The Business Ethics Blog

Should restaurants serve foods that a subset of the population finds distasteful? Animal rights activists think not, especially with regard to foie gras, that supposed delicacy made from the fattened livers of geese and ducks. To be fair, activists don’t just find foie gras distasteful, they think it’s unethical — though the ethical framework from which they draw that conclusion is far from uncontroversial itself. So, are they justified in pressuring restaurants to stop serving it? And more importantly, what methods are they justified in using to do so?

From the Ottawa Citizen: Out of the frying pan: Beckta bows to foie gras protest

One of Ottawa’s most celebrated restaurateurs swore off serving foie gras Wednesday following a targeted campaign by animal rights activists who aim to erase the controversial delicacy from menus across the city.

After months of finding himself on the receiving end of protests, dozens of abusive phone calls and hundreds of e-mails — many of them aggressive and even threatening — Stephen Beckta told the Ottawa Animal Defense League he would no longer serve foie gras once his supply runs out.

“It was a personal rather than a business decision because it didn’t really hurt our business,” said the owner of Beckta Dining & Wine and of the three-month-old Play Food & Wine. “In my mind, this is as much a story about intimidation and harassment as it is about animal cruelty….”

Though Beckta was the immediate target, the activists hope other restaurants will get the message. As one of them put it, apparently without irony, “I hope that the compassionate vibe will just catch fire and they’ll take it off voluntarily.” Of course, there’s no evidence that compassion has anything to do with this (or any other) restaurant’s decision, in the face of bullying.

(Here’s the Wikipedia article on Foie Gras, which includes a section on the controversy.)

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(p.s. for the record, though this is technically irrelevant, I personally don’t eat foie gras, or meat in general, but that’s mostly because I think the farming practices involved are ugly, not unethical.)

Business is a rough game. Competitors are in it to win, and a certain amount of pushing and shoving is to be expected. But sometimes the ref just has to blow the whistle.

From CNN: European Commission fines computer chipmaker Intel $1.45B

(CNN) — The European Commission found leading computer chipmaker Intel guilty Wednesday of violating European anti-trust rules and ordered that it pay a fine of 1.06 billion euros ($1.45 billion).
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The commission found Intel abused its dominant market position in the market for computer chips known as the x86 computer processing unit (CPU), Kroes said. The abuse lasted more than five years, she said.
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“That Intel had such a large market share is not a problem in itself,” Kroes said. “What is a problem is that Intel abused its dominant position. Specifically, Intel used illegal anti-competitive practices to exclude essentially its only competitor, and that reduced consumer choice — and the whole story is about consumers.”

But just what’s wrong with that, ethically speaking? In this regard, the analogy with sports is instructive. (In fact, on CNN this morning I heard one reporter refer to the charge against Intel as one of “unsportsmanlike conduct.”) For a more scholarly take on that analogy, see philosopher Joseph Heath’s An Adversarial Ethic for Business or When Sun-Tzu met the Stakeholder. Heath’s argument is that in business, as in sports, we allow some aggressive behaviour that wouldn’t be allowed in polite company. And we do so because the net effect is socially positive: we get joy out of watching tough, competitive hockey, and we get lower prices out of the scrapping between Honda and Mazda. The limit of that aggressive behaviour, however, is reached roughly when it begins to undermine, rather than to promote, those positive externalities. And that is what Intel did wrong.

File this one under “giving credit where credit is due.”

From Natural Products Insider:
Coalition Says Supplements Not Swine Flu Remedy

WASHINGTON—A Dietary supplement industry coalition advises against using dietary supplements to treat or cure H1N1 flu virus (“swine flu”). A group of trade associations released a statement saying they are unaware of any scientific data supporting the use of dietary supplements to treat swine flu. Furthermore, they said state federal law does not allow dietary supplements to claim to treat any diseases, including swine flu.

The American Herbal Products Association (AHPA), the Consumer Healthcare Products Association (CHPA), the Council for Responsible Nutrition (CRN), the Natural Products Association (NPA) and the United Natural Products Alliance (UNPA) are endorsing the following unified advisory for marketers and retailers of dietary supplements:

• Marketers and retailers of dietary supplements are urged to refuse to stock or sell any supplements that are presented as treating or curing swine flu, and
• Marketers and retailers should refrain from promoting any dietary supplement as a cure or treatment for swine flu.
• Anyone who believes they may have swine flu or may have come in contact with the virus should contact a healthcare professional. More information on swine flu and the proper actions to take if you suspect you are ill is available on the Centers for Disease Control Web site.

