Pharma Scandal: Doctored Photos and Wasted Billions

  • An extremely important medical story the mainstream mostly buried
  • Photo fraud leads Alzheimer’s researchers off-track for 16 years
  • China ups the ante on Pelosi, Wall Street yawns for now
  • Beware the “inflation whipsaw” in stocks (shades of the 1970s)
  • Reader recollections about the Great Depression (geese are involved)
  • Kudos from longtime subscribers for the new Paradigm.

Apart from anything COVID-related, it might be the most important medical story in years — and the mainstream has more or less buried it.

The U.K. Telegraph is one of the few outlets that picked it up: “The key theory of what causes Alzheimer’s disease may be based on ‘manipulated’ data which has misdirected dementia research for 16 years…”

Yeah, so we’re not talking about an innocent goof. Let’s call it what it looks like — fraud.

At issue is the “amyloid plaque” theory of what causes Alzheimer’s. Maybe you’ve heard of it — not least because nearly every attempt to treat or cure Alzheimer’s since 2006 has assumed these plaques are to blame. As the theory goes, the brains of Alzheimer’s victims get gummed up with plaque the same way that plaque clogs up the arteries of people with heart disease.

It all began with a 2006 research paper published in the journal Nature. And it’s all come crashing down this year with a six-month investigation published in the journal Science.

With the help of molecular biologist Elisabeth Bik, Science discovered what it calls “shockingly blatant” evidence of image tampering. That is, the researchers in 2006 “appeared to have composed figures by piecing together parts of photos from different experiments,” Bik says. [Emphasis ours.]

“The obtained experimental results might not have been the desired results, and that data might have been changed to… better fit a hypothesis.”

Seriously, you can’t make this stuff up… but it appears the researchers did.

“The amyloid theory of Alzheimer’s is bull, yet Big Pharma has dumped untold billions into this bogus idea,” says our science-and-wealth authority Ray Blanco.

Word. Years ago, Pfizer developed a drug that attacked the plaque. It didn’t work. Eli Lilly tried its own version. It was so flawed, it accelerated patients’ Alzheimer’s symptoms… and Lilly halted the trials.

For nearly as long as Big Pharma has been led down the primrose path of amyloid plaque, Ray has suspected something amiss.

“Simply clearing out the protein plaques in the brain doesn’t seem to be the best way to halt or reverse the disease,” he said in The 5 in 2015.

“Something further upstream is causing them, and it also shares responsibility for damaging the brain’s function. It may be that beta-amyloid plaques are some sort of defense mechanism against the root causes of the disease.”

That was still heresy when Ray said it in 2015. Last year, it became conventional wisdom.

In June 2021, the FDA approved an Alzheimer’s drug made by Biogen, brand name Aduhelm. It was the first new treatment for Alzheimer’s since 2003.

There’s no question Aduhelm can remove amyloid plaques. But the trials demonstrated no ability to slow the symptoms of Alzheimer’s.

Which kinda punched a huge hole in the amyloid plaque theory, no?

The FDA approved the treatment anyway — overruling its own advisory committee. The approval was such a scandal that several prestigious hospital systems — including the Cleveland Clinic and Massachusetts General — refused to administer Aduhelm. Many insurers refused to cover it.

The inescapable conclusion: “Amyloid plaques are a consequence” of Alzheimer’s — “not a cause,” declared Alberto Espay, professor of neurology at the University of Cincinnati.

Now they tell us.

“The FDA not only approved a drug that does not work, it also approved something with dangerous side effects like cerebral edema that does not work,” Ray says now.

“Sticker price for a year’s treatment: $28K. People aren’t buying.” Not if insurance won’t cover it, they’re not.

Biogen’s share price spiked past $470 upon approval 14 months ago. With reality having set in, BIIB trades this morning for $212 — about where it traded nine years ago.

As far back as 2007, Ray has followed the fates and fortunes of renegade scientists who refused to buy into the amyloid plaque theory. It’s been a tough road. Lining up trials is hard. Getting federal approval, harder.

But it’s important work, and Ray will stay on top of the battle — not least because whoever comes up with an Alzheimer’s treatment that works will make their investors very wealthy.

“Military Tensions Rise as Pelosi Leaves Taiwan,” says The Wall Street Journal’s homepage… but you wouldn’t know it looking at the day’s market action.

In fact, crude prices have retreated to levels just before Russia invaded Ukraine in late February — a barrel of West Texas Intermediate fetching $91.56.

U.S. stocks are rallying strongly — the Dow up 1% at last check and the Nasdaq up 2%. The S&P 500 vaulted easily past the 4,100 level again.

Among the big movers is Robinhood, purveyors of the brokerage app that all the cool kids use. Upon announcing that it’s slashing 23% of the full-time workforce, shares are rallying 13% on the day. (Isn’t that always how it goes?)

Bonds are selling off hard, the yield on a 10-year Treasury at 2.77%. Precious metals are in retreat, gold at $1,760 and silver back below $20.

So yes, House Speaker Nancy Pelosi has departed Taiwan. Now comes the Chinese response — the largest military drills around Taiwan in decades, complete with “long-range live ammunition shooting,” Beijing promises. They start tomorrow and continue for five days.

Taiwan matters to China in the same way Ukraine matters to Russia. Every Russian is keenly aware of how Ukraine was a key entry point for Hitler’s invading forces during World War II. And every Chinese is just as aware of a similar backstory involving Taiwan.

