Chapter 11

Chapter 11
Ethics of Pharmaceutical Innovation

PROFESSIONALISM
 The noun "professionalism" is best understood by recalling the verb form, "to
profess."
 To profess is to make a public promise that binds a collectivity, not merely an
individual.
 The medical profession promises the public to act primarily in the interests of the
individual patient and of the public at large, and only secondarily to pursue its own
interests.
 On the basis of this public promise, the profession hopes that citizens will find
physicians worthy of trust.
 Without that trust, the practice of medicine becomes impossible
Introduction
 Corporate managers responsible for the research, development, and marketing of pharmaceutical
products inevitably encounter challenging ethical issues.
 One main reason is that, to reach the market, drugs must be studied in animals and humans,
activities that have historically been plagued with ethical dilemmas about weighing the benefits and
risks to subjects and the goal of advancing medical science and, in the case of human research,
issues of free and
 informed consent.
 The second main reason that ethics has special relevance to the pharmaceutical industry is related to
the intrinsic nature of drug products.
 Drugs become intensely personal when they make the difference between life and death, health and
disability. The more grave the illness, the more patients care about them.
 Drug products are also unavoidably unsafe – no drug can be taken without some risk of harm.
 The diseases that have produced the need for drug therapy also make patients more vulnerable than
other consumers.
 Fairness issues are generated by pharmaceutical products since they are often costly and therefore
create access disparities.
Introduction
 Given the propensity with which this industry encounters ethical issues, it is
important to understand their genesis and to understand some of the history that can
provide lessons for the future.
 This chapter will serve these goals by identifying ethically relevant activities of the
pharmaceutical industry and presenting examples of how these activities have
impacted companies.
 Awareness of where the ethical pitfalls lie can end a common practice of addressing
these issues only in times of emergency and can allow managers to anticipate
potential problems and address them proactively.
CLINICAL ETHICS
 Clinical ethics focuses primarily on the relationships between physicians and their
patients.
 There is obviously an overlap between professionalism and clinical ethics;
professionalism dictates that the relationship should primarily serve the patient's
interests.
 Professionalism, however, is principally physician-centered, whereas clinical ethics
addresses more directly the impact of the physician's actions on the patient.
 Professionalism is best understood as a variety of virtue ethics, which is directed
inward toward the character development of ethical actor.
 Virtue ethics is more concerned with what sort of person the physician is, and less
directly attentive to rights and duties owed to others.
 Clinical ethics commonly focuses on ethical principles rather than virtues, and is
directly concerned with the impact of the physician's actions on the patient
CLINICAL ETHICS
 There are various ways to describe the principles, guidelines, or rules that ought to
govern the physician-patient relationship.
 All agree, however, that 3 considerations are prominently included in any such list-
providing patient benefit, avoiding harm, and respecting patients' choices.
 All these considerations presuppose a reliable evidentiary base.
 The physician cannot know how to promote benefit and avoid harm without a
scientific understanding of the effects of various interventions.
 The patient cannot be expected to make meaningful choices among treatment
options without the information about the pros and cons of each.
 Any practices that routinely lead to the concealment or distortion of scientific
evidence about therapeutics are therefore corrosive of clinical ethics.
 Unfortunately, many of the common marketing practices of the pharmaceutical
industry entail a distortion of the scientific basis for good clinical practice.
PUBLIC HEALTH ETHICS
 After some decades of neglect, attention to the ethics of public health has recently increased.
 Two major ways of thinking about public health have emerged
 The more traditional approach stresses on 2 aspects of public health - its unavoidably utilitarian
nature and the need to protect individual rights from utilitarian threats.
 Public health is focused on the health of a population and only secondarily addresses the health
of individual patients.
 Public health officials must necessarily be more concerned with maximizing health across the
population, rather than what happens to any given individual.
 This sets up a situation in which individual rights can be abused in order to serve a supposedly
greater public need.
 According to this view, public health ethics tries to balance protection of individual rights against
the overriding duty to serve the health of the population.
 The allowable degree of intrusion into individual liberties in order to protect a population from a
threatened epidemic, through quarantine or mandatory immunization, is 1 example of such a
need for balance
PUBLIC HEALTH ETHICS
 Other recent work in public health ethics argues for a different approach more
grounded in social justice.
 Instead of a negative duty to avoid interfering with individual rights, public health
practitioners have a positive duty to promote social justice related to health,
especially by attending to the needs of the most vulnerable populations in society.
 This expansive, justice-grounded ethic of public health finds further support in
arguments that social programs to assure basic health and health care comprise an
essential contribution to a life compatible with basic human dignity.
 This expanded view of public health would, for example, find problems with
corporate policies that stress the development of treatments that can be sold at high
profits in the rich nations, while neglecting diseases that affect a much larger
percentage of the world's impoverished population that cannot afford to buy
expensive medications
BUSINESS ETHICS IN HEALTH CARE
 Business ethics has emerged as a field of study within applied ethics that is
generally separate from medical or health care ethics.
 However, much of the practice and or- ganization of health care requires business
skills and applications.
 Therefore, there ought to be more communication and interchange between
business ethics and health care ethics than has previously been the case.
 Business ethics generally rejects the simplistic view that a corporation has 1 and
only 1 ethical duty, to maximize shareholder profit
 Most business ethicists recommend a stakeholder view and argue for a balance
between profits for shareholders and promoting benefits to other stakeholders,
notably the population in need of the corporation's products and the community in
which the corporation operates.
 Stakeholder duties increase when corporations occupy particular niches in the social
structure that cany special responsibilities, and when the corporations embrace
missions that are framed in terms of these social responsibilities.
 Thus a corporation that includes improving human health within its stated mission
undertakes obligations not shared by a company that manufactures the proverbial
widget.
 The siren call of the bottom line should not erase these ethical obligations
 There is an important relationship between the ethics of professionalism and the

