Lack of Leadership in Pharmaceutical and Medical Companies

Introduction

Several organizations make terrible errors while undertaking their various activities such as marketing and selling of their products (Frederick, 8). This does not exclude the medical and pharmaceutical organizations, which also engage in dishonorable activities for monetary reasons. However, sources indicate that these disreputable acts are primarily sparkled and fueled by poor leadership qualities, possessed by various company leaders. Such disgraceful acts often leave an organization in a dire state with a tarnished name and image. This document concentrates on pharmaceutical and medical companies. It describes and expounds the unethical instances that these companies encountered in the course of their activities. Ultimately, it expounds on the link between organizational leaders and their unethical issues.

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Eli Lilly Company

Company profile

Eli Lilly is a gigantic company and produces a wide variety of pharmaceutical commodities. The company has it’s headquarter in Indiana, but operates at a global level serving millions of customers in different countries. Formed in the 19th century, Eli Lilly grew gradually to become one of the most fruitful pharmaceutical companies (Lilly). Eli Lilly is a thriving company and one of the leading producers and suppliers of psychiatric medicines, and for being the first organization to manufacture penicillin in large quantities.

Ethical compliance

Eli Lilly established certain values that the company must uphold while carrying out its activities; the values included honesty, consistency and adherence to the law (Lilly). As proposed by the government, Eli Lilly proceeded to establish a compliance program, whose prime function was to identify and put off any legal and policy defiance. However, it was the duty of the company to ensure that its staff members complied with the program. According to the program, Eli Lilly reserves all the legal right to alter the compliance program at will and, without any public notice. This, therefore, act as a leeway for employees to perform unscrupulous acts, especially if supported by the topmost leaders of the organization.

Unethical issues

Despite establishing a compliance program, Eli Lilly still engages in unethical and unlawful practices. Their disreputable practices often affect the organization, in various capacities. The below instances i.e. Joseph Wesbecker’s case and the company’s marketing strategies, clearly point out how Eli Lilly engages in unprincipled practices.

Joseph Wesbecker’s case

Late in the 80’s, Joseph Wesbecker stormed his workplace and shot a number of people, then finally committed suicide (Daniels). He was an employee of the company for a considerable number of years; although, he often complained that the job was extremely stressful to him. Despite the circumstances, Wesbecker was undergoing therapy under the care of a psychiatrist. However, shortly before the horrible incident, Wesbecker had taken a certain antidepressant produced by Eli Lilly. This raised many questions about the legitimacy of Eli Lilly products.

The survivors of the incident and relatives of the dead filed a suit against Eli Lilly, asserting that Wesbecker’s horrible actions had direct association with the antidepressant. Despite the suspicion, the case was still unmerited, since Wesbecker had already collected several guns and talked about killing his workmates, long before taking the antidepressant. Moreover, sources indicate that the plaintiff chose to sue Eli Lilly due to the company’s financial capabilities; they wanted to gain from the incident by enriching themselves. This is because; they never even considered suing Wesbecker’s doctor or the company security.

Despite the flimsiness of the case, Eli Lilly would suffer a massive setback, incase the case info goes public. The company would lose an incredible number of customers, yet the product was just in the brink of becoming the highest-selling drug. Moreover, introducing this case in courts could reveal evidences, to one of the company’s previous immoral incidence that left many people lifeless i.e. in the early 80’s. Following these developments, Eli Lilly was cornered and thus ran out of options. The company finally resorted to pay huge chunks of cash to the plaintiffs, in the exchange of suit withdrawal. In other words, the company bribed the plaintiffs, to protect the image, name and financial interest of the company.

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Analysis of Joseph Wesbecker’s case

Despite the consequences, one should not solve an ethical problem by committing another massive one. The management’s decision of choosing to bribe the plaintiff was extremely erroneous, since it could result to more future problems, on the company. Yes, it may relieve the company shortly, but it does not offer long-term solutions, to the company’s problems. This is because; the option of bribing the plaintiff makes the company vulnerable, to manipulations and distortions.

