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Ethical Business Analysis

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Submitted By berserk539
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Pfizer Incorporated

Prepared by Benjamin Smith

Submitted in partial fulfillment of Thomas Edison State College course: 2014AUG PHI-384-GS004: Ethics and the Business Professional.

October 23, 2014

Pfizer is the second-largest biopharmaceutical company in the world, and largest research-based company in the world (Herper 2014). They are the producers of some of the most popular names in prescription drugs, including Lipitor®, Viagra®, Xanax®, and Zoloft®. They are also one of the leading names of over the counter drugs and supplements such as Advil®, Centrum®, and Robitussin®. Pfizer employs over 78,000 personnel all over the world in most every continent. Its operations encompass researching and development of new medications, vaccines, and therapies; government regulatory compliance; and providing care and support for global healthcare programs. My interest in Pfizer is that I plan on changing careers into the medical field as a physician or research scientist. As the leading research-based pharmaceutical company, I would aspire to work with neuroscientist Dr. Michael Ehlers and his team. This analysis will review Pfizer Incorporated as a responsible, ethical company by analyzing its mission statements, core values, published principles, and code of ethics, how these are reflected in their actions and which ethical concepts are displayed in these actions; how Pfizer prevents and responds to problematic and antisocial behaviors; what Pfizer has affected an ethical cultural change in itself; and how Pfizer is engaged with communities and worldwide citizenship alike.
The Company Pfizer Incorporated is leading research based biopharmaceutical company in the world. They operate in 75 countries on six continents (Pfizer Jobs 2014). Their market share falls second to medical conglomerate Johnson & Johnson (Market Capitalization 2014). Pfizer develops and manufactures medicines and vaccines for people and animals. Its corporate headquarters is located in New York City, NY. Being the largest company in any industry, as well as being highly ranked globally by both Forbes (#45) (Pfizer on the Forbes Global 2000 List 2014) and Fortune (#191) (Pfizer - Global 500 2014), can bring any company under close scrutiny. Although not getting caught is not the proper motivation to do the right thing, Pfizer must take proper steps to ensure it is acting responsibly from the employee, contractor, vendor, manager, all the way to the CEO. Pfizer’s mission statement reads: “Pfizer Inc: Working Together for a Healthier World®” (About Pfizer n.d.). The fact sheet summarizes the company’s ideals and goals: “At Pfizer, we apply science and our global resources to improve health and well-being at every stage of life. We strive to set the standard for quality, safety and value in the discovery, development and manufacturing of medicines for people and animals. Our diversified global health care portfolio includes human biologic and small molecule medicines and vaccines, as well as many of the world's best-known consumer products. Every day, Pfizer colleagues work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time.” (Company Fact Sheet n.d.)

Most of these ideals and goals are listed in Pfizer’s summary of policies on business conduct, also known as the Blue Book.
The Blue Book (2012) Pfizer publishes its Code of Conduct in a self-proclaimed “Blue Book.” This book lists its values and standards, and is not only distributed to its employees, it is available on their website for the general public (Pfizer 2012). At the heart of Pfizer’s core values is integrity. Pfizer is committed to upholding the law in all countries, and holds its vendors to that same standard. Pfizer lists a chart (pg. 7) of possible consequences to the company, employees, patients, customers and investors if an employee participates in non-compliance with any company policy, healthcare law and regulatory requirement. Pfizer has also created several outlets for employee to raise concerns both openly (open door policies, compliance helplines, and programs [pg. 8 – 11]) and anonymously (Office of the Ombudsman [pg. 13]). They also include a clear anti-retaliation policy and a confidentiality policy (pg. 12). The Office of the Ombudsman is “an informal place where all Pfizer colleagues can talk confidentially and off-the-record.” The Blue Book encourages a positive environment in which employees can voice ethical concerns without fear of retaliation. The second section of the Blue Book is an overview of what and how regulations apply to Pfizer’s operations. “Pfizer will compete lawfully and ethically in the marketplace. We will act responsibly in our relationships with healthcare professionals, patients, consumers, hospitals, academics, governments, regulatory entities, business partners, customers, suppliers and vendors. We will provide innovative products to our customers, and we will be honest and fair in all our business dealings.” (pg. 14)

Although it would be impossible to compile every applicable law and regulation into a single handbook, the Blue Book does provide the means to research these for the individual. Product safety is highlighted in the second section. Pfizer lays out a policy of reporting within 24 hours, any information about a product issue on the company’s intranet. It even includes a scenario in the margin (pg. 18): At a dinner party, a neighbor mentions to you that his wife tried a particular Pfizer product and experienced a headache. Do you need to inform the Company?