business ethics of the pharmaceutical industry.
 As a basic feature of stakeholder business ethics, a company, for instance, ought not
to pollute the environment
 Similarly an analogy also exists between the importance of medical professionalism
in society and the importance of clean air and water.
 These are all public goods that can be destroyed by organizations acting in their own
selfish interests.
 When pharmaceutical companies engage in marketing policies that predictably
create serious conflicts of interest and thereby threaten medical professional values
and the public trust, a public good is being destroyed in the name of higher profits.
 This is both a violation of basic business ethics and a self-destructive strategy for a
business firm, which should be as concerned about its long-term survival as about
short-term profits
 Ideally, business ethics would set a higher standard of behavior than law.
 Companies may engage in numerous unethical actions that are nevertheless legal
(especially when corporations have the political muscle to bend the law to their own
specifications).
 Therefore, illegal behavior is an especially serious breach of business ethics.
 When pharmaceutical corporations head the list of industries that have recently
settled Federal legal actions for fraud, this suggests that business ethics in the
pharmaceutical (and medical device) industry is in a worrisome state
Ethical Issues Confronting Companies in the Early 21st Century
1. Conflict of Interest
 The core idea underlying conflict of interest is trust in a social role.

 Conflicts of interest thereby become a central concern in professional ethics.
 This has led many commentators to focus on conflicts of interest as the central
ethical problem at the interface between medicine and the pharmaceutical industry.
 To be in a conflict of interest is to place oneself in a situation where reasonable
onlookers would judge that the temptation to elevate one's own or another's
interests above one's professed duty to the patient and public might become too
strong to avoid.
 Thus, even if one fulfills one's duty to patients, conflict-of-interest situations threaten
public trust in medicine.
 Therefore there is an ethical duty to avoid such arrangements when they can be
avoided, and to manage them carefully when they cannot be avoided
 Frequently, pharmaceutical companies seek the research expertise of academics to conduct

the studies that lead to product approval.
 Universities welcome these research contracts since they offset ever dwindling public
research support, generate publications for faculty, and create training experiences for
students.
 Despite the mutual benefits, however, conflicts of interest are common in this setting since
the two entities engaged in this activity are very different one from the other.
 Companies do not want competitors to learn of their early drug research activity and often
seek to keep this information confidential.
 Confidentiality is also important to protect intellectual property and trade secrets.
 The company sponsor also needs to design the research to achieve a commercial goal.
 In contrast, academics operate under conditions of openness and free discussion, and
faculties are accustomed to the freedom to research any matter regardless of its short
 term practical application.
 Universities also pride themselves as sources of objective knowledge and some

faculty members suspect that corporate funding influences their research focus or
scientific judgment about a particular technology.
 Too much corporate research support, it is argued, can undermine the credibility of
faculty members and the public trust in the university.
 In addition, academics have other campus obligations – teaching, governance – that
can be compromised if a faculty member spends too much time on corporate
sponsored projects.
 Sometimes, also, industry sponsored research can be too mundane to advance
science and learning.
 As a consequence, even though faculty may agree to conduct corporate research,
universities often refuse to abide by corporate requests to maintain confidentiality,
delay publication, or alter other basic academic practices
 Health policy researcher David Blumenthal and colleagues at Harvard University study these
conflicts of interest and commitment and have demonstrated that a certain level of industry
sponsored academic research is beneficial to both parties
 Beyond a certain point, however, the risks seem to outweigh the benefits.
 When academic researchers obtain more than two-thirds of their research funding from
commercial sources, they tend to be less open, lose academic credibility, and become less
productive academic citizens.
 Other problems include intellectual property disputes, disagreements about study design
integrity and data interpretation, and conflicts over company-mandated publication delays.
 A certain amount of delay to submit patent applications is usually tolerated but not when delay is
to preserve competitive advantages such as by restricting the dissemination of unfavorable data.
 On the other side of the deal, companies can be unhappy with university researchers when, for
instance, they assign the work to junior faculty or students, cause delays, breach confidentiality,
fail to follow the study protocol, and commit research misconduct.
 An example of a research collaboration that created these kinds of conflict occurred

when Sandoz collaborated with academic physicians to study the cardiac effects of
one of its blood pressure drugs compared to another common drug.
 Some of the faculty researchers alleged that Sandoz had wielded undue influence in
controlling how the research results were reported.
 For this reason, these faculty researchers made public their refusal to have their
names included as authors on the publication
 At other times, the complaint is about the magnitude of corporate research funding.
Research collaborations such as those between Sandoz and the Scripps Research
Institute in 1992 and Novartis and University of California at Berkeley in 1998 were
so large that protestors alleged that companies were taking over and subverting the
missions of premier American biomedical research and academic institutions
 In the Scripps case, National Institutes of Health objections and congressional

investigations forced a drastic reduction in scope
 Faculty objections at Berkeley delayed the Novartis deal for over six months.
 Another well known case involved the company Immune Response which sued
researchers at Harvard University and UCSF over publication of data on the
company’s anti-HIV drug Remune
 The academic researchers found a lack of effectiveness.
 Corporate scientists analyzed the data differently, found a clinical benefit, and
withheld data from the academic researchers in an attempt to prevent their
publication of negative study results.
 When the academics eventually published their data, the company sued claiming
damages of $7 to $10 million.
 Problems like this led many universities to adopt conflict of interest and conflict of
commitment policies.
 These policies often prevent faculty from committing too much time to corporate sponsored
work, dictate the permissible financial ties to industry, require control over study design,
mandate disclosures of corporate funding sources, and prevent certain controls over and
delays in publishing
 Becoming aware of the sources of potential conflict between independent scientists and
corporations and dealing with them proactively is often the best means to avoid conflict in
this endeavor
 Several resources can assist the researcher in this regard, including the reports and policies
of the American Association of Medical Colleges, the National Health and Medical Research
Council of Australia, and guidelines generated by the International Committee of Medical
Journal Editors
 Careful attention to the avoidance and management of these conflicts serve the goal of
generating mutually constructive and medically beneficial research collaborations.
2. Biased Study Design and Data Interpretation
 A related ethical question relates to a concern that corporate research protocol designs are
manipulated or the data interpreted to achieve a result favorable to the commercialization of a
drug
 This is an ethical issue faced by both academic researchers and those employed by industry
 The dilemma arises because companies need to design trials to meet their marketing needs.
 For instance, if the company plans to market a drug for a severe form of a particular disease, the
studies will exclude animal and human subjects with mild disease.
 Whether such a study design is considered biased hinges on intent which is often revealed by
the manner in which the company interprets and markets the data.
 Using the data, for instance, to claim that the drug is useful in the disease per se is obviously
misleading.
 The study may also be considered irresponsible if the company knows or strongly suspects that
the drug is ineffective or toxic in mild disease and that unsuspecting physicians will tend to do
what they always do – use the drug in all forms of the disease.
 The company may respond to this situation with a range of actions:

