Tuesday, April 7, 2020

Insys Therapeutics: The Aggressive Marketing of Subsys (2012-2019)

The case
Insys Therapeutics is an American based pharmaceutical company that primarily researches new medicines and drug delivery systems. They only have two drugs on the market, and for this piece it is important to know about Subsys which is an incredibly powerful opioid, 100 times more potent than morphine, and highly addictive as it is fentanyl-based and fast-acting because it is applied as a spray underneath the tongue (sublingual). It is also important to note that the FDA only approved this highly addictive and powerful drug for a select niche of people. Specifically, it was only meant for cancer patients who were already on around the clock opioid therapy and whose bodies were already immune to the weaker drugs. For visual purposes, here is a picture of the product below (NYTimes).

What is more important for this case is what happened next with the drug. Some of the high ranking executives of Insys Therapeutics, such as the company's founder and chairperson, John Kapoor, realized if they could widen the market away from just the select niche, the company could make an incredibly larger amount of money. Doctors and medical professionals knew of the potential harms of this highly addictive drug, so they weren't prescribing it. That is, they weren't prescribing it until those at Insys Therapeutics started what would be known as their sham speaker program which was just an elaborate way to woo doctors into their bribery and kickback program where the more prescriptions they prescribed, the more money they would make. Although it was illegal, it was incredibly successful which can be seen in the increase of their stock price (per Yahoo finance in the image below) up until their actions came to the public's, and more importantly government's, eyes.

After the illegal actions of those at Insys Therapeutics came out, they were hit with 225 million dollars in fines and restitution fees for their actions which forced the company to file for chapter 11 bankruptcy. Not only that, very importantly, those directly responsible in the higher up executive positions were also fined and even jailed for their direct involvement and engineering of this scheme. The biggest name being the previous billionaire John Kapoor (who lost his billionaire status once Insys Therapeutics was ousted).

Stakeholders can be defined as anyone who is directly, or indirectly, involved with Insys Therapeutics and their actions. This could mean employees, managers, those who take the prescriptions, the doctors, or anyone along those lines. The list can be very long and for Insys Therapeutics, it is. The biggest stakeholder group would be those directly affected by the opioid epidemic and the countless lives it has ruined. It has to be acknowledged that the actions taken in this case have directly contributed to the epidemic which has had people die from overdoses, ruined savings, ruined families, and ruined people's lives in general. Another large stakeholder group is those financially invested in the company (who didn't necessarily know what was happening) and lost large amounts of money when their stock price dropped from 46 dollars, to now lower than a dollar. Now the individuals can be considered as stakeholders as well, John Kapoor and several other high ranking officials in the company have rightfully received fines and even jail time for their direct involvement. And last but not least, we have the doctors who were involved in the bribery and kickback scheme. Many have lost their medical licenses, rightfully, and are still amidst legal battles determining their fate.

Amongst the four ethical theories that will be looked at, individualism is the most unique as it is specifically derived from the business world. it cannot be applied to everything unless paired with another theory such as utilitarianism or Kantianism. There are two main branches of individualism: Edward Freidman's and Tibor Machan's. To quickly generalize, Friedman argues that a business sole purpose should be to increase profit while within the law and therefore return for investors. Doing anything outside of this, such as corporate social responsibility, is unnecessary and a waste of money. Whereas Machan argues that Friedman's take on individualism is too restrictive and doesn't take into account the fact that in the long term, investing in things such as CSR can be more profitable. Applying these ideas to the case, we can see that Insys Therapeutics did a fantastic job of producing returns for the investors for several strong years. To achieve this astounding return, it is known that they did so with actions that were outside of the law. Simply because of this fact, their actions are and must be deemed unethical for that reason alone.

Utilitarianism was popularized by Jeremy Bentham and then John Stuart Mill. This is a rather well know ethical lens and is very commonly used in decision making, especially for those who are in positions of power where the outcome affects a large group of people. Generalizing, the goal of utilitarianism is to maximize the most happiness for the most amount of people, and only ave a minority be sad. Using the original terms, the pleasure should outweigh the pain if they were both on one side of a scale. Although the actions which get to the outcomes are important, the outcome is more important. The common phrase to understand this idea is that the ends justify the means (meaning the end). This means that even if the actions taken to get to the most amount of happiness for the largest group of people seem wrong or unethical, the good outcome can override the bad it took to achieve that outcome. That is why it is very popular amongst those in power as it has the goal of appeasing the most parties at the forefront of the theory. Applying this theory to the case is rather cut in stone as well when you look at the magnitude of the stakeholders. Although the happiness that the company got and the stockholders got from the increase in revenue and increase in stock price, it does not even come close to the sadness of those involved with the opioid epidemic, which Insys Therapeutics directly contributed to, have gone through. This means that the end outcome does not even come close to justifying the means, which means that the company's actions would once again be considered unethical.

