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Ethics and the business of biotechnology

by Simon Longstaff

Introduction

While the realm of science fiction conjures up the extraordinary and fantastic, mere reality seems capable of rivalling the images of Jurassic Park.

Who would have thought it possible that an Australian company, Biota Holdings Ltd, would be in a position to announce the development of a drug capable of curing that most 'canny' of diseases, influenza? Yet, just such an outcome seems to be in prospect. And then there are the extraordinary benefits that should flow to some of the poorest in the world with the elimination of rinderpest from Africa. Once again, the expected gains will be a direct result of developments in biotechnology. What is more, the list of 'uncontroversially good' applications is likely to grow.

Despite impressive progress, some argue that the elimination of influenza or rinderpest are selective examples of the 'benign' side of biotechnology. For such people, no amount of good associated with the relief and prevention of suffering will be sufficient to quell their suspicions about the supposedly 'dark' side of science and technology. It is an unfortunate fact of life that the popular imagination is easily moved by the image of the 'mad' scientist whose pursuit of knowledge leads to the creation of an unintended abomination.

But if there is a strain of popular concern about what scientists might do in the disinterested pursuit of knowledge, there is potential for extraordinary alarm at the prospect of business people generating profits through the control of such technology. In this context, the findings of social researchers like Hugh Mackay indicate that very few Australians believe that business is motivated by anything other than greed. As with the common view of scientists, such a perception may be ill-informed. It is; however, prevalent.

One suspects that people are worried about the tendency of companies to maximise the return to shareholders at the expense of all others. In some cases this may be seen as perfectly acceptable business practice. For example, the company that engages in unconscionable behaviour in the 'shoe lace' market may be frowned upon. However, it is unlikely to be loathed or feared. On the other hand, a company that controls a form of technology capable of determining matters of life or death for individuals and whole communities is liable to be subject to much greater scrutiny. In such circumstances there is a predictable range of suspicions and fears, many of which flow from past experience and observation..

Some things that people will worry about

Firstly, there may be the suspicion that important technology will be appropriated by interests that are already rich and powerful or that emerging companies will be tempted to form cartels designed to control the minimum price for goods developed using the new processes.

Ordinary people have a general appreciation of the great costs borne by companies funding research and development. However, they are loathe to accept anti-competitive practices that may be adopted, from time to time, as a way of ensuring a reasonably predictable rate of return on investment.

An associated concern could be that collusive practices will see prices set at a level that only the wealthy can afford. Again it might seem to be commercial common-sense to charge what the market will bear and to do so in the most lucrative markets. However, when it comes to the sale of items such as drought, salt and pest resistant seeds, commercial common-sense may need to be tempered by a response to the desperate need of people living in areas such as sub-Saharan Africa.

Another worry may be that powerful companies will be able to purchase the best research and then 'sit' on important new findings until less efficacious products have been marketed for long enough to recoup development costs. Once again, it may be commercially prudent to control the flow of products entering the market. However, a concern for humanity may be a different type of reason for 'fast-tracking' the application of discoveries capable of having a positive impact on the quality of life of millions of people (a successful flu vaccine will certainly be in this category).

On the other hand, there may be concern that biotechnology companies, in search of a quick return on capital, will release products before they have been fully tested for safety. The rush to lead the market may see companies wanting to release products in jurisdictions that do not have rigorous regimes of supervision. Indeed, there may be some temptation to conduct 'field trials' in communities that, out of necessity, cannot afford to be strict in their application of minimum standards of safety.

It will not only be consumers who will have to be wary. Biotechnology companies will also have to guard against unscrupulous competitors - especially those who may be inclined to engage in the relatively inexpensive alternative to research, industrial espionage. Biotechnology companies may face other challenges such as; hostile takeovers bids or inappropriate marketing strategies mounted by competitors.

The point is that the ethical climate in which business is conducted influences stakeholders in general. Prudent companies usually learn that there is some truth to the maxim that "those who live by the sword, die by the sword". An enlightened self-interest may dictate that sharp practices be avoided lest they infect the general culture of an industry.

The issues explored above are but a few of those that biotechnology companies will need to explore. Some may feel that they reflect too cynical view of business practice. However, the debate about such matters needs to be realistic. Bearing this in mind, it is important to note that some companies operating in allied industries have adopted many of the sharper practices outlined above.

