A Good Housekeeping Seal for Bioethics: Could It Improve Trust and Ethics in the Pharmaceutical Industry?

by Jennifer E. Miller

The public’s “negative view of the pharmaceutical industry is a major problem… (and there is) no shortage of “experts” with solutions on how to fix the problem. Unfortunately, many of the proposals are shockingly naïve and without merit,” grumbles John LaMattina, former President of Pfizer Global R&D. In response to LaMattina’s challenge for outsiders to develop more realistic reform strategies, this blog post proposes the introduction of an ethics accreditation system, akin to a Good Housekeeping Seal, as a practical means for the industry to credibly improve its ethics and restore its broken image.

As it stands, the majority of Americans distrust pharmaceutical companies, believing that they are consistently dishonest, unethical, and more concerned with profits than with individual and public health.  Interestingly, this was not always the case. The industry was once “"the world’s most admired."”[1] Merck, the company responsible for the Vioxx scandal, was ranked the “World’s Most Admired Company” for seven straight years (1987-1993) by Fortune magazine.[2]

A mere sixteen years ago, one could still find pharmaceutical companies ranking among the top ten most admired companies (30% of the companies were from big pharma).[3] In stark contrast, today the industry is ranked barely above tobacco and oil companies in terms of its perceived trustworthiness.  It has lost an essential component for innovation that is not just lamentable for the industry, but for all of us.

In fairness, some of the “"distrust in the pharmaceutical industry can be arguably linked to a corresponding rise in the distrust in big business generally."”[4]  However, “"not all big business is distrusted.  The automotive and technology industries are comparatively well respected industries.”"[5]  Is an ethics accreditation system a possible step forward for remedying at least some of the trust gaps?

In other industries, accreditation, certification, and rating systems have been helpful tools for both improving and demonstrating quality.  These programs generally perform three functions: they set and communicate standards, they evaluate companies according to these standards, and they signal to both internal and external parties when the standards have been credibly implemented.  Some programs focus more on evaluating the integrity of a company's processes and others evaluate outcomes.

There are, for example, programs that evaluate and signal car safety (awarding a rating of 1 to 5), the environmental impact of a building (LEED certification), whether a food is healthy or organic (the heart healthy checkmark and organic foods certifications), the quality of educational programs, the adequacy of factory working conditions, and the ethics of diamond mining.  There is also a program that considers whether an IRB has processes in place to adequately protect human research subjects.  Perhaps the most famous of these types of programs, is the Good Housekeeping Seal, which evaluates whether a product fulfills its marketing claims. 

While many of these programs have incentivized both companies and consumers to maintain certain quality standards within different industries, the question remains if such a program would work in the pharmaceutical industry for bioethical concerns.


The demand question: Who cares about ethics?

A primary concern about the suitability of implementing an ethics accreditation program for the pharmaceutical industry is a basic economic supply and demand question. Who would care about or look to see which companies have a high ethics rating?  Would patients, regulators, doctors, investors, internal company management, payers, governments or research subjects look for an ethics seal?  If there is no demand for a bioethics quality indicator, then there may be no incentive for companies to participate.

There are two main reasons why the demand question is less straightforward in the pharmaceutical industry than, say, for a certification of organic foods.  In the first place, most patients do not know who makes their drugs. Second, not all disease states have multiple treatment options.  Notwithstanding, company executives (like LaMattina) acknowledge that when distrust is high and value is questioned, "“patients and payers (alike) will balk at taking or reimbursing new medicines,"” a challenge that is not unique to the pharmaceutical industry.[6] In the beverage sector, for example, the Mondavi family understood the importance of improving the overall image of Napa Valley, California wines (arguably benefiting all vineyards in the region) in order to improve its own brand and sales.

More realistically, the demand for ethics accreditation may originate from within the industry itself as a means for keeping regulators and politicians at bay.  As I mentioned in a Pharmalot interview, this is in fact why most accreditation systems originate and are embraced by industries. This is, for instance, the reason accreditation systems were implemented to evaluate IRBs and universities. With trust levels so low, drug companies are at significant risk for increased regulations and sanctions:

“It is not unusual to hear a politician say during a campaign speech: “"Elect me and I will protect you against Wall Street, oil companies, and Big Pharma!"...  Concerned that the fines are not proving enough of a detriment to prevent the illegal detailing of drugs, the Justice Department and the FDA are considering a variety of more drastic ways to penalize offending companies.  One idea being discussed is taking away a company'’s patent rights as a condition of any settlement.  Another idea is to limit business with Medicare, thereby reducing the company'’s sales. Changes like these would have a bigger effect on a company’'s bottom line than even the billion dollar fines now being imposed.[7]

This of course raises further questions of whether sanctions or regulations are more effective means for improving ethics than accreditation (or some combination thereof). However, for our purposes, we shall table this discussion for now.  Instead, let us turn to another common concern held by critics: Can an accreditation program reliably assess if pharmaceutical companies are doing what they say they are doing; or, is it relatively easy to game, capture, manipulate, or invalidate an accreditation evaluation?

