Corporate custodians of confidential medical data should be closely monitoring events connected to a nightmarish computer security breach in the St. Louis region.

Express Scripts is one of the nation’s largest pharmacy benefits managers. The company, with headquarters in St. Louis County, handles approximately 500 million prescriptions per year for 50 million workers at 1,600 American companies. Early in October, it received an extortion letter, the details of which it released on Nov. 6.

The letter included personal information on about 75 Express Scripts clients — Social Security numbers, dates of birth and, in some cases, information about prescription medications. Whoever sent the letter demanded money from the company — the amount has not been disclosed — and threatened to use the Internet to reveal personal and medical information about millions of people if the demands were not met.

...

Beyond the scale of the problem for Express Scripts — and the potential impact on the company is enormous — the issue extends well beyond the mounting concerns about identity theft, a phenomenon with which most people have become at least somewhat familiar.

The greater problem is the unique nature of personal medical records, the importance of moving to computerization of such records to improve health safety and reduce costs and the irreversibility of the damage people can suffer if confidential medical information becomes public. The stakes are so high that a federal law establishes strict standards for maintaining the privacy of medical information and stiff fines for failing to do so.

Medical records of all kinds — paper and, especially, electronic — must be protected with the most sophisticated kinds of security systems available, including backup protections and automatic alerts of security violations. Yet Express Scripts learned of this breach in the “worst way,” as InformationWeek.com security correspondent George Hulme put it in an online report: “via an extortion letter.”

The Express Scripts breach raises many questions for all elements of the health industry: hospitals, clinics and doctors’ practices, benefits management firms, insurance companies, pharmacies, employers and government agencies:
Are they using the most advanced information security technology possible? Do they minimize the amount of data they collect and keep it only as long as necessary? Do they have strict protocols governing access to personal and medical data — and systems to enforce those protocols? If criminals were to hack into their systems, how would the companies know? How soon? And are the systems capable of instantly cutting off illegal access as soon as a breach is discovered?

Confronted with a grave breach of electronic security, Express Scripts has responded by contacting law enforcement, establishing an informational website, offering a substantial reward and hiring a private consulting firm to help clients who have privacy concerns and investigate situations that “appear to be tied to identity theft” and provide “identity restoration services.” There is no question that the company is taking the situation extremely seriously.
Given the ongoing criminal situation, information about how Express Scripts’ data systems were compromised — and whether it could have been avoided — has yet to be disclosed. But the American people have the right to expect that their sensitive personal and medical information is zealously protected and kept secure — not only by Express Scripts but also by every person or company entrusted with it.

"Customers and customer relationships...have tangible measurable value to businesses, and their value is much easier to communicate to those who fund projects. So in an enterprise risk management scenartio, their vlaue informs the risk management process...[For example, consider] a farmer deciding which crop to grow. A farmer interested in short term profits may grow the same high yield crop every year, but over time this would burn the fields out. The long term focused farmer would rotate the crops and invest in things that build the value of the farm and soil over time. Investing in security on behalf of your customers is like this. The investment made in securing your customer's data build current and future value for them. Measuring the value of the customer and relationships helps to target where to allocate security resources."

The sky is falling! Trip Chowdhry, the analyst with Global Equities Research who claimed Red Hat was ‘rubbish and the entire LAMP stack is potty, too’ published some eye-opening predictions, predominantly negative, about tech business in Silicon Valley. Now Chowdhry claims that “almost every VC funded open-source company is struggling and will run out of money within the next six months.” (Probably not the most unbiased guy about open source) Matt Asay argues that organizations in general are struggling, but open-source companies are not that high on the list. (But are they high on the VC “axe” list??) He notes Alfresco, Pentaho and JasperSoft are some of the players with ‘millions in the bank and growing revenue.’ Asay also says Chowdhry has a responsibility to do real due diligence and not create myths. Take that, Chicken Little! (img from Disney-Clipart)

We’re not as far behind as we thought we were. Google presented the results of a study they conducted about how IPv6- capable “ordinary users” are at the RIPE meeting in Dubai a few weeks ago. Turns out Apple Macs drive IPv6 penetration in the US. Fifty-two percent of all IPv6 users in the U.S. own a Mac and use 6to4 (creating IPv6 addresses from an IPv4 address and tunneling packets) – making the US fifth in the list of countries using IPv6. Russia and France took first and second place with .76 and .65 percent IPv6-enabled traffic . The US is at .45 percent. Worldwide, 0.238 percent of Google users’ systems are IPv6-enabled and prefer to use IPv6 over IPv4.

Obama’s win = Google’s win? Apparently Google CEO Eric Schmidt and President-Elect Obama are very good buddies and “this terrifies Microsoft”. Now competitors are more on guard against Google’s growing empire and popularity. Although Schmidt was mentioned as a possible candidate for the country’s new national CTO position, he said he would not accept the post if asked. I guess that’s one less thing Microsoft has to worry about.

After 26 days, and almost 350 million e-mail messages, only 28 sales resulted -- a conversion rate of well under 0.00001%. Of these, all but one were for male-enhancement products and the average purchase price was close to $100. Taken together, these conversions would have resulted in revenues of $2,731.88 -- a bit over $100 a day for the measurement period or $140 per day for periods when the campaign was active. However, our study interposed on only a small fraction of the overall Storm network -- we estimate roughly 1.5 percent based on the fraction of worker bots we proxy. Thus, the total daily revenue attributable to Storm's pharmacy campaign is likely closer to $7000 (or $9500 during periods of campaign activity). By the same logic, we estimate that Storm self-propagation campaigns can produce between 3500 and 8500 new bots per day.

Under the assumption that our measurements are representative over time (an admittedly dangerous assumption when dealing with such small samples), we can extrapolate that, were it sent continuously at the same rate, Storm-generated pharmaceutical spam would produce roughly 3.5 million dollars of revenue in a year. This number could be even higher if spam-advertised pharmacies experience repeat business. A bit less than "millions of dollars every day," but certainly a healthy enterprise.

Of course, the authors point out that it's dangerous to make these sorts of generalizations:

We would be the first to admit that these results represent a single data point and are not necessarily representative of spam as a whole. Different campaigns, using different tactics and marketing different products will undoubtedly produce different outcomes. Indeed, we caution strongly against researchers using the conversion rates we have measured for these Storm-based campaigns to justify assumptions in any other context.

Spam is all about economics. When sending junk mail costs a dollar in paper, list rental, and postage, a marketer needs a reasonable conversion rate to make the campaign worthwhile. When sending junk mail is almost free, a one in ten million conversion rate is acceptable.

News articles.