The Ethical Taint of Post-It Notes — and the Power of a Company Policy

News yesterday (5/27) from the pharmaceutical industry that may prove the insidious power of promotional materials, and how little it may take to taint what is supposed to be impartial, objective decision-making.  But what’s really interesting in this news, and less ambiguous, is evidence of the power of organizational policies to set ethical norms.

The news is of research about how promotional items, like pens and note pads, that bear the logo of a drug, affect the attitudes of medical students toward that drug.  You’ve probably seen these pens and pads, and the like, all over your doctor’s office. The ones in the study promoted the anti-cholesterol drug Lipitor. The study appears in the Archives of Internal Medicine.

Reportedly, the study found that the little trinkets worked!  According to the New York Times:

The researchers worked with 352 third- and fourth-year students at Penn, which bans most gifts, samples and meals from drug companies, and the University of Miami, which allows them.

Using a series of psychological tests, the researchers assessed whether the students had positive or negative associations with the cholesterol drug Lipitor and a competitor, Zocor, which is available generically for less money.

Most students from both schools viewed Lipitor more favorably, the researchers said.

But when the researchers sought to influence the students unconsciously by having them use promotional materials like Lipitor clipboards and notebooks, they found that the fourth-year students at Miami showed stronger positive feelings for the drug.

The Philadelphia Inquirer dug a little deeper on how the promo items made the Penn students wary of Lipitor.

The results weren’t due to an Ivy League bias, said study lead author and Penn doctor David Grande.

The environment is important, he said. Grande and his coauthors, including a University of Miami business professor, speculated that Penn’s restrictions on marketing seem to have primed students there to react negatively to even a small marketing message.

This study is especially interesting given changes that became effective in January 2009 to the leading pharmaceutical industry trade association’s code of practices, the PhRMA Code On Interactions With Healthcare Professionals.

(Some quick background: The PhRMA Code first took effect in 2002, amid concerns over “kick-backs” in the drug business, where drug companies allegedly rewarded doctors who wrote lots of prescriptions for their medicines by showering them with monetary favors. Clearly, you wouldn’t want the pharmas to outright bribe docs to write scrips: first, it would mean we are all underwriting those bribes as they become built in to the cost of drugs, especially because the government is such a big buyer; and second, you’d hope your doctor prescribed a particular medicine solely because it was the best thing for you. Extending this idea, various laws, regulations, government “guidances” and codes have made verboten favors from pharmaceutical (and medical device) companies to doctors — like lavish meals, golf junkets, and lucrative “consulting” contracts that do not involve any real work.)

As of January 2009, for companies that adhere to the voluntary PhRMA Code, even the formerly ubiquitous post-it notes and pens bearing a drug’s logo are now disallowed. PhRMA says the revised Code:

Prohibits distribution of non-educational items (such as pens, mugs and other “reminder” objects typically adorned with a company or product logo) to healthcare providers and their staff. The Code acknowledges that such items, even though of minimal value, “may foster misperceptions that company interactions with healthcare professionals are not based on informing them about medical and scientific issues.”

Pharma compliance leaders complained bitterly off the record about this level of restriction, but the research announced yesterday provides some vindication for this aspect of the new PhRMA Code.

On the other hand, it may simply show that advertising works.

So to me, the more interesting news in this research is the different reaction of students in the two schools studied (all the more interesting to me because I went to the law schools of both of these universities!).  At U of M, where the trinkets favorably disposed the med students to Lipitor, there was no school policy about students receiving promotional items from drug companies.  But at Penn, there is a policy banning promotional items — and it was at Penn that the give-aways wound up making med students feel less favorable towards Lipitor.

This is one of the neatest pieces of evidence I have seen to prove that an institution’s policies don’t just establish “the law of the land,” something that could be the basis for employee discipline. The policies do more: they establish an ethical norm, they help create the culture of the institution.

Is Employment a Corporate Social Responsibility?

I heard some interesting reactions to and interpretations of the comments on April 29 by Dr Margaret Chan, the Director-General of the World Health Organization. She said:

“I have reached out to companies manufacturing antiviral drugs to assess capacity and all options for ramping up production.

“I have also reached out to influenza vaccine manufacturers that can contribute to the production of a pandemic vaccine.

….

“Above all, this is an opportunity for global solidarity as we look for responses and solutions that benefit all countries, all of humanity. After all, it really is all of humanity that is under threat during a pandemic.”

In on-air chat the next morning, these comments led the CNN anchors into a discussion of corporate social responsibility in the broad sense, of pharma companies as rich citizens of the world, etc. Their explicit point: hey, drug companies — you’re making billions off of us, so don’t be greedy when the world needs your Tamiflu.

If that is a fair point, then how come we never heard it applied to the economy? According to the CDC there are, as of now, 226 cases of 2009 H1N1* in the US. By contrast, the Labor Department says some 1.9 Million Americans have lost their jobs since December 2007. A more widespread pandemic, don’t you think?

But we never heard a public outcry, or a governmental shout-out, to this effect.  What if someone with a bully pulpit said this:

“The Economic Meltdown of 2008-2009 is a pandemic, fueled by the contagion of uncertainty. People are afraid they are going to lose their livelihoods, so they stop spending, that causes losses in the companies that produce our goods and services, and those companies go on to lay more people off.

“To stop the spread of this pandemic, we need to contain the layoffs and the fear of layoffs. So we are calling on the companies that have profited from the American consumer to now do their part, to live up to their social responsibility, by striving to the greatest extent commercially possible NOT to put more people out of work.”

And saying that wouldn’t have cost the taxpayers a dime.

I have run companies. When my company’s survival or fundamental profitability was at stake, I laid people off. I really had no choice. And for many companies this year, that sad reality is behind their RIFs.

But seriously, and I would like to hear from my fellow corporate ethicists out there, do you think is it patriotic, is it ethical in this kind of economy for a profitable company to lay people off just to increase its profit margin?

I’m just asking.

But even Jack Welch might say that kind of layoff is unethical AND bad for business. At least, I think he’s saying that these days, now that he has repudiated the idea of “shareholder value” as a prime objective of business. As Jack told the Financial Times:

“Shareholder value is a result, not a strategy . . . Your main constituencies are your employees, your customers and your products.”

* I like bacon way, way too much to call it “swine flu.”

“Shareholder Value” and short-term thinking

Can short-term thinking in a business leader be ethical… at least when the survival of the business is not at stake?  Isn’t there something intrinsically wrong about sacrificing the future for the sake of the present?

Valuing the long-term over the short-term is at the heart of a lot of messages that company management gives to employees about ethics.  When we say, “Don’t approve a shipment of peanut paste that you know is tainted,” we are really saying, “We don’t want you to sacrifice the company’s future reputation and sales for the sake of filling this one, immediate order.”

So not being hypocritical about that message in the top-level business decisions we make adds a bit of a challenge in maintaining our “tone at the top,” eh?

And so it seemed ethically obvious when Jack Welch told the Financial Times on March 12, that the “obsession with short-term profits and share price gains that has dominated the corporate world for over 20 years was ‘a dumb idea.’ Welch says now that the concept of “shareholder value” that he championed was never supposed to be a be-all-and-end-all.

According to the Financial Times:

Mr Welch said last week he never meant to suggest that setting, and meeting, profit expectations quarter after quarter in an effort to boost a company’s share price should be the main goal of corporate executives.

On the face of it, shareholder value is the dumbest idea in the world,” he said. “Shareholder value is a result, not a strategy . . . Your main constituencies are your employees, your customers and your products.”

At least, that’s what he says now.