well-suited
to buy this.
I’ve done some work on the company.
Let me tell you what I think.
And you know, there’s just total silence on
the other end.
He’s like, are you a trader trying to talk
me out of a trade that– and you know, he
was just mad.
I mean, you know, the guy told on me, as it
were and I got in a lot of trouble.
And that’s what I just wasn’t made for that
life– wasn’t made for trading desk life.
And I was able to, but I learned an intense
amount about not only business, and finance,
and trading, and valuation.
So even though it was a rough proving ground,
I certainly acquired a knowledge base that
has served me remarkably well in later years.
BRIAN PRICE: So let’s jump to 2012.
And you’re part of the team that establishes
the Southern Investigative Reporting Foundation,
the mission of which is to have a goal of
providing in-depth financial investigative
reporting for the common good.
So given your work, given the fact that you’re
a board member of this foundation, are you
one of the loneliest guys in the world?
RODDY BOYD: At times.
I mean, at times.
I have long since accepted that I’m not going
to make a lot of friends doing this, that
while people profess to appreciate it, they
appreciate it in the abstract.
Everybody says they love investigative reporters
reporting, but they don’t really love investigative
And you don’t make a ton of friends doing
And you don’t, by definition, have a ton of
So yeah, it is a lonely job, but I mean, I
like it.
I think it’s important and it’s what I’m made
to do.
It’s what we need at this moment, quite frankly.
BRIAN PRICE: Why do you say that?
RODDY BOYD: Because there isn’t really other
people doing what I do.
I should say there are plenty of great reporters
out there.
And some of them do find business journalism
and some of them do it on the regular, but
there isn’t an organization out there dedicated
24/7 to exposing abuses, or misrepresentations,
or quite frankly, just plain old naked fraud
as their mission.
And our mission is to do it for the common
You know, we don’t take advertisement.
We don’t short stocks.
We don’t tell people when the story is coming.
We don’t do any of that.
And I think that’s important in this day and
BRIAN PRICE: With that, I want to start unpacking
some of your most impactful work.
And I want to start with Valeant and I want
to start with The King’s Gambit– Valeant’s
Big Secret, which made a lot of waves when
it came out.
Walk me through your work leading up to what
you suspected Valeant was up to.
And ultimately, does it start with a hunch?
Does it start with a gut instinct?
What ultimately led to this discovery that
really rocked Wall Street, and finance, and
the entire world that Valeant was a part of?
RODDY BOYD: That story is kind of the Southern
Investigative Reporting Foundation’s approach
to journalism in a nutshell, in that through
2013, 2014, 2015, and most of 2015, Valeant
was Wall Street’s darling and corporate America’s
And the investors it had attracted and the
serious accolades it was generating were unusual.
And I was attracted to it because there was
this sort of Olympian battle going on.
While it was being lauded, and making many
people rich, and attracting star investors,
on the other hand, there was a very loud,
defined, and serious coterie of Valeant skeptics.
People were doing a great deal of work– highly
credible people, in my estimation.
I mean, most publicly would be Jim Chanos,
the guy who runs Kynikos Investments– Kynikos
Partners, I believe– and was quite public
that this was a roll-up– just a company that
was using acquisition accounting to its benefit.
Eventually, they would not be able to implement
across-the-board absurd price increases.
There was another short seller out there that
was quite public, Fahmi Quadir.
John Hampton had written about it extensively.
So there were these people who are highly
BRIAN PRICE: And I want to just note, Fahmi
was the protégé to Marc Cohodes.
RODDY BOYD: Yeah, yeah.
Well, she was at a place called Krensavage
Capital Management, I believe.
And so you have these highly credible people
on both sides.
And the journalism, quite frankly, was reflecting
It was very obvious who was talking to who.
And I don’t view my job as just intermediating
this fight or just noting that the fight’s
going on.
I wanted to do a lot of work and find out
what really is going on.
And I took a step, I said, OK, I’m going to
try and find something about Valeant that
no one knows about.
And this is like an absurd thing, right?
You’re looking for a needle in a stack of
needles because everybody’s combing over this.
And 4:00 o’clock or at 3:00 o’clock in the
morning, I’d woken up one time and couldn’t
get back to sleep.
And I just started scrolling through a Cafepharma
message board, which is this kind of pharma
industry chat site where people gossip about
their bonuses, or talk about what’s selling,
or this doctor or that manager is a jerk or
a prince.
And I found something on like page 14 of Valeant’s
message board– you know, screen 14, so it
shows you I’d been there a while– and it
was some guy was saying that he was going
to get in trouble if he talked about Philidor.
And he was being told, you know, telling all
these doctors just to call Philidor and it
will work out great for the patient.
