Ethics and the pharmaceutical

ETHICS
industry
Stephen Green

Objective: Relationships between the pharmaceutical industry and the

medical profession enhance the potential for physicians to become involved in
conflicts of interest. Whether or not these rise to a level that violates standards
of medical ethics depends on the degree to which they detract from the quality of
health care and its cost, the objectivity of research, and the profession’s
integrity. This paper explores those issues from two perspectives
the micro-
level of the medical profession and the macro-level of society.

Conclusions: Practices and policies that affect varied aspects of the interac-
tion between the pharmaceutical industry and the medical profession
such as
education, research and marketing
are discussed. The reader is asked to reflect
on the ethics of issues raised; the author offers suggestions for mitigating
conflicts of interest and, in turn, the potential for unethical medical care.
Key words: ethics, pharmaceutical industry, psychiatry.

T
he ‘industry
investigator partnership’ between pharmaceutical com-
panies and the medical profession has yielded clear benefits,1
reflected, for example, in a wide spectrum of newly developed
psychoactive medications. Coincident with these gains has been criticism
of the pharmaceutical industry for its growing influence in day-to-day
medical care via methods that are sometimes ‘‘deeply troubling and even
criminal.’’2 Relman and Angell contend that it ‘‘dominates just about every
aspect of the American health care system’’ related to its business interests,
using wealth and political clout ‘‘to influence all who might check or
monitor its activities
including physicians, professional and academic
institutions, Congress and the FDA’’.3 Since the 1980s, as pharmacological
treatment of the mentally ill became more prevalent, the industry has
certainly enjoyed a growing influence in psychiatry. This paper will explore
the ethical issues associated with that evolution.

CONFLICT OF INTEREST
. June 2008

As Kassirer notes, ‘‘without the willing engagement and active involve-

ment of physicians’’, the effects of many complicated conflicts between the
medical profession and pharmaceutical industry would be diminished or
eliminated.4 The oath of the Pythagorean School makes no reference to
Vol 16, No 3

treatment of the mentally ill, but the Hippocratic tradition has never-
theless shaped the concept of right and wrong conduct for psychiatrists by
defining two fundamental goals of the medical profession: (i) establishing
Australasian Psychiatry .

Stephen Green
Clinical Professor of Psychiatry, Department of Psychiatry,
Georgetown University School of Medicine, Washington, DC,
USA.
Correspondence: Dr Stephen A. Green, 5410 Connecticut
Avenue, NW #109, Washington, DC 20015, USA.
Email: sgreen.georgetown@verizon.net
values that guide its work; and (ii) promoting guild interests by advancing
scholarship and technical skills for the purpose of applying that knowledge
to the needs of society. A clear tension exists between the two themes, a
clash we would currently ascribe respectively to professional and commer-
cial interests.5 Many feel the pharmaceutical industry has accelerated the
trend towards the latter by promoting conflicts of interest within the
medical profession.

doi: 10.1080/10398560701842595
158 # 2008 The Royal Australian and New Zealand College of Psychiatrists
Thompson defines conflict of interest as ‘‘a set of
conditions in which professional judgment concern-
ing primary interest (such as a patient’s welfare or the
validity of research) tends to be influenced by a
secondary interest (such as financial gain)’’.6 The
secondary interest does not pose a choice between
competing values that characterize ethical dilemmas
in medical decisions when each competing interest has
a presumptive claim to priority (e.g. autonomy and
paternalism if a patient requests termination of treat-
ment). In contrast, only one of the interests has a
primacy claim in a conflict of interest, and the goal is
to ensure that the other interest (usually financial)
does not dominate.
The severity of a conflict generally depends on two
factors: (i) the likelihood that professional judgment
will be influenced, or appear to be influenced, by the
secondary interest; and (ii) the degree of harm that
may result from such influence or its appearance.
Whether physicians (knowingly or unwittingly) are
involved in conflicts that violate standards of medical
ethics depends on the degree to which their behaviour
detracts from the quality of health care and its cost, the
integrity of research, and the profession’s integrity. As
regards the pharmaceutical industry, I address these
questions by exploring its relationship with physi-
cians, medical institutions and governmental organi-
zations from two perspectives
the micro-level of the
medical profession and the macro-level of society.