Some of the plaintiff could use their capacity to prosecute the company, to blackmail Eli Lilly in return of huge amount of cash. Consequently, the company will lose more millions of dollars, in the future. This could be a massive blow to the future prospect of the business, since it implied more future financial losses, to the company. Such effects may not go unfelt or unnoticed to the shareholders of the business, since they will also receive relatively lesser amount of dividends.

Apart from the future implications, deciding to bribe the plaintiff was completely unjust to the shareholders and the company in general. Using the shareholders’ cash, to bribe the plaintiff was completely an unjust act, since it was a backward step for the company. The company lost a considerable amount of cash in bribing the plaintiff, who translated to reduced profits, in a broader perspective. Reduced profits also affected the company’s investors, since their dividends reduced tremendously.

Another aspect that completely discredits the management’s decision of investing on unethical practice is when the whole information gets out of hand. The company could suffer immense business consequences, incase the plaintiff changes his mind and publicize the whole detail of the company’s unscrupulous practices. Eli Lilly could lose its incredible name, image and most importantly, its customers. This, unquestionably, could translate to an extraordinary decrease in sales and revenues of the company. Moreover, the company could lose some of its potential investors, partners and associates thus poor future business for the company. The investors will also feel such impacts, as their share and dividends would decline unceremoniously.

In the above unethical scenario, only the company’s management (leaders) is responsible for not upholding ethical standards. Moreover, the management never considered the long-term implications, to the company. The management team could have opted to proceed with the court case, and solve both cases i.e. the current and the previous one, ones and for all. This would place the company at an outstanding future financial position, despite the economic challenges it will face at prosecution period.

Marketing issues of Eli Lilly

Doctors have the capacity to prescribe a suitable drug for its patients i.e. with respect to their line of duty. However, it is unlawful for pharmaceutical companies to persuade doctors, to prescribe their drugs i.e. in accordance to the drugs, food and cosmetic act. Contrary to the act, Eli Lilly engaged in several years of pleading with doctors, to prescribe one of its antipsychotic drugs (Zyprexa), to certain categories of patient. Surprisingly, using the drug on these patients was like signing a death sentence to them; in other words, it was extraordinarily risky. However, Eli Lilly’s unprincipled marketing strategy was not over looked where the company suffered over a billion-dollar loss as penalty and further subjected to several years of scrutiny by the federal review organization. This was a massive blow to the company, since a substantial part of its operations had to remain at a stand still thus more losses to Eli Lilly.

Analysis of Eli Lilly’s marketing issues

This unethical marketing strategy is a reflection of how Eli Lilly leaders are immoral and possess unethical values, which vastly affects the company. It is extremely unacceptable and dishonorable for company leaders, to concur with the above marketing strategies. The effects of such marketing strategies are tremendous, and felt, in various capacities. For example, the heavy fines on the company following the legal prosecutions. Sources indicated that Eli Lilly lost over a billion dollar, in settling the legal charges, which is a considerable amount of cash.

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Such massive loss of cash often affects different aspects of a company and in various capacities. Losing over a billion dollar interfered with some Lilly’s activities and functions, since they could not adequately fund them. Consequently, the company suffered losses thus registering reduced profit, which translated to several setbacks on the company such as withdrawal of current and loss of potential investors. This is because; such reduced profits are often transferred to investors (shareholders) of the company i.e. they would receive reduced dividends. Shareholders will further feel the effects, since the value of their shares would decrease incredibly.

Despite displaying unethical leaders, the unscrupulous marking strategy undoubtedly indicated how the company leaders are incompetent. They assented to a dishonorable marketing strategy that targeted short-term goals, without considering the mess the company would endure. The company executives and marketers never thought about the massive loss that could subject the company into i.e. in the long-run perspective. This indicated how Eli Lilly managers and marketers failed to portray the traits of a quality leader i.e. the ability to foresee the future.

