The Business Ethics Blog

I’ve seen the case made, at least once, that a particular company (drugco Eli Lilly) deserved the corporate equivalent of a death sentence. But what about corporate seppuku (a.k.a. harakiri), or ritual suicide? If a company shuts its doors — effectively closes down, pending a reorganization and change in staff — following a scandal, is that a good thing? Should we be happy that the company has, in a sense, committed ritual suicide? How about suicide to be followed by reincarnation?

Over at the Research Ethics Blog, my friend & co-blogger Nancy Walton wrote this interesting entry about a company that seems essentially to have done just that: An update on the Coast IRB sting.

Coast IRB is a private Institutional Review Board, a company that conducts ethics reviews of research protocols prior to the commencement of drug trials. All such research done on humans has to be vetted by an ethics board. Research done at universities and hospitals is typically reviewed by an ethics board at the university or hospital; research not affiliated with a university or hospital (e.g., a study done by a drug company on its own) still has to be reviewed, and companies like Coast are there to do the job. Coast made the news by falling prey to a sting operation, in which operatives for the Government Accountability Office (GAO) hired Coast to scrutinize what turned out to be a phony research project. Coast’s ethics board failed to notice some serious problems with the project — including both some very serious risks, and things like the fact that the (fictional) physician leading the (fictional) research project had an expired medical license.

Nancy’s blog posting is mostly about the need to distinguish, from among the various wrongs Coast was accused of, between the merely apparently-scandalous and the truly dangerous.

My own interest is in the solution struck upon by the management of Coast: they are apparently ceasing operations, at least for now, and making some big changes. According to the Wall Street Journal…

“Coast IRB’s owners decided, through counsel, to cease future company operations,” a company statement said.

The company had said earlier that it intended to temporarily halt accepting new business and to stop enrolling patients in studies that had begun while it made a thorough overhaul of its operations.

This is probably a good thing. An overhaul is surely needed. But I’m also somewhat ambivalent about the idea of a renovation: it’s entirely possible that the “new” Coast IRB (likely with a new name and new corporate logo) will be different in all the right ways, but it’s also possible that the changes will be superficial, and that the name-change will let them shake this scandal easier than they should.