Big PharmaBGS Individual AssignmentGuo LiJia 01375836
Singapore Management University
Table of Contents
TOC o “1-3” h z u 1Introduction to Pharma PAGEREF _Toc524905821 h 32Defining & Identifying issues PAGEREF _Toc524905822 h 33Ethics – Misuse of Corporate Power PAGEREF _Toc524905823 h 43.1Issue: Pharmaceutical Crimes PAGEREF _Toc524905824 h 53.1.1Government Involvement PAGEREF _Toc524905825 h 63.1.2Applying to Singapore SAPI Code PAGEREF _Toc524905826 h 73.2Issue: Science to Salesmanship PAGEREF _Toc524905827 h 83.2.1Assessing Practices PAGEREF _Toc524905828 h 93.2.2Applying to Singapore SAPI Code PAGEREF _Toc524905829 h 94Review of Solutions PAGEREF _Toc524905830 h 94.1Analyzing SAPI effectiveness for use in SG PAGEREF _Toc524905831 h 94.2Cases of Pharma adopting Corporate Social Responsibility (CSR) PAGEREF _Toc524905832 h 95Managing Stakeholder’s Expectation PAGEREF _Toc524905833 h 95.1Analyzing interests PAGEREF _Toc524905834 h 105.2Cooperation/ working together? PAGEREF _Toc524905835 h 106Past, Present, Future PAGEREF _Toc524905836 h 10References PAGEREF _Toc524905837 h 11
Introduction to PharmaOver the years, the evolution of small medical hubs to the increasingly powerful Big Pharmaceutical Industry was evident of changing demand for healthcare due to globalization. With growing businesses, corporates are also bearing with huge amount of responsibilities as expected by the society. They are required to be economically responsible by their stakeholders to make businesses profitable for dividends sharing and interests sharing, legally responsible by the government in terms of following and abiding with laws and regulations. Also, they carry social responsibility as demanded by the society in addition to the code of laws that has already been placed to protect the people. Everywhere around the world, society’s expectations of business are changing. People increasingly expect business to be more responsible. Despite these, there has been multiple instances of pharmaceutical businesses failing to meet the society needs, with many defying laws for economic gains.
Defining & Identifying issuesDue to the difference in stakeholder’s expectation and the corporates actual performances, resulting in the performance expectation gap, there is a growing bad reputation of the Pharmaceutical Industry. This is as a result of pharmaceutical corporation’s actions, possibly due to the shift of focus onto marketing to maintain market share, on lobbying politicians to protect commercial interests, and on lawyers to enforce legal claims on intellectual property rights. CITATION Rob10 l 18441 (Walsh, 2010) These activities have brought a greater suspicion of the industry in the public at large, which are the crucial primary stakeholders in this incidents. This increasing distrust in pharmaceutical industry is definitely a cause for concern for both the corporations as well as the healthcare users/ the public. It is also crucial to note that all pharmaceutical companies have human rights responsibilities in relation to access to medicines. Among the relevant rights, mention must be made to the right to life, the right to health, right to private life, the right to be free from inhuman or degrading treatment, the right to participate in the progress of science and its applications, and the right to impart and receive information. CITATION Seu15 l 18441 (Seuba, 2015)Ethics – Misuse of Corporate PowerWith great power comes great responsibility. As the Pharmaceutical Industry gains power in the 21st Century, there are increasing number pharmaceutical companies that originally set out to discover, develop and promote new medicines for the good of patients falling to the trap of greed. The trusted physician–patient relationship is breaking with physicians being “hooked” to the pharmaceutical industry, where gifts and rewards influence physicians’ decisions and medical institutions are dependent on pharmaceutical support, all in a form likened to addiction. CITATION Mat08 l 18441 (Matthews, 2008). The transparency of data which plays a part in promoting and marketing of drugs is also a major concern to the society, which undermines the multiple aspect of human rights as mentioned PAGEREF _Ref524893848 p h on page 3 REF _Ref524893811 h Defining ; Identifying issues.
Issue: Pharmaceutical CrimesFrom the case study, there were multiple instances whereby large corporations committed offences under the law, displaying wrongful business ethics. The crimes touched upon in the case can be broadly categorized under Pharmaceutical Crime. The manufacturing and distribution of counterfeit or falsified (spurious/fake/falsely labelled) pharmaceuticals or medical devices, through licit and illicit supply chains CITATION Int14 l 18441 (Interpol, 2014), involving:
e. illegal trade
f. money laundering
The more prominent offence mentioned in the case is corruption, whereby corporations offers improper payments/ gifts to doctors or other healthcare organizations, as bribes in expecting gains. Companies pay doctors to prescribe patients with their products neglecting the fact that there may be other drugs that are more compatible with the patient or that the prescriptions can cause severe and dangerous negative side effects to them. Are these actions professional? Are they ethical? I’m sure that most will agree that it is not. However, given the situation that two prescriptions from different companies have equal positive and negative effects to a patient, will the physician then be justifiable or acceptable for accepting gifts from corporate A by prescribing A’s product? In my opinion, the act of accepting bribery in any case is considered dishonesty with its stakeholders—employees, customers, suppliers, stockholders, or competitors— hence behaving unethically and immorally.
