The Business Ethics Blog

This blog is starting to look like a pharma-business-ethics blog. I’m not doing this on purpose.

See the AP story at Yahoo.com: NJ Court Allows Whistleblower Suit Against Schering-Plough

Four former employees of drug maker Schering-Plough Corp.’s Argentinean subsidiary can sue over being fired allegedly for complaining about illegal marketing practices, including bribing doctors to boost drug sales, a New Jersey court ruled Friday.
…
The four longtime employees at Laboratorios Essex SA allege they were abruptly terminated after disclosing “widespread unethical and illegal marketing and sales practices.” They claim Schering-Plough engaged in “the pervasive and routine bribing of doctors and public officials” to boost sales of the company’s cancer and infection-fighting drugs in Argentina.

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Thanks to Pharmalot.

The current issue of The Economist has an interesting short commentary on a new move to include additional information — about products’ “carbon footprints” — on product labels: Food’s carbon footprint [Subscription required] (or see p. 84 of the print edition)

WOULD you like a footprint on your food? Labels already show fat, salt and sugar content, among other things. But now several British food companies and retailers plan to add carbon footprint labels showing the quantity (in grams) of carbon-dioxide emissions associated with making and transporting foods and other goods.…

Regular readers will know I’ve expressed a dim view of labeling as a way of dealing with controversy over GM foods. The Economist story reminds us that there are a whole lot of things consumers might wish to know (for all kinds of reasons, ethical and otherwise) about the goods they buy. But the article also points out that, even where companies see the value in labeling, there are serious methodological and logistical problems. Not that carbon-footprint labeling isn’t kind of a neat idea, but we should think about whether such efforts are generalizable.

So, let’s imagine, hypothetically, that you want to buy coffee beans that are:

• shade grown
• traded fairly
• organic
• non-GM
• low-carbon footprint

You might be able to get just what you want by buying your coffee at just the right coffee shop. But what if you have similarly exacting standards when it comes to buying apples, bread, olive oil, electronics, and jeans? How many companies have the supply-chain management systems adequate to provide (in priciple) detailed information about a whole range of products to large numbers of consumers? There’s only one that I can think of. Uh-oh.

From Business Week: The Rush To Test Drugs In China

The story is about the pros & cons, for pharmaceutical companies, of doing business in China.

…working inside China’s sprawling, often under-supervised health-care system may raise complex ethical questions. In the past, Chinese medical authorities have greenlighted risky experiments, including stem cell injections and treatments that involve altering the patient’s genes. Moreover, people recruited into trials don’t always understand what they have signed up for, but they rush to join because it may be their only chance to see a doctor.

This is a minefield for companies: as the story notes, many companies “choose to keep their distance.”

It’s entirely possible that Western companies just can’t do business in China while adhering to the ethical expectations of folks back home. But then, entrepreneurs thrive on being told something just can’t be done. So, the challenge: a billion customers for the company that figures out how to navigate this ethics minefield.

(Yes, yes, I realize some companies will just make a mad dash for the short-term cash, ethics be damned. But that’s a lame business plan.)

Here’s something to brighten your morning, from the Op-Ed pages of the Boston Globe: Does a drug firm’s free lunch influence doctors?

JUST WHAT is the best and most appropriate way for a company that researches and manufactures a prescription medicine to educate physicians about the products it develops? It’s a question that is increasingly being discussed in academic and political circles, yet too often those leading the discussions know little about the pharmaceutical industry’s commitment to patient education

The author — who happens to be a lawyer for the Pharmaceutical Research and Manufacturers of America — goes on to assure us that all the attention lavished on physicians by the industry is 100% useful, 100% safe. Besides, he chides, to think that physicians might be influenced is just insulting. (Nevermind whether there’s evidence that it happens, which there is.)

Indeed, the errors of reasoning in this piece are legion. I won’t speculate as to whether the author knows it.

Art Caplan at the AJOB Blog gets it right: “Look, I am willing to concede that worries about conflicts of interest have in many ways gotten a bit out of hand but, touting big Pharma as an objective source of information on drug use for docs strains credulity well beyond the breaking point. This op ed made me laugh….”

For better or for worse, the Nottingham University Business School is now offering an MBA in Corporate Social Responsibility

According to the programme’s website:

The MBA in CSR is a unique programme combining advanced teaching and learning in management with state of the art thinking in corporate social responsibility. This combination allows progressive learning at the leading edge of knowledge in the general discipline of management studies and socially responsible business.

Most people will see this as unremarkable, the natural consequence of the whole “ethics thing” coming of age.

The problem: While it’s true that, for some people, “CSR” is simply a synonym for “business ethics,” (i.e., the study of right & wrong decision-making in business), it’s more often used to describe a particular thesis about what responsibilities business actually has. From that point of view, CSR is the thesis that firms have obligations to return benefits to “society” beyond the benefits they typically provide (namely providing goods & services, providing employment, building wealth, and paying taxes).

It’s perhaps an unfortunate accident of vocabulary that the term “Corporate Social Responsibility” came to mean a particular view about the social responsibilities of corporations, rather than simply meaning the study of what social responsibilities corporations may have. None the less, it does have that meaning. And it’s a worrisome thing, I think, to have an MBA programme apparently dedicated to a particular, not-uncontroversial, normative thesis.

[Thanks to Andrew Potter.]

