Known and Unknown_ A Memoir - Donald Rumsfeld [135]
One of the more unexpected things I discovered as CEO of a pharmaceutical company was that I had to think as much or more about the federal government than I did about our competition. I had known on an intellectual level that government was involved in the private sector in a great many ways, but it was only when I was actually in business that I felt the full impact. The government was a participant in practically everything we did—from the IRS to the Food and Drug Administration to the Department of Justice’s antitrust division to the Federal Trade Commission to the Securities and Exchange Commission. We needed government clearance for almost all of our products. We also needed government approvals in each of dozens of other countries where Searle did business.
This was the case with the artificial sweetener Searle had discovered and had been developing for more than a decade. Aspartame was an example of the occasionally serendipitous results from research and development programs. In 1965, a Searle scientist was working on a treatment for ulcers involving amino acids. He happened to have some residual powder from two amino acids on his finger and accidentally discovered the sweet taste of the compound when he licked his finger to pick up a piece of paper.5
We knew that the products from aspartame could help the company, especially since there were questions being raised about the safety of the existing artificial sweeteners, notably saccharine. Searle had put aspartame through an extensive testing process, and the FDA had approved the product for commercial dry tabletop use in 1974. But a year and a half later, eighteen months before I joined Searle, the FDA took an almost unprecedented step when they issued a stay of their earlier approval of aspartame. The FDA had raised questions about Searle’s overall research and development activities, which had complicated the situation considerably. There was press speculation that the Department of Justice might indict Searle over allegations that some of the company’s research documentation might not have been in order.6 Given the cloud cast over Searle, aspartame began to look much less promising than had been hoped.
I was learning a critical difference between the federal government and the private sector. People in the public sector tend to be praised and rewarded for their efforts or intentions, rather than judged by the results of their actions. What government does is assumed to be respectable and in the interests of the public. The FDA, for example, is criticized only if it errs and approves a drug that turns out not to be safe or effective—as it should be. But there is no criticism of the FDA if it delays the approval of drugs that are safe and could save or extend lives.
Unlike in government, good intentions are not what are rewarded in the business world—results are. What matters is outputs, not inputs—that is to say, in business millions of dollars in investment mean nothing unless there is a fair return. In government, progress is often judged by how much money is thrown at a problem. Federal education programs, for example, are more often measured by the size of the education budget, not by the results they are producing, such as the graduation rate. And regardless of its mistakes, the federal government does not go out of business. If businesses make mistakes, they suffer, lose money, managers are replaced, or the companies go into bankruptcy. So while the FDA could wait as long as it wished in delaying aspartame, Searle paid the price.
The FDA stay of approval gave competitors more time to research alternative products to aspartame. It allowed critics of the sweetener to engage in a public