Yes. Regardless of how you learned of the event, the severity of the event, or whether you think the event was a side effect of the Pfizer product, it is your ethical and legal responsibility to forward the information to the appropriate Safety group within 24 hours of awareness.

The third section of the Blue Book discusses internal policies to maintain proper regulatory standards, utilizing and protecting company resources, assets and information, and conflicts of interest. Social media is also outlined at great length to ensure employees understand company policies and to whom to ask if they have any questions (pg. 28). I would especially like to emphasize their last bullet point, “Ask first, post later.” For those who would believe, “it is better to ask forgiveness than permission,” they should know that Pfizer does not share your point of view. The fourth section of the Blue Book covers a commitment to its colleagues and job applicants, outlines the anti-retaliation policy once again, equal employment, and anti-discrimination policies. Currently, Pfizer employs over 78,000 members all over the world. Pfizer values this diversity as a “source of strength” (pg. 35), and offers equal employment opportunities to the extent of local laws. Pfizer prides itself on its application and hiring practices, and lists a wide variety of personal characteristics that do not preclude employment. It is the Company’s policy to provide equal employment opportunities and, to the extent permitted by local law, to treat applicants and employees without regard to personal characteristics such as race, color, ethnicity, creed, ancestry, religion, sex, sexual orientation, age, gender identity or gender expression, national origin, marital status, pregnancy, childbirth or related medical condition, genetic information, military service, medical condition (as defined by state or local law), the presence of a mental or physical disability, veteran status or other characteristics protected by applicable laws (pg. 35).

The company also places the onus on mangers to ensure compliance with this policy. Pfizer also outlines a zero tolerance anti-discrimination or harassment policy, and extends this policy globally. This means that although a country or region may not have any harassment laws, employment or vendor contracts with Pfizer are contingent on following this policy. The last section of the Blue Book discusses how Pfizer supports the community, respects human life and animal welfare, health and safety of employees and communities, environmental impact, responsible political activity, and cooperating with local host governments. Pfizer has a global concern to positively impact the health of people. It has established the Global Health Fellows Program, in which Pfizer collaborates with non-profits to help address systematic healthcare challenges, the Pfizer Mobilize Against Malaria Program, and the Pfizer Health Solutions – a program designed to educate and support lifestyle changes in community-based health services (pg. 39). In its research, Pfizer employs several levels of ethical management to protect subjects and data in clinical research trials, and to responsibly conduct animal research in a humane and ethical manner (pg. 40 – 41). The Animal Care and Use policy applies to any third party research organizations. The rest of the section covers policies regarding environmental protection, media relations, political activities, and government requests for information and facility visits. Overall, the Blue Book displays an ethical, responsible, and caring company. Throughout the entire book, the core values are linked to policies and actions. The book even admits mistakes, as in a significant instance in which Pfizer paid $2.3 billion in a settlement to the Food and Drug Administration for off-label promotional activities (pg. 11).

The Pfizer Board Pfizer publishes several documents to govern the Board of Director and its ethical policies; these policies are available to the public on their website (Board Policies n.d.). The Corporate Governance Principles covers the composition, selection, board and committee functions, and review and update procedures (Pfizer 2013). Additional Board policies are in place for required transparency and public disclosure. The Director Qualification Standards policy dictates what form or family, professional, or affiliated relationships will and will not be allowed by a Director. The “independent” qualifications meet or exceed the minimum requirements set by the New York Stock Exchange (Director Qualification Standards n.d.). These standards are also reflected in the Code of Business Conduct and Ethics for Members of the Board of Directors.