The business of business is business?

Now, some might argue that many of these practices are perfectly acceptable tactics when applied in the field of commerce. It could be argued that it is only by pursuing profits that companies (and their host societies) can afford to fund social goods (including fundamental scientific research).

There are a number of difficulties with this generally popular response. The first is that it fails to recognise the point that the pursuit of profits is constrained by the need to adopt legitimate means. It is perfectly licit to pursue profits - but not at any cost. Indeed, the very idea of a free market (at least as advocated by Adam Smith) presupposes that it can be justified only to the extent that it promotes the common good. It should always be remembered that Smith argued in favour of the pursuit of self-interest and not selfishness.

Secondly, there is a risk that a narrow construction of self-interest may lead governments to intervene in the regulation of the biotechnology industry. Few industries (if any) would consider such an outcome to be desirable. What is more, it is quite likely that a formal regulatory approach will have both a domestic and international dimension.

As with the nuclear industry, the cost of complying with international protocols may be an expensive exercise. The impulse to regulate may be a desire to control the flow of technology in order to protect the interests of those who own the intellectual capital. However, it is equally possible that pressure to regulate the industry will arise from the social concerns of relatively affluent investors and consumers who can afford to exercise their consciences. One has already seen consumers in the USA and Europe using market and political pressure to ensure that manufacturers use processes that meet basic standards of fairness and propriety.

Self-regulation and the common good

So, how is one to respond to such fears and concerns? One basis for a response lies in the suggestion that companies (whether they deal in shoe laces or biotechnology) ought to take a broader than 'traditional' view of the role that they play in society.

For example, biotechnology companies may need to make quite explicit reference to the range of stakeholders whose interests they believe they may have an obligation or duty to serve. Companies that only recognise a commitment to shareholders may not be in a position to satisfy community concerns. This is especially so at a time of general cynicism about the motives of corporations. Indeed, it may be that biotechnology companies will need to make a fairly radical re-assessment of their relationship to stakeholders in general.

Given the importance of their products, it may become necessary to convince the community that the profit goal will be subservient to that of developing products that are safe, reliable and cost-effective. Biotechnology companies may find it helpful to re-orient themselves so that they explicitly seek to promote the common good.

As part of an industry response, biotechnology companies might support the development and application of a voluntary Code of Ethics and Conduct to be administered by an independent (but industry funded) Authority. For example, it may be possible to build on the existing framework provided by the Genetic Manipulation Advisory Committee. With government support, this Authority might be given the power to 'license' biotechnology companies. Each license would be issued for a renewable period of, say, three years.

While bearing in mind the need to recognise commercial realities, the licensing Authority might insist on a number of prudential standards. Compliance with these standards could be assessed by the use of regular audits. The point of this proposal is to suggest a regime of regulation that is 'owned' but not controlled by the industry. Any scheme will need to be credible lest government decide that it must intervene as a matter of public interest.

So why bother?

So why would biotechnology companies even stop for a moment to consider spending money on a regulatory framework that they will only be able to influence but not control? The preceding discussion would seem to suggest a number of reasons. Firstly, such a framework may help to allay public concern. Secondly, it may help to secure market conditions in which all participants are advantaged. Thirdly, it may be better to opt for self-regulation rather than that by government.

There is, however, a fourth reason. Given the breadth of issues to be addressed, there is the potential for considerable saving to be made if the development of appropriate ethical dispositions can be allowed to supplement a framework of regulation and surveillance.

That is, when people want to do the right thing, then the amount of investment in the institutions of regulation can be reduced to a necessary minimum. But this depends on there being a willingness to encourage the development of a sound ethical culture within the industry. And appeals to economy or prudence are not sufficient to establish a basis for a serious commitment to ethical practice. Rather, one hopes that people will be inclined to ethical behaviour because they recognise the importance of meeting obligations that may be owed to others.

The biotechnology genie is well and truly out of the bottle, and it promises to deliver practical results that, even a decade ago, would have been beyond the dreams of all but a handful of scientists. Cynicism and fear are capable of giving rise to a host of restrictions. It is up to the industry to ensure that it establishes a positive framework that will merit the trust of the community. Without trust, the stopper will be put back in the bottle.

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