The war against aging has been waged for as long as we know. One of the most prominent battles within this war is the fight against memory loss. As people age their brains begin to deteriorate, leading to absentmindedness, decreased ability to multitask, difficulty with name and face recognition, along with other side effects. The race to create a drug that can reverse or even halt neurological diseases and age induced memory loss has been booming with advancements in the study of memory. Spear heading this race is a company called Quincy Bioscience and their exceedingly popular supplement, Prevagen. Although it has boosted revenue and sales for years, the Food and Drug Administration (FDA) and other agencies have questioned its safety and efficacy. Quincy Bioscience is now being tried for false/misleading advertising, creating improper procedures during production, and not specifying how it controlled production, which would all ensure quality and safety for consumers.
|Prevagen uses protein found in jellyfish|
When analyzing this through the lens of the ethical theories, they would vary in responses. Individualists, who believe the only ethical responsibility is to increase profits of the owners, within the law, would not condemn Quincy Bioscience. They would applaud the company’s use of loopholes to remain within the law while maximizing profits. Utilitarianism argues that one must maximize the happiness for the majority of people to be ethical. Using this theory, a utilitarian would disapprove of this company’s practices because the majority of the people effected are the stakeholders and they are negatively impacted, leading to decreased happiness. The Kantian ethical theory analyzes the motivations and reasonings behind someone’s actions to tell if it was ethical or not. In this case a Kantian can argue that the founders of Prevagen are not ethical because their motivation to create this supplement was to make money fast, not necessarily for the betterment of its consumers. Finally, Virtue theorists would notice there is dishonesty, greed, self-interest, disrespect, and lack of empathy involved in this case. All of which completely go against the cardinal virtues described in the theory. Quincy Bioscience needs to listen to the FDAs recommendations, along with discontinuing to mislead the public about its supposed supplement.
Prevagen was advertised as a miracle drug that improved memory, learning, word recall, and executive function. Since the conception of the company, there has been controversy. For starters, Mark Underwood the founder, stole the idea for the product from his mother. Her intent was to use a protein found in jellyfish to create a proven medical treatment that can help people with neurological diseases. Mark took this idea and started Quincy Bioscience with the premise being to “make a totally obnoxious amount of money at an early age and spend the rest of my life spending it” (Wired). For years, the FDA has tried to make cases and find flaws in the marketing and production of Prevagen, always ending in Quincy Bioscience finding another loophole and avoiding disciplinary action. To begin, Quincy Bioscience took advantage of the differences between regulations for drugs and dietary supplements. Although they are both regulated, they are held to quite different standards. For drug manufacturers, the FDA requires them to undergo numerous testing to ensure that before the drugs are introduced, they are safe and effective. On the other hand, supplements are loosely monitored and have less regulations. In Underwood’s eyes, it was a no brainer to classify Prevagen as a supplement because he wanted to make money fast, “we didn't want to wait another 10 years—the time it could take to conduct clinical trials and request approval as a drug” (Wired). For example, for supplements, the companies are the ones responsibility of ensuring their products are safe and effective. This rule even applies if there is a new supplement introduced to the market, in many cases these companies do not have to notify the FDA and are presumed safe until proven otherwise. The exception to this rule is, if there is a supplement that contains a new dietary ingredient that is not in the current food supply. In this case, they must provide the FDA with evidence that the substance is safe for people to consume at least 75 days before the company introduces the product to consumers. This was an issue for Prevagen at the beginning because their main ingredient, a protein from jellyfish called apoaequorin, has never been a part of the current food supply. Although they needed to submit the documents for this “new dietary supplement” with 75 days’ notice, Underwood signed the forms a day before his company started selling Prevagen. Quincy Bioscience began sales in 2007, in 2011 the FDA began doing inspections to observe the procedures and manufacturing process that Underwood used to create and produce his supplement. During their inspections, the agents found many violations in Quincy Bioscience’s manufacturing process, quality control testing, which is used to safeguard the consumers from unsafe products, and the companies handling of customer complaints. While conducting their check up at