 claim that it is someone else’s responsibility to produce study data on how the drug
behaves when used “off-label”, in this case, for patients with the mild form of the
disease
 state in the labeling that the drug is useful in severe forms of disease
 state that no data exists on how the drug behaves in mild disease
 disclose the suspicion that the drug is not useful or safe in the wider spectrum of
diseased patients
 act on the suspicion and conduct studies to show how the drug behaves when
prescribed in the real world, in this case, for patients with the mild form of the disease.
 Disagreements are increasingly common about whether drug study designs intentionally
enhance efficacy outcomes or conceal side effects.
 Merck experienced criticism of this nature after it withdrew its anti-inflammatory drug Vioxx® in
2004, a drug that was selling $2.5 billion per year.
 After five years on the market, the drug was shown to enhance the risk for heart attacks and
strokes prompting questions about whether the company had delayed the discovery of these
risks.
 Leaks of internal documents revealed comments by the company’s vice president for clinical
research that suggested she knew that Vioxx could cause cardiovascular side effects and was
contemplating designing an important clinical trial to obscure this finding
 In another widely publicized case, the lead researcher responsible for ImClone’s anti-cancer
drug was called to testify at a congressional investigation hearing and asked to address
allegations that his lucrative company ties had led him to manipulate drug study data
 Whether Merck or ImClone scientists had designed studies in order to heighten efficacy or mask
side effects is unknown.
 Yet, commentary in the scientific literature indicates a long-held uneasiness about whether
company sponsored drug trials are skewed to produce positive data.
 Others say that this conclusion is too facile – that companies sponsor only those trials
where prior data support a reasonable expectation that outcomes will be positive.
 Another questioned practice is covert reporting of the same data.
 For instance, researchers found that meta analysis of the side effects of the antipsychotic
risperidone was skewed because what appeared to be 20 separate studies was actually
only 9 studies reported multiple times, often with different lead authors
 Re-publication of favorable studies artificially skews the balance of opinion in favor of a drug
and some researchers suspect that drug companies do this deliberately.
 Another criticized study design practice deals with how companies define and code adverse
drug reactions.
 Obviously, the number and kind of ADRs reported can be influenced by company decisions,
for instance, to characterize an event as disease rather than drug related.
 This issue arose when regulators were attempting to determine if the antidepressant
SSRIs caused an increase in suicidality.
 Some critics accused companies of wrongly attributing all suicidal behavior to the
depression the drugs were designed to treat.
 Subsequently, research showed that these drugs could increase suicidal behavior
and black box warnings to this effect were added to the U.S. drug labels almost 16
years after the first of these drugs was marketed (Food and Drug Administration
2004).
 Another related issue involves whether companies or company ties influence data
interpretation or opinions about drug products
 Recent studies have given credence to an association if not causation in this regard
 For instance, in 1998, a debate existed about the safety of calcium-channel
antagonists.
 One study at the time showed that 96% of medical journal authors writing on the topic who
supported the use of the drugs had a financial relationship with the manufacturers of the
drugs compared with 37% who were critical of them (Stelfox 1998).
 This study and others have been cited as evidence that an association with industry lessens
objectivity about the benefits and risks of drugs.
 Another possibility, of course, is that scientists and physicians form a favorable opinion
about a product which then leads to a research affiliation with a company.
 Again, the possibility that conflicts of interest can lead to biased studies and opinions has
led to university and journal policies requiring disclosure of industry ties.
 University policies, based on the belief that the amount of money determines the amount of
influence, also limit the extent to which faculty can financially benefit from commercial
affiliations.
 These policies cannot, however, eliminate the potential for bias. Sensitivity to the problem
should prompt researchers to remain vigilant – to carefully review all protocols to eliminate
biasing design elements and to maintain critical and objective data interpretation.
3. Selecting Drugs to Develop
 Several ethical and social questions exist about the choice of drugs to develop.
 The first involves whether the result is worth the effort and cost.
 Researchers often wish to devote their time and expertise to developing drugs that will make a major
difference in the lives of sick patients.
 The socially beneficial aspect of their work is what drives them and keeps them in the lab.
 In contrast, they chafe when asked to develop a chemically related drug that offers only minimal
improvement over existing therapies, so-called me-too drugs.
 The term me-too comes from the fact that, as soon as a large market prototype drug becomes
available, several other similarly active compounds immediately follow from competing companies.
 This kind of drug is attractive for companies to develop since they can capitalize on the research and
approval of the successful prototype, develop follow-ons more efficiently, and take an easier share of
a large established market.
 Me-too drugs are also developed to preserve a market for a blockbuster drug, the patent for which is
about to expire.
 Patenting a similar drug can allow the company to maintain premium pricing rather than watch
revenues decline when the drug losses patent its patent and becomes generic.
 Most often, the follow-ons offer some benefit over the prototype, such as lesser toxicity, improved
pharmacokinetic profile, more favorable compatibility with co-morbid conditions, or easier use.
 Patients benefit when the me-too offers significant medical benefit and generates price competition
 The reason that many researchers dislike developing me-toos, however, is that too many offer only a
marginal benefit, so small, claim some, that the intellectual and financial development resources expended
far outweigh any medical or social benefit.
 The situation worsens, claim some, when aggressive marketing obscures the small differences between a
high priced new drug and a cheaper generic.
 Scientists and physicians prefer intrinsic medical value rather than marketing to determine which drugs get
prescribed.
 The fact that these drugs are considered duplicative and wasteful of resources incites consumer groups as
well.
 Criticism of me-too drugs is relevant even in the situation where the existence of the me-too is the result of
a development race rather than post hoc imitation.
 Once a strong class breakthrough drug has been approved, some favor a system that will allow only those
follow-ons that demonstrate significant improvements over the prototype.
 Currently, most regulatory systems approve drugs based on their intrinsic merits rather than whether they
offer significant benefits over existing drugs.
 An example of the me-too phenomena is captopril, the prototype for angiotensin converting enzyme (ACE)
inhibitors, a class of drugs used to control hypertension.
 The approval of captopril was followed by at least 15 me-too ACE inhibitors most of which have equivalent
efficacy and side effect profiles.
 The similarities are so close that one pharmacologist suggested that physicians should routinely prescribe
whatever brand was cheaper
 An example of a drug developed to preserve revenues from a patented blockbuster is the acid reflux drug
Nexium® by Astra Zeneca.
 This drug is the S-isomer of the company’s blockbuster drug Prilosec® which had been a major revenue
producer until its U.S. patent expired in 2001.
 Astra Zeneca took advantage of the fact that isomeric forms are considered by the FDA to be different
compounds and can be separately patented.
 The company studies showed the S-isomer to be somewhat more effective than the racemic mix and,
while other companies can experience a loss of up to 85% of a drug’s revenues within a year of patent
loss, Astra Zeneca was able to preserve its franchise for Prilosec by marketing Nexium, the sales for which
were $3.3 billion in 2003.
 However, this move created a storm of criticism when patients understood that they paid up to eight times
as much for the patented Nexium as for the generic and very similar (and now over-the-counter) Prilosec
 Company reputation suffered as a result and a class action lawsuit was filed alleging that deceptive
advertising of a medically significant benefit over Prilosec led to the demand for Nexium
 Whether prescribing a me-too based on price or prescribing an equally effective generic drug, the cost
saving can be substantial and, at a time when financial resources for health are limited, economic
considerations are not a minor point.
 The profusion of these follow-on drugs has led commentators to ask whether this conventional form of
pharmaceutical business competition serves society as well as it should.
 This me-too value issue relates to a larger question about the role of the pharmaceutical industry in society
and whether the industry has an obligation to focus their efforts on innovative therapies and those for
neglected illnesses.
 Some dislike the question since it implies a social obligation that is more appropriate for governments than
business.
 The criticism seems aimed more at the existence of the capitalist system which would become seriously
eroded if companies were required to compromise their focus on the bottom line to benefit public health.
 In contrast, the focus on corporate profits contributes to serious social injustice since drugs are not
developed for diseases that exist in poor countries
 Because of increasing pressure from underserved groups, this issue will continue to be debated by the
industry and policy makers.
4. Human research ethics
 Because of a long-standing history of abuse, the ethical issues associated with