The marketing leaders could have opted for ethical and lawful marketing practices; instead of engaging in strategies in the short term. They could have engaged in strategies such as media advertising, personal selling, billboard advertising, which are more ethical and lawful. Moreover, such ethical strategies are less expensive and significantly promote company’s products, in the long- run. Moreover, the company could avoid legal charges and fines by employing ethical and legal marketing strategies thus maintaining its unshaken financial stability.

Pfizer Corporation

Based in New York, USA, Pfizer is the leading Pharmaceutical Drug Manufacturer in the World. The international company produces a wide range of products such as Lipitor, Viagra, Celebrex and Lyrica only to mention a few and many Physicians around the globe treat their patients with Pfizer products. Pfizer supplies its products to various healthcare destinations such as hospitals and pharmacies. Despite being among the most thriving pharmaceutical companies, Pfizer has engaged in several deceitful conducts, which massively tarnished its image and name.

Ethical issues

Pfizer has engaged in numerous unscrupulous conducts, which made the company lose a considerable amount of cash via legal suits. The company’s reason for practicing disreputable acts is often due to various reasons, poor leadership being the primary one. Below are some of the explanations and descriptions of Pfizer’s ethical issues.

Pfizer’s unethical marketing strategies

Unethical marketing on off-label use

According to FDA, doctors have the mandate, to prescribe a treatment or drug that best suits a patient. Pfizer used this opportunity as a leeway to employ unethical tactics and aggressively market its product. The company unduly persuaded doctors to use and prescribe its pharmaceutical products, while treating their patients. Despite proving risky, Pfizer deceitfully persuaded doctors, to employ Bextra in off-label use; an act outlawed by the FDA. The outlaw came about after proofing off-label use of Bextra amplifies the likelihood of some individuals developing heart disease and or strokes. Pfizer’s decision to disregard the warning left many people lifeless, while others extraordinarily injured. However, in 2005, the company withdrew the drug from the market, after distressing and anguishing the public.

Apart from Betrax, Pfizer sold one of its products that was fraudulently researched on. Researches on vioxx never indicated the use of human in testing the viability of the drug. Pfizer simply paid Dr. Reuben thousands of shillings to carry the research, which never included tests on patients. Consequently, over sixty thousand patients perished leaving many patients wondering whom to trust. The company faced several suits following this incident that forced the company to pull out the medicine from the market, in 2004.

The company also engaged in dishonorable activities while campaigning for antipsychotic Ziprasidone. Pfizer encouraged off-label use of the drug on children, which is extremely dangerous to this group of patients. This usage could result in serious consequences such as death. However, on this occasion, the company would receive their punishment; Pfizer received several charges leaving the company in an unstable financial position. The company had to pay heavy fines and compensation fees, to settle its legal matters.

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Analysis of unethical marketing on off-label use

Pfizer engaged in unethical marketing practices that left many people dead. The company leaders including the marketing manager permitted the employment of unethical marketing practices. This undoubtedly indicates how immoral and incompetent Pfizer leaders can lower themselves. They were unable to focus on the long-term gains; instead, they wasted their time and cash in unscrupulous practices, which left them with massive legal debts to settle. Leaders who cannot foresee their company’s future are incapable of devising ethical and concrete decisions for their company.

The leaders could have engaged in moral and lawful marketing strategies that are less expensive and more profitable in the end. Building stronger strategies with media advertising, sales promotions and billboard advertising are often economical and efficient, in the long run i.e. in comparison to unethical approaches.

The company campaigned for doctors to use their products for off-label use, which could prove fatal to patients. They targeted short-term gains i.e. to find easy market for their products; instead, of investing in marketing strategies that could have long-term benefits for the company. Consequently, their strategy led to massive financial loss, and left many people lifeless. The loss affected several aspects of the company, which also included the dividend payable to shareholders. Moreover, the shareholders also suffered from extraordinary reduction in their share prices, after the info about unprincipled practices went public.

