Nature Biotechnology 24, 237 - 239 (2006)
Published online: 1 March 2006; | doi:10.1038/nbt0306-237
Finding the moral high groundKen Howard Wilan1
& Laura DeFrancesco21 Westborough, Massachusetts 2 Feature Editor, Nature Biotechnology Biotech companies will be facing particular ethical challenges as their products enter the marketplace. How is the industry preparing? Ken Wilan investigates.Just three months after European biotech flagship, Serono, was fined $740 million for kickbacks promoting off-label use of its AIDS drug, Serostim (somatotropin)1—the largest fine of its kind ever levied—the US biotech company Genentech of S. San Francisco, California, may be facing similar charges. On January 11, the US government unsealed a whistle-blower lawsuit, which was filed last July by a former employee who was fired, he claims, for pointing out to superiors that Genentech's cancer drug, Rituxan (rituximab) was being illegally promoted for patients suffering from rheumatoid arthritis2. (Off-label use of prescription drugs is not illegal, but promoting it is.) This is not the first hint that something was amiss with Rituxan. In October, 2004, the US Attorney in Philadelphia subpoenaed documents relating to its marketing3.
Although Genentech may weather this storm—they have, with Biogen Idec of Cambridge, Massachusetts, which developed the drug, already made application to the FDA for expanded use of Rituxan for arthritis sufferers—this may presage ever greater scrutiny by regulators and prosecutors of the industry's business practices. The question is whether biotech companies are prepared for such scrutiny. At a recent investor conference in the Bay Area3, a panel of veteran biotech industry insiders posed the question, Can the biotech industry maintain the moral high ground and not jeopardize its business? The answer was a resounding yes, but it may take some rethinking and long-term planning to get there.
Especially (biotech) ethics
The drug industry faces some of the same ethical issues as any industry—how to treat employees, how to conduct and disclose its business practices—much of which comes under the rubric of business ethics and is covered by statutes. However, drug developers face some unique ethical challenges associated with the production and testing of products that affect health and the quality of life. Biotech, in particular, faces ambiguity as the technology runs ahead of society's ability to make sense of the changes it may cause. And because of its impact on human health, the atmosphere can be highly charged compared to other technologies like computer software or polymer science.
 Is ethical behavior good for business and necessary for scalable business? I would say it is.  |
Paul Pospisil
Atlas Venture (Waltham, MA, USA) |
|
| | |
"We have a fundamental dilemma. Organized industry is market driven, but what we produce is also viewed as an entitlement," says Steven Holtzman, CEO of Infinity Pharmaceuticals in Cambridge, Massachusetts. "If you're going to profit from sickness, people will hold you to a very high standard."
It is this conflict—between the need to make money and the desire to offer medication to those who need it—that creates ethical challenges for biotech companies with drugs in clinical trials or on the market. Pricing, distribution and availability become quasi-moral situations in biotech whereas with other consumer products, similar issues would be treated merely as business decisions.
In addition, some believe there exists a corporate responsibility for translating promising technologies into products for social good. This becomes problematic when funds are limited and the tendency from investors and the markets is to pursue sure things rather than truly innovative, groundbreaking research. "What happens to all the brilliant innovation that is happening at the academic level if investors are not willing to fund the translation of that into the beginnings of commercial development projects?" asks Charles Hsu, venture partner at Pappas Ventures, headquartered in Research Triangle Park, North Carolina. What are the social consequences of setting up duplicate infrastructures as multiple companies go after the same, often me-too drugs? Leaving it up to market forces may not work, says Hsu, whereas setting public policy to create more funding, in an era of dwindling federal budgets, may not be a viable solution either.
Keeping a business afloat, especially during financially troubled times, can cause stress, which in turn can affect decision making and cause executives to push the ethical envelope—such as not being forthright in disclosure, minimizing problems and spinning developments for the press. According to Brian Cunningham, CEO of biotech startup DaoGen of Burlingame, California, the venture capital culture adds to the problem, with its emphasis on short-term goals. The mentality of the startup, where the primary goal is to bring in dollars, lingers well beyond the time necessary, he says.
Where to turn?