And he’s like, uh, hey, guys, anybody know
what Philidor is because they told me not
to talk about it internally?
So he’s just throwing it out there, you know,
hoping a rep from another district picks it
And some guy replied a day later explaining
roughly what he thought Philidor was, which
was a fulfillment center, but it might be
a specialty pharmacy.
And there was this cryptic line in it and
it’s the reason this company is profitable,
and in fact in business.
And I was like, well, what’s that mean?
So I just– you know, again, so it’s 4:30
in the morning now.
I crank open my 10-K and I’m like, this company
really is benef– I think Chanos and Hempton
had the truth of it.
This company is a roll-up and they’re not
being able to grow organically.
So well, if you can’t grow organically, the
minute you stop buying big companies for more
and more money, and piling on more and more
debt, you’re going to be in a great deal of
Now that might be in 15 years, and, you know,
the stock might be $970, and all the short
sellers are bankrupt, but when that day comes,
it’ll be a reckoning that’s going to be cruel.
I was like, how is this company Philidor this
crux of the company?
So I started making calls and asking people
across the industry who might have an idea
what it was.
The company wasn’t talking about it.
And it took me weeks.
I mean, I’m talking weeks to get an informed
sense of what it is.
And I finally was able to start pulling documents
on the company.
They were registered in lots of different
states, but you couldn’t figure out who is
on the board, who was the beneficial owner.
There were hold cos on top, like one of those
Russian nesting dolls.
And so I was able to disaggregate that after
weeks and months.
And then I got really lucky just as I was
about ready to throw my hands up in exasperation.
Because you can’t go out to the public, you
know, when you’re a nonprofit and say, hey,
donate or support SIRF, and here’s something
that might be something, but it might not
be anything.
Here’s what I know and here’s what I don’t
know later.
You know, like, that just doesn’t happen.
So I was able to find buried somewhere, a
copy– a video copy– of a proceeding from
the California Pharmacy Regulation Board or
some such.
And they were essentially rejecting the application
of Philidor to have a specialty pharmacy in
the state of California.
Well, that’s big news right there.
And then it’s also big news because California
is, what, 10% of the American economy?
So I got lucky there.
I got to see a face and a name.
And I actually got in my car and I went up
And I saw the operation.
I just figured this might be some storefront
kind of like these things you see on side
streets of New York City, like little cell
phone stores that are like six foot by eight
Not so.
This was a massive– it was in a former, I
think, paper mill.
I mean, it’s multiple 1,000 square feet, 600,
700 employees, and expanding.
And you know, well, I was able to get on some
And they’re paying above market wages, so
it tells you they’re profitable.
And I pieced all this together.
And part of what I think makes SIRF, SIRF
is we approach the company and I laid all
this out– you know, a very, long, detailed
email and series of phone calls to Valeant’s
press operation– a woman named Renee Soto
at Sard Verbinnen, an outside PR company was.
And they kept me going for about a week or
I held off, I held off, and finally, I get
an email from her saying, oh, you know, regarding
your questions, just listen to the conference
call on Monday.
Well, I’m like, what?
They’re not reporting earnings.
They’re not– what’s going on?
And I looked at they had moved up their conference
call and this was going to be part of it.
And I was astounded.
I mean, this is companies don’t do that.
They schedule their calls, and then they don’t
move them up unless there’s a damned good
And the only thing I could think of– and
might be totally self-referential and flattering–
was these series of questions I’m asking about
And I just put it out at 6:00 that morning,
maybe 6:15, the morning of that conference
I think it was October 15 or 16, 2015.
And again, I just thought I had an interesting
Hey, this might be additive to these, you
know, Jim Chanos– a rich guy– throwing lightning
bolts at Bill Ackman– a richer guy– you
know, Harvard, Yale guys.
I mean, this is just not my milieu.
BRIAN PRICE: Fordham guy.
RODDY BOYD: And I’m a Fordham guy.
And so I just throw out that little thing.
And I promptly, I think I went for either
a run or did some push-ups, showered, shaved,
and was making my kids lunch.
I turn on my cell phone.
Let’s say it’s 7:15 that morning.
I have 19 messages, and then I have a message
from my cell phone provider, Verizon, saying,
you know, capacity full.
You know, you need extra.
You know, you need a new plan.
I have texts from people I’ve never heard
My email box is at like 44, 48 emails.
And I’m getting these long, iambic pentameter
practically, 1,500-word emails from people–
from serious investors, not kind of day trading
margin monkeys.
You know, these were serious blue-chip investors.
I just said to my wife, what the hell is this?
She’s like, Roddy, it looks like you caught
a fish here.