Unethical wooing of doctors

Apart from persuading doctors, Pfizer also engaged in wooing doctors to use and prescribe their pharmaceutical products (Shulamit). The company provided doctors with numerous lavish life experiences as a way of enticing them, to use their products. They provided doctors with spectacular meal and amazing trips, in return of their favor; in other words, Pfizer bribed doctors to use its products. Moreover, Pfizer also engaged in consultant meetings with doctors, in extraordinary places.

The company even paid doctors massive amounts of cash for them to attend i.e. over a thousand dollars for each attendance. All these treatments aim at enticing doctors, to prescribe Pfizer commodities for regular and off-label uses. This was extremely unethical, since enticing doctors, was already a violation of FDA regulations. Moreover, the company endangered the fitness of many individuals, by persuading doctors to use their products in an off-label capacity to gain profit. As this already proven act was off-label use and the product was extraordinarily risky to the patients.

Following these malpractices, the company pled responsibility for the alleged charges. These disreputable actions subjected the Company to massive fines and substantial fees for consumer protection. The total expenses incurred by the company in settling all the legal fees translated to over two billion, which is a massive loss to the company.

Analysis of unethical wooing of doctors

Pfizer also engaged in another unethical marketing practice, which left the company with a $2 billion loss. The company enticed doctors to use their medical products for off-label use, which was extremely unlawful according to FDA. The unethical practice immensely affected the financial strength and activities of Pfizer, which translated to a substantial decline in profits. The impacts of the decreased profits of the company further affected the dividends earned by shareholder i.e. dividends declined tremendously. Additionally, the shareholders experienced a tremendous decline in their share values after the info went public.

Bayer Company

Based in Leverkusen, Germany, Bayer is an international organization that dwells in the manufacture of pharmaceutical commodities. The company produces numerous pharmaceutical products, which it supplies to various destinations, around the globe. Bayer is among the top-most producers and suppliers of these medical and pharmaceutical products. Some of the common pharmaceutical products supplied by the company include aspirin, levitra, and suramin. Bayer supplies its commodities all over the globe to its several branches and dealers. The company consists of several branches in various countries, which include Argentina, China, United States, France, Brazil and Chile.

Ethical issues

Despite establishing and prioritizing the compliance program, Bayer is still practices several unscrupulous activities. Their unethical actions are often due to poor leadership accompanied by an extraordinary desire to make fast money and reduce expenditure and losses. The instance below clearly elaborates the company’s unethical practices.

Bayer engaged in unethical marketing practices that, in an extensive capacity, amounted to a criminal offence. Bayer, at one time, proceeded to sell some of its products, despite knowing that they were injurious and dreadful, to individuals. The company sold tainted blood plasma, in Asia, instead of supplying its newly produced plasma, which was extremely safe for human use. In other words, instead of Bayer selling purified blood, it proceeded to sell the already contaminated blood with HIV virus. The intension of the company was to get rid of its stock and minimize losses. Consequently, many hemophiliac individuals contracted HIV.

Analysis of the ethical issues

The company’s motive was to clear the remaining inventory, instead of suffering massive losses by destroying the stock. Thus, they preferred to risk the lives of people to protect the interest of the company i.e. to maintain the profit margin. Moreover, apart from endangering the lives of people, the company targeted a specific market with a certain racial group i.e. Asians. This undoubtedly indicated how racial the company was, especially to the Asian communities. Additionally, it indicated how the company cared more about the profitability of the company more than the lives of individuals.

Bayer’s involvement in unethical practices undoubtedly indicates how the leaders of the company are immoral. The leaders agreed to implement a marketing strategy that was completely immoral and unacceptable. Moreover, their consent to unscrupulous practices was due to monetary reasons; a purpose that is completely unreasonable and unjustified.