THE MEDICAL PROFESSION
The impact of industry contact with trainees and
practitioners
The relationship between the pharmaceutical industry
and members of the profession begins in medical
school.7 Although students and house officers deny
that gifts influence their behaviour, the data do not
support their contention.8,9 Reciprocity is central to
persuasion that characterizes the interaction between
pharmaceutical representatives (PRs) and physicians,
as gifts foster a psychological indebtedness that con-
sciously or unconsciously induces a sense of obligation
in the recipient.10 And the omnipresence of PRs in
academic medical centres (AMCs) has been demon-
strated to have considerable impact on attitudes,
knowledge and practices of physicians (e.g. prescribing
patterns).11 Moreover, the degree of interaction be-
tween PRs and trainees correlates with the degree of
contact with future practitioners, suggesting that a
pattern, in process and content, is established during
the nascent years of training.12
Education
Pharmaceutical companies contribute a substantial
proportion to the several billion dollars spent annually
on continuing medical education (CME) activities in
the US. In Relman’s opinion, their motivation is not
altruistic, but rather it is to promote products and
increase profits.13 An oft-quoted observation by one
industry spokesman
‘‘[c]ompanies live through edu-
cation’’
supports this belief.14
The industry directly and indirectly funds a vast
network of educational activities, primarily through
medical education and communication companies
(MECCs), for-profit organizations that produce CME
programs and presentations for hospital rounds, and
didactic materials for private practitioners. MECCs
often prepare teaching slides and curriculum materials,
ghost-write presentations for speakers, and subsidize
trainees and practitioners to attend meetings. Rel-
man’s concern about the potential for bias and conflict
of interest on the part of the pharmaceutical compa-
nies and the physicians hired by them13 is supported
by Kassirer’s description of two situations concerning
psychiatric education.4 He discusses an article that
compares the efficacy of celexa and lexapro (produced
by the same company), endorsing the latter as a
superior medication. Of note is that celexa was about
to go off patent (and therefore become a less profitable
product), the article was ghost-written, and the author,
paid by the manufacturer as a consultant, edited the
journal in which it appeared.4 Kassirer also reports that
physicians had accepted US$1000 for signing their
names to medical articles ghost-written by technical
writers and submitted to neurology and psychiatry
journals advocating off-label use of Neurontin.4 This
particular example highlights a major reason that the
industry sponsors educational activities. It is legal in
the US to use drugs off label, but illegal for a company
to advertise medications for uses other than those
approved by the Federal Drug Administration (FDA).
To bypass these regulations, companies recruit physi-
cians to discuss off-label uses, essentially employing
them for marketing purposes. The danger of this
practice is highlighted by a situation concerning a
second-generation antipsychotic (SGA) medication
that was promoted for treating dementia in the elderly
despite the fact that the medication carried a promi-
nent FDA warning of increased death in the geriatric
population.15
One fundamental responsibility of a profession is to
improve the expertise and technical skill of its mem-
bers. Educational endeavors that compromise scienti- Australasian Psychiatry . Vol 16, No 3 . June 2008
fic accuracy, or are primarily intended to promote a
product, subvert that task. In the case of psychiatry
Sharfstein observes that industry-sponsored educa-
tional activities have progressively transformed the
biopsychosocial model into a ‘‘bio-bio-bio’’ model,16
and Wanzana and Primeau warn that excessive focus
‘‘on which pill to take’’ may obstruct the broader
perspective required for reasoned clinical decision-
making.17 Focus on pharmacological treatment in
lieu of psychosocial interventions can also result in
unwarranted diagnosis and, in turn, over-prescription
of medications. This situation was illustrated by
heightened consideration afforded attention-deficit
159
 disorder in the 1990s. Halasz believes that over-
diagnosis of the disorder was partly attributable to
advertising efforts that emphasized both its prevalence
and the therapeutic benefits of stimulants.18
Research
Prior to the 1990s approximately 80% of clinical drug
trials were conducted in AMCs under the direction of
medical faculty with no potential for direct financial
benefit from the work. Subsequently, a large amount of
clinical research began shifting to non-academic set-
tings, primarily practitioners’ offices, as pharmaceuti-