human research have received widespread attention.
 Multiple national and international guidelines and regulations were developed to
ensure that human subjects are treated ethically and responsibly.
 Because these resources are readily available, this section will deal only with the
general categories of research topics that generate the most ethical concern.
4.1 Risk vs Benefit
 The first consideration for any researcher is to assess whether the potential benefit
of the proposed research outweighs the potential harm.
 Harms can include physical, psychological, social, or economic. In addressing this
issue, most research can be justified if benefit and risk is applied broadly in a
utilitarian sense, i.e., any harm to the relatively few subjects is justified either
because the research leads to new medical products that can benefit the many or,
with failed trials, the benefit from medical knowledge gained and the sparing of the
many patients from a useless or unsafe drug.
 However, ethical norms require that the risk-benefit calculus consider primarily the
effects of the research on the human subjects and, additionally, on the potential to
advance medical knowledge.
 For instance, in the U.S., IRBs (the institutional review boards that approve human
research) are instructed to assess risk and benefit as follows:
4.1 Risk vs Benefit
“Risks to subjects [must be] reasonable in relation to anticipated benefits, if any, to

subjects, and the importance of the knowledge that may reasonably be expected to
result. In evaluating risks and benefits, the IRB should consider only those risks
and benefits that may result from the research (as distinguished from risks and
benefits of therapies subjects would receive even if not participating in the
research). The IRB should not consider possible long-range effects of applying
knowledge gained in the research (for example, the possible effects of the research
on public policy) as among those research risks that fall within the purview of its
Responsibility”
4.1 Risk vs Benefit
 The Declaration of Helsinki (section A.5) is more narrow and states that the well
being of the human subject should take precedence over the interests of science
and society.
 Other aspects of minimizing risks to subjects require that sufficient prior research
should be performed to understand the potential risks as much as possible.
 Researchers also must be qualified and adhere to standards of good research
practice so as to preserve the benefits of the research as much as possible, thus not
exposing subjects to risk for no good purpose.
 Minimizing the risks and burdens to subjects in these ways adheres to the ethical
norm of non-malfeasance or doing no harm, which is a principle obligation of any
research physician.
4.2 Informed Consent
 Over the years, lack of informed consent has been at the heart of most unethical studies.
 Failure to fully inform subjects uses people as a means to an end (to produce data),
disrespects the right to personal autonomy, and offends our sense of fairness.
 Ethical lapses such as this are the reason for mandatory requirements that subjects be
provided a clear and accurate explanation of risks, benefits, and alternatives before
enrolling in any clinical study.
 In order for consent to be meaningful, the potential subject must be given understandable
information, informed of all of the expected consequences that a reasonable person would
want to know about, and given an opportunity to ask questions and an adequate time to
reflect before committing.
 Special attention to the consent process is needed when studies are complex or particularly
risky and when subjects’ ability to understand is compromised.
 Some researchers in these situations have required subjects to pass a comprehension test
before enrolling them into studies
4.3 Free Consent
 Informed consent is not the same thing as free consent.

