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| BRYAN W. HUSTED,
Co-Director, Chair of Business Ethics |
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WHEN HEALTH AND PROFITS CLASH: ETHICAL CHALLENGES FOR THE PHARMACEUTICAL INDUSTRY
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The questionable business practices of the pharmaceutical industry seem to be multiplying. Despite the recent Vioxx debacle of Merck, Sharp & Dohme, which was accused of misrepresenting the serious cardiovascular side effects of the drug, recent reports suggest that marketing practices in the pharmaceutical industry continue to raise serious concerns among knowledgeable observers.
Consumers International has just published a study that examines marketing practices among European drug companies. They studied 972 ethical breaches regarding drug promotion. Almost 35% of these breaches were directly related to misleading drug information. They cite the esults of a study by the Institute for Evidence-based Medicine, which analyzed 195 advertisements received by 43 German physicians. The Institute reported that 94% of the advertisements were not supported by adequate scientific evidence.
Among other problems, Consumers International observed:
• A lack of transparency. Few pharmaceutical companies reported the composition of their marketing budget, staff, and violation of ethics code breaches.
• Questionable marketing techniques. Despite EU legislation that prohibits direct marketing to patients, the drug companies were using internet chat groups and drug information websites to promote their products. Sometimes, companies provided information on illnesses without mentioning a specific product. However, many of these lifestyle diseases, mentioned in last quarter’s Ideas Empresariales, created a need among patients for the drugs used to “cure” the malady.
• Weak self-regulation. The study found frequent, serious violations of ethics codes, calling into question the efficacy of self-regulatory efforts by the industry.
• Lack of documented approval procedures for drug promotion. Few companies had clear procedures for the approval of promotional literature for new medicines.
In the United States, a New York Times report finds that doctors are setting up taxexempt foundations, in which pharmaceutical companies and medical device makers are making significant charitable contributions. Although the foundations are set up for ostensibly legitimate purposes, ideas95 def 2 ok 22/9/06 18:25 Página 64 they often engage in research dealing with the devices and products developed by the donors. Experts say that funds can be misused to subsidize the business expenses associated with the for-profit medical practice of the founding physicians. Clearly, the potential conflicts of interest are numerous.
Certainly, one can understand that the financial challenges faced by the industry are great. Industry sources report that the development of a new drug takes between 10 and 15 years at an average cost of US D 800 million. On the road to the development of a new medicine, some 8,000 chemicals are tested, of which only one becomes a new drug.
Still, it seems as though the pressures on the pharmaceutical industry are so great, that it sometimes forgets that its real purpose is to improve human health. When its marketing practices foster a misuse of drugs that lead to a diminishing of human wellbeing, then something isseriously amiss.
Consumers International focuses on a number of recommendations that involve greater external control of pharmaceutical companies. Among them: greater uniformity and transparency in reporting ethical practices and violations; “harder” forms of self-regulation involving public accountability and even sanctions for ethical violations. Clearly, such measures play a vital role in aligning incentives with the goals of fostering human life and providing checks on company behaviour.
Nevertheless, external control must be complemented with greater efforts to develop internal control within the firms. Such internal controls are closely tied to the renewal or development of corporate cultures in which the noble mission of bettering human well-being is central. Incentives are important, but so are beliefs and convictions. Recommendations must include attention to the corporate values and commitments.
The well-known response of Johnson & Johnson to the deliberate poisoning of its product, Tylenol, continues to provide an important benchmark for an ethical response to most safety problems in the pharmaceutical industry. Although the safety issues of the Johnson & Johnson case dealt more with packaging than with the product itself, a similar commitment to patient welfare should be at the heart of renewal efforts within the industry.
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