Since the early 1970s, biologists have had at least two places to turn for ethical guidance. The Hastings Center in Garrison, New York, and the Kennedy Institute of Ethics in Georgetown, Washington, DC, were established to investigate the ethical implications of biological research and its applications. Since then, bioethics departments and commissions have sprung up around the world (Table 1), with the US President's Council in Bioethics, set up as the National Bioethics Advisory Commission in 1997 in response to the cloning of Dolly, being one of the better known. Several programs are now turning to some of the business-related ethical dilemmas biotechs face. Eric Juengst's Center for Genetic Research Ethics and Law at Case University in Cleveland, Ohio, is launching a new program to look specifically at ethical issues associated with the commercialization of genetic research. And Stanford University's Center for Biomedical Ethics has a program that focuses on the ethics of marketing biomedical and genetic products, directed by Maggie Eaton.
| | |
The industry itself has not been silent. Industry-sponsored organizations in the US (Biotechnology Industry Organization, Washington, DC) and in Europe (EuropaBio, Brussels) have ethics working groups that have developed similar sets of principles regarding the socially responsible use of the technology (Box 1).
Large biotech companies have been putting ethics guidelines in place, and some companies have even designated a person to think about ethics and to be available for employee consultation. At Cambridge, Massachusetts-based Millennium Pharmaceuticals, which is often cited by industry executives as being one of the first companies to integrate ethics into its corporate culture, that person was Gary Cohen. (Cohen recently left the company to finish an advanced degree in bioethics.) Millennium also has a 76-page core-values handbook, which includes an ethics 'quick test'—with such questions as, "Would I behave differently if I knew my action would be reported in the newspaper?"—and information on insider trading, scientific integrity, confidentiality and conflicts of interest. Cohen, however, is quick to point out that the presence of a handbook alone doesn't insure an ethical environment.
"Enron had a very nice code-of-ethics contract," points out Cohen. "Eventually employees were selling it on eBay. The ones worth the most were still in their shrink wrap."
Conflict of ethics
Some industry observers say internal ethicists are like in-house lawyers: hired guns whose role is to guide a company but who cannot bring a truly independent perspective to a situation. Others, however, view them as assets who can contribute directly to the bottom line.
An in-house ethicist, although a rarity, can approach many different types of questions, says Tom Murray, president of The Hastings Center. These issues may include intellectual property in developing countries or how to treat research subjects. They can also alert a company to business opportunities and warn a company when it seems to be heading into complex terrain. But, cautions Murray, an ethicist has "to be willing to quit if they are window dressing."
Some executives, however, believe having a designated person in-house could subvert the goal of meaningful ethical exchange within a company. Companies "don't need ethical experts to tell you something's more ethical than others; it's mostly about engaging in a moral dialog," says Infinity's Holtzman. As chief business officer at Millennium for seven years, Holtzman helped shape that company's approach to ethics. "How to bring [ethics] to a corporation? You can hire someone, but they won't give answers like an accountant. It's more like having a psychologist who will engender having a dialog and set of questions—ideally, get everyone thinking this way as moral agents."
"Our feeling is ethics is something you have to live, but you don't need an ethics officer," says Elliott Hillback, Jr., senior vice president for corporate affairs at Genzyme in Cambridge, Massachusetts. "Ethics comes from the top at Genzyme." He says that an ethical culture lowers employee turnover rate and attracts people to the company, though he can't quantify the benefit. "It does help us day in and day out, [though it is] probably not measurable. On preventing a negative, it's probably very important. The upside is harder to measure and not as dramatic."
Hillback says an ethical culture is easiest to maintain through Genzyme's relatively small operating divisions, and the challenge as they continue to grow will be to maintain the culture without formalizing it.
"I don't like idea of an ethics guru or office, it is calling it out as a separate thing," agrees Joshua Boger, CEO and founder of Vertex Pharmaceuticals, Cambridge, Massachusetts. "It's part of the fabric. It's the wrong message saying it is something else. An unintended message of an ethics office is that it is a separate thing."
In addition to having a code of conduct and ethics at Vertex, which Boger likens to the Declaration of Independence in stating what the company is all about at the core, he says speakers are brought in to discuss ethical issues, and if somebody has a specific issue, he would bring in consultants for a discussion.
Other companies—often those doing work in ethically charged research areas, such as Geron (Menlo Park, California) and Advanced Cell Technology (Worcester, Massachusetts)—have taken the route of hiring consultants for ethics boards. This has at times resulted in charges of conflict of interest from people questioning board members' objectivity once they are being paid or even just associating with a particular company.
"The people in bioethics that serve on these panels see themselves as kind of impartial advisors," says Carl Elliott, from the Center for Bioethics at the University of Minnesota. "[But] you can basically get any answer you want, you can get an ethicist to say anything, it's not like picking a mathematician. If you pick the right ethicist you can get the right answer."
