Ethical : GlaxoSmithKline - Case Study Example

Ethical Case Study Essay: GlaxoSmithKline Pharmaceutical giant GlaxoSmithKline was recently fined large sums of money by the United s governmentfor mis-promoting some of its drugs. This fine came after the $3billion the company had paid in 2012, coming in a two-year period marked by allegations of ethical impropriety that GlaxoSmithKline has been found guilty of. Mis-promotion of drugs is a particularly serious crime in the United States and other countries (Jennings, 2014:37). Not only does it go against common law by endangering the lives of unknowing consumers, it also violates consumer laws that required companies to reveal everything there is to know about their products. GlaxoSmithKline’s CEO, Andrew Witty, communicated the company’s regret and provided assurances that it has learned from the naïve mistakes. Well, investors do hope he is right because this is the fourth such settlement the company has been involved in the past couple of years. Since stockholders – and other parties – usually suffer when companies make wrong inferences from their mistakes; it is vital to ask what “mistakes” GlaxoSmithKline made. According to the United States government, the company used illegal marketing strategies to enhance the sales of different drugs and hid important safety information about one of its most marketable medications. Like other big pharmaceutical companies, the firm pressured physicians to prescribe many of its drugs for purposes not authorised by the United States Food and Drug Administration (FDA). The company enticed many of its physicians to accept these “off-label” applications by providing them with benefits such as vacation packages, ski trips, spa privileges and concert tickets. This clearly shows that the company knew it was doing the wrong thing but still kept at it, probably convincing itself that its status in the industry protected it from possible repercussions. It is a common but flawed way of thinking by large companies that are often involved in ethical misconduct thinking that they are protected by their influence (Miller and Jentz, 2014:32). This time, however, one big fish – GlaxoSmithKline- was caught. It is also astounding to imagine some of the other things the company has done that were probably not highlighted in the recent cases or discovered by authorities. The fact that whistleblowers alerted authorities to the issue shows that chances of the company getting busted were very limited. One of the drugs mis-promoted by the company is Paxil, an antidepressant authorised for use by adults only. GlaxoSmithKline, however, presented it as safe for use by children; it even went a step further by providing free samples to psychiatrists although clinical testing indicated a heightened risk of suicide among users. The company pressured physicians to prescribe Wilburton, another antidepressant, for varied off-label applications, including as a remedy for obesity, ADHD, sexual dysfunction and drug addiction (Ferrell and Fraedrich, 2014:29). Among other charges, the firm settled are that it offered bribes to physicians and that it concealed evidence of cardiovascular risks of Avandia, a top-selling diabetes medication. The evidence concealed by the company eventually resulted in tight restrictions on its purchase and use in the United States and total prohibition in Europe. It is unclear from an analysis of the company’s gross misconduct just what mistakes the CEO was referring to. GlaxoSmithKline did not erroneously believe or was not mistakenly led to believe that its conduct was not only illegal but also unethical. In addition, it was not in the dark concerning the fact that it risked serious legal and ethical repercussions by engaging in such conduct (Ferrell and Fraedrich, 2014:33). If the company honestly wants to know the cognitive blunders that compelled it into multibillion-dollar settlements in the space of a few years, it should recognise and appreciate why millions of people outside the pharmaceutical industry – general public, the media and the government – are so incensed by its outright and years-long misconducts. According to Ferrell and Fraedrich (2014:36), a key reason for the negative response outside the industry was that these three parties saw GlaxoSmithKline as maliciously causing innocent patients to be susceptible to uncalled for and unknown health risks. In their perspective, the company was evidently untroubled by the potential risk and harm to patients when it pressured physicians to prescribe the aforementioned drugs for unauthorised and inappropriate uses or when it concealed from regulators material data on the drugs’ risks. Which begs the question: what was the company thinking? As one goes through the latest list of charges, and the charges involved in previous cases, it becomes increasingly clear that the company knew what it was doing all along because the charges form a long list of continuous violations of ethical and legal standards. Assuming the company executives are not evil people who are unconcerned about if their conduct endangers others, then it must be that they did not see anything wrong with the unethical moves it took in trying to achieve its sales targets (Miller and Jentz, 2014:41). This is undoubtedly due to the fact that, in the late 1990s and early 2000s, the