 Respect for persons requires that consent to research be truly voluntary.
 For various reasons, some patients are more vulnerable than others and are therefore more
susceptible to the influence of a trusted physician who asks for consent to join a drug study.
 Especially when patients are desperate for any chance of treatment, physician researchers need
to be careful to minimize the possibility of coercion or undue influence in the recruitment process.
 Vulnerable patients also include those who are economically and medically disadvantaged and
who may volunteer simply because money is offered or the fact that research participation offers
the only access to medical care.
 Those who lack mental capacity and cannot competently consent to research need a proxy who
represents the patient’s best interest.
 In addition, many believe that patients with mental deficits should be included in drug research
only if the mental condition is a necessary characteristic of the research population.
 Most countries also have provisions forbidding or controlling the use of prisoners in research
because of the difficulty in dissuading the incarcerated from the belief that cooperation with
researchers will result in favorable prison treatment.
4.4 Privacy
 The information collected in drug research is medical in nature and, as such, must
be kept confidential.
 Also, the fact that a subject has entered a clinical study often reveals his or her
diagnosis, so enrollment is also private information.
 Every precaution should be taken to respect the privacy of the subject and the
confidentiality of the patient’s information.
4.5 Research in Children
 Pediatric drug research has been generally neglected because of the reluctance to subject
children to unknown risks given that they cannot protect their own interests through informed
consent.
 In addition, the protective instincts of parents and guardians make them unwilling to enroll their
children in research.
 The resultant lack of data on how children react to drugs means that most pediatric treatment
proceeds through trial and error.
 Regulatory agencies are trying to correct this disadvantage by offering drug companies
inducements to conduct pediatric research and by specifying the ethical requirements necessary
to enroll these subjects in research.
 For instance, the FDA regulations list the safeguards that must be satisfied depending on the
risk of the research, the potential benefit to the child, the potential to produce generalizable
knowledge about the child’s disease, and the opportunity to understand, prevent, or alleviate a
serious problem affecting the health or welfare of children.
 The regulations also specify the qualifications of parents or other consent providers and require
the assent of the child if feasible.
4.6 Placebo Controls
 The ethical debate about the use of placebo controls centers on the scientific benefits of
eliminating the most study variables vs the risks to subjects of forgoing standard treatment.
 The use of placebo controls, according to most researchers, best satisfies the fundamental
research goal of producing scientifically accurate and dependable data that can distinguish
the effect of the drug from other influences, such as spontaneous change in the course of
the disease, placebo effect, biased observation, or chance.
 Regulatory agencies will not approve a drug without sufficiently controlled data and the FDA
especially adheres to the belief that no control is better than placebo.
 Thus, drug companies often rely on the use of placebo controls because the resulting study
data are considered trustworthy by the regulatory agencies and by physicians.
 Placebo controls are also desirable since, by producing fewer confounding variables,
studies can be conducted more rapidly with smaller populations than clinical trials using
active controls.
 Shorter clinical trials with fewer subjects can save time and money and put effective
products on the market more quickly
4.6 Placebo Controls
 The problem with placebos is that human subjects must agree to random and blind assignment
to a therapeutically inert substance masked as an active treatment.
 Obviously, the sicker the patient, the greater the potential harm from placebo administration.
 The duplicity (even though consented to) and the fact that diseased subjects receive no active
treatment is considered unethical by some researchers and standards bodies.
 For instance, the World Medical Association (in the Declaration of Helsinki, C. 29) states that
placebo controls should be used only in the absence of existing proven therapy.
 With few provisos, the Declaration requires that, if other therapies are available, experimental
drugs should be tested against the best of them.
 The World Medical Association’s stance on the use of placebos was promulgated after some
controversial AIDS research in Africa and was intended to reflect a widespread interest by
Association members to place subject safety over concerns about data certainty.
 Given the differences of opinion on this topic between regulatory agencies and medical
organizations, debates about placebo controls are expected to continue.
 In this environment, it is important for researchers to explicitly justify the use of placebos based
on compelling medical and scientific criteria.
4.7 Adherence to Protocol
 Research protocols need to be carefully designed in order to produce scientifically valid

data and to protect the rights and interests of human subjects.
 Failure to adhere to the protocol undermines both. A widely publicized example of this kind
of failure occurred in 1999 when an 18 year old human subject Jesse Gelsinger died in a
gene therapy trial conducted at the University of Pennsylvania.
 Gelsinger’s death resulted in investigations that disclosed multiple failures to follow protocol
requirements, including failure to stop the study if subjects developed certain levels of
toxicity, enrolling subjects who failed to meet eligibility criteria, failing to report side effects,
and failing to notify the IRB of protocol changes.
 In Gelsinger’s case it was likely that these failures contributed to his death and the family
sued as a result. In addition, the FDA ordered Penn to halt all gene therapy experiments at
its Institute for Human Gene Therapy and brought debarment proceedings against its
director (FDA 2002).
 The tragedies associated with this incident were many and, in addition to the death,
included a major setback in the progress of gene therapy research and the career injury
suffered by one of the country’s best gene therapy scientists.
4.8 Monitoring
 Vigilant study monitoring is required so that studies can be stopped as soon as the
balance of harms and benefits becomes unfavorable.
 Monitoring has become more difficult as companies have been conducting multi-center
studies often managed by independent contractors (called CROs, clinical research
organizations).
 Hoechst Marion Roussel experienced a problem in this regard when it conducted trials
on Cariporide®, a drug expected to reduce cardiac tissue damage after a heart attack.
 The Naval hospital in Argentina was one of 26 Argentinean study sites and one of 200
medical centers worldwide that participated in the 11,500 subject trials.
 In 1998, Hoechst and its U.S.-based CRO, Quintiles Transnational, noticed some
irregularities with the Naval Hospital trial and notified local authorities.
 Criminal investigations led prosecutors to allege that 137 patients had not consented to
the study treatment and signatures on at least 80 consent documents had been forged.
4.8 Monitoring
 Prosecutors also collected evidence that subjects’ records contained duplicated

