Team workAN UNETHICAL CULTURE IN NEED OF CHANGE:
TAP PHARMACEUTICALS
In 1995, Douglas Durand was offered the position of vice president for sales at TAP
Pharmaceuticals. TAP had been formed 25 years before by Takeda Chemical Industries
of Japan and Abbott Laboratories. Durand, 50 years old at the time, had married
his high school sweetheart and worked for Merck & Co. for 20 years, during which
he moved up in the sales organization to senior regional director. TAP offered him
the opportunity to earn 40 percent more per year (in addition to a $50,000 signing
bonus) and help the company move from niche player to mass-market purveyor of
ulcer and prostate cancer medicine. He took advantage of the opportunity and looked
forward to the challenge.
But only a few months after arriving at TAP, he was shocked to find a very different
culture from the one he had become accustomed to at Merck. Merck has long
had a reputation for ethics and social responsibility, and these qualities had been
borne out in Durands two decades of experience. For example, at Merck, every new
marketing campaign was evaluated by a legal and regulatory team before being
launched, and drugs were pulled back if necessary. But TAP turned out to be very
different. It quickly became clear that this was a culture where only numbers
CHAPTER 5 ETHICS AS ORGANIZATIONAL CULTURE 201
Copyright © 2011 John Wiley & Sons
mattered. On his very first day on the job, Durand learned that TAP had no in-house
legal counsel. The legal counsel was considered a sales prevention department. At
one point, Durand found himself listening in on a conference call where sales representatives
were openly discussing bribing urologists with an up-front administration
fee to doctors who prescribed Lupron, the companys new drug for prostate cancer.
TAP sales representatives also gave doctors Lupron samples at a discount or for free;
then they encouraged the doctors to charge Medicare full price and keep the difference.
Durand overheard doctors boasting about their Lupron purchases of boats
and second homes. TAP offered a big-screen TV to every urologist in the country
(10,000!), along with offers of office equipment and golf vacations. And reps
werent accounting for the free samples they gave awayas required by law. Durand
knew that failure to account for a single dose can lead to a fine of as much as
$1 million. Finally, rather than selling drugs based on good science, TAP held parties
for doctors. One such party for a new ulcer drug featured Tummy, a giant firebelching
stomach.
Durand soon became frantic and worried about his own guilt by association. Initially,
he tri
ed to change the culture. After all, he had been hired as a vice president.
But everything he tried was resisted. He was told that he just didnt understand the
culture at TAP. When he talked about the importance of earning physicians trust,
the sales reps just rolled their eyes. He then tried to influence change the TAP way
by offering a bonus to reps who kept accurate records of their samples. The program
actually worked, but then senior management discontinued the bonusand, of
course, the reps stopped keeping track. Over time, Durand began finding himself
excluded from meetings, and he felt trapped. What would happen to him if he left
this new job in less than a year? He wouldnt collect his bonus, and he wondered if
anyone else would hire him. What would happen to his family? But he also worried
about becoming the corporate scapegoat.
In desperation, Durand turned to an old friend he knew from Merck
Glenna Crooks, now president of Strategic Health Policy International. Appalled
by what she heard, Crooks encouraged him to document the abuses he had observed
and share the information with Elizabeth Ainslie, a Philadelphia attorney.
Given the documented fraud against the U.S. government, Ainslie encouraged
Durand to sue TAP under the federal whistle-blower program. Armed with documents,
he filed the suit and federal prosecutors ran with it. Durand left TAP for
Astra Merck in 1996. But under the whistle-blower program, investigations are
conducted in secret. Neither TAP nor Astra Merck was supposed to know about
it. The investigation took years, and, when called to testify, Durand had to make
excuses to take time off from his new job. He was uncomfortable living as a
double agent. In the end, TAP pleaded guilty to conspiracy to cheat the federal
government and agreed to pay a record $875 million fine. In October 2001,
Durand collected $77 million ($28 million went to taxes), his 14 percent share
of the fine paid under the federal whistle-blower statute. He retired to Florida to
be closer to his parents, but he had yet to face the unpleasant task of testifying
against six TAP executives, some of whom had worked for him.
202 SECTION III MANAGING ETHICS IN THE ORGANIZATION
Copyright © 2011 John Wiley & Sonsteam case study Ethicspreview of the answer
Businesses are required to conduct their operations while adhering to ethical standards. For example, they should not overprice their products or sale low quality products at high prices. At the same time, businesses are required to provide goods and services that are of high quality and which are also safe for consumption APA 490 words
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