“There are dietary supplements that have much to offer in terms of enhancing general immune function,” the released statement said. “However, therapies for the treatment of swine flu should only be recommended by qualified healthcare professionals or public health authorities.”

You could also file this under “stating the obvious,” but that would be uncharitable. True, anyone who thinks that herbs and vitamins are going to cure a sometimes-lethal viral infection is sadly uninformed, but the world is (apparently) full of sadly uninformed people. And given that the natural-remedies-and-dietary-supplements industry tends too often to exaggerate the benefits of its wares, it’s refreshing to see them issuing a statement recommending that people not use their products, even if it’s just for this one illness.
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HT to Dr* T at the Thinking is Dangerous blog.

A couple of times recently I’ve read about pharma executives wondering out loud why their companies get such a bad rap — you know, what with all the good work they do, saving lives and all. The short answer is: we’d give you more credit if you would just stop distracting us by doing blatantly unethical things.

Things like this….

Pharmaceutical powerhouse Merck & Co. recently paid the Australian branch of Elsevier, a company that publishes a wide range of scholarly journals, to put together a bogus journal for them. This is bad behaviour on the part of both companies. No one is really all that surprised about Merck, I take it. But Elsevier should know better.

Physician & columnist, Ben Goldacre, has this nice summary of the situation: Elsevier get into fanzines.

Goldacre first notes that academic publishers like Elsevier have long had an uneasy relationship with Big Pharma. Pharma spends buckets of money on advertising, and according to Goldacre, “there is evidence that all this money distorts editorial decisions.”

But this time Elsevier Australia went the whole hog: they gave Merck an entire publication to themselves, which looked like an academic journal, but in fact only contained reprinted articles, or summaries of other articles. In issue 2, for example, 9 of the 29 articles were about Vioxx, and 12 of the remaining were about another Merck drug, Fosamax. All of these articles presented positive conclusions, and some were bizarre: like a review article containing just 2 references….

Initially, Elsevier denied wrongdoing. According to Goldacre:

In a statement to The Scientist magazine, Elsevier initially said that the company “does not today consider a compilation of reprinted articles a ‘Journal’”. I would like to expand on this statement. It was a collection of academic journal articles, published by the academic journal publisher Elsevier, in an academic journal shaped package. Perhaps if it wasn’t an academic journal they could have made this clearer in the title which, I should have mentioned, was: The Australasian Journal of Bone and Joint Medicine.

Now Elsevier has retreated, and is apologizing.

Here’s a statement, by Michael Hansen, CEO of Elsevier’s Health Sciences Division:

It has recently come to my attention that from 2000 to 2005, our Australia office published a series of sponsored article compilation publications, on behalf of pharmaceutical clients, that were made to look like journals and lacked the proper disclosures. This was an unacceptable practice, and we regret that it took place.
We are currently conducting an internal review but believe this was an isolated practice from a past period in time. It does not reflect the way we operate today.

Here’s some free advice for Elsevier’s “internal review,” and for every other organization that has any dealings with any of the major pharmaceutical companies: beware. This is a group of companies with a terrible, terrible track record in terms of ethics. Does that mean don’t do business with them? No, that would be silly. A publisher or an office supplies company would be crazy to not want Merck (or Lilly or GlaxoSmithKline) as a customer, and a charity would probably be crazy to not want a donation from Merck’s charitable Foundation. So go ahead, do business with them. But be careful. This way danger lies. Take precautions. Ask questions. Doubt what they say. Think twice. And if they suggest doing anything out of the ordinary, be super vigilant. Think carefully about whether you’re being used, or manipulated, or drawn into something that is going to end in scandal. Because you probably are.

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If you like Ben Goldacre’s blog as much as I do, take a look at his book, Bad Science.

Back in July a controversy arose over the fact that British retailer Marks & Spencer was charging more for bigger bras. I blogged about it: Flat Pricing for Bras.

