Pfizer’s Ethics Violations Hurt All of Us

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“At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives. I couldn’t do that,” according to John Kopchinski, the sales representative who blew the whistle on Pfizer’s illegal marketing practices of Bextra, a now-discontinued medication approved for arthritis and menstrual pain.

Mr. Kopchinski was fired from the company in 2003. In hindsight, he won’t miss his job. He’ll receive over $50 million from the US government for his efforts to prosecute the $2.3 billion fraud settlement from his former employer—the largest such settlement in US history.

Paying $2.3 billion for “fraudulent marketing” should cause every marketing professional and salesperson to break into a nervous sweat. Murky ethics are amazingly common. They begin innocuously, then escalate. According to Mr. Kopchinski, what started as “aggressive promotion” of Bextra mutated into illegal practices. As he put it, “the ethical line kept moving.”

I’ve seen it over and over. Ethical risks are shrouded in code-speak: “we’re a ‘revenue-focused’ organization,” or “our company champions an ‘aggressive sales culture.'” Sound familiar? Anyone who doesn’t take heed from Mr. Kopchinski’s ethical-line observation faces the same risks. In Pfizer’s case, the problems didn’t begin with stereotypical predatory salespeople and percolate upward—they began at the top. Lies float, and so do corporate leaders who don’t set a good example–belly up. As sales effectiveness consultant Christian Maurer wrote this week on LinkedIn, “the fish starts rotting at the head.”

How can bright people working for well-regarded companies commit such ruthless dishonesty, when they wouldn’t think of robbing a cabbie at gunpoint—arguably a far less-heinous crime? By insulating the perpetrators from the victims. Here’s how (please see the embedded links):

Sales commissions: According to the NPR health blog, a “$50 bounty (was) paid to reps when they got doctors to add Bextra to the standard care for patients before and after surgery. These care protocols would direct patients to take Bextra, often at high doses, a few days before a knee operation, for instance, and then afterward to control pain.”

Telemarketing scripts directed to physicians: Salespeople were coached to tout greater efficacy and safety for Bextra compared to Vioxx, a competing painkiller from Merck. The US Food and Drug Administration never approved these claims.

Sales culture: OK. Let’s call it by its real name—intimidation. “If you don’t aggressively sell your products . . . you’re labeled a non-team player,” Kopchinski said, adding that only by promoting Bextra for unapproved uses could he achieve management’s revenue goals.

You can see the evidence in clear black and white, and it’s all creepy. What was Pfizer’s management thinking? Caught with its pants down, Pfizer cut a check for $2.3 billion. Everybody—just shut up, leave the chicanery behind, and let’s move on! Problem resolved. But is it? At the same time that jolly Pfizer managers were gloating over PowerPoint slides showing escalating sales curves, people were suffering or dying from taking medications for unapproved uses. Bad ethics don’t get much worse than that, and even a $2.3 billion mea culpa won’t enable the company to sweep its dark tactics under the rug. A plan to sell cigarettes in elementary schools might have appeared more benign.

Which brings Pfizer’s indiscretions to the everyday salesperson. We’ve all experienced what happens when “baggage” is brought into a sales meeting. A salesperson is often considered guilty before he or she proclaims innocence. It’s understandable. Along with evaluating the performance and features of a product, prospects scrutinize a salesperson’s motivations and integrity. But as Pfizer’s deceit has shown us, prospects now need to look further, and to question whether the top management of a vendor’s company has a moral compass. The answer to that question could reveal buyer risks that were previously unimagined.

For more on the topic of marketing ethics, please see:
Goofus and Gallant Make CRM Decisions, and
On My Honor as a Salesperson: Why Sales Ethics Matter

5 COMMENTS

  1. Dick Lee – Andy, fantastic post! Now, if only government agencies (or judges) would force companies “settling” to admit their wrongdoing. I have a sense that the judge presiding over the BofA/Merrill subterfuge is heading in that direction. And perhaps it’s time to start filing criminal charges in these cases.

    PS: Yesterday I called our financial planner and had him sell the Wellpoint stock in our retirement fund. Last week I learned that Wellpoint was among the prime offenders in illegally turning down health care claims.

  2. Dick: Thanks for your comment! I admire that you’ve divested your Wellpoint stock. If there were stock funds that specialize only in ethical companies, I wonder how many firms could be selected for the portfolio? Likely not a large number.

    Would the return outperform the market?

  3. Dick Lee: Andy, funny you should ask. My mother, who’s a 92 year-old, white haired radical, actually put all her retirement money in “eithical investment” mutual funds. They did outperform the market. 🙂

    Dick

  4. Great comments. I believe these problems creep up on organizations, often without any one making a consious decision that they are going to do something unethical, or hurt someone. I dare say that most all those involved at Pfizer never would knowingly hurt someone outside their “day job.” However, they begin to compartamentalize their live. When they are at home, they are good fathers and mothers, when they are at church they are good churchgoers, when they coach little league they are good coaches, and when they are at work they make decisions that are “good” for their company. Leaders MUST take the time to reflect on their own values and morals. Too often our society rationalizes everything, to the point where there is no right or wrong, only relative choices. We must take more effort to stop, relect on our actions and decide what type of legacy we want to leave behind. This is what our training program: Magnify Personal Leadership helps provide. You can learn more or join our newsletter at: http://www.magnifyleadership.com
    Also, you can join a similar conversation I just posted on my blog about what my ’74 Pinto teaches us about ethical decision making at: http://magnifyleadership.blogspot.com/

  5. Did the fine exceed the revenue, or was this stil a profitable decision for Pfizer ala the Ford Pinto?

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