electrocardiograms with the characteristic findings needed to justify entering the
patient in the trial.
 At least 13 subject had died, and prosecutors claimed that some of these deaths
were attributable to the experimental drug
 While no one thought that the drug company or the CRO had been responsible for
these problems, the multitude of offshore studies and the fact that both the company
and the study monitor were in other countries most likely contributed to the problem.
4.9 Compensation for Injury
 Most countries have requirements that research subjects be told whether they will receive
medical care or compensation for injuries experienced in clinical trials.
 However, there is no uniform practice about the provision of treatment or compensation.
 Some researchers provide neither and others provide both.
 And there is a range of practice between these two options.
 Injured human subjects who are not treated or compensated for their expenses and losses
are left to their own devices and they sometimes sue the study sponsor.
 Many commentators see the unfairness in such situations and have lobbied for some
uniform treatments and compensation practices.
 During the 1970s, a consensus began to evolve among medical ethicists that compensatory
justice principles required that subjects who were injured as a result of participating in
clinical research are entitled to full compensation for both medical and non-medical related
costs.
 Policy reasoning that supported this conclusion stemmed from the view that society as a
whole has a direct stake in the conduct of scientific research, including the knowledge
benefits that come from experimental failure.
 If society shares the benefits, so should it share the financial burden of the research activity
by paying for the costs of research-related injuries.
 Legal and ethical commentators argued that even if these injuries occurred through no fault
of the researcher or sponsor, accountable public policy required that responsibility be fixed
 wherever it will most effectively reduce the hazards to life and health inherent in the
research endeavor.
 If research sponsors were committed in advance to pay for injuries, the tendency to engage
in excessively dangerous research would also be minimized and research sponsors would
take more care in designing safe trials, monitoring for injury, and stopping trials as soon as
the data revealed excessive risk.
 Also, companies are most often in a better financial position to bear the costs of research
injury by including the cost of injury compensation in the price of the product.
 Finally, people would more likely consent to participate in research if they knew they would
not be responsible for the costs of any injuries
 Many proponents of this view also argued that since the primary goal of
compensatory justice is to restore the injured person as much as possible to his or
her original condition, injury compensation should include medical and non-medical
costs of injury, the latter including such things as lost wages or services provided
while the injured subject was disabled
 These arguments have been presented over the years to various national and
medical commissions (U.S. President’s Commission 1982) but consistent policy has
failed to result primarily because of disagreements about who should bear the
expense.
 Consequently, researchers need to consider in advance how they will manage this
aspect of their research activity
4.10 Post-study Responsibilities to Subjects
 After a clinical drug study ends, subjects become patients again and are most often referred back to
their primary care physician for any needed follow-up care.
 There are times, however, when subjects will expect something more from the company.
 Subjects who experience long term side effects from study drugs can expect help from the company
despite any contrary provisions in the consent form.
 In other cases, when subjects benefit from the experimental drug, it is natural that they would want to
continue taking it.
 Prohibitions on selling experimental drugs prevent such access and, especially when the drug was
an over-all failure and will not be marketed, subjects can feel abandoned and unfairly denied effective
therapy.
 The acuteness of the situation is heightened when the drug treated cancer or some other
 life threatening illness.
 These are reasons that the Declaration of Helsinki contains a provision that effective drugs be
provided to all study subjects at the conclusion of research.
 Not all researchers abide by this provision and it remains a matter of debate
 Envisioning all possible study outcomes in advance will help researchers devise strategies to
address questions about post-study support
5. Publication of Negative Data and Data Access
 Drug companies are not required to publish study results.