The company leaders could have considered investing on ethical marketing strategies, rather than the unscrupulous one. The company leaders should have considered the long-term implications rather than the short term before deciding to employ any marketing strategy. They could have employed ethical strategies, which could further uphold the incredible name and image of the company thus maintenance of customers, in the long run. Moreover, the company could also avoid spending lots of cash in settling legal suits.

Medtronic Company

Medtronic is among the most thriving organizations in the medical industry. Formed in 1949, Medtronic dwells in the manufacture of technological medical equipments. Based in Minneapolis, the company manufactures numerous medical equipments used in various surgical functions. Medtronic consists of several units responsible for developing and production of several equipments. Moreover, the company also offers therapies to numerous medical disorders around the globe. Medtronic supplies its products to various hospitals and health facilities around the globe. The company also registers extremely massive sales of its products, making it one of the most flourishing companies in the medical industry.

Ethical issues

Medtronic is unquestionably one of the most successful organizations in the medical industries. However, a considerable percentage of its success is partially contributed by some of the company’s unscrupulous practices. In the recent past, the company engaged in several disreputable marketing practices that resulted to a legal suit against the company.

Medtronic paid doctors exorbitantly for their consultation services as a way of wooing them to use the company’s devices. The company paid up to approximately $ 700, 000 per doctor within a period of one year or less (Andrew, 110). The excessive remuneration was to act as a bribe in return for the use of their products; in short, the company was bribing doctors. Medtronic targeted doctors in the complex back surgery docket, whereby they used complex and expensive equipments to carry out their surgery. Additionally, the complex back surgery is an advancing medicinal field, which means a future booming business for Medtronic. These are some fundamental reasons that made Medtronic go to the extent of bribing and wooing doctors.

Apart from the excessive pay, Medtronic also paid huge chunks of cash to facilitate several conferences for doctors, in prestigious places. Apart from the full doctors, the company also targeted the doctors to be i.e. the undergraduates. The conferences took place at extremely exotic places with stunning services and amazing food. Medtronic also paid for certain services to the doctors such as sailing, trips and fishing (Reed). In addition, they also paid for strip club services for the complex back doctors to attend. These numerous services paid by Medtronic aimed at persuading doctors, to use and prescribe the products of the company.

Analysis of unethical issues of Medtronic

Medtronic engages in several unethical marketing strategies of promoting its products. Leaders who are less concerned about upholding ethical standards in businesses spearhead this unethical practice by the company. The leaders of Medtronic leaders assented to marketing strategies that are unlawful and unethical. They pay doctors exorbitantly and provide them extraordinary services as a way of bribing and enticing them to use the company’s product. This undoubtedly indicates how Medtronic leaders are immoral.

Medtronic leaders do not posses on of the most significant qualities of a superb leader i.e. being able to foresee the future. The leaders engaged in practices that had short-term benefits rather than investing on long-term marketing strategies. Moreover, their strategy of employing unethical strategies could prove disastrous if the public get to know their practices. The company could significantly lose its customers, which translates to sales and profits. Consequently, the company share could tremendously reduce in prices thus a big loss to the shareholders.

The company leader should have employed strategies that are ethical and legal such as advertisements and sales promotions. This would help the company avoid instance that would make it lose money, and the value of its image and name. This would further imply a fruitful future of the company with no threats of losing cash and the value of the company.

Hoffman-La Roche

Based in Switzerland, Roche is an international organization that dwells in both the pharmaceutical and medical field (Roche). The company operates at a global level but in two different capacities i.e. the diagnostic and the pharmaceutical. Roche has numerous branches, around the globe; some of the countries with Roche branches include United States, England, China and Germany. Since its formation i.e. 1896, the company manufactures numerous pharmaceutical products such as valium, rohypnol and redoxon. Roche supplies its numerous products, to thousand of healthcare institutions around the globe.

Ethical issues

Despite having a compliance program, Roche still engages in dishonorable activities and practices. Same as other companies, Roche’s involvement in unscrupulous activities is due to the desire to make massive profits. Their immoral acts resulted to several legal suits filed by the infringed persons.