cal companies attempted to speed FDA approval by
avoiding the slow-moving administrative research ap-
paratus endemic to universities. Private practices en-
rolled patients in phase IV (so-called ‘post-marketing’)
studies of existing medications, in order to investigate
such issues as previously unknown side effects. Most
phase IV testing is facilitated by contract research
organizations (CROs), for-profit research entities that
organize clinical trials and employ physicians to con-
duct them. In 2001, over 1000 CROs worldwide re-
ceived an estimated US$7 billion from pharmaceutical
companies.3
The ethical issues connected with such research are
several, beginning with consideration as to whether its
primary goal is scientific enquiry or marketing. As
already noted, contact with practitioners affects their
prescribing patterns which are likely to be influenced
even more so by financial incentives offered to recruit
patients as research subjects. Second, CROs analyze
and interpret research data with minimal oversight
from the medical profession. As a result they may
report findings based only on a portion of the data,
and leave some investigators uninformed about other
aspects of a study. For example, the high incidence of
obesity associated with olanzapine was known to its
manufacturer as early as 1999, but the company
downplayed this health risk.19 Similarly, the results
of clinical trials indicating that Paxil had no beneficial
effect in treating adolescents were withheld by the
manufacturer ‘‘in order to minimize any potential
negative commercial impact’’.20 Third, phase IV trials
. June 2008
may compromise patients’ informed consent if they
are not fully aware of physicians’ financial compensa-
tion for conducting a study or of other available
treatments (e.g. less expensive generic medications).
Vol 16, No 3
Fourth, physicians’ participation in phase IV studies
may compromise their integrity and, in turn, that of
the profession, if their primary motivation is financial
Australasian Psychiatry .
reward. Finally, phase IV studies may expose patients
to higher risk than research conducted in academic
settings.21 Some dispute the latter issue, as the medica-
tions have already been FDA approved, but phase IV
studies may lack safeguards to respond to common
research issues, such as whether a participant should
receive a modified dose of a drug.
160
The degree to which clinical research is conducted by
CROs has also had a significant secondary effect on
academic-based research. Because of the pharmaceuti-
cal industry’s decreasing dependence on academe for
professional expertise, the prestige of scientific pub-
lication that may contribute to market success, and as
a conduit for recruiting research subjects, its financial
support of academic research has steadily declined.
Although AMCs remain non-profit entities, they have
become increasingly entrepreneurial in an effort to
regain research dollars. For example, in 1986, 46% of
private firms in the life sciences supported academic
research; by 1996, 92% did so.22,23 By 1999, 68% of
academic institutions in the US and Canada held
equity in businesses that sponsored research per-
formed by their faculty.24 During this same period,
financial ties between individual faculty members and
the pharmaceutical industry proliferated.22,24,25
These observations suggest a new revenue model of
‘‘medical entrepreneurialism’’ that blurs the line be-
tween academic and commercial values,24 as AMCs
increasingly regard themselves partners of the phar-
maceutical industry and court individual companies
accordingly. Relman and Angell go so far as to assert
that because the incentives of the marketplace have
intruded into the basic fabric of academic medicine,
‘‘the public can no longer be confident that the testing
of new drugs is unbiased’’, a claim supported by some
policies and practices of biomedical research con-
ducted at AMCs.3 For example, an association exists
between industry sponsorship and pro-industry re-
search findings.24 Perlis et al. studied funding sources
for all clinical trials published in four major psychiatric
journals between 2001 and 2003, and found the
prevalence of authors’ conflict of interest was asso-
ciated with a greater likelihood of reporting a drug to
be superior to placebo.26 Such findings are often
attributable to the study design and/or how data
are reported.27 For example, Melander et al. describe
findings of industry-sponsored studies of five selective
serotonin reuptake inhibitors submitted to the Swed-
ish drug regulatory authority as a basis for marketing
approval for treating major depression.28 They con-
clude that selective reporting ‘‘was the major cause for
bias in overall estimates based on published data’’, and
that lacking access to all studies, positive as well as
negative, ‘‘any attempt to recommend a specific drug
is likely to be based on biased evidence’’.