And still, you know, the day is going on,
and I’m doing my day, and trying to get through
And the stock opens up and it’s down a yard.
I mean, it’s down a lot of points.
And I think within five or six hours, a guy
named Andrew Left of Citron Research puts
out a real flamer of a piece, like this is
the next Enron or something.
He had called me enraged that I had posted
I’ve known him for years.
And I just still wasn’t grasping it, which
again, speaks that I’m totally isolated.
I’m in coastal North Carolina, not in this
New York milieu plugged in.
And at that point, my office was in my house.
And she’d come upstairs like, you’ve got to
come downstairs and see what’s going on.
I’m like, oh.
I figured, oh, my god.
What’s happening?
Something really bad.
I go downstairs.
She’s got like Bloomberg News on and they’re
talking about SIRF.
And they’re talking about this conference
call where the CEO Mike Pearson couldn’t really
answer the question.
I mean, they had some absurd, you know, scripted
nonanswer answer.
And I think from then on in, I think SIRF
was– we were established.
People saw that there was some utility here.
BRIAN PRICE: Should Mike Pearson be in jail?
RODDY BOYD: I think so.
I mean, look, I’m not a federal prosecutor.
In my mind’s eye, I am, you best believe.
But I am not a lawyer and I don’t work for
the Southern District, but I am convinced
he knew exactly what Valeant was, he was keeping
it from shareholders, from the investing public.
I’m convinced there was a series of dishonest
gambits involved in it.
He should at least be civilly sanctioned through
the SEC on disclosure violations.
But I mean, I think some of this stuff is
certainly criminal.
And I don’t believe that it stopped with just
two guys.
I mean, I just don’t.
And I don’t know how he isn’t in jail.
He certainly shouldn’t be free and affluent
in suburban New Jersey.
That’s for damn sure.
BRIAN PRICE: Well, and how about receiving–
what is it– $83,000 a month after he initially
steps down as CEO.
He’s a senior advisor, but he’s still being
RODDY BOYD: Yeah, he’s actually still working
on transactions at that point, when I was
able to– I was talking to sources within
Valeant who were like, you really won’t believe
who I spoke to today.
And I’m like, oh, hey, you know, what?
I’m figuring, oh, they talked to another reporter
some because I had a good source and I figured
this guy had been discovered.
And he’s like, no, it was Mike Pearson.
You know, we were working on squaring away
this Walgreen’s deal or something.
I was like, he what?
Like how?
I mean, are you kidding me?
I mean, and it just goes to show.
I mean, this is one of the things that SIRF
is trying desperately to do is stand in this
gap between the financial media’s economic
trouble– you know, this sort of the collapse
of the media– on one side, and then sort
of regulatory inertia on the other.
You know, Jesse Eisinger wrote a great book
called The Chickenshit Club.
And I’d recommend it to anybody, but he talks
about the stunning lack of conviction among
so many prosecutors and regulators these days
to prosecute white collar fraud.
So in that gap, we’re going to stand.
That’s our sort of mission and I think that’s
for the common good.
BRIAN PRICE: With that in mind, I want to
also discuss some very important work you
did with AIG in mind and the book you wrote,
Fatal Risk– A Cautionary Tale of AIG’s Corporate
When we think about the events of ’08, ’09,
and the crisis, do you look at that moment
in history and where we’re at now, and potentially
observe people who haven’t learned valuable
Who’s at fault, perhaps, for not operating
in a responsible, safe way within the market,
within the economy, within the US that has
you most concerned right now?
RODDY BOYD: Well, I mean AIG and companies
like it are how we got here.
I mean, I’m pretty convinced.
I’m not trying to be partisan, but I’m pretty
convinced you can’t get Trump elected or you
can’t even get the candidacy to the point
where he’s in punching distance of the GOP
nomination in 2016 if you didn’t have a complete
collapse of white collar prosecution in the
years after the financial crisis.
I mean, the fact that nobody went to jail,
that nothing was broken up, that there were–
there were certainly at the margins, or I
would argue respectfully, minor ways, some
small regulatory shifts here.
They’re, of course, are being pared back now,
but the fact that no one with a big name and
a bigger paycheck got in trouble after that
multi-year episode with the reams of evidence
we had suggests that the fix is in– that
either our politicians weren’t telling us
just how bad it was, that if you break up,
let’s say, Citigroup, that it would have knock-on
effects across the world, or if you kick out
a recidivist, almost criminogenic entity like
HSBC– if you say, you can’t do banking in
the United States of America– or RBS, which
is just a little less horrid than HSBC, that
it might bring down England, as it were, then
I feel personally that should have been said
to us in some form or another.
It’s just been left to us to fill in the gaps.
Well, they did this and this, and they didn’t
do that and that.