Well, the critics have won.

From CNN: British retailer admits bra boob

Charging chesty women more for their bras doesn’t win a lot of support, British retailer Marks & Spencer acknowledged Friday as it announced an end to the surcharge on its larger lingerie.

“We boobed,” screamed a full-page Marks & Spencer ad, which appeared in British newspapers Friday.

Marks & Spencer gave in to campaigners who argued that the higher prices of the bigger bras was unfair. The retailer charged as much as £2 ($3) more for all sizes DD and up.

“It’s true that our fantastic quality larger bras cost more money to make, and we felt it was right to reflect this in the prices we charged,” the ad said. “Well, we were wrong.”

It follows a nearly year-long campaign by members of the Facebook group Busts 4 Justice.

The basic back-and-forth of the argument went like this: It’s unfair — discriminatory — to charge some people more than others for bras. But bigger bras cost more to make, because they use more material. But that’s true of clothing in general: bigger sizes always take more fabric, but a size 10 dress doesn’t cost any more than a size 2. Why single out bras as an opportunity for price discrimination?

Consumers are used to paying more for bigger things in many product categories: you pay more for a bigger jar of peanut butter or (other things being equal) for a bigger car. Presumably we accept that because the logic of it is clear: it makes straightforward sense to pay more to get more. But for bras, the claim that bigger ones cost more to manufacture falls flat, because we know that for relevantly-similar products (i.e., other items of apparel) manufacturers and retailers don’t bother to charge more for bigger items. We don’t know how or why Levis charges the same for bigger & smaller jeans, despite the fact that one pair might require literally twice as much fabric as the other. Maybe the fabric just doesn’t cost that much to begin with; maybe the labour and shipping and advertising are the big costs, and so it’s not worth the hassle to charge based on size. But consumers tend not to wonder about that. They’ve been taught by experience that flat pricing is feasible for garments, and so there’s a strong presumption in favour of flat pricing, one which I suspect would be difficult for any retailer to get around.

Why is business ethics so dull? Why is it such a dismal, dreary endeavour?

I ask this in all sincerity, about a field that I take very seriously and that I think is enormously important and interesting.

Admittedly, the subject matter is often pretty serious: wrongdoing at Enron resulting in thousands of people losing their lives’ savings. Mismanagement at AIG putting the entire financial system at risk. Through to more mundane issues such as Soliciting Money from the Bereaved. Funny? More like depressing.

Now, admittedly, I’ve tried my best to bring some humour to the topic: monkey waiters, breast milk ice-cream, sex offender t-shirts, and so on. But one man can only do so much.

But really, does the issue of corporate behaviour have to be so dull and serious? Quick, name one fun-and-interesting book in the field. Or one lively, witty commentator. Just what I thought. Zip. Zilch. Nada. Thanks for proving my point.

OK, here’s my plea: lighten up a bit. Life is fun. Figuring out how companies should act should be interesting. And try to act as if the answers are not obvious. How much fun would it be if the answers were obvious? Foot-stomping just isn’t all that fun. Well, unless you do it to music. Don’t get me wrong. I like my righteous indignation as much as the next guy. But if this field gets too damn serious, it’ll drive away any but the most committed and strident and dull activists. And if the field of business ethics becomes dominated by people who think that fixing things is more important than figuring out the best answers to hard problems, we’re all in a lot of trouble.

And here endeth the rant.

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.

I’m constantly amazed by what the sellers of “natural” health products get away with. The pharmaceutical industry, rightly, is subject to considerable scrutiny. But if you’re selling something labelled as “natural,” no one seems to give a second thought to actually examining your claims to be able to work wonders on the human body.

Well, almost no one. Check out this nice posting by Scott Gavura, at the Science-Based Pharmacy blog: Vivimind: Forget About It

You’ve seen the billboards for Vivimind across Canada. Remember them? Targeting an aging population of boomers, Vivimind is touted as a “scientifically proven” natural health product that “protects memory function”. The website goes to great lengths to promote that Vivimind is both “scientific” and “evidence based”. So let’s take a look at what sort of science supports the claims for Vivimind….