Quincy Bioscience headquarters in Madison, Wisconsin, the FDA found records of “more than 1,000 adverse events and product complaints that had been reported to the company since May 2008. Only two adverse events had been relayed to the FDA by Quincy. An inspection report documents significant potential violations, or “observations,” investigators listed 18 cases that Quincy had decided not to classify as serious and did not share with the FDA. They included five reports of seizures, three of strokes or mini-strokes, and four of vertigo, dizziness, or falling that merited medical attention” (Wired). The FDA then realized that Underwood was manufacturing apoaequorin synthetically and not naturally as they stated earlier. They wrote Quincy a letter explaining that after review, the manufacturing of apoaequorin is considered not safe. The Federal Trade Commission (FTC) also question the claim made by Underwood that Prevagen can pass through the gastrointestinal system and cross the blood-brain barrier. If a company claims that a supplement can improve a part of human health through a process, while being taken orally, the company must prove and support that claim with evidence. This evidence was never brough forth, further discrediting the product and leading to more lawsuits. Studies have showed that these claims made by Underwood are false and misleading, “the product cannot work as advertised because its only purported active ingredient, apoaequorin (a protein), is completely destroyed by the digestive system and transformed into common amino acids no different than those derived from other common food products” (Justice). In contradiction, Quincy Bioscience relies on one study done, the Madison Memory Study. In this experiment, Quincy workers took individuals, gave half of them a placebo pill and the other half a Prevagen pill, they then had them do tasks and accessed how well they did, continuing this process for 90 days, recording results after 30, 60, and 90 days. They concluded that the individuals taking Prevagen has increased cognitive function, along with other mental benefits. This study is scrutinized because it did not show statistical improvement when observing the population as a whole, the study was sponsored by Quincy and authored by company employees, which leads to implicit bias. “As “proof” of power, a bar graph shows a rise from 5% to 10% to 20% over 90 days in “recall tasks.” But there is no way to know what these numbers refer to, how many people were studied, or other important details. And no information is provided about effects on memory after 90 days. The fine print under the graph says that the supplement “improved recall tasks in subjects” without explaining what this means” (Harvard). This study was used in all their advertisements and sales calls to mislead people into believing this supplement is effective. A Quincy Bioscience sales team member, Jovan Chavez, said he capitalized on the Madison Memory Study because it allegedly showed improvements in memory within 90 days. Using this information to his advantage, he encouraged customers to buy a three-month supply because purchasing more bottles decreased the shipping cost, while giving you the supply of Prevagen you need. Along with this, he promoted a more expensive extra strength variation, that will help customers faster. Eventually, this direct sales team was discontinued because customers would call and tell the employees about adverse side effects they experienced, that would then need to be documented. Quincy laid off 13 percent of its staff and “a year and a half later, in November 2016, FDA inspectors observed a “noticeable decrease” in the number of adverse event reports Quincy received after they stopped the calls” (Wired) leaving them with over 4,000 reports of health complications expressed by their customers.
With all these
issues cited in this case, lawsuits have become a powerful tool to combat and
regulate companies like Quincy Bioscience. Prevagen has been specifically
targeted in multiple proceedings, mainly surrounding their false advertising
claims. While the FTC’s false advertising case against Quincy Bioscience is
still ongoing, other settlements are flawed and keep the power in Quincy’s
hands rather than the affected customers. This is due to customers not making any
substantial compensation in these cases, and the ratio of awards to legal fees
being opposite to how they should be. Ultimately, resulting in little to no
individuals making a claim against the makers of Prevagen.
Quincy Bioscience relies on their relationship with its stakeholders to ensure they stay in business and continue making profit. The company will need to make reparations with its consumers after misleading and manipulating them into buying an unsafe and unregulated product. They would then have to mend the broken trust with other stakeholders, such as federal agencies in charge of regulating the industry. Quincy betrayed their trust by exploiting loopholes internally and not following regulations, even when instructed to. This relationship with these stakeholders will need to be repaired, especially if Quincy Bioscience wants to remain in the industry and get approval for future business actions.