"The difficulty is for ethicists themselves because ethicists are like journalists in that they aspire to a certain detachment [from] the subjects they write about," continues Elliot. "On the other hand, they aspire to some sort of practical influence to the world of policy. How do you have that influence without financially compromising your impartiality?" Elliot suggests that one solution would be for a bioethicist to do the work, but not take money. On the other hand, they have the same worry as imbedded journalists have in wartime. "If you are right in there working solely with industry, isn't that going to compromise your objectivity, even if you don't take the money?" he asks.
"Bioethics are about the ethics of the real world, you can't just teach and call for oversight and write papers and then not be able to do it," counters Laurie Zoloth, bioethics director at the Center for Genetic Medicine at Northwestern University's Feinberg School of Medicine in Chicago. She sat on a Geron ethics board from 1998 to 2002, receiving payment for her time at the meetings. She points out that it's not just the money that can influence someone's objectivity. "It may be easier for a philosopher to turn down money than to turn down fame. For a philosopher, participation and the ability to do interesting work is a temptation as well. So it's not just the money, you have to be aware of all the rewards."
Zoloth is also aware that some of her colleagues viewed her participation on a company's board as a public relations victory for that company. "The criticism is we're supposed to be watchdogs and instead we're show dogs," she says. But she has no regrets about having served on Geron's board. She said that she and her colleagues on the board insisted on independence in tackling ethical issues that Geron proposed, and also complete transparency about who was on the board and what was generated. Ultimately, they published their work in a number of academic journals. "Our opinions surely were not bought," she says.
Zoloth emphasizes that the transparency was important. "The ethicists were there to provide serious critique and reflection. We weren't there to serve stem cell research but to explore it for our own research."
The road ahead
Ultimately, it may be the increasing impact that biotech has on people's lives that will drive the industry to pay more attention to building an ongoing approach to ethical questions. "The more successful biotech is, the more important ethics will be," says The Hastings Center's Murray. And in today's atmosphere, one "can no longer plead ignorance of the ethical implications of a company's work."
"Is ethical behavior good for business and necessary for scalable business? I would argue it is," says Paul Pospisil, a venture capitalist formerly at Atlas Venture in Waltham, Massachusetts, now running his own firm. Pospisil sees it as an issue beginning with an individual providing leadership and guidance to a company and then extending it through dialog with stakeholders, including employees, investors and the public. "To think about the long-term [ethics] is good for your career as well as the corporation," in a business that is driven by the reputation of people, he says. "Your best teams will be thoughtful about these issues and address things up front. Ethics is a fundamental thing around operating a clear and sustainable business."
And the rewards would justify the effort. David Finegold, of the Keck Graduate Institute in Claremont, California, who recently completed a study of bioindustry ethics with collaborators in the US and Canada (see Finegold Feature p. 285 this issue), sees a payoff in a variety of areas. These include building a culture and values that will affect the company for many years, identifying potential minefields before they are an issue, motivating current employees and attracting the most talented job candidates, attracting strong business partners and getting on the radar of socially conscious investors, and reducing the likelihood of large legal settlements. Finegold also says that building an ethical structure within a company will enhance the image not only of individual companies but also of the industry as a whole and thus could prevent calls for increased government regulation5.
"Of all things that could ruin an investment, ethics is coming up now," says Kevin Schulman, director of the health sector management program at the Faqua School of Business at Duke University in Durham, North Carolina. "The smartest companies are ones that will anticipate and address [these issues] at some level."
Published online: 1 March 2006.
REFERENCES
-
Brady, R.P.
,
Manning, M.
,
Solomon, S.L.
,
Spivack, P.S.
&
Stanton, A.C.
DOJ settles two major off-label cases: recent settlements highlight array of DOJ enforcement inquiries. Pharmaceutical and Biotechnology Update, published online 29 December 2005.
http://www.hhlaw.com/newsstand/
pubDetail.aspx?publication=2072
-
Loftus, P.
Former worker sues Genentech over marketing. Boston.com News, published online 11 January 2006.
http://www.boston.com/news/local/massachusetts/articles/2006/01/11/
former_worker_sues_genentech_over_drug_marketing/
-
Herper, M.
When doctors go off label. Forbes, published online 10 October 2004.
http://www.forbes.com/home/sciencesandmedicine/
2004/10/05/cx_mh_1005genentech.html
- The International Business Forum's 13th Annual Biotech Investment Conference. Millbrae, California, November 2–3, 2005.
-
Finegold, D.
et al. BioIndusty Ethics (Elsevier, Amsterdam, 2005).
|