You can kind of read tea leaves and suppose
that things were actually much worse than
we thought in 2009, ’10, and ’11.
But if that’s the case, you’ve got to tell
And I think a lot of Americans thought that
something should have been done, someone should
have been held to account.
And the elites– the people who essentially
make the rules in Washington and Wall Street-
– weren’t terribly punished from that.
I think that we’re now reaping that whirlwind.
Institutions that make me worry– I mean,
look, I’m not smart enough to be like Jonathan
Tepper or these people who think on a macro
basis, but I mean, I don’t think a terrible
amount has been improved post-2011 or ’12.
I just think we’ve inflated the system enough
that things are, quite candidly, materially
more stable, but we have less institutions
that are just bigger.
And yes, they’re better capitalized and they’re
not lending abusively, or as abusively as
they were.
But I mean, I think there’s– you know, the
answer to an overly-concentrated economic
system in which commercial banks and investment
banks were completely intertwined and huge
to begin with, completely vertically integrated,
was just to merge all these sick sisters together
and hope that you get one healthy family member
at the end of the battle.
And well, that’s what we have now.
And I don’t think that that was the right
So if you were to say to me, well, we get
low rates again and it stimulates just tons
of lending and speculative activity– maybe
not home based, maybe it’s commercial real
I don’t know.
Maybe it’s autos, boats– you know, I could
see stuff happening.
| mean, I don’t think crises necessarily repeat.
They just have similar characteristics.
So the junk bond collapse of ’88, ’89, that
essentially put Drexel on its knees and was
down for the count when the Fed fined him
in ’90. had similar characteristics to 2003
and ’04 Orange County crises.
You know, I mean, they all had similar characteristics,
which is intense concentration of leverage
and decreasing valuation in one or two entities
are going to have knock-on effects among an
increasingly concentrated sector.
And you know, what the next trouble is?
I don’t know.
Maybe China.
Maybe China has its day of reckoning.
I know there is a huge alignment of China
shorts out there versus China bulls.
I certainly don’t have enough knowledge to
weigh in, but God Almighty, they’re leveraged.
And we have all the exposure in the world
to them.
If anything happens, we’re going to lose a
lot of weight really quickly when we didn’t
want to be on a diet.
So I mean, that’s one thing.
BRIAN PRICE: Well, that helps lead me to my
next question.
And I want to quote Josh Wolfe of Lux, who’s
also a– RODDY BOYD: Oh, sure BRIAN PRICE:
–friend of Real Vision, a frequent guest.
We love having him on.
And he tweeted out just the other day saying
that, the tide is turning.
When the tide is high, rates are low, cash
runs out, fraud gets done.
He then cites Theranos, the Fyre Festival,
crypto hustlers, the admissions scandal that
we’re seeing play out right now.
RODDY BOYD: Delicious.
It’s delicious, yeah.
BRIAN PRICE: And he then asks, what or who
is next?
And so I want to pass that question to you.
What or who is next?
RODDY BOYD: If you put a gun to my head, I’d
say if– you know the old Warren Buffett adage,
when the tide goes out, you get to see who’s
swimming naked?
I think private equity operations are going
to be the real loser in any let’s see who’s
accurately and fairly valuing assets, let’s
see who has deployed capital rationally, let’s
see who has operated with reasonable levels
of leverage.
And I think private equity operations across
the board fail that test.
There obviously are– I’m not trying to indict
the concept of private equity in which you
just take over entities and you can manage
them better, buy entire businesses or discarded
I mean, I think there is economic value to
be had there within an economic system.
What private equity is now though is so far
from, I think, what Gibson Greetings and William
Simon in ’81– it’s preposterous that you
see the transactions out there.
You see how they just suck cash out of businesses.
I’m not saying that they’re all bad people.
But I’m saying, within some very large private
equity shops, I have been astounded at the
poor management of the assets they have, the
abusive behavior in terms of just not investing,
and sucking cash out, and piling on debt.
And I think, eventually, some big shops are
going to get in trouble.
My guess would be we’re going to need an event
to catalyze that, right?
Now, I don’t know what that is.
I just have in my mind– and I have been–
it’s not good form for a reporter to talk
a whole lot about what he or she is working
But I certainly can say with confidence that
I’ve been looking at more than a few kind
of big name shops that are– let’s say, Apollo,
you know?
And you look at that place, and you’re just
like, god, look at the crap they’re buying,
you know?
Just what are they doing?
Now, I guess their limited partners love them.
But you know, you look at, like, Blackstone.
Like, how are these places even publicly traded?
I mean, it’s– you’re just like, my god, you
They win.
The people who manage those funds win.
Their LPs, I guess, do OK.