period when much of the misconduct happened – GlaxoSmithKline’s main rivals depended on similar marketing strategies, so that such actions like mis-promoting drugs and pressuring doctors to prescribe drugs with known health risks were viewed as part of the industry’s “code” of operations; its modus operandi. From another view, it must also be that the company’s senior executives were convinced that it was not responsible for negative effects on patients when physicians, convinced by its carrots, followed its self-serving instructions in writing prescriptions. According to Miller and Jentz (2014:49), it is more likely that they convinced themselves that, since doctors alone are make the decisions about what drug to prescribe for their patients, it follows that the doctors alone are liable for any harms resulting from their actions. It is the doctors’ job to care for the health of patients, the executives may have rationalised, and it is their job to optimise profits for shareholders by selling as many units of their medications as they can. In that case, one of the company’s biggest mistakes was a failure to acknowledge that, by sparking conflicts of interest for physicians or suppressing risk information, it impaired the doctors’ professional and medical judgment, affecting their ability to prescribe drugs based strictly on the needs of their patients (Ferrell and Fraedrich, 2014:52). It was a mistake not to recognise that in providing physicians with personal rewards for prescribing its drugs – including off-label applications – it was manipulating the physicians to serve its vested interests. This is a very disingenuous position. GlaxoSmithKline conflicted doctors, offering them benefits to take prescription actions based on their self-interests instead of what was best for their patients. Consequently, the company profited by disregarding the physicians’ independence – their ability to make professionally right, impartial decisions. At the same time, GlaxoSmithKline executives could dismiss any ethical worries by convincing themselves that the compromised physicians exercised complete independence in writing prescriptions, which would clear it of any liability for the repercussions. All factors considered. However, the company made profits in ways that conflicted with the choices and independence of physicians and sometimes caused patients to be subjected to major risks without knowledgeable consent (Jennings, 2014:67). Of course, this does not exonerate the doctors’ capability for falling prey to the conflicts of interest. However, in the perspective of Kant, GlaxoSmithKline’s conduct was wrong because it exploited the patients and the doctors as mere means to an end, viewing and treating them as just tools for financial benefits and not as fellow human beings. According to Jennings (2014:45), the company’s biggest mistake was failing to understand this; as well as an inexcusable ethical and moral failure by its executives. The company should have, in all circumstances and conditions, exercised better judgment by at least thinking about the patients, even if it did not care about physicians. It could have at least utilized the last shred of humanity and kindness left in it to recognise that some innocent patients it does not even know could suffer irreparable damage to their bodies by using the drugs marketed by the company. According to Miller and Jentz (2014:63), there are four ethical theories that GlaxoSmithKline went against by knowingly mis-promoting medications that could have caused unnecessary harm to patients and pressuring physicians to prescribe medications not only against their will, but also against their professional judgment. The four theories are individualism utilitarianism, the virtue theory and Kantianism. GlaxoSmithKline went against all these theories because of its unethical, illegal and potentially life-threatening drugs that it manufactured and promoted. Individualism theory, which is the modus operandi of most capitalist countries and capitalistic companies, holds that a business should concentrate on profits (Donoso, 2013:357). However, there is a catch. While focusing on profits, companies should remain within the applicable legal boundaries in the environment in which they are operating (Donoso, 2013:357). It is now clear that GlaxoSmithKline disregarded the second part of this theory went completely gung-ho with the first, doing every possible wrong it could to move its drugs in the market and not caring about the possible legal violations it was committing. The company completely ignored individualism’s core message, which is to maximise profits, but do it in a legal way. Even by the standards of the most selfish and capitalistic entities, GlaxoSmithKline probably broke and then set new bars for self-gratification and self-interests. It may be a ludicrous thing to say, but other companies that have previously been found guilty of illegal or unethical behaviours would probably think angels of themselves considering what GlaxoSmithKline did. They would probably look at the individualism theory and think that it is basically meaningless and inapplicable in today’s competitive business environment. GlaxoSmithKline’s violation of the individualism theory was compounded by the fact that it acted in complete knowledge of what it was doing, the