Promotion of Off-label drugs is also another issue that can result in disastrous consequences due to negligence on the pharmaceutical company and practicing physicians’ part.
Government InvolvementThe other crucial point is that the punishments meted out by the government were paltry given the severity of the misconduct (Table 1), as has unfortunately been the case in the vast majority of cases in which the government has caught pharmaceutical companies engaging in illegal activity over the past two and a half decades. CITATION Pub16 l 18441 (Public citizen, 2016)Table SEQ Table * ARABIC 1 The fines levied against the companies for FCPA violations over the past 27 years in comparison with the companies’ profits in a single year
Company Fine for FCPA violations(1991-2017) Net or operating profits(2015 alone) Profits in 2015 alone/FCPA fines from 1991 to 2017 (ratio)
Novo Nordisk $9 million $5.1 billion 567
Johnson ; Johnson $70 million $15.4 billion 220
Pfizer $60 million $7.7 billion 128
Eli Lilly $29 million $2.4 billion 83
Bristol-Myers Squibb $14 million $1.7 billion 121
AstraZeneca $4 million $4.1 billion 1,025
GlaxoSmithKline $20 million $12.6 billion 632
Teva $519 million $4.7 billion 9
Furthermore, despite the systematic nature of the alleged bribery, the federal government did not charge a single individual within the companies for engaging in, or neglecting to stop, the illegal conduct. This indirectly present the government’s stand on the issue and the fact that few deterrent actions have been undertaken by governmental organizations shows bribery of foreign officials and doctors by drug companies will continue and even proliferate over the next decade if this continues.
The U.S Pharmaceutical Industry is said to be protected by the U.S Government which in many cases is true, due to the fact that it is one of the richest and most profitable among all the industries not just nationally but also worldwide. However, the issue to be concern of is the lobbying force of the Pharmaceutical Industry, allowing the industry to control the way laws are shaped and how healthcare policies are both created and enforced. Pharma spends extraordinary amounts of money on patents to protect their profit margins. The Center for Responsive Politics (CRP) data show pharmaceutical firms spend more than $1.6 billion lobbying the Congress and the Obama administration for the 7-year span from 2009 to 2015. CITATION Kim16 l 18441 (Kim, Kim, & Unsal, 2016). One of the most attractive reason to invest in lobbying is the time and cost saved from winning Food and Drug Administration (FDA)’s approval to commercialize their newly developed drugs.
There are many other cases where companies are using these extra huge profits to lobby government representatives and lobbyists for the pharmaceutical industry in the United States have said to been very successful. Pharmaceutical industry lobbying draws attention from citizens, academia, and politics because lobbying firms often influence legislative activities to deliver results in favor of their product at the expense of customers.
Applying to Singapore SAPI CodeIn reference to the SAPI Code, the respective guiding principles 1 and 3 as followed are set to ensure fairness in Pharmaceutical Industry for its participating member companies as well as to protect patients’ rights.
Guiding Principle 1: The health-care and well-being of patients is the first priority for pharmaceutical companies.
Guiding Principle 3: Pharmaceutical companies’ interactions with stakeholders must at all times be ethical, appropriate and professional. Nothing should be offered or provided by a company in a manner or on conditions that would have an inappropriate influence.
Issue: Science to SalesmanshipThe pharmaceutical industry plays an important role in the research, discovery and development of new medicines. Along with this, the pharmaceutical industry must also take an active role in helping to ensure that patients receive access to scientific advancements. However, over the past century, pharma companies are shifting their focus to advertising their newly developed drugs directly to consumer (direct to consumer advertising), which (i) may contain false advertising, deliberate leaving out of negative information/ bad news of its products and (ii) may be a solution for insignificant aliments as compared to the other urgent life-threatening illnesses.
Once driven by finding innovative cures for illness and making profits by treating the patients has now been attuned to that of a consumer goods company- building brands and creating needs for these brands to make profits. It is thus not surprising to find that Pharma companies spend around two times more on sales and marketing than Research and Development as seen in the Figure 1 below. CITATION rev14 l 18441 (revenuesandprofits , 2014)
Figure SEQ Figure * ARABIC 1 Top 15 Pharma Companies spending in 2014
With this, it may seem to consumers that marketing and profits is coming before consumer safety and wellness. This defies the consumer rights and human rights that consumers ought to have, where consumers are missing out on the right to access of complete medicine information. CITATION Muj15 l 18441 (Mujinja, 2015)Assessing PracticesThere are many debates on the marketing tactics used by pharmaceutical firms. Namely the direct-to-consumer (DTC) drug promotion and the issue on the degree of transparency of data are mentioned in the case study are the more controversial topics which will be touched upon in the following sections.