Summarizing the role of the pharmaceutical manufac-
turers in research, Bodenheimer concludes that re-
search in the commercial sector is ‘‘heavily tipped
toward industry interests, since for-profit CROs . . .
contracting with industry in a competitive market,
will fail if they offend their funding sources’’, while
‘‘academic-industry drug trials have been tainted by
the profit incentive’’ but ‘‘contain the potential for
balance between the commercial interests of industry
and the scientific goals of investigators’’.
THE IMPACT OF THE PHARMACEUTICAL
INDUSTRY ON SOCIETY
Pluralist societies attempt to balance the needs and
independence of individuals against a variety of greater
goods (e.g. protecting the environment). Pluralism is
characterized by the dynamic interaction of public and
private interest groups, each of which requires financial
support to pursue its goals. The pharmaceutical indus-
try has enormous financial resources with which to
influence this political process in order to promote its
interests; in so doing, it has a direct impact on society.
It is sobering to comprehend the extent of these
resources. Since the early 1980s, it has been the most
profitable industry in the US (falling to third place in
2003). According to Fortune magazine, in 2001 the 10
American drug companies in the Fortune 500 list
ranked far above all other American industries in
average net return as a percentage of sales
18.5% as
compared to a median net return of 3.3% for all other
industries.29 A Congressional Budget Office (CBO)
report30 concurs that the industry’s profits exceed the
average for all US industries, but disputes the degree to
which they do so. Nevertheless, in 2002 the combined
profits for the 10 drug companies in the Fortune 500
(US$35.9 billion) were more than the profits for all the
other 490 businesses combined (US$33.7 billion)29

figures that have particular relevance to psychiatry. In
2003, Americans spent US$200 billion a year on pre-
scription drugs; three of the 10 most popular medica-
tions in sales were the psychoactive agents Zyprexa
(fifth, US$3.2 billion), Zoloft (eighth, US$2.9 billion),
and Neurontin (tenth, US$2.4 billion).
Pharmaceutical companies justify the cost of medica-
tions
and by inference their earnings
largely on the
basis of expenditures for research and development. A
recent, widely circulated study estimates that it takes
12 years to develop a new drug at an approximate cost
of US$800 million.31 However, that figure has been
challenged on several accounts. First, the actual ex-
penditure is half the amount, as the calculation
includes the ‘opportunity costs’ of interest or earnings
not realized from those monies invested in research
and development. Second, the US$800 million figure is
based on development of a sample of new molecular
entities (NMEs) by large pharmaceutical firms. How-
ever, most new non-NME drugs have substantially
lower research and development costs because they
are incremental improvements of already existing
products. And, as the CBO report notes, non-NMEs
constitute about two-thirds of the drugs approved by
the FDA accounting for ‘‘only about one-third of the
industry’s R&D spending’’ making their average direct
cost ‘‘about one-fourth that of an NME’’. Third, some
argue that the industry claims expenses for research
that is actually performed by others. For example, in
1998 ‘‘15% of scientific articles cited for patent
applications for clinical medicine came from industry
research, 54% from academic centers, and 13% from
government, and the rest from various public and
nonprofit institutions’’.3 Finally, as noted by Public
Citizen, the Washington-based consumer interest
group, research and development costs are deductible
from a company’s tax base. It therefore argues that
the costs of development should be reduced by the
amount of corporate taxes avoided,3 and calculates
that the net out-of-pocket, after-tax costs for research
and development would be less than US$100 million
for each drug approved between 1994 and 2000.
