The 10 Dumbest Things in Health Care This Year

3. Roche's Second Chance

Roche has now paid big bucks for the same company twice.

The Swiss health care giant this year paid hundreds of millions of dollars for the remnants of a diagnostics company that it once gave away.

Less than five years ago, following a tough courtroom battle, Roche agreed to pay $1.4 billion for a tiny outfit known as Igen. But Samuel Wohlstadter, Igen's crafty founder, arranged that sale with some crucial strings attached. Specifically, Roche had full rights to use Igen's technology for traditional patient tests, but not for special purposes such as drug trials and animal studies. Roche gave those rights to a new company, spun off to Igen shareholders, known as BioVeris.

Soon, however, BioVeris suspected that Roche might be breaking its promises. If true, based on the rules of the original deal, Roche would have to give BioVeris much of the revenue it realized from any "out-of-field sales." BioVeris started keeping track, estimating that it could pocket some $5.3 million for every 1% of the sales Roche made outside its approved arena.

Apparently, with the evidence mounting and the bills piling up, Roche figured it would probably have to take its medicine once again.

So this year, it paid $600 million -- a 58% premium -- to gain control of the diagnostic technology once and for all. Based on press reports, that's at least 20 times as much as BioVeris generated in annual revenue -- at its peak -- during its four years as a bleeding, stand-alone company.

Hey, who cares if Wohlstadter knows how to run a company? He sure knows how to sell one.

Dumb-o-Meter score: 90. "You know, we're not a powerhouse in terms of manufacturing or marketing or money or -- what's another M? Management!" Wohlstadter confessed during the company's shareholder meeting last year. "So we have to try to be a little faster on our feet" than the rest.