Direct to consumer Pharmaceutical Advertising (DTCPA)
DTCPA can be defined as an effort (usually via popular media) made by a pharmaceutical company to promote its prescription products directly to patients. CITATION Ven11 l 18441 (Ventola ; MS, 2011) DCTPA is legal in the US unlike many other countries, and there are groups supporting and against it.
In Support of DTCPA Opposing of DTCPA
Informs, educates, and empowers patients
Educates patients and allows them to take charge of their health
Consumers can also benefit from having access to multiple information sources about drugs and other treatment options rather than relying solely on health care providers
sponsored Web sites can also be used to inform patients by communicating safety risks and public health information, public and private health warnings about topics such as online drug purchasing, and adverse reactions Misinforms patients, promotes new drugs before safety profiles are fully known
By promoting a drug as the solution to a health problem, these advertisements may lead viewers to believe that adopting healthy behaviors, such as a good diet and exercise, are ineffective or unnecessary
New drugs have been associated with previously unknown serious adverse events after they have been introduced to the market and a substantial amount of use has occurred
can present a public health risk because the drug’s safety profile is not fully known at that point
Encourages patients to contact a clinician
A 2004 FDA consumer survey found that exposure to DTCPA prompted 27% of Americans to make an appointment with their doctor to talk about a condition they had not previously discussed Manufactures disease and encourages drug over-utilization
criticized as contributing to the “medicalization” of natural conditions, cosmetic issues, or trivial ailments, resulting in an overmedicated society
exacerbates unhappiness about normal experiences and also creates heightened expectations of drug benefits
Promotes patient dialogue with health care providers
In the 2004 FDA survey, 53% of physicians said DTCPA led to better discussion with patients and 73% believed that consumer drug advertising helped patients ask more thoughtful questions.
DTCPA increased the likelihood that a patient would initiate a dialogue with a physician to request an advertised drug Overemphasizes drug benefits
content analytic studies have found that most DTC ads emphasize drug benefits over risks
Information about risks is also typically presented in often-ignored smaller print or as part of a large, undifferentiated block of text or audio
omitting information about side effects/ exaggerating a drug’s effectiveness
Encourages product competition and lower prices
It is said that with advertisement, corporates will dixcover and research on new and improved methods on cost reducing so as to increase competitiveness Increases costs
Companies promoting the more expensive, newly developed version of drugs that might not offer significant benefits or advantage over older and cheaper medications
Relying solely on laws and regulations is a reactive approach to guiding proper communication activities. Nevertheless, robust legal and regulatory mechanisms may be especially useful in countries that do not have other control mechanisms (i.e. codes of practice). At the same time, it is important to point out that pharmaceutical companies that are members of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) apply national association codes of practice and the IFPMA Code of Practice worldwide, in every market in which they operate, even in the absence of legal or regulatory controls. CITATION Jef14 l 18441 (Jeffrey Francer, et al., 2014)Applying to Singapore SAPI CodeReview of SolutionsAnalyzing SAPI effectiveness for use in SG
Cases of Pharma adopting Corporate Social Responsibility (CSR)Managing Stakeholder’s ExpectationAnalyzing interestsCooperation/ working together?Past, Present, FutureReferences BIBLIOGRAPHY Gøtzsche, P. C. (2013). Big Pharma Often Commits Corporate Crime, and This Must Be Stopped. BMJ: British Medical Journal, Vol. 346, No. 7894, 26.
Interpol. (2014). Pharmaceutical Crime and Organized Criminal Groups. Interpol.
Kim, D., Kim, I., & Unsal, O. (2016). Two Faces of Corporate Lobbying: Evidence from the Pharmaceutical Industry. Retrieved 9 16, 2018, from https://scholarworks.merrimack.edu/cgi/viewcontent.cgi?article=1003&context=fin_facpub
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Matthews, R. (2008). Hooked: Ethics, the Medical Profession, and the Pharmaceutical Industry. The Journal of Nuclear Medicine, 49(12), 2068-2069. Retrieved 9 16, 2018, from http://jnm.snmjournals.org/content/49/12/2068.full
Mujinja, P. G. (2015). Consumer Rights and the Limits to Trust in an African Pharmaceutical Market: the Right to Pharmaceutical Information and Regulatory Implications in Rural Tanzania. Retrieved 9 17, 2018, from http://ijhie.com/ijhie/index.php/ijhie/article/view/21
Public citizen. (2016). Twenty-Five Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2015.
revenuesandprofits . (2014). Understanding The New Pharma Business Model.
Seuba, X. (2015). Pharmaceutical Test Data Protection and Human Rights. Retrieved 9 16, 2018, from https://papers.ssrn.com/sol3/delivery.cfm/ssrn_id2670225_code2455213.pdf?abstractid=2670225&mirid=1
Walsh, R. (2010). A history of the pharmaceutical industry. Pharmaphorum.