Customer not ethical?

Providing proactive business ethics training for real business problems can keep unethical customers from pulling your company into a mess.

One of the exercises common in our management seminars involves having the executives attending the seminar provide alternative solutions to an active problem they are facing.  We have noticed that a frequent problem to management is the customer who wants some product or service thing done differently solely to provide the customer with a better public appearance than might be justified.  For example, a customer may demand that it not receive a contractually due report, so that bad news will not become public.  The problem of the unethical customer making demands on threat of termination of profitable business is one that needs to be addressed, and applicable corporate values determined, long before the problem arises.  That's one of the reasons for having management ethics training sessions.

The following news report is a reminder of the legal problems that can arise from wobbly company ethics.

Suit Against Drug Research Firm Allowed to Continue

Breaking new ground in the area of drug products liability, a federal judge in November 2007 refused to dismiss negligence and fraud claims against contract research firm Statprobe. In Wawrzynek v. Statprobe Inc. (U.S. Dist. Ct. PA.) Judge Gene E.K. Pratter rejected the argument that a research firm owes no duty of care to a patient who was later harmed by a drug that won FDA approval....Instead, Prater found that when a research firm oversees the clinical studies and is aware of the drug's potential side effects, it may be held liable to patients.

Statprobe was hired by Gliatech to provide biostatistical services for a "double-blind" clinical study of the effectiveness of ADCON-L for use in some spinal surgeries. When the study was completed, the suit says, Statprobe informed Gliatech that the data failed to show that the drug was effective.

But in January 1998, at Gliatech's request, Statprobe provided Gliatech with the code to "unblind" the status of patients in the treatment and control groups. Gliatech personnel later performed a second reading of the studies that changed some of the data in a manner that made ADCON-L appear more effective, the suit alleges. Gliatech provided the new data to Statprobe, which accepted the new study and altered its report to show that ADCON-L was effective. The FDA then approved ADCON-L.

Gliatech pleaded guilty to federal criminal charges, including failure to notify the FDA of reportable events occurring in medical procedures....and submission of a report regarding a medical device that was false and misleading in a material respect. According to Wawrzynek's suit against Statprobe, the FDA's approval of ADCON-L was the result of a conspiracy in which both the manufacturer (Gliatech) and the research lab (Statprobe) manipulated data to make the drug appear effective.

Sample seminar geared for senior management or the Board

The ethics experts of Corporate-Ethics US are people you can be proud to offer to the CEO or to the Board for the education of senior management.  See samples.

This article was written by Leonard Bucklin

Leonard Bucklin is a peer-recognized attorney who focuses on advising and training company executives on corporate ethics culture and compliance. He is the principal of Corporate-Ethics.US™, a round table group of PhD and JD experts who provide ethics counsel, and customized, high-quality, ethics seminars. For more information on corporate ethics, visit www.Corporate-Ethics.US .