Corporate Social Responsibility?

What defines good business practices? Corporations are considered people, so why aren’t they held to the same ethical standards as every day people? People try to follow the Golden Rule as much as possible, but giant pharmaceutical corporations completely ignore this rule and secretly behave completely unethically and often times illegally. In recent news, there has rarely been a report of any pharmaceutical drug-making company that has put people first and profit second.

Pharmaceutical companies have a bad reputation for their practices, but despite that, the industry still rakes in billions of dollars in profits.

Pfizer is the biggest and most prosperous drug maker, however also one of the most unethical. John Kopchinski, who was a sales representative at Pfizer before he was fired for questioning the marketing of Pfizer’s Bextra, says "At Pfizer, I was expected to increase profits at all costs, even when sales meant endangering lives."

People who work for drug maker giants often face dilemmas with potentially dangerous drugs being distributed to the public. They would never give those drugs to their kids. The companies encourage making as much profit as possible without getting caught, and when they finally end up caught; they try as hard as they can to get away with their crime.

In 2009, Pfizer faced a settlement of $2.3 billion, the largest healthcare fraud settlement in history. Pfizer illegally promoted four of its drugs for “off-label use” which is prohibited by the FDA. A Wall Street Journal article says, “Besides Bextra, the drugs were Geodon, an antipsychotic; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug. Once the Food and Drug Administration approves drugs, doctors can prescribe them off-label for any use, but makers can't market them for anything other than approved uses.” The settlement was to resolve criminal and civil charges for Pfizer’s illegal marketing.

The world is faced with these giant companies who make dangerous drugs and market them as completely safe. There is a limit on how much the government can do to protect its citizens without intruding on the said “free market”. Basically, pharmaceutical companies can get away with what they want for a limited time before the drug is shut down. Then they simply rebrand and redistribute and the process repeats to squeeze out as much money of patients in need of these drugs as possible.

Sources used:

http://abcnews.go.com/Health/PainManagement/pfizers-23-billion-settlement-change-practices/story?id=8476391

http://www.usatoday.com/money/industries/health/2009-09-02-pfizer-fine_N.htm

http://www.kevinmd.com/blog/2009/08/drug-company-ethics-and-the-pharmaceutical-industrys-pursuit-of-profit.html

Key Ethical Issues

Sources:

http://healthmad.com/medicine/ethical-issues-regarding-pharmaceutical-research/

http://mja.com.au/public/issues/176_03_040202/kom10098_fm.pdf

Key Ethical Issues

Most industries face pressures from various special interest sources that hope to direct or influence the business or research efforts of the industry. While some of these efforts are legitimate and just, there are also efforts made that are self-serving and unethical. The pharmaceutical and biotechnology industry is a very large and profitable industry, and one that, unfortunately, is subjected to corrupt and unprincipled behavior from time to time. There are different types of unethical issues that confront this industry in the course of carrying out business and conducting research. A few examples follow:

• There is a lot of money made in the pharmaceutical business. The cost of developing medications is high and it is passed along to consumers. For profit companies constantly need newer and better pharmaceuticals to meet the demand of consumers and to improve their profitability. Some of these companies are not above providing unethical cash incentives to pharmaceutical companies to develop products for their exclusive sale and/or distribution.
• Research or study that is conducted to develop a marketable product that is profitable for a company rather than to gain more scientific evidence about a pharmaceutical effectiveness can create an ethical dilemma.
• The results of research can establish how good a particular drug is, but it can also affect how valuable the product is and how profitable it will be. Pertinent information could be left out of the studies, leaving the research results incomplete, if it would cause the pharmaceutical to be less profitable.
• It is not unusual for physicians to be sought out to provide their expertise and input into the research of a particular drug. It becomes unethical when the physicians are offered significant sums of money to mold their input to satisfy the objectives of the researchers.

The pharmaceutical and biotechnology industry is critical to the quality to life for everyone in this world. This industry is relied on to research, develop, and produce products that relieve suffering, extend life, assist people with dealing with challenges of everyday life, provide nourishment and dietary supplements, and many other functions. People everywhere need to be able to trust this industry to do the right thing, the thing that is in the best interest of the consumer, not in the interest of those seeking unethical personal or corporate advantages on the backs of those who depend on them.

Current Events

Hey guys! So I found a really interesting article about the pharmaceutical and biotechnical industry that greatly affects this business. The sources I provided all apply to this current event but some have more detail than others. Currently in the pharmaceutical and biotechnical industry, President Obama proposed a cut of $320 billion in Medicare and Medicaid over the next ten years as well as to ban pay-to-delay. This is all a part of his plan to cut the deficit and provide affordable healthcare and prescription drug coverage for all. A lot of factors go into this new proposal and everyone will be affected differently some good and some not so good.

Put simply, pay-to-delay is when larger companies that sell name brand drugs such as Lipitor, pay smaller companies to delay the release of the generic version of that drug so that the public is forced to pay more for the name brand drugs. Pay-to-delay is a way for larger companies to eliminate competition and comfortably charge what they’d like to charge for their products with out worrying about losing their customers.  The smaller companies, who would be offering the generic version of a drug, do not mind pay-to-delay because they are being paid by the larger companies to delay their product release thereby making it a win-win situation for all of the companies involved.  

By President Obama eliminating pay-to-delay, he would be making it easier for consumers to get affordable prescription drugs because insurance companies historically charge a smaller deductible for generic drugs and even if the consumer has to pay out of pocket, it will be drastically less than paying for the name brand drug.  Since many Americans cannot afford brand name prescription drugs in the first place, the offer of a generic version of that same medication would allow the consumer to be able to focus on healing themselves rather than worrying about falling into debt over medication.

