Rumsfeld: $5 Million Profit from Bird Flu

I know there are a lot of people who are extremely concerned about bird flu—many of whom, in fact, are concerned that we’re not getting worried enough about a possible pandemic. Suffice it to say, with less than 200 human cases worldwide, I’m not especially anxious about it, mainly because my particular paranoia directs me to wonder who profits off of health scares. In the case of the bird flu, I have my answer:

[Tamiflu] was developed by a Californian biotech company, Gilead Sciences. It is now made and sold by the giant chemical company Roche, which pays it a royalty on every tablet sold, currently about a fifth of its price.

Mr Rumsfeld was on the board of Gilead from 1988 to 2001, and was its chairman from 1997. He then left to join the Bush administration, but retained a huge shareholding.

The firm made a loss in 2003, the year before concern about bird flu started. Then revenues from Tamiflu almost quadrupled, to $44.6m, helping put the company well into the black. Sales almost quadrupled again, to $161.6m last year. During this time the share price trebled.

Mr Rumsfeld sold some of his Gilead shares in 2004 reaping - according to the financial disclosure report he is required to make each year - capital gains of more than $5m. The report showed that he still had up to $25m-worth of shares at the end of 2004, and at least one analyst believes his stake has grown well beyond that figure, as the share price has soared. Further details are not likely to become known, however, until Mr Rumsfeld makes his next disclosure in May.

Tamiflu is not a cure for bird flu, but is an antiviral which “can reduce [bird flu’s] severity” if taken soon after the appearance of symptoms. It is “the only oral medicine believed to be effective against the deadly H5N1 strain of the disease,” and massive stocks have been ordered by more than 60 countries, based on the alarming predictions of a possible pandemic.

Color me cynical. Something tells me that Rumsfeld was no more randomly lucky in catching this break than I will be randomly unlucky in catching the bird flu.