Drug pricing
Conceding that the cost of research and development
of a new drug is unclear, the costs claimed by the
pharmaceutical industry affect drug pricing in a way
that still raises ethical questions about fairness. First,
the majority of FDA-approved drugs are non-NMEs
and, as the CBO notes,30 the higher prices charged for
those ‘‘that are merely extensions of current product
lines may not be commensurate with the additional
value that those drugs provide’’. Commenting on the
CATIE study the New York Times expressed this opinion
when noting how the US wasted ‘‘billions of dollars
on heavily marketed drugs that have never proven
themselves in head-to-head competition against
cheaper competitors’’.32 A related issue concerns
allocation of health care resources; by expending
precious funds on higher-priced medications, state
programs (e.g. Medicaid) are forced to limit other
services. In that same vein, drug pricing has a broad
effect on society because the cost of pharmaceuticals is
a rapidly growing fraction of a US$1.4 trillion health
budget in the US, now 15
16% of gross domestic
product.
Pricing policies for medications also have a direct effect
on individual members of society. If based in a libertar-
ian model, those with resources can purchase needed
medications while those lacking funds are considered
victims of ill fortune but not unfairness. A utilitarian
model for drug pricing relies on greater utilization of
generic medications which increases the numbers of
individuals who can afford medications. Many mana-
ged health care and pharmacy benefit plans employ
this model. Finally, a fair equality of opportunity
model, formulated by the philosopher John Rawls,33
relies on resource distribution that attempts to ensure Australasian Psychiatry . Vol 16, No 3 . June 2008
that all citizens have an equal chance for achieving
their desired goals. This can take the form of social
policies that subsidize pharmaceutical benefits of those
most in need. The US employs an admixture of these
policies, though the predominant model is libertarian
(paralleling the US model of health care insurance)
despite skepticism about how ethical the distinction is
between that which is ‘unfortunate’ and ‘unfair’.
Political activities
Relman and Angell posit that the pharmaceutical
business is ‘‘critically dependent on governmental
161
 help . . . [as] its lifeblood is government-granted mono-
polies
in the form of patents and FDA-approved
exclusive marketing rights’’.3 The fortunes of the
pharmaceutical industry have skyrocketed in the US
since 1980, coincident with legislation that has trans-
formed the relationship between industry and aca-
deme, which some believe reflects the effectiveness of
successful influence-pedaling. Two Senators ascribe
to this view
Bernie Sanders (Independent-Vermont)
declared that the pharmaceutical industry ‘‘has hun-
dreds of victories to its credit and zero defeats in
the United States Congress’’, while Richard Durbin
(Democrat-Illinois) offered the more unnerving obser-
vation that PhRMA [the industry’s Washington-based
trade association] ‘‘has a death grip on Congress’’.34
Lobbying undoubtedly facilitated passage of the Bayh-
Dole and Stevenson-Wydler Acts of 1980, each of
which spurred a burgeoning commercial association
between academe and the industry. The former per-
mitted universities and small business to patent dis-
coveries supported by tax-sponsored research of the
National Institutes of Health (NIH), grant exclusive
licenses of those products to pharmaceutical compa-
nies, and charge royalties for their use. The biotech-
nology industry subsequently joined forces with
academe and all profited from the alliance. The
Stevenson-Wydler Act permitted the same legal and
financial arrangements as the Bayh-Dole Act for dis-
coveries resulting from intramural research conducted
on the campus of the NIH. It was amended in 1986 by
the Federal Technology Transfer Act that required
federal laboratories to actively seek opportunities to
transfer technology to industry, universities, and state
and local governments.
Subsequent legislation in the US furthered the indus-
try’s financial success. In 1992, the Prescription Drug
User Fee Act was passed which funneled significant
monies to the FDA from pharmaceutical companies
that paid a fee of US$310 000 in order to speed the
agency’s review process of each new product. These user
fees soon accounted for 50% of the agency’s budget in
2002. By 2004 they totalled US$260 million, and in
2006 represented US$400 million of the agency’s
US$1.9 billion budget. Some view these developments
. June 2008
as making the FDA financially dependent on the
industry it is supposed to regulate, particularly since
these monies were not used to monitor the safety of
already manufactured drugs. A 2006 report by the
Vol 16, No 3
Institute of Medicine35 faulted the FDA for being too
interested in the rapid approval of drugs at the expense
of ensuring their safety, and issued several recommen-
dations about the overall review process. The primary
Australasian Psychiatry .
goal was to bring the strengths of the pre-approval
process to a post-approval process in order to ensure
ongoing attention to a medication’s risks and benefits.