First, Scott gives us a bit of history:

Vivimind was once a promising prescription drug. It was called Alzhemed, and was hoped to be a breakthrough treatment for Alzheimer’s disease. Alzheimer’s disease is a neurodegenerative process, where amyloid plaques form in the brain, leading to dementia. It was proposed that Alzhemed might reduce the deposits of plaque, slowing progression of the disease.

So, what does science have to say about Vivimind?

Two major phase 3 trials were subsequently launched to test if Alzhemed could be an effective treatment for Alzheimer’s disease. Unfortunately, the results showed that patients taking Alzhemed did no better than patients taking a placebo. The FDA concluded that the results could not support a claim of clinical efficacy – that is, the manufacturer could not claim the drug worked. A European trial of Alzhemed was subsequently discontinued before the results were reported.

Case closed for Alzhemed? Not quite. After the failure of the phase 3 trial, where Alzhemed was shown to be ineffective, the manufacturer announced its intention to bring the product to market – but not as a treatment for Alzheimer’s. Nope – they were going after a bigger market – people with age associated memory impairment. And forget about all that pesky evidence and data the FDA wanted. Since approval of Alzhemed as a prescription drug to treat Alzheimer’s disease seemed out of the question, the manufacturer, Neurochem, decided to market it as a natural health product. The company changed its name to Bellus Health, and renamed the product Vivimind.

It didn’t work on Alzheimer’s, and there are no published studies on whether it works on more minor forms of memory impairment.

So, basically, Vivimind is a product that failed as a prescription drug, and is now marketed — without any evidence that it works — to people who don’t know any better. Sound ethical to you?

Now, it may not be that Bellus Health is flogging a product they know doesn’t work. Maybe that’s an uncharitable assumption on my part. But what are the other options? That they don’t care about evidence? Or that they’re deluded about the evidence? Ask yourself: is any of those possible scenarios comforting, when a company is selling you pills?

Here’s a must-read opinion piece, by Peter Foster for the National Post:

Trading honesty for ‘social responsibility’.

Here are a couple of early paragraphs that give the gist of what he’s saying:

It is surely also intriguing that the current financial crisis should have come after an explosion in the business ethics industry and the steady rise of the corporate social responsibility movement up the corporate hierarchy. You would be pushed to find any financial institution involved in the current debacle who was not dedicated to the very latest in independently monitored and internationally benchmarked governance practices, complete with high-sounding “codes” and commitments to carbon neutrality and fighting child poverty. And wasn’t the regulatory side of corporate governance meant to have been rendered cast iron by Sarbanes-Oxley?

Could that be the problem? Business ethics has become not so much about honesty and fair dealing as about the additional burdens companies should be taking on in the name of infinitely expansive corporate social responsibility and getting out in front of environmental issues.

Another choice paragraph:

There are, of course, cheats and crooks in the business world because there are cheats and crooks in the world more generally. The enormous wealth created by capitalism, and the importance of trust for the system to function, means ripe pickings — indeed astonishing pickings — for the likes of Bernie Madoff. Meanwhile you have flawed geniuses such as Garth Drabinsky for whom accounting fraud amounts almost to sport. But then Bernie Madoff is no more “typical” of capitalism than Enron, and any set of rules that closed all loopholes against Garth Drabinsky would bring the entire system to a grinding halt.

Now please be careful: Foster may be a little too ardent an admirer of capitalism for some of you. That’s fine. His rhetorical flourishes are a bit much at times, and his admiring reference to Milton Friedman will provoke those who see Friedman in a negative light. But get past that. Look at the point he’s making, about the things that really matter in terms of corporate behaviour. Is it possible — just possible — that all this focus on encouraging business to take on lofty social goals has distracted them, and us, from more basic issues of honesty and integrity?

In part, Foster is echoing something I said a couple of months ago, when I wrote this blog entry: Down With CSR! Up With Business Ethics! I offered 3 arguments against “Corporate Social Responsibility” and in favour of Business Ethics. Reason #3 read, in part:

Waste of Public / Activist / Media Attention. In the face of corporate scandals and economic instability, what we ought to be asking of business executives is that they focus on doing their job honestly and diligently….

It might just be a good thing if we could all agree to hold business to one or two clear standards, instead of a few dozen fuzzy ones.