Supplement or Medicine?
WHEN IS A TRADITIONAL herbal remedy a dietary supplement and when does it become a pharmaceutical that draws attention from the U.S. Food and Drug Administration? According to the Wall Street Journal, Bill McGlashan, MBA '90, is in a regulatory no-man's land looking for that boundary.
      Today U.S. law makes it legal to describe how a dietary supplement works. While it can't be claimed that a gingko extract cures Alzheimer's disease, it is legal to say that studies show the extract can help the brain function better. Encouraged by the more liberal law, McGlashan formed Pharmanex, a firm to test and market traditional folk remedies.
      Investing $26 million in product development, quality control, testing, and laboratory and manufacturing facilities in China, Pharmanex soon began marketing Cholestin, a red rice yeast that can reduce bad cholesterol. The problem, said the Journal, is that Pharmanex's research has shown that one of the active ingredients is a chemical compound identical to a substance called Lovastatin patented by Merck as a prescription drug to lower cholesterol. By being vague and claiming simply that Cholestin improves blood flow, Pharmanex can market its product, observed the Journal. By proving that its compound is chemically the same as Lovastatin, Pharmanex fuels the debate over whether Cholestin is a medicine and requires testing and whether it infringes a patent. "We just wanted to say exactly what the product does," McGlashan told the newspaper.

Tobacco Decision Lights Up Debate
"IF FLORIDA SLAPPED a 1 percent sales tax on every shirt or bottle of milk sold in California, Californians would never put up with it. So why aren't California and the other 48 states raising the roof over the settlement between the state of Florida and the tobacco industry?" asked Business School professors Jeremy Bulow and Daniel Kessler in an editor-ial page piece in the Wall Street Journal. They were attacking an agreement that will award Florida future damages from tobacco companies propor-tional to national tobacco sales. Among other arguments, the two economists protest that the legislative, not the executive and judicial branches of government, must decide taxes and that the penalty is actually a tax increase, rather than a payment for damages.

Armor Amour
A SELF-PROCLAIMED TANK nerd, Jacques Littlefield, MBA '73, is the proud owner of 46 tanks and another 80 or so military vehicles he houses on his property in Portola Valley, Calif. "I'm interested in all mechanical things, how they work, how they run. The fact that they're weapons is almost beside the point," he told the San Jose Mercury News. His collection includes a Russian-built self-propelled gun once used by the Czech army, a U.S.-made tank used in the 1973 Yom Kippur War, and enough spare parts to restore and keep the machines running.
      Littlefield has hosted visiting military veterans, retirees from companies that made some of the vehicles, and others interested in the history and workings of the machines. Some day, he says, he may move the collection to a museum, such as the U.S. Army's Gen. George S. Patton Museum at Fort Knox, Ky.

Laura Esserman defended the Defense Department's role in breast cancer research.

Photograph by Daniel Murtagh

Defense Against Breast Cancer
THE U.S. DEPARTMENT OF Defense has been an unlikely but excellent home for important breast cancer research, according to Dr. Laura Esserman, MBA '93, a surgeon and director of the Breast Care Center at UC-San Francisco. "Throughout its history, the Army Medical Corps has made major contributions to research that has helped civilians as well as troops," Esserman and Congresswoman Nancy Pelosi wrote in the San Francisco Chronicle. The DOD activities include work with civilian cancer survivors and grass-roots advocates, as well as with researchers, physicians, and nurses, they explained. The two wrote to contradict criticism that the Defense Department was not an appropriate venue for such research.

Calling Dr. Miller
SINCE RETIRING as vice chairman of Chrysler Corp. in 1996, Steve Miller, MBA '68, has "built an unusual second career as a rent-a-CEO, dropping into companies in crisis and reassuring workers and investors that things aren't so bleak," says the Wall Street Journal. Currently, Miller is installing new accounting practices, slashing the workforce, and overhauling the purchasing system of Waste Management Inc., one of the world's largest waste handlers. In December he became the firm's fourth chief executive in a year, but he has stated firmly that he won't consider taking the post permanently. He has held similar positions with Olympia & York Developments Ltd., Morrison Knudsen Corp., and Federal-Mogul Corp.
      Miller relishes the roll-up-the-sleeves attitude that takes over when a company is in serious trouble. It is the well-run company that frightens him a little, the Journal reports, quoting Miller as saying: "I wouldn't want to be the new chairman of Coca-Cola. Give me a basket case."

Bidding for an Oil Bonanza
IN THE TWO YEARS since becoming president and CEO of Conoco, Archie Dunham, SEP '84, has embarked on an ambitious path to double the firm's asset value to $30 billion within six years. Conoco has purchased a giant gas field in South Texas, has outbid rivals to win operating rights to Venezuelan oil fields, and is completing a huge refinery in Malaysia. "My goal is nothing less than for Conoco to be recognized as a truly great, integrated, international energy company," Dunham told the Wall Street Journal.
      Forbes observed that the venture that is currently sinking 500 new oil wells into a grassy plain in Venezuela could cause a dramatic shift in the oil industry away from dependence on the Middle East. New drilling techniques now make the Venezuelan oil easier to extract and could drastically reduce the amount of oil imported into the Western Hemisphere.

Myron Scholes received a fanfare for his formula at the Nobel ceremonies in December. Laura Esserman defended the Defense Department's role in breast cancer research.

Photograph by Palm Ulf (Pica Pressfoto)

Ruffles and Flourishes at Stockholm Fete
IN A GLITTERING ceremony held in Stockholm's Concert House December 10, Myron Scholes and nine other Nobel laureates were saluted with royal fanfares as they were presented their 18-carat gold Nobel medals by Sweden's King Carl XVI Gustaf. Some 1,800 guests entered the flower-filled hall for the ceremony, and 1,300 attended the formal dinner that evening.
      Scholes, the Frank E. Buck Professor of Finance, Emeritus, at the Business School, and Robert Merton of Harvard were honored for their work in the creation and development of the Black-Scholes Model, used to calculate option prices. The late Fischer Black did the original work with Scholes.
      "What they developed was the correct formula for making a purchase of an option, any derivative security, neither a bargain to the buyer nor a bargain to the seller, but a cor- rectly priced asset item--and that was not an easy task," 1970 Nobel laureate Paul Samuelson said in a CNN special on the awards. "You could say that that was the holy grail."

Kyoto, Continued
EFFORTS TO SUBSTANTIALLY reduce emissions of greenhouse gases, chiefly carbon dioxide, could push the world economy into a recession greater than the one occasioned by the oil shortage of the seventies, predict Henry S. Rowen, GSB professor emeritus and director of Stanford's Asia/Pacific Research Center, and John Weyant, director of the University's Energy Modeling Forum. They argue in the Wall Street Journal that emissions reduction goals set in Kyoto, Japan, last fall would be difficult or impossible to meet without serious economic damage.
      The most promising idea proposed by the United States, they said, was to establish a trading system "similar to the current system that allocates rights to emit sulfur oxides among U.S. coal-fired power plants." Under such a system, if producers of greenhouse gases produced less than a certain amount of emissions, they could trade the difference to other producers.