At some point in time, Roche sold some of its products without disclosing some of the effects associated risks. The company never informed the public about the dangers associated with the use of certain drugs. As a result, many people in the UK suffered injuries and being over dependant on the drugs. This resulted to various suits filed against the company by the injured parties.

Roche also engaged in several other malpractices, apart from its non-confession about its products side effects. The company sold unsuitable drugs to different countries and more deplorable drugs ended up in under developed countries. This unquestionably indicated how the company took advantage of the unreformed health systems of underdeveloped countries. Thus, proceeding to sell and supply their inappropriate products, to such companies.

Roche also engaged in marketing malpractices, which left many patients dead. The company introduced a certain drug in the market named as versed sedative, expected to replace an existing drug, in the market. Despite the warning from the research unit, the company still proceeded to sell the product, in its concentrated form. The company disregarded the warning that the drug’s concentrated form could prove fatal. After two years in the market, there occurred several deaths suspected to be as a result of the product, and more so, due to its concentration form. Later, the company withdrew the concentrated form and replaced it with a less concentrated one.

Analysis of Roche’s unethical practices

Roche’s unethical act of supplying unsuitable drug was due to lack of leadership qualities among the company leaders. The agreed to execute unethical business practices, which left several people dead. The company managers ignored the negative effects of their actions; on the contrary, they concentrated on the monetary side of their practices and despised the unethical implications. The company leaders overlooked Roche could lose the value of its image and name. Consequently, the company could experience a substantial decline in its shares, in case the public get to know about their practices.

The company leaders invested on unethical practices due to their strong desire of achieving short-term gains. The company sold its outdated products to patients as an easy way of disposing its stock; a move that posed serious consequences to the public i.e. loss of lives. Yes, employing this method could help the company financially; however, the strategy could immensely affect the company in a negative way i.e. in the long run. Moreover, it was extremely unreasonable and unacceptable for the company to employ such dishonorable acts.

Conclusion

Leadership is extremely essential in running organizations or institutions. This is because; many organizations including pharmaceutical and medical companies engage in numerous unethical activities due to poor leadership. Therefore, it is extremely necessary for leaders to uphold high ethical standard irrespective of the situation they are in. Apart from upholding high ethical standards, leaders should also learn to understand the implications of their short term goals.

This is due to the extremely unpleasant circumstances that a company might expose itself, in the long run. Some of the rampant companies that engaged in unethical practices include Medtronic, Eli Lilly, Pfizer, Bayer and Hoffman-La Roche, only to mention a few. These companies’ require reforms beginning with the topmost management of the company. Ultimately, excellent leadership is the key to consider when one needs to uphold exceptional ethical standards, in an organization.

Works cited:

Abelson, Reed. Whistle-Blower Suit Says Device Maker Generously Rewards Doctors. New York Times. 2006. Web.

Daniels, Anthony. Books: did Prozac pull the trigger? Anthony Daniels consider a case of mass murder, drugs and litigation. Eli Lilly Drugs. 1996. Web.

DuBrin, Andrew. Essentials of Management Author. Ohio: Cengage Learning. 2008 (8) 110.

Frederick, Robert. A companion to business ethics. Oxford: Wiley-Blackwell. 2002 8.

Lilly. Summary of Eli Lilly and company’s comprehensive compliance program. Lilly. 2010. Web.

Lilly. Facts at a glance. 2010. Lilly. Web.

Roche. Company structure. Roche. 2010. Web.

Shvartsman, Shulamit. Record breaking $ 2.3 Billion Pfizer settlement. Lawyers.com. 2010. Web.

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StudyCorgi. (2020, November 20). Lack of Leadership in Pharmaceutical and Medical Companies. Retrieved from https://studycorgi.com/lack-of-leadership-in-pharmaceutical-and-medical-companies/

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