Identify the ethical issue or issues presented in the case.

"Case Study 10.1: Marketing the Opioid Epidemic

One hundred forty-five Americans die from opioid overdoses every day. In addition to causing deaths, opioid addiction damages local economies, raises health care costs, increases the demand for drug treatment, boosts the crime rate, and breaks up families. President Donald Trump declared the opioid epidemic a national emergency in 2017.

Most observers blame Purdue Pharma, owned by the Sackler family, for triggering the opioid epidemic. In 1995, the company launched an aggressive marketing campaign to promote OxyContin®. The oxycodone in OxyContin is closely related to heroin, which is twice as powerful as morphine. Up until that time, doctors were reluctant to prescribe strong opioids for fear of addicting patients. Their use was restricted to treating cancer pain and end-of-life palliative care.

Purdue changed prescribing habits by funding favorable research studies and by paying doctors to argue that fears of opioid addiction were overstated. They did so at a time when attitudes about pain care were changing. Prominent physicians believed that many patients were needlessly suffering because they couldn’t get strong enough painkillers. The company convinced the Food and Drug Administration that the drug was safer than rival products because it had a delayed absorption formula that “is believed to reduce the abuse liability.”1

Company executives set up a speakers’ bureau, paying clinicians to attend medical gatherings to deliver presentations touting the medication. (Those attending these seminars prescribed OxyContin more than twice as much as those who did not attend.) Purdue also sponsored research studies demonstrating the drug’s effectiveness; advertised in medical journals; distributed luggage tags, plush toys, and other promotional items with the OxyContin label; and sent tens of thousands of videos to physicians containing testimonials from pain specialists and satisfied patients.

Purdue more than doubled its sales force in order to push the drug. They targeted general practitioners, who are not pain specialists, encouraging them to prescribe OxyContin for less severe forms of pain like arthritis, sports injuries, and back pain. Purdue told sales reps to assure doctors that the addiction rate for patients taking OxyContin was less than 1% when, in reality, it was much higher. Salespeople were handsomely rewarded for their efforts. In 2001, the company paid average bonuses of over $70,000. It encouraged physicians to offer coupons for a free initial prescription to patients and marketed heavily to doctors in poor communities. Within five years, OxyContin was generating $1 billion a year for Purdue Pharma, becoming the firm’s top money maker. By 2004, OxyContin was the most abused prescription opioid in the United States.

Users quickly discovered that they could get a powerful, often toxic, high by crushing OxyContin pills and then snorting them, dissolving them in liquid, or injecting them. Patients began selling their pills, and some doctors set up “pill mills” to profit from issuing OxyContin prescriptions. In Los Angeles, the Crips street gang transported groups of homeless people to pill mills where they would be handed prescriptions for the drug and took the transients to nearby pharmacies to get the prescriptions filled. Gang members would then sell OxyContin on the street for as much as $100 a pill.

Despite evidence of abuse, Purdue didn’t withdraw the drug but blamed recreational users for abusing it. “We have to hammer on abusers in every way possible,” then Purdue president Richard Sackler said in 2001. “They are the culprits and the problem. They are reckless criminals.”2 The firm had data indicating which doctors and pharmacists were overprescribing but refused to act. Company executives claimed that because they shipped the medication to wholesale distributors, it was the responsibility of the wholesalers to cut off supplies to pharmacies and to notify the Drug Enforcement Administration of suspicious activity. They also ignored evidence that their claims of 12-hour relief were false. Patients had to dose every 8 hours. Even those following their doctor’s orders to take a pill twice a day began experiencing withdrawal symptoms and were likely to become addicted.

Purdue Pharma replaced the original OxyContin pill with a new version that can’t be ground up, and prescription rates have dropped. Addicts who can’t get OxyContin on the street have turned to heroin, fentanyl, and other synthetic opioids. As the market for OxyContin shrinks in the United States, Purdue appears to be ramping up its efforts to market the drug overseas using the same tactics—commissioned studies, junkets, paid medical presenters, and videos.

In 2007, the company pled guilty to criminal charges that it had marketed OxyContin “with the intent to defraud or mislead.” Three company officers were convicted, and they and the company paid $635 million in fines. There are currently thousands of lawsuits against Purdue Pharma, including those brought by nearly every state. Sackler family members are included in many of these legal actions.

