United States: Ethics for the Life Science Company: Old Traditions Meet the Brave New World

Last Updated: January 29 2004

In these post-Enron times, ethics – especially corporate ethics – has become a buzzword in the business community. Ethical inquiries into what is "right" for a business and what is "good" are no longer simple academic exercises. Instead, as corporate ethics comes under increasing public scrutiny, doing well in business tends to include both doing what’s right and doing what’s good.

Companies in the life sciences face the same corporate ethics concerns as other businesses. In addition, though, the very nature of the life sciences industry entails an additional level of ethical reflection. Life sciences companies concern themselves with technologies derived from and relating to life itself, whether on the nano-level or the macro-level. These companies hence have to reckon with matters of bioethics as well as business ethics. Companies in this industry are generally young and fast-growing, fueled by fast-paced scientific discovery. Technological development can thus outpace corporate introspection, so that a company’s ethical principles and policies become implemented only as afterthoughts, when legal or public relations problems crop up.

Life sciences companies have learned that bioethics provides a toolkit for dealing with problems having ethical ramifications. But bioethics offers a company more than an approach to crisis management. A company can employ principles of bioethics throughout its lifecycle, to avoid creating problems at the outset, as well as to solve problems that arise unexpectedly.

Bioethical Building Blocks: Moral Reasoning and Moral Principles

Bioethics deals with the ethical and moral aspects of those technologies relating to biology. Groundbreaking biomedical advances are of particular concern to the bioethicist, for such innovations may be so new that their moral implications have not yet been formally considered. Many apparently novel ethical issues in the life sciences can be understood, however, by using traditional and well-established methods of bioethics: moral reasoning and principle analysis.

The first step in moral reasoning is to perceive that it is necessary – in other words, to recognize that an issue has a moral or ethical dimension. This should not catch a life science company by surprise. Any endeavor involving life, whether at the level of cells or at the level of human beings, has potential ethical significance. As a company formulates its business plan, it should creatively scan its ethical horizon, looking beyond its corporate responsibility to its shareholders to identify its responsibility to its stakeholders, those groups or individuals affected by its activities in the marketplace.

Methods of moral reasoning permit a company to examine its corporate mission from the stakeholder perspective. The first type of moral reasoning, termed utilitarianism or consequentialism, judges the moral worth of an endeavor in terms of its results. On this view, something is good if it yields good outcomes, and something is not good if its outcomes are not. The second type of moral reasoning, deontology, looks for the right thing to do, whether or not it produces beneficial outcomes. On this view, certain actions like truth-telling and treating persons with respect are right in themselves.

The difficult part of the utilitarian approach is defining those outcomes that should be considered "good." Similarly, the difficult part of the deontological approach is determining which values comprise what is "right." To overcome these difficulties, a company can use both approaches together to complement each other. As it contemplates its future products and services, the company can simultaneously carry out both types of moral reasoning, identifying the corporate "good" it wishes to achieve and the "right" types of behavior it anticipates.

Take, as an example, a bioinformatics company intending to commercialize data based on a population’s genetic information. How might such a company envision itself ethically? Using consequentialism, the company might reason that the "good" stemming from its endeavors should include developing predictive genetic tests, to facilitate identifying individuals at risk for a particular genetic disorder. This beneficial consequence then forms part of the company’s ethical commitment. Besides accomplishing good results, the company also wishes to "do the right thing" in its endeavors. One "right" type of behavior the company may embrace is protecting privacy. To accomplish this, the company can implement procedures for protecting confidential medical information, and can require similar protections from its customers.

Moral reasoning identifies positive ethical themes for a company’s business. As a reality check, the company can look beyond these positive themes to the ethical negatives it wishes to avoid. In the example above, the company may recognize that its data could be used for purposes besides those beneficial to human health. The company may also recognize that genetic information and genetic testing could be used to carry out social wrongs, like fostering discrimination or denying legitimate benefits. Perceiving these potential negatives, the company can adopt appropriate policies to prevent them.