whole time it was doing it. It understood that it was possibly endangering the lives of patients and compromising the professional standards of physicians, but still went ahead. Utilitarianism theory holds that people should try to maximise their general happiness within all aspects of their engagements and actions (Orsi, 2012:31). For example, a school teacher should try as much as possible to make sure that there is general happiness in the school where he teaches. Students, other teachers, parents and workers in the school should benefit from the teacher’s benevolent acts. GlaxoSmithKline violated this theory because it was mis-promoting its drugs to millions of people and causing potential harms to patients and doctors who risked their careers to participate in their unethical behaviour. The mis-promotion of Avandia, for example, was linked to an increase in heart attacks, while clinical trials showed that Wellbutrin could increase the likelihood of suicides in users. The company also marketed Wellbutrin to children when it was meant for adults. In this instance, the company focused on its own happiness; it did not care at all about the happiness of patients and physicians or the happiness of government authorities. In fact, the company went a step further by not just ignoring the happiness of other parties but also deliberately causing sadness for them. The happiness of the company’s customers, who used the mis-promoted drugs or heard about its unethical conduct that showed it did not care about them, was seriously compromised. Kantianism theory holds that all actions should be performed in accordance with some known and guiding principle (Woodard, 2013:248). According to Woodard (2013:256), Kant’s ethics are based on his perspective of rationality as the ultimate act of benevolence and that all people are basically rational beings. Considering this, was GlaxoSmithKline allowing its customers and physicians to make rational decisions on their mis-promoted drugs? The answer is no. The company put patients and doctors in a situation where they could not apply rationality in determining whether the drugs were good or bad for them. It is important to note that had the company issued a notice about the possible effects of the drugs in question, and talked to doctors about it, it could have put both parties in a position to apply rationality in avoiding the purchase and use of the drugs. The firm did not give its patients and doctors the freedom to apply rationality; it suppressed this freedom with lies and deceitful actions. Virtue theory states that upholding values like courage, justice, temperance and honesty should be the guiding principle of all human beings (Youpa, 2013:184). These are the primary virtues of this theory and ones that its proponents believe holds the key to greater understanding and mutual benefit for the human race. The theory also holds that people should avoid vices such as envy, greed, arrogance, selfishness and sadness (Youpa, 2013:185). In the case of GlaxoSmithKline, it is clear that it did the exact opposite of what this theory stands for. It propagated greed because it was trying to make the most profits it could while ignoring the plight of its patients and doctors. It knew that the mis-promoted drugs were harmful but still sold them and pressured doctors to sell them. The company also showed that it had no honesty because it should have communicated to its customers the true negative effects of using the drugs in question and helping them to avoid possible harms to their health and wellbeing. The company had no courage to take the drugs off the market once it became apparent that they were linked to possible negative health consequences for patients; it was only thinking about maximising income. Had the company pulled the drugs off the market, it would have earned some praise and shown ethical concern, but it did not. The company showed no justice because what it was doing to its customers and the physicians involved what was not justice at all; it went against everything that justice stands for. Finally, GlaxoSmithKline showed a lack of temperance because all their motives were centred on quick and maximum profits with no care for its customers. GlaxoSmithKline showed no regard for this theory because it violated all its virtues and acted with callousness and disregard. References Donoso, A. (2013) Toward a Liberal Theory of Punishment: Locke, Property, and Individualism, World Political Science Review, vol. 8, no 1, pp. 350-366. Ferrell, O. & Fraedrich, J. (2014) Business ethics: ethical decision making and cases (8th ed.), Boston, Houghton Mifflin. Jennings, M. (2014) Business ethics: Case studies and selected readings (6th ed.), Cincinnati, West Educational Publishing. Miller, R. & Jentz, G. (2014) Business law today: comprehensive edition: Text and cases--legal, ethical, regulatory, and international environment (5th ed.), St. Paul, Minn., West Legal Studies in Business. Orsi, F. (2012) David Ross, Ideal Utilitarianism, and the Intrinsic Value of Acts, Journal for the History of Analytical Philosophy, vol. 1, no. 2, pp. 28-40. Woodard, C. (2013) The Common Structure of Kantianism and Act-Utilitarianism, Utilitas, vol. 25, no. 2, pp. 246-265. Youpa, A. (2013) Descartes’ Virtue Theory, Essays in Philosophy, vol. 14, no. 2, pp. 179-193. Read More