From an individualist perspective, the production and sale of Prevagen would be ethical. This is due to Milton Freedman theory that management was responsible for maximizing business profits and any action taken without considering profit is stealing from the owners of the company (Salazar 17), but to always do so within the law. Freedman would look at what Underwood did with Prevagen and see the loopholes that he took to ensure profit and approve of the steps taken. If Underwood classified Prevagen as a drug, it would have taken years of research and experiments just to not be released due to it not being effective. Instead, he knew the loophole around the FDA and classified Prevagen as a dietary supplement, ensuring a quick and profitable route with this new product. This tactic seemed to work because “from 2007 through the middle of 2015, sales of Prevagen totaled about $165 million and the company claims Prevagen is now a “best-selling branded memory supplement in chain drug stores across the United States”’ (Elemental). Taking this route for Prevagen is attractive for an individualist because the safety of the product and compliance needed are very loose in this industry, furthermore, leading to people taking advantage of areas that the FDA falls short in. Quincy profited drastically by how “the marketers of Prevagen preyed on the fears of older consumers experiencing age-related memory loss” (elemental), it is not illegal to instill fear in consumers in order to sell a product, therefore, being ethical in an individualistic analysis. Also, by Quincy ending outbound sales calls, they were able to minimize their customer complaints and sell more Prevagen without having to document cases of adverse effects. This is ethical within individualism because it does not taint the companies records, it has less jobs since the direct sales department closed, and does not violate any laws. Eventually leading to increased profit in multiple areas. Although, with new changes to the FDA, including requirements for supplements to have experimental evidence and not mislead their customers, Quincy Bioscience will need to change their strategy to ensure they stay within the law.
On the other hand, a Utilitarian would analyze this case as unethical because of Quincy’s misleading advertising and lack of concern for the health and safety of their customers. The theory of utilitarianism states that “we can determine the ethical significance of any action by looking to the consequences of that act” (DesJardins 29). Using this as a basis of what is ethical, one would see that the actions of Underwood, who stole his mother’s idea to quickly sell a new product, without ensuring its safety and doing the proper experimentation just to make money, are all unethical actions.
For this to be ethical through the lens of a Utilitarian, Underwood would have classified Prevagen as a pharmaceutical drug, gone through the proper testing and regulations to ensure safety and effectiveness of the product. He then would have to not mislead his customers on the effects of the drug and report to the FDA the actual adverse effects that have been reported to the company. If he followed the regulations without exploiting, did not deceive his customers into purchasing a product that was not scientifically supported, and used his customers as an ends and not simply a mere means, then the business would “maximize happiness in the long run for all conscious beings that are affected by the business action” (Salazar 17). One of the fundamental regulations for Utilitarianism is to maximize pleasure and minimize pain with the focus being on the stakeholders. In this case, Underwood has more self-interest than the interest of the stakeholders. As seen from the business actions he took, it was all aimed at making profit and not aimed at creating a proven medical treatment. This directly goes against the ideals of a Utilitarian because they will “avoid short-sighted thinking that often boosts profits momentarily but leads to a quick demise” (Salazar 20), and that is the opposite of what Underwood did. Furthermore, being ethical from a utilitarian point of view is more important that just being just that. Being deemed unethical leads to more financial loss due to lawsuits from customers and agencies that report adverse effects, misleading advertising, and improper manufacturing procedures.
When analyzing this case as a Kantian theorist, the main deciding factor of whether the act was ethical or not depends on the will of the person behind the action. “Kantianism does not make decisions based on consequences” (Salazar 21), which is the major difference between that and utilitarian decision making. This can be applied in this situation because Underwood’s decision for Prevagen to be classified as a supplement rather than a pharmaceutical drug was expressing bad will. His reasoning was to make more money as fast as possible, instead of ensuring the safety and effectiveness of the product before introducing it. Along with that, another main concept to consider is that “Kant tells us that we should act only according to those maxims that could be universally accepted and acted on” (DesJardins 38). With that being said, the question would arise whether a universal law could be made to absolve supplement companies from providing evidence of their products safety and effectiveness and advertise dishonestly. This law cannot be made universal because if everyone was allowed to release a supplement without having to prove its effectiveness and is safe and can market it however they want, then that will cause a major health and safety risk for consumers. It would also not hold those companies legally liable if this kind of laxity were permitted. Furthermore, when creating universal laws one must consider that, “truth telling could, but lying could not, be made a universal law” (Salazar 38) and since Quincy Bioscience was accused of false and misleading advertising, they cannot say their actions are universally accepted.
When Quincy received warnings from the FDA, they would either deny them or make small changes that did not solve the issue at hand. When analyzing this using Kantianism, one would see that the company only made changes when they were demanded to, and their intent was to deter the FDA. Underwood is being unethical and practicing bad will because the reasoning behind making these changes should be for the betterment of his customers, not for his own self-interest.