 Except under rare circumstances, regulatory agencies keep company data confidential and
only require disclosure of selected summaries of study data in the drug labeling.
 As a result, negative drug study data often remains unpublished.
 Nothing stimulated an interest in changing this status quo as did the revelation about
unpublished data on the efficacy and safety of the use of SSRIs in depressed children.
 All SSRI manufacturers had obtained approval to market for use in depressed adults and for
years physicians had been prescribing the drugs for children off-label.
 Eli Lilly & Company then performed studies and obtained approval to market its SSRI
Prozac® for use in depressed children. When GlaxoSmithKline applied for similar approval
in the U.K. for its drug Paxil® (Seroxat® in the U.K.), the resulting investigation shed light on
the phenomenon of selective publication. U.K.’s Medicines Control Agency (MCA)
discovered that GlaxoSmithKline had conducted nine studies of its drug in depressed
children but had published only one.
 When the MCA and then the FDA conducted analyses of the individual and combined data in all of
the nine submitted studies, the combined data showed that the drug was not effective in pediatric
depression.
 Furthermore, in total, these studies showed that 3.4 percent of children who were taking or had
recently stopped Paxil had attempted suicide or thought more about it.
 That compared with 1.2 percent of the children taking a placebo, a statistically significant difference.
 In contrast, the one study that GlaxoSmithKline had published showed that the drug was better than
placebo in children and was not associated with any suicidal attempts or ideation.
 Further investigations revealed that other companies had also sponsored but not published negative
pediatric SSRI studies.
 GlaxoSmithKline had not been marketing the drug for childhood depression.
 However, critics, regulators, and prosecutors claimed that the company knew that the drug was
widely prescribed for children and that, by publishing only the positive study, the company misled
physicians and patients about the efficacy and safety of the drug. The press on the story convinced
the public that this kind of publication bias was common, and the ethical, clinical, and scientific
integrity of the industry was called into question
 The resultant furor involved the drug regulatory agencies (they started to reconsider their practice of
keeping study data confidential), drug companies (they began to face lawsuits and criminal charges
were brought against GlaxoSmithKline), medical journal editors (they sought wider disclosure
standards), the U.S. Congress (which convened investigations), and academics and patient advocates
(who demanded full access to all drug company research data)
 The SSRI situation stimulated a renewal by national and international groups to encourage registration
of all drug studies and disclosure of all drug study data
 Registries had existed for this purpose but had not been widely used by companies.
 Surveys had shown that existing registries had not produced the openness and transparency that
would have prevented the problem seen with pediatric SSRI data.
 Even companies that had attempted to address publication bias had not been successful in avoiding
problems.
 For instance, six years before the pediatric SSRI problem, GlaxoSmithKline’s predecessor Glaxo
Wellcome announced on its website that it would register, make accessible, and publish all of its clinical
trials.
 Openness and access, while well intentioned, is operationally difficult.
6. Product Pricing and Access to Drugs
 New drugs are expensive because manufacturers need to recoup the considerable expense of getting
a new drug to market (upwards of $800 million16 in the U.S. at the time of this writing)
 The price paid by patients is sometimes covered by insurance or public health programs but, frequently,
uninsured patients in developed countries and most patients in undeveloped countries cannot afford to
pay for new drugs
 This disparity has prompted members of society to ask whether the industry is going to address the
problem.
 Many large pharmaceutical companies have programs that provide needy patients with drugs and/or
assist patients in obtaining public or private insurance to cover the cost of its drugs.
 Yet, these programs help only a relatively few patients prompting countries and patient groups continue
to lobbying the industry to make medicines more affordable.
 In the U.S., Congress frequently considers bills that would mandate drug price controls.
 And in Germany, where price controls exist, companies went so far as to contribute € 200 million (about
$189 million in 2002) to the national health plan to prevent the country from imposing a further 4% price
cut on prescription drugs
 Some states in the U.S. have even sued drug companies for allegedly inflating prices. Patients in the
U.S., where drug prices are often the highest, hire tour companies to bus them to Canada where drugs
can cost as much as 50% less
6. Product Pricing and Access to Drugs
 Most of the pressure, however, comes from third world countries where drugs are not affordable, even
for the generics used to treat common diseases such as tuberculosis and malaria.
 The global AIDS crisis has added fuel to the protests against drug prices and spawned multiple efforts
to develop generic drugs in violation of drug company patents
 All of this activity has put pressure on the pharmaceutical industry to disclose its price setting practices,
lower prices, and/or relinquish patent rights to allow the manufacture of cheaper copies of patented
drugs.
 The pharmaceutical industry has been hard pressed to convince the public that forcing these changes,
while producing short term relief, would dampen incentives for industry to engage in expensive R&D
and would ultimately deprive society of valuable drugs.
 The U.S. Pharmaceutical Research and Manufacturers of American reported that, in 2003, its member
companies invested an estimated $33.2 billion on research to develop new disease treatments.
 This figure amounted to spending an estimated 17.7 percent of domestic sales on R&D – a higher
R&D-to-sales ratio than any other U.S. industry.
 Without the ability to freely price, this vigorous activity will inevitably diminish. Given the high cost of
development and the crucial need for prescription drugs, this cost vs value vs access debate is sure to
continue for many years.
7. Marketing and Advertising
 There are three main ethical issues associated with drug company marketing and advertising. The first
is whether the material is truthful and fairly balances information about benefit and risk.
 The second issue has to do with whether companies medicalize conditions to generate a market for
drugs or otherwise stimulate off label use.
 The third issue concerns the amount of money companies spend on advertising.
 Since prescription drug regulations have been on the books, company marketing material has been
required to be truthful, contain all material information, and fairly balance risk and benefit information.
 The industry has also adopted voluntary codes to promote and support ethical marketing practices.
 These regulations and codes are a result of continuous negotiation between regulatory agencies, drug
companies, and physician groups about the boundaries of legal and ethical prescription drug marketing
and advertising practices.
 Nothing has tested these requirements more, however, than when companies in the U.S. were allowed
to market drugs directly to patients.
 Until recently, it was widely believed that direct-to-consumer ads (DTC ads) for prescription drugs were
inappropriate because lay people lacked the education to understand the technical medical information
that was conveyed.
 In addition, drug ads can be misleading since they promote one drug only and fail to educate patients
about other treatment options
 Another primary objection concerns the fear that manufacturers, in their effort to persuade, attempt to
downplay the risks and give patients the misimpression that the drugs are totally safe.
 The FDA struggles with DTC ads because it is under-staffed to police them and because drug
companies always seem to be pushing the envelope of tolerability, especially for televised ads where
the time to present risk information is limited.
 Physicians generally dislike DTC drug ads because they prompt patients to self diagnose and put
pressure on the doctor to prescribe which often forces doctors to spend valuable time explaining why
a certain advertised drug is inappropriate
 For all of these reasons, most countries do not allow DTC drug advertising.
 In contrast, this activity has been widespread in the U.S. since the late 1980s.
 The drug companies claim a right to commercial free speech and the FDA, after conducting some
surveys, decided that patients had a legitimate right and need to learn about newly available