Japan took over Taiwan in 1895 after the First Sino-Japanese War. On our Wednesday conference call, our resident renaissance man Byron King reminded us how during the Second Sino-Japanese War beginning in 1937, Japan used Taiwan as an “unsinkable aircraft carrier” to launch an assault on the mainland.

“U.S. arrogance and inflexibility helped lead to the current tragedy in Ukraine,” writes Ted Galen Carpenter of the Cato Institute. “Policymakers blew through red warning light after red warning light from the Kremlin. A similar approach seems to be taking place in Washington’s relations with Beijing, and it threatens to produce a similar ugly outcome in East Asia over the Taiwan issue.”

Watch out for the “inflation whipsaw,” warns our income-and-value specialist Zach Scheidt.

Gasoline prices are falling. The prices of other items are still rising, but at a slowing pace. “With inflation pulling back and the economy in recession, investors now expect the Federal Reserve to be much more accommodative,” says Zach. “There’s a high probability that the Fed will pause its interest rate hikes” — maybe not at its meeting next month, but certainly by the time we get into 2023.

Here’s the problem: “If Jerome Powell lets off the brakes, it could easily lead to another inflation surge late next year — perhaps even bigger than the one we’ve just experienced!

“Of course, if inflation were to spike again, it would mean the Fed would need to raise interest rates even further. And in this scenario, the Fed would lose any credibility it still has left.

“This is exactly the kind of whipsaw inflation we had during the 1970s,” Zach says.

“It appeared inflation was backing off several times only to rear its head again. And it took drastic measures by the Fed to ultimately kill inflation at the expense of the overall economy.

“If we’re heading down this road, it’s bad news for investors. Not only will speculative stocks ultimately trade lower, but they’ll also bounce along the way when inflation temporarily dies down.

“These bounces can suck investors into bad stocks only to spit them out with losses a few months (or weeks) later.”

Zach will be on alert for these traps and keep us in the loop. The bottom line for now: “We’re not out of the woods yet and there are a lot of risks to manage.”

Hard times now, harder times then: “Yes, I remember men coming to the back door asking for food,” reads the first of several emails we got after soliciting readers’ recollections of the Great Depression — or what’s been handed down through family lore.

“Granddad had two mules and I got to ride in from the field. Grandad had one row that he used for vegetables.

“My cousin lived in a house with no electricity or water and an outhouse and a cow he had to milk and chickens. His father would pick up a can of water at the service station. We had a bathtub and he got to come in on Saturday for a bath.

“My family had as much respect for FDR as I have for Biden today.

[We could take that a couple of ways… but go on.]

“My aunt was a teacher and tax collection did not meet expectation and teachers were paid with

scrip. Scrip could be used to pay tax. Grandfather would purchase my aunt’s scrip to pay his tax.”

My great-grandfather is only known for two things that he did that were ‘immoral,’” writes our next correspondent.

“One was in 1931. The early-fall upstate New York had a long (over a week) fog event that caused the geese to stop flying south and wait. It was illegal per state law to hunt the wild animals and poachers were heavily punished.

“Great-Gramps wanted to give the family a real Thanksgiving so he walked up and dropped a box over a large goose. Took it to the house and was about to process it when a neighbor showed up. The neighbor had come to ask advice from an honest man, and asked about if it would be right to grab a goose in violation of the law.

“Gramps listened to the neighbor while sitting on a goose in the box.

“In the end he said, ‘Those politicians in Albany don’t have a decent bone in their bodies if they won’t let people harvest a goose to feed their families! So damn them and take one!’”

The 5: All very interesting… but what was the other “immoral” thing he did?

As it happens, a goose figures into our next reader’s recollections as well…

“On my father’s side, my people were so poor and lived so far from town, I think the Depression had little effect.

“Town wasn’t really much of anything beyond a railway station and a couple businesses and it would have been an all-day trip in a team and wagon. They hunted, fished, foraged and grew a garden. They always had food but money was scarce. They had a few cows but would never eat them as they could be sold for hard-to-come-by cash. Wood was used exclusively for winter heat.

“Back then you could pay your land taxes by doing roadwork. Everyone did it. Once a year Grandpa and his sons headed out and did enough roadbuilding or improvements to pay their taxes.

“They canned and preserved all their food and their medicine came from the forest. Grandpa also had a trapline that he worked.

“My grandmother liked to tell a story about my grandpa out on his trapline in the 1930s during the Depression. He shot a goose for dinner out of season and got caught by the game warden. This area is still remote today. He was extremely unlucky to get caught there. Grandpa asked the game warden, ‘What would you have done?’ The game warden said, well, he guessed he would have done the same thing. So they sat down together and had the goose for dinner.”

“Thank you, thank you from a lifetime member for putting all these advisers under one roof,” a reader says about our firm’s revamp under the name Paradigm Press.

“I could never remember all those other names — and I’ve been with you since 2004. This makes me really happy.”

The 5: 2004?! That’s literally as far back as we can trace our predecessor firms’ origins. (Agora, our parent firm, goes back to the late 1970s.) Thank you for sticking by us for so long.

More appreciation from our final correspondent today…

“I love The 5 and read it almost every day and…

“I learn so much and feel well-informed from all of your content and…

“I’m happy about everyone being under one roof and…

“I’m excited about all the new free features but…

“I feel guilty about getting so much great stuff for just $49 a year!

“Keep up the good work!”

The 5: It’s our privilege…

Best regards,

Dave Gonigam
The 5 Min. Forecast

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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