From a Virtue Theorist perspective, a person’s character and how their actions reflect who they are as a person is much more important than the outcome. Virtue theory is based on 4 Cardinal Virtues including, prudence, courage, temperance/self-control, and justice/fairness. Virtue Theorists use these to analyze if people are ethical by seeing if they “act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits” (Salazar 22). When looking through this lens, Underwood’s decisions display a poor character that a Virtue Theorist would see as being unethical.
Quincy Bioscience has infringed on numerous virtues that are crucial to being deemed ethical. For example, through misleading and false advertising, Quincy has not expressed the virtues of justice/fairness, which also include honesty. With the FDA citing issues with the company’s manufacturing processes, complaint handling, and the quality control testing, along with the FTC’s complaints on false, deceptive advertising, nothing aligns with the virtues of justice/fairness. The lack of compliance to regulations and feedback from the FDA has led Quincy to lie to agencies and their customers and ultimately be regarded as unethical. When analyzing virtue theory, it is good to use the analogy of a table, the legs are each virtue that someone must have to be ethical. If one of the legs are missing (justice/fairness), and someone does not have that virtue, then the table will collapse, and the person is unethical.
Justified Ethics Evaluation
In my opinion, I believe that Quincy Bioscience’s actions were unethical in every sense. Even the foundation and creation of the company was based on an unethical action, taking the idea from his mother, and changing it from the course she hoped it would have gone. It has then followed that trend of unethical behavior at almost every decision made. Whether it be from classifying Prevagen as a supplement and not a pharmaceutical drug, to not listening to agencies regulations, and false advertising, there are multiple aspects of this company that are unprofessional and express negligence. Underwood’s main goal of profit is ethical through the lens of an Individualist but analyzing it using any of the other ethical theories, one would evaluate that Underwood and Quincy Bioscience is unethical.
Even when customers started to complain about adverse effects and the FDA questioned the safety and processes within the company, Quincy tried to sweep everything under the rug. They would either deny or not report adverse effects that were reported to them and they did not listen to the FDA’s feedback and recommendations for reform. This negligence led to more people experiencing negative side effects that were detrimental to their health, all while not being held accountable for it. Even when they were given opportunities to change for the better, they continued down the unethical road by persisting to misinform, take advantage of, and manipulate the public, along with the FDA. Overall, Quincy Bioscience acted on its own self-interests and used unethical motivations, that drove every decision away from ethical thinking.
Company Action Plan
Quincy Bioscience has numerous issues that need to be resolved to continue making profit and regain the trust of their customers and stakeholders. The company classified Prevagen as a supplement instead of a pharmaceutical drug to make quick profits and bypass important regulations. This would be the first issue that needs to be resolved. The company should reclassify Prevagen as a pharmaceutical drug and put it through rigorous tests to ensure its safety and effectiveness. Although this will take a long time and they might encounter issues along the way, it will prove to their stakeholders that they are serious about reform and will act ethically. Underwood did not want to take this route because he wanted quick profits, but this way of thinking is unethical and short term. This is true because rushing and taking short cuts leads more flaws in the products and eventually a decrease in profits, along with lawsuits in the future. Classifying Prevagen as a drug is more of an investment, it will take longer to get profits but the product is trusted and proven to work, so in the long run the company will make more money through credibility and proven facts.
Another issue that Quincy needs to solve is their relationship with the agencies like the FDA. Through the lifespan of the company, they continuously took advantage of loopholes and did not listen to warnings given by these agencies. Multiple times the FDA has requested to come do inspections, during them, they cited changes that need to be made. In these instances, the agency was met with opposition and a complete lack of self-responsibility, either being ignored by the company or denying the violations that were reported. If Quincy listened to the FDA, they would have a smoother manufacturing process, they would not have to worry about breaking any violations, and consequently make more money by having the support of the FDA. Underwood should apologize to the agency and promise to be compliant with past and future issues.