prescription drugs and these ads can be educational and empowering and can prompt patients to
seek needed medical attention.
 Despite the expected benefits, however, debates continue about whether DTC prescription drug
advertising is good or bad for the medical profession and the public (t’Hoen, 1998; U.S. General
Accounting Office 2002).
 DTC drug advertising is an effective way to increase prescribing.
 Research has shown that drugs that are heavily advertised, whether to physicians or patients, are
prescribed more.
 In one study, researchers at Harvard University and the Massachusetts Institute of Technology
looked at the effect of DTC drug advertising on spending for prescription drug.
 The study found that every $1 the industry spent on DTC advertising in 2000 yielded an additional
$4.20 in drug sales.
 In addition, DTC advertising was responsible for 12% of the increase in prescription drugs sales, or
an additional $2.6 billion, in that same year (Kaiser Family Foundation 2003).
 Numbers like this are the reason that the industry in the U.S. is likely to continue this activity.
 The so-called medicalization issue involves the question of whether pharmaceutical company
marketers intentionally (and irresponsibly) create an expansion in what is considered a disease
condition.
 One reason, for example, that attention deficit hyperactivity disorder (ADHD) became a legitimate
diagnosis was the discovery that Ritalin® could control it.
 These criticisms of drug marketing practices have led to the question of cost vs benefit.
 If the advertising (especially the DTC kind) does not improve health awareness or provide other
benefits and, worse; if the ads are harmful, the cost of advertising becomes an issue.
 In 2003, U.S. companies spent $3.22 billion in DTC advertising (Hensley 2004) and it is reasonable
to assume that this amount is incorporated, at least to some extent, into the price of the products
 Supporters of DTC advertising believe that it can have a positive effect, such as when the ads prompt
people to seek treatment with cholesterol lowering drugs.
 Advertising lipid lowering drugs, for instance, can decrease healthcare costs from the decrease in
cardiovascular morbidity in treated patients.
 Critics, however, deplore the spending and wonder if the increase in the number of prescriptions
written for advertised drugs is contributing significantly to patient health.
 In the midst of this debate, some companies, such as Johnson & Johnson, are skewing their patient
ads to highlight the educational and safety aspects.
 According to the company, the move was to reduce the animosity directed to these ads and preserve
the right to market directly to patients by educating and counseling consumers to improve their health
8. Post-marketing Safety Monitoring
 Drug companies have increasingly understood that the commitment they must make to a new drug is
often more than the usually quoted statistic of 10 years and $800 million to get the drug to market.
 The post-market research and surveillance phase of a drug’s life is now often as active as the pre-
market phase.
 Companies are either obliged by the regulatory agencies or voluntarily undertake these post-market
programs.
 Reasons for doing so are usually related to the fact that clinical research can never predict precisely
how a drug will behave once prescribed in the open market.
 Plenty of examples exist of drugs approved for marketing only to be withdrawn within a short period
because of unexpected side effects.
 Historically, the rate of drug recalls in the U.S. is 2–3%
 Drug companies also know that physicians will prescribe a drug for many patients who were not
included on the pre-market studies – children, pregnant patients, the elderly, patients with co-morbid
conditions, or even patients with other diseases.
 These circumstances give rise to two questions that have ethical relevance.
 How much post-market safety monitoring should the company perform? And, to what extent is it the
company’s responsibility (as opposed to the physicians) to collect data on or study off-label uses?
8. Post-marketing Safety Monitoring
 The question about post-market safety monitoring depends on the extent of pre-market research, the
utility of the drug, and the severity of potential side effects.
 For instance, if there was extensive pre-market research, the drug is for an unmet medical need, and
the potential for side effects low, then the need for safety monitoring or further study is probably on
the low side of the spectrum.
 The question about off-label use is more difficult to resolve.
 On the one hand, physicians need to take responsibility for their prescribing.
 If there is little data to indicate that a drug is safe for a particular use, this suggests that the physician
should use the drug under research rather than clinical conditions and the company should not be
responsible if the physician is reckless in this regard.
 On the other hand, if the company knows that the drug has a high potential for toxicity, doing nothing
seems irresponsible, especially since the company benefits from the expansion in the market
attributable to off-label use.
 This is exactly the view taken by critics in the Vioxx debate (described above).
 The significant legal, financial, and reputational harm that resulted in that case indicates that
companies need to devote considerable attention to their responsibilities for post-market drug safety.
Obtaining Ethics Advice
 Companies have several options when seeking ethics advice to manage the issues described above.
 Large companies tend to have in-house ethics officers who are either primarily responsible for legal
compliance and report to the general counsel or, even better, are more narrowly focused on ethics
and who liaison with the legal department.
 Resources to support such people include the Ethics Officers Association and Business for Social
Responsibility, both of which exist to educate and enhance communication about to address ethics
issues as they arise or seek outside individual consultants who work on discreet issues.
 Several aspects of using outsiders need to be addressed when pursuing this course of action.
 Ground rules and agreements must be established about confidentiality of discussions, whether the
company discloses its use of ethics advice (this can seem self-serving), compensation (too much
seems like buying an opinion, too little will deter participation), and how to manage ethics advice that
conflicts with management decisions.
 The advisors themselves also need to be carefully selected. Although a company will not be well
served by retaining a committed industry critic, neither is it helpful to hire a yes man who will justify
and endorse all company decisions.
Obtaining Ethics Advice
 Companies will benefit maximally from learning about all sides of a debate, and should
retain an advisor who will provide objective advice while retaining a willingness to support
the overall corporate effort.
 Expertise is also a factor
 A good company advisor will be educable about the technology, knowledgeable about
general pharmaceutical company business and legal affairs and about business ethics, and
able to provide practical advice.
 Because it is rare for one person to possess all of these skills, companies may want to
convene a panel of advisors with a variety of expertise
 Regardless of the method used, an awareness and incorporation of an ethical perspective
into business decision making will serve pharmaceutical company interests.
 Both economic and socials goals are advanced when business ethics programs assist in
responsible development and marketing of medical products, support physicians in their
treatment of patients, and advance the important social benefits of pharmaceutical and bio-
technologies.

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Chapter 11

Ethics of Pharmaceutical Innovation

 There is an important relationship between the ethics of professionalism and the

 The core idea underlying conflict of interest is trust in a social role.

 Frequently, pharmaceutical companies seek the research expertise of academics to conduct

 Universities also pride themselves as sources of objective knowledge and some

 An example of a research collaboration that created these kinds of conflict occurred

 In the Scripps case, National Institutes of Health objections and congressional

 The company may respond to this situation with a range of actions:

 Because of a long-standing history of abuse, the ethical issues associated with

“Risks to subjects [must be] reasonable in relation to anticipated benefits, if any, to

 Informed consent is not the same thing as free consent.

 Research protocols need to be carefully designed in order to produce scientifically valid

 Prosecutors also collected evidence that subjects’ records contained duplicated

 Drug companies are not required to publish study results.

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