But jeez, the shareholders don’t seem to be
getting a whole hell of a lot of value.
That’s just one example.
I mean, that’s not a systemic problem.
I think it’s more.
I also think, from a sort of a moral or ethical
capitalism question, the way private equity
conducts itself with that, we need to just
get lean and firing employees, I do think
that it’s bad for the American economy in
the long term to have actors like that, the
Chainsaw Al Dunlaps and people.
I don’t think it grows enterprise value on
a long-term basis.
I think managers like Buffett, you know, not
a perfect guy or example, but I think that
example of if you’re going to own a business,
well, you bought it for a reason.
Get people in there who you think can manage
it and let them manage it as opposed to just
buying something, butchering it so that its
entire ability to grow, be a dynamic enterprise
is essentially removed, but you can still
harvest cash from it.
I mean, I have great concerns about the long-term
effects of private equity on the American
You know, Apollo just seems to buy garbage.
And they manage to make it work through piling
on debt and taking dividends.
And I guess it all works for their limited
I think over time, though, you buy enough
crap and it catches up to you.
Now, it’s been a while for Leon Black, and
he’s a billionaire.
So I don’t know if any of this matters.
You know, I look at Blackstone and just say,
I look at that stock, and I look at how they
run that business, and I’m like, well, you
can be pretty sure that maybe their LPs are
doing OK.
And the people who run the business there
are certainly doing OK, Steve Schwarzman,
et al.
But you can’t look at their investors and
say you’re doing too terribly well.
And I just think it’s an abusive business
construct that– You know, it all connects
back to that Harvard Business School kind
of mindset, shareholder value.
It sounds wonderful.
And it’s agreeable to a point.
But I don’t think it’s the best framework
or methodology for growing value long term
for investors, who are the risk takers, as
well as other stakeholders.
I mean, a well-run businesses is a beautiful
You know, it provides value.
It provides jobs.
Those in turn, you know, make our communities
better to live.
And I’m sounding like a parody of liberal
leftist, isolated journalist.
So I don’t want to– [LAUGHS] I’ll end my
rambling there.
BRIAN PRICE: Well, it sounds like one of the
most feared men on Wall Street just took a
warning shot at Apollo and Blackstone.
RODDY BOYD: Yeah, yeah, that’s fair.
BRIAN PRICE: Well, promise me– RODDY BOYD:
Yeah, I hate those guys.
[LAUGHS] BRIAN PRICE: Say that again.
RODDY BOYD: I dislike those people intensely.
BRIAN PRICE: Promise me as your work progresses,
you’ll come back and talk to me about it.
RODDY BOYD: Absolutely, absolutely.
BRIAN PRICE: Let’s move on.
BRIAN PRICE: Let’s look at health care.
BRIAN PRICE: I want to talk about a recent
post on your website.
And you spoke to the health care crisis in
this country citing price gouging, abusive
loopholes, hidden risks to patients, baffling
regulatory decisions, marginal efficacies,
and the use of doctor payments to stimulate
drug sales.
Ultimately, how do you see all these factors
coming together to destroy lives?
But more importantly, how do we fix them?
How do we address this crisis?
RODDY BOYD: I mean, this is the classic dilemma
of the American relationship to business.
You know, business works well when you have
clear and defined guardrails.
Like all games, all contests, if there is–
you know, look at an NFL game.
You know, it would be appalling to watch without
rules and regulations.
It’d just be a big bar fight with a leather
football being tossed around at the margins.
And I think business is kind of the same way.
There has to be really bright line regulations.
It has to be enforced clearly, fairly, and
And none of this works.
None of this works at all because we allow
lobbyists and businesses to carve out exemptions,
and loopholes, and all sorts of riders and
attachments to rules.
And it makes the– The American health care
experience for the taxpayer, for the average
citizen is just concentric levels of horror.
Yeah, and there’s no way out.
You can go insured.
You can go uninsured.
Either way, it just gets– one’s more expensive.
The other just ties you up in, you know, red
tape and expense, you know, plenty of expense
So the reason– how we got here is a function
of– largely a function of these just lack
of willpower.
In terms of doctors, like, look at doctors
and opioids.
You know, we have very clear, unambiguous,
like a kid could understand these regulations.
I mean, you have to– lots of informed consent
both on the patient and the physician side,
on the prescriber side.
Oftentimes, they require the patient to fill
out a form, sometimes watch a video or sit
through a talk, quarterly updates.
But we don’t really monitor physicians who,
let’s say, prescribe seven times over their
regional average, the average amount of, let’s
say, Class II opioids in that area.
I mean, it’s just the abuse of off-label.
People go in and get these short-term opioids
for chronic conditions like, let’s say, a
disk degeneration or things, you know, old
sports injuries.