The Image Overall, Pfizer displays an openly ethical company, concerned with meeting or exceeding governing laws and regulations, care and stewardship of its employees (Pfizer calls them “colleagues” on many occasions), and takes an interest in community and environmental affairs. Pfizer has established numerous policies and procedures and have made these available to the public on their website. The mission statement, core values, published principles, and code of ethics provided by Pfizer targets several ethical perspectives. The mission statement, “Working together for a healthier world,” is a combination of altruism (healthier world) and Confucianism (working together). The core values also describe numerous ethical principles as described in Craig Johnson’s book (Johnson 2012). The values Collaboration and Community point to Confucianism because the two are engaged in building healthy relationships. Innovation, Performance, Quality and Leadership are general Utilitarianism principles because these are designed to maximize profits without disregarding ethics. Integrity and Customer Focus demonstrate Kant’s Categorical Imperative because Pfizer is comitted to doing the right thing, regardless of the consequences. The last core value, Respect for People is an example of Rawl’s Justice as Fairness because the company follows both principle 1 (equal rights) and principle 2 (equal opportunities). Pfizer publishes all its corporate principles on its website, and sub-categorizes these based on how it appies in the company; Leadership and Structure, Corporate Governance, and Corporate Compliance. The company also makes its last two annual reports available.

The Responsible Party Pfizer has established several global heath initiaves. It’s Global Health Fellows program is designed to provide advice and assistance in emerging markets using Pfizer colleagues and volunteers. In collaboration with the World Health Organization, Pfizer is working to elimienate infectious diseases, such as malaria and trachoma (which causes blindness). The company has also established Infection Diseases Institutes.

Program Goal: To build capacity of health systems in Africa to deliver sustainable, high-quality care and prevention of HIV/AIDS, TB, malaria, and related infectious diseases through training, research and advanced clinical services (Infectious Diseases Institiutes n.d.).

Pfizer has also provided over $1.2 billion in Diflucan® (a treatment for two opportunistic infections associated with HIV/AIDS) since 2000 to countries in Africa, Asia, the Caribbean and Latin America (Diflucan Partnership n.d.), free of charge. Pfizer provides numerous grants to support health education and scientific research, and partnerships to strengthen communities. The company has a policy of “Transparency in Grants” in which all grants, charitable contributions, political donations, and any giving activities are fully disclosed and viewable to the public (Transparency in Grants n.d.). Pfizer’s commitment to protecting the environment covers a wide variety of topics. The company presents its Environmental Sustainability Commitment:

Because our unmatched resources allow us to do more good for more people, we will use our global presence and scale to make a difference in local communities ant the world around us (Protecting the Environment n.d.).

Topics listed cover many areas including Climate Change, Energy Efficiency, several “Green” policies, Material Safety Data Sheets, Metrics, Occupational Health and Safety, Supply Chains, and Water Use. The environmental responsibility section is very thorough and details on how Pfizer operates as a consumer and supplier, and its impact on the world.

The Controversies Pfizer has been involved in numerous legal cases involving its medications and treatments (or acquired liabilities thereof), marketing, and bribery. It has also faced public criticism for human rights violations and environmental impact. Pfizer currently holds the record for highest fines for health care fraud. In 2009, Pfizer settled on $2.3 billion to pay criminal and civil allegations, the highest in any industry (Harris 2009). The case revolved around the prescription drug, Bextra, and how managers and salesperson were encouraged to tell physicians about off-label use. The U.S. Department of Justice press release explains: Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called "off-label" uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns (Justice Department Announces Largest Health Care Fraud Settlement in Its History 2009).

Pfizer salespersons were advocating higher doses of the medication to treat medical conditions not approved by the FDA. These doses increased the risk of life threatening skin reactions, and resulted in deaths (Public Health Advisory 2005). As a result of the settlement, Pfizer entered into a Corporate Integrity Agreement (CIA) with the U.S. Government. This is not the first CIA that Pfizer has entered. In 2004, Pfizer entered into another Corporate Integrity Agreement regarding off-label promotion of the anticonvulsant Neurontin®. In a lawsuit filed in 1996, Franklin v. Parke-Davis, a salesperson working for Parke-Davis (later acquired by Pfizer) claimed that the company had intentionally engaged in off-label promotion of the drug (U.S. Ex Rel. Franklin v. Parke-Davis 2001).

Though physicians may prescribe drugs for off-label usage, the FDA prohibits drug manufacturers from marketing or promoting a drug for a use that the FDA has not approved.