This common question raises some interesting sub-questions.  For instance, how would a company game, capture, manipulate, or invalidate an ethics accreditation program?

  • How does one capture a program?
  • What is the typology of program capture?

Perhaps the best known method for capturing an accreditation or rating program is through finances.  When a program becomes financially dependent on the institutions that it is supposed to be impartially assessing, there is a risk that the evaluating agency will cater to the institutions seeking accreditation to maintain their patronage.  This risk can increase when there is more than one available accrediting or rating agency, as companies can play agencies off of each other by patronizing the more lenient program.

A second, lesser known method for capturing a program is to capture the individual site-reviewer.  This might be done by, for instance, an understood but unspoken promise of a potential job offer, should one be sought.  This type of capture might fall under concerns associated with revolving door policies.

Both of these ‘'capture'’ risks can be arguably reduced.  On the issue of finances, one could design a program that is independently funded (so far our program has not accepted any industry funding). Unfortunately, this is likely not a sustainable model. In practice, most accreditation programs are nonprofits that accept nominal membership or review fees, from companies seeking accreditation, to cover basic expenses.  These fees are generally scaled to company revenues.  Perhaps one method for beginning to address financial capture concerns is to cap each individual corporate membership or review fee so that it does not supersede more than 10% of the nonprofit’'s annual operating budget. Moreover, the accrediting organization can also refrain from selling any other services (for example, consulting services) to institutions and industries it accredits.

Similarly, individuals involved in recommending or voting on whether a company is accredited, could be asked to refrain from “"going in-house"” for a certain period of time after stepping down from their accrediting roles.  These are high and relatively uncommon bars to set for accreditation programs, but are nonetheless achievable options. But, are they enough to gain the trust of critics? 


How does one game or invalidate an accreditation program?

Industry critics also commonly worry that pharmaceutical companies will game an ethics accreditation program, thereby invalidating the program'’s credibility.  How might a pharmaceutical company game an accreditation system?  A prominent technique might be to exploit asymmetries in information.  This concern likely has to do with the competency of the individuals selected for on-site review teams and as voting members of the accreditation council.  One would think there are enough potential experts to choose from that can reduce this type of gaming risk.  The inquiry then becomes what '‘types' of expertise and individuals are needed.

Many critics also worry that the employees of companies seeking accreditation are not sufficiently incentivized to be truthful during accreditation interviews and surveys, if the information shared might prevent the company from being accredited.  Preliminary discussions with Edmond J. Safra Center Fellows seem to hint that the following may help in addressing this risk:  (1) avoid allowing the company to self-select which individuals are interviewed, (2) avoid group interviews, and (3) set up a confidential system whereby management does not have access to knowing which employees were interviewed. 


Conclusion

There are clear challenges to implementing a robust ethics accreditation system for the pharmaceutical industry.  However, they are largely surmountable challenges and the benefits to all stakeholders are well worth the efforts.  As I stated in AboutPharma:

“A successful pilot (of an accreditation program could) demonstrate a company’'s commitment to transparency, to ethical standards, to protecting research participants and patients, to helping doctors and others make informed decisions, and (an interest to) credibly communicate that ethics comes first (at a time when most think profits trump all else).”"

This solution-oriented program cannot be easily dismissed by the industry, nor its critics, as “shockingly naïve and without merit.”  To the contrary, this program offers deep learning, a rigorous and consensus based methodology, and a win-win opportunity. An ethics accreditation program for pharma companies is a substantial gain for them, since promoting the good rarely tarnishes a reputation.


[1] LaMattina, John L. (2012-12-10). Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image (Kindle Locations 2661-2665). Wiley. Kindle Edition.

[2] LaMattina, John L. (2012-12-10). Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image (Kindle Locations 2661-2665). Wiley. Kindle Edition.

[3] LaMattina, John L. (2012-12-10). Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image (Kindle Locations 2661-2665). Wiley. Kindle Edition.

[4] Miller, Jennifer E., Rebuilding Trust and Effectively Communicating Ethics Efforts, January 2013, AboutPharma. http://aboutpharma.com/news/farmaco/rebuilding-trust-and-effectively-com...

[5] Miller, Jennifer E., Rebuilding Trust and Effectively Communicating Ethics Efforts, January 2013, AboutPharma. http://aboutpharma.com/news/farmaco/rebuilding-trust-and-effectively-com...

[6] LaMattina, John L. (2012-12-10). Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image (Kindle Locations 2661-2665). Wiley. Kindle Edition.

[7] LaMattina, John L. (2012-12-10). Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image (Kindle Locations 2661-2665). Wiley. Kindle Edition.