You know, opioids are designed for short term
They’re designed either on one side, the palliative.
So you’re giving somebody who’s terminal rest
so they can sort of pass with dignity.
Or to stabilize them when they’re in a trauma
They’re not designed to be taken four times
a day over six months.
And we allowed this industry, or an aspect
of the pharmaceutical industry, led by Purdue
Pharmaceuticals, to create this medical notion
that these are going to be long-term drugs,
that there is good science behind it.
I mean, what it is, basically, Purdue essentially
bribed a couple of doctors in the mid-’90s
to sign a marketing document that pain is
the fifth vital sign and all of this nonsense.
And again, this is just one little aspect
of our trouble.
But I mean, we have lots of trouble with the
FDA monitoring sharp spikes in fatality or
morbidity, I guess I should say, in drugs
or dubious efficacy.
OK, well, it might work for somebody.
It doesn’t work for most people.
But it might work for somebody.
Let’s get it out there.
Yeah, I mean, let’s try something.
I mean, I get some of their thoughts along
these lines.
But I don’t think that we’re doing better
as a society by having to– if these drugs
are out there, Medicare’s paying for them.
There’s spiking morbidity.
I mean, I just think that there has to be
a better way of addressing this.
If America is going to be the engine that
drives pharmaceutical profits so they can
plow it back into R&D for the world, if we’re
going to put that on our backs as a people,
I think that we’re entitled to a better class
of regulation and enforcement than we’ve gotten.
Because it seems to me that the FDA and wide
sections of the broader Department of Health
and Human Services, with the exception of
their Office of Inspector General, I have
to say, are fairly co-opted by the medical
community on one side or the pharmaceutical
community on the other.
And I don’t think patients are benefiting
from it.
Now, I have to note that there are some incredible
We have the ability now to wipe out Hepatitis
C. What a break that is.
What an incredible medical leap forward.
So I mean, I do think that the industry is–
there are gains being made.
There’s been slow but steady improvement in
life expectancy across all kind of cohorts
of oncology.
Breast cancer used to be fatal just 15, 18
years ago, or medium-term high levels of morbidity.
Now, I mean, people or women are living much
I mean, so we’ve made remarkable progress
in a number of different areas.
So I’m not at all trying to suggest that this
industry is doing nothing for us, or you know,
they’re just purely rent-seeking, to use an
economic term.
But I mean, I do think that if we are going
to be the cow that generates the cash, we
deserve a better pasture.
You know, we deserve more than we’re getting
from our regulatory system, especially since
Medicare is hundreds of billions of dollars
of expense a year, well it’s– BRIAN PRICE:
Well, undoubtedly, advancements have been
made within the medical community.
But I want to stay on the dark side for a
second because I think there’s– RODDY BOYD:
Well, it’s my favorite side.
It’s– BRIAN PRICE: There’s a lot to unpack
And if examine the catalyst, whether it’s
greed, whether it’s ineptitude, whether it’s
some combination of the two, when you look
at the opioid epidemic in this country, could
it be framed as pharmaceutical genocide?
RODDY BOYD: Genocide is a strong word.
I am fairly confident, though, that the amount
of people killed, the amount of American citizens
killed by overdosing or the mass distribution
of opioids since, let’s say, the mid-’90s–
again, Purdue is in the vanguard there.
But I mean, you have plenty of people right
behind them– Cephalon, I’ve done a tremendous
amount of work on Insys Therapeutics.
I mean, you can just insert name, Galena Biopharmaceutical.
God, they’re just all in there.
I think the amount of people dead since the
mid-’90s from this class of drugs certainly
is approaching the amount of fatalities we
suffered in, let’s say, the European theater
of operations in World War II.
I mean, we’re definitely into the six figures
And I’m not counting heroin here, OK?
So you can’t say genocide.
But you can say that it’s done to us what
Hitler and other people, other implacable
enemies of America couldn’t do.
And no hyperbole.
bin Laden, just insert a name, any name.
You know, all the enemies outside of our soil
couldn’t do to us what a privately held pharmaceutical
company along Atlantic Street in Stamford,
Connecticut could do to us.
So I mean, I definitely think that’s sort
of the absolute perfect encapsulation of complete
regulatory capture, that the DEA and relevant
FDA organs, HHS, had seen the spike in abuse.
They saw that, certainly by the late ’90s,
OxyContin was being abused.
And it was being shipped in volume to places
where the abuse was most intense.
They saw that.
And for some reasons, they didn’t do anything.
I mean, right now, as we’re sitting here talking,
in a courthouse in Boston– I was just there
for six weeks.