Since the sales of prescription medications for off-label use are not reimbursable by Medicaid, many patients were either refused reimbursement, or were reimbursed unlawfully. In both cases, the companies that originally manufactured the drug were eventually merged into Pfizer as a subsidiary. This kind of “layering” of the company may have saved Pfizer from significant collapse. A CNN report explains how a guilty charge for Pfizer would exclude them from doing business with Medicare and Medicaid (Segal 2010).

…Any company convicted of a major health care fraud is automatically excluded from Medicare and Medicaid. Convicting Pfizer on Bextra would prevent the company from billing federal health programs for any of its products. It would be a corporate death sentence.

This “layering” may have also been the reason why this kind of unethical marketing was allowed to continue. Executives at the corporate level deny any knowledge of the practice. Since the Bextra settlement, Pfizer has taken steps to ensure that employees are safe to voice their concerns about any unethical practices, including their marketing. Using subsidiaries poses additional risks to the company. Pfizer’s subsidiary, Wyeth, was accused and found guilty of bribing doctors and hospital administrators in Europe and Asia (Matthews 2012). Pfizer paid $60.2 million in criminal fines resulting from Wyeth’s actions. When Pfizer acquired Wyeth in 2009, and with that purchase came all of Wyeth’s liabilities from their drugs. This includes the famous case of Fen-Phen, where over $21 billion has been set aside for settlements to users who have had serious heart valve damage resulting from the drug. Lawsuits are still going to court over delayed side effects from the drug (Feeley 2012). Marketing and bribes and drugs, oh my! These are just some of the controversies that Pfizer has faces over the last 20 years. Pfizer has also been accused of violating human rights. In 1996, an outbreak of cerebrospinal meningitis hit the children of Nigera. At the time, Pfizer had developed an experimental drug, trovafloxacin (commercially known as Trovan). Pfizer used the opportunity to conduct clinical investigation trials on its medication. Worldpress associate editor describes the problems that occurred in conducting the trials (Coleman 2001).

Due to the nature of the epidemic, however, Pfizer’s trial was set up hastily in conditions where parents of meningitis-infected children were panicking. Some of these parents have claimed that they did not know they were submitting their children to a trial of an experimental drug and were not told Trovan had never been tested on children. Of the 200 children who participated in the trial, five of those given Trovan died and many others were left with disabilities.

Pfizer agreed to pay $75 million in civil and criminal charges to Nigerian authorities in connection to the mishandling of the trials and damages to patients and families (Stephens 2009). Pfizer has even had clashes with its workers. Employees in Puerto Rico have filed suit in 2012, alleging that Pfizer had mishandled retirement accounts and workers lost hundreds of millions as a result of it (Fox 2012). In 2010, a former employee filed suit against the company claiming wrongful dismissal. Becky McClain claimed that she was sickened by a genetically modified lentivirus, and when she reported it, Pfizer investigated and dismissed her health and safety claims (Howard 2010). She was fired from the plant after taking extended medical leave as a result of her symptoms. A jury found in her favor, and awarder her $1.37 million in damages (Pollack 2012). Pfizer has been in hot water with their environmental practices. Although they have not been directly responsible for major settlements resulting from violations of the Environmental Protection Agency, they have absorbed some large liabilities when purchasing other pharmaceutical companies. Since 1994, Pfizer has paid almost $7 million to the EPA for mishandling its waste (Mattera 2014); however, acquisitions have cost over $500 million in cleanup and settlement costs (ibid). Pfizer is currently involved in the cleanup and remediation of a former American Cyanamid site in Bridgewater, New Jersey; another assumed liability from Wyeth (American Cyanamid 2014).