The influence of the pharmaceutical industry has also
been noted in the Medicare Bill of 2003 which, in
terms of ‘‘dollars, the number of people affected, and
162
the political stakes involved’’, has been described as
the most important piece of health care legislation in
the US since Medicare and Medicaid were originally
passed in 1965.36 The bill conveys clear advantages to
the industry. First, though senior citizens have two
options for coverage, their benefits can only come
from private health plans, raising concerns that the
legislation will not have any long-term effect on
controlling drug costs. Next, the federal government
is prohibited from negotiating prices with pharmaceu-
tical companies
in sharp contrast to the govern-
ment’s ability to do so in the Veterans Administration
system which has demonstrably lowered pharmaceu-
tical costs. Third, the legislation contains the hotly
debated ‘‘donut hole’’, a lack of coverage between
US$2251 and US$5100. Congressional lawmakers may
have allowed the provision in order to provide at least
some aid to seniors with both low and high drug costs.
However, it results in sicker patients with higher drug
costs paying more for their drugs.
Finally, as noted in the discussion of research and
development costs, the pharmaceutical industry has
also benefited from US tax policies. Between 1993 and
1996, drug companies were taxed at a rate of 16.2%
compared to an average tax rate of 27.3% for all other
major industries.29
Marketing
According to the US Securities and Exchange Commis-
sion (SEC), in 2001 the major pharmaceutical compa-
nies spent 35% of their revenues on ‘‘marketing and
administration’’, the largest single item in their bud-
gets. That year the industry reportedly spent US$19.1
billion for marketing: US$2.7 billion on direct-
to-consumer (DTC) advertising, US$5.5 billion for
detailing representatives to physicians’ offices (plus
US$10.5 billion for free samples to clinicians) and
US$380 million for advertising in medical journals.29
More than one-third of its workforce was dedicated
to marketing, exceeding those in research and devel-
opment or manufacturing.
DTC accounts for only 15% of monies spent on drug
promotion. Nevertheless, it has been effective due to
selective demographic targeting and thoughtful deci-
sions about which products to promote (e.g. drugs are
often advertised in response to competitors). One
study concluded that if DTC ‘‘opens a conversation
between patients and physicians, that conversation is
highly likely to end with a prescription, often despite
physician ambivalence about treatment choice’’.37
As suggested by the amounts of money spent to
finance PRs and dispense free samples, marketing
efforts are primarily focused on individual physicians.
Approximately 88 000 sales representatives in the US
visit doctors in hospitals and their offices, at an
average cost of US$8000
US$13 000 per physician.3,9
Moreover, many argue that the distinction between
industry-sponsored education and marketing is so thin
as to be invisible. A General Accounting Office report
indicates that the cost of activities such as CME
meetings and travel subsidies to attend them, consult-
ing fees, speakers’ fees and unrestricted educational
grants are excluded from the industry’s US$19.1
marketing budget which, Angell claims, brings the
actual figure to US$54 billion.29
The effectiveness of focusing marketing on physicians
is demonstrable. As noted above, PR contacts with
trainees and physicians likely influence thinking and
behaviour about prescribing over the course of their
professional lives. Although the full implications of
the CATIE and CUtLASS studies are still being digested,
they may be illustrative in this regard, as SGAs have
captured 90% of the market in the US generating
US$10 billion annually. The principal investigator of
the CATIE study observed that ‘‘the SGAs are not the
great breakthrough in therapeutics they were once
thought to be; rather, they represent an incremental
advance at best’’.38 He attributed the preference for
SGAs to ‘‘an overly expectant community of clinicians
and patients eager to believe in the power of new
medications’’ as well as ‘‘aggressive marketing of these
drugs’’ and an ‘‘enhanced perception of their effec-
tiveness in the absence of empirical information’’. The
principal investigator of the CUtLASS study observed
that ‘‘certainly one issue’’ in their widespread use was
that ‘‘pharmaceutical companies did a great job in
selling their products’’.39
A second, considerable benefit of focusing marketing
on physicians involves facilitating off-label use of
medications. Constraint against advertising for such
purposes can be bypassed by recruiting physicians to
write and/or speak about these matters, then have PRs
spread that information to trainees and physicians. A
testimony to the effectiveness of this strategy was
Neurontin’s earnings of US$2.4 billion in 2003.