The Sacklers, one of the richest families in the world, are also among the most philanthropic, funding museums, colleges, and institutes. These include the Sackler Museum at Harvard, the Sackler Wing at the Louvre, and the Sackler Institute for Biological, Physical and Engineering Sciences at Yale University. Some of these institutions are now refusing gifts from members of the Sackler family who run the company. The Metropolitan Museum of Art in New York dropped ties with the Sacklers after protests by activists. The Guggenheim Museum in New York, the National Portrait Gallery in Britain, some academic institutions, and other organizations followed suit. The Louvre removed the Sackler name. However, many museums and universities will keep previous donations from the family, and the Sackler name will stay on their buildings."

"Case Study 11.3: Dick’s Sporting Goods Takes a Stand

Ed Stack, longtime CEO of Dick’s Sporting Goods, the nation’s largest athletic retailer, is an unlikely gun control advocate. Stack is a lifelong gun owner, hunter, and Republican donor. As a teenager, he worked for his father assembling and selling firearms in the original Dick’s location in Binghamton, New York. Guns have always been an important product category for the company.

Stack took his initial step toward limiting company gun sales after the events of September 11, 2001. In the aftermath of the attacks, his wife, who knew nothing about firearms, vowed to drive to the nearest Dick’s to buy a gun. Concerned that others might show up to buy guns in order to shoot their neighbors of Arab descent, Ed ordered that all guns and ammunition be taken off the shelves for a few days. In 2012, following the shootings at Sandy Hook Elementary School in Newtown, Connecticut, the company acted again, this time to remove “assault-style” or “modern sporting rifles (MSRs)” from the shelves. This type of weapon was used by the Sandy Hook killer and other mass shooters. Stack determined that continuing to sell MSRs, which seemed designed for mass killing, would be seen as giving them Dick’s seal of approval. The company pulled the assault-style weapons nationwide and removed all guns from display in the stores nearest to Newtown. However, MSRs remained in the company’s Field & Stream stores, which were more hunting and outdoors oriented. Gun advocates accused the company of caving to the left and hating America and the Constitution.

CEO Stack took his most dramatic stance following the Parkland, Florida, high school massacre in 2018. The gunman had legally purchased a shotgun from Dick’s a few weeks before the shooting, though he used another weapon. (A day later, a Vermont teen was arrested for planning a school attack using a gun purchased from Dick’s.) The leadership team decided to remove assault-type weapons and high-capacity magazines in all of its stores and to no longer sell firearms to anyone under age 21. Stack went a step beyond other CEOs not only by stating an opinion and taking corporate action, but also by laying out a set of specific steps for the government to take. These included banning all assault weapons, raising the minimum age for gun purchases to 21, requiring universal background checks containing mental-health data and previous interactions with the law, creating a database of all prohibited buyers, and closing the private sale and gun show loophole, which allows purchases without background checks.

By offering specific proposals, Stack may have set a higher standard for other CEOs who take social stances. According to Duke professor Aaron Chatterji, the public is beginning to expect more than a tweet or vague statement from corporate activists. They want specific details about what CEOs are doing. “That specificity is going to raise the bar for future CEO activists. People are going to ask the follow-up questions.”1

Dick’s financial analysts predicted that the company’s stance would cost it $300 million or more; earnings, along with the stock price, dropped immediately after the announcement. The firm also destroyed $5 million worth of MSRs that were in stock. In a Washington Post opinion piece, Stack declared that the company was willing to take a financial hit based on principle. “This issue transcends our company’s bottom line,” he said. “We suspected that speaking out would have a negative impact on our business. But this was about our values and standing up for what we think is right.”2

The company’s stock price and sales have since rebounded. The move also encouraged the retailer to deemphasize its hunting business, which has low margins and only generates significant sales in certain regions. Company officials have removed firearms in some locations, filling the space with other merchandise. Walmart, L.L.Bean, and Kroger (Fred Meyer) joined Dick’s in adding gun sale restrictions.

Not surprisingly, gun supporters were furious with Dick’s for its gun stance. A few employees quit in response. Some took to the internet to send nasty tweets and email posts. For example:

“This is FA[S]CISM … You stupid puppets who can’t think [for] yourself will be the downfall of America as we know it.”

“Any hunters, target shooters or sportsmen should cease doing business with this rathole, Dick’s.”

“I will never buy from you again.”

“As expected, the gun-hating maggots ooze forth from the cesspools of their ignorant fascist lives.”

Instead of intimating Stack, this blowback had “an invigorating effect” on the CEO. Stack describes himself as a “street fighter” willing to take on anyone. He is proud of being a tough competitor in the “sport” of retail. The company, like its leader, is motivated by a fight, driving competitors Sports Authority and Galyan’s out of business. So, when he started receiving scathing tweets, Ed declared, “It got my adrenaline pumping. “It pissed me off … I was ready for a street fight.”3

Discussion Probes"

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