The Analysis and Conclusion:
The Ethically Transformed Company Although Pfizer has a controversial past, it is hard to ignore the positives that company does. In some cases, Pfizer was not the company that engaged in the unethical act, but they absorbed the responsibility (however, the use of “whipping boy” subsidiaries does protect the parent company from losing their ties to Medicare and Medicaid). Pfizer is a large company that provides several resources to the healthcare industry. With such a large footprint, it can be difficult to monitor every single unethical action. A bad manager will affect all his or her subordinates. Pfizer has implemented several means for employees to report possible unethical activities to the corporate main. The “Blue Book,” published in several languages and given to every employee speaks to Pfizer’s commitment to integrity. As a global citizen, Pfizer provides some medications free of charge to plagued countries. They send teams to setup and educate local heath care providers, providing support until the clinic can self-sustain. This can appear to be a means to enter into a new market, but the good provided by this entrance will save lives. Pfizer is environmentally responsible. Each annual report shows how the company is reducing its carbon footprint (Performance - Pfizer 2013 Annual Review 2014), and has received a 92 disclosure score from the Carbon Disclosure Project (Pfizer - Company Responses and Scores 2014). I would be proud to be part of this ethically transformed organization. Pfizer’s mission statements, core values, published principles, and codes of ethics are all appealing to a potential candidate for employment. Transparency in its operations builds trust to the community, and regulatory oversight provides accountability for unethical practices.
Works Cited

About Pfizer. (accessed October 22, 2014).

American Cyanamid. October 1, 2014. (accessed October 23, 2014).

"Board Policies." Pfizer. (accessed October 22, 2014).

Coleman, Sarah. Pfizer Scandal. April 2001. (accessed October 23, 2014).

Company Fact Sheet. (accessed October 22, 2014).

Diflucan Partnership. (accessed October 23, 2014).

Director Qualification Standards. (accessed October 22, 2014).

Feeley, Jef. Pfizer Loses Bid to Dismiss Fen-Phen Lung Ailment Suits. August 30, 2012. (accessed October 23, 2014).

Fox, Ben. Pfizer Sued In Puerto Rico Over Retirement Plans. January 27, 2012. (accessed October 23, 2014).

Harris, Gardiner. Pfizer Pays $2.3 Billion to Settle Marketing Case. September 2, 2009. (accessed October 23, 2014).

Herper, Matthew. Who's The Best In Drug Research? 22 Companies Ranked. May 22, 2014. (accessed October 22, 2014).

Howard, Lee. Jury Awards exPfizer Scientist $1.37 Million. April 02, 2010. (accessed October 23, 2014).

Infectious Diseases Institiutes. (accessed Ocitber 23, 2014).

Johnson, Craig. Organizational Ethics: A Practical Approach. Los Angeles, CA: SAGE, 2012.

"Justice Department Announces Largest Health Care Fraud Settlement in Its History." The United States Department of Justice. September 2, 2009. (accessed October 23, 2014).

Market Capitalization. October 22, 2014. (accessed October 22, 2014).

Mattera, Philip. Pfizer: Corporate Rap Sheet. August 27, 2014. (accessed October 23, 2014).

Matthews, Jonathan D. Rockoff and Christopher M. Pfizer Settles Ferederal Bribery Investigation. August 7, 2012. (accessed October 23, 2014).

Performance - Pfizer 2013 Annual Review. February 28, 2014. (accessed October 23, 2014).

Pfizer - Company Responses and Scores. 2014. (accessed October 23, 2014).

Pfizer - Global 500 2014. October 22, 2014. (accessed October 22, 2014).

Pfizer. "Blue Book - English." Pfizer. 2012. (accessed October 22, 2014).

Pfizer. "Corporate Governance Principles." Pfizer. 2013.
Pfizer Jobs. October 22, 2014. (accessed October 22, 2014).

Pfizer on the Forbes Global 2000 List. May 2014. (accessed October 22, 2014).

Pollack, Andrew. A Pfizer Whistle-Blower Is Awarded $1.4 Million. April 2, 2012. (accessed October 23, 2014).

Protecting the Environment. (accessed October 23, 2014).

"Public Health Advisory - FDA Announces Important Changes and Additional Warnings for COX-2 Selective and Non-Selective Non-Steroidal Anti-Inflammatory Drugs (NSAIDs)." Food and Drug Adminstration. March 7, 2005. (accessed October 23, 2014).

Segal, Drew Griffin and Andy. Feds Found Pfizer Too Big to Nail. April 2, 2010. (accessed October 23, 2014).

Stephens, Jeo. Pfizer to Pay $75 Million to Settle Nigerian Trovan Drug-Testing Suit. July 31, 2009. (accessed October 23, 2014).

Transparency in Grants. (accessed October 23, 2014).

U.S. Ex Rel. Franklin v. Parke-Davis. 96-CV-11651-PBS (United States District Court for the District of Massachusetts, Mass June 25, 2001).…...

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