Legal activities
The pharmaceutical industry also affects society by
mobilizing its vast financial resources in the legal arena,
including reaching financial settlements with plain-
tiffs. Eli Lilly recently agreed to pay US$500 million to
settle 18 000 lawsuits from people who claimed they
developed diabetes or other diseases after taking Zy-
prexa. In conjunction with earlier settlements, the
company paid a total of US$1.2 billion to 28 500
people.40 GlaxoSmithKline agreed to pay US$14 million
to 49 states to settle allegations that it blocked generic
versions of Paxil from being made, causing the states to
pay higher prices. Pennsylvania had settled a previous
suit primarily concerned with purchases by Medicaid.41
The company also paid US$70 million to settle a series
of civil lawsuits for claims that it inflated wholesale
prices of several of its medicines as far back as the early
1990s.42 And Schering-Plough agreed to pay US$435
million to settle a federal investigation into marketing
drugs for unapproved uses and overcharging Medicaid
for certain drugs.43 The amounts of monies spent by the
industry to pursue legal activities is extraordinary, but
companies seem willing to accept these expenditures
given the countervailing profits.
Finally, not all legislation affecting the industry fa-
vours individual companies, prompting legal action by
some to gain advantage over others. For example, the
Drug Price Competition and Patent Term Restoration
Act of 1984, also known as the Hatch-Waxman Act,
attempted to serve the dual purpose of stimulating
production of generic medications while providing
some additional protection for brand-name drugs.
The intended balance of the Hatch-Waxman Act has
to some degree been undercut by a series of legal
manoeuvres employed by the pharmaceutical industry
to exploit the second goal of the legislation. Brand
name companies have been able to delay distribution
of a generic drug for 30 months by suing its manu-
facturer on the basis of patent infringement, even
though such suits were for uses of the drug that were
different from its original patent as defined by criteria
of ‘‘usefulness, novelty and non-obviousness’’ by the
US Patent and Trademark Office.
MORAL DELIBERATION
Morality is concerned with right ideas and principles
of human conduct. Medical ethics examines the role of
values in clinicians’ relationships with patients, fa-
milies, and colleagues
psychiatric ethics pursues the
same goal with issues specific to mental health care

in an attempt to ensure morally correct treatment.
Ethical deliberation and decision-making is justified by
different moral theories that incorporate an amalgam
of rights, consequences, obligations, virtues and other
parameters. For example, the decision to terminate
medical treatment may be justified by the principle of
respect for autonomy (e.g. honoring patients’ wishes)
or a utilitarian calculus of whether continued treat-
ment conveys more harm than benefit. [Space does not
permit discussion of the predominant moral theories

Utilitarianism, Kantianism, Virtue Theory, Casuistry,
Principle-based Ethics and Care Ethics. See Green and
Bloch44 for a detailed review.]
Theoretical justification in medical ethics can become
extremely complex. For example, allocating resources Australasian Psychiatry . Vol 16, No 3 . June 2008
on a utilitarian basis, characteristic of managed health
care, may conflict with the Kantian belief that physi-
cians have a duty to provide treatment to all. More-
over, ethical dilemmas can arise even when adhering
to a single theory, such as trying to meet absolute, but
conflicting, obligations of Kantianism. Consequently,
a methodology for ethical decision-making is required
in order to reconcile the demands and directives of
different theories, as well as any contradictions arising
within a single theory. Hundert offers one such
methodology, proposing a schema for balancing com-
peting ethical values
a ‘‘reflective equilibrium’’ that
evolves from clinicians’ ongoing experience.45 Bloch
163
 and Green suggest another framework that emphasizes
the place of care ethics, given the importance that the
approach affords the role of emotions in moral deci-
sion-making.46
CONCLUSION
Ethical care is achieved by consideration of various
moral theories through the lens of an established
deliberative methodology in order to determine
whether a given clinical situation or professional
practice is right or wrong. Applying this procedure to
observations about interactions between the pharma-
ceutical industry and medical profession provides a
means for deciding whether or not the industry, with
or without the collusion of physicians, is involved in
unethical practices. As noted at the outset, I believe
conflicts of interest compromise professional ethical
standards if they negatively affect the quality and cost
of clinical care, the objectivity of research, and the
integrity of the profession in general. Several questions
may help focus the reader’s thinking along these lines.