In a courthouse in Boston, on Seaport Boulevard,
the Moakley Courthouse, five executives from
Insys Therapeutics are on trial.
And I said to a couple reporters in the press
gallery there, I said, there should be a sixth
defense table, and the FDA should be there.
They’re the silent sixth defendant in the
Insys Therapeutics case, where the abuses
of the opioid industry are put on– or just
nudely being displayed.
Because the FDA had chances in the late-’90s,
the early aughts, ’02, ’03, that famous instance
where Giuliani came in.
And you know, at that point he’s running Giuliani
Partners and sharply advocated against criminal
prosecution of some of Purdue’s executives.
I think ’06 and ’07, when you had the Purdue
settlement, again, they allowed them to do
some self-regulatory kind of– there was a
large fine.
Three executives pled guilty to one charge.
But I mean, it really didn’t knock that company
And you see that lack of– again, is it regulatory
willpower on one side or prosecutorial direction
on the other?
I don’t know.
I mean, we do know now that Eric Holder, and
Lanny Breuer, and all of them, you know, certainly
were holding the DOJ back in ’09, ’10, ’11
from wide-reaching prosecution.
Again, there’s just so many instances where
abuses in the system– putting aside the concept
of addiction across our broader– the broader
problem of treatment and addiction, which
exists broadly across our society and all
strata of our society– You know, the most
abusive aspects of the opioid– the companies
that sold these drugs weren’t really curtailed
until recently, until you started seeing the
prospect of executives at Insys Therapeutics
going away for 15, 20 years apiece.
But even then, I mean, they have– OK, they
went after a bunch of people there.
But I mean, they’re not the only company doing
this, you know?
I mean, there’s just a ton of work to be done
BRIAN PRICE: Rod, is it fair to say, with
all this in mind, that the FDA is on your
RODDY BOYD: Yeah, I mean, I– SIRF wasn’t
set up to do these all-encompassing investigations
of a massive enterprise like the FDA.
But I think that I might have to rethink that
eventually, maybe get up with some other reporters,
do some– maybe some other organizations,
and just start to look at that institution
as a standalone.
Like, how do we keep on having these problems?
No system is going to be perfect.
And you know, the idea of eliminating risk
from pharmaceutical development, and the idea
that we’re never going to have bad drugs,
and that drugs are going to be cheap, and
abundant, and effective, let’s not live in
Cloud Cuckoo Land.
But we can do better than what we have right
Those rules are in place.
I mean, we don’t really need new rules.
We need to allow the people at the DEA to
interdict the most abusive aspects of, let’s
say, the pharmaceutical industry, with the
opioid wing.
We need to perhaps have a– stick to rigid
interpretations of kind of classic testing
OK, well, you did a double blind trial, and
it worked over standard of care?
OK, you’ve got a drug.
Go do it.
Away you go.
Or oh, hey, it didn’t really prove better
than placebo?
Or you didn’t really stage a proper trial?
You did 31 people, and it was unblinded, and
it’s– you know, you’re not really showing
that this is scientifically scrutinized.
You owe– You know, if this is going to be
paid by Medicare, if this is going to be covered
by the taxpayer, you owe the taxpayer the
duty of applying scientific rigor to the approval
It’s not perfect.
Science is never perfect.
No drug is perfect.
At the end of a day, no matter what drug you
or I take, we both have tombstones with our
name on it eventually.
I mean, we need to accept these things.
That’s a different conversation.
I do think we’re placing, at some level, too
much pressure on the pharmaceutical industry
to stop cancer.
I don’t know that we’re ever going to eradicate
But I mean, we’ve been able to certainly curtail
the most– other diseases.
You know?
I mean, so– BRIAN PRICE: Well, I mean, I
don’t think we’re asking them to stop cancer.
RODDY BOYD: Yeah, yeah.
BRIAN PRICE: But I think, as consumers, we’re
hoping that the folks who are tasked with
doing a job are doing it to the best of their
ability so if I put something in my body I
know that the people behind that medicine
have done their due diligence, aren’t putting
me in a position of risk.
I think that is a reasonable standard and
a reasonable expectation.
RODDY BOYD: I have no arguments with you.
I mean, well, let’s just sort of jump aside
180 and just look at the idea of price.
There should be the ability to import non-Schedule
II, non-narcotic drugs from Canada.
Canada is every bit as “civilized,” quote-unquote,
as the United States is, often, quite frankly,
much more civilized than the United States.
Their economy, their infrastructure is every
bit as advanced as we are.
Their pharmaceutical manufacturing processes
are as rigorous and as scientifically and
chemically valid as ours.
And so why can’t we import allergy medicine
from Canada?
