Tuesday, April 1, 2014

Synthes: Illegal and Harmful Promotion (2011)

Synthes logo
Synthes Holding AG is a multinational medical device manufacturer based in Solothurn, Switzerland and West Chester, Pennsylvania. Along with producing surgical power tools and advanced biomaterials, Synthes is the world’s largest maker of implants to mend bone fractures. On November 16, 2011, Georgia Baddley, a 70 year old woman, received a surprising call from a special agent at the U.S. Department of Health and Human Services. The agent told her that the government had come across new information about her mother’s death. Eight years earlier, her 83 year old mother, Barbara Marcelino, had unexpectedly died during spine surgery. Baddley did not question what happened at the time because surgery was always risky for a woman of her age. The agent went on to explain that the surgeon had injected bone cement into her mother’s spine and that the product was not approved for that use and may have played a role in her mother’s death. Baddley was stunned at the news. “I was taken aback,” she says. “I had no idea that anything like that happened.”
In 2009, the U.S. attorney in Philadelphia accused Synthes of running illegal clinical trials experimenting on humans. They had tested a product called Norian XR, a cement that has the ability to turn into bone when injected in the human body. The Food and Drug Administration (FDA) explicitly told Synthes not to promote Norian for certain spine surgeries, but the company did so anyway. At least five patients who had Norian injected in their spine died on the operating table, one of them being Barbara Marcelino. Interviews with more than twenty former employees and surgeons involved in the project, hundreds of pages of court transcripts, and company documents submitted to the case reveal that the company also ignored scientists’ warnings that the cement could cause fatal blood clots. The Department of Justice targeted four high ranking executives at Synthes including Michael Huggins, Thomas Higgins, Richard Bohner, and John Walsh, whom all pleaded guilty to a misdemeanor under a law called the Responsible Corporate Officer Doctrine. They were each sentenced to eight months in prison, received $100,000 fines and got there medical licenses revoked. The indictment charged Synthes Inc. with a total of 52 felony counts including conspiracy to impair and impede the lawful functions of the FDA and to commit crimes against the U.S; seven counts of making false statements in connection with an FDA inspection; and 44 counts of shipping adulterated and misbranded Norian XR in interstate commerce with intent to defraud. The company faced charges of $24 million in penalties. Synthes was proven to be an unlawful company and further examination can be helpful to determine if what they were doing was also unethical. In order to understand whether Synthes is an ethical company, it can be helpful to consider and apply four core ethical theories. These include the theory of individualism, utilitarianism, Kantianism, and lastly the virtue theory.
Michael Huggins, Richard Bohner, and john Walsh,
Synthes managers blamed for illegal clinical trials

Milton Friedman’s theory of individualism states that the only goal of a business is to profit within the constraints of the law, so the only obligation that a business person has is to maximize profit for the owner or the stockholders. Under this theory, Synthes would be considered ethical in that they were trying an innovate product that could increase profits in the future. In fact, profits increased from $907.7 million in 2010 to 966.8 $million in 2011 after the executives and the company were charged. The profit increase was driven by global revenue of nearly $4 billion. Also, in 2011 Synthes merged with Johnson & Johnson to create the world’s largest orthopedic corporation. Despite their attempt to boost profits, the company cannot be considered ethical under individualism because what they were doing was not lawful. Technically, if they were found innocent in court they would have been ethically sound according to individualism but since the Department of Justice found them guilty that cannot be the case. The trials they ran were illegal and therefore an individualist would not consider Synthes an ethical company.

John Stuart Mills, a primary contributor to the utilitarianism theory, believes that happiness and pleasure are the only things of intrinsic value and that people ought to bring about happiness and pleasure in all beings capable of feeling it. With utilitarianism, it can be helpful to identify the costs and benefits of each main stakeholder within the ethical issue. The stakeholders who were affected in this affair include the patients that were injected with the dangerous bone cement and their families, the executives working at Synthes at the time, and the shareholders of the company. Without a doubt the stakeholders that were most affected were the individuals that lost their lives in surgery. The benefit that these patients could have gained from the operation was a healthy spine but the risk, apparently unknown to these individuals and their families, was ultimately death. In no way did Synthes bring about happiness to others in this situation. They mislead people into surgeries they knew were risky and contributed to the death of at least five people not to mention the grief that it caused the patient’s families and friends. 
In order to maximize happiness, they should have never administered the testing of Norian on these unfortunate individuals, or at the least should have notified them of the risks at hand. Next, the executives at Synthes also were not able to instill pleasure in themselves or others because of their actions. The benefit of conducting the Norian experiments was to create a new and breakthrough way of conducting surgery that could also lead to larger profits down the road. The cons proved to outweigh the pros and the executives lost their licenses and went to prison. They neglected to see the consequences of their trials and it ended up hurting themselves and those around them. If these four individuals wanted to be ethically sound under utilitarianism, they should have treated human lives with more respect and then they would be living a happier and more fulfilling life. Lastly, the shareholders were not affected negatively from the scandal so the company would not be considered unethical for this stakeholder. Although the stock took a slight hit when the scandal first hit, profit began to rise when they expanded to international markets and merged with J&J, causing the stock to steadily increase. Despite the fact that shareholders made out fine after the lawsuit, it is clear that Synthes would not be considered ethical by a utilitarian. They failed to maximize happiness in themselves and their patients and the results were catastrophic. 