In a world of bad customer service, how bad does your service have to be in order to get the government to sue you over it? One word: “Dell.” Here’s the story from ABC News:
Dell Hell: Computer Giant Faces Consumer Lawsuit (Consumers Allege They Didn’t Get the Tech Support They Paid For)

Dell is the No. 2 computer seller in the United States, but now some say the technology giant is ripping off its customers.
New York state Attorney General Andrew Cuomo has filed a lawsuit against Dell, accusing the company of deceptive, fraudulent and illegal business practices.
…
Part of the suit claims that though Dell gave the impression of an “award-winning service” available to consumers “24 hours a day, seven days a week,” consumers faced “nightmarish obstacles” to get help and technical service for their computers.

I’ve blogged about Dell customer service before, and about why this IS a business ethics issue:
Business Ethics & Dell Customer Service

Dell Ethics

From today’s New York Times: Narcotic Maker Guilty of Deceit Over Marketing

The company that makes the painkiller OxyContin and three of its current and former executives pleaded guilty Thursday in federal court here to criminal charges that it had misled doctors and patients when it claimed the drug was less likely to be abused than traditional narcotics.
The company, Purdue Pharma, agreed to pay $600 million in fines and other payments to resolve the criminal charge of “misbranding” the product, one of the largest amounts ever paid by a drug company in such a case.
The three executives, including its president and its top lawyer, also pleaded guilty to misdemeanor charges of misbranding the drug. Together, they agreed to pay $34.5 million in fines.

Note that the kind of deception that was a the centre of this case is the kind that jeopardizes the efficiency of (i.e., roughly, the social benefit to be had from) free markets. One has to wonder how much flack pharmaceutical companies would take with regard to, say, their pricing strategies, if they managed to keep their noses clean more generally and actually stuck to the rules that are supposed to define a free and competitive market. (For a more complete exploration of that type of question, I again recommend to you Joseph Heath’s paper “Business Ethics Without Stakeholders,” Business Ethics Quarterly, 2006, Vol 16 Iss 3.)

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Update, November 2008:
For more recent developments on this story, see:
Bereaved Mom Sings Oxycontin Blues on Wikipedia
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Here’s yet again still another further additional corporate ethics ranking, this time from Ethisphere, an on-line compliance & ethics magazine: 2007 WORLD’S MOST ETHICAL COMPANIES

The page linked above includes a chart showing winners in each of 30 different industries (interesting in itself), but you have to register if you want more details.

Generally, Ethisphere gets high marks for being interesting reading, and especially for having a sense of humour (whichs is way too rare in the world of ethics). Another of their articles, 50 Codes of Conduct Benchmarked, includes both a serious assessment along with lots of snippy annotations (such as pointing out that the code for the Janus Capital Group “Comes across like the operating manual for a nuclear powerplant,” and noting that the code for Nomura Holdings is “Basically a 5 page haiku.”)

Since the folks at Ethisphere have a sense of humour, I hope they won’t mind some teasing. As an educator I have to register a grammatical complaint. Here are the opening sentences of the “Most Ethical” ranking:

Ethics are absolute. Business ethics are relational.

I love hate to be picky, but they’re misusing the word “ethics.” “Ethics” is a singular noun that happens to have an “s” at the end (just like “mathematics,” and “linguistics”) . So, it should read “Ethics is absolute. Business ethics is relational.” There are a few limited cases in which “ethics” can be taken as plural, but this isn’t one of them.
(Sometimes my students make the same mistake. But a magazine devoted to the topic?!)
By the way, I did alert the magazine to the error, and then waited 24 hours before posting this, just to be fair.

From yesterday’s L.A. Times: Buffett rebuffs efforts to rate corporate conduct

Warren E. Buffett, chairman of Berkshire Hathaway Inc., said Sunday that he regarded efforts to rate the performance of companies on social, human rights or environmental measures to be of dubious merit and would not consider such factors when selecting investments.

“I don’t know how I would rate Exxon versus Chevron versus BP,” he said at a news conference one day after Berkshire’s annual meeting. “It’s very difficult to judge the actions of companies that act on thousands of things every day.”

Here’s the potential essay question for biz ethics students:
Explain the following quotation from Berkshire Vice Chairman Charles Munger:

“I don’t think that the people who do that philanthropy are all that good at knowing whether they are doing more good than harm,” Munger said. “If you put a gun to my head and asked which one has done more good for the world, the Ford Foundation or Exxon, I’d have no hesitation in saying Exxon.”

From the BBC: Early baby sex test over the web

A test is being sold on the internet that enables parents to check the sex of their unborn baby at just six weeks.
The kit, sold by DNA Worldwide for £189, is controversial. Critics claim it may prompt parents to abort if they are unhappy with the test result.

The company rejected these claims, saying the early results, obtained from a finger-prick of blood, allow parents more time to plan for their baby.

According to the company’s ethics page

DNA Testing Direct are aware that there are some concerns that the Pink or Blue Test could lead to gender selection and are keen to encourage the ethical debate in this new area. As a company we, together with the manufacturers of the test, have decided not to sell the early gender test into China and India and some other areas, as it is not our intention that the Pink or Blue test should be used, either directly or indirectly, for sex selection.

The company operates in the UK, a liberal society that does not prize babies of one sex over another, a culture which also places the responsibility for the unborn baby firmly with the mother. As this is the case with most if not all Western cultures we are happy that, with education and informed debate, responsibility should lie with the individual.