Traditional moral reasoning, illustrated above, can be supplemented by the analysis of core bioethical principles. Four such principles, described a generation ago by Beauchamp and Childress, still have vitality for bioethics today: 1) respect for persons, including respect for human autonomy; 2) beneficence; 3) non-malificence; and 4) justice. Although a life sciences company may wish to include other principles in its ethical foundation that relate more directly to its business, these four principles are a good place to start.

For our hypothetical bioinformatics company, ethical principles expand the foundation that moral reasoning has already established. For example, the principle of respect for persons and their autonomy provides additional justification for protecting confidential information. Respect for autonomy also underwrites obtaining informed consent from human subjects whose genetic materials the company uses. In addition, the principles of beneficence and non- maleficence (doing good and avoiding harm) may help the company establish further specific policies regarding the end-use of its data. The company might decide, for example, only to license its data for institutional review board-approved protocols, reasoning that IRBs impose additional safeguards as to how the data will be used. Finally, the principle of justice may guide the company in its relations with the population whose genetic information it uses. Having identified a unique genetic population, the company might determine, for example, that justice requires some form of "giving back" to that community.

Bioethics and Problem-Solving

Having engaged in ethical reflection from its early stages of development, a life sciences company will be better equipped to deal with unanticipated bioethical problems that arise later. A problem having a bioethical dimension may also have legal and/or regulatory aspects. Without recognizing the bioethics component, though, the company’s other efforts may appear rule-bound and soul-less.

To see how ethical analysis can coexist with regulatory and legal analysis, consider a hypothetical company planning a clinical trial in a developing country. Initially, the situation seems driven by regulatory and legal issues. The regulatory issues are paramount: what must the company do so that the data it obtains in the foreign clinical trial satisfies the FDA? The company must also sort out legal issues, ranging from U.S. informed consent requirements to products liability exposure to host country clinical trial procedures. Dealing successfully with the legal and regulatory does not solve the entire problem, though. Testing a drug in a developing country raises a host of ethical issues – and better that the company confront these head-on before starting the trial. Applying the bioethical methodologies set forth above can help address potential ethical pitfalls.

What is so ethically problematic about this situation? Ethical problems here arise in part from the profound economic and cultural differences between host and sponsor. These cultural differences alone can introduce ethical problems. For example, how does the difference between host culture and sponsor affect informed consent? The company must compare its Western-based notion of autonomy with what is understood in the host country. After sorting out top-level cultural differences, the company can embark on more orderly ethical analysis. First, the company should consider whether the trial itself is morally "right." Are the business reasons for the trial also ethical ones? The principle of justice may help with this determination. Is it fair to "outsource" a clinical trial merely because recruiting subjects is less expensive in the third world? And is it fair to impose the risks of drug development upon a foreign population that will not benefit from the drug? The company may well be able to structure affirmative answers for these questions, but only after it knows to ask them. Second, the company should consider the consequences of its actions, both beneficial and harmful. If the drug is effective, for example, will the subjects still have access to it when the trial concludes? If the drug is harmful, will the company provide care for those it has injured? The company may be able to design its trial to bring about good consequences and avoid harmful ones, but not until it asks about the ethical implications of its behavior.

Only if ethical questions are asked, then, can a company decide how it wishes to respond to them. Only if a company thinks through the ethical aspects of its actions can it design policies to prevent or solve ethical problems. Such policies are increasingly important, with ethics assuming such a prominent place in public concern. The mere perception of unethical behavior can damage a company’s reputation and its position in the marketplace. And life science companies are held to a higher ethical standard than other businesses. Because their endeavors affect life itself, society charges these companies with responsible stewardship. To fulfill these responsibilities, companies in the life sciences industry need proactively to incorporate ethics into their institutional structure so that they can anticipate and avoid ethical problems, not just solve them. Traditional methods of bioethical analysis can help even the most innovative company in such tasks. 

Goodwin Procter LLP is one of the nation's leading law firms, with a team of 650 attorneys and offices in Boston, New York and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability.

This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. (c) 2004 Goodwin Procter LLP. All rights reserved.

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