Quincy Bioscience has also received backlash due to their poor relationship with their customers. Agencies are calling for lawsuits for the misleading and false advertising expressed by the company. They would deceive their customers into ordering more of their product by relying on a noncredible study, taking advantage of peoples fears, and exaggerating the effects it has on the body. The Madison Memory study has been refuted multiple times as not showing any conclusive evidence into the effectiveness of Prevagen. The sales team would market Prevagen to older consumers and prey on their fear of age-related memory loss. Quincy also claimed that Prevagen improves memory by being able to cross the blood-brain. This claim is false because the main protein that is supposed to improve memory, gets broken down into amino acids during digestion, before reaching the brain. With all their claims “Quincy Bioscience failed to show that Prevagen works better than a placebo in any measure of cognitive function” (NBC). To resolve these issues and create a better relationship with customers, Quincy must first apologize and take responsibility for their deception, then they must pay reparations to those negatively impacted by their use of Prevagen. Once those steps are done Quincy should conduct a credible study, their marketers should not take advantages of people fear, and only make claims that are supported by multiple credible findings. This will take time and money, but in the long run, they will have a better relationship with customers and be trusted again.
Aside from issues within the company, one of the biggest issues in this case is the agencies lack of resources to combat companies that exploit regulations. The lack of funding to adequately police this industry is a large part of the problem and creates situations where agencies are not prepared to take regulatory action, instead they must resort to citing voluntary action to a company. This leads to companies taking advantage and not being held accountable to following the rules. With the FDA recently announcing plans to modernize its regulation of supplements, many companies will be forced to obey new rules to ensure the safety and validity of every aspect in the industry.
Quincy Bioscience needs to change their mission statement from being about making money any way possible, to making sure people see their growth and that they strive to be more ethical. My recommendation would be “Quincy Bioscience is a biotechnology company based in Madison, Wisconsin, that devotes new discoveries, developments and commercialization of novel technologies to support cognitive function while emphasizing factual evidence, trust, and transparency”. This mission statement stays true to the original vision while adding key elements that they were deficient in historically.
The core values that are expressed in that mission statement, if implemented, resolve the issues that the company faces, along with confirming their ethical status when analyzing the company using all the ethical theories.
· Factual Evidence – Making sure every claim made is factual is crucial for every company. This was a shortcoming with Quincy Bioscience, so if they stress that all their statements are supported by evidence, the issue will be resolved.
· Trust – Loyalty is vital when it comes to its stakeholders. Underwood lost the trust of these individuals by lying and deceiving. If they can regain this trust, then their customers will be loyal and business partners will be proud to be associated with them.
· Transparency – Being transparent and honest with a company’s stakeholders is of the utmost importance. This was a major issue with Quincy Bioscience not being transparent with customers and the FDA on facts, figures, and reports. If they emphasize honesty, then they will be more ethical and resolve many issues.
To ensure ethical productivity and monitoring of ethics Quincy Bioscience can become more transparent with agencies and customers. This transparency will hold them accountable for their actions and keep their record clean. They can also implement ethical trainings with advocacy groups that can speak up if they see anything that is unethical. These groups can either be apart of the company or apart of an independent organization that solely monitors the ethical state of the company. They can promote employees that give ideas on how to be more ethical, along with firing individuals that were the leading cause of claims against the company for unethical behavior. Quincy Bioscience needs a completely new marketing strategy that showcases their reforms they have done and how they shed away their wrong, unethical past.
My plan will take time and be expensive, but it is worth the investment if the company wants to continue profiting and be ethical. If Quincy Bioscience does not change, then they will face financial ruin through lawsuits and violations of regulations. Since Underwood tried to take shortcuts in the beginning stages of this company, he is now facing the consequences of these unethical actions. If Quincy Bioscience implements these changes, they will profit from gaining back the trust of their stakeholders, become a reputable company that people can rely on, and ensures good ethics through maintaining their core values.
The supplement industry is very underregulated with a lot of opportunities for companies to take advantage for financial gain. This is exactly what Mark Underwood and Quincy Bioscience did with the memory loss “supplement” Prevagen. They took advantage of loopholes, preyed on the fear of their customers through false and misleading advertising, to sell them a drug that is not proven to be effective or safe. The only way they can comeback from this is to follow the correct regulations that are set in place by the FDA and have their main goal be to create a proven medical treatment. The product needs to be tested in multiple, reputable, studies, factually advertised, and held accountable in every facet of production and reports. Even though there are differences between the ethical theories, there are commonalities amongst them that, when used correctly, can ensure a company is acting ethical. Hopefully, Quincy Bioscience learns from their mistakes and are better able to effectively improve the health of the public in the future.
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