. Is the Hippocratic tradition of ‘‘First do no harm’’
undermined by the way research is conducted or
medications are reviewed by the FDA?
. Have patients been afforded true informed consent
when enrolled in phase IV trials or subjected to DTC
marketing?
. Are clinicians fully and accurately informed about
medications, given the way research data are inter-
preted and how those data are employed in market-
ing?
. Has the profession fulfilled its primary and continu-
ing educational responsibilities or abdicated that role
to the industry?
. Has the use of newer medications (e.g. SGAs) and the
off-label use of medications been a net benefit or
harm to individual patients and to society?
. Have individual citizens been adversely affected by
drug pricing policies, and has society suffered from
the growing cost of medications and its impact on
the US health care budget?
. June 2008
The answers to these and other more nuanced questions
are not absolute. Individual practitioners will have
different opinions based on different professional ex-
periences;45 for example, one clinician may be more
Vol 16, No 3
scrupulous than a colleague when securing informed
consent during a phase IV trial, yet each may provide
ethical care. Professional codes can be employed in an
Australasian Psychiatry .
attempt to apply more standardized ethical parameters
to the relationship between pharmaceutical companies
and the medical profession. However, such guidelines
(e.g. those governing the American Medical Association
and American College of Physicians) have been
criticized for vagueness and obstacles to enforceabil-
ity.47 Additional actions are required to diminish the
164
potential for the types of conflicts of interest addressed
in this paper. In closing, I review suggestions of
others3,4,29,48 that seek to achieve that goal.
The medical profession should devote more energy
informing students and trained physicians about the
ethical pitfalls inherent in commercial collaborations,
which already occurs in some medical schools.49 The
profession should also reform medical and continuing
medical education, primarily by invigorating instruc-
tion in pharmacology and the critical review of
research design and analysis. Industry should be
excluded from all educational endeavours, which
would involve banning PRs from training environ-
ments; eliminating all gifts, particularly educational-
related payments (e.g. for travel to meetings or
participation in meetings); abolishing drug-sponsored
symposia at professional meetings; and prohibiting
participation in speakers bureaus. Physicians should be
prohibited from all research endeavours in which they
have financial interests. (Angell has even suggested the
establishment of an independent centralized organiza-
tion for all clinical trials, such as a laboratory of the
NIH, as a comprehensive means of controlling poten-
tial abuses of research in both academic and non-
academic settings.29) Claims that medical education,
research and the scope of professional meetings would
suffer absent support from the pharmaceutical indus-
try have legitimacy. However, individual companies, if
so inclined, could contribute to centralized offices (e.g.
within AMCs) that distribute funds for research and
educational activities independent of industry input.
The government, which has significantly affected the
relationship between the medical profession and
the pharmaceutical industry via legislation since the
1980s, can exert positive influence in several ways.
First, the US is the only developed nation that does not
regulate drug pricing, which at the very least is
unreasonable, and more likely unfair, given the mil-
lions of American unable to purchase needed prescrip-
tion medications. Provisions of the Bayh-Dole Act
already permit governmental control of drug pricing
under certain circumstances, one of which is generally
interpreted to involve establishing reasonable costs to
consumers,50 and those powers should be exercised
when required. Second, the FDA needs reform in order
to diminish potential
and real51
conflicts of
interest, and to strengthen the post-marketing mon-
itoring of medications.
Finally, the public has a responsibility to become better
informed about the pharmaceutical industry’s influ-
ence on the medical profession, and to advocate for
desired changes. This would involve the lobbying
members of Congress by individuals and interest
groups (e.g. to amend provisions of the Medicare Bill
of 2003), and require patients to be more proactive by
regularly engaging physicians in discussion about the
rationale for specific pharmacological treatments.
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