Kantianism was popularized by Immanuel Kant. It is closely related to utilitarianism in its description, but to be very clear it is very distinct. What is meant by this is that the same phrase from before can be used again: do the ends justify the means? In the case of Kantianism, no. Under Kantian thinking, the means never justify the end, even if the end is very good. The reasoning for this is the focus is not on the outcome, but rather on what it took, the actions, to get there. It is because of this that anything along the lines of deceit, lying, manipulation is wrong because it implies that you are not respecting the other human's humanity, independence, and free will. This is the idea known as the formula of humanity. Also, if the actions do not come from the right motivation, meaning the intent of the action, then the action would be considered unethical. Applying this lens to the case, it can be seen that once again, the company's actions would be considered unethical. Applying the formula of humanity, Insys Therapeutics took advantage of their power and manipulated the doctors into prescribing more of their product to unknowing recipients who didn't need it. It is very easy to see that the actions of the company were motivated with selfish intent. They intended to profit off of this, regardless of the consequences, because they did and would've continued profiting off of this unless they were outed and caught, which happened.

Virtue Theory
This theory was popularized by everyone's favorite ancient Greek philosopher Aristotle. Virtue Theory is also fairly unique in comparison to the other three ethical lenses. The reasoning for that is it doesn't necessarily focus on the outcomes or the actions it took to achieve them. Instead, it focuses on individuals and their character. What is meant by this is looking at an individual from an outside perspective, you can see whether the individual was acting rationally by doing things which benefit themselves, but also society and those around them. Essentially, if a person is living a virtuous and beneficial life, their actions are most likely ethical. Typically the four best virtues are courage, honesty, temperance, and justice (there are plenty of other good traits). Whereas those who live a life full of vices typically act unethically. Common vices are dishonesty, selfishness, and greed which degrade people's character. Applying this lens to the case, it can be seen once again that the individuals who helped in the aggressive marketing of Subsys were embodying the vices which degraded their, and their company's character. They were selfish, greedy, and dishonest meaning their actions should be, and are, deemed unethical.

Personal Evaluation & Justification
I believe that regardless of the use of an ethical lens, the decision is rather clear. The opioid epidemic in the United States is for the past few decades has continually grown and taken and ruined countless lives which can be seen through countless reports from governmental agencies such as the CDC or the HHS. Quite simply, the statistics info-graphic from the HHS for 2018 below is extremely sad to think about considering the numbers since then have only grown.
Without a doubt, Insys Therapeutics and the individuals involved, such as John Kapoor, their actions cannot be justified. What they did to aggressively, and illegally, market the highly addictive and powerful drug which contributed to an already raging epidemic, is quite honestly selfish, greedy, and disgusting. That would also mean that personally, regardless of the lens, I view the actions of those in the company with Subsys as unethical and morally wrong.

Action Plan
Despite the poor actions which previously occurred in the company because of some individuals in pursuit of profits, the rest of the company can come out of the aftermath and be reborn. It will not be easy, but it is doable if they accept what happened, not hide from it, and analyze it so that they can put safeguards in place so it never happens again.
The two first general things they should focus on is to start thinking in the long term because generally speaking, companies which are thinking in the long term typically act more ethically and are well received by the public. As we saw with Subsys, the tactics, although highly effective for a few years, were short term oriented and ended up costing the company a lot more than it was worth. Secondly, they need to better their public image by getting back to what they initially set out to do, helping individuals who have the most need.
They can achieve both of these general goals and be profitable in the long term if they reorganize their structure, their training processes, and their sales mix. To start, those who participated in the Subsys scandal need to be permanently terminated which should be too challenging as they are already jailed. As well as firing, they should also hire a third party, or hire individuals to form an ethics department or committee which constantly is investigating the actions of the corporation to make sure everything that is happening is ethical. While they are at it, they should create a substantial ethics training covering all the necessary topics so that everyone understands what happened and how it could have been prevented. Then to also get a better opinion in the eyes of the public, they should form a new mission statement which shows that they truly care about the individuals and genuinely want to help those in need with unique solutions. They should also create a corresponding set of core values to show that they have truly changed. Finally, to cement the fact they are thinking long term, they should introduce a couple of more generic products into their sales mix to increase their revenue streams so they don't have to worry about one product, Subsys, producing most of their revenue. The culmination of these factors would completely revolutionize how the company operates and is seen by the public for the better.

My Name
Tyler Mayrand

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