Why can’t we import other pills, from antibiotics,
or other things, again, nonnarcotic, from
But I mean, you look at the voting bloc senators
from New Jersey and Pennsylvania.
And again, I understand that the pharmaceutical
industry is large, has a lot of employment
in that area.
But I mean, these– we should have that.
That should be an option.
But it’s not.
You know, we can’t really buy drugs that we
should be able to buy from Canada.
I mean, that’s just like– at every step of
the way, even incremental, rational steps
are blocked, or truncated, or just completely,
in that case, shut down.
And it’s ridiculous.
I mean, I’m not sure why you’re paying $80
for a drug when you could be getting it for
$10 in the mail or something like that.
How all this would work, don’t ask me.
I’m a reporter.
I mean, I’m not a businessman.
I understand there’s complexity and challenges.
But I mean, that’s just a great answer.
How do we get here in this system, where we’re
reinforcing price gouging, abusive behavior,
poor scientific– or we’re incentivizing poor
scientific outcomes?
Well, you know, it starts with shutting down
rational avenues like that.
BRIAN PRICE: Well, as your work focusing on
the FDA perhaps progresses once again.
RODDY BOYD: No, yeah, yeah, happy to.
BRIAN PRICE: Let’s stay on companies that
you’ve been studying for quite some time.
What’s your assessment of Acadia Pharmaceuticals?
RODDY BOYD: I mean, Acadia is a troubling
And I think that a more muscular response
by the FDA, if not investors, is warranted.
I mean, their drug Nuplazid certainly had
sort of a dubious scientific background.
OK, it’s approved.
I get it.
I guess I can accept it.
But I mean, it’s obvious that it’s being prescribed
in great volume off label, that they are simply
getting up with the highly put upon, stressed,
and challenged medical directors of nursing
homes or care facilities.
Oftentimes, these places are lightly regulated,
to be charitable.
And it’s fairly obvious if you track, let’s
say, the Center for Medicaid and Medicare
Services open payments data that they’re just
pouring cash into some doctors who are prescribing
it en masse, off label as a sedative.
Because I mean, at the end of a day, it is
a sedative.
And you give it to grandma or grandpa or Uncle
Stu or something like that, they are going
to be much more chill than they are going–
than they are.
Now, I get it.
I mean, if you’ve ever had any family members
who are beginning to have central nervous
system deterioration– Alzheimer’s, Parkinson’s
in my family– it’s a brutal, demeaning, degenerative
It is absolutely the area where medicine has–
it is a hill that every one has died on.
The amount of drug research that has been
expended by major, Western world pharmaceutical
companies is in the multi-billions of dollars.
You’re almost not in the game unless you’ve
written off hundreds of millions of R&D on
I have a lot of empathy for people who are
just grasping for treatment.
The thing is, is it just medicates them for
a little while.
It doesn’t do anything for the underlying
conditions, I think, based on conversations
I’ve had with a lot of sources inside and
outside of the FDA.
And it really is leading to a, I would argue,
a spike in fatalities.
Now, I understand the length or duration of
life among people who have, let’s say, mid
to late stage Parkinson’s, or if it’s off
label for Alzheimer’s, which is where they’re
trying to go.
Let’s be clear.
It’s a cohort where you’re going to see higher
People are at the end of their life.
That said, I do believe there’s probably got
to be a better way than just throwing this
wet blanket on them, you know, this central
nervous system wet blanket.
It’s remarkably profitable for them.
It’s allowed.
We have a system where, because of the rough
parallels between Parkinson’s and Alzheimer’s
and dementias and Lewy bodies, you know, we
have a system in which that isn’t going to
step in and say, OK, is this indicated at
Now, if it’s indicated and it doesn’t work,
or you know, hey, that’s on the label.
It has the label that says this is a risk.
You know, all eyes open.
But when it’s pretty obvious that it’s being
written just for Alzheimer’s patients.
I mean, in my story of last year, where I
talked about– we pulled some of the longer
form adverse event report data.
And you could see that it’s being written
constantly for people who don’t even have
the indication.
And a few times, it wasn’t even written for
people who had any prospective dementia.
So I mean, that, to me, is just– you know,
that’s in the wheelhouse of malpractice.
Again, not my place to be making those micro-arguments.
But it does speak to a system where– I’m
not trying to be an idealist.
I just have to believe that there– if we
just deincentivize this behavior, I think
we’ll be better off as a nation.
BRIAN PRICE: All right, I want to thank you.
RODDY BOYD: Oh, It’s been an honor.
Thank you.
BRIAN PRICE: Please come back and join us
here at Real Vision.
RODDY BOYD: Oh, trust me.
Trust me.
BRIAN PRICE: Thanks so much.
RODDY BOYD: Will do.

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