Article template 2007

Business Ethics and
Reputation in
Pharmaceutical and
Medical Device
Companies
By Richi Gil, Chief Culture Officer at Axialent
Nowhere else in the corporate world will you find a higher defining a body of ethical values first and acting out these purpose: Pharma and medical device companies exist to help values in every meeting and decision making process, mankind live better and longer. This higher purpose is what companies can transform reputations and ethical standards on drives thousands of scientists, R & D departments, FDA agents, a holistic level—not just a top-down basis. and marketing specialists in the industry to work everyday. It’s what they’ve chosen as their inspiration, where they’ve The business of pharma and medical device ethics, or let’s say decided to spend the best hours of the best days of the best the workers whose charge it is to be highly concerned with years of their lives. It’s also, unfortunately so, sometimes ethics, lives in the R&D department. This is also where value unconsciously forgotten by many leadership teams across the decisions are first made. In any decision, at the moment of making tradeoffs, one value is always subordinated to another. In R & D, it could be said this is the easiest place to subordinate Take for instance the recent agreement by Johnson & Johnson value A) pleasing shareholders to value B) creating medicines to pay $1 bil ion in a settlement as a result of a decade-long and devices that save and improve lives. But then, somewhere civil investigation into the fraudulent marketing of the in the process, a drug or device is released when it’s just below antipsychotic drug Risperdal. The drug was heavily pushed as a a certain standard, the long-term side effects are not as clear dementia drug, among other uses, causing dangerous side as the short-term financial benefits, or, as in J&J’s case, effects, when it’s only approved use was for schizophrenia. released for one purpose and used for another. It’s also at Events like this and many others frequenting our daily some point during this process that managers and leadership headlines, are, for some leaders, seen as a “cost of doing teams begin to walk a thin line, the decision-making process business” in the pharma and medical device world. Normally, a becomes cloudy, and the higher purpose becomes distorted. bil ion dol ar loss would be a crippling, if not fatal business mistake for most other industries. Once a sub-par product not up to the standard of a company’s higher purpose is released the waters become even murkier. Trials and fines related to unethical behavior like J&J are wel Marketing decisions relating to product launches and product documented; but what is the point of recording this data if pushes are then made. These next decisions are biased from there is no effective action from individual companies to the beginning as they inherently function on something other change the behaviors leading to unethical decisions in the first place? If just one company changes in this way, it has the potential to help all pharma companies raise reputations as There needs to be a universal call to action for all pharma and they follow suit. This type of corporate transformation is one medical device leadership teams to question if they are making of the fastest ways to reach large groups people and can have decisions based on conscious values or mental models concealing the ethics of the situation and creating groupthink. Groupthink is a thought process, usual y unconscious, that This article aims to make a case for changing the leadership keeps people from questioning the fundamentals of a behavior directly related to unethical actions paradoxical y situation. For example, with J&J, the decision makers on the steering pharma and medical device companies’ reputations Risperdal team might have unconsciously concluded that away from their intended and passionate higher purpose. By pleasing shareholders in the short term was best due to the Business Ethics and Reputation in Pharmaceutical and Medical Device Companies
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incredibly high cost of researching and developing the drug. technical dimension of their business (the quality of drug and The way to do that was to “naturally” sel Risperdal to a larger data from trials) with the human dimension (how leaders target market, and if they were helping dementia patients in formulate strategies people use to be healthier) of their the meantime al the better for society, right? They were not business. There is no human approach that wil make up for a able to become aware of the negative long-term effect flawed technical approach. The process has to start with through this pattern of unconscious thoughts. These questions like: Do you objectively have a good product to put unconscious thoughts can be best thought of as a “filter” that on the market? Are the clinical trials proving your drug is a prevents people from a deeper reflection. good enough solution to the betterment of the world or to heal people? If on a technical level we don’t have a good drug, The problem is not the filter itself; it’s more the problem of are you going to put it in the market, or are you going to sit people forgetting they see the world through individual filters down and say we have a problem here, let’s talk about it? It or mental models. When people remember their own filters, can be done, but you’l have to do it one conversation at a they may take the time to question themselves, and then question others’ filters plus their reasoning and data—rather than accepting blindly what they say—until the truth of the situation comes to light. Once the truth is revealed, the ethical dilemma is also revealed and the possibility to make conscious choices with clear connection to the company’s higher purpose increases tenfold. Ricardo is a seasoned executive with more than 20 years working with global organizations. He possesses extensive To do this though, takes awareness, discipline, and practice. experience in leadership development, organizational Social scientists have found a remarkably high correlation effectiveness, and the corporate world. between our capacity to delay gratification and our physical and mental health. This same concept applies to business. Working with senior leaders and their teams, Ricardo Companies that are disciplined enough to subordinate (what coaches and facilitates processes that help these teams appear to be) urgent matters to important, higher purpose significantly improve their own performance as wel as the matters generate greater profitability, growth, and value for entire organization’s performance. As Chief Culture Officer shareholders than those that focus on the problem of the day. at Axialent, he consults with clients on how to develop the This is the important point that Raj Sisodia makes in his book behaviors, symbols and systems required to create Firms of Endearment. Companies that base their actions on a conscious business cultures while also accomplishing desired higher purpose, have a conscious culture, and develop business strategies. Before Axialent, Ricardo made career conscious leaders have consistently outperformed the S&P strides during his years of work for EDS (now HP), a global IT 500. They’ve even outperformed Jim Col ins–designated Good services enterprise. As a Senior Vice-President for HR in Latin to Great companies for the last 15, 10, 5 and 3 years. Today’s America, he led a culture transformation effort for the top research is consistently proving this compelling trend— leaders, personally coaching and mentoring the senior building a conscious business is also good business. executives of the region on leadership and team issues. On every level, Ricardo is always integrating the physical, the Pharma and medical device companies need to develop a cognitive, and the spiritual realms into a successful and decision making “technology” that works to blend the 2012 Axialent Inc. All rights reserved. Business Ethics and Reputation in Pharmaceutical and Medical Device Companies

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