President Obama is also requiring that drug companies offer discounts and rebates. Drug makers are not fond of this idea because drug makers of generic products are required to give the government a 13% rebate and makers of brand-name drugs are required to give the government a 23% rebate which is a loss in revenues. “The trade group PhRMA commissioned a study of the rebates, [and they found that] lost revenues could touch off as many as 260,000 job losses.” The issue now is that although customers would be receiving a discount on pharmaceutical products, many jobs would be lost making a lot of people worse off. The last thing our country needs is a greater loss of jobs, which makes this proposal not so appealing.

~ Zenas Wilson

Sources:

http://www.fiercepharma.com/story/obama-plan-hits-pharma-rebates-pay-delay-ban/2011-09-20?utm_medium=nl&utm_source=internal

http://www.nytimes.com/2011/09/20/us/politics/medicare-and-medicaid-face-320-billion-in-cuts-over-10-years.html?_r=1&src=recg

A Two Faced Industry

Companies in the pharmaceutical/biotechnology industry care about two things: their products and their patients.  What matters to us, as consumers, is which one they choose to prioritize.


Those who choose to prioritize their products are a force to be feared and reckoned with.  Of the big firms, many of their mission statements include a point about besting the competition, developing the most innovative products, and thereby gaining the most value possible in their company.  This ambitious detail becomes the whole mission in more than one case, in fact, here are three: 


The first line of Pfizer's mission statement is: "We will become the world's most valued company to patients, customers, colleagues, investors, business partners, and the communities where we work and live."


The main portion of GlaxoSmithKline's web section of their mission statement focuses on this segment: "Since 2008, we have focused our business around the delivery of three strategic priorities, which aim to increase growth, reduce risk and improve our long-term financial performance:

•           Grow a diversified global business
•           Deliver more products of value
•           Simplify the operating model"

And this is all the Cephalon website says about their mission statement:

WE ARE DRIVEN

Our mission is to discover and develop innovative drugs to improve patients' lives. Cephalon provides a range of speciality as well as branded generic and generic products to healthcare professionals and patients in over 70 countries, covering Western and Central Europe, the Middle East and Africa.

Kind of scary isn't it? Each of these statements focuses almost completely on a mission of profit generation through innovation, not on patient care.  To be fair, Pfizer continues their mission statements with other statements about their corporate integrity, employee pledges, ethics, and lastly patient care, and their first mission isn't all bad either. It at least holds a double meaning which lends itself to be interpreted as a company which is valued both by patients and by shareholders, however, between GlaxoSmithKline and Cephalon, one would think that pharmaceutical and biotech companies don't care a bit about the people they are supposedly trying to serve through their business.  The GlaxoSmithKline statement is vicious in its claims about future growth.  They outline business strategy, new areas of marketing, new regions to compete in globally, and yet never mention their patients.  This truly is a company to be feared in the marketplace and maybe in our homes too.  The most stirring example of ambition in the pharma industry remains Cephalon's, however.  The statement was taken verbatim from their own website and that really is a frightening prospect.  When a company writes "we are driven" in thirty-two point font on their mission statement page, I start to have doubts about how much they care about their customers.  

There are some bright corporate spots in the darkness of this vast ambition though.  Companies like Johnson and Johnson, Biogen Idec Inc., and Amgen Inc. all have very large focuses on patient care in their mission statements, and even show compassion for their customers over profit for their stockholders by prioritizing them in their set goals. 

Johnson and Johnson's credo truly defines what it is to be a responsible corporation with its first two sentences: "We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality." 

These two lines make me a comfortable and happy consumer of Johnson and Johnson's products and medications.  What they don't do is scare me with their ambitious claims.  Biogen and Amgen follow a similar track as Johnson and Johnson, but with a more product centric focus.

Here's Biogen's - "To our patients, we are the trusted source of vital therapies for multiple sclerosis, such as AVONEX® and TYSABRI®. We also discovered RITUXAN®, the world's most prescribed treatment for non-Hodgkin's lymphoma and an effective treatment for rheumatoid arthritis. Our patients count on us not only for medications, but also for a variety of support programs that help them deal with the rigors of living with serious illness."

And Amgen's - "Amgen strives to serve patients by transforming the promise of science and biotechnology into therapies that have the power to restore health or even save lives. In everything we do, we aim to fulfill our mission to serve patients. And every step of the way, we are guided by the values that define us."

These three corporations give me hope for the future and give me confidence in the present with their positive, patient centric mission statements.  

So which is the true face of the pharmaceutical industry?  Judging by stock portfolios, the consumer focused organizations do appear to have a lead.  However, only time will tell if their regard for patient care will allow them to soar above the more ambitious companies, or if it will ground them as members of the industry.  For all our sakes though, I can only hope that we, as patients, will continue to have more  market power than any potential innovation, no matter how spectacular.

-Spencer Swan

The following websites were used as sources for this article:

http://manonamission.blogspot.com/2005/06/johnson-johnsons-jnj-mission-statement.html

http://manonamission.blogspot.com/2005/06/pfizers-pfe-mission-statement.html

http://www.gsk.com/mission-strategy/index.htm

http://www.biogenidec.com/about_corporate_overview.aspx?ID=5469

http://www.amgen.com/about/mission_values.html

http://www.cephalon-europe.com/