Synthes headquarters in West Chester, PA
Kantianism, developed by Immanuel Kant, encourages people to act rationally and to not act inconsistently with their actions while also helping others make rational choices and respecting an individual’s needs and differences. Kant also believes that motivation should come from good will, or seeking what is right because it is right. Synthes would not be considered an ethical company under this theory. One reason relates to Kant’s formula of humanity along with his formula of universal law. The formula of humanity states that people should act in a way in which they treat others as an end and never simply as a means while the formula of universal law encourages people to identify how their actions will influence “everybody” and naturally this forbids all forms of deceit. Simply put, Synthes treated the patients they injected with Norian as a means and it cost them their lives, strictly forbidden in the formula of humanity. Also, the company did not notify their patients of the risks of the bone cement which is undoubtedly deceit and in violation of the universal law. If the company at least made the information about their trials available to those who needed surgery, they would be considered more ethical under this law. Synthes also defies the basic principles of Kantianism in that they did allow others to make rational choices. Because they administered the trials without informing the patients of the risks, they failed to give them their right of making a rational decision. The sensible choice in this situation would have been to go with a more traditional form of surgery that has been proved effective and if informed, it is likely that the patients would have gone this route. If Synthes had done this, they could have been considered ethical under Kant. It is important though, that they do it for the right reasons. If they told people of the dangers only to avoid future lawsuits then they would still be acting unethically. In order to be in accordance with all Kantian laws and principles, they would need to have revealed the risks of the Norian cement simply because it was the right thing to do.

Virtue Theory
Lastly, the virtue theory asserts that businesses have certain virtues, or characteristics, that make them ethical. These include courage, honesty, trust, and justice. Synthes certainly was not courageous in this situation. After they were accused of running the illegal trials, they tried to cover it up to save them money and a poor public image. Although the executives did end up pleading guilty, it was only because they finally realized the evidence against them was too substantial to argue against. If the company were courageous, they would have admitted their mistakes immediately and taken responsibility. Honesty and trust often go hand in hand. In order for there to be trust, there has to be honesty and Synthes displayed neither of these traits. They lied to their customers and this ultimately led to people having less trust in the company. Even though this lack of trust did not show in their financials, it is safe to say that people that have heard about the wrongdoings of this company would have less trust in them as a whole. Justice emphasizes hard work, quality products, good ideas, and fair practices. It can be argued that Synthes was working hard and they had innovative ideas concerning their products, but in the end the quality was as poor as you can get and their practices were in no way fair. Norian XR led to the deaths of unknowing individuals and running trials on humans after continuous warning from the FDA and scientists is extremely unfair to those that suffered. 

After looking at four central theories of ethics, it is evident that Synthes cannot be considered a company that demonstrates the core principles of each theory. Despite the fact that their profits did not drop after the scandal, their actions were still unlawful. The company did not allow themselves or those they served to live up to their full potential happiness and they continually disrespected their patients thus not allowing them to make rational decisions. Lastly, Synthes displayed unfavorable characteristics that contradict what a virtuous and ethical company should. 

"Annual Report." Synthes. 17 Feb. 2011. Web. 1 April 2014.

Herper, Matthew. "A Shocking Scandal At A Billionaire's Bone Company." Forbes. 18 Sep. 2012. Web. 30 Mar. 2014.

Kimes, Mina. "Bad to the bone: A medical horror story." CNN. 18 Sep. 2012. Web. 30 Mar. 2014.

Russ, Hilary. "Synthes Investor Blasts $21B J&J Deal in Suit." Law 360. 6 May 2011. Web. 31 March 2014.

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